The Senate passed a sweeping financial reform bill today, though the only thing it is likely to sweep is more problems under the rug. After many compromises between Democrats and Republicans, the bill basically lets regulators feel the financial sector up but then caucusblocks them from going all the way. Sure there are now limits on how much banks can invest in hedge funds and sure some prop trading desks will be sold, but all this bill really did was create a fuckload more complexity in regulating the financial sector and The Street thrives on complexity since they make money by basically exploiting loopholes. So the bill gives the Fed more strength (and really, haven't they earned it?) to create a bunch of redundant regulatory groups and gives them power to do a bunch of shit that they will only do after the fact because pro-active regulation is more of an oxymoron than deafening silence or David Hasselhoff's talents. Money McBags gives the financial reform 3 yawns out of 4 as it's like thinking about putting a band aid on a gaping bullet wound.
In macro news, new claims for unemployment were the lowest they have been in 2 years, until the (No) Labor Department revises them upward next week. Claims dropped by 29k to 429k after they were once again manipulated upward from last week's 454k number to 458k. The large drop in claims is being attributed both to temporary layoffs at factories being postponed as companies like GM announced they will keep their plants open for most of the season, and just making up numbers. One reason the drop didn't move the market up is that the (No) Labor Department concentrates on seasonally adjusted numbers and their seasonal adjustment is likely as good as Sheyla Hershey's boob job so therefore if we look at unseasonallly adjusted numbers, we see that they rose by 45k to 513k, the highest number since January. Also, continuing claims jumped up by 247k to 4.68MM which is as healthy for the economy as smoking a cigarrette spiked with asbestos and Charlie Sheen's taint hair. Either way, Money McBags is sure that the 429k number will be revised upwards to something like 437k next week so it's hard to get excited about a big drop that is really due to a timing issue and will be changed anyway. And just to show that Money McBags is here for you in analyzing the numbers, remember that last week after claims were announced at 454k, Money McBags predicted that:
"The big macro news is that new claims for unemployment dropped to 454k or some number higher than that depending on how much the (No) Labor Department manipulates/readjusts numbers next week. Money McBags is not a betting man (unless there is money to be won or young ladies to impress) but he is willing to wager that next week we learn that new claims for this week should have actually been 459k."
And sure enough they were manipulated up to 458k so either Secretary of Labor Hilda Solis (though to be honest, Money McBags thought we did away with the word "secretary" and were now calling them "administrative assistants," but whatever) is using WGP to set her numbers or Money McBags' forecasting method which involves sticking his finger in the air while figuratively pulling a number out of Sofia Vergara's voluptuous ass is not just more delightful than the bullshit models used by the (No) Labor Department but also hella more accurate. See, anyone can make up numbers.In other macro news, the NY Fed's Empire State Manufacturing index dropped like George Steinbrenner on Tuesday (too soon?). The index came in at 5.1, only slightly below the 18 economists had guessed, and while Money McBags has no idea what the difference between 5.1 and 18 is (other than 12.9), he's pretty sure something less than 1/3 of predictions isn't good in the same way that being the only female smurf or hiring MC Esher to design your staircase isn't good. Not only did manufacturing in New York decline, but it did in Philly as well where the Philly Fed's manufacturing index also fell to 5.1.....READ MUCH MUCH MORE TODAY...LOTS OF NEWS....
Disclosure: Long GOOG