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2/17/10 Midevening Report: Fed hints at reversing stimulus, starts by canceling Bernanke's Playboy subscription

|Includes: AMZN, RCI Hospitality Holdings, Inc. (RICK)

The market was up today like a hooker's skirt in Tiger Wood's SUV.  The rally was driven by earnings, earnings, earnings and some macro data.  Apparently people are still building houses as housing starts hit their 6-month high, rising 2.8% to an annual rate of 591k.  This marginally beat expectations and should be a good sign for the economy, even if half of the houses were built from legos and the other half have already been forelcosed on.  In other macro news, the Fed announced that industrial output grew .9% which also beat expectations with capacity utilization coming in at 72%, 8% below the average from the last 37 years.  So there is still room for the economy to rebound and thus produce more of those delightful "For Sale" signs to go in front yards, printers to print out resumes, and muzzles to put over Lady Gaga's face.  Also, import prices rose by 1.4% signalling inflation may be on the way (and for those of you who need a less subtle signal: INFLATION IS COMING!!  And Ben Bernanke is going to have to make inflation think long and hard about baseball for him to try to stop it from coming).  Many analysts were unphased by the rise in import prices claiming oil and natural gas drove up prices, so I guess it's good we don't rely on those fuels at all or else we might have to worry a bit more about the dollar.  Phew.

 

There was one piece of macro news which caused a brief sell-off before the market put back on its pearl necklace and returned to the ball (and yes, all of those were very bad puns).  The minutes came out today from the last FOMC meeting and the head of the Kansas City branch of the Fed, Thomas Hoenig (known at the Fed as T-Ho), was the one dissenting vote on interest rates.  T-Ho got all up in Benny B's grill and axed him why they needed to say the fed funds rate would remain low for an "extended period," preferring to change the language to say the fed funds rate would remain low for "some time, and shit."  The minutes also revealed that the Fed is starting to look at...read more...


Disclosure: Long RICK