3/25/10 Midafternoon Report: Bailouts, stimulus, and earnings. Oh My!

The rally is on again as Germany says they will back Greece, earnings are crushing estimates, and Bernanke is going to continue to stimulate the economy like he's the delightful young actress Jessica Pare (moderately safe for work) and the economy is Money McBags.  Bernanke spoke to the House Financial Services Committee today and he tried his best to use small words so the elected officials could understand him.  Bernanke reiterated that "The economy continues to require the support of accommodative monetary policies" and cited the high unemployment numbers, the weak housing market, and the decline of Paul Reubens' career.  He did say that the Fed has a plan to tighten monetary policy and he will do so at the appropriate time even if it causes Alan Greenspan to roll over in his grave.  More importantly, new claims for unemployment fell by 14k to 442k which was 8k below economists' forecasts (forecasts called for it to be overcast with a chance for showers and instead it was sunny and thus caused the showers to be golden to the delight of urolagniacs everywhere).  11.1MM people are still claming unemployment which is only slightly fewer than the number of people in Ohio or the number of pornstars claiming to have seen Tiger's wood, so it is still a big fucking number.  Economists think that if the new claims for unmeployment can drop to 425k, that could signal job growth, of course most of these same economists also thought that home prices could go up forever, that steady state unemployment could be achieved, and that Adam Smith actually had an invisible hand, so be careful to whom you listen (and as an aside, if Money McBags had an invisible hand it would be firmly attached to Bar Refaeli at all times).

In international news, Germany's Chancelor Angela Merkel told the EU and Greece that Germany would support aid to Greece if the IMF were to be involved and if the Greeks finally cleaned up the Parthenon (I mean seriously, it's been around for 2,500 years.  Can someone in Greece do like 1 days work and just dust around the edges a bit?).  France is backing the German plan which marks the first time these two countries have worked together since their ill-fated Broadway run in the musical Les Miserables Time We Had On Das Boot: A Love Story.  Not only did Greece get positive news, but Dubai is putting up to $9.5B in to Dubai World and it's failing real estate business to make sure that the illusion of grandeur can continue.  Dubai World creditors will be paid back in 5 to 8 years or just in time for the next bubble.

The big news of the day has been in the US stock markets where earnings have continued to impress like Beethoven on "Take your kid to work day" or Salma Hayek at a treasure chest convention.  Best Buy easily beat their numbers posting a profit of $1.82 per share vs. analyst guesses of $1.79.  They also gave full year guidance of $3.45 to $3.60 per share which is well above the $3.36 consensus analyst guess.  Same store sales rose by 7% after the company cut prices on flat panel TVs and started offering free taint massages for any purchases over $2,500.  Best Buy also announced further international expansion, continued stock buybacks, and Olivia Munn to be in charge of the Geek Squad's free "modem adujstment" promotion.  In other stock news Qualcomm is off to the races after they raised their expectations for the second time.  They now think Q2 earnings will be between $.56 and $.58 per share which is higher than analyst guesses of $.53 and higher than previous guidance of $.49 to $.53.  They cited better licensing revenues and the addition of crack cocaine directly into their Snapdragon chipset.  Both QCOM and BBY are up 7%+ on the day as investors run to chase good news like Alabamans chase leprechauns.

In small cap news, Money McBags ditched his RICK shares and it really hurt him to do so.  The easy money had been made, though in positive news for those still holding RICK, Money McBags will be putting a portion of his >50% profits back in to Rick's business through the purchase of many Jack and Cokes without the Coke while watching the fine classically trained dancers.  In other small cap news, you might be able to make a momentum trade on CRTX.  Money McBags wrote about CRTX after their Q in the first week of March and they seem to have picked up some steam since then.  They are up 7% today on no news and slightly higher than average volume, but they have been steadily rising for the past couple of weeks.  The company still has a ton of risk as their top selling drugs are in decline, they gave away controlling interest of the company to Italian pharma company Chiesi last year in order to help their balance sheet and acquire new drugs, and their operating record is thinner than Keira Knightley.  If you believe their projections though, they are trading at only ~1.5x sales and that is way too low for a real company to be valued (of course this may not be a real company like, Nohjay Nimpson may not be a real name, oh wait, scratch that).  So if you're feeling lucky, this is a total momentum trade with absolutely no news behind it other than valuation seems relatively cheap and thus your downside should be limited (that is if the company's proections are accurate).

12/14/09 Midday Report: Abu Dhabi on a Dubai-ing spree for Christmas (or whatever the fuck they celebrate)

Before we get to the midday report, we all need to pour out a little Courvoisier (or whatever your revealed preference for drinks may be) for noted Economist Paul Samuelson who passed away at age 94  Samuelson did his best to try to bring legitimacy to the completely made up and theoretical field of study called Economics, which as every good professor will tell you does not work in the real world, like "just being friends" and Eddy Curry.  Samuelson wrote the most famous textbooks on Economics and luckily he was reading one as he passed away so he died peacefully in his sleep.  A big Money McBags moment of silence for Professor Samuelson.

In market news, Abu Dhabi is bailing out $10B of Dubai's debt which would be great if Dubai didn't owe another $150Bish (but why let math get in the way of a market rally?).  If 14 other Dubai neighbors each pony up $10B, this should all blow over like Eliot Spitzer's dalliances.  I mean nothing ever came of those, right?

As for stocks, C somehow raised enough money to pay back their TARP funds just in time to get the government off their backs so they can pay out end of year bonuses (and really, if anyone deserves a bonus this year, it is the management team of C, who never saw value they couldn't destroy.  They are to banking talent what Sarah Palin is to syntax).  Also, Exxon is spending $31B to buy XTO Energy, a domestic producer of natural gas.  Hey Exxon, instead of dropping $30B on XTO, how about just giving me $10MM and I'll stop off at Taco Bell daily, order 5 bean burritos, and give you all the natural gas you need.  That's right Exxon, I got your natural gas right here.  OH!

11/27/09 Midday Report: Dubai? Do Sell.

Money Mcbags hopes you all had a good Thanksgiving and were able to "stuff a turkey" thanksgiving night after stuffing yourself with turkey thanksgiving day.  But Thanksgiving is over now and the markets are taking a dive because apparently Dubai can't pay off their debts.  Honestly, this is about as surprising as finding out strippers aren't dancing just to put themselves through college and Britney Spears had boob implants.

For those of you who haven't been paying attention, we're in a bit of a global recession led by financial derivatives exciting a real estate boom.  Over that time, one of the most developing countries was Dubai who now features one skyscraper per every two people (I get floors 1-50, you can have 51-99, and floor 100 we'll just turn into our own personal oda).  Well now apparently Dubai World (the investment are of the Dubai government) wants to suspend their repayments of $60B of debt.  Uh oh, UAE we have a problem.

Money McBags isn't too concered over this since it should have been baked into forecasts.  Dubai having debt issues caused by construction has been known for quite awhile, just ask small public construction management companies like HIL (and Money McBags thinks HIL is a nice little play for you small cap ladies out there looking to add some "steel rods to your portfolio" with little inventory risk.  Actually, it would even be a good play for the guys too.).  The point of all of this is we are still in turbulent times and commercial real estate is still overvalued whether it's in the US, Dubai, or Uzbekistan since we are in a global economy.  So as always be smart out there and remember, Money McBags is here for you.