The market crumbled today like Charles Rangel's reputation as apparently Europe went through the TSA's new back-scatter x-ray machine and was revealed to have a severely dangling Ireland. In addition to Europe being on the verge of another meltdown (or just a continuation of their previous one), China is trying to regulate inflation, and the Fed's asset buying strategy continues to confuse politicians like global warming, health care, and honesty.
The biggest news of the day though was that Ireland is in talks with everyone from the EU to the IMF to NAMBLA to try to reach a deal to help them meet their spiraling budget deficit. A bail out would allow them to avoid having to go to the bond markets to raise more debt where yields on Irish bonds continue to spike faster than a college student's heartbeat after shotgunning a Four Loko (incidentally, the FDA is set to soon rule on Four Loko and their ilk and early word is that they are likely to rule them "awesome"). The hold up in reaching a deal seems to be Ireland's desire to find other ways to turn the country's fortunes around such as the brilliant new business strategy of locating themselves next to twitter's offices and hoping for a business plan to emerge through Porter's 6th and most important force: Dumb fucking luck (and for those aspiring dick joke writers out there, Money McBags' dining room table has three vacant seats for the highest bidder).
If a bailout can't be reached, Ireland may have to resort to selling some natural treasures such as the Blarney Stone, Michael Flatley's shaved chest hair, and Katherine Jenkins, in order to raise funds. That said, Money McBags doesn't care which international organization jumps in (as the only international organization he fully supports is the Ukrainian Femen) so someone should just bail Ireland the fuck out (and the probability of that happening is whatever is higher than 100% likely) and celebrate over some pints of Guinness, or Europe should finally disband the whole fucking EU and be done with the charade of a unified Europe. It didn't work in the 1940s and it probably won't work now.
But it's not jut Ireland that is giving Europe problems today as Austria is dropping all kinds of schnitzel in the punch bowl by claiming that Greece has not lived up to their bail out promises. Citing the EU having to increase Greece's budget deficit three times already from "likely insolvent" to "Stephen Baldwin insolvent," Austrian finance minister Josef Proell got his bah humbug on and said that his country has not yet submitted their December contribution for Greece's bail out. While Austrian models continue to show Greece's economic situation as being dire (and if one of those models is Nicola Mar, then kudos to Austria's economists), Proell toned down his statements later in the day to say he thinks Greece is "on a good path" before mumbling "in bed."
The market also tumbled today as a result of rumors that China's government will take steps to curb inflation such as raising rates, instituting price controls, and sending inflation to its room before dinner. Chinese shares dropped 4% on this news as price controls could eat away company profits faster than Kirstie Alley on a bender.
In US macro news, wholesale prices rose by .4% which was below analyst guesses of .9% and was driven by gas prices rising 9.8% (and we saw that in yesterday's retail sales numbers as well). That said, if we get our Fed on and just look at core inflation (because why give a shit about the things that people really need to spend on such as food, gas, and botox injections), we see that core PPI was down .6% which was the biggest drop in four years and was led by a 3% drop in car prices and a 4.3% drop in pick-up truck prices. Of course finding out that expensive discretionary products need to be discounted to sell is less surprising than finding out kids who go to Yale are douchebags, so big fucking "duh" (Note to loyal readers of the award winning When Genius Prevailed, remember this bit of info for WGO's Q. And yes Money McBags is still short).
In other US macro news, home builder sentiment rose by 1 to 16 in November which means absolutely nothing to Money McBags except that anything under 50 is considered to be negative so anything under 20 must be hella fucking negative. Finally, industrial output was weaker than expected ending today's run of "who gives a shit" US macro news.
In the market, WMT put up a good Q and raised earnings guidance despite weakness in US same store sales as their customers continue to struggle with high unemployment rates and finding the right fashions. Same store US sales were down 1.3% which was the 6th consecutive quarterly decline as non-discretionary items continue to struggle worse than sales of The Economist's first annual Swimsuit Edition. HD also put up a good Q, and raised earnings guidance thanks to better cost controls and sales of dollies to help people move out of their foreclosed upon homes. That said, they did lower their full year revenue guidance a bit as according to their CEO "the economy is still a bit fucked up."
And here is something of which to make note (while here is something of which to make more than a note), retailers SKS, ANF, and TJX all put up good Qs and yet all struggled in the market today which usually means earnings have now been more than fully priced in and the sell off will start gaining steam. Finally, MAT rose sharply after it was announced that Carl Icahn had started accumulating a position and that the company is going to use its balance sheet to buy back stock, raise their dividend, and buy enough material to finally give Ken dolls the proper anatomy.
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