Posts tagged new claims fo unemployment
6/3/10 Midevening Report: BP apologizes for oil spill while investors await market’s apology for recent 12% drop
The market held steady today like the Universe according to Fred Hoyle or the unemployment rate over the past several months. Speaking of unemployment, jobs data came out in advance of tomorrow’s already leaked positive government non farm payrolls report which will no doubt feature a birth/death model plug so large that it will be able to stop up even Jennifer Lopez’s ample backside. Today’s release by ADP showed that private firms added 55k jobs in May which was below the 70k guessed by economists. That said, 55k new jobs out of 20MM unemployed workers is so irrelevant it’s like the Octomom and her likely cavernous hoohah getting any pleasure out of being boned by the late great He Ping Ping and his little ding ding. It’s called a hot dog down a hallway my friends. Also, new claims for unemployment fell by 10k from 460k to 453k as the Labor Department apparently hired Dostoevsky’s Underground Man as their accountant and he finally got his wishes of 2 x 2 not equalling 4. Last week Money McBags reported on the 14k drop in new claims to bring the number down to 460k, but the Labor Department went to work (pun intended) and recounted their made up estimates and have revised last week’s new claims upwards to get to 463k which means claims dropped by 11k and not 14k last week. So that is how 460k – 10k = 453k. Money McBags eagerly awaits next week’s made up number that will also test the limits of believability and mathematics like claiming Josie Maran isn’t hot or trying to divide her awesomeness by zero. In other macro news, the ISM’s index of non-manufacturing businesses came in at 55.4 for the third month in a row which was below the median guess of 55.6 but still showed some expansion with the service sector going from flacid to half mast.
Internationally, markets in Europe rose before the open as economic data showed that Europe has yet to adopt the barter system even with the Euro on life support (though hopefully better life support than what Rue McClanahan was on). Markit’s UK services purchasing managers index (and Money McBags dares you to say that 3 times quickly) rose to 55.4 in May which is strangely the same ordinal number that the ISM’s US service sector index showed, so it’s good to see that the US and UK are both goalseeking for the same numbers. Now Money McBags doesn’t want to tell the governments how to collude, but perhaps they should use different fucking numbers when making shit up and make us at least attempt to use Benford’s law to call BS. While the Markit number showed expansion, digging deeper showed a slow down of new business growth and employment which is as positive of a sign for the UK as the “narrow bridge, use caution”" sign was for Ted Kennedy. Finally, Japan’s finance minister Naoto Kan, is said to be in the lead to become the new Prime Minister and who could be a better choice to run the world’s second biggest economy than a guy who has twice had to resign positions for failing to make his pension fund payments (no really, he did). With judgment and ethics like that, Kan is said to be in discussions with the US to extradite Bernie Madoff and appoint him to the now vacant finance minister role.
In stock news, Moody’s and Fitch cut their ratings on BP because apparently it wasn’t obvious to the whole world that BP is fucked. Rumor is tomorrow the ratings agencies will be cutting ratings on Enron, New Century Financial, and Jimmie Walker’s career. Also, retailers reported their monthly sales numbers and results were mixed and came in at 2.5% growth, .1% below guesses with weakness seen in the West. Surprisingly, Costco had one of the biggest misses, though they still grew 5%, as people are still buying cheap shit but apparently not as fast as expected, perhaps because they bumped into the top of their credit lines.
In small cap news today, JOEZ shot up 6% today on average volume and no news that Money McBags could find other than that they opened up a new store in Cincinatti last week. Wow. Really? You’re selling premium priced fashionable jeans and the place you find to open your 13th store is Cincifuckingnatti? Really? What’s wrong, was Des Moines? Too upscale? Opening up a Joe’s Jeans in Cincinatti makes as much sense as Simona Halep’s decision to become less top heavy (listen Simona, you’re ranked 166th in the fucking world by the WTA, so here’s a little hint: It’s not the fucking boobs that are holding you back, it’s that you’re just not that good at tennis. So as long as your ground game blows, why not continue to highlight your volleys?). Now look, if Money McBags were in charge of strategy at JOEZ, first of all, he would strategize the operations guy out the fucking door since they have controlled costs as well as Al Gore controlled his son, or his marriage. Secondly, he wouldn’t be opening any damn stores in Cincinatti or the entire state of Ohio until he had penetrated the entire East Coast, West Coast, and Amanda Seyfried. Heck, Money McBags would open a store in the deliciously named Butte, Montana before Cincinatti because where better to have a jeans store than Butte? That’s some free marketing and strategy right there. Anyway, Money McBags is sticking with his $.13 to $.15 high end range for JOEZ’ eps so he doesn’t think it is terribly cheap in an environment where uncertainty is dominating which makes small growth stocks that are highly levered to consumer spend and fashion trends riskier than playing grab ass with a person suffering from a bad case of irritable bowel syndrome.
The market continues to sell off as Angela Merkel happily plays her fiddle atop the Zugspitze while Europe burns below. The debt crisis in Europe continues to gain momentum like it has an improbable, though theoretically possible, coefficient of restitution greater than one or as if it were running for office with the promise that Amanda Carrier will personally “thank” every voter. ECB president Jean-Claude Trichet (also known as the peon from Lyon from his starring roles in Bubble Impact and Wall Street Fighter) warned of an uncertain outlook for the EU after the ECB held rates at 1%. The uncertainty stems from the EU not being sure if Europe’s impending bankruptcy will be caused by hyperinflation or just good old fashioned default. He also defended the ECB’s decision to suspend Greece’s bond ratings by saying “well, we didn’t have a rating lower than junk, so it wasn’t really a tough choice” and when queried about Spain and Portugal, he responded that they are “not in the same boat” as Greece, before mumbling “They’re in the boat that is sinking next to Greece’s boat.” Trichet then lauded Greece’s austerity measures and shrugged while claiming if they didn’t work “c’est la vie.” Slightly positive news is that while Spain’s cost of raising debt was up by ~80bps and a quart of paella, demand remained strong with their latest bond offering being oversold by ~2.5x. However, rumors are that the EU is looking into what is being called a “nuclear option” of buying government debt in the secondary market in order to help keep demand and liquidity at reasonable levels and if that doesn’t work, they will try the “nuclear cough option” which is trickier and has a stronger possibility of backfiring. The point is there is some bad shit going down in Europe and the scary part is that the US suffers from many of the same issues since we love eating hamburgers today, even though we’ll have to pay for five of them on Tuesday. Money McBags prefers to think about baseball, bunny rabbits, and Alice Eve and thus sweep the impending economic crisis under the rug because if he stops and focuses on the real issues he gets nauseated enough to give even the most discerning emetophiliac a stiffy.
In the US, Retail sales slumped a bit in April with some analysts blaming the earlier Easter season and others blaming something called 10% unemployment. Speaking of unemployment, new claims for unemployment dropped last week by 7k to 444k or as Moses Malone would say “fo fo fo.” Economists were guessing claims would drop by 11k so the number was a bit of a disappointment, though not as much of a disappointment as Ron Palillo’s career. One thing that may be keeping claims down is the productivity rate in the US which grew 3.6% and bested economist guesses of 2.5%. See as workers and production become more efficient, employers need to hire fewer people thus prolonging the unemployment cycle. So a big fuck you to all of you efficient workers who are keeping the unemployment rate so high that the economy is still struggling. If Money McBags were president, and trust me he has turned down the nomination many times, the first thing he would do would be to hire Alan Greenspan, just so he could fire him again, the second thing he would do is make Hayley Atwell his Undersecretary of State, and the third thing he would do is promote the terribly NSFW guesshermuff to the work force thus sinking their productivity as they spend hours mastering the competitive sport of muff guessing. And with that one move, producitivity would decrease enough to cause companies to hire more people and thus unemployment would start to abate. Problem fucking solved (and to be honest, Money McBags would love to solve any problem the still NSFW 1600 has).
In stock news, MGM posted a loss thanks in part to their CityCenter development on the Las Vegas strip which had a $255MM operating loss. Apparently people stopped buying overpriced condos in overdeveloped Las Vegas and CityCenter went through a drastic hooker shortage. MGM is trading down 6% on the day but promises it will make it up to investors tonight when they finally hit a hot streak at the craps table. Nintendo is down 3% on a disappointing Q as apparently Mario finally saved the Princess from Donkey Kong thereby leaving the franchise to spend some time alone with his long lost fair maiden. Sales of the Wii were down 20% for the year and the company is guiding to further declines as the market becomes more competitive and saturated and teenagers start to discover something called “outside.”
In small cap news, everything is pretty much getting shit on like it is playing the foil (or perhaps the saran wrap) in a German scat film. One company Money McBags has talked about before though never felt comfortable enough to own, HIL, just put up a craptastic quarter and is down a whopping 24%. HIL is a project and claims manager for construction projects with most of their revenue coming from outside the US. Money McBags has not listened to their call yet but he went through their release and it looks like the problem stemmed from cost controls worse than those of Stephen Baldwin. Revenue was flattish and basically in line at $104.5MM vs analyst guesses of $106MM but eps missed by a wider spread than Larry Craig in a Manhole bathroom. Analysts guessed eps would be $.11 and it came in at $.06 as SG&A rose from 31.4% to 33.0% of their consulting fee revenue which is a heck of a lot of nights out at the Dubai Rick’s Cabaret. Not only was SG&A up, but backlog fell from $620MM to $540MM, 12 month backlog fell from $280MM to $240MM, and Money McBags’ back log fell after eating a bean burrito with extra hot sauce. Most of the damage was done in their claims management business which is ~75% of revenue and was down ~8% organically largely driven by business in the Middle East (perhaps they lost out to the Bluth Company in building construction in Iraq). Money McBags isn’t sure what the fuck is going on with this business as managament had mostly indicated that things were ok so it is not clear why they managed costs like Corey Feldman has managed his career. If you annualize this Q’s EPS and EBITDA, the company is trading at 20x eps and ~9x EV/EBITDA even with the down 24% today. Unfortunately, that seems a little too pricey until we can understand why SG&A went up so much and how they are going to backfill the loss of organic growth in the Middle East (and speaking of backfill, Money McBags would love fill Marissa Miller‘s back).
And loyal readers, don’t forget Money McBags is on twitter and since he is providing you with top level analysis, insights, and plenty of dick jokes all out of the goodness of his way too big heart, how about telling a friend or 10,000 about When Genius Prevailed? Could you help an analyst out?
4/15/10 Midday Report: Tax day causes 53% of the US population to be pissed, other 47% pissed every day about being broke
Oh shit, just when the economy was looking better than a threesome with Hayley Atwell and Alice Eve, new jobless claims for last week rose for the second week in a row and economists didn’t have Easter to blame this time. Well, actually they did, as a government analyst once again warned that the numbers could be skewed since Easter falls on a different day each year. Wow, really? You’re going with that excuse again? Umm, if Money McBags is correct the numbers are seasonally fucking adjusted and since calendars have existed since shortly after the fucking neanderthals were exterminated (which was caused by too much contaminated dinosaur meat since those smallbrained fuckers never learned how to fucking use fire), shouldn’t that seasonal adjustment adjust for Easter? Seriously, it’s not like the day it fell on surprised anyone last year or this year (well, except for maybe Amy Winehouse or the hippocamus-ly challenged), so that excuse is lamer than Spectacular Bid or Boy Meets World reruns. Claims rose by 24k to 484k which is the highest since late February and the highest since the Great Walmart Lockout of 2006. There are still over 10MM people receiving some kind of unemployment benefit and since those benefits don’t include being tucked in by Ashley Dupree (very NSFW, but required viewing), that’s not good. In other macro news, defaults doubled in the government’s loan modification program which is weird to think that people who couldn’t afford mortgage payments still can’t, even at lower rates. It’s like being surprised that a kleptomaniac might want to steal again after being released from jail or that Tiger Woods is likely boning skanks again despite going to the laughable sex therapy (by the way, it’s not called “sex addiction,” it’s called “having a penis”). In positive news, manufacturing production in the US gained as output of factories rose .9% with companies building back inventory while the Empire State manufacturing report demolished expectations. The survey came in at 32%, well above the expected 24%, and Money McBags has no idea what that means other than beating expectations is good and at least New Yorkers have something to cheer themselves up about while watching the Mets.
Internationally, Greece is back in the news again trying to screw up something good we all had going with the markets. It’s like we’d been asking the markets out for 2 years, finally got her to come to dinner, got her home, and as we were about to inspect her large Sharpe ratios, the ruphies wore off. So thank you Greece for scaring the markets again with your rising interest rate spread. Of course there is more of a chance of the Laffer Curve being right than there is of Greece going bankrupt, so Money McBags will be buying at any big market dislocation caused by rumors of our Hellenic friends going to take a ride on the river Styx (though if they go to Styx, they should give a big “domo arigato” to Hades).
Also interntationally, China’s economy is surging like William the Conqueror’s popularity among the French in 1066. GDP was up 11.9% from last year which is more bubble-icious than Gonzo Grape. Not only that, but investment in real estate was up 35.1% and housing prices were up 11.7% in March alone. Wow. China is definitely hitting on all cylinders and their economy is busting out more than Lina Li thanks to the ginormous government stimulus, the artificially deflated currency value, and the accelerating population growth.
In stock news GOOG is running up in to earnings since, you know, they are fucking GOOG. Money McBags should have bought more but it is already an outsized position for him so he’ll root for the best with their earnings report and likely buy any dip. UPS pre-reported their earnings today and grew profit by 37%. They earned $.71 per share, well above analyst guesses of $.58, and upped their full year EPS guidance from $2.70-$3.05 to $3.05-$3.30. Wow. Apparently people really want to ship some shit that can’t be attached in an e-mail. This is a huge signal to the strength of a business rebound. International shipping was up 18% and while US shipping volumes were up less than 1%, it was the first growth in US shipping in two years. So yeah, it is barely up from a much lower base, but this is how things start out. A very encouraging quarter from UPS.
In small cap news, NTRI is starting to run and Money McBags has broken their business down a number of times here. They are cheap but operational issues keep Money McBags from owning this stock. Also, MLNK is trying to rally back from a huge sell off after missing their quarter. Money McBags has analyzed the fuck out of this company but it is ridonkulously cheap on an EV/EBITDA basis, trading at ~4x with a bigger cash cushion than Jennifer Lopez’s ass cushion. This is a small holding of Money McBags and he is currently down ~10% on it but is thinking about nibbling at some more. The biggest issue is that their excuse for missing the quarter made less sense than Kathy Griffin’s career as HP is their biggest customer and was up 10%, yet MLNK’s sales were down 9% even including revenue from an acquisition. It is more head scratching than crabs as to why their revenues performed so poorly and why their guidance was down as the global economy and the consumer are picking up so this company should be seeing revenue growth off of such depressed numbers. That said, the stock has started acting better, so it is worth watching.
4/8/10 Midday Report: Citi execs sorry they broke the economy, wipe their tears with their outsized bonuses
Money McBags is back and the markets are selling off a bit as apparently people somehow still care about Greece going bankrupt (but then again, some people also still care about the Poincare conjecture, the etymology of Star Wars languages, and saving the whales, so whatever). Seeing as how Greece hasn’t been relevant since the Battle of Corinth or the internet rumor of a Maria Menounos side boob shot, their financial crisis shouldn’t be enough to derail the market from rallying back. What should be enough is continued unemployment as new claims for unemployment rose last week by 18k to 460k which was worse than economists’ guesses of a drop to 435k. So once again supposed experts even got the coin flip direction wrong (Money McBags told them to call tails instead of heads). Economists are blaming the Easter holiday for some of the variation in the jobs number because the floating holiday comes at a different time each year and seeing as how no calendar existed last year and the day Easter fell on this year was a complete fucking surprise, it makes sense that data to allow economists to properly seasonally adjust for Easter would be difficult to obtain. The Easter excuse is about as plausible as a bunny laying colored eggs, Santa Claus, or a male friendly lesbian (shout out to Chasing Amy on that one, it’s too bad Kevin Smith died shortly after that movie came out, he had such promise. And if he didn’t die, how does one explain Jersey Girl or you know, the last 10 fucking years of his supposed career?). The positive news on the jobs report is that continuing claims decreased by 131k to 4.5MM which is the lowest it has been since December of 2008 and companies like Home Depot say they are starting to hire more workers. Money McBags is more positive on the economy than he has been in months and is looking to add to his exposures if the market consolidates here.
Internatonally, as mentioned before Greece is still taking up all of the headlines as they try to boost their resume from reality star to working actress status, and if this debt issue doesn’t work, they’re either going to adopt a Malawan kid or try to get Crete drunk and have octuplets. Bonds of the country are slumping worse than sales of Alan Greenspan’s new book: Bubbles for Dummies: How any Dummy can create one. The premium for Greek bonds over German bonds is now 427bps, the highest it has been since the Euro was created and the great deodorant crisis of 1964. Of course, Greece isn’t going anywhere so hedge funds, asset managers, and Pete Rose can bet against them all they want, but if the country survived the release of My Big Fat Greek Wedding, it can survive anything. In other international news, China is going to revise their currency policy where they will now let it float and perhaps appreciate as much as 2% against the dollar. This is another small step in trying to prick the Chinese bubble but most importantly, China is trying to do this without using any MSG. Also, Europe is keeping their benchmark rate unchanged at 1% as they hope the cheap cost of capital can pull them out of recession by increasing the sales of black jeans.
In stock news, United and USAirways might be merging which is a little like if syphilis and gonorrhea had a baby and you had to spend 6 hours sitting next to that baby on an LA to NYC flight. Of course this merger fits in with the old adage, two wrongs don’t make right (though two Wrights make an airplane, three rights make a left, and I believe four rites make a Scientologist) as two crappy airlines don’t make a good one. Also, Citi’s failed management team has been testifying before congress where they have promised to tell the truth about how they were more incompetent than Gabirelle Sidibe’s dietician or John Edwards penis. Charles Prince opened with: “Let me start by saying I’m sorry,” which was succinct, to the point, and no doubt a great solace to all of the people who lost money due to his criminal risk controls. He then expanded on that by saying: “I’m sorry the financial crisis has had such a devastating impact for our country. I’m sorry about the millions of people, average Americans, who lost their homes. And I’m sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us.” Well thanks for that Chuck, really. I am sure every average American will sleep better on their worn out mattresses knowing that you feel badly that you missed the biggest financial crises in the last 80 years even though you were in the fucking center of it. Either you are blinder than Mr. fucking MaGoo after downing a bottle of Wild Turkey or you were just a greedy fuckwad, so let’s just be up front about everything. You didn’t “not see the unprecedented market collapse” you didn’t bother looking for it, which is you know, something on which someone running a bank is supposed to focus, it’s called risk fucking management, jeesh. So while you were out getting your teeth whitened for the 38th time, your company wrote, traded, and packaged enough bad loans to help sink the global economy, but Money McBags is glad you are so sorry that you have now permanently relocated to your multi-million dollar Florida mansion where you no doubt sadly eat caviar off of hookers’ ass cheeks all day (and just a head’s up, that stuff in the crack may not be beluga). But hey, thanks for being sorry dickbag.
In small stock news, JOEZ has been rocketing up into their quarterly results release after hours tonight. Money McBags broke the stock down after their last earnings call and will do so again tomorrow, but in the meantime the stock has become more fashionable than Giselle Bundchen in a pair of their jeans. Money McBags does not get $150 jeans as he understands fads as well as prisoners understand game theory or Tiger Woods understands texting (hey, Tiger, your messages don’t just disappear into thin fucking air. A blind person leaves fewer tracks when walking through the mud than you did while cheating on your wife, but kudos to you for being more clueless than a colorblind synthesthesiac). Money McBags will start breaking more stocks down again next week as he is evaluating a number of names. KITD remains his top pick as they have more potential than a slightly overweight 18 year old girl with low self-esteem and no gag reflex. What is interesting about KITD is that their smaller competitor, Brightcove, just raised another $12MM in their 4th round of financing. Brightcove is barely breaking even (so is KITD, though this year KITD should earn at least $.55 and likely closer to $1) but this round of financing should allow them a nice private plane with all of the accoutrements for their likely upcoming IPO road show. Money McBags is creaming at the possibility of Brightcove going public and thus giving analysts/the market/Pauly Shore a public comp for KITD to show how undervalued KITD remains. So keep your eyes on Brightcove (while Money McBags will try to keep his eyes on Michelle Lombardo‘s not so bright cove) for any news to help with valuation.