The market is limping in to Thanksgiving like Kenny Easterday with a broken wrist thanks to the European Union being on shakier ground than Gabourey Sidibe on a tight rope, North Korea dropping bombs on South Korea after South Korea’s TSA apparently tried to touch Kim Jong-ils junk, and the Fed releasing the minutes from their last meeting which showed less consensus than how to spell “Bernanke” at a Tea Party convention.

Loyal readers of the award winning When Genius Prevailed know that Odette Yustman is hot, but they also know that Money McBags has been baffled, bufuddled, and downright befuckingperplexed at the market’s continued strong rally given that data remains tepid at best and Europe continues try to sweep their problems under a rug more tattered than Elton John’s.  So continue to make sure you are careful in your investments because the fan is on and the global economy just downed a bag of Nacho Cheese Gorditas and a six-pack of Metamucil.

As for macro news today, the Fed released their minutes from their last meeting and in them we learned that they downgraded their assessment of the economy from “meh” to “oops” with GDP targets for next year lowered from a range of 3.5% to 4.2% to a range of 3.0% to 3.6% while also raising the completely fictitious upper range of the long run rate of unemployment from 5.3% to 6%.  So suck on that NAIRU.  The minutes also showed that the Fed discussed that QE2 would sink the value of the dollar (despite their repeated denials of such an effect) and ways to improve their communication with the public such as not lying, using smaller words, and employing cartoon characters.

One other interesting detail released was that the Fed had a special video conference two weeks before they officially met (though the video conference got off to a rocky start when Janet Yellen and Sandra Pianalto were subjected to a flurry of cock shots as Bernanke, Hoenig, and William Dudley thought they were merely on chatroulette).  The conference was to discuss hot button issues such as setting explicit targets for inflation and long-term interest rates (targets as explicit as “Fucking higher” and “Cockposterously higher”) and which Fed member had the awesomer name between Christine “Honey I’m” Cumming and Brian P. Sack (and when Money McBags becomes the next dictator, he is going to require everyone with the last name Sack to have the middle initial P.).

In other macro news, GDP was revised up to 2.5% from 2% thanks to stronger exports, better consumer and government spending, and a fuckload more inventories as businesses stock up on broken dreams and malt liquor to make their own Four Loco.  Inventory increases accounted for about half of the 2.5% growth so as inventory trickles down in the next Q as re-stocking goes the way of full bush and those fucking annoying Wassup Budweiser guys (thanks to the holiday season ending and federal unemployment benefits drying up), GDP will struggle to stay positive in the upcoming Qs.

Elsewhere, existing home sales fell 2.2% sequentially or 26% y/y depending on whether you are bearish or fucking bearish (actually the sharp year over year decline was driven by last year’s home buying tax incentive, but whatever).  Sales were effected by some states postponing foreclosures due to something about robosignatures and straight up fraud, as well as people not having any money.  The annual rate of sales is now 4.43MM, which was below the 4.49MM guessed at by analysts, and means there is now 10.5 months of inventory on the market not counting shadow inventory and Ice-T’s wife’s ass.

As mentioned earlier though, it was international news that figuratively pissed in the market’s cheerios today as North Korea and South Korea are nearing war and threatening to use biological weapons such as unrefrigerated kimchi on each other.  In Europe, Ireland bent over and took their $100B+ bailout from the EU who once again showed their love for Doin’ Da Butt.  This massive bail out has effectively caused the Irish government to collapse as PM Brian Cowen’s Fianna Fail party has officially Fianna-failed.  While Cowen won’t step down immediately, he agreed to hold new elections after the budget passes in order to “let some other schmuck deal with this mess.”

Three funds will be created for Ireland in the bail out, one will back up the country’s failing banks, one will allow Ireland to continue government operations without turning to the bond markets for help, and the final one will get Ireland one night with homegrown Claire Tully.  This package should allow Ireland to operate without funds from the markets for up to three years, unless they follow Greece’s lead and fabricate their books worse than Stephen Ambrose on a bender.  Making matters worse was that Ireland’s central bank Governor Patrick Honohan said, “Irish banks are up for sale” and Money McBags is willing to bid anything between “not a fucking chance” and “eat a bag of dick” because he hasn’t seen assets that toxic since Paris Hilton got her last pap smear.

Luckily, Greece is getting their aid (as they must have received the placebo in the Truvada trials) of $12B in January from the IMF but German Chancellor Angela Merkel pointed out there is now serious bailout risk sweeping the continent as moral hazard from stepping in for Greece and Ireland has created a slope slipperier than OJ’s alibi (he did have an alibi, right?).

In the market, the FBI raided 3 hedge funds after they likely tracked messages posted to Dickflash emanating from those offices.  As for stocks, J Crew was up 16% after agreeing to a $3B buyout from two private equity funds who have until the month to return the deal for store credit if they are not happy.  HPQ was up 2% after a decent Q in which the company beat analyst guesses on both top and bottom lines and gave above the street guidance.  The quarter was highlighted by new CEO Leo Apotheker playing Santa Claus to former CEO Mark Hurd’s Scrooge by reversing pay cuts, reinstating a 401k matching plan, and bringing Skinemax back to break room TVs.  Also, NYT strangely shot up again today on unusual volume as algorithms apparently don’t know that the newspaper industry is shrinking faster than gonorhhea cases in the US.

In other earnings news, Hormel put up a good Q with profit up 17% thanks to the strong performance of Jennie-O Turkey and the fact that with real unemployment running at ~17%ish, SPAM is now considered a luxury good,  Finally Campbell’s soup was down after missing analyst guesses as their promotional spend didn’t pay off because apparently hiring Mel Gibson as a spokesperson was a case of bad timing.

In small cap news today CTGX continues their ride up (and remember Money McBags told you all about them at the beginning of the year), while KITD continued to bounce after their $96MM equity raise the other day.

That said, KITD had their quarterly call yesterday and Money McBags wanted to briefly go over the highlights as he went over their preannouncement in exhaustive detail the other week.  Unfortunately he didn’t get to watch the call as the streaming on their site was somehow fucked up (and Money McBags won’t blame this on their VX Platform, but rather will assume it had to do with trying to watch Carmella Bing‘s latest video at the same time).  Anyway, this is what we learned:

1.  EBITDA margins were much lower than they have been coming in ~16% but that was due to a bigger sales pipeline than expected leading to more implementations.  It was also the result of investing in future growth by doing some hiring.  Money McBags is fine with this, especially as EBITDA guidance for 2011 stayed at a spanktastic 24% with 30% EBITDA margins being the long-term target.

2.  While DSOs spiked to 116 days, they were down to 78 days at the end of November with 94 days being a more normalized number.  So good on them for getting this shit down after late quarter acquisitions caused them to rise.

3.  They added 45+ new clients including something called the International House of Prayer, where salvation is served all night.

4.  They clearly stated that they have raised enough cash for their transformative acquisition which will be a company with $50-$60MM in revenue and which they will spend ~$100MM (and remember, Money McBags estimated they’d buy ~$40MM-$50MM of revenue for $100MM, so good for his fucking guess).  They also said they would only do an accretive deal and they threw in $20MM+ of their own money in this last equity raise.  So while Money McBags has given management a ton of shit for their constant equity raises, he has always appreciated that they are risking their money with shareholders.  Sometimes it is good to get high off your own supply.

5.  They are trying to book as much restructuring and integration charges as they can in Q4 so they can start 2011 with a relatively clean income statement.  They’ve also been trying to buy back 450k warrants for quite some time from some cock knocker hedge fund who simply won’t sell.  Money McBags thinks this is huge because they could easily put up ~$.75 of eps next year which will trip the shit out of algorithms and screening models that aren’t picking up this GAAP eps negative company.

6.  Olivia Munn is hot.  Money McBags didn’t learn this on their call per se, but it is a very important thing to remember.

7.  They sold the ~$14MM in non-SAAS business they intended to ditch which was EBITDA neutral for them so next year’s guidance is $137.5MM in revenue and 24% EBITDA margins.  Well, until the acquisition and then guidance will probably jump to ~$195MM and who the fuck knows about EBIDTA.  They also said that due to the long-term nature of their contracts, ~60% to 66% of their 2011 revenue is already in pocket (and those must be some hella large pockets because even if they are carrying a $50MM bill and two $20MM bills, that would still leave ~$1.67MM in ones which is at least two hours for Money McBags sitting stage level at his local Rick’s Cabaret).

KITD remains one of Money McBags favorite names and there will probably be some nice entry points (though not as nice as these entry points) as they get closer to making their transformative deal.

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