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Thursday, March 28, 2024

Mubarak Challenges Quantitative Easing for Title of Biggest Pyramid Scheme

Courtesy of MoneyMcbags

The market was relatively quiet today as protesters in Egypt clashed with pro-government supporters (apparently one group wore plaid and another wore stripes, how gauche), earnings were more mixed than a Barack Obama-John Kerry love child (and with a terrific radio voice to boot), and investors gathered around their TVs to see if Lloyd Blankfein would see his shadow on Groundhog Day thus signifying six more weeks of snow jobbing clients (though it was a bit of a trick because we all know vampire (squids) cast no shadows).

 

While violence in Egypt ratcheted up to the point where even innocent bystanders like Anderson Cooper were attacked (which surprised him because it’s not usually the fists of young men that he takes to the face, not that there is anything wrong with that) and the ripple effect (though unfortunately not the nipple effect) of the recent uprisings in Tunisia, Egypt, and the Bush household spread to places like Jordan, the impact of major geopolitical change on the market was more muted than Stephen Hawking during a power outage.  So even though the world is becoming less stable than Francium or Michael J. Fox, the S&P was down only slightly and it closed above the coskposterously high 1,300 psychological barrier that separates “holy shit the market is too high,” from “holy shit the market is too high but I have to buy the rip.”

 

In macro news, the ADP jobs report showed 187k jobs were added to the economy which beat analyst guesses of 140k and is most likely more irrelevant than capital structure (according to Mr. Modigliani and his pal Mr. Miller) or Bill O’Reilly’s views on science, or anything.  And the reason why Money McBags doesn’t give a fuck about the ADP numbers is because they don’t include government workers (who by the way are getting shitcanned faster than moms at a NAMBLA convention), they will likely be revised as last month’s 297k job gain was revised down by 50k to 247k (so sorry 50k people who we thought were hired last month, we guess you’re still fucked, now run along and take the scent of despair with you, its bad for our complexion), and they are less correlated to the non-farm payroll numbers to be released on Friday than getting a Tattoo is now correlated to being cool (and guy, really?).  So great, according to ADP 187k jobs were added with 166k being in the service sector (of which 150k were hired to service Charlie Sheen), but Money McBags puts as much stock in to that as he does a Paul Krugman opinion piece or Heidi Montag‘s singing career.

 

In other macro news, Challenger, Gray & Christmas’ outplacement survey showed planned layoffs rose to 38.5k in January which was up 20% from December, but will be down 46% from last January as employers have simply run out of people to layoff.  The 38.5k planned layoffs are the fewest for any January since the survey began in 1993 which is great news for all but 38.5k people.  Finally mortgage applications rose 11% recovering from the 13% fall last week and increasing the number of suckers who are buying declining assets at elevated prices.

 

Internationally, borrowing costs in Portugal dropped and bonds generally strengthened in Europe as European countries adopted the slogan “We’re not Egypt” for fixed income investors while expectations grow that policy makers will make it easier to bail out fucked countries.  Elsewhere in Europe, S&P cut Ireland’s long-term credit rating to A- from A as they estimated that Ireland’s domestic bank debt is more than 170% of GDP which is so fucking bankrupt it makes John Edwards’ morals look solvent.  S&P said it would be able to reassess the rating by April, which will only be a month or so after Ireland defaults, so much quicker than S&P usually misses on the news.

 

In the market, earnings were mixed with TWX beating forecasts thanks the strength of their movie division and a 21% increase in advertising sales.  The company also raised their dividend by 11% and increased their stock purchase plan to $5B and said their goal is to increase the cash they return to shareholders because if they keep it, they’ll just do something stupid with it like buy AOL or greenlight another season of The Bachelor.  Along with TWX, Electronic Arts put up a good Q and jumped up ~15% on strong sales as more people are forced to take staycations and thus look to find shit to do at home to stay entertained.  Finally, something called Acme Packet was up 20% after strong revenue guidance and Money McBags has no idea what this company does but apparently it has to do with cloud computing so he’s sure it is on its way to a price of a billionty.

 

Not all companies beat earnings though as GNW was down 8% after posting a loss in its mortgage operations which surprised analysts (though the real surprise is that analysts have yet to figure out that GNW’s mortgage business remains full of shit).  As Money McBags firmly believes that it is impossible to understand what the fuck is really happening on a financial services company’s balance sheet, especially one as convoluted as GNW, he wouldn’t touch this company with Rock Hudson’s dick.

 

Money McBags has so much more today on the award winning When Genius Prevailed that he’s thinking of charging not just your dignity to read the rest, but your self-respect as well.  So if you don’t feel like working, check out Money McBags as he once again puts his analyst cap on and gets busy with a small cap name in ways that make his CFA charter shudder.

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