8/2/10 Midevening Report: Market hits ten week high as meth lab in the basement finally pays off

The market ran faster today than Roman Polanski going to get his keys to pick the baby sitter up because the manufacturing sector grew at its slowest pace since December, private construction spend dipped for the second month in a row, and Ben Bernanke said shit still sucks out there.  So rally fucking on like Donkey Kong having his way with the princess, only if the princess had tainted his banana wth AIDS.

With the market rallying on macro news that was about as positive as a RuPaul pregnancy test, Money McBags is left to wonder what he is missing, how much the market would rally if there were actually something positive going on in the economy (like maybe either the second derivative of released data positively increasing or the unemployment rate decreasing and not from just from a declining labor force participation rate), and how he overlooked this delightful NSFW Alice Eve scene which has caused his Oscar to stand and applaud.  Money McBags is not quite sure how to interpret the market moving in opposition to macro data, as the language of giberrish wasn't on the rosetta stone the last time he checked, but he hopes those of you buying in to this capitualting market are careful.

As for macro news, Benny B warned us that "we have a considerable way to go to achieve full recovery in our economy, and many Americans are still grappling with unemployment, foreclosure, and lost savings, in addition to the angst and nausea they feel every time they look at the deficit and realize their kids may be more fucked than Stephen Hawking in a duel."  Ok, perhaps that last bit was made up but, whatever.  Bennie B did get slightly positive by saying he fully expects consumer spend to pick up in the next few quarters as wages rise, business demand picks up, and the US finally figures out what to do with all of the underwear they stole.

Money McBags is a bit skeptical of Bennie B's claims since unemployment remains more stagnant than the Terri Moulton Horman for "Stepmother of the Year" campaign or jokes here on the great When Genius Prevailed so it's not clear where these rising wages are going to come from unless it's from laying more people off and then giving those still employed a bit of the saved salary, which of course would do nothing for overall consumer demand.  But hey, when Bennie B gets his Fed on, the market listens (to the parts it wants to hear).

In other macro news, the ISM came out with their numbers for July and the manufacturing sector grew at its slowest pace this year, but luckily, the 55.5 number was better than the 54.2 analyst had guessed so rally on my friends.  It was the third straight month (and the month was so straight it even got it up for a Kathy Najimy-Rachel Ray threesome) of slower growth but remember, readings above 50 still signal expansion, so apparently there is nothing to see here (except for new orders dropping to their lowest level in over a year, production slowing down, and Kagney Linn Karter).

In the final bit of macro news, construction spending rose .1% as increased investment in public projects (perhaps maybe a bridge to somewhere) offset the 15th straight monthly decline in private nonresidential construction and the .8% decline in private homebuilding (which included growth from the Greenspanville's being erected across the country, and yes, Money McBags said erected). Yowsa.  As usual, last month's new construction was revised downward from a .2% drop to a 1% drop as part of the government's "hold the shock and hope for no awe" strategy, so this month's .1% decline should be labeled as "wishful thinking."

Internationally, China's manufacturing sector cooled further as the government tries to reign in reckless speculation on real estate and ben wa balls.    The official purchasing managers' index  fell to a 17 month low of 51.2 from 52.1, a separate PMI released today by HSBC and Markit Economics showed a drop to 49.4 from 50.4, and a third reading of PMI from the desk of Sum Dum Gai simply took the average of the two.  China's ec0nomy slowing down is actually favorable as it has been growing at a rate less sustainable than a conversation involving only eye contact with Christina Hendricks so having it moderate a bit and perhaps not inflate to a bubble like every other emerged economy would be beneficial for all involved.

Driving the market today was the European banking sector thanks to HSBC putting down its fag, rolling up its sleves, and earning the fuck out of some profits.  The bank doubled its profits to $7B despite revenue growth declining by 7%, operating expenses increasing by 9%, and no one having any fucking money.  Profits rose as losses on bad loans tumbled to $7.5B, just over half of last year's losses, and were the result of bad loans rolling off the books and the bank not lending anyone any money.  BNP Paribas also put up a good Q, with the French bank's profits rising due to credit getting better and having Laetita Casta on call to help coax out customer deposits.  Just like in the US, bank profitablity seems to be rising across the globe despite declining revenues as credit is improving.  That said, credit can only drive earnings for so long until the banks are going to have to start lending to people again to drive revenue and thus the vicious cycle will begin anew.

In other market news, Blackberry is not just losing market share to the iPhone but now the UAE said they will cut RIMM's data service like the dirty infidel that it is.  The UAE cited security concerns over RIMM's reliance on encrypted emails which make it easier for criminals to operate and harder for the government to watch that stupid fucking video of the double rainbow that everyone seems to be emailing around.  Not since Peter Chung anointed himself King has there been an international email controversy like this and it does not augur well for RIMM's jobs overseas going forward as other countries like Saudi Arabia are also thinking about taking steps to ban Blackberry's mobile services.

Finally, KO got an upgrade today from JP Morgan on the strength of the company's emerging markets and having read Money McBags' columns about the solid brand equity overseas the company enjoys.  An article in Baron's also pimped KO today, saying it could rise by at least 10% in the next year because of North American markets and because it still tastes better than water.  And last but not least, Corning was up nearly 6% on news that it's 50 year old Gorilla glass could be the next bazillion dollar product for flat screens and touch screens as it is 2 to 3 times stronger than regular glass, half the thickness, and sells for only a few bananas.  The lighter, sturdier glass should cut down on shipping costs and scratched screens while also being easier to clean after one gets done with a chat roulette session.

In small cap news, everything was up.  Money McBags is short on time today but he wants to highlight KIRK which remains too fucking cheap even though it was up strong today.  Money McBags broke KIRK down a little over month ago saying its low end market focus (midwestern/southeastern housewives who love tchotchkes more than Joanie loves Chachi), growth through the downturn (and now they are going to be opening stores instead of closing them), and valuation (it is now trading ~9x to 10x eps estimates not including the $3.50 per share of cash on the balance sheet) make it almost as attractive as Diora Baird, and nothing has changed since then except for John Kyl's stand on the 14th Amendment.  The other interesting small cap name is NTRI who traded down big on Friday after what Money McBags thought was an OKish quarter.  He has to go through it in more detail and while he wouldn't be a buyer of the stock until their management team actually performs (they are 0 for the last bazillion quarters, rounding up to the nearest bazillion), they pay a nice yield, have a terrific cost structure, and are in a growing (pun intended) market.  It's worth keeping on a watch list for when/if they can figure out how to start accelerating their growth rates (Money McBags votes for getting Nicole Eggert as a spokeswoman, but that's just him).

6/22/10 Midafternoon Report: Home Un-Improvement

The market had trouble finding a direction for most of the day as news is thin and the summer is beginning so most volume is moving to the Hamptons where portfolio managers can sip on lemonade, listen to yacht rock, and denigrate the poor all while ignoring the economic data which has been so lackluster that it is in line for its own NBC prime time sitcom (tentatively titled:  Just Dilute Me!).  There was one bit of macro data released today which was about as encouraging as the letter "L" is to Jackie Chan on a read through script and helped send the market tumbling end of day.  Purchases of existing homes fell last month and somehow analysts are surprised about that since reading comprehension is not one of their strong suits and thus they missed the part about the government tax credit running out and sales being pulled forward like Eddy Curry's pay check.  Home sales dropped 2.2% from last month despite near record low mortgage rates and falling prices and are now starting to roll over and play dead like a trained circus dog or Brittany Murphy.  The best part is that the National Association of Realtors is blaming part of the drop on a processing delay which is holding up 180k mortgages as apparently the red "Rejected" stamp has run out of ink.  Analysts guessed sales would be up 5.5% to 6.12MM homes which was such a close guess that it only missed by a nut hair, that is if the nut hair belonged to a brontosaurus, and not any brontosaurus, but a brontosauros with elephantitis of the nuts.  But hey, maybe the 180k "processing" hold up was real (though something smells fishier about it than Paris Hilton's penis flytrap after pissing out a Long John Silver's fish taco platter with extra tartar sauce because Money McBags doesn't remember hearing about any processing holdups when 7MM+ mortgages, or 25%+ more than last month, were being processed monthly in 2005, but whatever).  Anyway, if we assume the hold up was real and add the 180k home sales that were delayed due to "processing" to the monthly figures, exisiting home sales would have been up .8% which is still way fucking short of the 5.5% increase analysts guessed.  And making it even worse is that analysts used a lower number to build their forecasts as last month's sales were just readjusted upwards to the 579k number so analysts were actually forecasting greater than 6% growth.  Money McBags hasn't seen a miss this bad since Men Who Stare at Goats (and really, that movie was so fucking awful Money McBags wanted to stare in to the fucking sun so his retinas would burn and thus he wouldn't have to watch the whole movie) or any economics paper released by Art Laffer.  With the expiration of the government tax credit, the real question is if home sales are merely taking a breather after an artifically pulled forward sales surge or if the housing market is about to take another dip and send the economy back to it's bad place. 

In international news, Britain released a new emergency budget which includes an additional 17B Euro of budget cuts (25B Euro in total, or about what Money McBags would pay Britain for a chance to have Lucy Pinder and Nikkala Stott star in his personal home movie "The Mystery of Bonehenge").  The cuts are aimed at stricter rules for what qualifies someone to get disability pay (simply listening to Madonna's music will no longer be considered a disability, though listening to it and liking it will remain a sign of real impairment as only the auditorily challenged can bear that shit), a freezing of welfare benefits, an increase in the value added tax from 17.5% to 20%, a new tax on banks, and the biggest revenue generator will be a fine levied on those with crooked teeth.  In other international news, the yuan fell back a bit after yesterday's rise as the Chinese government is determined not to let it appreciate too quickly for fear of losing a large part of their manipulated competitive advantage.  Chinese state owned banks are now buying up dollars to either prevent a rapid yuan appreciation or to have more worthless paper to burn to keep warm when fiat currencies fail and the world reinstitutes the barter system.

In stock news, Walgreens announced a crappier than expected quarter and is trading down as if it spilled 1B tons of oil in to the Gulf.  The stock was down 7% after revenues rose 6% and earnings came in at ~$.53 taking out one-time charges which was $.04 below analyst estimates.  Speaking of Gulf oil spills, BP was down another ~3% today because it still has not hit zero (and yes, Money McBags is going to use that same joke every day until BP is actually at zero which will be sometime between tomorrow and when investors get their heads out of their asses).  And finally, AAPL is up today because in direct opposition to BP, it hasn't reached infinity yet.  AAPL's price target was raised by Deutsche Bank to $375 based on their new iPhone 4 release, the continued strong sales of the iPad, and a need to publish research to get portfolio managers to trade with Deutsche Bank.

In small cap news, WGO sold off hard on no news that Money McBags could find other than perhaps people realizing that paying more than 30x for a company in a declining industry with an expensive discretionary consumer product and a fleet of cheaper alternatives, is probably not the best thing to own.  Shit, Money McBags would rather own NTZ which might be the worst idea for a business right now (high end furniture in Europe), worse than even selling ice to eskimos, unfunny jokes to Jay Leno, or panties to Britney Spears.  The difference between NTZ and WGO of course is that NTZ is trading like it is a stupid fucking business while WGO is trading like it is selling super powered iPhones which give off pheremones to attract Aubrey O'Day rather than $100k gas guzzling unnecessary RVs.  After last Q, Money McBags hesitantly raised his WGO top end target to $9 from $7.50, so there is still plenty of room for the stock to go down.  In other small cap news NTRI has continued to try to make a run.  Money McBags wrote about them after thier last Q and they remain a very interesting watch list name as the company has a ton of earnings power, trades like a momentum name, and just put up a quarter of positive new customer growth which fuels their sales.  It's still a bit early for this company as they keep fucking up their ad spend and their affiliate program sucked a donkey dick (which was certainly pleasurable for Eeyore, yet did nothing for investors) to the tune of a $3MM charge last Q, so management clearly needs to figure out how to better execute (perhaps they should ask the state of Utah for ideas) but it's trading inline-ish with peers, has a nice dividend, and if they can put up a good next Q should have significant upside.  The only problem is Money McBags doesn't have a lot of faith that next Q will be good and he doesn't gamble (unless he is in Las Vegas, Atlantic City, his apartment, the car, etc..), so he is not going to buy.  Money McBags prefers more certainty than he has for NTRI right now so while it has a number of things going right, Money McBags would still just be guessing at their next Q.  One data point is good, two are better, three is a trend, and four is time to think about selling.  We're at the first data point now, so do your due dilligence.

5/4/10 Midafternoon Report: Monty Python to rewrite script as somebody expects the Spanish Inquisition

Timberrrrrrrrrrrrrrrrrrrrrrrrrrrrr.  The market is trading down as if Europe is going to go bankrupt like John Edward's morals or like investors think it will give them AIDS (which means Magic Johnson is happily buying today since he can't be infected again).  The news continues to be fears that even with austerity measures and a bailout, Greece is going to be more fucked than Custer at the Battle of Little Bighorn or Houston after the Houston 620.  As a result, the dollar is at its one year high against the euro, though to be fair, part of that high is because 90% of dollars have traces of cocaine on them.  Adding fear to Greece's impending doom is worry that the debt contagion is spreading to the other crappy European countries about which no one cares (you hear that Liechtenstein with your alps, tax haven, and policy of neutrality?).  Spain is once again worrying the markets as Spanish banks are proving to be weaker than the force carried by W and Z bosons or Tiger Wood's "sexual addiction" excuse.  Apparently two banks in Northern Spain were supposed to merge but that is now some sort of power struggle to see who gets to be in charge of the crappy loans which sounds a bit like Dustin Hoffman and Warren Beatty arguing over who gets the marketing rights to Ishtar.  Along with bank issues, the country's current unemployment rate is over 20% and considering they have like a 15 hour work week, that is fucking shocking.   Spanish Prime Minister Jose Luis Rodriguez Gonzalez Ramirez Guerrero Zapatero is shocked by the speculation that his country may be facing worse fiscal problems and claimed his country has “strong solvency” and the possibilty of needing a bailout is “complete madness”  before he asked reporters if they'd like to buy an unfinished church and promised he'd make them a deal, even throwing in a Shake Weight for free.  The market is scared today with Europe's debt crisis pulling a Coleman Silk and spooking investors but we were due for some consolidation so as long as you hold names you are comfortable with, don't panic.

In US macro news, pending home sales rose 5.3% which beat guesses and reached a 5 month high.  As always, this increase was driven by tax breaks for new home buyers and cardboard boxes now being included in reported home sales numbers.  Also, factory orders jumped 1.3% in March and were up 3.1% when excluding transportation orders which is the biggest surge in 5 years since the great home redecoration bubble of 2005.  The US macro news continues to be encouraging but we still need to see unemployment decline until we will start feeling giddier than Amanda Carrier's bowflex.

In stock news, everything is down so this could be a buying opportunity for real companies.  Unfortunately, SIRI isn't one of them despite putting up a quarter where they actually earned a $.01 per share profit.  SIRI's business model is more flawed than Amy Winehouse's face or supply side economics.  With the prevalence of iPods, podcasts, internet radio, and Brooklyn Decker (not clear what Brooklyn Decker has to do with this, but she is hot), there is absolutely no reason to pay for radio unless you are a fan of the great Howard Stern and when Stern retires at the end of the year, Sirius will be deader than Larry Craig's political career.  Money McBags would rather be subject to 24 hours of Celine Dion's music while watching re-runs of Friends and having his anus waxed than go long SIRI.  In other news, MRK and PFE both had good quarters as untemployed people still need to stay medicated to stave off depression, anxiety attacks, and the stench from Paris Hilton's vagina.

In small cap news, Money McBags is getting absolutely obliterated like Alf Landon in the 1936 election (perhaps he shouldn't have eaten all of those cats) or Carmella Bing in Sodom 4.  CRUS is getting pounded, though it has run up so much that momentum investors are likely just taking profits.  This is true of most of Money McBags' names but he is holding steady as he believes in their stories and they are not overvalued (except for maybe VMW which is a bit overvalued, but whatever).  Yesterday Money McBags told all of you to watch NTRI's Q last night and they are up 20%+ after putting up moderately better numbers than the street was expecting yet giving what Money McBags thinks is pretty good guidance.  For the Q, NTRI earned $.15 per share on revenue of $159MM of revenue but they had $8MM of potential one-time marketing expenses so absent those, they would have earned closer to $.28 per share.  While revenue was basically flat with last year, new customers were up 11% and new customer revenue was up 14% due to a mix shift back to more expensive products.  New customers basically drive this business as they help with reactivation as recency of dropping out plays a big role in getting people to rejoin plus the weak new customer additions from the past two quarters have hurt their regular program revenues.  The bad news was that their Walmart/Walgreen's/Sam's club retail promotions bombed worse than Michael Richards on Showtime at the Apollo.  The roll out of those programs cost them $3MM in marketing expense which won't be repeated again and was part of the $8MM excess marketing spend.  Of course that other $5MM came from higher ad rates so it's not clear how much of those are really temporary vs. a shift in demand for ads and thus persistently higher rates.  The company guided to $1.02-$1.12 eps for the year and $.33-$.36 eps for next Q with moderate topline growth so they are banking on marketing spend going back down to ~29% of sales while their gross margin and op ex improvements maintaining.  They are trading at ~20x that with their 20% run up today and are still pretty cheap on an EBITDA basis.    They earned ~$70MM EBITDA last year but with their guidance they should slightly exceed that so call it $75MM.  With $90MM cash and no debt, they now have an EV of $600MM and thus are <9x EV/EBITDA on 2010 earnings.  That's about inline with peers but pretty cheap for their cash flow business model.  The stock is still 33% below its high from the beginning of the year which means they have 50% more to go to get back to where the market thought they should be valued if growth was to come back.  The point is, strong growth isn't quite here yet but they are starting to get trickling sequential growth and adding that to operating improvements gives you a stock with the potential that is now reasonably priced for a static environment.  But the thing is, we know there are a ton of fat people in this country so programs like this are always going to be in demand until society stops shunning bulimia.  NTRI's diabetic targeted product is continuing to grow and apparently hiring the once delicious Angie Everhart has spiked up sales to their women's segment.  Money McBags is going to let the shorts cover today but may be buying tomorrow when this thing settles.  There is plenty of room to move up while downside seems limited, that said, the stock is near fairly valued if you think their weight loss products will only have moderate growth.

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.

4/15/10 Midday Report: Tax day causes 53% of the US population to be pissed, other 47% pissed every day about being broke

Oh shit, just when the economy was looking better than a threesome with  Hayley Atwell and Alice Eve, new jobless claims for last week rose for the second week in a row and economists didn't have Easter to blame this time.  Well, actually they did, as a government analyst once again warned that the numbers could be skewed since Easter falls on a different day each year.  Wow, really?  You're going with that excuse again?  Umm, if Money McBags is correct the numbers are seasonally fucking adjusted and since calendars have existed since shortly after the fucking neanderthals were exterminated (which was caused by too much contaminated dinosaur meat since those smallbrained fuckers never learned how to fucking use fire), shouldn't that seasonal adjustment adjust for Easter?  Seriously, it's not like the day it fell on surprised anyone last year or this year (well, except for maybe Amy Winehouse or the hippocamus-ly challenged), so that excuse is lamer than Spectacular Bid or Boy Meets World reruns.  Claims rose by 24k to 484k which is the highest since late February and the highest since the Great Walmart Lockout of 2006.  There are still over 10MM people receiving some kind of unemployment benefit and since those benefits don't include being tucked in by Ashley Dupree (very NSFW, but required viewing), that's not good.  In other macro news, defaults doubled in the government's loan modification program which is weird to think that people who couldn't afford mortgage payments still can't, even at lower rates.  It's like being surprised that a kleptomaniac might want to steal again after being released from jail or that Tiger Woods is likely boning skanks again despite going to the laughable sex therapy (by the way, it's not called "sex addiction," it's called "having a penis").  In positive news, manufacturing production in the US gained as output of factories rose .9% with companies building back inventory while the Empire State manufacturing report demolished expectations.  The survey came in at 32%, well above the expected 24%, and Money McBags has no idea what that means other than beating expectations is good and at least New Yorkers have something to cheer themselves up about while watching the Mets.

Internationally, Greece is back in the news again trying to screw up something good we all had going with the markets.  It's like we'd been asking the markets out for 2 years, finally got her to come to dinner, got her home, and as we were about to inspect her large Sharpe ratios, the ruphies wore off.  So thank you Greece for scaring the markets again with your rising interest rate spread.  Of course there is more of a chance of the Laffer Curve being right than there is of Greece going bankrupt, so Money McBags will be buying at any big market dislocation caused by rumors of our Hellenic friends going to take a ride on the river Styx (though if they go to Styx, they should give a big "domo arigato" to Hades).

Also interntationally, China's economy is surging like William the Conqueror's popularity among the French in 1066.  GDP was up 11.9% from last year which is more bubble-icious than Gonzo Grape.  Not only that, but investment in real estate was up 35.1% and housing prices were up 11.7% in March alone.  Wow.  China is definitely hitting on all cylinders and their economy is busting out more than Lina Li thanks to the ginormous government stimulus, the artificially deflated currency value, and the accelerating population growth.

In stock news GOOG is running up in to earnings since, you know, they are fucking GOOG.  Money McBags should have bought more but it is already an outsized position for him so he'll root for the best with their earnings report and likely buy any dip.  UPS pre-reported their earnings today and grew profit by 37%.  They earned $.71 per share, well above analyst guesses of $.58, and upped their full year EPS guidance from $2.70-$3.05 to $3.05-$3.30.  Wow.  Apparently people really want to ship some shit that can't be attached in an e-mail.  This is a huge signal to the strength of a business rebound.  International shipping was up 18% and while US shipping volumes were up less than 1%, it was the first growth in US shipping in two years.  So yeah, it is barely up from a much lower base, but this is how things start out.  A very encouraging quarter from UPS.

In small cap news, NTRI is starting to run and Money McBags has broken their business down a number of times here.  They are cheap but operational issues keep Money McBags from owning this stock.  Also, MLNK is trying to rally back from a huge sell off after missing their quarter.  Money McBags has analyzed the fuck out of this company but it is ridonkulously cheap on an EV/EBITDA basis, trading at ~4x with a bigger cash cushion than Jennifer Lopez's ass cushion.  This is a small holding of Money McBags and he is currently down ~10% on it but is thinking about nibbling at some more.  The biggest issue is that their excuse for missing the quarter made less sense than Kathy Griffin's career as HP is their biggest customer and was up 10%, yet MLNK's sales were down 9% even including revenue from an acquisition.  It is more head scratching than crabs as to why their revenues performed so poorly and why their guidance was down as the global economy and the consumer are picking up so this company should be seeing revenue growth off of such depressed numbers.  That said, the stock has started acting better, so it is worth watching.

3/5/10 Midafternoon Report: With Oscars approaching, the market is "Up" as economists "Blind Side"d by fewer job losses while strength of recovery remains "Up in the Air"

The market is running again as a result of the jobs report and inertia.  According to the (No)Labor Department, the economy lost 36k jobs in February while the unemployment rate stayed steady (and for those cunning linuists or Nabokov fans, that is back to back anagrams) at 9.7%.  This was better than the estimates of 68k job losses but is not a definitive enough number (like 42) to give investors a real read on the direction of the economy.  However, beating estimates is all that matters even though we know estimates are inherrently flawed like a supermodel with a hairy ass.  Some economists partially blamed snowstorms for the job losses, while others blamed companies for wanting to be profitable.  The (No)Labor Department chimed in and said job losses from snowstorms were unquantifiable like the square root of a negative number (imaginary numbers be damned), the number of one night stands by Paris Hilton, or how many licks it takes to get to the center of a tootsie pop.

In international markets, the Greeks are still protesting their loss of free lunches (and if those lunches were chicken gyros with a dollop of tzatzki sauce, who can blame them?) but now they are rioting in the street causing police to employ Greek helmets for protection.  German Chancellor Angela Merkel pulled herself away from the daily German scat film break to say she feels Greece has done enough to cut their deficit which has made the market guess as to whether the EU will continue to provide support.  This was not helped by Germany's economic minister Rainer Bruederle who tried to "rainer" on Greece's parade (and since it has been sunny in Greece today, it was quite a golden shower) by saying Germany "does not intend to give a cent" to Greece.  Of course Money McBags isn't falling for that sleight of language, knowing that Greece wants euros and not cents, so it was only an idle threat by Herr Bruederle.  Also, some guy named Jean-Claude Juncker (and one can only hope he isn't a bond sales man because Juncker bonds would be a name almost as unfortunate as if Mary Turdy sold bottled water, hence Turdy Water) who heads a group of euro-area finance ministers is soothing the market by saying “We’re telling financial markets: Look out, we’re not abandoning Greece." Money McBags has been saying all along that Greece isn't going anywhere (well unless the Anatolian plate keeps moving westward) and the EU will be there to bail them out regardless.  This Greek default hysteria has been a more overblown news story than Tiger Wood's love of filth or anything having to do with tea baggers that doesn't involve Kim Kardashian.

In stock news, Apple has announced that April 3rd will be the launch of their unfortunately named iPad (no word on when their super powered iPad, to be known as the Max-iPad, will come out to sop up sales) while financials continue to shoot up like Robert Downey Jr. in the 1990s.  The market is in full blast off mode as the economy is not getting worse today, just getting sideways.

In small stock news, everything is fucking up so good on you for owning anything that is publicly traded.  Money McBags promised to take a look at NTRI the other day after their craptastic guidance and he has finally had a chance to go through their call.  The stock is down 50% in the past 3 months after a massive rally on expected sales improvement.  Unfortunately, performance has not accelerated as hoped as investors remember that fat people are fucking lazy and thus are not apt to sign up for dieting even if they feel that the economy is getting better (though to be fair, NTRI costs less than actually buying groceries, but the up front costs are prohibitive for some).  NTRI's Q was actually not too bad.  Without one time charges they earned $.18 on a shrinking sales decline of only 7%.  These numbers were better than estimates with the company also earning $14.5MM of EBITDA in the Q and a delicious $69MM of EBITDA for the year.  The stock traded down though as their guidance for Q1 was so far below estimates that estimates needed an electron microscope to see it.  The company said that ad rates in Q1 have gone up by 50% to 100% in some cases as companies come back into the advertising market and drive up prices for everyone.  They guided to $.10 to $.13 for Q1 eps and analysts were estimating $.54 eps.  That is a bigger let down than for a gold digger who married into the Madoff family.  Not only is that guidance bad, but they said earnings will be negatively impacted by around $.17 in the Q with 60% of it coming from the marketing spend uptick and 40% coming from sunk costs to build out their retail channel.  So even if we add back those one time charges, guidance would have been around $.30 or still way fucking below estimates.  Revenue guidance is for around $155MM which is only 10% below expectations but the company said their retail sales partnerships other than Costco (Walmart, Walgreens, Old Country Buffet) posted disappointing and immaterial results.  While Nutri System D (geared towards diabetics) performed well and they saw new customers sign-ups flat and not down for the first time in over two years, their profitability crumbled like a Taco Bell Chalupa in the hands of one of their target customers.  Look, I'm no Norman Einstein but if you want to sell shit to fat people, why not sell some fucking Oreos instead of diets?  Really.  It's like trying to sell an agoraphobic Super Bowl tickets instead of indoor furniture.  Either way, the company is back down to where it was in October before the anticipation of better things to come.  That said, if we step back for a second and look at the company, it's actually not a terrible buy right now.  Earnings guidance is basically flat with the midpoint being $1.07 for the year, so it is trading at 15x that.  NTRI has a 4.5% dividend yield and spits out a ton of cash.  The company is trading at an EV/EBITDA of around 6x last year's EBITDA and with guidance for 2010 in the same range, the multiple should be the same.  Sure they have not grown in a while (while pseudo competitors like MED are growing like weeds on anabolic steroids), and sure they are facing huge headwinds and uncertainties with more expensive marketing costs and their retail sales programs belly flopping from the high dive, but the time to buy companies with decent track records, good returns, and solid balance sheets, is when every one fucking hates them.  NTRI has fixed some of their operations and still has solid brand equity and remains profitable.  It may be too early to get in to this, but it is worth keeping on your radar as this country will remain chock full o' fat people and thus there will always be potential customers (though if I were NTRI, I would partner like fuck with insurance providers and businesses as a way to get employees to lose weight and thus get premiums and high risk patients down).  Anyway, do your own research here but more than anything, enjoy the weekend.

1/21/10 Midday Report: With healthcare solved, Obama to take on banking industry

The big news spooking the market today is Obama's unknown plan to try to regulate banks.  He is now said to be giving former Fed Chairman Paul Volcker the keys to palace and Volcker is rumored to be getting all Glass-Steagall on bankers's asses telling them they can't trade financial securities using their own deposits.  Money McBags is usually for the free market (especially if that free market specializes in foie gras or taint cleanings), but large financials firms need to be regulated.  They have too much sway over the global economy, like Rasputin had over the Tsaritsa Alexandra or ugly chicks have over former President Bill Clinton.

The other news moving the market today is that China's GDP rose the fastest it has in two years as it grew 10.7% thanks in part to their ability to make really cheap shit and therefore have consumers need to continually replace said really cheap shit when it breaks/tears/poisons them.  Q4 economic growth was driven by a $586B stimulus package, subsidies for consumer purchases, a credit-fueled investment boom, and buy one get one free happy endings at local Shanghai massage parlors.  The strong growth in China has investors worrying that the Chinese government will finally try to slow down their lending to avoid more of a bubble than they have already created, which in turn will dampen the global economic recovery.

In US macro news, first time claims for unemployment rose last week by 36k to 482k defying analyst expectations for a 4k drop.  Money McBags is not going to harp on analysts for getting the number wrong as he knows it's not easy to guess at a number that can be anywhere from 0 to 300MM, but guys (and gals), can we at least get the fucking direction right?  You have a 50-50 chance on that one which is slightly better than your odds of not contracting herpes from shaking Tiger Woods' hands, so can we do a little better?  Luckily an economist for the  U.S. Labor Department (or as it is soon to be renamed, the U.S. Non-Labor Department or simply You're Fucked) cleared everything up by claiming that last week's numbers were higher than expected in part because the Christmas and New Years holidays created a backlog in some states.  To quote this brilliant economist: "It is not an economic thing -- it is an administrative thing."  He then went on to explain that the recent market crash also "wasn't an economic thing, it was a math thing," John Edwards denials about being some broad's baby daddy "wasn't a lying thing, it was a syntax thing," and for the ladies out there, swallowing after a hummer "isn't a romantic thing, it is a nutrition thing, so bottoms up" (when of course, we all know it is both).  The main point is, whether or not the rise in new unemployment claims was due to an anomalous administrative glitch or more people simply losing their fucking jobs (you know, what the statistic actually measures), there were still at least 450k people who recently filed for unemployment so this economy is about as healthy as Amy Winehouse at an all you can smoke crack bar or a Krispy Kreme donut with extra transfats.

Also, the Philly Fed showed the pace of manufacturing slowed a bit in January as the index fell to 15.2 from 22 and was below the expectations of 17.  Apparently a positive number still signals growth so since we have no idea of the impact of the relative values of the arbitrary numbers (how much worse is a 15 than a 17?  And about 10% is not likely the correct answer), all we can say is that the Philadelphia area produced some shit, though it was likely all stolen by the residents, so should have minimal economic impact.

In stock news EBAY put up a huge quarter as PayPal revenue was up 28% thanks to an uptick in Nigerian princes needing funds to return to their homelands and reclaim their fortunes, while Starbucks (SBUX) beat analyst estimates by quadrupling profits from a year ago.  Same store sales were up 4% proving that overpriced coffee may be a giffen good.  The biggest stock news of the day though was Goldman Sachs beating profit estimates by raking in $4.95B in the Q.  More surprising than Goldman's success under the Obama administration was the Streltsys' profitability during the reign of Ivan the Terrible, the benefits earned by the Imperial Guard during the Napoleonic era, and Haliburton's favorable business wins during Dick Cheney's vice-presidency.  Goldman's revenue was mostly inline and their outperformance was caused by putting aside only $16B for bonuses.  The pay ratio dropped to 38.5% which means the average worker will be forced to scavenge with only a $500k bonus and with the way the dollar is dropping, that means these poor Goldman employees will only be able to buy one Maybach and 3 nights with Charisma Cappelli (though to be honest, if all 32k employees had 3 nights with young Ms. Cappelli, she may get a little tired, so to those Goldman employees reading this out there, try to be in the first 1k if possible).

As for small stocks, HAFC continues to love it's long time shareholders as it erupts for the second day in a row on no news.  As stated yesterday, TBV is somewhere around $3.60 so this stock has plenty of room to move up, but this is very speculative as Money McBags trusts that TBV number about as much as he trusts politicians, Mexican water, and 35 year old virgins.  Also, anything that has recently risen, like RICK, is selling off faster than Rachel Uchitel's 10 minutes of fame.  This is going to present some buying opportunities for the better companies.  Over the past several weeks Money McBags has mentioned several companies he thought were solid but had run up a little too much (CRUS, NTRI, TMRK, heck even INTC) so use this sell off wisely to re-evaluate and make some smart decisions like the guy who married Christina Hendricks.  Oh yeah, a big shout out to When Genius Prevailed reader Matthew who has nailed NLS like a 19 year old girl in her first Monsters of Cock video.  Kudos on that pick.

12/30/09 Midday Report: The market mimics the Alabama school system as investors close their books until the New Year

With the year coming to a close, trading is thinner than a bulimic after a good gastric banding while market news is scarcer than Paris Hilton's panties or Bernie Madoff's investment returns.  The only real market news out today is that the Chicago ISM was released and measured a whopping 60, though it is unclear what 60 is out of and what 60 actually means, but it was higher than estimates so that must be good.  Apparently, readings over 50 signal expansion which means every time Bar Refaeli shows up on my screen, my pants would read about a 99 on the Chicago ISM scale.  Directionally, the results point to manufacturing in the midwest gaining strength and could signal positive changes for the job market as long as you are looking for a job as a competitve eater, snow shoveler, or corrupt politician (Chicago's 3 big industries).

The dollar is also on a bit of a rally as people forget how much money the US printed and borrowed, thus sending metals prices down.  Money McBags has talked about gold's Bubblicious rise in the past and we are now witnessing some sell off.  Long term, gold still remains a good hedge, though not as good as wearing two condoms when in Thailand.

Finally, GMAC may need more money from the government to the tune of $3B to $3.5B as not only did they finance shitty cars, but they financed them shittily.  As a result of this news, the financial services sector is down as the fear of more bad loans and bail outs is leaving a slight scent on the market (and that scent is a bit like a young skunk who has been urinated on and left to sleep with Amy Winehouse for a week).  That said, remember, these banks are getting free money and lending it out for a heck of a lot more than free so they should be raking in the dough so there are still some good buys out there.

In stock news, Money McBags favorite WILC hit its 52 week high as the shekel increases vs. the dollar and companies (unlike overweight strippers and kleenex) just can't stay ridiculously cheap forever.  Also there appears to be a sell off of momentum names in the weight loss space as NTRI and MED are dropping like Alan Greenspan's credibility.  NTRI announced a $5MM impairment charge yesterday, MED's CEO is regstered as having sold shares, and these names have been flying higher than a coked up Ruppell's griffon so a sell off is not unexpected.  Money McBags does recommend keeping an eye on NTRI as they have had solid returns, recently entered the diabetic market, and have new deals with WMT and Walgreens.  The company is a solid cash flow generator and this country has more fat people than Tiger Woods has STDs, so their business has plenty of room to grow.  It is worth following and waiting for the momentum buyers to finish selling.

12/24/09 Mid-Morning Report: It's Christmas Eve, can a jew get a table dance?

Yes Money McBags lights the menorah and it looks like the market wants him to get those table dances tonight as it is up again on positively mixed news.  Durable goods orders rose, though missed expectations with weakness in autos and airplanes which is not suurprising since "Cash for Clunkers" went away like Tom DeLay's dignity.  Taking out transportation, durable goods demand demolished estimates like Kirstie Alley demolishes her Christmas ham (and it is reasons like this that NTRI has been absolutely killing it lately).  Orders were up 2% ex-transportation, led by demand for machinery, metals, computers, and stripper poles.  The question remains whether this is real demand or just inventory build back, so we're trying to temper our excitement and make it last longer by just thinking about baseball.

In other positive market news today, initial jobless claims fell to their lowest level since September 2008 as eventually you run out of people to fire.  So if you made it through and stayed employed this long, you might be ok, but if you're looking for a job, you may be fucked worse than the lovely Houston at her 620 man gangbang.

In stock news, Money McBags' long time favorite QCOR is up 20% on news that the FDA will give a ruling on Achtar for IS by June (and hopefully the ruling is more than just finding it delicious).  Seeing as how it took QCOR about 3 years and several  "do-overs" to get this filing accepted (and you'd think they were trying to prove P=NP with how long it took them to simply get a filing complete), this is positive news, but the FDA still has to approve this drug which is used by the majority of doctors anyway (so one would think it would be approved, but then again, one also thought Lindsay Lohan would have had a long and profitable career and Evolution would not have been contested in the 21st Century).  Money McBags wouldn't be buying into this rally though.  It seems more like short covering than anything because the company is still going through growing pains and there is some uncertainty to their medicare reimbursement as they currently have to pay more than they get from medicare and didn't reserve enough for late/non-payments last Q.  The company is probably at a ~$.08-$.10 quarterly run rate right now, but they have cash and give back to shareholders through buybacks.  They could have real upside if they continue to penetrate the MS market and can get on-label IS approval while overcoming the sticker shock from doctors/patients/insurance companies on the price of a vial of Achtar which currently runs at $23k a pop (and that is enough to cure spasms from MS/IS but create spasms from having to pay that price).