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Macro News Blows, But Will it Swallow the Market’s Momentum?
The market traded down today as earnings season began not with a bang, or a whimper, but with a Kirstie Alley-esque thud as AA missed revenue guesses (and the 6% drop in the stock likely caused some AA investors to fall off the wagon), Japan’s market fell again as the severity of the nuclear disaster continues to worsen from “there’s nothing to see here” to “Get your free plutonium,” Oil prices dropped which capped the biggest two day drop since jheri curls went out of style, and US import prices rose to their highest level since Lucy Pinder’s last photo spread in Nuts magazine.
In all, there was little positive news (other than the Phallological Museum finally getting their human schlong,
and Money McBags can only imagine what that will do for traffic) and
with the market already priced as if the ponzeconomy™ has recovered, as
if flat wages and spiking input prices won’t cause a decline in the
average American’s standard of living on par with the decline in Bernie
Madoff’s, and as if Josie Maran will be the next visitor to the delightful meinmyplace, a sell off was more inevitable than death, taxes, and a Miley Cyrus sex tape (and trust Money McBags that will happen).
In US macro news, as already mentioned import prices rose 2.7%
but luckily that was only driven by a 10.5% increase in petroleum
prices and a 4.2% increases in food prices (and the rise in food prices
had the indirect effect of causing bacon perfume to challenge Imperial Majesty and Marisa Miller‘s
vulva for the world’s most expensive scent) and as the Fed has taught
us, food and energy are irrelevant for prices so a big fucking yawn (and
yes that makes as much sense as saying the number 5 is irrelevant for
Math or a sharp tongue is irrelevant for a cunning linguist, but as we
can see from the National Debt,
the Fed may not be the best source for logical proofs).
Stripping out
the prices of petroleum, fuel, and common sense, prices rose only .3%
which means that after you spend all of your money to eat, stay warm,
and drive to another job interview, you’ll barely have to pay more for
those non-discretionary items that you can’t afford to buy anyway. That
said, the rising import prices led the trade gap to be above analyst
guesses which means analyst guesses of GDP are likely too high and thus
should start to fall faster than Glenn Beck’s ratings
or civility. So GDP getting cut at the same time that QE2 runs out,
means only one thing, buy the fucking dip because the US’ shadow(y)
bank will have to reignite the market manipulation with QE3.
Speaking of the Fed, they released their minutes today
which simply should have read “ibid.” The only interesting parts of
the minutes were that the Fed Banks of Kansas City and Dallas asked for a
25bp raise in rates while the Fed Bank of NY asked not to be seated by
those assclowns again. Money McBags does look forward to the Fed
meeting next month where he hopes to finally understand the fallacy of
core inflation and also hopes to get the Fed’s opinion of this
cocktastic look at the TALF
by Matt Taibbi (and if you are going to read one thing today, hopefully
it will be the rest of this column, but if you are going to read two
things today, hopefully it will be the rest of this column and Ashley Dupre’s tattoo,
but if you are going to read three things today, hopefully it will be
the column, the tattoo, and the piece by Matt Taibbi as he annihilates
the rich shitsticks who keep abusing the system because they are the
system. If reading it doesn’t make you angrier at the Fed than Christina Applegate at a Femen rally, then Money McBags can’t help you).
The only other real US market news was that the compromise budget cuts were finally announced and they will affect a wide range of programs and services including high-speed rail construction, emergency first responders, the NEA, the EPA, and likely even some T&A.
More than $1 billion will also be cut from programs to prevent
sexually transmitted diseases, AIDS, and viral hepatitis which means
you will now be required to have health insurance before coming
in contact with a Kardashian.
But not everything is geting cut as some important programs and
departments are actually getting increased funding such as the SEC which is getting $74MM more which should also be great for Vicki Richter’s career (and if you didn’t get that reference, this should help).
Along with the short-term budget agreement, President Obama is scheduled to give
his proposal for the budget going forward which will likely include
provisions that say any tax increases will need to include spending
reductions, so really the worst of both worlds (Money McBags would love
to hear the logic that went in to that line of thinking which sounds
like the "Cut your nose to spite your face but then cut your face to spite your nose" strategy).
It is said that Obama is trying to align his budget with the yet to be
released objectives of the orgy-tastically nicknamed Gang of Six, which
is not just the name of Faye Reagan‘s
next movie, but also a group of three Republican and three Democratic
senators working on a bipartisan solution (and interesting enough, Ms.
Reagan will also be working on bi solutions).
Internationally, Japan lifted their atomic alert to Chernobyl levels as entropy keeps rearing it’s ugly head.
Japan’s Nuclear and Industrial Safety Agency raised the rating to a 7
from a 5 after determing the East German judges had been keeping the
scores down. The governemnt said the delay in reporting the radiation
was because of concern that the margins of error had been large in
initial computer models so they thought it was best to err on the side
of whatever is the exact oppostie of caution.
In the market, CSCO flipped off their flip camera business
citing shitty margins, a poor strategic fit, and too many peeping tom
complaints. Elsewhere airline stocks rallied on falling oil prices and
Morgan Stanley’s telecom analyst apparently hasn’t been bringing in the
trading commissions as he plopped out a series of ratings changes
including downgrading Nokia to underweight from equal weight, upgrading
ALU to overweight from equal weight and ERIC to equal weight from
underweight, and promising to increase his flow of bullshit in the
future.
If you're still bored (and if you've read this far you must be), Money McBags has more on cmall cap stocks and Karissa Shannon at the award winning When Genius Prevailed.
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Elegantly, suscinctly and humorously put. Nice sum up.
LOL! Nice work MM. Now I can have a productive day.
"The only interesting parts of the minutes were that the Fed Banks of Kansas City and Dallas asked for a 25bp raise in rates while the Fed Bank of NY asked not to be seated by those assclowns again."
LOL...first laugh of the day!