Stocks were down again today as the market is still reeling from yesterday’s crap trick (the crap trick being 3 large economies announcing things are getting crappier in a 24 hour period) and suffered further bad news with CSCO missing revenue targets, new claims for unemployment surging, and deflation taking over as the new inflation.

In macro news, new claims for unemployment were up 2k to 484k (or up 5k from the 479k reported last week, but who cares about details like that when either way all signs point to things getting worse than a Goldman mortgage backed CDO which puts the “toxic ass” in “toxic assets”).  New claims are at their highest since February, though will likely be even higher when readjusted upwards next week per government policy.  Analysts guessed that new claims would be down 14k to 465k and the fact that they can’t even get the fucking direction right says all you need to know about their gaussian curve based regression models which create more of a moral hazzard than asymmetric information.  The fact is that claims for unemployment continue to move the wrong way for the economy now that the stimulus has petered out and it doesn’t take Karl Pearson to realize the r-squared of analyst models are somewhere between zero and the square root of zero with the “model best fit” being up their asses (though if the model were Tiffany Selby, that would probably be quite enjoyable).  Anyway, another day, another set of worse and upwardly revised bad macro data which is making trying to do any type of individual company micro analysis about as enjoyable as being stuck in an elevator with a caffeine high Ellen Degeneres and a constant stream of muzak showtunes being piped in from the speakers.

But there was good news for unemployed home owners as they just got $3B in aid from Uncle Obama so they can continue to wallow in their mire and broken dreams in the privacy of their own decrepit homes.  The measures will help ~400k of the 3MM homeowners facing foreclosures and will likely keep them under the roof of the house they couldn’t afford but were able to get a loan for so Goldman Sachs traders could pawn off those mortgages to unsophisticated investors in order to help John Paulson make a few extra hundred million dollars and thus continue to trade with GS thereby allowing Lloyd Blankfein to finally save up enough money to buy the toupee made out of unicorn hair he has always wanted.  So at least it was all for a good cause.

There was a dearth of international news today other than that Colombia’s Sofia Vergara remains hot and thus the real news driving the market was CSCO’s quarter which disappointed analysts as much as analysts disappoint Money McBags.  Despite beating eps guesses by $.01 by earning $.43 per share and despite denying any culpability for The Thong Song for the 11th consecutive year, CSCO traded down nearly 10% as the technology bellwether was short of revenue guesses and gave below the street revenue guidance.   Revenue was up 27% to $10.84B which was $40MM below guesses of $10.88B and is causing the stock to get routed as investors switch out to other names.

But it wasn’t just the revenue miss (and for those of you keeping score at home, the miss was by <.5% which is barely a nut hair), it was also that guidance for Q1 was for 18%-20% top line growth which was short of estimates by 1% and the commentary was spinkled with comments such as that the economic recovery has been “more modest” than anticipated, that Cisco customers expect “a very gradual return to more normal economic conditions,” and “hey dingbats, we’re still going to grow ~20% so suck it.” CEO John Chambers also warned about the economy making things uncertain for the company as he said: “We’re seeing a large number of mixed signals,” before he channeled his inner Bernanke and said “We think the words ‘unusual uncertainty’ are an accurate description of what’s occurring.” So fanfuckingtastic.

As CSCO was one of the first to see the slowdown at the begninng of the recession, investors use the company to help guide their expectations so CSCO pointing to slower revenue growth is about as healthy for investor optimism as a KFC Double Down is for coronary arteries everywhere, which was seen by JNPR and NTAP trading off strongly today.  That said, with stock down 10% and now trading at <20x earnings for a company growing 18% to 20% that basically sells all of the shit that allows Money McBags to have these dick jokes sent to you and to guess muffs, it is getting to be an attractive entry point, especially as blue chips should relatively outperform in the coming apocalypse (though it’s coming largely because it just figured out that spankwire exists.).  Money McBags wouldn’t buy it today, but this is definitely a name to put on your buy list if you’re looking for long exposure.

In other earnings news, GM just put up their best quarter since 2004 when the housing bubble was just a glint in Alan Greenspan’s both near and farsighted eyes.  The company earned $1.3B on the strength of 14% sales growth in North America which was below the industry average but solid performance for a branch of the government.  Speaking of which, their government appointed CEO (and if you read that sentence out loud three times in a row, Andrew Jackson will roll over in his grave) said he will be stepping down to be replaced by a guy who used to run telecom companies so it seems like a perfect fit for GM’s new business model where they plan to sell cars in intervals of minutes.

Other companies reporting today included Advanced Auto Parts which put up a good Q after analysts checked under the hood.  The company’s profts were up 25% and they raised their earnings guidance from $3.34 to $3.54 to $3.70 to $3.80 as they are taking advantage of the fact that consumers can’t afford to buy new cars so they have to keep fixing up the shitty ones they own.  Finally Kohl’s profits rose but their guidance disappointed, Sara Lee baked up a profit after a loss in Q2 last year but gave cautious guidance, and Wendy’s profits were cooked as they fell 28% and the company is now going to focus on a lower price menu which hopefully will involve doing away with their boneless wings which look as appetizing as a shit sandwich with extra asshair.

In small cap news, Money McBags is currently looking for new ideas.  The companies he follows have mostly all reported and are just going to trade with the market as macro news dominates earnings right now like Laverne would dominate Shirley were they ever to enter the NSFW ultimate surrender ring.  Check out Money McBags analysis of ZAGG from earlier today and hopefully he’ll find something interesting for tomorrow (though probably not as interesting as January Jones).

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