Money McBags is back today after technical difficulties kept him from dropping some market knowledge yesterday.  He’d like to say his absence was because he was busy trying to solve some of the world’s greatest problems such as auditing the recent proof of P vs NP (which showed that P does not equal NP, though to be honest, Money McBags could have told you that in about 1 second, unless of course N =1) and figuring out once and for all who stole the cookie from the cookie jar (not so fast Jessica Simpson), but it was nothing so interesting.  Unfortunately, the other day Money McBags’ 7 year old laptop refused to turn on no matter how hard he coaxed it, jiggled it, or promised it he would download more pictures of Heather Vandeven for it to scan on its hard drive.  So today Money McBags is on a new machine with a keyboard that has keys spread wider than Larry Craig’s feet in an airport bathroom stall, so please excuse any typos as this keyboard seems to like fat fingers more than Portia Di Rossi does.  Either way, thank you all kindly for still checking out the site yesterday.  Money McBags is now only a nut hair away from his goal of 1MM readers (though it is a nut hair from Whitezilla after he downs a carton of propecia and then awakens from a 100 year sleep), so remember to tell a friend, a kind of friend, or just some douchenozzle you want to annoy, about the great When Genius Prevailed.

Anyway, the market was up huge today, figuratively poking bears in the eye as if they were watching a new Japanese 3D movie, thanks largely to earnings from WMT and HD, a take out bid piped in for POT, and a continued disbelief in macro economic news which has been trending worse than Nouriel Roubini’s Q score at a meeting of the Fed.  PPI rose for the first time in 4 months due to higher prices for food, consumer goods, and Playboy thanks to Kelly Brook’s very NSFW appearance.  The .2% rise was inline with analyst guesses which makes analysts 1 for the last millenium and shows that inflation is currently in check.  In other macro news, industrial production beat analyst guesses by rising 1% as factories churned out more computers, appliances, automobiles and shit most people can no longer afford.  Of course the number released by the Fed is about as believable as Enron’s accounting or OJ’s alibi (umm, he had an alibi, right?) since as part of their “hold the shock and hope for no awe” strategy, they revised last week’s number downwards from a .1% increase to a .1% decline.  Given that, Money McBags predicts next month the Fed will revise this number down to something less than 1% but no one will care because backwards looking revisions are never as fun as false hope (or backwards looking visions).

Finally in US macro news, housing starts were up 1.7% but slightly below analyst guesses, building permits dropped by 3.1%, and last month’s 5% housing start decline was downwardly revised to an 8.7% decline which was less surprising than learning most smurfs suffer from blue balls (and not just because their skin is blue, but because there is only one fucking female smurf).  Home builder sentiment is now at a 17 month low as they wait for new government home buyer tax credits, a full nationalization of the entire mortgage finance industry per Bil Gross’ suggestion (which just happens to help his bond book, so weird why he would want that), or the economy magically recovering (and Money McBags bets that will be the the third of those three things to happen).

Internationally, Germany’s Zew monthly confidence index fell after both a huge Q2 that is not likely replicable and after remembering it had failed to use protection when sleeping with Nadja Benaissa.  That said, the indicator still predicts modest growth in the second half of the year thanks to Germany’s surging exports led by machinery, automobiles, and Sonya Kraus calendars.

The big news of the day though was that BHP put in a $38B take out offer for POT making it potentially the biggest pot sale since Snoop Dogg got his last royalty check.  The bid of $130 was 16% above POT’s closing price on Monday and the stock was up >25% after the company rejected the offer and was rumored to have told BHP that it wouldn’t sell for anything less than $100B.  POT controls ~20% of the world’s potash supply which is key to helping farmlands become more fertile as witnessed by that piggy Octomom lady who was seen feasting on a plate of potash before her pregnancy.  The market obviously thinks the bidding will continue to go higher, with potentially more bidders entering, which means POT will likely leave potential acquirers hungry and red-eyed after staying up all night crunching numbers rushing to get a deal done.

In other earnings news, WMT beat estimates and raised their earnings outlook as a result of cost cutting and strong global growth in China, Brazil, and Mexico.  That said, their US same store sales fell by 1.8% which was the 5th consecutive quarter it declined as US consumers look for cheaper products at places such as dumpsters, the ground, and Stephen Baldwin’s house.  WMT’s revenue was up 2.7% which was slightly below analyst guesses while their eps of $.96 beat analyst guesses by $.01 and the company raised their 2010 EPS forecast to $3.95 to $4.05 from a previous forecast of $3.90 to $4.00 with analyst guesses of $3.99 being right in the middle like a less noisy lucky pierre.

Finally, Home Depot saw profits jump 6.8% and raised their full year EPS guidance by $.02 to $1.90.  That said, their top line was weak and they lowered their fiscal year revenue guidance to 2.6% growth (down from 3.5%) but the market applauded that as the implied same store sales growth was in line with Lowe’s and that somehow gives the market confidence that things are not getting shittier.

In small cap stocks, JOEZ jumped 14% after it apparently got some kind of shout out on CNBC (Money McBags isn’t quite sure what the shout out was as he watches CNBC like he watches tranny porn which is with both eyes closed, the sound off, and only in the presence of the SEC.  Money McBags broke JOEZ down after their last Q and his opinion hasn’t changed since then that this company is likely too expensive right now even with their strong growth because they manage their bottom line as well as Gabourey Sidibe manages her waist line (though perhaps with less of a Cheetos smell).  More interesting is that KITD was up another 3%+ after being up 10%+ yesterday after their strong Q.  Money McBags has not wavered in his love of this little company that has done nothing but go down on him despite putting up solid numbers (and not the good kind of going down, but the bad kind, like with extra teeth, braces, and canker sores).


Money McBags is going to have a more in depth analysis of KITD’s Q in a separate post either tonight or tomorrow morning.  He apologizes for not getting to it today but things in the McBags’ mansion have been hectic as of late as Money is working on a book proposal (in which he proposes to electronically find and replace “Benjamin Graham” with “Money McBags” all across the internet), talking with hedge funds about providing them with his services (and for you small cap hedge funds out there looking, Money McBags is happy to listen to offers (no really, he is, he cleans up remarkably well), especially if they involve double bonuses), and trying to track down the greatest works of Carmen Kinsley.

Share and Enjoy:
  • Print
  • Digg
  • Facebook
  • Google Bookmarks
  • Netvibes
  • Tumblr
  • Twitter
  • StumbleUpon
  • Yahoo! Buzz