The market was up today despite the government lowering their forecast of Q2 GDP to 1.6%, down from the 2.4% they fabricated last month and likely up from the lower number they will make up next month in their “hold the shock and hope for no awe strategy.”   Growth in the economy has now slowed to the pace of a 150 year old tortoise with MS and a hella bad case of hemorrhoids.  Most of the downward revision was caused by government analysts incorrectly assuming that companies added more inventories than they actually did which wasn’t just a result of analysts being bad at their jobs but also being bad at math.

Inventories were originally reported to have grown by $75.7B, but actually only grew by $63.2B as iPhones and ramen noodles flew off the shelves while Gum Job Grannies stocks were not replenished.  Some economists think the lower inventory number is a positive since if the economy grows, businesses will have to add workers to ramp up production, but then again some economists didn’t think we were even going to have a housing bubble (cough Art Laffer cough), while others spend their days eating paste, licking windows, and worshipping at the altar of John Maynard Keynes, so who really cares what they say.  Sure, if the economy grows inventories will build, even if they were $15B higher that would happen, so the fact that companies held down inventories either means all of their forecasting models are wrong (possible) or real growth isn’t going to come back anytime soon.  The good news Money McBags guesses is that economists guessed that the downward revision would be to 1.4% after they shook their Magic Eight Balls and asked if they’d marry Olivia Munn when they grew up, so GDP beating downwardly revised expectations is a positive.

Having a more positive affect on the market was Ben “Bennie B.” Bernanke taking time out from his schvitz at the annual Fed Symposium and Rodeo to address the economy (and Money McBags is told he addressed the economy with a simple “hello” before inviting it back to his room to jiggle its balance sheet a bit).  Bennie B. said that the FOMC “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.” He then said those unconventional measures could include shifting the composition of the Fed’s bond portfolio, reducing the rate the Fed pays on bank reserves, or playing the fiddle on top of Capitol Hill while the economy burns, which wouldn’t fix the economy but would soothe his withered nerves.

Bennie B. also opined that “Central bankers alone cannot solve the world’s economic problems,” using the last four years of policy decisions as his case and point.  Finally he said that deflation was not a significant risk and that “preconditions for a pickup of growth in 2011 appear to remain in place.”

Now look, Money McBags doesn’t want to drop a turd in everyone’s punchbowl here (unless it’s Gina Lynn‘s punchbowl and it’s not a turd he is dropping), but what the fuck are “preconditions?”  That sounds more like BS gobbeldygook than “misremembering,” not having sexual relations, and “hiking the Appalachian Trail.”  You know what?  Money Mcbags is exhibiting the preconditions for a threesome with Kate Bosworth and Natalie Portman as he knows their names and knows exactly what will fit where, but that sure as fuck doesn’t mean it will happen (though if it does, Money McBags will keep it quiet for all of those involved, you hear that ladies?  It’s the promise of discretion).  Anyway, the economy is showing some made up “preconditions” for growth a year from now (until it doesn’t) which is about as reassuring as finding out your doctor got his degree from the University of Phoenix, so rally on, market, rally on.

In stock news, INTC cut their Q3 revenue and gross margin forecast, citing weaker consumer pc demand and “preconditions” for growth not being in their forecasting models.  The stock traded up today on that bad news and as a result, the company is rumored to be taking guidance down even more just to keep the rally going.  In other stock news, BA said their Dreamliner plane will be delayed by several weeks due to the lack of availability of the Rolls Royce engine it uses and continued air congestion causing it to wait on the runway for a gate to open up.  Finally, JCG gave shitacular guidance and dropped 7% on a day when even WGO closed up.  The company actually had a nice quarter, handily beating analyst guesses by growing top line by 14%, but they lowered full year guidance from $2.45 per share $2.25 to $2.35 per share and gave Q3 guidance of $.55 to $.60 per share which was below the Street’s $.71 EPS guess and a result of weaker spending trends and some fashion missteps such as lumberjack costumes and scratch and sniff jeggings.  And last and most certainly least, Dell and HP continue to up their bids for 3Par in an attempt to show the market just how much they believe growth in their business has slowed.

In small cap news, just about everything was up today because unless you missed the memo (which was stapled to the back of the TPS report), the preconditions for growth are here.  CTGX and KITD are bouncing off lows while EBIX continues to show strength until they fire their auditors again for the 4th time.  Money McBags wanted to get to more of a deep dive on BRLI today but their 10Q was not out yet and he wanted to go over a few more details.  The stock isn’t a home run and obviously could run in to some rough patches with people losing their work insurance, medicare dropping prices, or having collections made harder by no one having any money, but personalized medical testing remains a huge trend and the company continues to put up good numbers.  The stock isn’t terribly cheap, but even if the economy double dips Nouriel Roubini’s balls in a recession teabag if you will, people are still going to get sick and doctors are still going to want to run more effective tests to limit their liabilities (or cure people, whichever).  So if you have some time this weekend, take a look at BRLI as a longterm investment (and take a look at Catherine McNeil as a dong term assessment, and Money McBags has no idea what that means but it rhymes and it is late Friday afternoon, so it is what it is).

Enjoy the weekend.

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