McCullough: Is The Fed Dumb Enough To Hike On Today’s Jobs Report?

In this brief excerpt from The Macro Show earlier today, Hedgeye CEO Keith McCullough discussed how the Fed will interpret today’s late cycle non-farm payroll numbers and its implications for investors.

Craziest Offer In Hedgeye History (Not an April Fool's Joke)

Takeaway: The deal expires at 4pm today. Get it before it's gone.

Click image below to take advantage of thiS offer.


Craziest Offer In Hedgeye History (Not an April Fool's Joke) - z april fools promo

Us Versus Them (What We Think About US GDP)

Takeaway: Our estimate for Q1 2016 GDP is 1.0% versus delusional Fed commentary and Wall Street's high forecast.

Us Versus Them (What We Think About US GDP) - 4  growth cartoon 03.02.2016


Yellen & Co. remain steadfast believers in an "all is well" U.S. economy as a mostly blinded Wall Street eats it up. Right? Apparently, the Fed doesn't believe its own forecasts. The Atlanta Fed's GDPNow forecast for Q1 2016 has tumbled from 2.7% in Febraury to 0.6% today (click here and here for more). Talk about a messaging mess (among other Fed messes...)


Meanwhile, Fed head Janet Yellen waived away recent weakness largely blaming "transitory" lower oil prices, a stronger dollar that would "gradually dissipate" and "foreign economic growth... [that was] weaker this year than previously expected." 


Roger that.


Here's where we shake out in comparison to Wall Street's stubbornly high Q1 GDP forecast and the Atlanta Fed's scattershot estimate.


Us Versus Them (What We Think About US GDP) - gdp estimates wall fed us


... And watch the video with Hedgeye CEO Keith McCullough below to learn what we REALLY think about the Fed and "data dependence."


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10-Year U.S. Treasury Yield
1.89 1.75 1.78
S&P 500
1,989 2,069 2,060
Russell 2000
1,069 1,124 1,114
NASDAQ Composite
4,732 4,892 4,870
Nikkei 225 Index
15,852 16,853 16,759
German DAX Composite
9,713 10,062 9,947
Volatility Index
13.25 19.70 13.95
U.S. Dollar Index
94.26 96.31 94.58
1.11 1.14 1.13
Japanese Yen
111.42 113.66 112.12
Light Crude Oil Spot Price
36.64 39.92 38.11
Natural Gas Spot Price
1.80 2.04 1.96
Gold Spot Price
1,206 1,261 1,234
Copper Spot Price
2.15 2.24 2.18
Apple Inc.
103 110 109
533 606 593
McDonald's Inc.
122 126 126
Utilities Select Sector SPDR
48.13 49.84 49.62
Financials Select Sector SPDR
22.01 22.82 22.50
Facebook, Inc.
110 116 114

Hedgeye Converting to a Master Limited Partnership (MLP)

Independent Investment Research Firm Aims To Take Advantage of MLP Structural Advantages



STAMFORD, Conn., April 1, 2016 -- Hedgeye Risk Management announced today that it has officially converted to a Master Limited Partnership (MLP) effective immediately. This corporate structure conversion occurs concurrently with Hedgeye’s acquisition of all the assets of the “Old Walla-Balla Oil Field” headquartered in Lower Manhattan, with oil fields scattered across the southeast United States.


The main objective of Hedgeye’s corporate conversion is to increase tax efficiency and diversify the research firm’s growing revenue base.  In addition, like many MLPs before Hedgeye, the firm’s new low cost of capital will allow it to aggressively overpay for declining assets.


“This was a very simple decision,” said Hedgeye President Michael Blum. “Our Energy analyst Kevin Kaiser did extensive work featured in Barron's on LINN Energy, Kinder Morgan and Summit Midstream Partners which made us well aware of myriad risks to the MLP structure.  And yet, in the midst of the miasma, we saw one clear, obvious benefit too good to pass up—the ability of investment bankers to sell the dream of a yield in a zero interest rate universe.” Blum said.


The new Hedgeye MLP will issue a dividend to holders of both Hedgeye General Partnership (GP) and Hedgeye Limited Partnership (LP).


  • Holders of the GP units will receive a preferred dividend yield of 18% securitized by gold stored in the Company’s vault. 
  • Holders of the LP units will receive an unsecured dividend yielding 5%.  It is expected the initial payout ratio on the LP dividend will be 51%, based on pro-forma calculation excluding all expenses and capital expenditures.  (On a cash basis, the payout ratio is expected to be north of 300%)
  • All holders will receive a $25 gift certificate to Chipotle provided by Hedgeye Restaurants Sector Head Howard Penney.


“Look, like most things Old Wall, we recognize that these oil fields are a declining asset,” said Hedgeye Chief Financial Officer Todd Jordan.  “But we also recognize that our firm’s core revenues can’t continue growing at 30%+ per annum organically forever. This combination of tax savings and proceeds will allow us to further diversify our revenue and return cash to shareholders via a non-GAAP distribution set at a yield of 18%. Maybe 52%. It’s not entirely clear yet."


"Except the Chipotle gift card," Jordan added. "They’ll definitely get the gift card.”


***Proceeds from the bought deal coinciding with transaction will be used for the following purposes:


1) Start a Hedgeye Gear apparel business which has been launched in its Beta form.

Hedgeye Converting to a Master Limited Partnership (MLP) - z h gear 1


2) Wholly acquire the Charlestown Chiefs of the Federal League and move the team to Stamford, CT.

Hedgeye Converting to a Master Limited Partnership (MLP) - z ch

3) Acquire the yacht Octopussy under the auspices of the Jones Act and relocate our offices to its main cabin.



The firm is a declining, conflicted, and compromised asset based in lower Manhattans in the area more commonly known as “Wall Street.”




Hedgeye Risk Management is an independent investment research and media firm. Focused exclusively on generating and delivering actionable investment ideas in a proven buy-side process, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts, all with buy-side experience, covering Macro, Financials, Energy, Healthcare, Retail, Gaming, Lodging & Leisure (GLL), Restaurants, Industrials, Consumer Staples, Internet & Media, Housing, and Materials.




McCullough: Shame On You Mark Zandi


In this animated excerpt from The Macro Show, Hedgeye CEO Keith McCullough pulls no punches on establishment economist Mark Zandi and establishment financial media which is failing America.

the macro show

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