6/2/10 Midafternoon Report: Market runs in the late afternoon as it attempts to get home in time for Oprah

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5/3/10 Midafternoon Report: Consumer spending up as sales of moral hazard increase (though to be fair it does come in blue this season)

Stocks are off to the races again today and the good news is that the market is seemingly being ridden by Calvin Borel.  Sending the market up is that Greece is once again set to be bailed out, Warren Buffet was out defending Goldman Sachs, and people are spending more than they earn.  Hold on a second on that last one.  Now look, Money McBags is no historian (though he knows the difference between Dred Scott and Avy Scott, knows that neither tea nor pot was involved in the Teapot Dome scandal, and knows that the War of 1812 not only ended in 1815 and thus is a bit of a misnomer but also ushered in the "Era of Good Feelings" where bipartisanship was shunned and taint tickling Tuesdays swept the nation), but spending more than one earns is what got us in to this whole fucking recession.  Anyone remember the popular sport from the mid 2000s called flipping fucking houses?  Well it caused the economy to be flipped as people just borrowed the fuck out of shit because banks were able to package all of those crappy loans and sell them to yield hog investors who wanted those extra 10bps of interest income.  The point is, consumers not managing their personal balance sheets with eyes on the future (though if their eyes were on Katie Price, Money McBags can almost forgive them) is a recipe for fucking disaster which we just learned, oh I don't know, 24 months ago.  Ugh.  To highlight the shortsightedness of consumers, consumer spending was up today, but it grew twice as fast as incomes grew.  And if you do the math on that (and remember, math likes to be done in the reverse cowgirl position), that means savings declined, which again, is exactly what got us in to this mess.  American people apparently just like buying shit and then whining about it when they lose their jobs and can't afford to pay their too expensive mortgage or their maxed out credit card bills.  This is a nation of infants and if they don't figure it out soon, Money McBags is going to go door to door with Jeremy Grantham and the pinheaded Suze Orman and he and Jeremy will take turns buggering Ms. Orman and her inflated FICO until people understand having money saved for retirement is more important than buying a new Shake Weight.  Rant over.

In other macro news, manufacturing grew at its fastest pace since 2004 as the ISM's factory index rose to 60.4 which was inline with analyst guesses.  The growth was driven by new equipment orders and increased production of default notices.  Also new construction was up modestly, but the fact that it was up at all has Bulls giddier than Peter North's son on take your kid to work day.  What drove new construction was public construction which was up 2.3% and state and local government construction which was up 2.5% as new line dividers were constructed to keep the crowds at the unemployment office running smoothly.

Internationally, Greece is getting a 110B bailout in euros over a three year period, until tomorrow when Angela Merkel's cold feet and colder heart once again change her mind.   To get the bailout, Greece has to instill a 30B austerity plan, cut their debt, and promise to tell native born son Yanni to shut the fuck up.  Even with the bailout,  Greece's debt is estimated to rise to 140% of GDP in 2014 which is a whole lot of souvlaki they can't afford.  The bailout may be giving investors a day to breathe a bit easier but with the amount of debt Greece is going to have to repay and the cuts to their publc spending, the country is now facing real threats of deflation and the first potential revolt since Alexander Ypsilantis led the Filiki Eteria.

In the markets today, Warren Buffett was out defending Goldman because, well because he owns a fuckload of GS preferred so you know, he has to defend his fucking book.  Buffett defending Goldman is about as much of an endorsement as Michael Brown defending the hurricane Katrina response, Jerome Kerveil defending his trading, or Tara Reid defending plastic surgery.  So big fucking yawn there.  In other market news, United and Continental  announced a $3B merger.  The deal was actually consummated a month ago but was held up due to weather (feel free to steal that one Jay Leno).  And Apple annonuced they sold over 1MM iPads thanks to them coming installed with Diora Baird wallpaper.  Lastly, semiconductor sales were up 4.6% in March as PC and smartphone sales continue to rise and inventories climb back to normal levels.  Money McBags is longer the technology/smartphone trend than Lexington Steele is before a scene with the lovely Lisa Ann.

In small cap news, Money McBags bought TMRK close to the open today in the mid $7.30s.  He has talked about TMRK many times (starting on 1/4/10) and finally pulled the trigger for no particular reason and he has no idea why it is up so much today other than the fact that Money McBags is a market mover.  Money McBags is feeling better about TMRK after they raised $50MM last week which should give them enough growth capital and they are still trading at a discount to larger peers.  TMRK has a competitive advantage in that they have a lot of government business (~22% of revenue) and they are in a market growing 20% a year with some big players (Amazon, Google) who are clearly going to be looking for acquisition targets to consolidate the space.  TMRK is trading ~9x 2011 EV/EBITDA estimates but that is lower than where EQIX bought SDXC and not only that, but VMware who is the leading software developer in this space (and portfolio holding of Money McBags) has a nice sized investment in TMRK.  If VMware doesn't know this space better than 99.7% of the world, than Money McBags will eat a giant shit sandwich with extra diarrhea.  Now Money McBags doesn't expect this stock to rocket up any time soon as they are still going to have lumpy quarters and are still investing in building out data centers, but cloud computing growth is more real than Pam Anderson's tits (though perhaps that is a low bar) so TMRK should continue to be in a fragmented multi-year growth industry.  In other small cap news, NTRI reports tonight and Money McBags is very curious to see what happens to their advertising spend.  If you remember, two months ago Money McBags broke down NTRI's craptastic guidance which was so bad it caused investors to throw up for days and thus more effectively lose weight than using NTRI products.  The company is still trading ~7x EV/EBITDA which is pretty cheap for a solid cash generator and nice business model when they aren't fucking up their advertising strategy.  Money McBags has no idea what NTRI's Q is going to look like but it is worth paying attention to tonight because the stock should be more volatile tomorrow than Mike Tyson after missing a week of his medication and having some of his pigeons stolen.  This could be a good entry point (though still not as good of an entry point as Jessica Alba's derriere), so pay attention to earnings.

2/12/2010 Pre-Market Report: China tired of Greece stealing headlines, raises reserve rate to try to be January's Economist centerfold, promises to show their Shanghai if selected

It's a travel day for Money McBags so we'll get to the market news early.  The big story which should give pause to the market (and by pause, I mean send it into a bit of a downward hissy fit like someone at Fox News after trying to spell USA without a teleprompter) is that China is raising their bank reserve requirement once again in order to put a damper on growth.  China has been fueling the global recovery as they not only provide cheap, flimsy, and lead ridden goods for the world, but they are growing internally faster than a metastasizing anal fissure.  This is the second time in month China is raising this reserve rate in their attempt to show the world that they are not fucking around and will try to avoid Greenspan's folly.

Also likely to send the market down today is Europe's recovery being more stagnant than Demond Wilson's acting career.  GDP rose .1% in Europe which was only slightly below the .3% estimate but traders will likely overreact because volatilty to them is like spinach to Popeye or like Amanda Seyfried to Money McBag's "popping eye" (and yes that is a very bad euphemism, but you get for what you pay).  This slow down in Europe's economy could not come at a worse time as markets are still trying to figure out when/how the EU intends to bail out Greece.  It's like the EU has hired the underpants gnomes to solve the potential debt crisis.  Step 1:  Hint that you will bail out Greece.  Step 3: Recover.  Unfortunately, those people with actual working cerebral cortexes (Which rules out the delightful Carrie Prejean and the guy who invented Nuts 'n Gum) understand that there has to be a more substanial plan (and as an aside is the plural of cortex, cortexes or corti?  Can someone exhume William Safire and get a ruling on this?  Money McBags is not always a cunning linguist).  Money McBags is sure that the EU will come to Greece's aid, because the Euro is not going anywhere, so until then, traders will just have their fun by continuing to bring volatility to the market.

There's not a lot of stock news yet but Berkshire Hathaway will be entering the S&P 500 today which should nudge it up a bit higher and maybe even cause Warren Buffet to take off his trifocals, pull up his breeches, tighten his cravat and gingerly smile before going back to his game of whist.  In small caps, EHTH announced their quarter and revenue was a bit light on application growth struggles.  EHTH is an interesting name in that they provide a network for people who do not have employee sponsored health care to get health insurance.  The company should be booming right now with so many people signing up for Cobra that GI Joe may get slaughtered (and yes, that was an unfunny and terrible joke).  EHTH has had a solid balance sheet, great ROEs, and a terrific business model, but Money McBags is a bit confused as to why they haven't been able to see stronger growth and if they are not booming in this environment, when will they?  Money McBags has not had a chance to go through their quarter yet or listen to their call, but will be surprised if they don't sell off today.

Enjoy the weekend.

1/27/10 Midday Report: In bid to increase approval ratings, Obama to unveil Apple Tablet at State of the Union address as a panacea for US budget problems

The market continues to limp it's way down as investors await tonight's State of the Union address where President Obama is likely to whip out his small business tax breaks and smack them against a non-defense discretionary spending budget freeze.  This budget freeze supposedly applies to 17% of the Federal budget and will have enough loopholes in it to make it less well-followed than the failed reality TV series: Federal Reserve Bank Governor Idol (though Sandra Pianalto yelling at Chuck Evans for leaving the toilet seat up in the house was must see TV).  It does likely mean that the president won't be getting the X-Box he asked for for his birthday as times are tough.  In addition to Obama going after the budget tonight, Apple is set to finally release their new tablet which has techies more excited than they were for the release of Avatar, extra-strength Accutane, or Olivia Munn's Princess Leia photos.  Honestly, Money McBags has not seen anything this eagerly anticipated since the release of those vapidly redundant Harry Potter books or Hanna Hilton's first girl on girl scene (and Money McBags gave that two bums up).  The tablet is supposed to be so awesome that it is said to have cured Steve Jobs' cancer and to run on the tears of baby unicorns.  And finally, the FOMC is meeting today with Bernanke expected to keep rates at their current 0 to 25bps or what we in the business call "free."

While the market awaits that news, there were some macro-reports that came out which highlight the worries people are starting to get about the economy.  New home sales fell in December by 7.6% and were short of expectations as analysts expected sales to rise (and I believe this now makes analysts' incorrect prediction of the simple 50-50 guess at the direction of home sales statistically significant at the 95% level, so they've got that going for them).  Home sales were down as a result of the government tax breaks drying up and the forgotten fact that no one has any money.  Plus as the job market is more frozen than an Alaskan's nuts after a midnight skinny dip in Lake Chilkoot (and yes that is really the name of Lake in Alaska), people simply aren't moving.

In world news, Greece teeters on bankruptcy causing investors to stock up on credit default swaps of sovereign debt and all the tzatziki sauce on which they can get their hands.  Greece is trying to remedy the situation by pawning off 25B of Euro bonds to China as well as stadium naming rights to the Parthenon, and the Golden Fleece.  The flight to quality and away from sovereign debt like Greece has caused one month treasuries to have a negative yield for the first time since March of last year which is about as good of an omen for the stock market as stairs are for Stephen Hawking.

Berkshire Hathaway's B shares are shooting up today like a young Drew Barrymore as word is they will be added to the S&P 500 index after their acquisition of BNI.  Also, Toyota announced they will be shutting down production on eight lines of cars which make up 57% of their 2009 sales due to problems with the accelerator pedals seemingly caused by something called a friction lever.  A friction lever joke is way too easy for Money McBags but this bears watching as the street wonders if Toyota has started to slack on their quality which has been their competitive advantage.  In other stock news, YHOO turned a profit despite a 4% drop in year over year revenue.  Revenue was up 10% sequentially and management said they see search revenue stabilizing so any investor who wants to own a portfolio of market laggards, now is your time to buy.

As for small cap stocks, ZAGG once again continues to trade down making Money McBags' bet on 12/31/09 seem even better as it was likely risk free.  So just remember, betting against Money McBags is like challenging Greg Oden to a cock off (very NSFW or actually anyone, but the news needs reporting), you can't possibly win.  And SMCI put up a huge quarter.  Now SMCI basically makes custom servers and server solutions for businesses, usually being the first to market with new INTC chips, hence the Nehalem release has been driving new business for them.  They just put up $.22 of earning per share on $182MM of revenue (up 42% y/y), easily beating analyst estimates of $.17 and $160MM.  The company also gave above street guidance of $.18 to $.21 eps for next Q and $180MM of revenue in what is typically a down quarter for the industry.  SMCI is an extremely well run little niche company with $82MM of cash on their balance sheet and no debt.  They have a competitive advantage in that they are small and nimble (like Speedy Gonzales or the slightly smaller and more nimble, Shawn Johnson) and therefore can be first to market and customize at the same time.  The company may be peaking but on the call management said they could get back to 30% growth rates as the end of the year should be good for them with AMD and INTC introducing new products.  Estimates for fiscal 2011 are for around $1.10 and they are currently trading at 13 or so times that not including their cash after today's run up.  This should be a cyclical company and this may be the top of the cycle as they have just strung together some very good quarters so Money McBags would not be buying today as the easy money has likely been made.  That said, this really is a quality company and has proven over time that they are good at what they do and well managed.  Should there be a dip, this is definitely a company to accumulate but either way it is worth doing your own research here as they could continue to outperform.

1/5/10 Midday Report: After 330 years, stock market proves Isaac Newton wrong: Gravity, schmavity. What goes down, must keep going up

The market continues it's latest rally despite at best mixed news today.  The biggest news is that pending home sales dropped more than Dolly Parton's boobs have in the past 5 years (and for the record, she now calls them "anklets").  The 16% drop was more than the expectation of a 2% drop after a 3.7% gain last month.  Of course the gain last month was due to the first time home buyer tax credit which stimulated the existing home sales market like Simona Halep once stimulated the WTA.  The number today should not be shocking as when there are incentives for something, and then those incentives go away, that behavior does not always remain when it comes to a non-reflex behavior like Economics.  You hear that Pavlov?  You can keep ringing that bell, but I know there is no tax-incentive in the dish, so stop fucking with me and get me my $5k deduction while I lick my balls some more.  On second thought, I'm just gonna keep doing this, so you can get me the deduction later. Arf.  Therefore, it is not surprising that the initial sell-off in the morning based on this news has reversed.

The one real effect of the news though was the dollar falling again as optimism that the Fed will raise rates sooner rather than later is beginning to wane, like Alan Greenspan's misguided influence.  This thought was reitirated yesterday at The Boar's Nest by Fed Governor and Bo and Luke's long lost and full chromosome having cousin, the lovely Elizabeth Duke.  Ms. Duke was quoted as saying:  "In the current environment, the FOMC continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."  So perhaps Greenspan's influence isn't waning afterall, ugh.  Duke then went on to say, "to quote my good friend Roscoe P. Coltrane, in time, the economy will be "Good, Good, Good.""

In market news, Ford has reached it's highest price since 2005 as traders anticipate Ford's December sales numbers which are being released today.  A strong number will be very positive for the economy because if people are buying Ford's shitty cars, they will likely buy anything and thus discretionary spend will be back.  Finally, Kraft upped their offer to buy Cadbury to the tune of issuing 370MM new shares in the proposed take over.  This has drawn the ire of Warren Buffett who owns a 9.4% stake in Kraft.  Buffet argued that issuing shares will dilute the already cheap Kraft stock at a price $6ish below where Kraft bought shares back themselves in 2007, will give Kraft a "blank check" to renegotiate the deal higher whenever they want, and will make him really really angry to the point that he will go to his room and not come out or talk to anyone until the company rejects the plan.  The 78 year old Buffett was then heard to complain about those damn kids on his lawn, CBS's decision to take Matlock off the air, and the fact that dames no longer have yams like Eleanor Powell.