3/23/10 Midday Report: Health care bill passes causing market to turn its head and cough

Money McBags was unable to provide market insight yesterday because he was waiting in line at his doctor's office to receive his now monthly health care rations (sorry, couldn't resist).  Since like 99.9% of Americans Money McBags hasn't read the health care bill (though he eagerly awaits the movie, especially if Alice Eve stars as the naughty nurse and Jessica Biel as her saliva deficient patient), nor does he desire to (Money McBags would rather get a colonoscopy with no anesthesia and a rusty camera), he has absolutely no idea what congress passed but he is 100% sure it is neither as onerous as teabaggers grunt about while flexing their abnormally large brow ridges, nor as ball ticklingly fantastic as democrats pontificate while using their unusually acicular heads for ring toss targets.  More than likely, it will have no effect on anything other than giving people with too much free time (talk radio hosts, congressmen, Rosie O'Donnell's dietician) something about which to get their panties in a bunch (and if it is Brooklyn Decker's panties that are bunched, Money McBags will unselfishlessly volunteer to unbunch them).  So big fucking yawn to health care.  If this country could survive slavery, Andrew Johnson, and Ronald Reagan Jr. in the White House, it can survive an undefined program that accomplishes some good and some bad.  Money McBags will now get off his high horse (mainly because the horse has the munchies from being so high) and get to investing.  Interestingly, the market seems to be unconcerned with the death of America and their 37th ranked health care system in the world as the rally continues despite moderately negative macro economic news.  Existing home sales numbers came out and were down .6% to an eight month low, though in line with the median analyst forecast.  Interestingly, the number of previously owned homes on the market jumped up 9.8% which National Association of Realtors Chief Economist Lawrence Yun claimed was "unusual."  Wow, really Larry?  An increase in homes on the market in a 10% unemployment economy with no job growth and a weakening currency is "unusual?"  It's like calling a rise in the death rate during to the bubonic plague a bit "strange."  Or the increase in internet usage if a Kate Bosworth-Blake Lively college shower scene leaked out as "confusing."  To quote the New York Times (and as always, it may all be made up), "Mr. Yun also cited the winter weather as a reason for some of February’s lackluster results, although sales were strongest in the storm-plagued Northeast and Midwest and weakest in the West."  Great job again Larry.  Apparently the National Association of Realtors has been trolling craigslist for their economic hires and Money McBags only wonders if the pay Mr. Yun in "roses."

In stock news, Google and China are continuing their game of find the button as China has moved to restrict access of mainland users to Hong Kong's Google site.  This is after Google gave a big middle finger to China's censorship and redirected mainland users to their Hong Kong site which features uncensored web access and thus allows mainland Chinese to guess muffs to their hearts content (and if you don't check out the NSFW 1465, you clearly hate life).  Money McBags couldn't be more excited by any of this and eagerly awaits the upcoming pillow fight.  For investors, this should create a buying opportunity for GOOG as Money McBags has said before, China is a small part of their revenues and by the time it can become material, all of this censorship crap will have worked its way out.  In other stock news, KB Homes came out today and said their loss for the Q narrowed from $.75 per share to $.71 per share, so whoop de dam doo.  That's like going from getting your name right on the SATs to getting your name and address right (not so fast Derrick Rose).  Chairman, CEO, and fantasy world dweller Jeffery Mezger said "Encouraging data in recent months suggest that a number of housing markets may be stabilizing or starting to rebound."  He then went on to say those housing markets showing a rebound include Park Place and Ventnor Avenue, but not the B&O railroad.  But fear not for he predicted KBH will return to profitability in the latter part of this year as apparently they will now be building homes out of hopes and dreams.  Finally, Walgreen's posted a 4.6% increase in profits as restructuring charges were less and prescriptions filled were up 6% (no doubt due to people stocking up on prescription drugs ahead of the health care legislation, and yes that is a joke).

In small cap news, Digimarc (DMRC) continues its push upward after signing an agreement with Arbitron ending their lawsuit and requiring Arbitron to pay DMRC $4.5MM and to license DMRC's digital watermarketing patents in DMRC's quest to be a pain in everyone's ass.  DMRC is a very interesting little company which basically has a huge patent portfolio, a bunch of lawyers, and a fuckload of time.  Their most important patents revolve around digital watermarking (and Money McBags would break this market and technology down for you but everytime he thinks about it he teeters on the precipice of catatonia) and they basically go after any company needing to use some kind of digital tracking since DMRC has patented that space like Carrie Prejean has patented stupidity and Thomas Pynchon has patented gibberish.  The point is, this company really doesn't do anything other than litigate the hell out of any real company trying to enforce security or fend off the pirating of their actual online/digital content by claiming patent infringement on whatever security/tracking measures the real company enacts.  In this way DMRC confrontationally secures rev shares for themselves while impeding real innovation in the anti-piracy space (so good on you DMRC for being the digital watermarking bully).  They have around 1/3 of their market cap in cash but no real earnings stream until some of their deals start kicking in in the next few years.  One could argue there is a ton of value here as online piracy picks up and DMRC's patents will get more use, but one could also argue that Weekend At Bernie's should have won an Academy Award.  The point is, this is a very interesting company that holds the keys to a potentially huge market, but their revenue model is not quite there, difficult to fully grasp, and not something in which they have a lot of control.  For anyone who wants to really dig in to a business and an idea, this is a good place to start.  For those of you who don't, this is a good pace to start.