Throughput Tuesday

Throughput as in "down the throat and out the...." :)

Lennar. Oi.

"Losses for the quarter ended Aug. 31 totaled $513.9 million, or $3.25 per share, compared with a profit of $206.7 million, or $1.30 per share, in the 2006 period. Latest-quarter results included a charge of $3.33 per share related to valuation adjustments and writing off land option deposits, among other items."

Ouch.

And those who have polluted commercial paper? They're paying for it (GOOD, says I!)

"On Baffin Island in the Arctic Circle, Baffinland Iron Mines Corp. almost missed its window to ship provisions to workers before winter arrives. The delay came not from the weather, but from a sudden freeze in the market for short-term debt 2,000 miles south in Toronto."

Yeah, well, maybe you should talk to those banks and tell them you're tired of the bullshit financial engineering games?

Oh, and both Lowes and Target said their sales results are going to suck:

"Two retailers that have been strong performers in recent years said late yesterday that they are facing softer-than-expected sales, raising concerns about whether once-exuberant consumers are finally starting to snap their wallets shut."

No, you think? Gee, what do you think happens when the MEW-cum-ATM machine runs out of money? Is this really difficult to figure out? Talk about "reporting" the obvious....

The Case-Schiller Home Price Index showed declines in 16 of 20 markets with an aggregate of 3.9% y/o/u. Ouch. So much for the NAR pumpers who said "oh no prices won't go down." Horseshit!

"Home prices in 20 U.S. metropolitan areas fell the most on record in July, indicating the threat to consumer spending was rising even before credit markets seized up in August, a private survey showed today.

Values dropped 3.9 percent in the 12 months through July, steeper than the 3.4 percent slump in June, according to the S&P/Case-Shiller home-price index. The index declined in January for the first time since the group started the measure in 2001, and has receded every month since then."

I think those who bought into the pumping by the NAR ought to sue those fuckers. That'd be, oh, basically anyone who bought a house from March to now. Sue 'em for fraud and break their balls.

ICSC Chain Store Sales came in -1%, continuing a two week trend (last week was -1.1%). Wow, you mean that Chuckie really has had his head cut off and is running around with a burnt credit card in his hand trying to spend but is now starting to run out of blood in the circulatory system too? What a shock - NOT.

Redbook came in +0.5%. Huh? Hmmmm....

Oh, consumer confidence? It sucks. The conference board reported Consumer Confidence under 100, at 99.8. Previous month was revised downward as well. Guess what - below 100 means an expectation of contraction in the economy. Oops.

The Dollar? That move yesterday sure does look corrective now. Ouch. There was hope that perhaps it was not, but today that hope looks to be misplaced. An impulse below the 30-year lows is going to provoke one of two reactions, both quite violent - either a strong bout of "buy the dips" or a total shitstorm on the sell side. Which will come is nearly impossible to predict, but that one or the other will result is essentially assured. On an intraday basis we have now penetrated the previous level, going below 79.3, and it looks like we will soon head in the downward direction once more.

Truth is about to come to the forefront on the Dollar.

Existing Home Sales came in down 4.3%, with previous down 0.2%. That number sucks.

Bottom? Yeah right. Me thinks we got this situation instead



Never mind that - the cheerleaders are out in force today on CNBC. Apple, RIMM, the usual suspects. Ooook. You buy here, you're a total IDIOT. Mark my words! Recessions hit "momo" stocks the hardest of all; if you lived through the 2000 wreck you know this, and if not, you're going to get a really rough lesson in your portfolio!

Oh, let's talk about Apple for a bit.

They supposedly came out with a "dire warning" today about people unlocking their phone, the gist of which was a threat that their updater may be recoded to intentionally destroy an unlocked device.

First, such a thing is trivially easy for them to do if they want. They can validate the old code and if it fails checksum brick the NVRAM in such a way as to overwrite the boot loader (assuming that part of the NV space is writable)

However, such a thing, if they do so, is almost certainly bigtime illegal.

Remember guys and gals, you didn't "license" the iPhone - you purchased it. You own it. For Apple to intentionally destroy it because you modified it - a modification, by the way, that the US Copyright Office has ruled perfectly legal - would expose them to ruinous litigation.

Even better, if they discussed this with AT&T/Cingular (and I bet they did) you might be able to nail them under RICO. All you need is a predicate offense (and I'd say that the intentional destruction of the property of a few thousand or tens of thousands of people probably qualifies) and two more people involved in conspiring to do it.

So I, for one, hope they are so fucking arrogant that Cocksucker Jobs tries something like this. I only wish I was an attorney so I could go after 'em and ram a big fat dry one up his cornhole.

The truth? My money is on this being a bluff by a bunch of arrogant fuckheads. Heh Jobs - just in case you didn't figure it out the first time - FUCK YOU. Oh, and may the EU (and other forward-thinking nations) ram you over your alleged monopoly games with iTunes. Capiche? Good.

Oh, and if you ever needed a reason to sell Apple's stock? You've got one. Arrogance is a bad thing folks, and it never works out well when you're talking investments. I bet Apple thought they had a great idea when they allegedly backdated their options too right?

BTW, if you're curious about what current P/Es on these stocks look like:

AAPL: 43
RIMM: 76 (!)
AMZN: 128 (!!!!!)
GRMN: 40
GOOG: 46

Ooook.

Oh, the really stupid?

BIDU: 179 (!!!!!!!!!!!)

Yeah, ok.

I remember how this turns out.

Anyone remember BRCM? March of 2000 - $160. Then about a month later, it fell to about 80, and people said "buy buy buy!" They drove it to $180 in the summer of 2000.

In 2002 it was about $5 a share.

Is there a lesson here? Well, today its $40. Not bad if you bought it at $5, eh?

What if you bought it at $180?

Better think folks.

Now let's add one more thing to the mix. When was the last time that a recession - or even a "mid-cycle slowdown" - resulted in expansion of earnings multiples?

That's what I thought.

Here's your technical!