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If a Fed Statement Falls During a Rally, Does it Make a Noise?

Courtesy of MoneyMcbags

The market continued to rally today as the Fed voted to keep QE2 going (something about the economy being shitty, so rally on), bankers at Davos figuratively whipped out their cocks (which now seem so much smaller since they no longer get to mark to market) and pontificated about how regulation is bad for their industry (so rally really on, and excuse Money McBags while he punches himself in the nuts on that one), and traders all vociferously signed up for social media platforms to more quickly “get on top” of the news (which Money McBags fully supports, especially if this is the news).


The point is, as the S&P barrels its way to 1,300, a number it hasn’t seen since tweeting was just something for the birds, reading out loud wasn’t such a must see event, and there was something called Lehman Brothers, Money McBags is still very fucking cautious because the real causes of the depression haven’t been addressed (and Money McBags hears they like to be addressed as “Your Misery”) like unemployment, an income gap bigger than the gap on most resumes, and the spiraling debt, so this recovery feels way too over blown, like Evan Stone in Tiger’s Got Wood.  Money McBags gets that the market is rising because the Fed is pumping it up, but shit, something just feels so dirty about this, like NSFW muff guessing in public.


That said, the most interesting news today for Money McBags was that Alice Eve was literally out on the town, while the second most interesting news was that the Fed released their monthly policy statement and caused the market to move less than Milton Friedman’s hair (and not because he’s dead, but because he was bald).  It was more of a non-event than an Art Laffer lecture or a Tila Tequila sighting as the Fed basically reiterated their nonsense from last month and said: “the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions” and as a result, they unanimously voted not to stop their quantitative easing (and somewhere Thomas Hoenig is rolling over in his grave.  He is dead right?).


More importantly, the Fed finally admitted that commodity prices have risen but then claimed that “longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward” which is so fucking cockposterous that Money McBags can’t believe that was written with a straight face because continuing to ignore food prices in the inflation calculation is like ignoring every fucking movie M. Night Shyamalan has made since the Sixth Sense when giving him funding, or ignoring Heather Mills’ prosthesis when signing her up as your partner in a three legged race.  It is amazing to Money McBags that this statement literally had less effect on the market than grammar rules have on a Palin or dignity has on a Kardashian, but shit, this is Bernanke’s world and we’re all just living in it.


In other macro news, home sales were miraculously up 17.5% while mortgage applications were down 12.9% as people are either now buying homes with 100% cash down, or someone forgot to take the absolute value sign out of the calculation.  Falling mortgages applications (and both purchase and refi mortgages apps fell) with other worldy home sales (including a 72% rise in the West thanks to a California homebuyers tax credit and 7 homes being sold instead of 4), is more of a paradox than Suri Cruise or the statement “this sentence is a lie” (and the Suri Cruise one may take a few seconds to hit you).


Finally, the rhetoric ran deeper than a Nabokov novel (or his theories on butterflies) as the President’s State of the Union Address was applauded as he promised to freeze spending as long as that spending doesn’t pertain to medicare, social security, or any other government program.  Obama rightfully claimed that “we need to out-innovate, outeducate and outbuild the rest of the world” which would take us out of our sweet spot of just “out-manipulating” it.  Speaking of which, the business elite were still getting their ski on in Davos at the exclusive invite-only World Economic Forum (and Money McBags can only assume his invitation got lost in the mail) where CEOs, witch doctors, and world leaders hobknob during the day while keeping their fingers crossed that they won’t pick Christine LaGarde in the nightly key party draw.  That said, it wasn’t all champagne and laughing at poor people, as rising commodity prices and spiraling debt caused Nouriel Roubini to get his panties in a bunch, which is of course reason #2 why Money McBags always freeballs (this of course is reason #1).


In earnings news, Boeing delivered fewer planes, saw revenue drop 8%, and gave guidance below analyst guesses thanks to higher pension expenses, lower defense contracting spend, and the fact that planes are really fucking expensive.  That said, the commercial airline sector flew a whole lot fucking higher today thanks to UAL turning a profit after adjustments that beat analyst guesses (with those adjustments being merger costs and their on-time reliability) while US Airways put up a big Q as higher ticket prices, fees for baggage, and the selling of more special seats (including extra wide, vibrating, and for kilt wearers) caused revenue per passenger to rise 3.4%.  It’s the first time in four years that US Airways has made money in Q4 as demand for travel picks back up and reduced airline fleets boost occupancy rates higher than Kate Bosworth’s cheeks.


Lastly, Eastman Kodak fell 16% due to a 25% drop in revenue and something called the digital camera.  Money McBags isn’t saying their business model is outdated but he heard Louis Daguerre called and wanted his strategy back.


Money McBags has plenty more as he gets his small cap and his Rachael Cordingley on at the award winning When Genius Prevailed.

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