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11/29/10 Midnight Report: EU Buys Ireland on Cyber Monday, Comes with Free Shipping, 6 Pack of Guinness, and Plenty of Broken Dreams
Hells yeah, Money McBags is back from his Thanksgiving break where he basted some turkeys, watched consumers run up more debt during Black Friday sales that they won’t be able to pay off until the dollar hyperinflates to whatever is just below infinity (perhaps Bernankity), and furiously read Wikileaks to learn that the US had a nuclear fuel standoff with Pakistan, was weary of Chinese computer hacking, and never puts the toilet seat back down after using it.
The big news on the Street today was that the market faltered despite strong holiday sales on everything from computers, to cars, to Ireland. Black Friday sales were up 6.4% and the market hopes consumers build on that with Cyber Monday, Five Finger Discount Tuesday, and “Oh Shit What are We Going to Do with All of this Inventory” Wednesday. As mentioned, the market failed to rally on this because congress returned to work (which means the economy is that much closer to combusting) and Ireland’s bailout became official for the 3rd time. Ireland will be getting 85B Euro under the conditions that they don’t spend it all in one place, stop giving loans to people who can’t pay them back (other than themselves, which is weird logic there, but the EU must know what they are doing, right?), and lend Jill Kelly to the IMF for just one night so the IMF can conclude their proper due diligence.
Of the 85B euro, 17.5B will be coming from the Irish government through money it has already raised by selling bonds and as proceeds from the pride of Limerick Tanya Trianta‘s car wash and Irish bagpipe booth. Of the rest, 22.5B will come from the IMF and 45B will come from bilateral loans from European nations (and the loans are so bilateral that they love other loans of the same denomination) and from two rescue funds set up by the EU in the Spring for either a rainy day or when shit is blowing up.
The debt will come with interest rates ~6% (or 0% once Ireland’s economy doesn’t recover and they can’t afford to pay interest) and Ireland has said they will try to cut the budget deficit from 32% of GDP to 3% of GDP by 2014 and hopes like the Special Olympics, they simply get credit for trying. That said, this is all completely cockposterous as with budget cuts coming (and not just because they were manipulated by Claire Tully), how the fuck is Ireland going to cut in to their debt since growth will be more strangled than OJ Simpson’s career, or his loved ones? Seriously, this is more of a contradiction than the liar’s paradox and not because it doesn’t make sense, but because they are all going to be fucking liars.
With the austerity plan aiming to cut $15B euro of spending over the next 3 years (which means HBO will be shut off in all government buildings and if Prime Minister Brian Cowen wants second breakfast and third lunch he will have to return to the Shire), Ireland is as likely to cut their deficit to 3% of GDP as Leslie Neilsen is to marry Crystal Mccahill (and not because he couldn’t have her, but because he’s dead, but surely you understood that, and yes, Money McBags will stop calling you Shirley). Luckily, the EU is already willing to extend Ireland’s deficit target until 2015 (until next year when they extend it to 2016), as the slippery slope has already been fucking slipped on and is set to leave Europe with more than just a broken coccyx.
But it’s not just Ireland, as once again the cost of debt in Spain and Portugal has risen from “too high” to “too fucking high” as Spain and Portugal may need a bailout worse than one of Stephen Seagal’s assistants. Noted turd in the punchbowl Nourel Roubini said Spain is the big elephant in the room (though they clearly aren’t standing in the same room as Lexington Steele) because there is not enough official money to bail Spain out (until more is printed, duh). As Roubini said: “..the stress tests were not stressful enough, if not a total fudge” before adding, “and that fudge was packed with care by Europe as they tried to keep this their dirty little secret.“
But then the master of disaster, the prince of pessimism, the modern day nabob of negativity, and the spitter in the oral scene if you will, had the quote of the month as he said this about QE2: ”The problems of the economy are not problems of liquidity, but problems of credit insolvency, and therefore monetary policy cannot resolve this.” And yes the bolding is intentional because when The Bernanke reads the award winning When Genius Prevailed tonight (and believe Money McBags, he will), Money McBags wants to make sure Benny B sees that quote and doesn’t miss it while skimming the column for the latest Sofia Vergara boob shot or the link to take him back to dickflash.
In the US, macro news was lighter than repeat traffic to any site dealing with the Blue Waffle (and google that at your own peril) with the only real news being that President Obama proposed a two year freeze in Federal work pay which means most Mailmen and tranny porn screeners will cost the American people only $150k a year in perpetuity.
In the market, Morgan Stanley’s Mary Meeker was hired by Kleiner Perkins after she spent 4 years on a 424 page research report that concluded mobile technology was the next big thing. Holy shit, excuse Money McBags while he punches himself in the nuts over that one. Wow, he now anxiously awaits her next opus to be published around 2015 concluding that “the suns is really hot” to be followed up by her 2020 piece de resistance concluding that “Tits Sell.” And Money McBags thought Cindy Margolis was the most washed up chick on the internet.
In stock news, there weren’t a lot of big movers (or as they are known as on the award winning When Genius Prevailed, Gabourey Sidibes) today. Fed Ex delivered ~4% returns to investors after an upgrade from Credit Suisse because Credit Suisse finally figured out that people around the world need shit delivered. Walmart announced that they intend to buy 51% of South Africa’s Massmart which is already being protested by South Africa’s largest labor union. So jjust to clarify how shitty Walmart treats employees, a country that didn’t find Apartheid oppressive until 1994 immediately found WMT’s labor tactics to be too onerous, so umm, yeah. And finally, SBUX told Kraft to eat a venti dick as they claim Kraft has been mismanaging sales of SBUX coffee in grocery stores.
In small cap news, Money McBags only has time for a quick overview tonight, but JOEZ continues to blow falling to ~$1.60 per share and this is what Money McBags said after their last quarter: “…Money McBags doesn’t expect any big Qs soon, so while it is difficult to short a stock trading under $2, you can probably get a decent return here.“ ZAGG somehow zigged up 5% despite their competitive advantage being whittled away faster than Minnie Driver’s looks (and yes that is funny because ZAGG has no competitive advantage and Minnie Driver never had looks). And finally SPRT rose ~2% because apparently trading at a bazillion times earnings (assuming they have earnings by growing 150% while slashing margins and thinking happy thoughts) is the new trend, just ask NFLX or Melissa Giraldo‘s vagina (and Money McBags is not entirely sure what that means, but you all must admit it was a good note on which to end).
Money McBags to NYTimes: You’re copy editing sucks like Nina Hartley at an all you can eat pickle bar
As you know Money McBags spends his days scouring the financial news in order to provide it to you in a more suitable, informative, and entertaining form. However, during today’s reading, Money McBags came across a glaring error in a NY Times article which he then posted a comment about to their site. Said comment never reached the general population of NY Times readers as the NY Times editorial staff knows not give their competition any print space (and if you don’t think the NY Times is in competition with whengeniusprevailed, then you clearly don’t understand how Money McBags is slowly taking over the financial media).
Anyway, this is the comment that the NY Times refused to publish:
Dear NYTimes copy editors/fact checkers. This paragraph appears in the above article:
“Large swaths of the population — 15.3 million — remained unemployed. And the number of Americans out of work for six months or more, and in many cases longer than a year, hit 39.8 percent in December, the highest level since records were first kept in 1948.”
Now look, Money McBags is no Strunk or White, but he does understand macroeconomics and the above paragraph reads as if 39.8% of the US population has been out of work for 6 months or more. This is obviously untrue since:
1. Unemployment is only 10% as stated in this exact same column. Now I know you can play around with numerators and denominators and what is and is not included in the unemployment figures, and maybe you can get it to 17ish%, but that’s it. You’re not getting 39.8%.
2. The article states 15.3MM people remain unemployed, so if that represents 39.8% of the population, that would mean the US shrunk by a factor of around 8 overnight. Now I haven’t turned on my TV today, but I am pretty sure there were no once in a lifetime catastrophes last night that shrunk the US population from around 300MM to around 40MM. And if there were, couldn’t someone have at least tweeted me about them?
3. If unemployment were 39.8%, we’d all be selling apples out of a cart and since we’d all have the same occupation, unemployment would exponentially grow until this country no longer existed. In that case, we could just change our name to the United States of We’re Screwed or Turkmenistan.
So clearly, 39.8% of Americans have not been unemployed for 6 months or more.
Now I alluded to my old nemesises (or is the plural of “nemesis” nemesi? It’s too bad that Safire guy isn’t still here) Strunk and White earlier and I believe they could help with this misleading statement. As a foremost thinker on the markets, Money McBags knows that there are ~5.5MM people who have filed for extended unemployment (being unemployed for 6+ months). This number is roughly 36% of the 15.3MM unemployed people cited in the article. So if we use round numbers or massage them a bit to get the happy ending we seek, we can get to the 39.8% number used in this article. Therefore, a good copy editor, one who has The Elements of Style on their Kindle, would have spotted the glaring grammatical error and fixed this awkwardly worded, contradictory, and patently false statement.
The statement should read (correction in caps, I’m not yelling, but bolding does not work in the comments section):
“Large swaths of the population — 15.3 million — remained unemployed. And the number of Americans out of work for six months or more, and in many cases longer than a year, AS A PERCENT OF THE TOTAL UNEMPLOYED POPULATION hit 39.8 percent in December, the highest level since records were first kept in 1948.”
Hey, it happens. There are a lot of words in the NY Times that need to be read and reviewed, but if Money McBags, who has butchered language in ways that would make Aelius Donatus wish he had never become a tutor, can spot these mistakes, there clearly needs to be more focus here.
Now readers. This is the article from the NY Times. You can see they fixed it, and they did so 10 minutes after Money McBags brilliant diatribe on their grammatical injustices.
It now reads:
“Still, large swaths of the population — 15.3 million — remained without work. And 39.8 percent of unemployed Americans have been out of work for six months or more, and in many cases longer than a year — the highest level since records were first kept in 1948.”
A simple thank you will do.