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Jeff Macke: "We're Making This Up As We Go Along"

Jeff just fired that off to Dylan Radigan on CNBC's "Fast Money"... at least the guy is telling the truth!

This show was the birth child of a global stock market mania, and will likely go away... as all fads do.
KM

PPC: This Chicken Is Done!

On 9/6/08 I wrote a note titled "TSN and PPC: Stay Short The Chickens"... we hope you did. The stock was down another -40% today. Howard Penney posted a note this morning titled "Big Bird De-Boning". Too bad Lehman Brothers isn't accountable for their August 13, 2008 "Overweight" initiation, when the stock was at $16 and they slapped a $38 target on it!
  • My short term target for PPC is $1.48/share. Howard thinks it could be a zero.
    KM
Chart courtesy of stockcharts.com

Eye on Leadership: John Allison, CEO of BB&T Bank

Below I have attached what is the most sane depiction of reality in the US Financial System, from someone with credibility. In a "Dear Senator/Congressman" note, CEO, John Allison walks through 14 reasons why he thinks "it is inappropriate that the debate is largely being shaped by the financial institutions who made very poor decisions" rather than companies like that which he heads up throughout the mid-Atlantic and southeast states ($136B multi state banking company with 1500 branches).

Here are three points he makes that should not and cannot be ignored:

1. "There is no panic on Main Street and in sound financial institutions. The problems are in high risk financial institutions and on Wall Street"

2. "Protecting the banking system, which is fundamentally controlled by the Federal Reserve, is an established government function. It is completely unclear why the government needs to or should bail out insurance companies, investment banks, hedge funds, and foreign companies"

3. "Treasury is totally dominated by Wall Street investment bankers. They do not have knowledge of the commercial banking industry. Therefore they cannot be relied upon to objectively assess all the implications of government policy on all financial intermediaries."

John Allison doesn’t need a short selling ban in BBT. He’s getting the job done.
KM

Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.32%
  • SHORT SIGNALS 78.49%

Taiwan: What happens to stocks when they cut rates?

I asked Andrew Barber to put this data set together, and I was actually expecting a different conclusion. I am looking for reasons to get positive on Chinese and Taiwanese Equities, but being data dependent has it's realities.

One reality is this chart's output. The 1st cut in a cycle doesn’t call the bottom in stocks. Quite the opposite actually - look back at the rate cut cycle in 2000.

This morning Taiwan cut rates for the 1st time since 2002. They unexpectedly cut their benchmark rate to 3.5%, and the stock market sold off on the news, closing down -1.2% on the day.

After we get through this domestic tsunami of economic issues in the US, the masses will be forced to get back to business and realize that it is global this time, indeed.
KM

The chart that the Street will focus on next week...

This morning's jobless claims number was a large one. Coming in at 493,000 (see chart), this is the highest print we have seen since the 4th of July.

Notwithstanding the disclosure in the report (that the government attributes 63,000 of the claims to hurricanes), the number is the number, and it takes the 4 week moving average up yet again to 463,000.

This week, next week, and the weeks after that, the proverbial hurricanes in the US Financial Services industry will have to be accounted for as well don’t forget.

Come "bailout day", there is an economic cycle underneath this financial crisis that will not stop trending in its current direction. Conversely, it will worsen throughout Q4. The September employment report looms next week (after the short sellers are allowed back into the game).

KM

Restaurants @ Research Edge – My Perspective on Keith’s Trading Calls

Keith’s Trading Call: PFCB looks like McCain, swan diving in AZ; going to 22.72 next

My Perspective: PFCB - I don’t think they are doing enough to offset the macro.

Keith’s Trading Call: SNS looks nothing like CHUX or RT... Looks like it is going to discover the cure for something actually

My Perspective: SNS - The market wants to believe the new CEO (aka boy wonder) can save this ship.

Keith’s Trading Call: RT looks like one of their remodels; bad... and people not coming back

My Perspective: RT - The banks are going to need to step up and save the day.

Keith’s Trading Call: PNRA feels like watching a WWF cage match, broke its nose today off the turnbuckle, but remains conscious

My Perspective: PNRA - In 2009, YOY wheat and gas prices should be favorable, but the consumer is an issue.

Keith’s Trading Call: CHUX looks like it had a shot on the zero line

My Perspective: CHUX - A third tier company in an unforgiving market.

Keith’s Trading Call: DPZ trading with TED spreads b/c of their debt ... nuts, but reality; stock breaking down

My Perspective: DPZ – A good operating model, with a leveraged balance sheet.

Keith’s Trading Call: BWLD - tough day, but hangin' tough... bullish still using a 37.83 line of support

My Perspective: BWLD - Well positioned concept, but I don’t like the move into Las Vegas.

Keith’s Trading Call: GMCR finally broke my line today, $31.36 target

My Perspective: GMCR - The acquisition of Tully’s will buy them time, but long term margin trends don’t look good.

Early Look

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