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4/27/10 Midafternoon Report: If Greece is now junk, what does that make Haiti?

|Includes: Cirrus Logic, Inc. (CRUS), F, GS, MCO

The market is down today as Standard and Poor's downgraded Portugal to a principality and Greek to junk and not the the kind in a trunk that most investors love, but good old fashioned junk.  It was the first time since the advent of the Euro that a European country has lost its investment grade status and Money McBags would be concerned if the rating cut hadn't coming from an agency who missed something called the subprime mortgage meltdown which only caused the biggest financial collapse in 80 years.  The real fear is that the EU can not handle this situation and it spreads throughout Europe like the bubonic plague in the 1600s or black jeans in the last half of the 20th century.  Consider the market spooked, as it was looking for a reason to consolidate down anyway and now we have it.

 

In the US, consumer confidence rose to its highest level since Lehman Brothers collapsed and the highest level since the pet rock fad (because seriously, if people were willing to throw money away on fucking rocks, they must have been hella confident that things were going ok).  The consumer confidence index came in at 57.9 beating even the highest of forecasts after getting those forecasts in a camel clutch and having them submit.  People are generally starting to feel better and the fact that most Americans don't read the news and have no idea that Europe is teetering on the brink of bankruptcy while their own government printed more money than humanly possible to count (again, the "too big to count" strategy) can only help the blissful ignorance.  In other macro news, the Case-Shiller index showed that home prices were up from a year ago but declined on adjusted basis by .1% sequentially.  This still beat analyst guesses though prices are basically stagnant which is better than them dropping but is still a long way from a recovery.  And grabbing most headlines today were Goldman Sachs executives and Fabulous Fab Tourre who never saw shitty CDOs they couldn't pawn off on investors, testifying in front of congress about their alleged fraudulent behavior.  After hours of questions and answers, all we learned is that Senators don't have a fucking clue about the financial system and Senator Claire McCaskill, to quote another great Fabulous Fab, "Girl you know it's true, ooo, ooo, ooo."  Today's hearings accomplished nothing other than letting some rich assturds (the Senators) grandstand and belittle the richer assturds (GS executives).  Excuse me while Money McBags yawns through this part of the saga.  The fact is GS did some shady shit as did the whole fucking financial system so unless GS gets more than a slap on the wrist, nothing is going to change.  Money McBags is close buying long dated out of the money puts on MCO because when the smoke clears from this cock off, the rating agencies are going to be the musician to the regulators' very rusty trombone.

 

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Disclosure: Long CRUS