Is Carl 'Talkin His Own Book?'

"Somewhere over the rainbow - way up high, there's a land that I heard of once in a lullaby......somewhere over the rainbow skies are blue, Then the dreams that you dare to dream really do come true.....Someday I'll wish upon a star and wake up where the clouds are far behind me......" Judy Garland - The Wizard of Oz

Now in this classic, iconic scene - young Dorothy is sitting on a farm wagon in the cornfields of Kansas - just ahead of a storm brewing...the skies are dark, the clouds are gathering, the mood was about to change and Dorothy was about to go the land of Oz........ That was in August 1939....

Today we have Billionaire investor Carl Icahn - not sitting on a farm wagon in the corn fields of Kansas. but rather a multibillion dollar penthouse on Central Park, in NYC - who is now singing a bit of a different tune - thinking maybe he should have stayed on the farm..... - His is "Good Bye Yellow Brick Road" made famous by none other than Sir Elton John...."When are you gonna come down, When are going to land, I should have stayed on the farm, I should have listened to my old man.. You know you can't hold on forever...." Well you get it right....

Carl made headlines yesterday when announced that he was releasing a video......Not about rainbows, lemon drops or even lullabies....Carl has taken center stage and is now 'warning of a bubble'. Go figure! Really Carl - Did you just wake up from a coma? 'Warning of 'Danger Ahead - low rates causes bubbles in art, real estate and hi yield bonds; Fed has backed itself into a corner'... blah, blah, blah.... I mean - Where has he been? Is this earth shattering news? Has NO ONE even bothered to mention this before? Are we supposed to 'pay attention' now because Carl made a video? Is he 'talking his own book??? I mean you can't make this stuff up....it's like 'Nightmare on Wall Street'

At some point you just gotta laugh, otherwise you'd jump out the window.....

Ok...it was a bad day for stocks.....and for almost all asset classes.......Biotech's got slaughtered once again as we learned now that 'regulators' are taking much closer look at drug pricing' (Thank you Hillary) Specifically - Democrats are seeking a subpoena on drug prices at Valeant Pharmaceuticals (VRX)....This news sent that stock down 15% or $30..... 18 Democrats wrote a letter to Jason Chaffetz - chair of the Committee on oversight and gov't reform - saying that

"We believe it is critical to hold drug companies to account when they buy old drugs and raise the prices"

In this case - VRX has raised the prices of two heart drugs - Nitropress and Isuprel by 212% and 525% respectively..... (Last week is was Turing Pharma, Rodelis and a couple of others - which leaves one to ask - What drugs are these guys smoking?)

"Valeant is using precisely the same business model as Martin Shkreli (Turing), Both appear to be engaging in the same business model of acquiring potentially lifesaving drugs to maximize their own corp profits." -

So now when regulators call them out on this behavior - investors run for exits.....

So yesterday the downward spiral in stocks continues - taking us right back to the August lows, just like we have been talking about for the past couple of weeks.....the mkt has to test it - the break was so dramatic that the mkt needs to know if it holds..... It was the usual suspects....weak commodities, (highlighted by Glencore Plc) China, FED, rates, earnings, end of qtr......all giving investors a reason to take their ball and go home.

(In fact - the Glencore story only adds to the angst......rumors of its viability due to the extent of the company's debt vs. this fallout in commodity prices is causing huge amount of uncertainty around the world - it's like an Enron or Lehman moment all over again........Someone (management) better come out, raise their hand justify why the rumors are wrong and move ahead.... the longer this simmers the worse it will get.......History does repeat itself- I'm just sayin......)

Yesterday's selloff was broad based - with almost every sector - save for utilities - in the red... I have been saying that a 'second attack' on the August lows was in the cards - . Well, yesterday and overnight we attacked. Small cap indexes, and the microcap sector closed at prices lower than their closing prices seen in the late August sell-off - the Dow, S&P and Nasdaq are very near to breaking below their August lows as well....

That being said though, the mkt is also reaching an extreme oversold condition, shorts need to be careful here - they run the risk of getting burned by big brother as they attempt to drive prices up forcing the shorts to run for cover and you know what that means.......the sellers back off and the shorts kick and scream as they try to buy back stock adding fuel to a spike rally that is suspect to begin with.

If they defend the August lows, if long term investors think that this sell off is overdone - once again presenting a bargain hunting opportunity - they will be here, they will be adding to positions, they will stand up and defend the level and this will spark the short-covering rally....are we seeing that now? US Futures are up 10 pts - after futures tested the August lows overnight. Unless we break the lows - expect the mkt to bounce here..... But remember- the mkt rarely goes straight down or straight up, rather it moves in waves so traders will be riding those waves in the days ahead.

This 2015 correction is different than any of the corrections we have experienced since this latest bull mkt began in March of '09. ( Due to the QE efforts via the Federal Reserve). The difference is the ferocity of the move in August, and now with the September retreat confirming those prices it leaves us to wonder - is this the beginning of a bear mkt or just a correction in a secular bull mkt?

This current bull market has lasted for over 7 yrs and was built upon global easy monetary policies led by the FED. Consequently, we should not pretend that the Fed can keep the party going.....in fact - they have run out of bullets .....which is what is causing investors to 're-price' the risk of the global economy. Yes, I do believe that the FED wants out of this game of market manipulation - (others would say intervention) but we are seeing just how tough that is and is going to be.....They may WANT the mkt to stand on its own but how willing will they be if the bottom falls out? How soon will they announce some other new program to stop the bleed as we now enter the 2016 Presidential race in full battle mode?

Overnight in Asia - mkts were under pressure....no surprise...Japan lost 4% as the China story intensifies...... Hong Kong -3%, China -2%, ASX -3.8%.

European mkts are bucking the trend a bit.....Glencore is rallying by 8% as Citibank comes to their defense - saying that the selling is 'overdone' maintaining their buy rating on the stock... Of course they are - if they liked it at $10- they have to love it at $1........ Now be careful - Is Citi talking their own book? Just asking.......
FTSE -0.49%, CAC 40 +0.04%, DAX + 0.29%, EUROSTOXX + 0.09%, SPAIN +0.45% and ITALY +0.20%.

US futures are up 6 handles - after being up 10 earlier this morning. Now yesterday - we traded right down to the August lows....and held. The test will be - today.....will they test that level again? And if so - will they defend it? If we breach it - then watch as the sell algo's kick into high gear, and buyers step back - sending the mkt into a tailspin.....(I don't think this will happen today) ...........I suspect the mkt wants to test and hold, but if the media keeps playing the Icahn song and dance then maybe not.....I for one think that Carl is late to the game, but because he has a big mouth and a lot of money - he could potentially move the mkt in the short term. - Let's see.

Pork Tenderloin Medallions in Arrabiata Sauce

Arrabiata Sauce - this is a southern Italian tomato sauce that gets its kick from the crushed red pepper - in fact - Arrabiata means Angry.....you can use this sauce over pasta or even meats - today let's eat

Pork medallions bathed in Arrabiata Sauce.

Begin by making the sauce - for this you need:
2 cans of Italian plum tomatoes, garlic, onion, crushed red pepper, some fresh basil,& olive oil. Simple and easy.

Heat up the olive oil, add the sliced garlic - sauté. Now add in the sliced onions and move them around until nice and soft - you can smell the sweetness.....
Open the cans of plum tomatoes - hand crush them and add to the pot - bring to a quick boil and then turn the heat to simmer - now add the crushed red pepper and the basil - cover and allow to cook - stirring occasionally.

Now it's done...if you choose you can boil up some pasta and dress with the sauce always serving with grated pecorino Romano cheese. But for today - now the pork medallions.

You need - onions, green peppers and pork tenderloin - which you cut up into medallions.... Season with s&p. Set aside.

In a large frying pan - heat up some olive oil and add in the onions and peppers - season with s&p - sauté on med heat until soft - maybe 20 mins....remove and set aside. Now in the same pan - toss in some more sliced garlic and sauté...now turn the heat up to high add the seasoned pork medallions.... and sear on all sides. Can you just smell it?
Turn the heat to low - add back the onions and peppers and the Arrabiata sauce....allow to simmer for 10 - 15 mins. Serve immediately with a nice Chianti.
Simple.

Buon Appetito.