Posts tagged New York Times
4/22/10 Midday Report: Market struggles to find green on Earth Day thanks in part to the new planet threatening phenomenon of Goldman Warning
It’s Earth Day which means Al Gore is likely so giddy that he is rolling around the back seat of his electric car while warming his globes to thoughts of Susan Solomon’s ozone hole and Carmella Bing’s flourescent bulbs. And sadly, while all of this is happening, somewhere a polar bear dies. Anyway, the market is trying to shake off a sluggish start thanks to poor earnings, the Greek economy’s impending trip down the river Styx, and the release of a new Jennifer Lopez movie suggestively titled The Back-Up Plan (and yes, Money McBags would plan to back that up).
But all is not bad today as US macro news was largely positive. Existing home sales in March rose for the first time in four months climbing 6.8% thanks to government incentives, the weather, and buy one get one free Sundays. Also, new claims for unemployment were down 24k to 456k which was surprisingly pretty much inline with analyst guesses thus giving credence to the old adage that even a broken clock is right twice a day (as opposed to the new adage that even a broken cock can love Hanna Hilton twice a day). As always, 10MM people are still receving unemployment benefits, extended benefits, and for the really lucky ones, friends with benefits. Finally, Producer prices rose but only modestly above analyst guesses. The PPI was up .7% largely because of food costs which were up by the most in 26 years since the great Dorito shortage of 1984. The price of vegetables was up a remarkable 49%, which did wonders for Stephen Hawking’s market value, but at some point those cost increases wil start being handed down to consumers. Excluding food and fuel though, PPI was flat, so once again, as long as you don’t need to eat or go anywhere, your money should last a long time. The point is, no matter how long economists want to delude themselves by using core PPI, inflation is coming because the goverment fired up the money making machines to try to push our economic problems off on the next generation (so next generation, here’s a big fuck you, but on the positive side, we did give you the NSFW Spankwire.com). Money McBags would call it the largest ponzi scheme in history, but it already has a name: Keynesian Economics.
In international news, apparently the Greek budget deficit was worse than originally thought and may top 14% of GDP which is a fuckload of dolma. The bigger problem is that there are many “uncertainites” about the quality of Greece’s data including the currency swap noted fraudsters Goldman Sachs hid for them and the fact that they hired David Friehling to audit their books. As a result of all of this nonsense, premiums on Greek bonds continue to reach new heights like Enceladus going through puberty. Greek Prime Minister George Papandreou is caught between a rock and his nether regions upon viewing Greek sensation Julia Alexandratou’s sex tape (which can be viewed in its entirety by searching for it on the aforementioned spankwire) as further austerity measures may crumble the spirit of the already striking Greek workers while doing nothing may hinder Greece’s ability to get aid from the IMF and Eurozone. As always, Money McBags is going to assume this is much ado about nothing because the Euro countries are not going to let Greece fail and if the country survived the Trojan Wars and Criss Angel’s career, a little debt is not going to hurt it.
In earnings news SBUX put up a quarter stronger than a venti Sumatra with no cream or sugar. Not only was traffic up 3% up, but spending was up 5% which helped drive eps of $.29 beating analyst guesses by $.04. SBUX rasied their outlook from $1.09 per share for 2010 to $1.19 to $1.22 and the stock is now trading at ~22x the top of that range which isn’t ridiculously expensive, except when you factor in that overall revenue growth was only 9%. Money McBags doesn’t own SBUX but he would be long biased. Driving the Street down though were earnings from EBAY and QCOM. EBAY actually beat estimates, but revenue growth in their core US business was inline and guidance of $.37 eps to $.39 eps for next q was below analyst guesses of $.40. Money McBags is not a bidder for EBAY since their business model ex. Paypal is so 1998 that he just doesn’t get it as the only people who still buy shit on EBAY auctions get kicked off half the time because their dial up AOL accounts fail. As for QCOM, they also gave disappointing guidance which has caused a sell off as fear that handset sales may be weak despite AAPL’s rindonkulous quarter yesterday.
In othe market news Moody’s downgraded Toyota due to their recent vehicle recall, while Money McBags once again downgraded Moody’s. So well done Moody’s, though downgrading Toyota now is a bit like downgrading White Star Lines a month after the Titanic sunk, but hey, at least you were earlier on this downgrade than the one for Lehman. You know what though Moody’s, go fuck yourself. You are worse at your job than an achluophobic night watchman or Heidi Montag’s voice coach.
Finally, the NYTimes turned a profit, but then again, Money McBags learned that from reading the New York times for free online so it could all be made up. And last and most definitely least, in a deal no one gives a shit about, Century Tel is buying Qwest for $10.6B in stock and one outdated business model.
In small cap news today Money McBags favorite KITD is out with another share offering and this one is even more dilutive than the last. Money McBags has broken down KITD’s business may times (just type KITD into the search box here), but is a bit concerned about the size of this offering which is for ~4.3MM shares at $13 in order to get ~$55MM in cash. The good news is the $13 price is above where it closed yesterday, KITD’s CEO has maintained that any acquisition will be accretive, and Heather Graham has another NSFW nude scene in her new movie. The bad news is that the share offering is about 25% dilutive and without knowing how it is going to be used, it reduces Money McBags $2.00-$2.25 high end eps estimate for next year to closer to $1.75 at best. Money McBags is glad that KITD is finding opportunities and the CEO owns a fuckload of equity so he is diltuing himself as well, but there comes a point in time where they are going to have to run this business and put up results with what they have. So while they say only 40% of growth is from acquisitions, they are going to need to show some strong numbers to support that. Money McBags has no intention of selling on this news, he still trusts management is doing things right, but the size of the deal and the fact that it is coming so soon after the last one gives Money McBags just a small pang in his gut that he hopes is merely last night’s dinner and not some early subliminal warning sign that this company may be biting off more than it can chew.
2/10/10 Midday Report: Bernanke’s statement stuns meteorologists, causes it to rain on market’s parade in the middle of a snowstorm
The big news moving the market down today was the statement from Ben Bernanke about the FED’s future policy plans. Bernanke was supposed to testify in front of the House Financial Services Committee but the snow storm in Washington caused the hearing to be postponed giving Barney Frank more time to make snow angels and less time to suck at his job. Bernanke did release his full statement which serves to make Crime and Punishment read like a fucking Dr. Seuss book (I will kill her with an axe, I will kill her with hot wax. It will be an act of enormous enormance! No rational performer’s performed this performance!). I’m not saying it was boring to read, but Ambien is said to be suing Bernanke’s statement for patent infringement. However, since Money McBags is here to serve the people, he made it through the whole statement and can sum it up in fourteen words: “We did a bunch of shit, now we are going to try other shit.” The important parts are that eventually rates will rise (duh), though not in the immediate future, and in the meantime, the FED will investigate other ways to control interest rates and bank lending, such as paying banks interest on reserve balances held at the FED. Below are Bernanke’s actual words on this (no jokes, real information):
“By increasing the interest rate on reserves, the Federal Reserve will be able to put significant upward pressure on all short-term interest rates, as banks will not supply short-term funds to the money markets at rates significantly below what they can earn by holding reserves at the Federal Reserve Banks. Actual and prospective increases in short-term interest rates will be reflected in turn in longer- term interest rates and in financial conditions more generally”
The FED has also been developing a number of additional tools to use to reduce the large quantity of reserves held by the banking system. Those tools include offering term deposits, selling securities, and using reverse repos and their more deliciously effective cousin, the reverse cowboy.
In macro news, the US trade deficit increased, widening to $40B as both exports and imports increased. However, the rise in the dollar over the last couple of months may be hurting export growth in a classic Catch-22 situation, like mark to market accounting for bank balance sheets in a declining asset economy or finding Gia Carangi in your bed in 1985 and not having any condoms. While the trade gap was driven to some degree by a larger quantity of petroleum being imported, and while a 3% growth in exports is still growth, the US needs exports to take off like a young Milton Friedman in the mid 1940s in the University of Chicago Economics department where he proved the hypothesis that chicks dig rising permanent income (generally speaking).
Internationally, China’s exports grew 21% while imports grew 85%. Container companies were said to have raised their shipping rates as export growth is causing steel containers to become more scarce in China than Andrew Johnson supporters in 1867 or female smurfs. The export growth in China has increased the calls to unpeg the renminbi and let it float to reflect its actual value, of course if it were up to Money McBags, he would just peg all currency to the the Vietnamese Dong (and yes, learning that Vietnam’s currency is named the dong was pure comic gold for Money McBags, like whe he ran in to Tiger Wang on linkedin. Of course it does make Money McBags wonder if Lexington Steele would be the richest man in Vietnam due to the amount of dong he carries. Thanks, and don’t forget to tip the waitress, though not too much because she has a bit of vertigo).
And we can’t forget about Greece where civil servants went on strike and walked off the job for 24 hours thus shutting down airports, hospitals, and schools, in their attempt to become Camden, New Jersey. The EU’s bailout will force the country to freeze salaries, raise the retirement age, and require citizens to purchase deodorant. But it’s nice to see the workers protesting these cuts becuase I am sure they didn’t receive any benefits from the enormous amount of debt taken on by the Greek government (and yes that was sarcasm).
In stock news, The New York Times had a quarter that beat expectations but the company continues to run a declining and outdated business. Their newspaper advertising revenue was down 17%, slightly better than the 30% decline from the first three quarters of the year, but still about as good as Emo Phillips hosting a Def Comedy Jam remake or Jennifer Love Hewitt’s ass. New director of strategy, Phil Von Werescrewed, said “we expect the newspaper advertising revenue to level out any quarter now, unfortunately that level is going to be zero, so we’re actively looking at new ways to be profitable, like shutting down, or restarting out dauggerotype business.” In comparison to the Times’ 1940′s business, BIDU announced first quarter revenues to be above estimates as they gained advertising dollars from Google’s potential pull out of China (which would make GOOG the most famous thing to pull out of Chyna since Triple H).
In small cap news, DFZ continues to rise after their huge Q which Money McBags broke down for you yesterday. Money McBags did have a chance to go through their call last night and it all sounded pretty good. They did say they expect to be unprofitable for the next six months which is consistent with previous years as the first six months of the calendar year is mostly replacement and replenishment business (hence their desire to make an acquisition to counter the seasonality of the slipper business). However, they did guide for slight revenue growth, though to be somewhat offset by an increase in marketing, but gross margins should be over 40% for the year, operating margins between 10% and 12%, and they are having no input pricing issues in China. The company has earned $.95 so far this year, so let’s just call it $.90 in total for the fiscal year assuming a loss of $.05 in the next two quarters (though Money McBags thinks they might actually earn a profit with international sales increasing and the Dearfoam brand getting increased marketing, but whatever). They are now trading at 11x this number which is for the fiscal year ending in June (so not even really forward earnings). That is a ridiculously low multiple for a cheap growing company with a solid balance sheet. Money McBags thinks this is at a minimum at $12 stock but could easily see $15 if they continue to execute.
The big news of the day is that the Labor Department, led by Hilda Solis whose name is an anagram for the upcoming Snoop Dogg swine flu dis track titled “Hos said ill,” came out with their jobs report for December which showed a loss of 85k jobs. This was worse than expectations and held the unemployment rate at 10% while moving the underemployment rate up from 17.2% to 17.3% (you know, the rate that actually counts all of the people unemployed, like the ones who have given up on trying to find a job because they’re 50 years old and companies can just hire someone half their age, if they’re going to hire anyone, at half the price to sit at a desk all day and watch Youtube videos, look at the hot chicks they can date, and wonder why Leon gets to take a break at 2pm while they have to fake work until 3pm). So look at the person to your left and then look at the person to your right, and then look at the person one over from that person to your right and the person one over from the one to your left, and odds are one of you will be underemployed. Leading the way down were builders who cut 53k jobs last month as the construction industry halted to stare at the Burj Dubai Tower and all it’s infinite awesomeness which now claims the title of the world’s tallest building, though still measures a few centimeter less than Peter North’s most famous appendage.
Further causing concern is that unemployment in the euro zone rose to 10%, it’s highest rate since 1998. This was led by Latvia who now sports a 22% unemployment rate to go with it’s 22% literacy rate and Spain where 43.8% of the population under the age of 25 is now on siesta according to the NY Times, which we know is chock full of typos today. If true, that is a truly amazing statistic. You would think with all of that unemployed labor they could finally finish the Sagrada Familia, I mean it’s only been under construction for 128 years and to put that in context, 128 years ago there was no Panama Canal, TV hadn’t yet been invented, and Barbara Walters was still in High School.
In stock news today KO slid 2% as JP Morgan downgarded them to neutral based on KO’s 18% premium to the group. The analyst obviously is unaware of KO being a great dollar hedge due to their booming worldwide business spurred on by great brand equity and a fuck load of sugar. The financial sector is also giving back some gains today with the Citi analyst cutting estmates for investment banks and people getting temporary amnesia and forgetting the one fact Money McBags keeps harping on, banks are getting money for free and lending it for more than free and at a spread at historic highs. Sure risk mitigation is the most important metric, and banks have failed at that worse than Artie Lange failed at accuracy, but the next few Qs should show record profits.
Anyway, that’s all until monday, until then, enjoy the weekend.
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.