McCullough: You Can Front-Run The Fed

In the Q&A segment of today's Morning Macro Call for institutional investors, Hedgeye CEO Keith McCullough reveals how the Fed has tipped their hand courtesy of WSJ’s Jon Hilsenrath, discusses his expectations ahead of Wednesday's FOMC meeting, and reminds us what would happen should interest rates rise.


McCullough: I Don't Give One Iota About Greece

In this excerpt from today's Morning Macro Call for institutional subscribers, Hedgeye CEO Keith McCullough talks Greece's "fascinating" weekend developments and the effects of oil's continuing tumble.


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This Is the #1 Read-Through from "Super Mario" Draghi's Move

Editor's note: This is a brief excerpt from Hedgeye research this morning. Click here to learn more and become a subscriber.

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The #1 read-through from Mario Draghi's move last week?


More (not less) #deflation.


There are a lot of ways to play this... but pressing the short side of WTI Oil is obviously one of them.


Oil is down again this morning (after a -7.2% down week) to $44.95. It has no support to lower-lows. Meanwhile, there’s still a massive net LONG position of +324,642 futures/options contracts in crude.


This Is the #1 Read-Through from "Super Mario" Draghi's Move - oilc


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Keith's Macro Notebook 1/26: Oil | #Deflation | Financials


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Hedgeye CEO Keith McCullough shares the top three things in his macro notebook this morning.

Join Tomorrow 11AM: Is The Worst Yet to Come In Russia? Top Russia Authority to Discuss

Hedgeye’s Macro Team is pleased to continue our special “Behind the Curtain” conference call series to discuss Russia’s Crash with Russia authority Anders Åslund TOMORROW, Tuesday, January 27th at 11:00am EST.


Åslund is one of the world’s foremost experts on Russia and the Peterson Institute authority on economic policy of Russia, Ukraine, and Eastern Europe.


Åslund is currently calling for Russia’s GDP to plunge -10% this year on sanctions, falling oil prices, and poor structural economic policy.


Similar to our previous speaker, former U.S. Ambassador to Russia Michael McFaul, Åslund brings on the ground experience across multiple Russian regimes to offer broader context on Putin’s Russia.


Specifically, Åslund served as an economic adviser to Russian President Boris Yeltsin in 1991-94 and to Ukrainian President Leonid Kuchma in 1994-97, followed by key economic advisory positions to the Baltic states and Kyrgyzstan.


Åslund will provide 30 minutes of prepared remarks, followed by open Q&A moderated by Hedgeye’s analyst Matt Hedrick.


Join Tomorrow 11AM: Is The Worst Yet to Come In Russia? Top Russia Authority to Discuss - HE M putin2



  • Forecasted view of the Russian economic environment
  • Assessment of the decline of the Russian Ruble and 2015 outlook
  • How falling energy prices will impact the Russian government and budget specifically
  • Discussion of the current and forecasted state of sanctions against Russia and assessment of their impact
  • Russia’s involvement in Ukraine:  War or Resolve?



  • Toll Free Number:  
  • Direct Dial Number:  
  • Conference Code: 275897#
  • Materials:

Ping for more information.





Anders Åslund has been a senior fellow at the Peterson Institute since 2006. He is also an adjunct professor at Georgetown University. He examines the economic policy of Russia, Ukraine, and Eastern Europe, as well as focuses on the broader implications of economic transition. He worked at the Carnegie Endowment for International Peace from 1994 to 2005, first as a senior associate and then from 2003 as director of the Russian and Eurasian Program. He also worked at the Brookings Institution and the Kennan Institute for Advanced Russian Studies. He earned his doctorate from Oxford University.


Åslund served as an economic adviser to the governments of Russia in 1991–94 and Ukraine in 1994–97. He was a professor at the Stockholm School of Economics and the founding director of the Stockholm Institute of East European Economics. He has worked as a Swedish diplomat in Kuwait, Poland, Geneva, and Moscow. He is a member of the Russian Academy of Natural Sciences and an honorary professor of the Kyrgyz National University. He is chairman of the Advisory Council of the Center for Social and Economic Research (CASE), Warsaw, and of the Scientific Council of the Bank of Finland Institute for Economies in Transition (BOFIT).


He is author or coauthor of 13 books, including How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, the Caucasus and Central Asia (Cambridge University Press, 2007 and 2013), The United States Should Establish Permanent Normal Trade Relations with Russia (2012), How Latvia Came through the Financial Crisis (2011), The Last Shall Be the First: The East European Financial Crisis (2010), The Russia Balance Sheet (2009),How Ukraine Became a Market Economy and Democracy (2009), Russia's Capitalist Revolution: Why Market Reform Succeeded and Democracy Failed (2007), Building Capitalism: The Transformation of the Former Soviet Bloc (Cambridge University Press, 2002), How Russia Became a Market Economy (Brookings, 1995), Gorbachev's Struggle for Economic Reform, 2d ed. (Cornell University Press, 1991), and Private Enterprise in Eastern Europe (Macmillan, 1985). He is also editor or coeditor of 16 books, including The Great Rebirth: Lessons from the Victory of Capitalism over Communism (2014), Russia after the Global Economic Crisis (2010), Challenges of Globalization: Macroeconomic Imbalances and Development Models (2008), Europe after Enlargement (Cambridge University Press, 2007), and Revolution in Orange(Carnegie Endowment, 2006).

Retail Callouts (1/26): Idea List, GPS, AdiBok, NKE Jordan, PVH, M

Takeaway: Hedgeye Retail Idea List. Gap closes Piperlime. Adibok promos running shoes. Nike sued over Jordan logo.


Retail Callouts (1/26): Idea List, GPS, AdiBok, NKE Jordan, PVH, M - 1 26 chart1





GPS - Gap Inc. to Close Smallest Brand, Piperlime



Takeaway: Not a big deal for the consolidated GPS - at $151mm in revs it's less than a percentage point of the consolidate revenue base. The company started the brand in 2006 and probably shifted its focus away from the whole e-comm thing to focus on Intermix and Athleta which the company acquired in 2013 and 2009 respectively. That helps explain the growth trend which fell off from +60% in 2012 to 7% in '14. It makes us wonder what the prospects are for other e-comm only operators functioning primarily in the wholesale model. Gap probably has a weaker stomach when it comes to dilution from its smallest brand. But, it does reinforce the disconnect between content owners and peddlers in the online channel.  Our math suggests that Piperlime is probably losing about $50mm annually for GPS. That's about $0.06-$0.07 after tax, or about 2% dilution to earnings. So all in, this is a slight positive. 



Adibok, NKE - Forget Soccer—Adidas Challenges Nike to a Foot Race



Takeaway: The product and marketing event surrounding the release jibes with the company's commentary from July of '14 which called for a step up in marketing spend. The company took over a building on Wall Street with a host of athletes on Friday to promote the newest iteration of the Boost line which will retail for $180. Two thoughts on the kicks and the release. 1) Adi's athlete roster is telling. Yohan Blake, David Villa, and Sammy Watkins were on hand for the release of the 'Best Running Shoe Ever'. We'd call that the B maybe even the C team. 2) In what world does Adi think it can command $180 for a pair of runners? We think that's a tough value proposition to communicate to consumers. Excluding iD's, Nike only has 3 models above that price point in its entire running line and it's earned that strata. Adi is still far behind on the innovation side.

Retail Callouts (1/26): Idea List, GPS, AdiBok, NKE Jordan, PVH, M - 1 26 chart2



NKE - Nike sued over Michael Jordan logo



Takeaway: This case revolves around use of a photographer's photo of Michael Jordan dunking, and its use in creating what we now know as the 'Jumpman' logo for Brand Jordan ($3.3bn in retail sales). While parts of the article are convincing as it relates to the merit of a case, we have a hard time seeing how any court could side with the plaintiff. It's like sitting on a $1m lotto ticket that expired in 1987 and then suing for the sum plus interest. Some kind of statute of limitations has to kick in here.

Retail Callouts (1/26): Idea List, GPS, AdiBok, NKE Jordan, PVH, M - 1 26 chart3





PVH - PVH Restructuring Underwear, Dress Furnishings



AAPL - J. Crew CEO to leave Apple board



AAPL - Inroads Made by Apple Pay Propel ‘Mobile Wallet’ Idea



KORS - Full World of Kors to Open in Ginza



M - Macy’s will expand CA fulfillment center to meet omnichannel demand



MIK - Michaels stock offering priced at $23 per share



Sir Philip Green in Talks to Sell BHS





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