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5/13/10 Midafternoon Report: Market down as Prozac prescription runs out, or common sense prevails, take your pick

|Includes:CRUS, CSCO, The Female Health Company (FHCO)

The market bounced around today before closing down as it seemingly takes a breather from a week so volatile that it caused quants to come out of the closet and question their autoregressive conditional heteroskedasticity (but that is what they get for having a GARCH model and not Brooklyn Decker as the centerfold for last month's Automated Trader Magazine).  In US macro news, new claims for unemployment were down slightly, or they weren't, depending on who is making up the data this week.  According to the Labor Department, claims fell by 4k from last week to drop to 444k new claims.  Of course last week, claims dropped by 7k to also reach 444k.  Hmmm.  Now look, Money McBags is no Stephen Hawking (and that's not just because Money McBags isn't a professor of Mathematics, but also because Money McBags can walk), but if new claims for unemployment were 444k last week, how the fuck could they fall by 4k to the same 444k this week?  Unless high frequency traders have also begun manipulating the laws of mathemetics, Money McBags is pretty sure 444k - 4k = 440k.  In fact, he's more sure of that than he is sure that Cheryl Cole is hot and that John Edwards is not just a scumbag, but also has bad taste.  So what say you Department of Labor with your statistics, PhDs, and cluttered website?  Is this some new kind of math that will lead to solving the great P=NP problem or finally answer the question of how all of those clowns fit in to that one little car?  Ohhhh, I see.  Apparently, the Labor Department revised last week's number up by 4k to 448k in order to have another positive headline this week.  So good on you Hilda Solis, because who can't get logically confused and thus miss the point by reading "new claims for unemployment fall by 4k from 444k to 444k."  And the point of all of this is new unemployment claims are stagnant, or they're not, apparently, it depends on what day you ask, but things are not getting appreciably better.  In other US news, the NY AG is going after banks who may have lied to ratings agencies about what was in their MBS CDOs.  Wow, really?  You think the banks were fudging the details a bit or do you think rating agencies were turning their heads the other way and coughing as the banks cupped their bottom lines?   Or do you think, I don't know, that everyone was fucking complicit?  Jeesh.  There were more shenanigans going on in CDO deals than there were in Lawrence Taylor's hotel room last week.  If the SEC, NYAG, or the ghost of Nipsey Russell wanted to seriously prosecute the banks, it would take like one second of research to do so since the banks have been manipulating markets since Alexander Hamilton donned a powdered wig and let Maria Reynolds sample his US Mint.  So a big fucking yawn until someone actually does something to protect investors.

In international news today, the ECB is trimming their purchasing of Italian and Spanish bonds after trying to save the market from collapsing in a pool of its own inflation.  By providing liquidity to the Europe bond markets, the ECB hopes they have fooled investors into thinking there are actual bids in the market and are also hoping that investors will continue to have shorter term memories than Charlie Sheen's wife.  Also, Portugal announced an austerity plan following the leads of Spain and Greece.  When Prime Minister Jose Socrates was asked if he would also jump off a bridge if Spain and Greece did first, he replied that it would depend on the height of the bridge and the motion of the ocean beneath.  Portugal's austerity plan calls for a 5% cut to the salaries of senior public officials, increases in value added taxes, and the end of free Madeira Mondays.

In stock news, CSCO reported a solid Q (and Money McBags is an owner of CSCO), yet is getting walloped after...READ MORE...ANALYSIS OF FHCO...

Disclosure: Long CSCO