GOOG

After a 2.5 hours halt, GOOG just reopened at $687 from its pre-halt close at $687.30 (from $755.40 close yesterday). QQQs implied an open around $650! Please note that $711 is VWAP - the algos will be looking for that...

44 analysts cover Google. 82% are Buys. Average Target Price is $811. The lowest and least herd-like was Heather Bellini of Goldman Sachs who has had a $660 price target (which is where GOOG is implied to trade currently) since 8/13/12. We wonder what Capstone's Rory Maher is thinking today with his $910 target?

While everyone knows that GOOG is halted and may or may not resume trading before market close (and no, RRD merely reported the facts, if only early, and as everyone knows the market has a revulsion to reality peeking during trading hours), few are aware just why it is that everyone dumped the stock which soared to all time highs a few short weeks ago. Here it is, in its full visual splendor - Google's Operating Income, which was expected to come in at $3.536 billion printed at $2.736 billion, a 23% miss!

While GOOG is halted, the rest of the world goes on trading - with 165 hedge funds seeking protection somewhere... QQQ is trading lower, implying a $660 price for GOOG or down 12.5% on the day... so far...

Sorry, it's not the Iranian hackers' fault this time:

• GOOGLE SAYS 8K FILED WITHOUT AUTHORIZATION
  
• GOOGLE SAYS RR DONNELLEY FILED DRAFT 8K EARNINGS W/O AUTHORITY

This means Dubya, Europe and the weather are all off the hook. It also means that the press release is accurate (unless of course GOOG decides to implement a last minute Morgan Stanleyesque's DVA "one-time" charge to EPS that is).

AAPL slumbered today (fading at VWAPs) and GOOG stumbled on FTC settlement chatter - dragging Nasdaq to its biggest weekly loss in almost 5 months. Financials were also sold hard (following what every talking head said was 'good' earnings by JPM and WFC this morning) - leaving the sector down 3.7% from post-QEternity highs with previous darling WFC slapped down to BofA/MS levels post-QE -6.5%. Dow Transports outperformed its peers on the week (ending very slightly red) but this remains more a pairs-trade story than anything to hang a 'recovery' on. The S&P has auctioned back to the top of the post-Draghi spike - battle is commencing. Treasury yields legged down once again (long-bond down 18bps on the week at lows) but pulled off the lows after Europe closed -5bps to -14bps as the curve flattened. The USD limped lower for the last few days but ended the week +0.45%. While Oil managed a 2% rise on the week, we saw commodities getting sold today with Gold/Silver sliding (-1.44% and 2.9% respectively on the week). After an early spike down, VIX leaked back higher all day ending at the magical 16% level - up 1.5vols on the week.

This post is to address all of the #fanbois & rose colored #iPhone5 investors who spread FED (oops, I mean FUD) regarding my views & accuracy on Apple. Well, the facts simply speak for themselves - and they're starting to get rather loud! Read on...

As we have been saying for over a year now, there are two key issues (one of which follows logically from the other) that central bankers are banging their heads against: the increasing scarcity of money good-assets, i.e., credible collateral, that can be pledged in exchange for debt at both the private and public level, and the collapsing cash flows at the corporate and household level (both incidentally direct artifacts of ubiquitous central planning and central banker intervention). This, among various other reasons chief among which is the parallel collapse in CapEx and R&D spending at the corporate level, is the main reason for the now secular decline in corporate revenues, which in turn will impact corporate profitability for years to come (now that the easy cost cuts have been made and firms have no choice but to cut into the muscle), and why any expectations that currency dilution will transform into higher profits in a time when input costs rise far more aggressively than revenues, are merely pipe dreams, as is the market's obsession with expanding PE multiples. Perhaps the best confirmation that the much needed cash flows continue to not materialize, is the news that first Amazon, and now Google, are slowly migrating to a model of vendor financing, whereby they provide credit to their product and service vendors to stimulate top line growth. And while this may boost AMZN and GOOG stock price briefly, all it indicates is what we have all know for a long time: the US consumer is once again tapped out, and is unwilling and/or unable to spend money at the rate needed to justify either the forecast S&P earnings or the applied multiple, confirming fundamentals are even more disjointed from market surreality than previously expected.

• No Joy on Wall Street as Biggest Banks Earn $63 Billion (Bloomberg)
• And more good news: IMF’s Blanchard Says Crisis Will Last a Decade (Reuters)
• Hobbit Returns to Find Middle Earth Has Become Expensive (Bloomberg)
• Freddie's Foreclosure Plan Hits Roadblock (WSJ)
• Who will buy the FT? Pearson CEO Scardino Will Step Down as Fallon Takes Over (BBG)
• Jeremy Lin Said to Be in Talks With Harvard on Licensing Deal (Bloomberg)
• Jon Weil tears apart the NYAG "prosecution" - Eric Schneiderman Will Have to Do Better Than This (BBG)
• Portugal Offers to Exchange Bonds as It Seeks Debt Market Access (Bloomberg)
• Is unlimited growth a thing of the past? (FT-Martin Wolf)
• European Bank Capital Results Overtaken by Tougher Global Rules (Bloomberg)
• China’s Slowdown Reverberates as ADB Cuts Forecasts (Bloomberg)
• Tokyo has no plan to extend currency swap deal with Seoul (Reuters)

• Madrid Protesters March Again as Spain Braces for Cuts (Bloomberg)
• Euro Can Bear Fewer Members as Czech Leader Calls Greeks Victims (Bloomberg)
• Chinese Industrial Profits Fall 6.2% in Fifth Straight Drop (Bloomberg)
• China pours $58bn into money markets (FT)
• Beijing vows more measures on Diaoyu Islands (China Daily)
• Noda vows no compromise as Japan, China dig in on islands row (Reuters)
• Politico’s Paul Ryan Satire: The Joke’s on Them (Bloomberg)
• Electoral Drama Shifts to Ohio (WSJ)
• German opposition party targets banks (FT)
• Fed action triggers fear of new currency wars (FT)
• Ex-Credit Suisse CDO Boss Serageldin Is Arrested in U.K. (Bloomberg)
• Romney ‘I Dig It’ Trust Gives Heirs Triple Benefit (Bloomberg)

• China carrier a show of force as Japan tension festers (Reuters)
• Draghi Rally Lets Skeptics Dump Spain for Bunds (Bloomberg)
• China’s Central Bank Injects Record Funds to Ease Cash Crunch (Bloomberg)
• Obama warns Iran on nuclear bid, containment 'no option' (Reuters)
• When Would Bernanke’s Successor Raise Rates? (WSJ) that's easy - never
• Italy's Monti Downplays Sovereignty Risk (WSJ)
• Portugal swaps pay cuts for tax rises (FT)
• Madrid faces regional funding backlash (FT)
• Berlin Seeks to Push Back New Euro-Crisis Aid Requests (WSJ)
• Race Focuses on Foreign Policy (WSJ)
• China Speeds Up Approvals of Foreigners’ Stock Investment (Bloomberg)

• Obama, Romney tiptoe around housing morass as they woo voters (Reuters) ... just as ZH expected
• Poll Finds Obama in Better Shape Than Any Nominee Since Clinton (Bloomberg)
• Romney on Offense, Says Obama Can’t Help Middle Class (Bloomberg)
• Fed’s Fisher Says U.S. Inflation Expectations Rising (Bloomberg)
• Citigroup Warns Irish Investors to Plan for Losses (Bloomberg)
• Central Banks Flex Muscles (WSJ)
• China says U.S. auto trade complaint driven by election race (Reuters)
• Brussels sidesteps China trade dispute (FT)
• How misstep over trading fractions wounded ICAP's EBS (Reuters)
• Ex-CME programmer pleads guilty to trade secret theft (Reuters)
• Income squeeze will persist, says BoE (FT)
• South African miners return to work, unrest rumbles on (Reuters)

Much has been said about Apple's recent victory over its key component supplier, Samsung, in a recent US court decision the direct result of which has been the halt of sales of several Samsung products which are already obsolete in cell phone year terms. The paradox here is that AAPL's victory is quite pyrrhic: if and when Samsung feels sufficiently threatened, it can just pull a Gazprom and halt the supply of mission critical components to the world's biggest publicly traded company. Alternatively the Chinese politburo can one day decide to pull FoxConn's operational license, in the process bankrupting AAPL overnight. But these are of course M.A.D. scenarios which in rational, non-centrally planned market would never take place, and so we have no reason to worry about them. That said, it is increasingly becoming clear that patent warfare fought in partial domestic judicial systems, will be the next form of protectionism as pertains to that most faddy of technology: the ubiqutous smartphone. And while Apple may have won the first battle, the outcome of the war is still very much unclear: in fact, the return salvo after Samsung's big defeat on US soil may come quite soon, this time courtesy of another Chinese Apple "clone", HTC Corp, which if it goes against the Cupertino company, could have a large impact on revenues.

On December 20, 2010, Netflix CEO Reed Hastings had one message to everyone who cared: "Cover Your Short Position. Now."

NFLX price then: $178.05...  NFLX price now: $55.40; Return: -71.20%. And they say CEOs know their companies best...

Thanks for the advice Reed. But we'll stick with our short. But hey, when the whole CEOing thing doesnt work for you, the ECB will surely hire you as it is in dire need of people who sound sophisticated, pretend they know what they are talking about just because they speak loud and with confidence, and write long-winded essays of windbaggery, that say nothing, and end up 100% wrong.

Q2 hedge fund reporting season has come and gone. Below is a summary of the key funds, and who held what at the end of June.