Thursday, January 14, 2010

Whutz In The Newz? (And A Bright Idea)

OK - INTC beats handily as markets set new highs. Intel posts sharply higher profit, tops views from Marketwatch. Looks like the earnings bar may be set low enough to allow the Fed and PPT to take a break for a week or two, let their fat fingered interns take a much needed break to heal the blisters on their thumbs and finally let some much needed irrational investors enter the market. Just wait till the banks knock the cover off of the ball as I expect a zero interest arbitrage, cash rich, non lending, equity pumped institutions should do.

The games our government plays to show a recovery when there is not one just don't seem to stop. Mish has Measuring the effect of stimulus: If you don't like the results, change the yardstick - "It would have been a lot easier on Obama if he simply made up numbers of jobs created without disclosing the methodology. Someone might have believed him. This Mickey Mouse manipulation in plain sight of inquiring minds just makes the administration look foolish." We are playing kick the can down the road and pull demand forward (with a sprinkling of Monopoly money and some BLS manipulation), you can't win at either game. You'll have to pay the band eventually. Sadly the band is not the Blues Brothers and we can't just fork over a case of PBR. Caught between a rock and a hard place they are, praying on their knees that if the good Lord will just let this bubble reflate one more time and make all of this bad mess go away they swear they will never let it happen again.

This one may seem a little off base but indulge me. naked capitalism has - Monsanto GM Corn Linked to Organ Damage in Animals. I am a pretty big believer that GM foods will be the "next big thing" once all this mess is over in about 10 years. You see, they are fucking with mother nature and might just put the royal fucking on our food supply. First, screwing with the genetic code of stuff and feeding it to us is not a good thing. You should check to see if what you are eating is GMO or not. Second, MON is one of the companies that I will be buying at the next low, because it is quite possible they will own a patent and get royalties on every food source grown on the planet. I'm not kidding. If you grow soybeans and the farmer next to you grows MON soybeans and they cross pollinate then the soybeans you plant  next year from the seeds have MON genetic code in them, you lose. You just stole their product and will pay royalties. Uh, yes, this is a real and not fictional problem. They own the code. Hell, they tried to corner and get the genetic code patent on pigs not to long ago - if they had won and you owned a pig - any pig anywhere - you were SOL. Their patent, thatnks for taking care of their pig. Not kidding again. Some great youtube vids on this stuff. MON is a bad, bad, bad company IMO.

THE RECESSION ON MAIN STREET CONTINUES from The Pragmatic capitalist hits a home run. "Unfortunately, the frustrations are likely to grow on Main Street for Wall Street isn’t a place that lives in the same reality as the rest of us.  Wall Street is a world based on expectations and as long as investors remain depressed and corporations continue to outperform these low estimates the likelihood is for a continued rise in stock prices.  Unfortunately, a recovery that doesn’t involve Main Street is destined to fail sooner or later." I could not have said it better myself. Mish also has Small Business Trends Suggest No Recovery On Horizon. You see, this manufactured rally is taking the SPX to the top and everyone else is getting the shaft. For this reason I will begin to track the $WLSH to see if the trickle up failure theory works from here. The market should start to rot at the bottom first. so $WLSH and then $RUT should begin to lag and not recover to the highs set by the big boys. Let's test that theory, shall we (that may have been a moment of sheer enlightenment).

Washington's Blog has If Government Won't Break Up the Giant Banks, Let's Do It Ourselves friggin brilliant! I aspire to be the news hound and avid reader that WB is. His here, here, and here links just blow me away. We all know that we are going to eventually have to take the bull by the horns if we want any control over our destiny, otherwise we become further entrenched in the bought and paid for, corrupt, manipulated, over lobbied, special interest driven, socialist state we have become. Give this one a read, take a few action items away with you and figure out your plan for doing your part to get our nation back. 

Zero Hedge has Amherst Securities Estimates Nearly Half A Trillion Cumulative Losses At Fannie And Freddie which is not really all that surprising is it. The lender of last resort that has played hoover sucking up every overvalued RE asset on the planet has a small $500B problem and its growing. "If Laurie is correct, not only will numerous additional episodes of housing-focused Quantitative Easing be needed, but such a deterioration, once it is acknowledged by the auditors who obviously have no interest in indicating how bad the situation is, would have significant political repercussions which would reverberate from the FHA all the way to the White House. Another implication is that the shadow inventory is likely to continue remaining unsold so as not to blow the bottom out of the supply side in the market, likely confirming that banks will continue to pretend the vast majority of real estate assets on their balance sheets are unimpaired when in actuality they deserve a haircut of 20%,30% or more." Marked to market is the great ghost haunting the government and they will do whatever it takes to keep it in the closet for as long as possible. 

From The Big Picture - How bankers think - 

Have a great evening.