Timberrrrrrrrrrrrrrrrrrrrrrrrrr.  The market went down today faster than the Hummer Mom chaperoning a Boy Scout overnight.  Given the months of bad macro data and the Fed warning about slower growth yesterday, the drop is about as surprising as learning that menstrual cramps may alter women’s brains (and for their next study, National Yang-Ming University will likely prove that exposure to Hannah Hilton may alter men’s pants).  Today’s sell off was driven by more lackluster macro news both in the US and China as well Bernanke flexing his balance sheet yesterday and stressing his determination to keep it inflated.

The most significant US macro news was that the US trade deficit jumped 18% (and not just because a mouse ran in front of it) as exports fell faster than Bar Mitzvah invitations sent to Mel Gibson.  Exports dropped 1.3% while imports rose 3% causing the deficit to continue to widen like a a recent federal penitentiary inmate’s colon.  The trade deficit reached $49.B while economists had predicted it would shrink which proves once again that the whole field of Economics is more of a sham than Bernie Madoff’s returns or gravity.  The biggest issue is that the unexpected growing trade gap will cause past GDP to be revised downward with Q2 GDP now likely to be between 1% and whatever is lower than 1% which means the economic growth we have seen (and by “seen” Money McBags means “artificially generated using Excel’s solver function”) has been more contrived than Paul Krugman’s Nobel Prize for Economics or Scientology.

Adding to the disapointing trade deficit was that despite record low rates, mortgage applications rose by only 1% as squatters have taken over empty houses and thus it is unnecessary to buy.  Thanks to higher unemployment, stricter lending requirements, and the belief that rates will continue to fall in perpetuity, buyers have less urgency to buy new homes than Hugh Hefner has of becoming monogamous.  That said there was one slightly positive piece of macro news today and that was that the US budget deficit narrowed to $165B in July, of course the bad news was that the US budget deficit was $165B in July.  Increased corporate tax revenue helped trim the budget a bit which may cause the end of year deficit to only be 1.499T instead of $1.5T so we can all breath a sigh of relief.  That said, if the recovery has stalled (which it has), corporate tax revenues may dwindle once again and more stimulus may occur which will push the deficit even further in to the proverbial shitter.

Making matters a fuckload worse today was that international growth is now seen to be slowing down like Maxine Waters’ re-election campaign funds.  The biggest downer for the market is that Chinese investment is slowing (well for at least 20 minutes until it gets hungry again).   Retail growth in China also slowed to 17.9% from 18.4% and was below analyst guesses of 18.3% which shows analysts suck in any language.  With China’s government trying to reign in the bubble they may have created, banks issued only 533B renminbi in new loans last month, down from 603.4B renminbi in June and it means the economy won’t get the free two-liter of Coke with their order this time.  China is fueling the global recovery right now so if they start teetering, the rest of the world may totter and that will likely be as enjoyable for investors as having to give a diarrhea sufferer a rusty trombone.

But it’s not just China as Britain also cut their growth forecast saying growth will peak at an annual rate of 3% which is almost 20% below what they predicted in May.  The Bank of England cited the US’s uncertain recovery, further austerity plans across Europe, and banks being stingier with lending than Kirstie Alley is with sharing cupcakes, as reasons for cutting their growth forecasts.  So basically every economy across the globe today showed things are slowing down which is less surprising than Kelly Brook finally relenting to do a playboy spread, and an assload less enjoyable.

In stock news, Macy’s put up a big Q and rose nearly 6% on the day as they earned $.35 per share beating analyst guesses by $.06 and raised eps guidance for the year by $.10 to $1.85 to $1.90 and same store sales growth guidance to 4.0% to 4.2% from 3.0% to 3.5%.  The company attributed their success to a locally tailored merchandise effort in which they place more wife beaters in their New Jersey stores, more panties in their Miami stores, and more bullet proof vests in their Detroit stores.  Disney also drew up a good Q today growing revenue 16% and earnings >25% as a result of 19% growth in their cable business and a return to profitability of their movie studio thanks to such hits as Toy Story 3, Iron Man 2, and a whole bunch of other shitty movies Money McBags would never pay to see.  That said, the stock followed the market down on the day which investors thought was a bit fucking goofy, but it s what it is.  Finally Nestle crunched the numbers and beat analyst estimates by growing 6.1% and raising their guidance for the year to 3.9%rowth to 5% growth.  Their results were driven by an 11% increase in sales in emerging markets thanks to chocolate eclairs and ice cream cups in India.

In small cap news everything was down including Money McBags favorite KITD which he has analyzed and written about so often that he might as well work for the fucking company.  The stock was shit on today worse than if it were starring in its own German scat film (likely shown online using the company’s video IP solutions) despite the company speaking at two confrerences this week and earnings due out Monday.  Yes, Money McBags thinks it is a buy, yes he owns it at much higher prices, and yes he is 98.3% sure this company is legitimate so he is going to close his eyes during this time of unrest and hope he bad man goes away.


Stay tuned later tonight or tomorrow morning for a longer analysis of ZAGG’s Q.

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