Here Are The Most Shorted S&P And Russell Stocks (Yes, Trulia Is One Of Them)

Earlier today, countless investors who still foolishly believe that in the new normal “fundamentals” matter, screamed out in terror when Zillow announced that it would acquire Trulia for $3.5 billion, a 20% premium to the Friday close, and were suddenly silenced. The reason: with 38% of its float short (making it the 30th most shorted stock in the Russell 2000), this was one of the most dramatic confirmations of what we said was the best trading strategy under the Fed’s artificial capital misallocation regime, namely “buying the most hated names to generate the most alpha.”

In fact, for the benefit of our readers who also wanted to think like a central planner, criminal or five year old (or all of the above combined) we started compiling the list of most shorted stocks some time back in 2012. It was then that we said:

By now it should be no secret that under the New Centrally-Planned Normal, good is great, but worst is far greater. It is therefore no surprise that in the past year, some of the highest returning stocks have been the companies which have seen wave after wave of shorts come in, attempting to ride the underlying equity value to zero, only to see themselves scrambling to cover short squeezes, generated either due to the pull of borrow by an overeager shareholder, or due to bad news not being horrible enough, leading to short covering ramps.

Since then the most shorted stock category continues to make fools out of all those who still believe that under ZIRP things like cash flow, earnings growth, covenant, leverage, or going concern matter (as they experienced most recently today with TRLA), and have outperformed the broader market by several orders of magnitude.

So for all those who still believe that the market has quite a ways to go under the yoke of the Fed’s centrally-planning before it all crashes into a house of rigged cards, here is the list of the most shorted stocks in the S&P 500 and Russell 2000, sorted by descending short interest as a % of float.

First, the S&P 500:

 

And the Russell 2000:

Source: CapitalIQ




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America No Deus Ex Machina: John Kerry Can’t Even Get a Truce Between Israel and Hamas

not even for the camerasA year and a half ago when John Kerry took over
as secretary of state at the start of President Obama’s second
term, he set his sight on the quixotic holy grail of U.S. shuttle
diplomacy, a Palestinian-Israeli peace. Today, with Hamas and
Israel locked in a violent struggle, John Kerry has found he can’t
even negotiate a ceasefire between Israel and Hamas, with The
New York Times
reporting that Israel told U.S. officials they
did not need, and were not interested in, another round of “shuttle
diplomacy” by Kerry. The U.N.  Security Council has also
called on both sides to
cease fire
.

Egypt has taken the lead on negotiating a ceasefire between
Hamas and Israel, a role it’s assumed on and off since signing a
peace treaty with Israel in 1979. That treaty was negotiated at
Camp David with the help of President Jimmy Carter and insured by
the promise of billions of taxpayer’ dollars in U.S. aid aid to
Egypt and Israel, an arrangement that continues to this day. That
treaty ended a state of war between Egypt and Israel that began
during the 1948 war that followed Israeli independence, and was the
first time an Arab state recognized Israel. It also involved the
withdrawal of Jewish civilians and troops from the Sinai peninsula,
which Israel occupied after the Six Days’ War in 1967. The
Egyptian-Israeli peace treaty also led to Egypt being suspended
from the Arab League for a year and eventually the assassination of
Egyptian President Anwar Sadat by Islamist extremist s.

Thanks in large part to the annual U.S. aid, the peace treaty
has survived nearly 40 years despite widespread disapproval among
the Egyptian population and even when the Egyptian government was
headed briefly by a president from the Muslim Brotherhood. Mohammed
Morsi vowed to
respect
the peace treaty with Israel and
during the last flare-up
between Israel and Hamas he tried to
broker a ceasefire, as Egypt is doing again now.

John Kerry would desperately like to be able to claim some kind
of victory in the Israeli-Palestinian peace process but his failure
to make any progress so far, even as expectations are lowered,
illustrates why the American government is a less-than-ideal, and
hardly necessary, broker in whatever “peace process” may still
exist. The U.S., for example, does not recognize Hamas so on the
Palestinian side U.S. diplomats can only talk to Fatah, which has
effectively no power in Gaza. Because of its aid to Israel, U.S.
diplomats aren’t seen as unbiased brokers. And as Israel’s defense
minister Moshe Yaalon showed when
he said
he wanted John Kerry to win a Nobel Peace Prize so he
could leave Israel alone, there’s a sense that U.S. involvement in
Israeli-Palestinian peace process is more a matter of prestige than
peacemaking per se. The U.S. government should give Yaalon what he
wants: disengage from the peace process and stop
subsidizing
the Israeli military. Maybe it’ll open the door for
Israel and Palestine to settle their problems on their own the way
they want.

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Ex-NSA Chief Hayden Finally Admits Snowden Is a Whistleblower

Michael Hayden, former Director of both the CIA
and the National Security Agency (NSA), has said a lot of things
about Edward Snowden. He’s called the former government contractor
a “defector,” a “traitor,” and a
“morally arrogant, troubled young man.”
He’s also joked about
getting the
“evil”
Snowden
killed
. So it comes as a bit of a surprise to hear Hayden
finally on pace with
the majority of Americans
by finally referring to Snowden as a
whistle-blower.

First spotted by
one of Snowden’s legal advisers, Jesselyn Radack, Hayden said
during an
Aspen Institute Security Forum
(a “gathering of top-level
present and former government officials from all relevant national
security agencies”) last week, “When Snowden blew the
whistle
on the 215 program, that’s the metadata stuff, the
phone bills up at Fort Meade, I’ve got to tell you, people at the
fort thought they were cruising smooth.”
Here’s the video
:

Techdirt‘s Mike Masnick
suggests
that it might have been “something of a Freudian slip”
since “he goes on to insist that the program was clearly perfectly
legal based on all of the supposed ‘oversight'” though he
“conveniently leaves out the fact that many of the details of the
program were not actually known by those who did the approving” and
other facts that disrupt his narrative of a squeaky clean
NSA. 

Nevertheless, this is a surprising softening of rhetoric from
Hayden. He has in the past vigorously
refused
 to use the
term whistle-blower to describe Snowden, arguing
that “he did … not tell the appropriate authorities.”

Maybe Hayden’s changed tone has to do with the fact that the NSA
is losing interest in Snowden. “As time goes on” he becomes less
relevant, a current NSA official
said
at the conference. “It’s been over a year since he had
access to our networks and our information so the need for us to
understand that greater level of detail is lesser and lesser.”

Snowden’s asylum in Russia is set to expire this Thursday, July
31. He has applied for an extension, but is still “awaiting
approval from Moscow,”
according
to Al Jazeera. 

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Gaza Continues to Explode, France Offers Asylum to Christians from Iraq, Another Gay Marriage Ban Struck Down: P.M. Links

  • But we liberated them in Iraq! We liberated the hell out of them!Raids and airstrikes continue
    in
    Gaza
    after a truce ended. Hamas infiltrated a Jewish village
    and killed Israeli troops. Civilians in a park were killed in an
    explosion. Residents blame Israel. Israel says it was a misfired
    Hamas rocket.
  • A federal appeals court panel has struck down
    Virginia’s ban on same-sex marriage recognition
    . The court also
    has jurisdiction over North and South Carolina, West Virginia, and
    Maryland.
  • France is offering asylum to
    Christians from northern Iraq
    being driven out by the Islamic
    State, which has ordered them to convert or die.
  • Liberia’s president has closed most border crossings and
    instituted quarantines to try to contain its
    Ebola outbreak
    .
  • Amazon.com has launched a service for customers to
    purchase 3d-printed items
    .
  • Human Rights Watch and the American Civil Liberties Union put
    out a joint report today showing that America’s surveillance
    programs are making it more difficult for government officials to

    speak anonymously to journalists
    . So … working as intended,
    then?

Follow us on Facebook
and Twitter,
and don’t forget to
sign
up
 for Reason’s daily updates for more
content.

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Ira Stoll: Are Tax Cuts Working in Kansas?

The New York Times has been highly
critical of the recent tax cuts enacted in Kansas, calling them
“ruinous” and “spectacularly ill-advised.” But Ira Stoll has some
advice of his own: Don’t believe the hype. In his latest column,
Stoll explains what the Times’ breathless coverage gets
wrong about tax policy in the Sunflower State.

View this article.

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Beloved Beach-Town Businessman Faces $8,000 Fine for Illegally Selling Shaved Ice

Rhode Island resident Gregory Manko has been
selling shaved ice on the seashore for 11 summers standing. By all
accounts Hawaiian Desserts—the shaved ice stand he operates from a
private parking lot near the beach in Westerly, Rhode Island—is not
a bother to the local community. But Westerly recently
imposed a ban on all street vendors
except at festivals and
special events. Town officials say the ban is necessary to protect
public safety. 

Police Chief Edward St. Clair told the Associated Press that no
one had complained about Manko’s business, but other vendors
setting up in inappropriate areas caused traffic congestion. One
can’t help but wonder, then, why the law wasn’t written to apply
only to those vendors actually causing problems and not those
unobtrusively serving the community? 

Manko thinks it’s because the public nuisance rationale is just
a cover. He told AP that town officials want to turn the
“blue-collar beach town” into the next Martha’s Vineyard. Banning
all street vendors is an authoritarian attempt to class up the
place by fiat. 

Whatever the city’s true rationale for the ban, Manko now stands
on the wrong side of the law. He’s continued to operate his
shaved-ice stand in spite of the new ordinance. 

In court last week, Manko pleaded not guilty to 16 counts of
violating the street vending ban. If convicted, he faces up to 30
days in jail and an $8,000 fine ($500 for each count); he’s due
back in court this Thursday.

Kenneth Adams, who owns the local Ocean View Motel, is also
challenging the ordinance, after being cited for selling ice cream
out of a truck on his own property. 

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Meet the Press Panelists Can't Stop Laughing About Marijuana Prohibition

New York Times columnist
David Brooks
and Washington Post columnist

Ruth Marcus
produced two of the year’s most embarrassing
commentaries on marijuana legalization, so naturally they were
invited to
discuss
that issue on Meet the Press yesterday.
They did not disappoint.

The most annoying thing about the segment is the jokey tone that
Brooks establishes as soon as host David Gregory asks him about the
recent
New York Times editorial
calling for the repeal
of marijuana prohibition at the federal level:

Brooks: I disagree with them on the larger
issue. I don’t know what they’ve been smoking up there in the
office. The haze is…

At this point Brooks is interrupted by uproarious laughter from
Gregory and the other panelists, who apparently have never heard
this ancient joke before. Despite that disadvantage, they
understand Brooks’ point: The position taken by his colleagues at
the Times is so absurd that they must have
high
when they wrote the editorial! Just like everyone who
opposed alcohol prohibition must have been drunk! Trying
to join in the mirth making, PBS
NewHour
 anchor Judy Woodruff chimes in with, “They
didn’t inhale.” Then, having finally understood the gravamen of
Brooks’ jest, she adds, “Maybe they did.”

Perhaps we should cut Woodruff some slack, since she later
confesses, “When I think of grass, I think of something to walk on.
I think of pot as something you put a plant in.” This provokes more
merriment. It also raises the question: Exactly how old
is Judy Woodruff? According to Wikipedia, she was
born in 1946, which means she graduated college in the late 1960s.
Hmm.

And the jokes keep coming:

Marcus: It is a vast social experiment.
We do not know the outcome, except that the best evidence is that
if you use marijuana as a teenager regularly, eight IQ points…and I
don’t know about the rest of the table, but I don’t have eight to
lose.

I believe here. But wait, there’s more:

Woodruff: I think it’s important to have
the debate, but I wonder what’s the rush.

Marcus: Pardon the pun.

I don’t think I will. Yet when the panelists turn serious,
their contributions are even lamer. Both Brooks and Marcus, while
agreeing with those crazy potheads at
the 
Times that states should be
free to set their own marijuana policies, argue that legalization
is a mistake…because of the children:

Brooks: I just don’t think we can
sanction—say for adults, fine, but if you’re 18, you can’t do it.
That’s just not gonna work, I don’t think….

Marcus: I think for states to decide to
go the full legalization route is a problem, precisely for my mommy
reason, that you can say it’s OK for adults, but everybody knows
who has teenagers like me that…the fact that alcohol is legal
increases their access to alcohol. Making marijuana readily,
legally available will increase their—my kids are at home, laughing
at me.

Maybe they are laughing at her because they see the folly
in arguing that anything deemed inappropriate for children should
be forbidden to adults as well. In any case, Brooks’ concerns
extend beyond children:

I don’t think the government should be sanctioning
activity that most of us mature out of, most of us age out of it. I
just don’t think it’s the way we want to spend our
minds….

The country is getting more libertarian on a lot of these
issues, and it’s “everyone should do what they want.” But we’re
part of a community; we’re part of a culture, where we’re
[affected] by each other’s views and each other’s values, and to me
there’s some role for the government playing some role in
restraining some individual choice, just to create a culture of
healthiness. 

As Mediaite‘s Evan McMurry
points out
, the panelists never acknowledge the human cost of
forcibly imposing their pharmacological prejudices on their fellow
Americans. Although the total has declined from a

peak of more than 858,000 in 2009, police in the
United States still arrest
hundreds of thousands of people for marijuana offenses every year
(about 750,000 in 2012), the vast majority for simple possession.
It’s true that most of these people do not spend much time behind
bars. But the inconvenience, humiliation, financial drain, and
ancillary costs of being treated like a criminal should not be
forgotten amid all the marijuana-induced giggles. Nor should the
fact that people can and do receive lengthy prison sentences,
including life, merely for
growing or selling a product that you can openly buy at
state-licensed stores in Colorado and Washington. Funny
stuff.

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Meet the Press Panelists Can’t Stop Laughing About Marijuana Prohibition

New York Times columnist
David Brooks
and Washington Post columnist

Ruth Marcus
produced two of the year’s most embarrassing
commentaries on marijuana legalization, so naturally they were
invited to
discuss
that issue on Meet the Press yesterday.
They did not disappoint.

The most annoying thing about the segment is the jokey tone that
Brooks establishes as soon as host David Gregory asks him about the
recent
New York Times editorial
calling for the repeal
of marijuana prohibition at the federal level:

Brooks: I disagree with them on the larger
issue. I don’t know what they’ve been smoking up there in the
office. The haze is…

At this point Brooks is interrupted by uproarious laughter from
Gregory and the other panelists, who apparently have never heard
this ancient joke before. Despite that disadvantage, they
understand Brooks’ point: The position taken by his colleagues at
the Times is so absurd that they must have
high
when they wrote the editorial! Just like everyone who
opposed alcohol prohibition must have been drunk! Trying
to join in the mirth making, PBS
NewHour
 anchor Judy Woodruff chimes in with, “They
didn’t inhale.” Then, having finally understood the gravamen of
Brooks’ jest, she adds, “Maybe they did.”

Perhaps we should cut Woodruff some slack, since she later
confesses, “When I think of grass, I think of something to walk on.
I think of pot as something you put a plant in.” This provokes more
merriment. It also raises the question: Exactly how old
is Judy Woodruff? According to Wikipedia, she was
born in 1946, which means she graduated college in the late 1960s.
Hmm.

And the jokes keep coming:

Marcus: It is a vast social experiment.
We do not know the outcome, except that the best evidence is that
if you use marijuana as a teenager regularly, eight IQ points…and I
don’t know about the rest of the table, but I don’t have eight to
lose.

I believe here. But wait, there’s more:

Woodruff: I think it’s important to have
the debate, but I wonder what’s the rush.

Marcus: Pardon the pun.

I don’t think I will. Yet when the panelists turn serious,
their contributions are even lamer. Both Brooks and Marcus, while
agreeing with those crazy potheads at
the 
Times that states should be
free to set their own marijuana policies, argue that legalization
is a mistake…because of the children:

Brooks: I just don’t think we can
sanction—say for adults, fine, but if you’re 18, you can’t do it.
That’s just not gonna work, I don’t think….

Marcus: I think for states to decide to
go the full legalization route is a problem, precisely for my mommy
reason, that you can say it’s OK for adults, but everybody knows
who has teenagers like me that…the fact that alcohol is legal
increases their access to alcohol. Making marijuana readily,
legally available will increase their—my kids are at home, laughing
at me.

Maybe they are laughing at her because they see the folly
in arguing that anything deemed inappropriate for children should
be forbidden to adults as well. In any case, Brooks’ concerns
extend beyond children:

I don’t think the government should be sanctioning
activity that most of us mature out of, most of us age out of it. I
just don’t think it’s the way we want to spend our
minds….

The country is getting more libertarian on a lot of these
issues, and it’s “everyone should do what they want.” But we’re
part of a community; we’re part of a culture, where we’re
[affected] by each other’s views and each other’s values, and to me
there’s some role for the government playing some role in
restraining some individual choice, just to create a culture of
healthiness. 

As Mediaite‘s Evan McMurry
points out
, the panelists never acknowledge the human cost of
forcibly imposing their pharmacological prejudices on their fellow
Americans. Although the total has declined from a

peak of more than 858,000 in 2009, police in the
United States still arrest
hundreds of thousands of people for marijuana offenses every year
(about 750,000 in 2012), the vast majority for simple possession.
It’s true that most of these people do not spend much time behind
bars. But the inconvenience, humiliation, financial drain, and
ancillary costs of being treated like a criminal should not be
forgotten amid all the marijuana-induced giggles. Nor should the
fact that people can and do receive lengthy prison sentences,
including life, merely for
growing or selling a product that you can openly buy at
state-licensed stores in Colorado and Washington. Funny
stuff.

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High-Yield Credit Hits 10-Week Wides As Stocks Bounceback To Unch

Despite an early dump on dismal data, US equity markets (except Trannies) 'v-shape-recovery'ed back up to unchanged or better (as Europe closed and POMO ended) on the heels of an increasingly more beta-sensitive AUDJPY rampfest. Trannies never really recovered (3rd down day in a row) and Russell was less exuberant in its dead-cat-bounce but the Dow and S&P closed very modestly green. High-yield credit markets continue to widen – now at 10-week wides (up 35bps from tights) – notably divergent from stocks. Away from the shenanigans in stocks, the USD ended unchanged; Treasury yields were up 1-2bps; and gold closed very modestly lower. Oil slipped 0.5% to $101.60. VIX closed unch. Only the Nasdaq is green post MH17 Headlines on 7/17 and The Russell 2000 is -1.9% and Homebuilders -9% year-to-date.

 

AUDJPY ruled the day…

 

Notable divergences intraday among the major indices…

 

Since MH17 Headlines, only the Nasdaq is green…

 

Builders not having a great year…

 

High yield credit did not v-shape recover today…

 

Treasury yields rose modestly as stocks boucned… long-end closes up 1-2bps, short-end 2-3bps.

 

Gold and silver were oddly not monkeyhammered today…

 

 

 

Charts: Bloomberg




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Peak IPO

For a while the window ‘grab-the-greater-fool’s-money’ had closed… but with stocks surging back to all-time record highs on the back of dismal data and dangerous geopolitics, the IPO bandwagon has once again exploded as 25 new names are expected to attempt to squeeze through the door this week before it once again slams shut. As WSJ notes, this is the highest number of IPOs in a week since August 2000. Is this Peak IPO? Or will it go Peak-er?

 




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