David Einhorn’s Comments at the Greenlight Re (GLRE) Investor Day on May 20th 2014

• Bernanke was predictable, but the new chairwoman is less predictable.
• It has been 5 yrs into the recovery. Corporate profits have increased a lot and continue to grow. Current earnings expectations are high at a double-digit growth rate. Q1 numbers are showing the economy growing at  ~1%.
• The fund is fully invested at 114% long and 66% short. It has increased its net long book from 35 to 50%.
• Largest longs are Alpha Bank, Apple, gold, Marvel, Micron, and Oil States International.
• Longs are cash-rich tech companies and businesses benefiting from structural changes. Shorts include secular decliners, momentum stocks, and iron ore related companies. Macro overlay due to monetary policy and unresolved imbalances.
• Divergence between stock and bond markets?  Bond market is saying that economy is slowing down and yields have come down. Yields are not down because of deflation – we are not in deflation as commo

The Securities and Exchange Commission has touched off a major bureaucratic scuffle with its fellow financial regulators by proposing to, in the words of one Democratic aide, “rip the heart out of Dodd-Frank.” The SEC, following the wishes of one of its Republican commissioners, has initiated a turf war over which agency gets to monitor a key corner of the financial system.

At issue are so-called asset managers, companies like BlackRock, Fidelity and Pimco, who manage investments on behalf of individuals and groups through mutual funds and other vehicles. Asset management firms collectively control an astonishing $53 trillion in investor funds.

Historically, the SEC has regulated asset managers. But under Dodd-Frank, the Financial Stability Oversight Council, a newly created super-regulator, can designate “systemically important financial institutions,” or SIFIs, and subject them to rules previously reserved for banks. An FSOC designation puts non-bank SIFIs under the supervision of th

• Rumor today that Icahn will reveal a substantial stake in TWTR.  No reaction in shares
• Rumor Bill Ackman will announce a short position in the company has Apollo Education (APOL) quickly off 6.5% in late-morning action.

More on APOL.  In the 80's and 90's online education was all the rage and names like APOL were a momentum stock, ramping with hopes of future growth.   Then the bloom began to fade as the market came to accept high drop out rates and defaulted student loans.  They obviously still persist today.  I have no idea if Ackman will unveil a short position and if so, just what his thesis will be BUT from a chartist point of view, it would seem every time the months upper Bollinger Band was pierced, a sell off ensued.  While they repurchased shares 2002-2011, there's been no buybacks since.  They issue no dividends and in this (slow growth) environment, that makes it even less appealing for investors.  If they're not growing, investing in their own company nor returning

Sadly wage growth......is not growing so does anyone see a resolution to this "underwater" problem other than time?   From Forbes:

A total of 9.7 million American households still have “underwater” mortgages, meaning they owe more on the home than it is currently worth. Homes in the lowest price tier are most affected, according to data released today from Zillow.

Thirty percent of homes in the bottom price tier are in negative equity, while only 18.1% of homes in the middle tier and 10.7% in top tier are underwater, according to Zillow’s Negative Equity Report. Homes are defined as top, middle, or bottom tier based on their estimated value compared to the median home price for that area. (Nationally, the median price in the top tier is $306,700; middle tier, $163,400; bottom, $98,400.)

Overall, 18.8% of homeowners were underwater during the first quarter of 2014. 

Zillow’s figures for homes with negative equity are higher than other recent reports looking at the same problem.

Meanwhile MGM and other casino names are showing signs of head-and-shoulders tops.  Full disclosure I am long LVS as a long standing drawer pick and short MGM here. (click chart to enlarge)

Macau is the growth engine for the global casino industry, and revenue growth for casinos there seems to be slowing, Wells Fargo said in a report.

That could affect sales and earnings for world's largest casino company, Las Vegas Sands (LVS), and rivals Wynn Resorts (WYNN) and MGM Resorts International (MGM), which all have properties in Macau. It could also hurt Hong Kong-based Melco Crown Entertainment (MPEL), which competes with the Vegas casinos in Macau.

Wells Fargo analyst Cameron McKnight is in Macau meeting with company executives this week. McKnight said in a Monday report that, based on those meetings and channel checks, he expects May revenue for Macau casinos will rise 10% to 14% compared with the same month a year ago. That's well below his earlier forecast for 14% to 16% growth.

When I brought up this chart to short the miners (XME) in Chat and subsequently posted it in the charts section, it was prettymuch met with the sound of crickets.......but I never said it would be easy.  To my thinking, one would add up near resistance (which we had last week) and cover above it; thereby limiting the risk to ones portfolio.

Well the mining bulls a're finally giving in.

I preferred shorting XME over an individual (possibly weak) miner due to anticipated M&A activity in the area but that's just me.  Blame China slowing down.  Blame an increase in copper production vs. 2013 and no demand.  What does it matter.  Good things come to those who wait,  Come to Mama!

Some recovery.  *pfft* 

To construct this chart, we compute for each month the year-over-year house price change for all 1,220 counties for which CoreLogic reports overall house price indexes. Those price changes are ranked from highest to lowest and then reported as percentiles based on this ranking. For example, the 5th percentile tracks the 61st-lowest county-level house price change in each month. Note that an individual county can be, and often is, in different percentiles over time. Gray shading indicates an NBER recession.

Courtesy of NYFed

This visual gives one a clear perspective on what housing areas were hit the hardest during the recent financial crisis and subsequent housing (price) fall. The recovery in some areas has been amazing.

Created by Catherine Mulbrandon at VisualizingEconomics.com

The new home market, held down by high prices and low supply of units, appears to be stalling further, not accelerating, as the spring unfolds. The housing market index fell 1 point to 45 which is 3 points below the low-end forecast. And weakness is centered in current sales, down 2 points to 48 in a reading that points to further trouble for new home sales.

But expectations for future sales are strong, up 1 point to 57, while traffic is weak but improving, up 2 points to 33. Breakdowns show mid-to-high 40 readings for all regions except the Northeast which is by far the smallest region for new home sales and is lagging badly.

The new home market in general has been lagging badly, lagging both the economy and holding down the housing sector. March new home sales fell a very surprising 14.5 percent in March and today's report doesn't point to much improvement for April and May.

The "new normal"?  With new job creation being either at the very low end, or very high end of the pay range

We are witnessing the maturation of an industry and the adoption of proven management practices. Successful cleantech companies are making their offerings competitive by focusing on excellence in operations, marketing, sales, and distribution. The principles that apply to any manufacturing business, such as reducing procurement costs and improving productivity through lean manufacturing, are increasingly important for clean technologies as well.

The cleantech space is diverse; it cannot be painted with a broad brush. We looked at 16 important clean technologies and found that while every single one has made progress over the past decade, some are moving much faster than others. Just over half of them—advanced building technologies, advanced agriculture, food life-cycle optimization, grid analytics, grid-scale storage, intelligent transport, next-generation vehicles, solar PVs (photovoltaics), unconventional natural gas, and water treatment—could become truly disruptive to the incumbent

The staggering increase in prescription drug costs can only make one wonder if one day..... only the wealthy "elite" will be able to afford to live longer.

Prices for brand-name drugs for diseases such as diabetes, multiple sclerosis, cancer, and arthritis are soaring, a survey for Bloomberg News by data provider DRX found.  Analysts, meanwhile, predict the first $1 million drug treatment may be just around the corner. The analysis of big-selling drugs found that price increases in the United States have far outpaced inflation since late 2007 for many drug categories. Here are 73 drug brands whose U.S. prices for at least one dosage increased 75 percent or more in the period.

(View Interactive Graph)

Earl Harford, a retired professor, recently bought a month’s worth of the pills he needs to keep his leukemia at bay. The cost: $7,676, or three times more than when he first began taking the pills in 2001. Over the years, he has paid more than $140,000 from his retirement savings to

This one's intriguing not only for the possible daily head-and-shoulders top (gap fill is the obvious target) but look at it's monthly chart.  I believe U.S. growth has been "baked in" with a wealth of competition and increasing pressures in the "healthy drink" area.  In my opinion, they'll have to become more dependent on overseas growth to expand revenue and margins.  Overseas growth in a time of austerity throughout the globe.  It won't be simple.  There are definite divergences developing on the weekly and daily time frames and I seriously would not be surprised if this turns into a longer-term short.  Sure, (*if it works) I'd take a partial on breakdown and another at gap fill but I'd leave the balance with a alert to cover above $82.30 and see what happens.  If it doesn't work - risk is defined.  That or buy LEAP puts and sit back.  What goes up in parabolic fashion, does usually come down and revert to the mean.

(Edited to add ITB weekly chart)

We chuckle in Chat when we see a fund manager recommend a short (or buy) in an area we've already discussed on site.  Case in point: home builders.

Having a mortgage banking background AND given the current state of low wage job creation, I could not agree more with Doubline's Gundlach.  Increasingly big business lobbyists are pushing for the Obama Administration to increase the number H-1B visa issuance, stating that the U.S. doesn't have the skilled workers needed to fill their need.  In truth are they merely pushing for a cheaper, more pliant labor?  That's an entire debate on it's own but I also think the charts are signalling future weakness as I recommended shorting TOL and PHM in April.

CLICK ALL CHARTS TO ENLARGE

You have cash buyers (top/left) buying up bank foreclosures to help with not only their balance sheet, but with existing inventory..............but NEW, first-time home buyers?  Their credit scores are still decimated from the credi

Shorted XLV.  Stop on a close above the 50d.  Suggested previously here

Target below the 200d.  I like the risk/reward

Ever want to reach through the television screen and punch someone?  To see ANY commentator spew fairy dust and tall tales with a straight face without telling the entire picture just makes my blood boil.  Here's a portion of this discussion - full video located below

"The excess amount of young adults living at home will unwind alongside a stronger macroeconmic environment and income growth; and the inordinate amount of married couples that are residing in apartment will transition into single-family homes"

• Where's the "stronger macroeconomic environment"?  The GOP is doing everything they can to stop a minimum wage increase.  Steve, perhaps you should write your Congressman.
• Su

For a nifty $5,000, this too can be yours. Ouch!  OK clearly it's not luxury construction but for temporary housing, sturdy weather-resistance storage, camping (?) and housing the poor, quite the innovation. One can only imagine the long term implications for both housing..............and the construction worker.

A private company in east China recently used a giant printer set to print out ten full-sized houses within just one day.

The stand-alone one-story houses in the Shanghai Hi-Tech Industrial Park look just like ordinary buildings. They were created using an intelligent printing array in east China's city of Suzhou.

The array consists of four printers that are 10 meters wide and 6.6 meters high and use multi-directional automated sprays. The sprays emit a combination of cement and construction waste that is used to print building walls layer-by-layer.

Ma Yihe, the inventor of the printers, said he and his team are especially proud of their core technology of quick-drying cem

After decades of M&A and consolidation, here are big, remaining four.  

Courtesy of WSJ

"I keep calling it the Woodstock of television," Seibert tells Mashable. "It is the biggest audience of mass television viewing in the history of moving pictures."

Seibert isn't joking. With over 1 billion unique users watching over 6 billion hours of video each month, YouTube's reach is stunning. According to Neilsen, the site reaches more U.S. adults aged 18 to 34 than any cable network.

It's easy to see why cartoon creators would forego the red tape and high pressure of cable television in favor of the Internet. Taking a cartoon from concept to production is grueling work, requiring a huge commitment from the creators and a huge paycheck from the network. More often than not, pitches never see the light of day.

Simon's Cat is hand-drawn, frame by frame. Tofield himself storyboards the episodes.

On YouTube, that process is accelerated tenfold. Operating on a smaller scale with smaller risks, cartoonists can take a chance with more niche ideas and experiment

Off the 50week SMA which has been prior support.  If it works, I'll throw it in a drawer.  If doesn't hold that channel trend line, what does that say for the tech sector overall? Risking 10%  Click chart to enlarge.

• EU added 7 rich men and 17 corporations to their list to sanction in Russia. Obama hits them with exports and the banking sector.  Market still not liking the tensions there. 

  Asked in his CNBC interview Wednesday whether Wall Street is right to remain calm over the standoff, Mr. Obama replied: “No.”“I think this time’s different,” he said. “I think they should be concerned…. When you have a situation in which a faction is willing potentially to default on U.S. government obligations then we are in trouble.  (WSJ)

• Fed whisperer Hilsenrath says it's time to worry (WSJ)

• If you're into experimental, cutting edge technologies, checkout this list of futuristic blogs by List.ly

• Kyle Bass of Hayman Capital's presentation on "Global Outlook Pitfalls and Opportunities For 2014."