• Thanks for reading today.

Thanks a lot for reading my Diary.

Enjoy your evening!

• My sister, the famous artist Debbie Kass, was honored by the New York Foundation for the Arts.

As the day comes to a close, I wanted to send my warmest wishes and congratulations to my sister, the famous artist Debbie Kass, for being this year's honoree by the New York Foundation for the Arts.

Debbie is an exceptional woman in many ways, and I am so proud to be her brother.

Here, she thanks the Academy in last night's gala celebration in New York City! 

And here is a very good description of Debbie's influences and art.

• I bought more shares at $37.80.

I added to Ocwen (OCN) at $37.80 today.

Here is my Kass Katch column on the company.

• Here are his musings at midday.

Midday musings from Sir Arthur Cashin:

Indecisiveness continues as demonstrated by S&P establishing a series of intra-day lower highs and higher lows.

Watch for either a higher high or lower low as a possible trigger to set a trend.

Run rate looks like a mirror of Tuesday ¿ 650/730 million shares.

• Run, don't walk, to watch Ackman and Pearson on Bloomberg TV.

Bill Ackman, CEO at Pershing Square Capital, and Michael Pearson, Chairman/CEO at Valeant Pharmaceuticals (VRX), spoke with Bloomberg Television today about their joint bid for Allergan (AGN) and explained how and why they partnered for the deal.

Here is the tape.

When asked if he is a corporate raider, Ackman said, "No, no one is being raided. Actually what we're doing is we're helping facilitate a transaction between two companies for the benefit of the shareholders." On whether Allergan would feel the same way, he said, "I don't know; you have to ask them."

Ackman on the pharmaceutical industry:

The entire pharmaceutical industry is changing. There is a dynamic happening. Why is there so much opportunity for synergies? And the answer is there is a lot of costs in this industry. It's one of the few industries which has not been forced to operate with the same kind of economic discipline as other industries. And I think that Mike [Pearson] and his team had been a driving force in leading the charge and making this a much more shareholder-oriented industry and making this a much more profitable industry.

Ackman on Herbalife (HLF):

I don't think this stock gradually goes to zero. I think it's more of an overnight phenomenon. You have a criminal investigation in the Department of Justice. The FBI have launched a criminal investigation.... For the FDC to go to a formal investigation here with the vote of the commissioners -- what they're telling the market is, they certainly see some evidence of serious problems at the company. And the FDC's track record of going after pyramid schemes is pretty much, they've got about 100% batting average.

Other highlights from the Ackman interview include:

• Short-termism in investing is bad.
• Entire pharma industry is changing.
• He's never before invested in pharma.
• Valeant more like Procter & Gamble (PG) than biotech.
• Valeant business model more efficient than rivals.
• "No-one's being raided" at Allergan.
• Stock & cash offer is win-win for shareholders.
• Pearson makes full and fair offers, not overpaying.
• Valeant-Allergan easily $200 stock when deal closes.
• Simplest trade is to "buy Valeant stock."
• Doesn't think Herbalife stock gradually goes to zero.
• Herbalife demise "more an overnight phenomenon"; investigations serious.

Here are previous columns and in which I object to Ackman's modus operandi.

• Here are his comments on the five-year.

The Lindsey Group's Peter Boockvar on today's five-year auction:

Following a mixed 2 yr auction yesterday where dealers got stuck with a lot of the paper, the 5 yr today was also mixed. The yield was above the when issued but the bid to cover was above the 12 month average. Direct and indirect bidders took a better % of the auction than yesterday and above the recent average. Bottom line, with the bear flattener we've seen in the yield curve, the Fed about half way done with ending QE, confusion in Treasuries relative to US equities in terms of messaging of where the US economy is going evidenced by the curve flattening, the multi year high in commodity prices and anecdotal signs of labor costs rising in select industries points to importance with these Treasury auctions in gauging market sentiment outside of the daily market moves. Today's auction however tells me nothing new unfortunately as the results were somewhat in no man's land.

• At $49.57.

I added to my Wells Fargo (WFC) short at $49.57.

• The Oracle wins this round.

I have closed my Berkshire Hathaway (BRK.B) short, as discipline trumps conviction.

Fortunately, I have traded around this short, but, in the main, it was not successful.

I will revisit in the days ahead after I consider what went wrong.

• I would not reduce Bon-Ton, even despite the 5% rise.

Bon-Ton Stores (BONT) is up 5% today on no news.

I would not reduce Bon-Ton, even despite the rise.

See my last post earlier this week on the company.

• Ackman appeared disingenuous.

I was watching Bill Ackman's defense on CNBC this morning and, to be direct, he appeared disingenuous to me.

While Bill stayed inside a law (which, as I pointed out, functionally permits insider trading), he knows that the news of his purchases will push up the stock and defends himself by saying he is only stealing from short-term traders who are selling to him.

On that basis, I wonder if Bill would like to change his compensation scheme to take an incentive fee only after a limited partner withdraws from Pershing Square rather than in an annual allocation based on 12-month performance?

Long-term investors don't pay taxes until they realize their gain -- why should it be different for hedge fund managers?

• They're not great.

I expect Apple (AAPL) to report a disappointing earnings report tonight, coupled with weak guidance.

It is also likely that this report will be cushioned by an increase in the company's stock repurchase program.

• World retail sales of machines fall 12%.

Caterpillar (CAT) releases rolling three-month retail sales for March.

World retail sales of machines fall 12%, total energy and transportation retail sales rise 7%.

And here are the year-to-date dealer statistics.

In this report, the company is providing information by geographic region for retail sales of machines in each of its resource industries and construction industries reportable segments, as well as information regarding total retail sales of its machines globally. For its energy and transportation reportable segment, the company is providing retail sales information by major end use.

• Adding to bank shorts this morning, and to a Tesla short.

In keeping with this morning's note on the flattening yield curve, I have added to Bank of America (BAC), JPMorgan (JPM) and Wells Fargo (WFC) shorts this morning.

I have also added to my Tesla Motors (TSLA) short.

• Back to market neutral.

I am out of my SPDR S&P 500 (SPY) short and back to market neutral.

Trading opportunistically and actively.

•  Here's his view of today's March housing data.

Peter Boockvar on today's economic data:

New Home Sales in March, free of weather excuses, totaled 384k annualized, well below expectations of 450k and down from 449k in February (revised up by 9K) and 455k in January. This is the worst sales month since July and m/o/m declines were seen in the Midwest, South (38k drop) and West. Combined with the most amount of homes for sale since November '10, months' supply rose to 6.0 from 5.0, the most since October '11. The main possible culprit for the decline was a huge 11.2% sequential price increase to $290,000 which is 12.6% higher y/o/y and the highest MEDIAN price on record. This not only likely scared away the first time home buyer but the all cash investors who are seeing their IRR's get hurt. The 2007 peak was $262,600. Bottom line, this poor sales pace in the beginning of the spring selling season explains why the NAHB home builder sentiment has been below 50 for 3 months running. And, a 384k sales pace is below the 1991 recession bottom of 401k for perspective with an obviously smaller US population then. The bright side though is the large upside that should be ahead of us in years to come as households form but also comes with the greater competition from those wanting to rent. The US recovery remains in fits and starts.

The US markit.com national PMI in April at 55.4 was little changed with the March read of 55.5 and slightly below the estimate of 56.0. Smoothing out the winter has the 6 month average at 55.2 vs the 2013 average of 53.5. New orders, backlogs and export orders were higher while Employment was little changed. Both input and output prices were lower m/o/m. Bottom line, while flat m/o/m, the current level of the index still points to good manufacturing growth as it's well above 50. While of note and claiming a high correlation to the ISM report out next week, the market will focus more on the ISM where expectations are for a modest gain to 54 for April from 53.7 in March, 53.2 in February and just 51.3 in January due to the weather. This though would be below the 56+ readings in the back half of 2013.

• The result is consistent with my view.

My constant theme this year has been that the pause in housing would continue and that it would be a linchpin for subpar domestic growth.

This morning's new-home sales figure was a large miss to expectations and consistent with my view on the U.S. housing market.

• Specifically, in the SPY and QQQ.

I took in half of my SPDR S&P 500 (SPY) and PowerShares QQQ (QQQ) shorts just now.

Down to 5% net short.

•  No wonder the average investor feels disenfranchised.

In "Kill the Quants" (ad infinitum) I have continually argued against the unfair practices of High Frequency Trading, a group of traders who have an unfair advantage over most other investors.

This week, Bill Ackman's Pershing Square hedge fund announced it has purchased a large investment in Allergan (AGN) and, with a partner, is planning to acquire the company. 

To me, Bill Ackman's actions do not meet the spirit of the law. 

In substance, Bill has traded on inside information. 

But, technically speaking, insider trading is not illegal (according to current SEC regulations).

That said, Bill Ackman's acquisition of Allergan stock is not (to this observer) representative of a player on an even playing field with the rest of us (investors and traders). 

No wonder the average investor feels disenfranchised, disaffected and unfairly positioned.

• How Bob Dylan's message in 'It's Alright, Ma' applies to the investment business.

Darkness at the break of noon

Shadows even the silver spoon

The handmade blade, the child's balloon

Eclipses both the sun and moon

To understand you know too soon

There is no sense in trying....

Old lady judges watch people in pairs

Limited in sex, they dare

To push fake morals, insult and stare

While money doesn't talk, it swears

Obscenity, who really cares

Propaganda, all is phony

-- Bob Dylan, "It's Alright, Ma (I'm Only Bleeding)"

Arguably "It's Alright, Ma" is the best written Bob Dylan song. It was written in 1964, covered by Roger McGuinn on the soundtrack for the 1969 movie Easy Rider and performed regularly by Dylan and The Band on the 1974 tour during the Watergate scandal.

The song is 20 stanzas long, and the rhyming, imagery and emotional depth are unparalleled. It is dark in content -- a message from the mid-1960s, shedding light on society's flaws.

The song starts with an apocalyptic tone, which was not only a recurring Dylan theme early in his work but it was also a sign of the times. The body of the song deals with the remorseless working of things -- that whatever is wrong can't be stopped. No doctrinaire optimism will turn the ship around by itself.

In the fifth stanza, Dylan relates how the actions of powerful people impacts us all.

As some warn victory, some downfall

Private reasons great or small

Can be seen in the eyes of those that call

To make all that should be killed to crawl

While others say don't hate nothing at all

Except hatred

In the first line below, Dylan sings that if you've read enough history and/or have been a keen enough observer of human nature, you kind of learn what to expect. The second line might be a warning to watch out for people's partisan political agendas.

An' though the rules of the road have been lodged

It's only people's games that you got to dodge

And it's alright, Ma, I can make it

He dishes it out to both optimists and pessimists and their partisanship hang-ups. Later, in the reference to the president of the United States, the minstrel reminds us that even the most powerful are fallible.

"Although the masters make the rules/For the wise men and the fools" points to the anger and disdain that Dylan has for policymakers. And "he not busy being born is busy dying," used by President Carter in his 1976 acceptance speech for the Democratic Presidential nomination and also by Al Gore, means that powerful people will be judged.

Toward the end of "It's Alright, Ma" Dylan submits that a life unexamined is an empty vessel and is not worth living.

Below is how I see Bob Dylan's message in the song and its application to the investment business:

• Read enough history, Dylan relates, and you can learn what to expect in the future. (History and markets rhyme.) The song matches the massive importance we place upon our past and the events that have led us to where we are today and where we might be going into the future.
• Money has great influence, though sometimes its impact is perverse. Think of quantitative easing's impact on markets, the growing schism between the haves and have-nots, and the threat of screwflation that poses risks ahead. (Note: The Fed's legacy of Ben Bernanke might be judged harshly in the fullness of time.)
• The song does not express optimism in the possibility of political solutions. Think of our inert and partisan leaders in Washington and their unwillingness to address our cyclical and structural fiscal problems.
• We are all being fed a false picture of reality in terms of economic growth and corporate profit prospects. Think of the gap between rising P/E ratios and the lowly 10-year U.S. note yield.
• We shouldn't live our investment lives with our heads down and our eyes closed. The investment masses are sometimes ignorant of the fate that awaits them. Think of being a contrarian.
• As Socrates wrote, "the life which is unexamined is not worth living." Investors who don't have a zest for knowledge are doomed to poor investment returns. If you invest without the ambition to garner as much information as possible, you will not likely succeed... "you'd just be one more/Person crying."

While one who sings with his tongue on fire

Gargles in the rat race choir

Bent out of shape from society's pliers

Cares not to come up any higher

But rather get you down in the hole

That he's in

P.S. -- Hat tip to subscriber "jesusishere" for bringing up the idea of this column to me yesterday!

• Beware the banks.

The yield curve (slope between the yield on the two-year and 10-year U.S. notes) has flattened by a large 7 basis points this week.

My recent cautious stance on bank stocks is, in part, predicated on a continued curve flattening, and, as a result, the prospects for net interest margins continue to erode.

I am long Citigroup (C) and Northwest Bancshares (NWBI) and short Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (WFC).

• The firm has raised its holding to over 12%.

Omega Advisorsraises is stake in Monitise (MONI.L/MONIF) to over 12%.