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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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  • 6/21/10 Midafternoon Report: China drops its peg, exposes its growing yuan 0 comments
    Jun 21, 2010 5:53 PM | about stocks: GS, KITD, AA

    The market rallied today in the morning like a chubby chaser with a bottle of crisco on his way to a Peter Paul Rubens exhibit until it faded in the afternoon thanks to common sense and volume.  Rallying the market in the morning was news that China is going to unpeg their currency from the dollar thanks to pressure from global leaders who felt that the currency peg gave China an unfair trade advantage in selling their cheap shit even cheaper.  The announcement comes ahead of the G-20 summit in Toronto this weekend where finance ministers and central bankers from around the world will no doubt descend upon the NSFW Brass Rail and flaunt their ability to negotiate currency while manipulating bottoming assets (of course after the EU's latest bailout, finance ministers will certainly wonder if that is a printing press in EU central bank governor Jean Claude-Trichet's pants or he is just happy to see them).   While it's good that China is willing to let the renminbi/yuan float (and if anyone can explain to Money McBags the difference between "renminbi" and "yuan," other than several letters, he'll send you a free autographed poster of Gong Li), China has stated that they will do it gradually so as to avoid a potential destabilization bubble like what happened in Japan when the yen was unpegged from the dollar in the mid-1980s or like what happened in Britney Spears' pants after she was unpegged from Justin Timberlake.  With the return of a "managed floating rate," the yuan/renmindbi/johnson rod was up ~40 bps against the dollar to its highest level in five years which means happy endings just got a little less happy for all of us.

    In US macro news, less is happening today than on a Bernie Madoff trading desk in 2006 or in a eunuch's pants.  The SEC is going after a firm called ICP Asset Management for manipulating CDOs in ways that would have made even Meggan Mallone blush.   ICP is accused of pumpng up CDO prices to increase the value of their funds, pushing profits to their owners rather than their investors, and being what I believe the SEC called "a bunch of dicks."  In other news, the proposed Durbin Bill which is supposed to keep credit card companies from charging merchants exorbitant interchange fees as a way for those credit card companies to have adequate reserves when their customers charge off due to the high prices the customers have to pay for goods which of course are partly caused by merchants raising prices to make up for high credit card interchange fees (it is the least fun daisy chain Money McBags has ever encountered), is rumored to be losing steam.  News today is that the bill will take out "network fees" from interchange and thus credit card companies will still be able to charge retailers the fuck out of transactions due to a semantics loophole.  The result of all of this is that V and MA shot up at midday while politicians once again do their best to to take the bite out of their bark or the steam out of their cleveland steamer if you will.

    In stock news Alcoa ran up today...READ MORE....

    Disclosure: Long KITD
    Stocks: GS, KITD, AA
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