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Money McBags is the preeminent financial humorist and money maker in the world. While known for his ability to find and invest in undervalued equities, Mr. McBags is also a world class dick joke teller, an aficionado of lovely ladies, and avid reader of books without pictures in them. With... More
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When Genius Prevailed
  • 5/3/10 Midafternoon Report: Consumer spending up as sales of moral hazard increase (though to be fair it does come in blue this season) 0 comments
    May 3, 2010 2:25 PM | about stocks: UAUA, TMRK, GS, AAPL, NTRI

    Stocks are off to the races again today and the good news is that the market is seemingly being ridden by Calvin Borel.  Sending the market up is that Greece is once again set to be bailed out, Warren Buffet was out defending Goldman Sachs, and people are spending more than they earn.  Hold on a second on that last one.  Now look, Money McBags is no historian (though he knows the difference between Dred Scott and Avy Scott, knows that neither tea nor pot was involved in the Teapot Dome scandal, and knows that the War of 1812 not only ended in 1815 and thus is a bit of a misnomer but also ushered in the "Era of Good Feelings" where bipartisanship was shunned and taint tickling Tuesdays swept the nation), but spending more than one earns is what got us in to this whole fucking recession.  Anyone remember the popular sport from the mid 2000s called flipping fucking houses?  Well it caused the economy to be flipped as people just borrowed the fuck out of shit because banks were able to package all of those crappy loans and sell them to yield hog investors who wanted those extra 10bps of interest income.  The point is, consumers not managing their personal balance sheets with eyes on the future (though if their eyes were on Katie Price, Money McBags can almost forgive them) is a recipe for fucking disaster which we just learned, oh I don't know, 24 months ago.  Ugh.  To highlight the shortsightedness of consumers, consumer spending was up today, but it grew twice as fast as incomes grew.  And if you do the math on that (and remember, math likes to be done in the reverse cowgirl position), that means savings declined, which again, is exactly what got us in to this mess.  American people apparently just like buying shit and then whining about it when they lose their jobs and can't afford to pay their too expensive mortgage or their maxed out credit card bill.  This is a nation of infants and if they don't figure it out soon, Money McBags is going to go door to door with Jeremy Grantham and the pinheaded Suze Orman and he and Jeremy will take turns buggering Ms. Orman and her inflated FICO until people understand having money saved for retirement is more important than buying a new Shake Weight.  Rant over.

    In other macro news, manufacturing grew at its fastest pace since 2004 as the ISM's factory index rose to 60.4 which was inline with analyst guesses.  The growth was driven by new equipment orders and increased production of default notices.  Also new construction was up modestly, but the fact that it was up at all has Bulls giddier than Peter North's son on take your kid to work day.  What drove new construction was public construction which was up 2.3% and state and local government construction which was up 2.5% as new line dividers were constructed to keep the crowds at the unemployment office running smoothly.

    Internationally, Greece is getting a 110B bailout in euros over a three year period, until tomorrow when Angela Merkel's cold feet and colder heart once again change her mind.   To get the bailout, Greece has to instill a 30B austerity plan, cut their debt, and promise to tell native born son Yanni to shut the fuck up.  Even with the bailout,  Greece's debt is estimated to rise to 140% of GDP in 2014 which is a whole lot of souvlaki they can't afford.  The bailout may be giving investors a day to breathe a bit easier but with the amount of debt Greece is going to have to repay and the cuts to their publc spending, the country is now facing real threats of deflation and the first potential revolt since Alexander Ypsilantis led the Filiki Eteria.


    Disclosure: Long TMRK, Long AAPL
    Stocks: UAUA, TMRK, GS, AAPL, NTRI
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