Fucking Europe. Seriously. First they tried to tax us without letting us represent ourselves and you know what, we don't play that way. Then they got all upitty and burned down the White House while poor little James Madison sat on his gelding and got his S'mores on. And after that we've had to bail them out of losing a fucking war to the worst human ever (and Money McBags does not mean Bill Laimbeer), got stuck with Pride and Prejudice being taught to every high school class in America, and were subjected to the fucking Spice Girls. Really? Jeesh. As if Europe has not treated us poorly enough by using us like a young lady in Lawrence Taylor's hotel room, now they have decided to have their whole fucking economy go to $0 because the loose union of countries can't keep the weakest links from exhibiting worse moral hazard than Magic Johnson's wife after finding extra strength condoms. Sure, we fucked up the whole financial system first, but for fucksake Europe, at least we know whom to blame. So clean your shit up because Money McBags doesn't want to have another revolution and have to throw your tea away because his tea bagging is reserved for Faye Reagan only. As an aside, Money McBags is aware that every example he used above refers to Britain and their tea and fucking krumpets eating, bad teeth having, and fag smoking nation, and that Britain does not use the Euro and therefore is not the problem. That said, his commentary stands after all, we all know it wasn't over when the Germans bombed Pearl Harbor.
In US macro news, ain't a lot of good shit going on today. New claims for unemployment spiked to 471k, up 25k from last week and the first rise in five weeks which surprised everyone but the 20MM people looking for jobs. Riddle me this, with unemployment so high, how the fuck are all of these economists still getting paid for adding absolutely no value? It is a more fraudulent occupation than the Chief Compliance Officer at Goldman Sachs or Lady GaGa's stylist. Not only were new claims for unemployment up, but the index of leading indicators was down .1% which was worse than economist guesses for a .2% gain as apparently they confused the word "leading" with "made-up." Finally, the Philadelphia Fed said manufacturing rose to 21.4 but was short of the 22 predicted by consensus estimates. In that same report, the jobs number fell and more unemployment is only going to do wonders for the lovely metropolitan Philadelphia area where the motto is "if it's not nailed down, it's ours."
Politically, the SEC continues to investigate what is now being called the "flash crash" because "high frequency trade off," "stock schlock," and "holy fuck what just happened" apparently weren't catchy enough. When they're done investigating the crash and can completely rule out trannie porn as the cause, Money McBags hopes they investigate why the market is going to $0. Also, Senate Democrats apparently voted down a proposal for financial reform because Senators Feingold and Cantwell didn't think the proposed regulation went far enough and Money McBags applauds the state of Washington's lovely Ms. Cantwell who couldn't well pass the current legislation without stricter rules on derivatives. The junior Senator said "Even something like Hoover Dam with all of the great concrete and all of the great engineering and all the great things that make that structure work, still has a problem if somebody drills a hole in the bottom of it." Well said and to be brutally honest, Money McBags trusts any 51 year old single, never been married, woman when she talks about needing to proverbially put fingers in dykes.
Internationally, well, internationally things are more fucked than Dexter Manley in a spelling bee or Keynesian economics. Germany's ban on naked short selling continues to spook the market as German traders all run to their nearest Breuninger's to load up on slacks. Making matters worse is that Greek workers are on a 24 hour strike, or what used to be known as "Tuesday." Money McBags isn't saying that Greek workers are lazy, but does it really take more than 300 years to clean up some rubble from the fucking Parthenon? I mean we now have things called cranes and bulldozers. Luckily, French economy minister Christine Lagarde said: “I absolutely do not think that the euro is in danger” before adding "it will provide great kindling for Europeans when they can no longer afford heat."
As for stock news, well, everything was down, especially financials though the always optimistic, rarely right, and yet deliciously named Dick Bove (rhymes with "oy vey") said banks stocks "may fall another 10% to 12% reflecting market fears but they are still very attractive investments." He then opined, "Longer term, I still expect that these stocks will grow in multiples, not percentages, as long as we feed them after midnight, expose them to bright lights, and dunk them in water." SPLS actually put up a good Q today, unfortunately the market cares less about performance than a John Meriwether investor. Staples CEO said he is a little more optimistic than he has been and raised the low end of guidance for Q2. Williams-Sonoma also posted better than expected profits, raised guidance, and said they are getting more positive about their customers coming back as apparently there is still a demographic that likes to buy overpriced shit that they don't need. Also, Game Stop also put up a good quarter thanks to popular games like "Battlefield Bad Company 2," "God of War III," and "Erin Andrews Peephole Finder." It's no surprise that a video game retailer would put up a good quarter because stoners are still selling the shit out of weed, something about inelastic demand. Finally, Sears put up a shit awful Q simply because they are Sears.
In small cap news, everything is going haywire again except KITD has somehow moved up on another high volume day. Money McBags has talked about KITD all week but their sell of was overdone if you believe management. The spike in A/R has investors worried, especially as those receivables are tied to european revenues but management had a mostly logical response to the spike which Money McBags broke down the other day. One of Money McBags' favorite small shorts (along with Bridget the Midget), WGO, has been getting hammered lately and he'd like to think it is because investors are finally realizing this company is not going to break even for at least another year and not just because everything is down. WGO simply does not earn money and now that inventories have been un-destocked, they can't play the positive cash flow game anymore. Even if WGO were to somehow earn money, for the stock to trade at its current price of ~$12.50, WGO would have to earn $1.25 next year because Money McBags would never pay more than 10x for a company selling an expensive discretionary good with little operational flexibility in the biggest recession since Herbert Hoover stuck to the gold standard. So if you want to play the downside, shorting WGO is a decent option. That said, when the market settles down, Money McBags will be looking to add with companies like CTGX, ARTG, TMRK, RICK, and QCOR on his to buy list. But hey, be careful out there.