The markets are modestly higher today despite a blow out quarter by Goldman as other blue chip companies mostly met expectations and meeting expectations after an 80% market rally is like trying to impress Grigori Perelman with long division or Tommy Lee with a Hawaiian Tropic girl.  The big news is obviously that Goldman released their quarter today by smacking their CDOs on the table and yelling “Securities fraud this!”  They demolished analyst guesses of $4.14 eps by earning $5.59 per share on $3.46B of earnings which was 91% growth.  Though to be fair, it is not clear how much fraud and market manipulation analysts had in their models as Excel’s goal seek function isn’t yet equipped to handle that.  What’s also amazing is how a company who produces nothing other than writing on paper can earn $3B. Anyway, the quarter was so jizztastic for GS that Lloyd Blankfein is going to spend the rest of the day at the spa getting his nails done so they will now match the drapes in his conference room.  But all is not well for Goldman, they still have to deal with the SEC’s lawsuit about how they misled investors (but only on that one CDO, wink wink, and if you believe that, Money McBags not only has a bridge he’d like to sell you but he’ll give you a great deal on it) and in the quarter they lowered their compensation payout from 46% to 43% so all of the traders who have been manipulating the market are now going to have trade down from a hooker a day to one every other day and might have to pass up on the third bottle of Dom at their local Rick’s Cabaret.

There is no macro news out today and the only international news is that Greece’s latest bond offering met strong demand.  Of course they had to double the previous yield on these short term bonds to 3.65% which was actually below estimates but still hella expensive for the ponzi scheme George Papandreou is running where he will gladly give you three souvlaki’s and a glass of greek wine tomorrow if you pay him for one today.  The IMF is starting to get a bit frisky here and is warning about sovereign debt impeding global growth.  Wow Captain Obvious, you think?  Next week it is rumored that the IMF will issue warnings that staring directly in to the sun may cause blindness, eating foods high in saturated fats may cause obesity, and getting too close to Paris Hilton may cause herpes.

The real story of the day though is earnings with KO, IBM, and J&J mostly meeting expectations but trading down as the market demands quarters to be cleaner than an OCD sufferer’s closet for stocks to appreciate.  KO’s profit rose by 20% to $.80 per share taking out one-time charges while their revenue grew 5% to $7.53B.  The eps number beat analyst gueses by $.05 per share while the revenue number disappointed as analysts had guessed they would bring in $7.72B.  Driving growth was the international business which was up 5% thanks to Brazil and India where sugary sweetnees is still seen as the cool thing to do while North American sales fell 6% thanks to people avoiding higher end products and wanting their teeth to stay cavity free.  Money McBags is actually an owner of KO and bought more last week to get some market exposure from a blue chip stock that hasn’t really participated in the recent rally.  Despite weak North America sales, KO isn’t going anywhere and will be a place investors go for safety if the market gets chippy again or if it finally consolidates.  IBM’s earnings rose 13%, they beat revenue and EPS guidance, and they raised their forecast for the year to at least $11.20 per share and yet the stock is trading down 2% because their service booking dropped 2% in the quarter, margins were slightly below forecasts, and Chewbacca was a Wookie.  Finally, JNJ had a 29% increase in earnings yet lowered their outlook due to recent health care legislation which is the same thing every drug company has done so this is more of a non-event than a Larry King divorce.  The stock is flatter than Heidi Montag‘s singing voice or her original chest, so a big fucking yawn here.

In small cap news, SFSF got an upgrade today to buy from an analyst at something called Janney Capital Markets or known better as “Morgan Stanley wasn’t hiring.”  The analyst raised SFSF to a buy claiming that the worst for them is likely over and that they should be able to continue to grow bookings at 20%.  The company has a decent balance sheet with ~$300MM in cash and no debt though most of that is thanks to a recent follow on offering to give them some powder for future M&A and they are already using some of it to buy Inform for $40MM of cash and stock.  The company is in a niche space of selling performance/compensation management software for businesses to evaluate employees, essentially outsourcing and making HR more efficient while relegating the number of smiley face cupcakes employees receive.  They sell the software as a service which should yield a better multiple than the traditional software model.  That said, this comany still has no earnings and guidance is for at best breakeven this year with revenue growth already in decline and estimated to be 17% for 2010.  Money McBags is a bit perplexed by this stock as the valuation assumes a hefty growth rate and analysts seem to be valuing them on the fictitious EV/adjusted FCF and anytime a company is being valued on a non-traditional metric, that usually points to something being fucked up (and in this case the fucked up is the earnings which are less positive than Don Rickles at an ugly convention).  The company is up 4% on today’s upgrade but Money McBags thinks the valuation is way ahead of itself especially as the company relies on big deals, hence the rebound in the last half of last year.  Money McBags is staying away from this stock for now as it seems too rich despite a decent software offering and being in a market less penetrated than Ellen Degeneres, but it is that market potential that keeps SFSF on his radar.

And don’t forget Money McBags is now testing out twitter, for reals this time.

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