Posts tagged home prices
9/22/10 Midevening Report: Market down as Bernanke’s mixed signals cause it to question whether he “likes” or “like likes” it
The market was up briefly in the morning before investors could pull themselves away from watching NSFW art films (and Money McBags does not know the plot of that film but believes it is about the unbelievably wonderful place people in heaven go to after they die in heaven) and realize that the emperor has no clothes (and unfortunately this is not the emperor). With the Fed announcement from yesterday beginning to sink in that QE2 is most likely on the way (and it is not the kind of QE2 that comes with a full wet bar and toga night on the poop deck), investors once again must face the realization that growth is more likely to be L-shaped (or backslash-shaped) than the U-shape those on CNBC constantly shout about through their foaming mandibles. So be careful out there as the market whipsaws around as it tries to comprehend where the economy goes from here.
In macro news, home prices fell by .5% from June and by 3.3% from last year and in the least surprising move since Kirsten Gillibrand was voted hottest Senator (though that’s really only because since he turned 65, Joe Lieberman totally lost his bikini body), last month’s numbers were revised down from a .3% decline to a 1.2% decline as the “hold the shock and hope for no awe” strategy once again rears its ugly head. The new home price numbers were worse than analyst guesses and there is now 12.5 months of housing inventory on the market (which is a 10 year high) not including all of the shadow inventory, upside down mortgages, and places the Quaids are squatting.
And even with record low mortgage rates, home loan demand continues to fall as applications for purchase mortgages were down 3.3% last week and refis were down .9% as the housing market witnesses the demand curve shift left while the supply curve shifts right in the housing market’s attempt to recreate the graph of Betamax purchases in the early 1990s or sales of Heidi Montag‘s debut album. The housing market remains unhealthier than Ted Kennedy’s liver (and not because he was a drunk, but because he’s dead) and with people no longer able to lever up with HELOCs or even be in possession of the H to get their ELOC on, consumer spend will remain more stunted than Edward Nino Hernandez‘s growth.
Internationally, Spanish Prime Minister José Luis Rodríguez Ramirez Gonzalez Quinones Zapatero dialed up a page from the NBER and claimed that the European debt crisis is over, whew, it’s about time, Money McBags feels much better now. Of course after claiming the end of the crisis, Mr. Rodríguez Ramirez Gonzalez Quinones Zapatero went on to claim that the rain in Spain does not stay mainly in the plain and the Sagrada Familia will be finished any day now. Look, if Money McBags were the Prime Minister of Spain, the first thing he would do is hire Eva Gonzalez to take some hard dictation, the second thing he would do is order up a round of fucking seafood paella, and the third thing he would do, especially if he were sinking in the popularity polls and dealing with 20%+ unemployment rates, debt running at 12% of GDP, and more labor cuts on the way, would be to tell everyone everything is going to be ok. People like being kissed before being fucked so claiming the debt crisis is over is really just the gentlemanly thing to do.
In the market, ADBE was down ~20% on guidance more disappointing than the end to Gogol’s Dead Souls (mainly because it had no end) or that hide the button trick Bishop Eddie Long liked to show his altar boys in private and about which they couldn’t tell anyone else. The company said they were experiencing weaker sales in their Creative Solutions segment with US educators and with all products in Japan where they failed to produce bukkake friendly products. While they actually had fairly strong performance in the Q, revenue guidance for next Q of $950MM to $1B was below analyst guesses of $1.03B and eps guidance of $.48 to $.54 was also mostly lower than analyst guesses of $.53 and caused a flurry of downgrades by the sell side who hope they can make enough noise and print enough gibberish to get institutions to trade with them.
In other market news, newspaper stocks were down big stemming from NYT’s shitastic forecast where CEO Janet Robinson addressed investors and analysts at a conference by simply saying “hey dingbats, you’ve heard of the internet, right? Well they do what we do only for free and probably with less plagiariasm, so we’ve got that going for us.” Money McBags would rather go on a date with Nadja Benaissa than own a newspaper stock, so whatever.
As for things moving up, KMX rose ~7% as they crashed through estimates thanks to something called a recession making used cars the preferred choice of the downwardly mobile (or more commonly known as: “Americans”) and NFLX continues to soar after BBI claimed bankruptcy. Money McBags has said it before, but if you want beta in the consumer space in your portfolio, NFLX is the way to go. The valuation is ridiculous but they are clearly winning in a growing space by focusing on video delivery and aren’t content with a simple stagnant through the mail DVD business. These guys are fucking innovators and if Money McBags is going to expose himself to hyper growth in this current market, it is only going to be with companies on the cutting edge and selling products that people will use even as their pay checks dwindle (and yes, streaming videos should really pick up as more people stay home and take advantage of their 50 inch flat screen TVs before Rent-A-Center comes and repossess them).
In small cap news, Money McBags ran a bunch of screens yesterday to find new ideas and one of the companies that looked promising is breaking out today for no fucking reason that Money McBags can tell other than perhaps investors caught Money McBags’ scent on the case (and that scent is a nice lilac mixed in a honey pot). That company is HSTM and they provide some kind of internet research and training to the health care sector. Money McBags was going to look in to them later this week as right now he has no fucking idea if they are a buy or a sell but they popped up so much today on heavy volume (they traded over 200k shares, something they have only done once in the last year) that he thought he’d throw this one out there to his readers as a half-baked idea to see if they know anything about this company.
In the 20 minutes of research Money McBags has done, he likes that revenues have been growing, he likes their returns (though he hasn’t yet thoroughly dug in to their financials), he likes the $18MM cash and no debt on the balance sheet, he likes that they somehow had a greater than 100% customer renewal rate (no really, it says so in their last earnings release), he conceptually likes their segment of being in the health care training space as that seems like a good opportunity given the constant training and retraining physicians need, he likes their institutional ownership (T Rowe owns ~11% and Wellington owns ~3%), and most importantly (though perhaps unrelated) he likes Malin Akerman. That said, he knows about 5% of what he would need to know to understand this company as he hasn’t even read their investor presentation because Money McBags’ computer for some reason doesn’t want to read Adobe Acrobat files today (no wonder that shitstain of a company was down today).
Here are the obvious questions that need to be answered:
1. What segments does HSTM sell to and how big is that target market?
2. What makes HSTM’s product/offering different from or better than competition? And who the fuck is competition anyway?
3. What is driving growth and is that a long-term trend or is there some short term catalyst? Revenue was up 14% last Q and it looks like that was driven by internet-based subscriptions, so is that the growth driver? (And Money McBags loves internet based subscription models with their low fixed costs and easy distribution).
4. What the fuck is this SimVentures thing that HSTM is investing in right now? Are they struggling for growth in their core business or is this a complementary opportunity?
Those are just the most basic questions. It looks like the company is on ~$14MM EBITDA run rate and has ~$95MM enterprise value so trading ~6x current year EV/EBIDTA and they are on ~$.35 eps run rate so they are trading ~15x current year earnings, but top line growth was 10%+ and operating earnings grew 25%+ so perhaps we’re on to something here. Money McBags is going to do more research over the next few days in to HSTM, and in to Emily Scott, but if you know anything about either of them, hit Money McBags up in the comments section or at email@example.com.
The market was up again today as Europe remains solvent and investors ignore macro data and instead focus on how they can become race car drivers. In economic news, production in the US slowed as automakers held back on churning out new cars due to a little something called a consumer fucking recession. Not only did production slow, but last month’s number was revised down from 1% to .6% growth in the government’s consistent “hold the shock and hope for no awe strategy” which is surprisingly more effective than their “hey look, it’s Enrico Palazzo” strategy or simply telling the truth.
In addition to production across the US slowing, the Fed’s Empire State business survey unexpectedly dropped further than Abe Vigoda‘s ball sac after taking off his depends. The survey showed general business conditions slipped to 4.14 (whatever the fuck that means) while analysts had guessed the number would come in at 8 but at least they were ordinally correct as 4 and 8 are both numbers (though the poor guy who guessed the survey would come in as “a” will certainly need to fix his regression model).
In other US macro news, the real estate market remains weaker than Gary Coleman’s kidneys and sell side research as new mortgage applications dropped to their lowest level in over a year as a result of frictional unemployment becoming more non-existent than acting in the best interest of clients at Goldman, the new home buyers government tax subsidy having ended months ago, and more mortgages being underwater than on the fictional island of Atlantis. Even with rates at record lows, there are still fewer buyers than there are straight Wiggles or giffen goods which means prices are going to have to continue to tumble to somewhere between $0 and foreclosure before the housing market once again becomes liquid (and if it is going to become liquid again, Money McBags would suggest it become a nice Jack Daniels or perhaps a refreshing peppermint schnapps). With home equity loans having been one of the engines that fueled economic growth in to the bubble and allowed people who couldn’t otherwise afford it to buy such necessities as 60 inch flat screen TVs, Hummers, and diamond encrusted gold teef (because really, your teef deserve it), the inability of home owners to tap in to these lines of credit with their upside down mortgages and lowered home values will continue to weigh on the recovery. With shadow inventory of somewhere between 8MM and every fucking house in the country looming, home prices will continue to feel more pressure than Ricky Martin’s colon on a Saturday night so it’s no wonder that the market keeps rallying (and yes that was sarcasm).
Internationally, Japan tried to weaken the yen by slipping it some roofies and telling it it doesn’t love it anymore. With the yen at a 15 year high against the dollar, Japan’s central bank is furiously buying US currency in order to help Japanese exports and to try finally get that 50th state quarter for which it has been looking. In other international news, the European commission was out with rules aimed at stabilizing the markets (other than closing them down, barring HFTs, and telling Goldman Sachs to go fuck themselves). The new rules include giving regulators the ability to ban naked short selling (which is fine as long as those doing the short selling don’t look like this) and to get better access to information on derivatives books in the market (and Money McBags’ favorite derivatives books are The Clearinghouse of the Seven Exchangeables and Black-Scholes Beauty).
In stock news, YHOO (remember them?) was up 4%+ after saying they won’t sell their stake in Chinese internet firm Alibaba. YHOO’s stake in Alibaba is valued at ~$11B which is more than 50% of YHOO’s current market value as apparently being second (or third) fiddle to GOOG (the MySpace to GOOG’s Facebook or the Youporn to GOOG’s Spankwire, if you will) isn’t as lucrative as it used to be. In other stocks, MA was up 5% after saying they expect 20%+ EPS growth through 2013 since fiat currency will likely die and lugging gold bars to pay for trivial necessities like dinner rolls, soup mix, and insect repellent, will be hella inconvenient. Finally Travelers was up ~3% after saying they will be buying back $5B worth of stock, $1B more than previously announced, in the continued run of companies returning cash to shareholders as re-investing in the company for growth becomes another outdated management strategy for Peter Drucker and his ilk to drone on about along with “knowledge work productivity” and discounted lunches in the company cafeteria.
In small cap news, DGIT was up ~8% and Money McBags pointed this stock out again yesterday saying it is still a buy because the Ascent Media/Extreme Reach rumors are more overblown than Ron Jeremy (though to be honest, it is not clear one can ever really be over blown) and a company that is growing should not trade at <4x EV/EBITDA. There is is still time to buy as it should be worth at a minimum in the low $20s with upside to $30ish.
Also, KIRK continues to tick back up after the company traded off way too much after their Q. Money McBags wrote about them in the comments section last night but since the award winning When Genius Prevailed comments section is likely less trafficked than a bridge in Alaska or Gabrielle Sidibe‘s vagina, he will reprint it here (with some modest edits) since he believes KIRK is still a very good buy:
KIRK has found a nice bottom (though not as nice of a bottom as either of the Davalos twins) and Money McBags expects that over time they will bounce off that bottom because they are simply too cheap unless their business dies with the rest of the economy, so, um, maybe scratch that.
Money McBags analysis of KIRK has not changed and he recently read the Piper Jaffray note where the analyst shit all over KIRK as if she were filming an update to 2 Girls 1 Cup called 1 Analyst at Work by downgrading it to neutral and saying stagnating middle-income wage growth will hurt KIRK’s top line by causing them to discount more (because really, wouldn’t $9.99 make you buy the “Diva” word plaque instead of $14.99, and yes, Money McBags is recommending a company that sells something called a “Diva” word plaque and yes, he believes that sound was Emily Post rolling over in her exceptionally well cared for grave).
But here is what Money McBags loves most about the sell side and their lack of balls (though in this analyst‘s case, Money McBags is ok with a lack of balls), the analyst ripped the stock and downgraded it, and yet her price target is $19. Sure it is down from her previous target of $28, but her $19 target is ~50% above KIRK’s current price and yet she only rates it a “neutral.” That makes less sense than M-theory or lesbian transexuals. Either Ms. Tamminga is covering the greatest stocks in the Universe and thus 50% upside is “neutral” for her, or the concept of logic has not infiltrated somewhere called Calvin College or the University of St. Louis MBA program from where she has her degrees.
Her fiscal year EPS estimate for next year is $1.60 (and Money McBags is not blessing this number, just stating her guess) and that includes her negative view of the company. They have >$3.00 in cash on the balance sheet. If you want to be a dick, throw a 10x on her negatively slanted number (and that number is ~10% growth, so a 10x multiple is probably too low, but whatever) and add the cash and you’re at ~$19, which is ~50% above where KIRK is today, so it clearly sounds like a neutral-rated company to Money McBags. See, by having a neutral on the stock but a 50% upside price target, the analyst can claim she was right or wrong no matter what happens to the stock, and that my friends, is how the sell side operates.
So what have we learned:
1. KIRK is cheap
2. The sell side has no balls and instead of making cogent and logical arguments, would rather just produce volumes of nonsense to get the buy side to trade with them.
3. The Davalos twins are hot
Anyway, KIRK should be trading in the $18+ range, but it will take time now that they blew their quarter (and most importantly, they forgot to swallow), so you can build a position at your leisure.
The market has hit a speed bump today as consumer confidence fell to its lowest level in 10 months. Consumers are now less confident than a slightly overweight 16 year old girl with bad acne and a spastic colon on her first day in a new school. The confidence index dropped to 46, which is below the 56 economists were expecting, and Money McBags has no idea what 46 means but he is confident it is not good in the same way he is confident having one’s ladyfriend say “we need to talk” is also not good. While the consumer confidence index is a forward looking metric (and if you really want to look forward, just tape a picture of Kate Bosworth to your glasses), the measure of present conditions came in at its lowest level in 27 years. Wow. That is not an exaggeration. People are not only finding jobs harder to get, but growth in the job market seems to be more stagnant than Bobby Jindal’s political career (and as an aside, Money McBags doesn’t give a fuck about politics because they are all the same person, just a different suit, but has any politician ever had a faster and bigger fall than this Bobby Jindal guy has had without mismanaging a war, getting caught in a crack house, or banging Peggy Eaton? Jeesh, that guy has disappeared so fast he was on the back of my milk carton this morning). Anyway, the point here is that investors are now worried that retail spending will be weaker than expectations with the drop in consumer confidence providing a swift kick to the nuts. In slightly positive macro news, home prices declined but the annual pace of decline slowed from “holy shit” to “is it hot in here?” The decline was .2% and was worse than the flat expectations, but only by a rounding error. Interestingly, 15 of the 20 metro areas saw price declines and that sound you just heard was Money McBags throwing up in his mouth. Ugh. The market is now teetering after such a nice totter last week, but that is why this is called an inflection point.
In stock news, Home Depot followed competitor Lowe’s strong quarter yesterday with solid results of their own including their first increase in same store sales since 2006. Of course the comps for same store sales were much easier due to the fact that the only people buying anything at Home Depot in Q4 last year were repo men and the guys who strip empty houses of their copper wire, but still, a 1.4% increase is positive. Home Depot also gave fairly rosy guidance and said they gained 100bps of market share which was likely a result of their November promotion “buy two shower heads, and we’ll throw in a golden one for free.” In other stock news Barnes and Noble is down after posting an inline-ish quarter after they announced same store sales were down 5% and then blamed it on something called the fucking internet. Sorry guys, but the classic brick and mortar book selling business is about to go the way of video rental stores, address books, and civility. Sure Barnes and Noble had strong growth in their online business, but that is a fraction of their sales.
In small cap news, EBIX is getting a case of the dropsies again while ISLE crapped out on another quarter as people don’t like gambling in run down casinos. And yesterday, long time Money McBags reader and ninja assassin (and Money McBags loves any word with two “ass”es in it) Matty McSacks put up some solid thoughts on LOV in the comments section. Matty treated the comments section like he was two girls and it was one cup with his mancrush on LOV. Apparently he loves LOV so much that he is lobbying for them to start intrinsicvaluedate.com, where investors can go to WACC off while getting their shorts squeezed. Anyway, Money McBags knew nothing of LOV until yesterday but he spent some time last night reading their 10Q, playing around on their site, and watching some Tori Black videos on Spankwire (and you may be asking what the Tori Black videos have to do with LOV, and the answer is absolutely nothing). LOV apparently runs about 30 online dating sites with their crown jewel being JDate which accounts for 50% of the company’s subscribers. Now Money McBags lights the menorah but he never understood the appeal of JDate as he prefers his ladies to be over 5 foot 2 and without what I believe is referred to in medical circles as the “nag you to fucking death” gene. Other sites LOV runs are Blackchristiansingles.com, Singleparentsmingle.com, and Canadwarfgetatabledance.com (ok, one of those is made up). They also run a delicious dating site aimed at weight challenged people called Moretolove.com which Matty claims is their fastest growing site and Money McBags only hopes that the pun was completely intended. And while Money McBags loves this concept, he would have named it either Cushionforthepushin.com or Dinnerfor3.com. Anyway, Matty values this stock at at least $5 based on $8MM-$10MM free cash flow per year and some brand value for JDate. Hmmmmm. Let’s see. They earned $.05 per share last Q and while there may have been a sequential lift in subscribers (unclear if that was seasonality), JDate still had a 6% decline on a year over year basis in lonely Jews and those who are looking for some gifelte fish on the side. But here’s the weird part, revenue declined by 16% in that segment which is more than subscribers declined which means they are either discounting more or are losing their premium clients (and it’s unclear what their premium clients get, perhaps a chance to date the one Jewish girl who swallows, and again, Money McBags is a yid, so he can make those jokes). Not only is their revenue dropping faster than they are losing subs, but their marketing cost went up as a % of income by 300bps. And here is another red flag, industry sources have the online dating industry growing 10% to 15% a year (though that industry source is Piper Jaffray, so buyer beware as one should never trust anything from a person who chooses to live in Minnesota). But let’s assume that the number is directionally correct. So the market is a moderate double digit grower and yet this great affinity site JDate is losing subscribers. Something doesn’t smell kosher. The company claims to have had $8MM of adjusted EBITDA in the first 9 months but there was also $1.7MM of income from a legal judgment which I believe they included in that number. So really closer to $6MM of EBITDA or an $8MM annual run rate. That puts the company with it’s very marginal balance sheet at a run rate of around 7.5x EV/EBITDA to go along with their 15x run rate p/e. So the multiples aren’t too high, but the investment in this company really has to come down to whether or not you think it can actually grow, especially with increasing competition from Facebook, Twiter, and the completely NSFW Guesshermuff. JDate has been around for several years already and given that it has grown through word of mouth and the Jewish population is closer knit than a purl stitched willy warmer, there probably isn’t much more free growth left. The point being, 99.95% of Jews already know about JDate and if they haven’t yet signed up, they are not going to do so. As for the Jews just reaching dating age, they are simply using twitter and the like and not dropping $40 a month or whatever in order to have a mitzvah. So I am very skeptical that the drop in JDate subscribers is just the economy and also very skeptical that they will be able to keep their spanktastic margins in that business because marketing costs simply have to go up. You can only rely on word of mouth for so long, unless that mouth belongs to Faye Reagan and the word is “enter.” Anyway, having the stock 45% owned by a PE shop certainly doesn’t hurt because we know PE funds rarely make mistakes (just ask Warburg Pincus about their MBIA investment), but the fundamentals of the business still remain weak. Matty did a nice job on NLS last time so he does get mad props here for his calls on companies who are sucking and have yet to show things are getting better, but LOV just doesn’t have the margin of safety to make Money McBags comfortable and he fears their business is going to continue to face headwinds. If the company were to show some growth and get to an industry growth rate, then sure, Money McBags could see it trade up to $4 or $4.50 but until then, a $.20 eps annual run rate company with no growth and few barriers to entry should probably trade closer to 10x which would make this a $2 stock and thus leave us with 33% downside. If you really want to invest in a shitty internet affinity play, why not just buy INET who at least has exhibited solid business growth? Money McBags will monitor LOV, but he’d rather own a company like KITD right now that is trading at like 7x EV/EBITDA and growing 60% a year with 17% EBITDA margins.
1/25/10 Midday Report: Bernanke likely to get bipartisan support despite claiming he doesn’t swing that way
The market is trying to rally after last week’s sell off which was caused by Obama letting Paul Volcker threaten to open up a can of whoop ass on the banking system, the senate seemingly hedging on reaffirming Ben Bernanke as Chairman of the Federal Reserve proving once and for all that the Senate is as good at making decisions as NBC is at handling their prime time schedule, and something called “data” which showed that unemployment remains higher than Brittany Murphy on the morning of 12/20/09. Money McBags has been saying this for a while, but we are at an inflection point. The market has rallied back to above a fair value based on earnings, so either earnings are going to have to be strong, or the market is going to have to do a very public walk of shame and re-trace some of its steps.
The news today is that the Senate has defied all known human physiology and started to think with their asses (because that is where their brains appear to be) and is likely going to reconfirm Ben Bernanke as Fed Chairman. This move is said to largely be a result of the Senate’s other top choices, Bernie Madoff and Raj Rajaratnam (or Raj-squared for short), currently being a bit indisposed (though to be honest, Money McBags highly approves of Mr. Rajaratnam’s hiring practices and only wonders if he would have hired Mrs. Brosnan to cover large cap stocks or some woman named Heidi Montag to cover plastics). InTrade is betting there is a 95% chance Bernanke stays as Fed chair which are exactly the same odds of the US highest income tax rate being above 38% in 2010 and Hilary Clinton being a man.
In macro news, US existing home sales plunged 17% which was the biggest decrease since they started keeping records in 1968 (thus after both the Great Depression of the 1930s and the scratch and sniff paint fad of the 1940s). The drop in home sales was driven by the end of government tax incentives for first time buyers, continued unemployment, tougher lending standards, and not being able to find a carpet to match the drapes (a problem which Jenny McCarthy can sympathize with in this very not safe for work image).
In stock news, it’s still earnings season and most people are eagerly awaiting Apple’s earnings tonight after the bell. If they beat estimates, will they be able to rise or will the market sell the news like they did to GOOG, INTC, and Jay Leno on prime time? Haliburton announced earnings today and profits were down 7%. The company cited weaker drilling activity and the fact that Dick Cheney is no longer vice-president. And Ericcson will be cutting 1,500 jobs due to an 82% drop in profits. However, the drop in profit does disprove Tiger Woods theory that Swedes don’t go down.
In small cap news, HAFC continues it’s fall from a silly rally as it shows that the book value depends on the book (you hear that Peter Cooper Village?), and ZAGG is also taking it in the yingus as the market realizes that no one wants to pay $30 for an iPhone cover (and honestly, this might have been the easiest short since Bridget the Midget). In fact on 12/31/09, Money McBags said this in the comment section of this very blog while debating with a reader: “In fact I will wager 1 share of ZAGG (and that is funny because ZAGG is going to $0).” Just a few months ago, ZAGG was trading at a multiple greater than 30x, despite the fact that they sell one product which is overpriced, don’t even own the technology, are in a market with low barriers to entry with a lot of competitors coming in, and it is easier and less time consuming to get Artie Lange off drugs than it is to apply their ZaggSkin product. Plus management was talking about building ZAGG stores for all of their future products instead of figuring out how to make their current product easier to apply and cheaper. They are now trading at around 14x 2009 expected earnings of $.20 per share, a number by the way which has maintained stagnant despite top line growth (which happens when you have to distribute products to more expensive channels and you pay more for shipping than you receive). The easy money has been made on this short, but it is unlikely their ZaggBox sells even as well as Rosie O’Donnell’s box and their App Store or marketplace or whatever they want to call it is more commoditized than fake boobs at a casting call for Van Wilder 3: The Rise of My Pants. In other small cap news, MED pre-announced a good quarter today of 75% growth and EPS to be $.17 to $.20 in this Q. The company has great ROEs, is growing faster than a steroidal weed, and is trading at only around 20x 2010 earnings and estimates will likely move up after today’s pre-announcement. Money McBags would ordinarily like a stock like this, especially after it’s big recent sell-off, but there is something about multi-level marketing that feels oh so dirty to him and apparently others agree. MED could be a big winner, but Money McBags is going to sit this one out.
12/23/09 Midday Report: Consumer confidence rises enough to spur consumers to still not buy new houses
Another day and more mixed data so Bulls and Bears can both rejoice (Yay!!! Things are getting better and Yay!! Things are staying crappy. See we can all get along, you hear that Israel and Palestine and Tiger and Elin?). US consumer confidence rose to 72.5 according to the Michigan Consumer Sentiment Index, though it was down from the preliminary reading of 73.4 just over a week ago. It’s good to see even Michigan is adopting the Commerce’s departments’ “downward revision” strategy which Money McBags outlined for you yesterday. In addition to Consumer Sentiment rising to some undefined number, personal spending and incomes were up (though less than forecast) as the second derivative of unemployment has slowed and the economy has been stimulated from flaccid to almost semi-erect with all of the dollars the government has printed and strategically placed into their g-string.
But Bears don’t worry because in contrast to the stronger consumer (though not as strong as estimates, Magnus ver Magnusson, or the odor from a Mickey Rourke corn shit), new home sales fell to a seven month low and dropped 11%. I’m no Robert Shiller (for fucksake I’m not even Karl Case) but when home foreclosures are at a record, why the fuck would anyone buy/build a new home when they can get an existing one for 70% of the price (and backing this sentiment up was the news from yesterday that existing home sales were up)? But fear not everyone, because Timothy Geithner says there will be no “second wave” financial crisis and we all know how good Treasury Secretaries have been with their predictions.
In stock news, newspapers are moving up (and that is not an error as bizarre as it seems, so there will be no retraction necessary) as a Wells Fargo analyst upgraded the sector from “underweight” to “equalweight” after sniffing four packages of glue, downing a fifth of Jack Daniels, and revving up the flux capacitor in his DeLorean and travelling back to the 1980s, thus forgetting about this little thing called the interfuckingnet. Along with that report, the analyst also predicted that New Coke will soar, Ishtar will revolutinize the movie industry, Teddy Ruxpin will be the best selling toy in history, and AIDS will be but a fleeting virus and thus he also downgraded CHD.
Tommorrow is a half day on the markets so get your trades in while you can and then enjoy your day off.