5/5/10 Midday Report: Investors celebrate May 5th with Sink-o de Marketo celebration

Buenos dias on this lovely Cinqo de Mayo as investors smack the market like a pinata in hopes of breaking it open to catch some falling CDS.  Things remain ugly today as Europe is still on the verge of going bankrupt thanks to Greece's steroidal Wimpy strategy of having a gyro today while promising to pay for five of them on Tuesday.  Unfortunately this strategy is finally coming back to bite Greece on its hairy proktos.  Fear continues that Spain and Portugal will be next to need bailouts while even more fear continues that Heidi Montag will put out a new album or Alan Greenspan will find someone to listen to him again.  Moody's put Portugal on review telling the country that they need to start paying down their debts, show up to class on time, and stop throwing spitballs at Spain.  Moody's is threatening to cut Portugal by two notches from the contrived "Aa2" to the less contrived "AaYour'efucked."  Of course as always, Money McBags cares what the rating agencies have to say as much as he cares about John Meriwether's advice on starting a hedge fund or Fabulous Fab Tourre's sales pitch for subprime bonds.  Moody's will likely be late once again to the dance with their downgrade of Portugal as by the time Moody's figures it out, Portugal will long have fled the prom in a fit of tears after busting out of their prom dress and leaving their assets exposed and devalued.  Making matters worse in Europe is that Europeans hate to shower and it's getting hot outside, but making matters even worse than that is that three people were killed when Greek workers protested the new austerity measures yesterday. On the bright side, that is one way for the government to extinguish the debt, though on the negative side it's a bit morally lacking.  In the protests a bank branch also burned to the ground, luckily, the bank only held subprime debt and thus was worth more as ash than as a solvent entity.  And finally, EU central banker Axel Foley Weber warned about “grave contagion effects” of the Greek debt crisis for the rest of Europe but added that it doesn't mean the EU should use every instrument necessary to quell it such as more bailouts, rate changes, or sticking bananas in tailpipes (though if it is Kristin Bell's tailpipe and Money McBags' banana, Money McBags will heartily disagree).

In US macro news, ADP reported that 32k jobs were added to the economy and it was the third month in a row of increases while Challenger, Gray & Christmas stopped by for some milk and cookies before reporting that planned layoffs decreased by 40% from the previous month.  Also, mortgage applications soared to a 7 month high thanks to the ending of the federal home buyer tax credit and an extra strong dose of meth while the ISM reported that service industry expanded at the same pace as last month as a result of a Viagra milkshake and being shown Carmen Electra workout videos.

In stock news, News Corp put up a good quarter thanks to revenues from Avatar which Money McBags will see as soon as he grows a vagina.  The company is trading down 5% though as they warned of a likely fourth quarter profit decline due to rising costs and lower revenues in their Fox network TV business, decelerating revenue in their cable business, and lower revenues in their film division as they are replacing Avatar with a film slate including the sequeals Alvin and The Chipmunks Get Rabies, The Thunder From Down Under Presents: What Happens in Vegas, and My Big Fat Greek Bankruptcy.  In other market news, GOOG is up today on news they are going to start selling e-books and investors realizing that GOOG is only a nut hair away from world domination.

In small cap stocks, Money McBags' biggest small cap holding KITD is getting pounded like they walked up to Brock Lesnar and told him not only is his mom a whore, but she's like a shotgun because one cock and she blows.  KITD has ~70% international revenue so with Europe about to join Atlantis and Chritsina Applegate's breasts in the annals of fictional places that once really existed, it is not a surprise that there is some movement down.  That said, Money McBags believes in this company and is in it for the long term (and by long term, he means until CEO Kaleil Tuzman sells to CSCO or whomever).  Tomorrow pay attention to EBIX reporting quarterly results which Money McBags is sure will look good but will lack any semblance of detail as that business is more obfuscated than John Goodman's belly button or Tiger Woods' sense of dignity.  On any metric the company is a screaming buy yet the red flags with CEO's disdain of the Street, his self promotional nature that makes Kim Kardashian seem like a recluse, and his penchant for changing auditors like Ben Roethlisberger changes alibis, is alarming.  Money McBags is going to stay away but if any of you can get comfortable with whatever it is in the insurance business they are doing other than installing johnson rods, you could have some nice upside.  FHCO also reports tomorrow and with any luck they will have been protected from the European debt disease.  FHCO has had a nice run on good earnings and a newly declared dividend and remains a strange and small company which Money McBags likes.  He doesn't own it as it ran a bit too much for him but he's going to reconsider after they report the Q.  Money McBags did make a couple of trades today by hedging his portfolio with EPV and selling his CIT shares for no reason other than to take profits and get some risk off the table.  CIT should actually fare well with new CEO John Thain, a cleaner balance sheet (but who really knows for sure how clean it is no matter what the 10k says), and a valuation of right around book value.  Should the market continue to drop, Money McBags will look to re-enter CIT while should Abigail Clancy's knickers drop, he will look to re-enter her.