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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
  • 10/26/10 Midevening Report: New tune for market as it B flatter than Mozart concerto

    First of all, apologies for the fuckawful headline pun, but some days you simply have to play the cards you are dealt.  That said, the market was quiet today as it digested marginal macro news and even more marginal earnings news while it continues to wait for next week's QE2 which promises to be a worse proposed sequel than Amistad II: The Return Trip Home.

    On the QE2 front, New York Fed President and voting member of the FOMC member William "Dollar Bill" Dudley got his college on today at Cornell University (known as the Harvard of Ithaca, NY) where in a speech he said "The Fed cannot wave a magic wand and make the problems remaining from the preceding period of excess vanish immediately." He then explained "For the millionth time, we're not magicians, we're fucking witch doctors so we don't waive magic wands, we dance around fires and chant incantations to the great Jobu.  Come on people, that's Wiccan 101 shit for you."

    Dudley went on to say that QE2 would be unwarranted unless "the economic outlook were to evolve in a way that made me more confident we would see better outcomes for both employment and inflation before too long."  And with that, Money McBags can see why some teabaggers want the Fed to be shut down since evolution is a myth and thus the economy can't evolve, it can only intelligently design itself to something better and do you trust these people to design anything intelligently?

    As far as tangible macro news, consumer confidence rose slightly last month off of an unsurprisingly downwardly revised number and still remains near record lows as most consumers are only confident that the economy is getting worse than Bob Guccione's lungs (and Money McBags tips his jimmy hat to the great media mogul).   Digging in to the number shows that the "jobs hard to get" index rose to 46.1% from 45.8%, the "jobs plentiful" index slipped to 3.5% from 3.8%, and the "jobs you're never going to get again" index rose to "oh fuck I'm screwed."

    In other macro news, the Case Schiller index weakened, in what Money McBags calls the "no shit Sherlock" fact of the day.  While the index rose 1.7% y/y which was below analyst guesses of 2.1%, it fell .2% sequentially or .3% on a seasonally adjusted basis.  But here is what Money McBags loves most about the data, per the NY Times "S.& P. announced earlier this year that the unadjusted numbers were a more reliable indicator."  So riddle Money McBags this Mr. Case, Mr. Schiller, and Standard and fucking Poor's, if the seasonally adjusted numbers are a worse indicator than the non-seasonally adjusted numbers, WHY THE FUCK DO YOU BOTHER ADJUSTING THEM?  That is more mind boggling than the fact that they just now stopped making the Sony Walkman.

    Seriously, why take shitty, dated, questionable data in the first place, and manipulate that data to make it even more worthless?  It's like whatever the opposite of putting lipstick on a pig is (perhaps putting Rosie O'Donnell in a bikini or Alan Greenspan on CNBC?).  So while the adjustment didn't matter this month, making data worse and then presenting that data as relevant can be more misleading than something called naked table building (which apparently involves no nudity, but plenty of wood), so why it is done is more perplexing to Money McBags than anything involving Randy Quaid.

    One other piece of interesting news is...READ MORE....

    Disclosure: No positions
    Tags: HSTM, F, COH
    Oct 27 10:34 AM | Link | Comment!
  • 10/25/10 Midnight Report: Show us your TIPS!

    And now it has come to this.  With the Fed set to print more dollars than there is available rag paper (though they will soon be able to use the tattered clothing of the homeless and long-term unemployed to make up for that shortage), the US Treasury issued TIPS at a negative yield for the first time in history.  Wow.

    Just think about that, Investors are willing to earn a yield on their fucking INFLATION PROTECTED securities that is below indexed fucking INFLATION because either they believe in the delightful French interpretation of inflation which means they are happy to avoid protection to get it, or they realize that QE2 (and its successors QE3, QE4, and QE holy shit we've run out of paper) is coming and thus they are willing to give up some of that inflation protection to get any protection at all and not figuratively be left standing completely exposed and merkin-less.

    Buying a negative yield TIPS to protect your portfolio for the coming hyperinflation (and of course, hyper inflation is coming because of the aforementioned QE2 and not because it googled Alaina Huffington) is like buying a can of mace filled with visine to protect yourself from muggers.  It may stun a bit, but in the end, what was in your wallet is going to be gone.  So do as the Fed wants and hurry up and get your money in to the market because shortly the dollar isn't going to be worth anything, but just be sure to pull your money out before people realize the dollar isn't going to be worth anything because that won't end well either in the least fun absurdity since the Simpson Paradox (and Money McBags is not talking about this, but about the fact that the gloves didn't fit, and yet they still shouldn't have acquit).

    Speaking of currency issues, the G20 met this weekend in an out of the way, yet highly rewarding spot that could only be reached with the help of a little man in a boat.  At the meeting, the G20 decided to try their best to avoid a “competitive devaluation” of currencies, to avoid letting trade balances get too out of whack, and most importantly, to avoid fat chicks.  The problem is that what the G20 actually committed too is looser than a diarrhetic's stool after chugging a six pack of metamucil as members refused to be tied down to any precise metric to avoid further currency issues.  As the WSJ pointed out, the strategy to avoid currency wars simply relies on peer pressure.  So to put that in perspective, avoiding a global currency clusterfuck now comes down to reminding China that they look fat in those jeans and telling Japan that all of the other cool kids are doing it.  Seems like a plan to Money McBags.

    Aside from currency issues, the only macro news today was relatively positive as sales of existing homes rose by 10% which is the biggest rise on record (no word as to whether it was also the biggest rise on tape cassette or 8-track).  The number destroyed analyst guesses thanks to a 2.4% decline in prices, record low mortgage rates, and 35 fucking percent of all sales being distressed or foreclosed upon houses.  Not including shadow inventory and shadowier data, there remains ~11 months of inventory on the market so even though the relative jump in existing home sales prices seems jizztastic, we can't forget that the absolute sales were still more fuckawful than John Meriwether's track record or non-rhyming poetry, as they were the 3rd worst in history.  So while the relative is nice, we need to keep abreast of the forest through the trees (or the adam's apple through the make-up, if you will) and not lose sight of the absolute.

    Finally, Ben Bernanke was out today....READ MORE...

    Disclosure: No Positions
    Tags: DTLK, BAC, RSH
    Oct 26 9:40 AM | Link | Comment!
  • 10/22/10 Midnight Report: Will Geithner's plan at G20 hit the spot?

    The market was mixed today as fears of currency wars formed the yin to earnings beats' yang (or the teeth to earnings beats' hummer if you will) and with macro data more non-existent than Mel Gibson's career, there wasn't much for the Street to manipulate.  That said, a number of US officials were in the spotlight today sharing their views on the economy.

    First of all, Tim Geithner wrote a letter to fellow finance ministers at the G20 meetings (though unclear if it was SWAK) where he urged countries to keep their current account balances below 4% of GDP and stay the fuck off of his front lawn.  The idea was Geithner's way of trying to find a backdoor solution (other than more lube or an extra pillow to bite) to try to avoid the wave of global currency manipulation, especially with the dollars' upcoming plunge with QE2 on the way.  Unfortunately, his suggestion was met with a more tepid response than Jaleel White's comeback as countries with large trade surpluses like Germany and Japan don't want to be held to any kind of hard targets.

    Elsewhere, the president of the Fed Bank of Dallas, the honorable Dick Fisher (which sounds like the name of an Atlantis cruise ship) told Bloomberg that the Fed needs to be mindful of the impact that their decisions have on the dollar while also maintaining that no decisions have been formally made about more quantitative easing.  He then informed the interviewer that he had to go as his unicorn was impatiently waiting outside to take him back to the land of "you're so fucking gullible."

    In addition to Dick Fisher getting a bit flaccid on QE2, noted Fed turd in the punch bowl Thomas "T. Ho" Hoenig got his gangsta on and told an audience in Albequerque, New Mexico that the Fed needs to be wary of excess liquidity because it can fuck a market worse than he fucks his bottom bitch.  T Ho opined "My experience tells me that if you wait until you’re absolutely certain that everything is fine, you waited too long" and followed with "My experience also tells me that "no" don't always mean "no," and most Fed Bankers ain't shit but hoes and tricksYou hear that Benny?"

    And kind readers, on Wednesday (also known as hump day or as we call it in the offices of the award winning When Genius Prevailed, day) you should recall that Money McBags commented on the fantastic returns the government made on their bank and insurance TARP spend.  Well today, data was out about the toxic mortgages the Treasury has been buying and the data is even fucking better. The Treasury so far has had a 36% return on their purchases of toxic mortgages in their Public-Private Investment Program (PPIP) which gives Money McBags' newly established party, Bail Outs Get Us Savings (BOGUS for short), even more fucking street cred.  Money McBags' new party boasts the greatest idea for the government to get out of debt since hyperinflation and selling pet rocks.

    What Money McBags proposes to do is...READ MORE...

    Disclosure: No Positions
    Tags: EPAY, AXP, AMZN
    Oct 23 10:42 AM | Link | Comment!
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