The market got its schwerve back on today by buying the dip as if the dip were going to cure cancer, reveal the meaning of life, and lead to a threesome with Kayla Collins and Sara Underwood (who as always, can get under Money McBags’ wood whenever she pleases).  So forget about unemployment, forget about home prices, and forget about everything you never learned in your economic classes because you were too busy trying to understand crucial concepts like Giffen goods and positive externalities, and just lever up on those double long S&P ETFs because the market has nowhere to go but up (and yes, that was sarcasm).

Money McBags may be but a simple antithalian misanthrope who apparently doesn’t understand concepts such as quantative easing, core inflation, and whatever this fucking Justin Bieber thing is (and really, this is what teenage girls like?  Shit, Money McBags wishes he knew that 20 years ago so he could have been much douchier), but he eagerly awaits for someone to explain to him how the market can be trading where it was in late 2005 when the unemployment rate was ~50% of what is today, home prices were not just a fuckload higher, but a fuckload higher and rising, and credit was easier to come by than a venereal disease in the Kardashian house.

Seriously, let’s say the economy was at X in late 2005 and today the economy is at X minus “a bunch of shit people can’t afford anymore,” so how can the market be valued the same unless common sense has turned in to uncommon sense, inflation is so fucking high that that it is causing corporate profits to seem better in nominal dollars (and not that bullshit core inflation number which is less useful than an organ transplant waiting list in Arizona), or the economy is simply driven by the richest 5% of the people who are now back to dining on unicorn meat and the tears of defenseless babies since the algorithms shot their investment portfolios back up to a bernankity.  Money McBags remains thoroughly confused, but as a former hedge fund colleague of his tried to logically explain earlier today, and Money McBags is paraphrasing, “the market is going up, SO IT SHOULD GO UP.”

And there we have the rally in a nut shell, what goes up, should continue to go up, because why else would it fucking be going up (and Money McBags believes that is called the transitive property of insanity)?  Now if you’ll excuse Money McBags, he has to go burn his CFA Charter that is propping up his door and his MBA diploma which is plugging the rat holes in his kitchen because the Underground Man was right and 2 + 2 may not always equal 4.  So buy this dip, that dip, or all the dips and bask in the cognitive dissonance.

Anyway, the reason the market rallied today (other than inertia) was that the ADP jobs report came out (though we all kind of knew anyway, especially when we caught it holding hands last month with the B(L)S’ Employment Situation Summary.  Not there is anything wrong with that) and demolished guesses by showing 297k private sector jobs were created vs. guesses for 100k.  And it wasn’t just that, but the data was quickly followed up by the ISM’s Service Sector Report where the index reached its highest level in four years (and lucky for it, there will be no blood test tomorrow) which seemed to confirm growing strength in the economy.  So hoofuckingray for macro data today.

Of course one has to look at the data critically, and not just stare in to its headlines with their dreamy big words and pithy punctuations, to properly understand what the fuck happened and when one does that, one sees the reports weren’t all lobster tails and blow jobs.  First of all, while people celebrate the 297k private sector jobs created according to ADP, they ignore that the report showed that 142k government/public sector jobs were lost.  So only ~150k net new jobs were added which is better than zero, but still not enough to put a dent in the “Job-Lost Generation™.”

Secondly, in looking through the details of the report spewed by the (J)ISM, we see that the employment index actually dropped from 52.7 to 50.5 which seems in direct opposition to the positive ADP report and the positive headlines telling us that the positive ISM report supposedly supported the positive ADP numbers (wow, that was a positively large mouthful).  According to ZeroHedge via GS witch doctors, who never saw a market they couldn’t bullishly manipulate,“The decline in the employment index, however, suggests that the strong ADP employment number has considerable statistical distortion and should therefore be interpreted with care.” So the headlines told Money McBags the numbers were good, and yet the great Goldman Sachs is telling him that he needs to interpret the numbers with care (which is Banksta for “the data is fucked”).  Color Money McBags confused here (as long as it is a nice shade of blue to match the tint of his despair).

Internationally, Portugal’s borrowing costs jumped again as they issued €500MM of 6 month bills to be able to finally pay someone to finish the Batalha Monastery and to buy enough cases of 10 year tawny port to get them through this recession.  The bills had an average yield of 3.69% which was well above the 2.05% for a similar offering in September, and a fuckload above the .6% average yield for an offering early last year.  Luckily, they only need to raise ~€19.5B more this year (and yes, that was sarcasm again) which will allow them at least one more year to play in the great global ponzi scheme as well as plenty of lap dances from Sara Santos.

One more interesting piece of world news is that global food prices hit a new high.  Of course since food prices are not counted in core inflation numbers, this is nothing about which to worry (unless you’re hungry, poor, or a rational thinker).

In the market, just about everything was up except FDO which was down 8% as earnings missed guesses despite sales up 9.5% and same store sales up a delicious 6.9% (though the period after the 69 instead of in between it would have been enjoyed more by all parties).  Guidance for $.92 to $.97 eps was also below street guesses (but enough to buy a 3-pack of socks at all FDO stores) as margin compression wreaks havoc on earnings.

Elsewhere, JCG was up as Urban Outfitters and Sears are rumored to be outbidding TPG and Leonard Green to purchase the retailer.  Sears is apparently in the midst of their spaghetti strategy of just trying to throw shit against the wall to see what sticks as this potential bid comes a week after announcing their bizarre plans to take on NFLX and a week before their likely bid to take over the Ms. America pageant.  Also BJs once again caused investors to choke on profits and spit out shares as the retailer announced they will be closing 5 stores and laying off ~500 employees.  Finally, DIS was up after being added to the conviction buy list at GS and at ~14x next year’s eps guess, the call seems a bit fucking Goofy.

In small caps, all of Money McBags’ favorite names jumped up including TMRK which is starting to really run.  Also OPEN shot up another ~7% to reach a PE just a nut hair below infinity as Money McBags continues to ask for the check on this one as valuation makes less sense than Mila Kunis claiming to be a gay man in a straight woman’s body (and Mila, Money McBags will put a straight man in your body if you think that will help).

Finally, Money McBags wanted to point out EHTH today, which has been getting yammied on an analyst downgrade from Citi, because Money McBags actually wants to give the analyst credit for proactively sticking his balls out on this name and cutting his numbers based on forward thinking and real research.  Yeah, Money McBags is going to give the sell side some love today because this guy put out an against consensus opinion and backed it up, so kudos and huzzah (now Money McBags has no idea if the opinion is right, but that is irrelevant).

EHTH is a stock that has confused Money McBags for years now as they have always had a ton of cash (so looked cheap) and yet have consistently underperformed despite having the kind of business model that makes Money McBags’ dick hard (and not just this business model).  EHTH runs a health insurance network/online marketplace where they basically form the backbone for insurance carriers to reach insurance seekers on the internet and in turn, EHTH gets a commission.  It’s a great business model and yet it has never quite taken off in this space for a variety of reasons including regulations, work provided insurance, and uninsured people not giving a shit.  That said, Money McBags followed this company quite closely a few years ago because they should have had strong earnings during the height of the depression when laid off workers were running out of their COBRA coverage faster than Money McBags was running out of similes.  Alas, EHTH could never seem to get anything going so Money McBags just forgot about them since if they couldn’t outperform in an environment tailor made for them, they were just never going to be successful.  Not only that, but with the potential for government health care, it was unclear what the fuck value EHTH would add unless they were picked to run the back end of the government option.

Anyway, the stock had actually been acting ok until this analyst report came out and sent the stock down ~10% by claiming EHTH will miss their Q4 number and street guesses of $.59 eps for 2011 are cockposterously high.  And it’s not just that this is a ballsy call, or that this analyst awesomely stated “We don’t have a higher conviction idea over the first few months of 2011 than our Sell rating on eHealth,” it’s that he backed it up with fucking data.  The guy looked at Comscore to see that traffic in the last few months to EHTH has been slowing down and also realized that regulatory issues in CA have fucked with health insurance sales in the last few months.  He also postulates that commissions will eventually get close to zero when health care exchanges are introduced and provided rate card information to show that commissions are already being cut nearly in half.

The report is ~12 pages long, which is unfortunately about 13 pages too long for Money McBags to thoroughly read, but the parts he skimmed, he really fucking enjoyed.  So a job well done by some guy named Carl McDonald at C and the first real analysis Money McBags has seen from the sell side since the lovely Meredith Whitney retired (wait, she’s not retired, then why won’t she return Money McBags’ calls?).

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