The market rallied a bit in the afternoon as rising new claims for unemployment missed analyst guesses by somewhere near a fuckton (give or take an asshair or ten), Portugal and Greece saw bond yields rocket up more than applications to LaSalle’s MBA program and even more than Kate Upton on the awesomeness scale, and the US government got even closer to banging up against their fictitious debt ceiling (and it is more fictitious than the Easter Bunny, Hanukkah Harry, and Goldman Sachs’ congressional testimony) that in the past 25 years has been lifted more times than Joan Rivers’ face or Lisa Sparxxx‘s gunt.  So as always, rally on Money McBags’ friends because the solution to a weak (or non-existent) real recovery, to global turmoil so uncertain that it has even caused Heisenberg to roll over in his grave, and to long-term unemployment more structurally fucked than a Sarah Palin sentence, is to simply buy the dip and thank the great Bernanke in the sky for making QE a permanent part of the lexicon (and for making the US government closer to insolvency than Lenny Dykstra is, though unfortunately with fewer hookers and tobacco stains).

In macro news, new claims for unemployment rose by 27k to 412k which was just a rounding error away from analyst guesses of 380k (and a rounding error in the same way that Kathy Bates is a rounding error away from Kathy Gardiner) and signals the economic recovery may be losing steam faster than John Tyler’s 1844 re-election campaign (because pissing off both parties is a worse election strategy than telling the truth, or at least more of the truth than others) or Hosni Mubarak’s heart (though who knew he had one).  And what Money McBags loves most about the number isn’t just that it was likely the result of someone at the B(L)S forgetting to hit the goal seek function, but that the (No) Labor Department chalked it up to unusually large layoffs that happen at the end of quarters, but umm, while Money McBags is no econometrician (heck he couldn’t even tell Daniel McFadden from Darren McFadden if he were given a discrete choice, and yes that was the first econometrics joke in the history of the award winning When Genius Prevailed) he is pretty sure analyst regression models should fucking account for seasonality since that is kind of the entire fucking point of a regression model.  So either all of the analyst regression models suffer from some kind of spurious correlation (and correlation more spurious than thinking people buy Playboy for the articles) or the data is more made up than the Fed’s mandate, so it is hard to have any real confidence in the numbers.

And it’s not just that the data is likely completely bogus, but in the continual “hold the shock and hope for no awe” government strategy, last week’s numbers were revised up for the infinityillionth time from 382k to 385k which made last week’s beat, now a miss.  But of course the market cares about details about as much as the Brits now care about the Royal Bride’s virginity (and Money McBags will take the over on that), so it is what it is.

In other macro news PPI was up .7%, though mostly because R Kelly was seen chugging bottles of Gatorade while telling his lady friends not to blink.  Excluding food and energy, the core index rose only 0.3% which is great news for rocks who as far as Money McBags can tell are the only things that don’t use food or energy to survive.  Also, foreclosures dropped 27% from a year ago to their lowest level in 3 years mainly due to lenders’ inability to keep foreclosing on the same homes.  Actually, the drop was mostly caused by the the mortgage documentation scandal delaying many foreclosures as borrowers chant “if the documents are bogus, you can’t foreclose us.

And finally, the budget remained in the news as on Wednesday night President Obama released his deficit reduction plan which was so well received by critics that it has already been nominated for a Pen/Faulkner award.  Obama’s plan aims to cut the deficit by $4T in 12 years through overhauling the tax code, cutting defense spending, and collecting underpants.  Of course Republicans hate Obama’s plan with the main differences being a lack of an overhaul of medicare and the fact that they didn’t write it.

Look, Money McBags hates getting political (unless it is to support the Femen Movement, the Slut Walk, or the right to bare arms and barer breasts) but why do people give a fuck about this theater of the absurd which is more farcical than a Marx Brothers movie (where time flies like and arrow and fruit flies like a banana) or the notion of efficient markets?  Seriously, it is a 12 year plan.  Do you know who will be president in 12 years?  Exactly.  Shit, do you know who will be President in 2 years?

So this plan is completely irrelevant because it will change next year or the year after as whoever is in charge will continue to make short-term trade-offs for long-term pain because that is how you win fucking elections.  Sure eventually someone will get caught holding the bag, but delaying the inevitable is more American than apple pie, pick-up trucks, and Carrie Prejean so why get so worked up about which plan is less full of shit when they both will accomplish less than Heather Mills in an ass kicking contest.  And just to prove that point, the spending bill that was so fucking important last week that it threatened to shut down the government was finally passed by the House and the $38B in cuts were really only $350MM (or a year’s supply of botox for Nancy Pelosi), so wake Money McBags up when either party gets serious about anything (though if you are going to wake him up, please make sure you are appropriately dressed).

Internationally, Greece’s borrowing costs soared almost as high as Icarus as they rose to 18.3% which to put in perspective is the same as the rate on Stephen Baldwin‘s credit cards (though without the opportunity for cash back).  The reason for the jump was that Germany said for the first time that Greece may need to restructure its debt and after last year’s $140B bail out, any shenanigans with Greece’s balance sheet could be more catastrophic to Europe than the bubonic plague or a black jean shortage.  So keep an eye on Europe here, and also keep an eye on this.

The only other global news was that computer shipments fell 3.2% worldwide as earthquakes in Japan, uprisings in the Middle East, and no one having any fucking money, hindered sales.  Computer shipments in Japan fell 15.9% as something called “not going outside to avoid radiation” took precedence over buying discretionary products while shipments in the US fell 10% as consumers either switched to tablets or decided not to upgrade due to the hassle of having to transfer all of their porn to a new machine.

In the market, RIMM was down after its tablet received worse reviews than “Our American Cousin” did from Mary Todd Lincoln (apparently she liked it as much as a hole in the head).  Money McBags has been crapping all over RIMM for months now as like YHOO, EK, and Kourtney Kardashian, you never invest in the the second tier player when there is a clear market leader.

Also, GS was down today as Senator Carl Levin released the findings of a 2 year investigation that showed GS acted like a bunch of assshats by misleading clients and lying to congress.  While Lloyd Blankfein tried to slip Levin some iocane powder and some more BS before the report came out, it doesn’t really matter because the government has no interest in actually trying their own.  The fact that no one at GS has been jailed for being complicit in the biggest financial meltdown of our time is more cockposterous than Taco Bell testing a taco shell made of Doritos or the Waterfall TALF Opportunity, but it’s good to be King.

In small cap news Money McBags spent all day on KITD answering emails, tweeting away, and trying to figure out WTF sent the stock down 12% in the morning as Money McBags actually really liked their large acquisition from the other day.  Money McBags talked to a shitload of people on the Street and just couldn’t find anything that made sense so he reiterated his buy recommendation when the stock was getting absolutely clobbered and it wound up going from down ~12% to closing down only ~1%, so hopefully you all bought in today because it is at times of fake uncertainty like this that real money can be made.

And this is one of the reasons Money McBags started the award winning When Genius Prevailed, so regular investors could see how the sausage is made.  See, Money McBags is still very connected to the Street and talks with many analysts and PMs so when KITD was dropping down like Tori Black on pay day, Money McBags called the fuck out of people who are just privy to information that the average investor isn’t.  He talked with sell side analysts, hedge fund colleagues, and even fired up the magic eight ball.  Fuck, CEO Kaleil Tuzman sent out and email to analysts defending the stock and was then on an hour invite only phone call and Money McBags not only had the email forwarded to him but listened in to the phone call.  Retail investors of KITD just don’t get that kind of access which is why investing is not a fair game.  And again, that is why Money McBags started the award winning When Genius Prevailed, to shed light on what really goes on in the market and how asymmetric information and access kills the retail investor.

Anyway, Money McBags thought Kaleil absolutely killed it on the phone call and email where he basically pissed all over the shorts who thought ioko was a flat growth company (which it is only because they have a dying legacy business which is not in KITD’s projections or numbers), that ioko somehow changes KITD’s mix of service vs. software business, or that ioko was KITD’s third choice.  Money McBags still promises to get his full KITD analysis out sometime before Monday but it’s really pretty simple.  This company is going to have ~$300MM in revenue in 2012, at least $70MM in EBIDTA, is the market leader in a market growing ~30% with huge long-term potential, and is now trading at ~6x EV/EBITDA, so um what else do you need to know?  No really?  Money McBags guesses he will add ~2k words of dick jokes and hot chick pics to that thesis to spruce it up a bit, but there just isn’t much more he can say.

Oh yeah, old friend RICK is finally shutting down their club in Vegas which is a great decision since that club has been an absolute money suck (and there is a terrible pun in there somewhere).  While Money McBags applauds the decision (and as a shareholder, he is happy it will  add a few cents to earnings), his heart does go out to all of the girls who will now have no way to afford that college education.  It is a sad day for humanity, but a happy day for shareholders.

Writer’s note:  Yeah, Money McBags has used the headline before, but shit, when there is no theme of the day, writing a headline at 2:30am is fucking difficult.  Money McBags will gladly refund your dignity for having a bit of a redundancy tonight.

Mubarak heart attack
Share and Enjoy:
  • Print
  • Digg
  • del.icio.us
  • Facebook
  • Google Bookmarks
  • Netvibes
  • Tumblr
  • Twitter
  • StumbleUpon
  • Yahoo! Buzz