Marginal macro news, the upcoming G20 meetings, rising commodity margins, and enough uncertainty to make even Heisenberg jealous had the market once again bobbing up and down like Shyla Stylez trying to make her rent.  We remain at a confusing time with economic data saying the market should go down (that economic data being a U6 unemployment rate higher Charlie Sheen’s blood alcohol level on a Wednesday night, massive government debt that might even turn the immortal John Maynard Keynes into to an Austrian, and the world’s global reserve currency fast on the way to becoming more worthless than a Chubby Cox rookie card) and yet algorithms, blind hope, and the Bernanke Put potentially lasting to in-fucking-inity keep supporting the market and edging it higher.

The bad news is that the day of reckoning may be coming, the good news is that nothing has collapsed yet, and the better news is that you can now use Facebook to tell the world that your boss is an assclown and not suffer any consequences (of course since Money McBags has no boss and still can’t get his own Facebook page, that doesn’t do much for him).

That said, there was a plethora of macro data out today as President Obama finally touched down at the spot of the G20 meetings and told the other 19 Gs to calm the fuck down about currency wars.  In a letter to other leaders, the President said that US growth is the most important contribution the country can make for a global economic recovery (other than auctioning off a threesome with Raven Alexis and Audrina Patridge), that the strength of the US economy will determine the value of the dollar (horse meet cart, now get the fuck behind it), and that LeBron James is a bitch.

New claims for unemployment dropped to their lowest level in four months (until they are revised upwards next week) and registered 435k, down 24k from last week’s upwardly revised 459k or 22k from last week’s announced 457k as the “Hold the shock and hope for no awe” strategy once again rears its ugly head.  Analyst guesses were for 450k so Money McBags would like to applaud them for at least getting the direction correct seeing as how not only are they relying on outdated assumptions of normality, but they are also guessing at completely made up data.

In other news, the trade deficit narrowed in the US as the weak dollar helped exports grow a whopping .3% to their highest level since 2008 when the Kim Kardashian sex tape first got international distribution rights.  Also, mortgage loan applications rose 5.8% but still remain at historically low levels as “buying a new home” ranks up there with “getting involved in a land war in Asia,” and “investing money with Bernie Madoff” on Americans’ to do list.

In stark contrast to the US, China’s trade surplus rose once again thanks to the Chinese government continuing to manipulate down the value of the Yuan and a surprising increase in the demand for pee pee flavored Coke (no joke).  While China’s trade surplus jumped from $16.9B to $27.1B the Chinese government decided to tighten bank rules in order to cool off their housing market which is expanding at a pace slightly quicker than whatever the pace is that causes bubbles (perhaps really fucking quick or quicklicious).  With real estate in China threatening to mimic tulips in the Netherlands in 1637 or two lips of Brooklyn Decker wherever she goes, the government is now requiring banks to raise their reserves by half a percentage point which is the fourth such increase this year (with the fifth of course to come next month).

In the market Boeing crashed ~3% as their new 787 Dreamliner had to make an emergency landing as perhaps it was dreaming of Heather Vandeven which caused the lining of its circuits to short.  As a result of the jet now being 3 years behind schedule and still working about as well as Carnie Wilson‘s lap band surgery, Boeing was taken off Goldman’s conviction buy list and told to go to their room and not come out until they understand how they made the Goldman analyst feel.

Elsewhere, everyone seems to be raising their hands and shouting “I want BJs” as BJs Wholesalers shot up on news that the board is looking to sell the company.  The company is rumored to be licking their lips over a ~$2.75B offer which would make it the most costly BJ since Monica Lewinksy frequented the oval office.  Morgan Stanley was hired to give heads up advice and lead the deal team and they hope to have the sale humming along in no time.


Also, GM posted a $2B profit as they prep for their upcoming IPO and hope investors forget that they are a shittily run company while AIZ tumbled ~11% even after assuring investors that allegations of their policies for something called forced placed coverage being nefarious are way out of proportion, like Mayim Bialik’s nose or Paul Krugman’s reputation.  Finally Polo Ralph Lauren galloped up ~8% after beating analyst guesses and raising guidance for the year.  The company cited strong growth in footwear and apparel as well as “looking like a douche bag” being back in style.

In small cap news ZAGG put out their earnings release and had their call after the close which Money McBags has yet to listen.  That said, in going through their release they had a surprisingly good Q (except for their gross margin falling again because, you know, stuffing channels isn’t as easy as it seems).  Revenue was up ~135%, eps was up to $.16, and they seem to be happy with their AT&T partnership.  As loyal readers know, Money McBags likes this company about as much as he likes G-rated movies or DCF valuations (well to be fair, he likes the theory of DCF valuations, but as for their execution, well, he is all for it).  ZAGG’s long-term business model, which relies on one over-priced commodity product to which they don’t even own the patent, is less likely to remain a successful strategy than Jimmy McMillan’s campaign strategy for Governor of NY or .  That said, on the surface their earnings look good so Money McBags will give them their due and hopefully break them down later this week after he goes through their call and their 10Q.

In other small cap news, Money McBags had time to got through DFZ’s call today as he promised and it was not as splenderiffic as he would have hoped.  The stock dropped ~15 minutes in to their call yesterday but at that point they had just reasonably finished explaining why their margins shrunk (due to increased late deliveries that had to be airshipped and not due to price discounting or a company wide boondoggle at their local Rick’s Cabaret).  That said, on the call they warned of input prices rising (though not as much as Natalie Dylan’s input), sales in the first 7 weeks being a bit disappointing, and seeing some softness in cold weather goods including furry slippers (and the fact that there is no definition for “furry slippers” on Urban Dictionary has made Money McBags lose a little more faith in humanity).

So Money McBags forecast may be tempered a bit.  In his last breakdown he guessed that they will earn ~$.87 in fiscal 2011 based on 4% topline growth 40% gross profit margins and $36MM SG&A.  If those margins slip to ~39% then we’re looking at closer to ~$.80 per share.  The company is trading ~$10 but should have at least $4.50 in cash on the balance sheet at years end which means they are trading at ~13x that low end $.80 eps estimate or 8x the estimate plus the cash.  So even if they struggle a bit, they are still pretty cheap.

Of course none of those projections really matter because they reiterated that they are going to make an acquisition within the next 12 days, so if you want to invest in this company ahead of that, you have to feel confident that management knows what they are doing and isn’t going to screw up an acquisition worse than John Tyler screwed up the Whig Party or an 8-ball screwed up River Phoenix.  Money McBags thinks the stock is cheap enough that there is a decent margin of safety, but he’s not sure what the upside is until he knows what they buy, so if you don’t own it now, probably no reason to jump in here.

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