David Tepper Catches Bearish Billionaire Bug: Cuts Long Exposure By A Third; Liquidates All SPY, QQQ Calls

With 13-F reporting season officially open, today’s most interesting filing came from the man who single-handedly manages to move the market, based on his CNBC appearances, whether bullish or bearish: Appaloosa’s David Tepper. And, according to a quick flip through his latest filed long equity holdings, it appears that the “bearish billionaire” bug that recently affected such prominent asset managers as Soros, Gundlach, Druckenmiller and Icahn has not bypassed Tepper either, because as of June 30, the soon to be Florida resident has reduced his notional long stake by a third, and now shows $3.8 billion in long US equity exposure, down from $5.7 billion last quarter.
The most notable changes include the elimination of his SPY and QQQ calls (which together amounted to $664 million), as well as the complete sale of his stake in Delta, Facebook, Abengoa Yield, Bank of America and Pfizer among the top liquidations. Offsetting these, were new positions in Atlantica Yield, Western Digital, US Foods and Quorum Health.
Among his biggest positional changes, were additions to Allergan (adding 1 million new shares), Williams Partners, Mohawk, Allstate, Synchrony Financial and FOX. There were far more reductions, however, starting with HCA (down 2 million shares), Energy Transfer Partners (cut by 4.8 million), the Alerian ETF, Southwest, Kinder Morgan and many others.

This post was published at Zero Hedge on Aug 12, 2016.

ECB Buys 21% of JAB Holdings Bond Issue (Keurig, Peet’s, Einstein Bros, etc)

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
The European Central Bank (ECB) is showing its love of coffee by purchasing 21% of JAB Holdings Bond issue. Sitting through all those meetings requires something stronger than Perrier water.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ August 12, 2016.

It’s TIME For A Big Change In This Presidential Campaign

We previously noted the ironic timing of TIME magazine’s Trump “meltdown” cover – as Trump’s poll number have stabilized and improved in the last few days. This got us thinking… what happened after each of the last 8 Hillary/Trump TIME magazine covers…
It appears to us that when the Democrats, Hillary, or The Establishment are “TIME-covered”, Hillary’s poll number stop rising (and even fall)…
But when Trump is “TIME-covered”, his poll numbers stop falling (and in most cases rise).

This post was published at Zero Hedge on Aug 12, 2016.

Clintons Made A Quarter Billion Dollars Since Leaving The White House, Mostly From Speeches

2015 was a bad year for the Clintons: with only $10.6 million in taxable income, as Hillary revealed earlier today in order to shame Trump in revealing his tax returns, this was a 60% drop from the record $27.9 million they earned in 2014, it was the lowest income the power couple made since 2010, and was the third lowest income they generated in the past decade.
Of the $10.6 million, the dynastic presidential couple earned over 60%, or $6.7 million, from speaking fees: it was their top money-making activity by a wide margin. As reported earlier, the due also donated $1 million to “charity”, of which 96% went to the Clinton Foundation.
A breakdown of the Clinton’s income shows that they have earned nearly a quarter billion dollars, or $237 million to be precise, since leaving the White House in 2001. The full breakdown is shown in the chart below.

This post was published at Zero Hedge on Aug 12, 2016.

The Real Reason Brazil Can Still Be “the Country of the Future”

Writing this week for Bloomberg, Tyler Cowan made the case that Brazil is ‘still the country of the future.’ While I share Cowan’s optimism for the nation’s future, his focus on the country’s diversity, size, and vaguely federalized political structure overlooks the real story – that Austrian economics and libertarianism is winning the battle of ideas within the country.
As Reason recently highlighted in an excellent short documentary, Brazil is home to one of the fastest-growing and accomplished liberty movements in the world. Not only did organizations like the Mises Brasil, Students for Liberty Brazil and the Free Brasil Movement play a pivotal role in the suspension of president Dilma Rousseff but, as I love to point out, Ludwig von Mises is now the most searched economist in the country. More impressive still, as of last month, F. A. Hayek was searched more than John Maynard Keynes and Murray Rothbard was searched more than Milton Friedman. This is an incredible testament to the work of Mises Brasil, Instituto Rothbard and the other organizations within the country dedicated to spreading Austro-libertarian ideas.

This post was published at Ludwig von Mises Institute on Aug. 12, 2016.

Weekend Reading: Willful Blindness

Submitted by Lance Roberts via RealInvestmentAdvice.com,
Despite deteriorating economic data, the market continues to cling to recent levels of over overbought, overextended and low reward/risk outcomes.
The problem for individual investors is the ‘trap’ that is currently being laid between the appearance of strong market dynamics against the backdrop of weak economic and market fundamentals. Ignoring the last two to chase the former has historically not worked out well.

This post was published at Zero Hedge on Aug 12, 2016.

Market Talk – August 12, 2016

The Nikkei (cash market) had a lot to recover having just returned but recover it did. The early bounce was pulled back then the Friday afternoon recovery took over and we closed just off the days highs ( 1.2%). China’s Industrial Output was expected at 6.1% but came in a little short at 6% which did provide a bit of a pause but happily was just short lived. Retail Sales was also a little under the forecast (10.2 v’s 10.5) but that too was quickly dismissed. Having pushed through the 3k level late yesterday we eventually saw a happy run into the weekend to close 1.6% up on the day. The Hang Seng was also strong closing with the Nikkei around 1% better.
Much of the excitement did not really occur until we saw the lunchtime data in the States. Europe had responded to the very positive Asian session but really was looking for confirmation in the form of positive data. However, what we saw was far from what the equity markets were looking for and all stocks came off their days highs. We did manage a rather neutral close but were searching for positive guidance.

This post was published at Armstrong Economics on Aug 12, 2016.

Gold Daily and Silver Weekly Charts – Not Too Obvious – The Devil’s Tower

Today’s intraday gold chart looks like the Devil’s Tower mountain in Close Encounters of the Third Kind.
So up they went into the NY trade, and down they came after Europe and Asia went to bed.
There was quite a bit of delivery action yesterday in gold, if delivering claim tickets for bullion of a less than transparent pedigree counts. And as usual there was little to no action with the physical bullion in the warehouses.
Silver had no deliveries reported, but enough movement in the warehouses to warrant a look.
There was intraday commentary on the warnings that Pam Martens had given to the Fed and the Administration in 1998 about the repeal of Glass-Steagall and the proliferation of dangerously leveraged derivatives bets. And guess what, we are right back there again, with many of the same faces saying the same things in different ways.

This post was published at Jesses Crossroads Cafe on 12 AUGUST 2016.

How The ECB Helped Buy Krispy Kreme

To legions of Green Mountain shorts, JAB Holdings may be one of the most hated names in finance: this is the the European investment fund that in late 2015 acquired the infamous coffee company which over the years had what may have been the biggest short interest of any stock. JAB Holdings is also the company which in May of this year announced that having purchased the coffee, it would also buy the donuts, when it unveiled a $1.35 billion deal to purchase Krispy Kreme Doughnuts, adding to its stable of famous brand ranging from Caribou Coffee to Jimmy Choo shoes, and even Durex condoms.
The reason we bring it up, is because also in May, two months after the announcement that the ECB would purchase corporate bonds in the open market, we speculated on what we thought at the time was Monetary Lunacy, namely that “The ECB Could End Up Funding Bayer’s Purchase Of Monsanto.” As Reuters noted “Bayer could receive financing from none other than the European Central Bank to help fund its takeover of the world’s largest seed company, US-based Monsanto, according to the terms of the ECB’s bond-buying program.” And as we added, the purpose for which the bonds are issued “is not among the criteria set by the ECB, which will start buying corporate bonds on the market and directly from issuers next month. It now appears the “use of funds” may be M&A, and even LBOs.”

This post was published at Zero Hedge on Aug 12, 2016.

Confidence? S&P500 Index Rises Despite Falling Consumer Confidence

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
The University of Michigan consumer confidence indices were released this morning. And the indices showed a decline in the Current Economic Conditions Index among consumers.
The S&P 500 index kept on rising despite a loss of confidence among consumers.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ August 12, 2016.

Review Of Q2 Earnings Calls Reveals Cautious Consumer, Margin Contraction And Brexit Fears

As part of their quarterly earnings review, analysts at Goldman Sachs scour the conference calls of 50 companies, representing over 30% of the market cap of the S&P 500, to find clues about the health of the world economy. The 2Q 16 review generally found that consumer sentiment is mixed due to political and economic uncertainty, margins are expected to be flat to down in 2016, the strong dollar is hurting domestic companies and Brexit is already causing companies to take a cautious stance toward Europe.
Below are come of the key takeaways:
Theme 1: Consumers sentiment mixed with companies expressing concerns that consumers will postpone spending due to rising political and economic uncertainty. However, Financial firms noted an improvement in household balance sheets. Notable comments included:
Union Pacific Corp. (UNP): A soft global economy, the negative impact of the strong U. S. dollar on exports and relatively weak demand for consumer goods will continue to pressure volumes through the second half of the year.

This post was published at Zero Hedge on Aug 12, 2016.

“Yes, The System Is Rigged”

Submitted by Patrick Buchanan via Buchanan.org,
‘I’m afraid the election is going to be rigged,’ Donald Trump told voters in Ohio and Sean Hannity on Fox News. And that hit a nerve.
‘Dangerous,’ ‘toxic,’ came the recoil from the media.
Trump is threatening to ‘delegitimize’ the election results of 2016.
Well, if that is what Trump is trying to do, he has no small point. For consider what 2016 promised and what it appears about to deliver.

This post was published at Zero Hedge on Aug 12, 2016.

Stocks Extend Winning Streak To Longest In 4 Years Despite Deluge Of Dismal Data

Productivity plunges… Retail Sales disappoints… Consumer’s Confidence in their finances lowest since 2014… Weak China data… global bond yields at record lows… US yield curve back near cycle flats… US and Global GDP expectations at cycle lows… BUT best week in oil in 4 months… simultaneous record highs in S&P, Dow, Nasdaq for first time since Dec 31 1999…

This post was published at Zero Hedge on Aug 12, 2016.

Soros’ “Big, Bearish” Bets Backfiring? CIO Steps Down After Only 8 Months

Two months ago, we wrote that in the latest move by a prominent billionaire seeking an exit from the boredom of retirement and a return to active asset management, none other than George Soros had decided to return to trading at the fund he founded, the $25 billion Soros Fund Management family office with, what the WSJ described at the time, were “big, bearish bets.”
While Soros had always closely monitored his firm’s investments, as he got older he would delegate more and more, with many of his proteges moving on to start their own hedge funds, Trump’s fundraiser Steven Mnuchin being just one example. As a result, in recent years, he hadn’t done as much investing of his own. That however changed in early 2016 when Soros was spending more time in the office directing trades.
Soros had stepped into a void at his firm.

This post was published at Zero Hedge on Aug 12, 2016.

VIX And Junk Bond Spreads Are Out Of Whack

Submitted by Eric Bush via Gavekal Capital blog,
The relationship between the VIX and the spread between high yield bonds over 10-year treasuries is highly correlated (87% over the past 15 years).
This, of course, makes intuitive sense. The VIX tends to spike when confidence in stocks or the economy is shaky. Which is also true for high yield bonds. When investors begin to worry that high yield issuers won’t be able to make debt payments because of, for example, slowing growth, high yield bonds usually sell off against treasury bonds. This occurred earlier this year in February when the VIX spiked to over 28 and the spreads widened to 850 bps.

This post was published at Zero Hedge on Aug 12, 2016.

Fed’s Bullard: “We Don’t See Recession Risk Likely In Near Term”…. Just Like In August 2008

Moments ago, during an interview on Wharton Business Radio, St. Louis Fed president James Bullard, who recently flipped from the Fed’s biggest hawk to its more vocal dove, said that he sees just one rate interest in the next few years. Judging by the market action ever since the February lows, he is merely confirming what the market already knows. He also confirmed that the Fed will never hike rates at a time when even one recent economic data point has printed negative, saying “the right time to move rates is after good economic news.”
More troubling was his admission that the Fed is now helpless to fix America’s biggest problem, namely the ongoing decline in productivity by saying the Fed “can’t influence US productivity growth rate.” He is sadly very wrong here, because while the Fed can not influence productivity, it certainly can influence what corporations allocate capital toward, and as we have repeatedly shown, in recent years, virtually every dollar of free cash flow generated by the S&P500 has gone not toward productivity-boosting activities like spending on growth capex or expanding R&D, but toward stock buybacks and dividends, instead. We are confident not even Bullard would deny that pushing the stock market higher in what is one slow-motion, marketwide LBO (or rather MBO) does absolutely nothing for economic productivity; it does, however, do miracles for trickle-up wealth, as both investors and management teams (courtesy of their equity-linked compensation) have never been richer.

This post was published at Zero Hedge on Aug 12, 2016.