Pershing Square

• Vietnam mobs set fire to foreign factories in anti-China riots (Reuters)
• Recession-Baby Millennials Scarred by U.S. Downturn Spurn Stocks (BBG)
• U.S. Agents Start Hunting for Sanctioned Russians’ ‘Shiny Toys’ (BBG)
• Russia moves to oust US from International Space Station (FT)
• China Central Bank Calls for Faster Home Lending in Slump (BBG)
• Geithner Must Give S&P Documents in U.S. Fraud Suit (BBG)
• Samsung's 'crown prince' in focus as father hospitalized (Reuters)
• Yahoo buys mobile 'self-destruct' messaging app Blink only to shut it down (Reuters)
• Goldman’s Twitter banker joins hedge fund (FT)
• Keyword being "unexpectedly": Sony Unexpectedly Forecasts Loss Amid PC Restructuring Costs (BBG)

CNBC must be reeling this morning as probably the highest-rated rivalry among hedge-fund managers has ended. As The WSJ reports, the hatchet was buried on Thursday. Mr. Ackman spoke with Mr. Icahn's assistant on April 24 saying, "I am calling to forgive Carl," according to Mr. Ackman. Mr. Icahn, 78 years old, returned the call and told Mr. Ackman, 47, that "it is a blessing to forgive," Mr. Icahn said, "and I forgive you." The acrimonious activists thus closed the door on one of the ugliest spats in financial market history as forgiving being called "a crybaby" and forgetting being labelled "a dishonest man" has been trumped by. as Ackman notes, the "much greater possibility that we are on the same side than the opposite."

Allergan on Tuesday night said that its board of directors had adopted a one-year stockholder rights plan to give it more time to consider takeover proposals. The Valeant offer was made with Pershing Square Capital Management hedge fund, which built up a stake in the company. The chief executive officer of Valeant Pharmaceuticals, which made a $47 billion unsolicited offer for competitor Allergan Inc. on Tuesday, said during an interview on CNBC that he was "disappointed" with Allergan's so-called poison pill. "We are disappointed but on the other hand, I think this deal will get done," Valeant CEO Michael Pearson said on Wednesday.

If you know your "partner" is about to submit a takeover bid for a company, wouldn't you buy every call option you can find ahead of the announcement? That is precisely what Ackman did.

• Ukraine Accord Nears Collapse as Biden Meets Kiev Leaders (BBG)
• Novartis reshapes business via deals with GSK and Lilly (Reuters)
• Moscow Bankers See Fees Slide 67% as Ukraine Crisis Grows (BBG)
• Why ECB's QE will be Ukraine's fault: Draghi Gauges Ukraine Effect as ECB Tackles Low Inflation (BBG)
• As Phone Subsidies Fade, Apple Could Be Hurt (WSJ)
• Amazon Sales Take a Hit in States With Online Tax (BBG)
• Ford Speeds Up Succession Plan: Mark Fields, Auto Maker's No. 2, Seen Replacing Alan Mulally as CEO Ahead of Schedule (WSJ)
• U.S. force in Afghanistan may be cut to less than 10,000 troops (Reuters)
• IBM End to Buyback Splurge Pressures CEO to Boost Revenue (BBG)

The Herbalife drama - perhaps the biggest billionaire pissing contest of 2013 - just got excting again, following FT news that a criminal probe has been launched into Herbalife. "The US Department of Justice and the Federal Bureau of Investigation are investigating Herbalife, the multi-level marketing company that hedge fund manager Bill Ackman has alleged is a pyramid scheme, according to people familiar with the matter. The criminal investigation by the FBI and US attorney’s office in Manhattan raises the stakes for Herbalife, which is already facing civil inquiries from multiple government agencies that are looking into the Los Angeles-based company and its associated network of independent distributors."

The stock market really was rigged... “It’s 2009,” Katsuyama says. “This had been happening to me for almost two years. There’s no way I’m the first guy to have figured this out. So what happened to everyone else?” The question seemed to answer itself: Anyone who understood the problem was making money off it...

• China worries chill markets, copper slumps (Reuters)
• Peak dot com dot two idiocy: Candy Crush Saga maker King seeks $7.56 bln valuation from IPO (BBG)
• Obama Meeting With Yatsenyuk Raises Stakes in Ukraine (BBG)
• Federal prosecutors open criminal probe of GM recall (Reuters)
• Pimco Cuts Government Debt on Outlook for Fed Buying (BBG)
• Missing Malaysian Jetliner Confuses World That’s Online 24/7 (BBG)
• Mortgage Giants Face Endgame (WSJ)
• Russia Calls U.S. Aid to Ukraine Illegal Amid Standoff (BBG)
• U.S. judge freezes assets of Mt. Gox bitcoin exchange boss (Reuters)
• Ousted Libyan PM flees country after tanker escapes rebel-held port (Reuters)
• Senate-CIA Dispute Erupts Into a Public Brawl (WSJ)

David Stockman blasted the GSE-profiteers just last week but the manic run-up in the stocks of Fannie Mae and Freddie Mac has abruptly come to an end as the FT reports, the US Senate banking committee on Tuesday released a highly anticipated plan that would maintain government backing of mortgages but wind down the GSEs. Not a great day for Mr. Ackman - who owned 10% at last filing.

The Fed’s serial bubble machine has not only bestowed massive speculative windfalls on the 1%, but it has also fostered a noxious culture of plunder and entitlement in the gambling casinos of Wall Street. After each thundering sell-off during the bust phase, crony capitalist gamblers have been gifted with ill-gotten windfalls during the Fed’s subsequent maniacal money printing spree.  In this context comes Bruce Berkowitz “scolding” and firing “salvos” at Washington from the front page of the Wall Street Journal.

• Russian markets hit as Putin tightens grip on Crimea (Reuters)
• Ukraine Sees More Russian Incursions as Standoff Worsens (BBG)
• Ukraine Crisis Roils Global Markets (WSJ)
• Cold War Ghosts Haunt East Europe in Moves for Crimea (BBG)
• How Moscow Orchestrated Events in Crimea (WSJ)
• Russia Gas Threat Shows Putin Using Pipes to Press Ukraine (BBG)
• Euro-zone PMI slowed less sharply than estimated (MW)
• Two top Microsoft execs to leave in reshuffle (Reuters)
• Soaring Luxury-Goods Prices Test Wealthy's Will to Pay (WSJ)
• IQ-Boosting Drugs Aim to Help Down Syndrome Kids Learn (BBG)

Bill Ackman helped rescue General Growth Properties (GGP) - the US 2nd largest shopping mall operator - from bankruptcy in 2009/10 as the company collapsed in the financial crisis. Ackman  "turned $60 million into $1.6 billion" in the process but, according to Bloomberg, has now exited his entire position, dumping his final 28 million share back to the company via a buyback. The spin, of course, is that it's right to take profits and that GGP is now 'a much different company than it was then." However, given Ackman's knowledge of JCP (and perhaps RSH), we can't help but wonder, given all the exuberance about Fed tapering must mean the recovery is here and sustainable - just why Ackman would unload it all at such a pivotal time in the US economy...?

2013 is in the history books, and with it so are all those strategies that worked last year. As much can be seen in the performance of the marquee hedge fund names, whose performance so far in 2014, undoubtedly taking a cue from the market which in January was turmoiling over tapering and EM fears, is decidedly mixed, with about half generating negative returns, and the other just barely beating the flatline. Some notable exceptions: the woefully named Tulip Trend Fund which is already down -8.5% YTD, as well as the Keynes Leveraged Quantitative Strategies fund, down 2.9%, while on the other side Pershing Square is no longer Perishing up  4.1% through the end of the month, undoubtedly driven by the plunge of HLF in January, a move which may or may not last and likely depends on whether in the aftermath of AAPL, iCahn decides he has had enough of his game with Ackman as well.

• Only time will define Bernanke's crisis-era legacy at Fed (Reuters)
• Record Cash Leaves Emerging Market ETFs (BBG)
• Investors Look Toward Safer Options as Ground Shifts (WSJ)
• Fed Policy Makers Rally Behind Tapering QE as Yellen Era Begins (BBG)
• Rating agencies criticise China’s bailout of failed $500m trust (FT)
• Russia to await new Ukraine government before fully implementing rescue (Reuters)
• U.S. readies financial sanctions against Ukraine: congressional aides (Reuters)
• Companies resist president’s call for minimum wage rise (FT)
• Secret Swiss Funds at Risk as Italy’s Saccomanni Visits Bern (BBG)
• Top Democrat puts Obama trade deals in doubt (FT)
• Erdogan to Give Rate Increase Time Before Trying Other Plans (BBG)

After the epic fail of Pershing Square's Herbalife short, aka the stock we predicted, correctly, in January 2013 has Volkwagen-like short squeeze potential, it was only a matter of time before the analyst responsible for the trade got the boot, politely of course.