A flurry of buyouts, headline-y good macro news (just don’t read the “not so” fine print), and the Fed promising to print enough dollars to make everyone a millionaire as Bernanke mimics the First Citiwide Change Bank “volume” strategy, caused investors to celebrate in the morning by doing the Dougie.  However, the market slipped end of day as common sense eventually kicked in as the economy is nowhere near out of the woods (though if it is Evan Rachel Wood the economy is in, then by all means, it should feel free not to get out of it).  Given the uncertainty, investors could walk out on the market at any minute, like Charles Rangel in an ethics committee hearing, so trade your positions wisely (especially if your position is a reverse cowgirl).

In macro news today, retail sales posted their biggest gain in 7 months as they were up 1.2% sequentially, 7.3% y/y, and a shitload % beyond reason.  That said, there were two really interesting things about the number.

1.  The 1.2% increase exceeded even the highest guess of all 74 analysts surveyed by Bloomberg in the latest edition of “Guess Your Luck” where economists try to fit their outdated models to the Commerce Department’s random data number generator in hopes of avoiding the dreaded Whammy.  As always, Money McBags’ point is that if the data were following any forecastable pattern, then in a normal Gaussian world it would generally fall somewhere in the middle of “expert” guesses (while in a normal Seussian world it would generally fall near a fox wearing socks fixing clocks munching box) but since it was higher than EVERY SINGLE GUESS, something is more wrong here than the theory of luminiferous aether or whatever happened to Bruce Jenner’s face.

2.  While the headline number looked good (though nowhere near this good), this is what Money McBags refers to as a shemale number because while the top might have been attractive, in digging down we bumped in to something that wasn’t what it appeared to be or what we hoped to find (unless we were Eddie Murphy).  See, the beat was driven by autos and gasoline, so if we strip that shit out of the numbers and just view what the Fed looks at which is core retail sales, we see that core retail sales were only up .2% or as it’s better known: “a rounding error.”  Motor vehicle and parts purchases were up 5%, likely driven by people purchasing new crank shafts to fix their 15 year old cars since they can’t afford new ones and gas sales were up .8% likely driven by OPEC needing a new cot for the extra concubine they decided to order.

So netting out the non-core retail numbers, we see that a 1% increase in spend on books and hobbies (since staycations are the new vacations and Jim Davis’ latest Garfield book just hit the stores) and a .7% increase in clothes purchases were offset by a .7% drop in sales of electronics and a .7% drop in sales of furniture.  Those numbers don’t seem healthy to Money McBags since electronics are as discretionary as it gets and furniture is obviously intertwined with home sales, so excuse Money McBags as he scratches his head over people finding these numbers positive.

In other macro news, business inventories rose .9% as companies continue to stock up on new locks and deadbolts in anticipation of the next round of layoffs.  With businesses now holding 1.27 months of inventory, a cooling is likely to come in the next few months which will be about as good for GDP as hubris was for Amelia Earhart or refusing to carry the one was for Enron.  Also, manufacturing in the New York region unexpectedly contracted in November (of course what it contracted was herpes from being so close to the Jersey Shore) for the first time in more than a year thanks to slow sales of “Yankees 2010 World Champions” paraphernalia.  The Federal Reserve Bank of New York’s general economic index fell to minus 11.1 from 15.7 with anything below zero showing contraction (while anything below Jasmine Dustin likely showing expansion).  Making the numbers worse was that new factory orders slumped to minus 24.4 and unfortunately extra batting practice and praying to Jobu might not help them break out of that slump.

Elsewhere in the US a bunch of Republicans are calling out Bernanke as Indiana Rep. Mike Pence argues “printing money is no substitute for pro-growth fiscal policy.”  While Money McBags doesn’t necessarily disagree, he finds it hard to give a shit about the opinions of anyone who doesn’t believe in evolution.  And speaking of opinions about which Money McBags doesn’t give a shit, Alan Greenspan said this weekend that high deficits could crush the bond market, but then again, caring what Alan Greenspan says about the economy is like caring what George Custer said about war strategy or Magic Johnson says about safe sex, so a big fucking yawn.

Internationally, Europe may be coming to the aid of Ireland even though Ireland continues to play hard to get while not realizing it has less leverage than Kahagendra Thapa Magar on a seesaw opposite one of Gabourey Sidibe‘s salivating mandibles.  The Irish government continues to insist that it doesn’t need financial aid, it can present a credible austerity budget, and it has enough money to finance its operations through spring of next year while the EU continues to insist that Ireland should shut the fuck up and do what it is told.  With the IMF perhaps stepping in here, it looks like its time for Portugal to come on down to see if the Price is Right for their upcoming bail out (and remember to have your debt spayed or neutered).

Finally, Japan’s GDP grew at an annualized rate of 3.9% as a result of their stimulus and a new line of Hello Kitty urinal targets being introduced.  With incentives for the purchase of fuel-efficient cars and energy-saving appliances (such as solar powered wet vacs to clean up after all of the bukkake films) having ended in September, GDP will surely slow in the next few quarters.

In the market buy outs were the news as Caterpillar hopes buying something called Bucyrus for $7.6B will allow it to metamorphosize in to a different company while EMC is paying $2.25B (or what is known to Money McBags as a weekend in the champagne room at his local Rick’s Cabaret) to acquire Isilon.   In other M&A news, BHP told Potash to eat a fat dick and rescinded their buy out offer and instead will restart its $4.2B share buyback program.

Elsewhere, AAPL said that on Tuesday they will have an announcement that “you’ll never forget” so either they have coaxed Hanna Hilton out of retirement or have developed an app to let users bid on OPEN reservations using PCLN while having NFLX stream in the background which will surely push the stock to a billionty.  Rumors are that the announcement will involve the Beatles portfolio of music being available on iTunes which would be awesome if this were 1964.

In earnings news, Lowe’s put up a disappointing Q and said revenue was weaker than expected and lowered full year guidance.  CEO Rob Niblock said “Ongoing uncertainty in employment and housing continues to pressure our industry…” and then added “You do read the fucking news, right?

In small cap news TSTC was up 23% on a good Q and this is precisely the type of small cap company over which Money McBags salivates.  It is growing rapidly, trading at a way too cheap multiple, completely underfollowed by the street, and potentially set for another movement up off of good earnings.  That said, it also has the three things Money McBags avoids in a company, it is Chinese so he can’t do real due diligence on it, it has a shitawful balance sheet, and its technology is less understandable than anyone who broke up with Jessica Simpson.  Money McBags is only mentioning them to highlight the difference between investing and gambling (and see, that’s funny because it is all gambling).

About a year and a half ago, when Money McBags still worked for the man, TSTC came in to his fund’s office for a meeting and the sheer awesomeness of it still lingers like the mellifluous scent of a game worn Reggie Jackson uniform.  Not only did the CEO bring what appeared to be a concubine under the guise of “personal secretary” (and Money McBags is not joking as this personal secretary was not allowed to look at anyone or talk to anyone), but the CEO also spoke almost no English and brought with him a Director of IR or CFO (Money McBags doesn’t remember his title) who had been with the company for less than a week.  So basically every time Money McBags asked a question, the CFO guy would apparently explain it incorrectly and the CEO would jump in but since he spoke English about as well Moses Malone, the whole thing was comlpetely incomprehensible.  It was absolutely bizarre and Money McBags just decided to stay the fuck away because he understood less about the company after the meeting than he did before it, and frankly wasn’t quite sure if he was on an episode of CNBC’s version of Punk’d (and if CNBC ever does a version of Punk’d, they should have an episode where they tell John Merriwether that his fund is actually successful).

So the point is, even though the company is ridonkulously cheap (if one can understood exactly what their technology does) as it is trading at <7x full year eps and growing at 80%, there is just too much unknown (like how they plan on managing receivables and when Faye Reagan‘s next movie comes out) to bother.  If this were an American company, Money McBags would be all over it because in a few phone calls he could talk to someone who generally understood the company but given that it is impossible for him to do any real research on a tiny Chinese company without being in China or speaking the language, he is going to continue to pass on this like he passes on network TV, decorum, and 19th Century romance novels.

**Editor’s note:  Money McBags knows this headline sucked, but he already used “Retail Stales” and spent way too long trying to think of something better.  So feel free to write in your own, you won’t hurt Money McBags’ feelings

mellifluous
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