The market sold off today as it couldn't keep ignoring the data and finally had to come to grips with where the bad macro news had touched it. The biggest negative was the Fed's Beige Book report which failed to titillate the market like either Money McBags' book report on the Kama Sutra (which he described as both thought provoking and delicious) or Fonzie's little black book.
In Bernanke's beige book we found out that economic activity has slowed in some areas and that Federal Reserve Bank President of Cleveland Sandra Painalto doesn't let you get to second base on the first date (Newsflash Sandy: If you ever want to get out of Cleveland, you're going to need to loosen up a bit, lower your reserve standards, and give Bennie B. some of that gold you've been hoarding). Eight of the twelve regions tracked by the Fed saw growth including New York, Richmond, and Andy Roddick's pants (he is married to her, you know that right?), while Atlanta and Chicago saw a slowdown, and Cleveland and Kansas City held steady. The Fed cited high unemployment, an ailing housing market, and consumers being more fucked than Lisa Ann in I'm a MILFaholic as reasons for the slower than hoped for recovery.
In other macro news, durable goods orders fell by 1% in June while analysts had guessed they would rise by 1% which makes guesses just an absolute value sign away from being correct which is a fuckload better than usual. Orders for long lasting goods like machinery, metals, and herpes were down the most they have been in almost a year and a half. Even worse, non-defense aircraft orders tumbled 25.6% after falling 30.2% last month as airlines brace for the continuing growth of staycations and poverty.
Finally, mortgage applications fell 4.4% last week but were led by a 5.9% drop in refinancings as rates ticked up 10bps and anyone who still owns a non-foreclosed upon home has pretty much already refinanced it. Surprisingly new home purchase mortgage applications were up 2% but since the majority of those will likely be rejected, that 2% number is more fictitious than the easter bunny, santa claus, or male affectionate lesbians.
In stock news, RIMM jobbed it's way up today despite the bad taste it has left in investors' mouths as of late. Rumors are that the company will be launching a new operating system and potentially a new keypad before officially giving up to AAPL and thus becoming the second biggest thing to ever be defeated at Waterloo (fyi, RIMM's headquarters are in Waterloo, Ontario).
Also, BA nosedived a bit after reporting a strong bottom line but a weak topline which was down 10% from last year. The company did reaffirm guidance which was slightly below analyst guesses but BA promised their new 787 would be more spacious and thus allow more opportunities for flyers to join the mile high club. And finally, Moody's lowered their ratings on banks BAC, C, and WFC from stable to negative citing lessened government support for banks under new regulations and something about shitty track records which means those banks are going to eventually need that lessened government support. And if any company knows what a poorly run company who sucks at their jobs looks like, it is certainly Moody's who never saw a huge market collapse it couldn't misinterpret.
In small cap news, beta sold off as these stocks had run strongly over the past week or so as if they were trying to catch a glimpse of the delightful Melissa Archer and thus it's not surprising that investors would want to take profits. CTGX reported last night and results were pretty much inline with Money McBags' expectations. The company grew revenue 21% thanks to both strong staffing and health care services businesses. Health care services is now 27% of revenues and should start driving this business like Nipsey Russell drove all of the housevies crazy on the Hollywood game show circuit in the 1970s. In addition to a solid topline, SG&A was down 120bps, operating margins were up from 3.6% to 4.3%, and EPS went from $.09 to $.12.
The stock sold off on the day though due to the general market taking it in the yingus and lowered full year EPS guidance by CTGX due to a reduction in demand for solutions work from one of their large customers in their energy practice. Excuse me while Money McBags yawns on this one. Full year revenue guidance was increased to $320MM to $328MM from $314MM to $322MM (which is 18% growth) while eps guidance was reduced to $0.45 to $0.51 from $0.47 to $0.55 and although it is down, it is still a 26% increase from 2009. But the point is, Money McBags gives less of a shit about 2010 guidance than he does about Alan Greenspan's thoughts on the housing, Nassim Taleb's thoughts on lyrical prose, or Audrina Patridge's thoughts on anything other than which hole to enter.
As said frequently in this space, the coming electronic medical records implementations (and they are coming because the government has mandated them, not just because they ran in to Sonya Kraus in the hallway) are going to be huge for CTGX. As the CEO said in the press release: "We believe we are still in the early stages of the significant increases in demand expected for EMR assessments, systems implementation, and development work."
This Q, EMR was 1/2 of their health care business which was ~$10MM in revenue and means they were working on 13-20 installations at ~$2MM-$3MM a project annually. But the thing is, only ~10% of hosptials have EMR and they are MANDATED by the fucking government to have them at least underway by 2014 so this business should scale faster than a business selling bronzer, or Valtrex, on the Jersey Shore.
Money McBags has gone through his valuation on CTGX here on When Genius Prevailed many times, so feel free to throw it in the search box, but this company is set for strong growth over the next few years so use this sell off as a potential buying opportunity. Obviously the lack of trading volume and the fact that CTGX's boring staffing business is still ~70% of their revenues is a concern, but as long as EMR is on the way and this company isn't full of shit about their ability to service that sector as aplombly as Bunny De La Cruz services the ding dong sector, the company should see solid growth.
And remember, When Genius Prevailed is on Facebook and Twitter.
Showing posts with label Moody's. Show all posts
Showing posts with label Moody's. Show all posts
Wednesday, July 28, 2010
Tuesday, July 13, 2010
7/13/10 Midafternoon Report: The market is AA-ok as Alcoa foils bears
The market was off to the races today as if it the races were going to feature Usain Bolt taking on Sara Jane Underwood in the 100 meter dash with the loser having to run a lap in the buff. The big news of course was that Alcoa started off the earnings season by destroying analyst guesses of $.12 eps by earning a whopping $.13 per share in the last Q. That's right, the fact that a whole extra penny (with rounding) is the difference between a down market and an up 2% market makes as much sense as the theory that gravity is an illusion or candwiches.
Making it even more ridiculous is that as ZeroHedge points out, just last month Bloomberg showed consensus analyst guesses of $.16 for AA's Q. So with analysts lowering their guesses before the quarter, AA is now back to where it was when guesses were for $.16 so the would have been $.03 miss has been mitigated by strategic downgrades. Brilliant stuff. As the late great Kurt Vonnegut would say, "No damn cat, and no damn cradle." Analysts are now quickly dropping their guesses on companies across the board because they only get paid when the market goes up and with unemployment benefits going away, they need to keep their jobs like Kathy Griffin needs to keep off of HDTV. That said, AA did raise their guidance for aluminum consumption for the year from 10% to 12% and revenue was up 22% despite cratering aluminum prices as a result of demand slowing down and oversupply given that aluminum is the 3rd most prevalent element in the earth, behind only oxygen and whatever medal Mr. T wears around his neck. That said, the declining prices and rising energy costs are hurting overall profitability but with foreclosures up, demand may surge as the recently homeless grab sheet aluminum to build shanty towns to be known to future generations as WhothefucklentthosepeopleallofthatmoneyVilles or for short Goldmanvilles.
In macro news today, the US trade gap widened to 4.8% or $42B, which is the largest since November 2008 and a gap wider than between the antenna on a new Apple iPhone or the gap between Paris Hilton's legs on a Sunday morning. Not surprisingly, a trade gap is the exact opposite of what economists had guessed and thus once again proves that "economist" is not a real job, like rap music spell checker. Imports were up 3% thanks to a 12% increase in imports from China which, as pointed out yesterday, was driven by people not having any money and thus only being able to afford the cheap shit made overseas. US exports continued to see strength, which is a bit surprising given the weakness in the Euro last Q, as they were up 2.4% which was their best month since September 2008 when the US instituted buy one get one free Wednesdays for foreign countries.
And finally, the National Federation of Independent Business (known better as NFIB or "irrelevant") said optimism declined among small businesses by 3.2% in their monthly survey to which no one pays attention to anyway. NFIB's chief economist William Dunkelberg (who is still smarting from his decision to leave his hosting gig at Small Business Idol to pursue other career opportunities) opined that: “Confidence is lacking and the news out of Washington is discouraging. Until this changes, don’t expect small businesses to start hiring.” He then went and stole an ice cream cone from a little kid, told his wife she looked fat in those jeans, and ordered a ton of coal so he'll be prepared to adequately fill the stockings of everyone at the NFIB during Christmas time.
Internationally, Moody's cut Portugal's debt rating by two whole notches which means absolutely nothing to Money McBags as he cares what Moody's has to say about rating debt as much as he cares what Art Laffer has to say about tax policy, Jeffrey Dahmer has to say about cuisine, or Mel Gibson has to say about anything. Moody's dowgrade stems from Portugal's national debt having risen sharply relative to GDP as a result of stimulus measures and the 168 siesta hour work week. Moody's also warned that weak growth would weigh on government finances for two or three more years while Portugal warned that weak analysis would weigh on Moody's finances for eternity. European markets are up on this news as even they realize that Moody's is worse at their job than a eunuch sperm donor or Alan Greenspan.
In large cap stocks, just about everything was up as we move in to earnings season with INTC, C, BAC, and GOOG to report this week so hopefully analysts already lowered their guesses in order to keep the market moving. One interesting stock to note is AAPL as the company is down after Consumer Reports said it will not recommend the new iPhone 4 due to reception glitches, and Steve Jobs simply being a dick. In their defense, Apple maintains that any cellphone will lose reception if held a certain way, like in a toilet, at the bottom of Lechuguilla Cave, or up Candice Swanepoel's well chiseled buttocks (and Money McBags is volunteering to test that theory out) so there is really no big deal. Plus, to fix the problem, AAPL claims all one needs to do is wrap some duct tape around the iPhone where the gap in the antenna is and who doesn't want a piece of metallic tape draped around their sleek and expensive gadget? It would almost be like fixing a tear in the Mona Lisa by putting a SpongeBob Squarepants band aid over it.
In small cap news, LHCG was down ~6% today after competitor AMED announced a shitactular Q and dropped nearly 25%. Money McBags broke LHCG down the other week after the SEC announced they were investigating AMED and AFAM for potential shadiness in how they were charging medicare for visits that may not ever have happened or visits that were unneeded. Anyway, guesses for AMED were for quarterly earnings of $1.37 per share and today they said that earnings will be closer to $1.12 which makes it almost as big of a miss as the Edsel or Glitter. Money McBags did not hear AMED's call but it is reported they said that their client base changed and they will need to reevaluate their structure and will hold off on full-year forecasts. Now look, without further color Money McBags isn't sure how this will affect LHCG because he has no idea what AMED means by their "client base changing" because either they stopped treating sick people (which would seem a silly thing to do for a home fucking healthcare company) or they started treating fewer sick people and thus had fewer home visits (which is a more likely scenario, especially with the SEC all in their business about charging for too many medicare visits). More concerning though is that shareholders have filed a suit against LHCG for an investigation from April into LHCG's reimbursement procedures, so fuck Money McBags on that one.
The industry makes sense longterm, the cost savings to insurance companies are too great, and home care is simply better, so it remains a good way to play the aging population trend but there is way too much fucking noise right now for an investor without access to industry insiders to get a leg up on the billing practices. As a result, Money McBags would stay the fuck away from this sector even though a few days ago he said LHCG was an interesting longterm buy (and it still remains that way but Money McBags needs more information to be able to make a sensible decision about the SEC investigations). Anyway, with all of this uncertainty, there are easier ways to make money (like TMRK which is a great takeout candidate and is getting a boost with MSFT's entry into cloud computing ) so keep watching LHCG but you probably want to avoid going long in the short term unless you have better contacts in the industry than Money McBags has. In times of turmoil, money can be made, but to do so, one needs to be confident that they have all of the information, so do your work here carefully.
Making it even more ridiculous is that as ZeroHedge points out, just last month Bloomberg showed consensus analyst guesses of $.16 for AA's Q. So with analysts lowering their guesses before the quarter, AA is now back to where it was when guesses were for $.16 so the would have been $.03 miss has been mitigated by strategic downgrades. Brilliant stuff. As the late great Kurt Vonnegut would say, "No damn cat, and no damn cradle." Analysts are now quickly dropping their guesses on companies across the board because they only get paid when the market goes up and with unemployment benefits going away, they need to keep their jobs like Kathy Griffin needs to keep off of HDTV. That said, AA did raise their guidance for aluminum consumption for the year from 10% to 12% and revenue was up 22% despite cratering aluminum prices as a result of demand slowing down and oversupply given that aluminum is the 3rd most prevalent element in the earth, behind only oxygen and whatever medal Mr. T wears around his neck. That said, the declining prices and rising energy costs are hurting overall profitability but with foreclosures up, demand may surge as the recently homeless grab sheet aluminum to build shanty towns to be known to future generations as WhothefucklentthosepeopleallofthatmoneyVilles or for short Goldmanvilles.
In macro news today, the US trade gap widened to 4.8% or $42B, which is the largest since November 2008 and a gap wider than between the antenna on a new Apple iPhone or the gap between Paris Hilton's legs on a Sunday morning. Not surprisingly, a trade gap is the exact opposite of what economists had guessed and thus once again proves that "economist" is not a real job, like rap music spell checker. Imports were up 3% thanks to a 12% increase in imports from China which, as pointed out yesterday, was driven by people not having any money and thus only being able to afford the cheap shit made overseas. US exports continued to see strength, which is a bit surprising given the weakness in the Euro last Q, as they were up 2.4% which was their best month since September 2008 when the US instituted buy one get one free Wednesdays for foreign countries.
And finally, the National Federation of Independent Business (known better as NFIB or "irrelevant") said optimism declined among small businesses by 3.2% in their monthly survey to which no one pays attention to anyway. NFIB's chief economist William Dunkelberg (who is still smarting from his decision to leave his hosting gig at Small Business Idol to pursue other career opportunities) opined that: “Confidence is lacking and the news out of Washington is discouraging. Until this changes, don’t expect small businesses to start hiring.” He then went and stole an ice cream cone from a little kid, told his wife she looked fat in those jeans, and ordered a ton of coal so he'll be prepared to adequately fill the stockings of everyone at the NFIB during Christmas time.
Internationally, Moody's cut Portugal's debt rating by two whole notches which means absolutely nothing to Money McBags as he cares what Moody's has to say about rating debt as much as he cares what Art Laffer has to say about tax policy, Jeffrey Dahmer has to say about cuisine, or Mel Gibson has to say about anything. Moody's dowgrade stems from Portugal's national debt having risen sharply relative to GDP as a result of stimulus measures and the 168 siesta hour work week. Moody's also warned that weak growth would weigh on government finances for two or three more years while Portugal warned that weak analysis would weigh on Moody's finances for eternity. European markets are up on this news as even they realize that Moody's is worse at their job than a eunuch sperm donor or Alan Greenspan.
In large cap stocks, just about everything was up as we move in to earnings season with INTC, C, BAC, and GOOG to report this week so hopefully analysts already lowered their guesses in order to keep the market moving. One interesting stock to note is AAPL as the company is down after Consumer Reports said it will not recommend the new iPhone 4 due to reception glitches, and Steve Jobs simply being a dick. In their defense, Apple maintains that any cellphone will lose reception if held a certain way, like in a toilet, at the bottom of Lechuguilla Cave, or up Candice Swanepoel's well chiseled buttocks (and Money McBags is volunteering to test that theory out) so there is really no big deal. Plus, to fix the problem, AAPL claims all one needs to do is wrap some duct tape around the iPhone where the gap in the antenna is and who doesn't want a piece of metallic tape draped around their sleek and expensive gadget? It would almost be like fixing a tear in the Mona Lisa by putting a SpongeBob Squarepants band aid over it.
In small cap news, LHCG was down ~6% today after competitor AMED announced a shitactular Q and dropped nearly 25%. Money McBags broke LHCG down the other week after the SEC announced they were investigating AMED and AFAM for potential shadiness in how they were charging medicare for visits that may not ever have happened or visits that were unneeded. Anyway, guesses for AMED were for quarterly earnings of $1.37 per share and today they said that earnings will be closer to $1.12 which makes it almost as big of a miss as the Edsel or Glitter. Money McBags did not hear AMED's call but it is reported they said that their client base changed and they will need to reevaluate their structure and will hold off on full-year forecasts. Now look, without further color Money McBags isn't sure how this will affect LHCG because he has no idea what AMED means by their "client base changing" because either they stopped treating sick people (which would seem a silly thing to do for a home fucking healthcare company) or they started treating fewer sick people and thus had fewer home visits (which is a more likely scenario, especially with the SEC all in their business about charging for too many medicare visits). More concerning though is that shareholders have filed a suit against LHCG for an investigation from April into LHCG's reimbursement procedures, so fuck Money McBags on that one.
The industry makes sense longterm, the cost savings to insurance companies are too great, and home care is simply better, so it remains a good way to play the aging population trend but there is way too much fucking noise right now for an investor without access to industry insiders to get a leg up on the billing practices. As a result, Money McBags would stay the fuck away from this sector even though a few days ago he said LHCG was an interesting longterm buy (and it still remains that way but Money McBags needs more information to be able to make a sensible decision about the SEC investigations). Anyway, with all of this uncertainty, there are easier ways to make money (like TMRK which is a great takeout candidate and is getting a boost with MSFT's entry into cloud computing ) so keep watching LHCG but you probably want to avoid going long in the short term unless you have better contacts in the industry than Money McBags has. In times of turmoil, money can be made, but to do so, one needs to be confident that they have all of the information, so do your work here carefully.
Wednesday, June 30, 2010
6/30/10 Midday Report: Technical levels blown, now they just want to cuddle
The market was flattish for most of the day until the last hour as some of the fears about Europe abated in the morning thanks to their banking system remaining open for at least another three months (so long enough for depositors to carve out space in their mattresses and pull their funds before the next bank run). The big news is that european banks didn't seek as much capital from the ECB as people feared they would with the ECB's 442B Euro line about to expire like the late great Diaperman. Banks only needed an additional 131B Euro 3 month loan which was below the 210B Euro estimate and only 131B Euro above being healthy. In other international news, German unemployment was down for the 12th straight month as German workers have to put in overtime to make sure their Spanish counterparts can take their proper siestas. Ahhh, to be young and in the Euro.
In US macro news, private employers added 13k jobs in the US in June according to ADP which makes a huge dent in the 20MM unemployed/underemployed/already given up people in the US (and by huge dent, Money McBags means the opposite of that). Really, 13k out of 20MM is as significant as a null hypothesis with a p-value of 1 trillion or as likely to change the current atmosphere as a stink bug crawling in to Lady Gaga's underwear changes her cuntosis. Analysts had guessed that 60k jobs would be added in June so they were only ~250% too high which for them is good enough to win Institutional Investor's golden shovel as analysts of the year which can then be used clear out all the crap they have been spewing. One has to remember that analysts have confidence intervals wider than the divergent opinions on global warming or Taylor Rain's rectum. The report should quell hopes of Friday's Labor Department jobs number release being positive so the government may need to hire Melissa Archer to deliver the release in order to keep investors from paying attention to the actual numbers. In other US news, the FCIC is beginning their two day hearings on AIG and Goldman's relationship to understand how those firms exacerbated the financial meltdown through their selling of derivatives and then how Goldman profited when AIG was bailed out as AIG used the bail out money to repay their mortgage partners of which Goldman was one (Goldman was repaid to the tune of $12B and Money McBags is told that tune is a mash up of Flight of the Bumblebees and Don't Worry Be Happy). While Money McBags doesn't believe anything will come from this inquiry, if it just puts the FCIC's Heather Murren in the spotlight for a few minutes, he will at least be moderately titillated (and yes, that is Heather on the left).
In market news, S&P is cutting their ratings of Moody's which is a bit like Jeffrey Skilling calling Dennis Kozlowski a fraud, Attila the Hun calling Ivan the Terrible a bit mean-spirited, or Lindsay Lohan calling Paris Hilton a whore. S&P cited that with new financial regulation investors now may be able to sue (and rightfully so Money McBags will vociferously add) rating agencies for sucking at their jobs (and as a reminder, their only job is to recognize when bad debt exists, and they missed the entire subprime/Alt-A fiasco like an anorexic misses dinner), there could be reduced demand for ratings if regulation removes the need for companies to be rated by nationally recognized organizations (here here), and Moody's sucks at their job. It is only a matter of time before Moody's lowers their ratings of S&P on the same concerns and we get a tit-for-tat ratings agency cock-off. In other news, Playboy announced a restructuring where they will become even thinner by eliminating low level workers but will keep senior executives to remain properly top heavy and Ford was rising after paying down $4B of debt and telling people they changed their name to Tesla.
In small cap news, ISLE continues to get shellacked and was doing so even when the market was slightly up today. Two day ago Money McBags told you all shorting ISLE would be a good trade and now you should be up 8% to 15% on it depending at what price you were able to short. A healthy company with a ton of debt doesn't just dilute shareholders by ~23% unless bad shit is happening. That said, this was purely a trade so if you want to lock in your profits and go home, Money McBags would applaud that move like he applauds charitable donations, rags to riches stories, and rainbow parties. Also, old friend COOL has dropped below $.70 and remember Money McBags broke them down after their last Q and said the $1 they were trading at was much too high and he would be short if the stock were more liquid. Well if you were able to short it, congratulations but you might want to start covering because the easy money has been made. The point is, Money McBags has been hitting some good names for you all and providing you with enough dick jokes to make even Bob Saget shudder so tell a friend, tell an enemy, and follow WGP on twitter and facebook because the revolution has begun.
In US macro news, private employers added 13k jobs in the US in June according to ADP which makes a huge dent in the 20MM unemployed/underemployed/already given up people in the US (and by huge dent, Money McBags means the opposite of that). Really, 13k out of 20MM is as significant as a null hypothesis with a p-value of 1 trillion or as likely to change the current atmosphere as a stink bug crawling in to Lady Gaga's underwear changes her cuntosis. Analysts had guessed that 60k jobs would be added in June so they were only ~250% too high which for them is good enough to win Institutional Investor's golden shovel as analysts of the year which can then be used clear out all the crap they have been spewing. One has to remember that analysts have confidence intervals wider than the divergent opinions on global warming or Taylor Rain's rectum. The report should quell hopes of Friday's Labor Department jobs number release being positive so the government may need to hire Melissa Archer to deliver the release in order to keep investors from paying attention to the actual numbers. In other US news, the FCIC is beginning their two day hearings on AIG and Goldman's relationship to understand how those firms exacerbated the financial meltdown through their selling of derivatives and then how Goldman profited when AIG was bailed out as AIG used the bail out money to repay their mortgage partners of which Goldman was one (Goldman was repaid to the tune of $12B and Money McBags is told that tune is a mash up of Flight of the Bumblebees and Don't Worry Be Happy). While Money McBags doesn't believe anything will come from this inquiry, if it just puts the FCIC's Heather Murren in the spotlight for a few minutes, he will at least be moderately titillated (and yes, that is Heather on the left).
In market news, S&P is cutting their ratings of Moody's which is a bit like Jeffrey Skilling calling Dennis Kozlowski a fraud, Attila the Hun calling Ivan the Terrible a bit mean-spirited, or Lindsay Lohan calling Paris Hilton a whore. S&P cited that with new financial regulation investors now may be able to sue (and rightfully so Money McBags will vociferously add) rating agencies for sucking at their jobs (and as a reminder, their only job is to recognize when bad debt exists, and they missed the entire subprime/Alt-A fiasco like an anorexic misses dinner), there could be reduced demand for ratings if regulation removes the need for companies to be rated by nationally recognized organizations (here here), and Moody's sucks at their job. It is only a matter of time before Moody's lowers their ratings of S&P on the same concerns and we get a tit-for-tat ratings agency cock-off. In other news, Playboy announced a restructuring where they will become even thinner by eliminating low level workers but will keep senior executives to remain properly top heavy and Ford was rising after paying down $4B of debt and telling people they changed their name to Tesla.
In small cap news, ISLE continues to get shellacked and was doing so even when the market was slightly up today. Two day ago Money McBags told you all shorting ISLE would be a good trade and now you should be up 8% to 15% on it depending at what price you were able to short. A healthy company with a ton of debt doesn't just dilute shareholders by ~23% unless bad shit is happening. That said, this was purely a trade so if you want to lock in your profits and go home, Money McBags would applaud that move like he applauds charitable donations, rags to riches stories, and rainbow parties. Also, old friend COOL has dropped below $.70 and remember Money McBags broke them down after their last Q and said the $1 they were trading at was much too high and he would be short if the stock were more liquid. Well if you were able to short it, congratulations but you might want to start covering because the easy money has been made. The point is, Money McBags has been hitting some good names for you all and providing you with enough dick jokes to make even Bob Saget shudder so tell a friend, tell an enemy, and follow WGP on twitter and facebook because the revolution has begun.
Friday, June 18, 2010
6/18/10 Midday Report: Gold hits new highs, silver plans an intervention
It's quadruple witching Friday today in the market which is unfortunately just the day where stock index futures, stock index options, stock options, and single stock futures all expire and not the day where the market finally gets a 5-some with Elizabeth Montgomery, Barbara Eden, Melissa Joan Hart, and Omarrosa. While this is usually a volatile day, the market has been quieter than the Clinton's bedroom as there has been little macro or company news released today. That said, owners of gold are being showered with rewards as gold has reached a record high today thanks to investors betting against the current fiat system remaining viable. While it's likely we'll hit a deflationary period before inflation takes off like Shawn Kemp from a delivery room, holding gold as part of your portfolio right now as a hedge against volatility and the potential crash of the Euro makes more sense than pairing Suaterenes with a nice foie gras. In other US news, Tim Geithner is apparently getting new and more power which he has easily earned given how he has revived this economy from dead to about to die again and helped to bail out the firms who caused this mess. Geithner is set to lead a new council run by the Treasury Department to identify companies that might be shut down because they pose a risk to the financial system. So does that mean the government is going to shut down the SEC, FCIC, FINRA, FDIC, and NAMBLA? Don't they all do the same fucking thing? Hey, I know how to solve a problem, let's just create other fucking groups to do the same thing that current groups do but hope they do it better. Unbelievable. Money McBags just wants to know when more bureaucracy has ever fixed anything other than creating meaningless jobs. Somewhere Josef K. is scratching his head.
Internationally, the Eurozone added Estonia as the lastest member in their global ponzi scheme. Estonia now has to pay $1B to Greece, and then Greece will pay 80% of that up to Spain, who will then pay 80% of that up to Germany. Funding problems solved. While it is certainly odd timing for a country to be joining the eurozone, Estonia said they had no choice after the University of Texas decided to stay in the Big 12 and and Utah beat them out for the last spot in the Pac 10. “It’s a great day for Estonia,” remarked Estonian prime minister Andrus Ansip, who was perhaps (an)sipping on a little too much Saku Originaal as getting in to the Eurozone right now is about as desirable as joining a tv show co-starring Ted McGinley or being drafted by the Washington Generals. Anyway, for those of you unfamiliar with Estonia, here are some quick facts: They were 4th out of 173 countries in the Worldwide Press Freedom Index narrowly being edged out by Canada and their NSFW Naked News, they've previously been occupied by more countries than Zsa Zsa Gabor's vagina, and the person they most admire is Yosemite Sam. They've been independent since 1991 and are finally looking to settle down after 20 years of hard drinking and nordic flirtations in order to raise their favorite offspring Tiiu Kuik in a stronger family environment. So welcome to the Euro Estonia, just don't burn all those Kroons quite yet. In other international news, the IMF backed Spain's austerity measures after downing one sangria too many and learning about imaginary numbers.
In stock news, C is planning on raising $3B because they haven't lost enough investor capital already. Just remember, this bank is so poorly run and has such bad judgment that they fired someone for being too hot, and she's not even really that hot, I mean we're not talking about Sara Carbonero for fucksake. And the best part about this is that they are raising money for their private equity and hedge fund groups right before Paul Volcker slaps his rule on the table and bans banks from owning those type of funds. Wow. Good for the funds but that makes about as much sense for C as it did for Saddam Hussein to build a new palace in Baghdad in March of 2003 or Simona Halep to go bra shopping right before the summer of 2009. Money McBags is sure C's CEO Vikram Pandit will retain some type of personal interest in these funds when the Volcker Rule takes effect so I guess it makes sense for him but for C shareholders it seems like a whole lot of wasted time and energy (though if you're a C shareholder, you have bigger problems to worry about than the company raising money for funds they are going to have to give up soon). In other news, CVS and WAG decided to end their snit over prescription drug benefit reimbursement and just go back to screwing Medicare and the American health care system together. Finally Moody's lowered their ratings of BP by 3 notches from the unintelligible Aa2 to the just as unintelligible A2 (or maybe it was the other way around, who the fuck knows). It's nice to see that weeks in to one of the biggest environmental disasters in history, Moody's is still on the ball. Good job guys, Money McBags eagerly awaits your downgrade of daguerreotype companies within the next 6 months. Though to be honest, any investor who needs Moody's to tell them BP is more fucked than a cupcake in Kirstie Alley's house probably shouldn't be investing.
In small cap news CRUS continues to rocket up. Money McBags believes $24 (20x his $1.20 estimates) is a plenty fair price but at $20 he'd start to think about trimming to take some of the hella sweet profits you've made off the table (and rememeber Money McBags first brought CRUS to your attention when they were trading under $8 and he told you he bought them shortly thereafter. The fact that he dumped them after the "Flash crash" for liquidity reasons doesn't change his valuation, it only makes him angrier that he believes the market structure is so broken that fundamentals may not matter). And if any of you are interested in a high flying small volatile momentum name, check out SPRT. Money McBags will try to break them down next week but they are basically outsourced and remote computer repair. It's like Geek Squad only you don't have to have a fat smelly skeevy fuck show up at your house and stink the place up while he wipes all of the porn off your computer to clean up whatever virus you downloaded while searching for that Miley Cyrus upskirt pic (and Money McBags will not be linking to the pic since he believes in the legal system). It's certainly an interesting and potential low cost business model and the company is currently scaling up their technicians faster than a young hollywood starlet scales up her ambitions. It is doubtful that in this market Money McBags would ever own this stock because a lot has to go right for it to be valued even near what it is trading today, but it has a nice story has some real opportunity, and more than anything it has strong momentum and a rapidly accelerating business. If you have money you don't care about, send it to Money McBags for a night out at Rick's, otherwise, do some research here as this might be a good trade.
Internationally, the Eurozone added Estonia as the lastest member in their global ponzi scheme. Estonia now has to pay $1B to Greece, and then Greece will pay 80% of that up to Spain, who will then pay 80% of that up to Germany. Funding problems solved. While it is certainly odd timing for a country to be joining the eurozone, Estonia said they had no choice after the University of Texas decided to stay in the Big 12 and and Utah beat them out for the last spot in the Pac 10. “It’s a great day for Estonia,” remarked Estonian prime minister Andrus Ansip, who was perhaps (an)sipping on a little too much Saku Originaal as getting in to the Eurozone right now is about as desirable as joining a tv show co-starring Ted McGinley or being drafted by the Washington Generals. Anyway, for those of you unfamiliar with Estonia, here are some quick facts: They were 4th out of 173 countries in the Worldwide Press Freedom Index narrowly being edged out by Canada and their NSFW Naked News, they've previously been occupied by more countries than Zsa Zsa Gabor's vagina, and the person they most admire is Yosemite Sam. They've been independent since 1991 and are finally looking to settle down after 20 years of hard drinking and nordic flirtations in order to raise their favorite offspring Tiiu Kuik in a stronger family environment. So welcome to the Euro Estonia, just don't burn all those Kroons quite yet. In other international news, the IMF backed Spain's austerity measures after downing one sangria too many and learning about imaginary numbers.
In stock news, C is planning on raising $3B because they haven't lost enough investor capital already. Just remember, this bank is so poorly run and has such bad judgment that they fired someone for being too hot, and she's not even really that hot, I mean we're not talking about Sara Carbonero for fucksake. And the best part about this is that they are raising money for their private equity and hedge fund groups right before Paul Volcker slaps his rule on the table and bans banks from owning those type of funds. Wow. Good for the funds but that makes about as much sense for C as it did for Saddam Hussein to build a new palace in Baghdad in March of 2003 or Simona Halep to go bra shopping right before the summer of 2009. Money McBags is sure C's CEO Vikram Pandit will retain some type of personal interest in these funds when the Volcker Rule takes effect so I guess it makes sense for him but for C shareholders it seems like a whole lot of wasted time and energy (though if you're a C shareholder, you have bigger problems to worry about than the company raising money for funds they are going to have to give up soon). In other news, CVS and WAG decided to end their snit over prescription drug benefit reimbursement and just go back to screwing Medicare and the American health care system together. Finally Moody's lowered their ratings of BP by 3 notches from the unintelligible Aa2 to the just as unintelligible A2 (or maybe it was the other way around, who the fuck knows). It's nice to see that weeks in to one of the biggest environmental disasters in history, Moody's is still on the ball. Good job guys, Money McBags eagerly awaits your downgrade of daguerreotype companies within the next 6 months. Though to be honest, any investor who needs Moody's to tell them BP is more fucked than a cupcake in Kirstie Alley's house probably shouldn't be investing.
In small cap news CRUS continues to rocket up. Money McBags believes $24 (20x his $1.20 estimates) is a plenty fair price but at $20 he'd start to think about trimming to take some of the hella sweet profits you've made off the table (and rememeber Money McBags first brought CRUS to your attention when they were trading under $8 and he told you he bought them shortly thereafter. The fact that he dumped them after the "Flash crash" for liquidity reasons doesn't change his valuation, it only makes him angrier that he believes the market structure is so broken that fundamentals may not matter). And if any of you are interested in a high flying small volatile momentum name, check out SPRT. Money McBags will try to break them down next week but they are basically outsourced and remote computer repair. It's like Geek Squad only you don't have to have a fat smelly skeevy fuck show up at your house and stink the place up while he wipes all of the porn off your computer to clean up whatever virus you downloaded while searching for that Miley Cyrus upskirt pic (and Money McBags will not be linking to the pic since he believes in the legal system). It's certainly an interesting and potential low cost business model and the company is currently scaling up their technicians faster than a young hollywood starlet scales up her ambitions. It is doubtful that in this market Money McBags would ever own this stock because a lot has to go right for it to be valued even near what it is trading today, but it has a nice story has some real opportunity, and more than anything it has strong momentum and a rapidly accelerating business. If you have money you don't care about, send it to Money McBags for a night out at Rick's, otherwise, do some research here as this might be a good trade.
Thursday, April 22, 2010
4/22/10 Midday Report: Market struggles to find green on Earth Day thanks in part to the new planet threatening phenomenon of Goldman Warning
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Monday, March 15, 2010
3/15/10 Midday Report: March Madness is officially here as Moody's thinks people actually care about what they say
The market is flattish today, likely taking a breather to fill out its NCAA bracket while trying to sleep off the headache caused by Dick Vitale's pontifications yesterday on how loving Mike Krzyzewski is post-coitus. That said, Moody's is out warning that major economies such as the US, Germany, the UK, and Vivid Video may be closer to having their debt ratings lowered as growth may not be enough to "resolve an increasingly complicated debt equation." Hey Moody's, Money McBags has your increasingly complicated debt equation right here and it equals "go fuck yourself." No really, do it. Money McBags is going to sit here and wait until you take your credit scoring model and shove it right up your asset backed security and wherever else the CDO doesn't shine. Here's the deal Moody's, you are not very good at what you do, you are as good at your job as Bernie Madoff is at investing or Kirstie Alley is at dieting. You completely missed the whole fucking sub-prime collapse and you know what? That was your only fuckng job. It's like if Robert Newman forgot to bring lanterns to the steeple of Old North Church on 4/18/1775 or US intelligence never found weapons of mass destruction in Iraq (umm, ok, scratch that one). So pardon Money McBags if he doesn't give two shits about what you have to say, even if those shits are from a homeless AIDS patient with diarrhea and a massive anal fissure. Having you continue to rate debt is like if Ford re-hired the guy who designed the Edsel to produce a follow up called the Edsel Deuce or if Alan Greenspan were put back in charge at the Fed. The point is, even a blind microeconomist can see that the world economy might go to hell, so shut your fucking yaps and go crawl back in to the financial hole which you created. While Moody's is rating credits, Senator Christopher Dodd is set to announce a tougher financial reform bill today. Unless that bill requires Moody's and other credit rating agencies to put a disclaimer saying "We suck at our jobs" on every report they release, requires companies writing CDS to actually hold reserves on those CDS since, you know, they're fucking insurance policies, and requires current and former Goldman Sachs executives to win popular elections before running the country, the reforms will simply be more government lip service (though if it's lip service from Raven Alexis, then that is the kind of government action Money McBags can support). In other US macro news, industrial production rose .1% in February signaling a continued demand for computers and communications equipment. It doesn't take a genius like Bill Gates or the guy who created the next great Olympic event (though NSFW) of muff guessing, to understand that technology is going to continue to grow and regardless of the global economy, people are going to continue to use it. Cell phones, computers, iPads, etc. are going to keep driving the way people interact with each other until we finally all just get chips put in to our brains (which is sometime in the next 30 years according to Ray Kurzweil) so being long technology even if this recession double dips is not the worst idea one has ever had (though it is slightly worse than taint tickling Tuesdays or the theory of general relativity).
In stock news, Phillips-Van Heusen acquired Tommy Hilfiger for $3B cash and stock as they apparently woke up thinking it was still 1991. PVH CEO, Ripped Off Van Winkle, said "Well we wanted to buy JAMZ and the company that makes those awesome Hammer Pants all the kids are wearing these days, but if we could only buy one of the three it was going to be Hilfiger. We just want to let people know that PVH is down with OPP." Also, AIG is talking about cutting their previously announced bonuses by 30% in order to hopefully quiet controversy while still keeping the employees who almost caused a total global economic collapse. Whew. How would AIG ever operate without the people who fucking ruined it? In other news, LA county just retroactively gave Marcia Clark and Cristopher Darden bonuses for their handling of the OJ Simpson case while Tara Reid rehired her plastic surgeons. Siemens is shooting themselves in the face today by pulling the sale of their hearing aid unit. There is absolutely no reason you should care but Money McBags just wanted to see if he could type Siemens while keeping a straight face (and if you're keeping score at home, he didn't). Finally, WMT is up after a C analyst upgraded them to buy based on the potential for WMT to gain share from supermarkets and their pending world domination.
In small cap news today, FHCO is getting some national press as the city of Washington DC is handing out 500k of the new and improved FC2 which is not only cheaper to produce with higher margins, but it also tastes great. Money McBags wrote about FHCO about 2 months ago and all they have done since then is go up like a 45 year old virgin's johnson after viewing this delightful NSFW shot of Money McBags favorite Alice Eve. The company has probably run a little too much but good things are still happening with a potential retail partner still out there and country specific AIDS programs just getting traction. Plus there is that little thing about AIDS not going away. In other small cap stocks, IBKR got downgraded today by KBW due to the ratio of actual to implied volatility in the options market showing no rebound and due to another little thing called "having no actual control over your business model revenue stream." IBKR is both a market maker for options (though taking on no counterparty risk) and provider of a trading platform for day traders. The problem they have been running in to is that the options market requires them to hedge the volatility and when the actual vol differs greatly from the implied vol, they can find themselves in a situation where they don't make any money as their margins get thinner than John Edwards' excuses. Their CEO claims they have $2 in annual earnings power and over a long time horizon their earnings should be smoother than Olivia Munn after a cocoa butter bath, but that long time time horizon may be 100 years at this rate. The fact is they have lumpy quarters and less ability to control the lumpiness than Michael Jackson has the abilty to moonwalk ever again. So if you believe over the long run that those quarters will even out and there really is $2 of earnings potential, buying this stock at 8x those earnings on a down day due to a downgrade is not a terrible entry point. That said, value investors have loved this stock all the way down from $35 and it's one of the few companies not to have participated in the rally.
In stock news, Phillips-Van Heusen acquired Tommy Hilfiger for $3B cash and stock as they apparently woke up thinking it was still 1991. PVH CEO, Ripped Off Van Winkle, said "Well we wanted to buy JAMZ and the company that makes those awesome Hammer Pants all the kids are wearing these days, but if we could only buy one of the three it was going to be Hilfiger. We just want to let people know that PVH is down with OPP." Also, AIG is talking about cutting their previously announced bonuses by 30% in order to hopefully quiet controversy while still keeping the employees who almost caused a total global economic collapse. Whew. How would AIG ever operate without the people who fucking ruined it? In other news, LA county just retroactively gave Marcia Clark and Cristopher Darden bonuses for their handling of the OJ Simpson case while Tara Reid rehired her plastic surgeons. Siemens is shooting themselves in the face today by pulling the sale of their hearing aid unit. There is absolutely no reason you should care but Money McBags just wanted to see if he could type Siemens while keeping a straight face (and if you're keeping score at home, he didn't). Finally, WMT is up after a C analyst upgraded them to buy based on the potential for WMT to gain share from supermarkets and their pending world domination.
In small cap news today, FHCO is getting some national press as the city of Washington DC is handing out 500k of the new and improved FC2 which is not only cheaper to produce with higher margins, but it also tastes great. Money McBags wrote about FHCO about 2 months ago and all they have done since then is go up like a 45 year old virgin's johnson after viewing this delightful NSFW shot of Money McBags favorite Alice Eve. The company has probably run a little too much but good things are still happening with a potential retail partner still out there and country specific AIDS programs just getting traction. Plus there is that little thing about AIDS not going away. In other small cap stocks, IBKR got downgraded today by KBW due to the ratio of actual to implied volatility in the options market showing no rebound and due to another little thing called "having no actual control over your business model revenue stream." IBKR is both a market maker for options (though taking on no counterparty risk) and provider of a trading platform for day traders. The problem they have been running in to is that the options market requires them to hedge the volatility and when the actual vol differs greatly from the implied vol, they can find themselves in a situation where they don't make any money as their margins get thinner than John Edwards' excuses. Their CEO claims they have $2 in annual earnings power and over a long time horizon their earnings should be smoother than Olivia Munn after a cocoa butter bath, but that long time time horizon may be 100 years at this rate. The fact is they have lumpy quarters and less ability to control the lumpiness than Michael Jackson has the abilty to moonwalk ever again. So if you believe over the long run that those quarters will even out and there really is $2 of earnings potential, buying this stock at 8x those earnings on a down day due to a downgrade is not a terrible entry point. That said, value investors have loved this stock all the way down from $35 and it's one of the few companies not to have participated in the rally.
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