The market was off to the races today as if it the races were going to feature Usain Bolt taking on Sara Jane Underwood in the 100 meter dash with the loser having to run a lap in the buff.  The big news of course was that Alcoa started off the earnings season by destroying analyst guesses of $.12 eps by earning a whopping $.13 per share in the last Q.  That’s right, the fact that a whole extra penny (with rounding) is the difference between a down market and an up 2% market makes as much sense as the theory that gravity is an illusion or candwiches.

Making it even more ridiculous is that as ZeroHedge points out, just last month Bloomberg showed consensus analyst guesses of $.16 for AA’s Q.  So with analysts lowering their guesses before the quarter, AA is now back to where it was when guesses were for $.16 so the would have been $.03 miss has been mitigated by strategic downgrades.  Brilliant stuff.  As the late great Kurt Vonnegut would say, “No damn cat, and no damn cradle.”  Analysts are now quickly dropping their guesses on companies across the board because they only get paid when the market goes up and with unemployment benefits going away, they need to keep their jobs like Kathy Griffin needs to keep off of HDTV.  That said, AA did raise their guidance for aluminum consumption for the year from 10% to 12% and revenue was up 22% despite cratering aluminum prices as a result of demand slowing down and oversupply given that aluminum is the 3rd most prevalent element in the earth, behind only oxygen and whatever medal Mr. T wears around his neck.  That said, the declining prices and rising energy costs are hurting overall profitability but with foreclosures up, demand may surge as the recently homeless grab sheet aluminum to build shanty towns to be known to future generations as WhothefucklentthosepeopleallofthatmoneyVilles or for short Goldmanvilles.

In macro news today, the US trade gap widened to 4.8% or $42B, which is the largest since November 2008 and a gap wider than between the antenna on a new Apple iPhone or the gap between Paris Hilton‘s legs on a Sunday morning.  Not surprisingly, a trade gap is the exact opposite of what economists had guessed and thus once again proves that “economist” is not a real job, like rap music spell checker.  Imports were up 3% thanks to a 12% increase in imports from China which, as pointed out yesterday, was driven by people not having any money and thus only being able to afford the cheap shit made overseas.  US exports continued to see strength, which is a bit surprising given the weakness in the Euro last Q, as they were up 2.4% which was their best month since September 2008 when the US instituted buy one get one free Wednesdays for foreign countries.

And finally, the National Federation of Independent Business (known better as NFIB or “irrelevant”) said optimism declined among small businesses by 3.2% in their monthly survey to which no one pays attention to anyway.  NFIB’s chief economist William Dunkelberg (who is still smarting from his decision to leave his hosting gig at Small Business Idol to pursue other career opportunities) opined that: “Confidence is lacking and the news out of Washington is discouraging. Until this changes, don’t expect small businesses to start hiring.”  He then went and stole an ice cream cone from a little kid, told his wife she looked fat in those jeans, and ordered a ton of coal so he’ll be prepared to adequately fill the stockings of everyone at the NFIB during Christmas time.

Internationally, Moody’s cut Portugal’s debt rating by two whole notches which means absolutely nothing to Money McBags as he cares what Moody’s has to say about rating debt as much as he cares what Art Laffer has to say about tax policy,  Jeffrey Dahmer has to say about cuisine, or Mel Gibson has to say about anything.  Moody’s dowgrade stems from Portugal’s national debt having risen sharply relative to GDP as a result of stimulus measures and the 168 siesta hour work week.  Moody’s also warned that weak growth would weigh on government finances for two or three more years while Portugal warned that weak analysis would weigh on Moody’s finances for eternity.  European markets are up on this news as even they realize that Moody’s is worse at their job than a eunuch sperm donor or Alan Greenspan.

In large cap stocks, just about everything was up as we move in to earnings season with INTC, C, BAC, and GOOG to report this week so hopefully analysts already lowered their guesses in order to keep the market moving.  One interesting stock to note is AAPL as the company is down after Consumer Reports said it will not recommend the new iPhone 4 due to reception glitches, and Steve Jobs simply being a dick.  In their defense, Apple maintains that any cellphone will lose reception if held a certain way, like in a toilet, at the bottom of Lechuguilla Cave, or up Candice Swanepoel‘s well chiseled buttocks (and Money McBags is volunteering to test that theory out) so there is really no big deal.  Plus, to fix the problem, AAPL claims all one needs to do is wrap some duct tape around the iPhone where the gap in the antenna is and who doesn’t want a piece of metallic tape draped around their sleek and expensive gadget?  It would almost be like fixing a tear in the Mona Lisa by putting a SpongeBob Squarepants band aid over it.

In small cap news, LHCG was down ~6% today after competitor AMED announced a shitactular Q and dropped nearly 25%.  Money McBags broke LHCG down the other week after the SEC announced they were investigating AMED and AFAM for potential shadiness in how they were charging medicare for visits that may not ever have happened or visits that were unneeded.  Anyway, guesses for AMED were for quarterly earnings of $1.37 per share and today they said that earnings will be closer to $1.12 which makes it almost as big of a miss as the Edsel or Glitter.  Money McBags did not hear AMED’s call but it is reported they said that their client base changed and they will need to reevaluate their structure and will hold off on full-year forecasts.  Now look, without further color Money McBags isn’t sure how this will affect LHCG because he has no idea what AMED means by their “client base changing” because either they stopped treating sick people (which would seem a silly thing to do for a home fucking healthcare company) or they started treating fewer sick people and thus had fewer home visits (which is a more likely scenario, especially with the SEC all in their business about charging for too many medicare visits).  More concerning though is that shareholders have filed a suit against LHCG for an investigation from April into LHCG’s reimbursement procedures, so fuck Money McBags on that one.

The industry makes sense longterm, the cost savings to insurance companies are too great, and home care is simply better, so it remains a good way to play the aging population trend but there is way too much fucking noise right now for an investor without access to industry insiders to get a leg up on the billing practices.  As a result, Money McBags would stay the fuck away from this sector even though a few days ago he said LHCG was an interesting longterm buy (and it still remains that way but Money McBags needs more information to be able to make a sensible decision about the SEC investigations).  Anyway, with all of this uncertainty, there are easier ways to make money (like TMRK which is a great takeout candidate and is getting a boost with MSFT’s entry into cloud computing ) so keep watching LHCG but you probably want to avoid going long in the short term unless you have better contacts in the industry than Money McBags has.  In times of turmoil, money can be made, but to do so, one needs to be confident that they have all of the information, so do your work here carefully.

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