Source – davidstockmanscontracorner.com
– If you need evidence that Wall Street is a financial time bomb waiting for ignition look no further than the recent meltdown of Valeant Pharmaceuticals (VRX). In round terms, its market cap of $90 billion on August 5th has suddenly become the embodiment of that proverbial sucking sound to the south, having plunged to less than $12 billion by Wednesday’s close.
That’s nearly a 90% haircut and VRX was no microcap penny stock. It was a giant inhabitant of a hedge fund hotel.
Needless to say, the cliff-diving pattern in the graph below provides evidence that the ticking bombs in the casino are of the neutron variety. In this case, the hotel may be still standing but the inhabitants have been ionized. On a single day last week, hedge funds lost $5.3 billion in value.
Condign justice, some might say, for the likes of rank gamblers like William Ackman (Pershing Square) and Jeffrey Ubben…
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