Long or Short Capital

Ahmadinejad has won the Iranian presidential election. Critics of his victory point to this piece of crockery on leaked elections results or to the mismatch between the results and the polling that had occurred prior to the voting. They may even cite the massive amounts of protests as further proof that the Ahmadinejad is not the president, as the voters do not believe the outcome reflected their votes. Proponents of Ahmandienjad as well as students of zimbabwenomics understand that Ahmandinejad is the president and will be the president. The outcome of the election and the context in which it occurred are entirely irrelevant.

In our research report entitled, Using Zimbabwenomics to Win Elections, we outlined the ways in which zimbabwenomics can be used to better understand election outcomes as follows:

Under normal political analysis, there are two result paths from an election, only one of which is victory:

1. Win the election
2. Lose the election

From a Zimbabwenomic perspective, there are also two result paths from an election, the difference being that BOTH lead to victory:

1. Win the election
2. Lose the election, but actually win the election, because your opponent pulls out

Ahmadinejad understood these basic concepts, and applied them to the Iranian election. He created an offshoot of the second zimbabwenomic path wherein he lost the election, but actually won the election, because he controlled the voting process and had the backing of the Supreme Leader.

As you may know, America had been the rising zimbabwenomic star of the last two years. But these recent events demonstrate that Iran now positions itself as a potential alternative to America as the center of zimbabwenomic thought.

Morningstar (NASDAQ: MORN) does a lot of important things, and produces services that people pay them for and other stuff. But none of that will be nearly as important to their share price as the fact that Morningstar employs this woman Catherine Odelbo:

Catherine Gillis Odelbo is president of equity research for Morningstar, responsible for Morningstar Equity Research, Financial Communications and Publications, Morningstar Real-Time Data, and Morningstar® Indexes.

Odelbo joined Morningstar in 1988 as a mutual fund analyst and from 1995 to 2000 served as senior vice president of content development, as well as publisher and editor of stock and closed-end fund research. In 2000, she was named president of retail, overseeing all print and online products for individual investors.

Sounds impressive, right? All that jazz is irrelevant too.

The key to Catherine Odelbo, and the reason you should be so long on Morningstar, all comes down to the remunerative powers of OO. Odelbo is pronounced “Oo-dle-boo”, making it the single most powerful name in the corporate world. That she has risen as high as she has is almost definitely solely due to her devastating front-back OO combo she sports, obviating the entire rest of her resume. Sets you up with an OO, slams it home with a BOO.

Recommendation: Long MORN. Our recommendation on all things Odelbo that exist to today, or will exist in the future, is long. E.g. if she ever gets securitized, or if you find some other way to invest in her, do so without hesitation.

The United States Government

Previous Rating: BFFAE
New Rating: BFFBAS

There has been so MUCH gossipy chatter about those other rating agencies (not mentioning names, but Moodys, S&P and that Fitch Bitch) and whether they should or would downgrade the credit rating of our country, the United States of America. But no one has asked me Melissa Moody! And my answer is YES!!!! I would!

I know a thing or two about the rest of the world. I have seen most of Europe. I have stayed in its five star hotels. I have slept with Italian boys who wooed me with vespa trips to hilltops. I have even been to Prague. You would know this already if you checked my Facebook update I did with all my pictures from my JYA. I know what is up. And I know that the US has some shaky credit and the other countries I have been to know it too, because they are so worldly and interesting and have a much better way of life than us.

I also know a thing or two about using massive amounts of credit card debt to stimulate your economy. My sophomore year was very difficult on me. I felt like I had lost a step, gained a pound or two and lost that twinkle in my eye. I tried my own version of stimulus spending, racking up $15,000 in credit card debt to spend on “infrastructure” — a little lipo, a personal trainer and a dozen dresses from bebe that were super sexy. It seemed like I would be able to hot my way right out of slump!!!! But then the bill came. Literally, the bill came and I saw it and I was like “OMG” because I totally had no way to pay it off. And that’s when I started working the street….JK!! No, my dad paid it off and I was like “I love you daddy!”, but as far as I know the US doesn’t have a daddy who can pay off their debt burden, they only have an Uncle and he wears a creepy beard and is probably too busy pointing his old-man finger at people to help out.

I am downgrading the US to Best Friend Forever But Also a Slut. My rating would change upwards if the United States reins in its seemingly unchecked fiscal recklessness, or if it shows it has a daddy who can pay off the trillions in debt they have racked up on their Treasury card, but until that time, they will be notched as a slutty issuer.

Ratings Methodology:
Hey everyone! It’s me, Melissa Moody…not that other Moody’s you have been reading about. Actually that’s why I’m here I’m just so sick and tired of that other Moody! Their ratings stink, and they don’t know nearly as much as I do about debt, it’s true, I’m maxed out on 4 out of 7 credit cards I know I have a problem but I just can’t stop,ha ha. I can do a better job than Moody’s and that is what I’m gonna do! And let’s face it, their old ratings were too complicated. I mean Aa3, Baa1, Caa2, B1 who knows what that means? My ratings will be simple:

• BFFAE (Best Friends Forever and Ever)
• BFF
• BFFLAF (Best Friends For Like Almost Forever)
• BFFBAS (Best Friends Forever But Also a Slut)
• BFFBIHH (Best Friends Forever But I Hate Her)
• Whore

One common criticism of attempts to redistribute financial income — for purposes of fairness — is that financial income is generally earned, after some fashion. Is the government also going to redistribute good looks, talents like a great voice or acting ability, or height (from the tall to the short)? I think I read a research paper of some kind where this worked out fantastically well. Depends on your definition of “well” I suppose.

I am glad to see that the current administration has proven faithful to its philosophy and is now distributing jobs without regards to qualification or merit.

The 31-Year-Old in Charge of Dismantling GM

It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born.

Recommendation: It appears increasingly likely that a) most jobs will be controlled by Washington in the future and that b) these jobs will be distributed on a semi-random basis, with little regard to qualifications or merit. This provides an excellent opportunity for anyone wishing to find employment, change careers, or remake an American industry according to their hastily conceived notions. If you fall into one of these categories, we suggest you immediately contribute a modest sum to the Democratic Party of Hope, move to Washington, and wait. Develop a special trait such as a “beard that appears and disappears” that will allow you to catch the eye of a patron. Then re-design the industry of your choice. I’ve always had a taste for Plastics, myself. Or maybe Cable.

There are some fundamental laws of advertising. One, I think is try and spend effort advertising to potential customers, rather than on people who are not potential customers. Maybe it’s the other way around, I always get it confused. I came across this while on Ars Technica’s Opposable Thumbs gaming site. Direct your attention to the right hand margin:

Ars Technica is aimed at computer enthusiasts, Apple zealots, Microsoft fans, humans interested in science, humans interested in gaming, stop me when I get to something that indicates a woman would ever visit this site, programmers, open source advocates, the list goes on. According to a survey from last year, 2% of the readership is female. So 98 cents for every dollar (whether in terms of advertiser’s actual dollars or the publisher’s pageview inventory) spent on this ad was essentially lit on fire. If it were on the main page.

But only probably 2% of that 2% would be likely to click on this article in the gaming section (called Opposable Thumbs), a review of a game called Prototype which features a paragraph describing it thusly:

Battles between your character and the military feature bodies and cars flying this way and that as civilians are treated as little more than shrapnel. To fill your energy you can grab anyone in the world and “consume” them, first killing their body and then absorbing their body into yours. The game gleefully counts up the number of military and random passers-by you kill in each mission.

Sounds like Gossip Girl mixed with the Bachelor dressed up in a pink bow!

Recommendation: Now, this comes down to Google (NASDAQ: GOOG), not Brooks Brothers or Ars, since it’s Adsense and that ad is pay-per-click. How can Adsense still target so poorly so often? Short Adsense.

In TV Ads, Chrysler, GM Diverge on Image Repair:

General Motors — once so mighty, it made half of all new cars in the United States — has humbled itself before the American consumer. Its new television ad begins with a man’s voice intoning: “Let’s be completely honest. No company wants to go through this. . . . General Motors needs to start over to get stronger.” The ad, a montage of images seemingly meant to show everyday American life, is part of a multimedia campaign called “re: invention” that includes a corporate Web site, where consumers can track the company’s progress through Chapter 11 bankruptcy.

“Because the only chapter we’re interested in,” the GM ad concludes, “is Chapter One.”

And that’s the problem. The Chapter you need to be writing is the chapter titled “Cars People in America Want to Buy, Made At Prices at Which We Will Be Sustainably Free Cash Flow Positive”. That chapter still doesn’t seem to be in your book.

More simply, the OLD GM, y’know the one that filed for bankruptcy protection a few weeks ago and the one that since 1980 has hemorrhaged cash like it was Prince Alexei after a Rasputin beatdown, looked like this:

While the new GM looks like this:

Spot the problem yet, Private Motors?

The campaign is the result of consumer research beginning last December, when the company’s executives were pilloried for haughtily coming to Washington — on a private jet — to ask for aid. After that fiasco, GM asked consumers: What do we need to do to regain your trust?

“They just kept giving us the same feedback — that we need to be brutally honest,” said Jay Spenchian, GM’s executive director of North American marketing strategy. “We need to ‘man up,’ was one of the terms that came out of the focus groups.”

I repeat, you’re a company not a lover. GM, I know that this it is difficult to even conceive a reality where this would be the case, but ideally people want to buy your cars, not get into bed with them. You don’t need to man up, or regain trust to make us open our wallets. You need to cut costs and make things people want. They just don’t understand that their goal is to make money. Nothing else.

Recommendation: Short GM. But give them credit where credit is due. They will probably bang a couple insecure freshman chicks with their sensitive-guy “trust” shtick. These girls will be drunk, and later full of regret. They’ll move GM into the friend zone during their Psych 101 Lab section a few days later. But good for GM, another notch on their belt and maybe the best they can hope for.

I was getting into a cab and I may (or may not) have cut in front of a man who hitching for a ride. He said, and I quote, “You penis.” I was taken aback. I know myself. I am self-aware and I, anonymous other man in the city, I am no penis. I am a dick. So I said, without missing a beat, “I’m not a penis, I’m a dick. Get it straight.” Now put aside questions about how likely it is that my wit is that quick, sharp and nuanced. Focus on my package. Dick vs penis.

To be a “dick” is not always bad. Certain situations call for it. Waiting in lines requires it, whether those lines be traffic, or for takeout or taxis. Getting your best possible deal on a car? Dickhood is a must for the circumspect auto-shopper. Attractive female assets? The dick status is practically a down payment on fantastic strange. Sure, you don’t want your friends or loved one to think you are always a dick, but at the end of the day, a dick is more likely to have a great res at fantastic restaurant with a sexy broad on his arm than a Schmoe.

On the other (left) hand, a “penis” is irredeemably lame, a flaccid creature that brings none of the good qualities of a dick to the table while retaining most of the bad. A penis is immature and ineffectual but nonetheless a douchebag. A dick is aware of what it is, a penis thinks it is a dick and thus is an erroneous prick. “That guy over there with the double popped collars, he is such a penis.”

Recommendation: Long dick, short penis. From an insulting investment perspective, we’d be long “penis” as it should generate higher insult effectiveness returns. As an example, insulting someone with a “penis” can prompt them to onanistically wax for almost 300 words on the internet.

Detroit News Editorial on Chrysler case:

Under the government-arranged settlement, Chrysler’s bondholders will receive $2 billion for their $6.9 billion in debt. That amounts to about 29 cents on the dollar. Nine-tenths of the creditors agreed to the deal, although most of them are banks and investment funds that are borrowers from the federal government.

Three Indiana pension funds, whose debt holdings amount to $42 million, contended that as secured lenders they should have received better treatment than such unsecured creditors as the United Auto Workers retiree health care trust fund. The UAW fund will receive 55 percent of the equity in a reorganized Chrysler while Fiat, which put up no money, will receive a 20 percent share as well as effective control of a new Fiat-Chrysler alliance.

Legal commentators have said the union received a better deal than is usual in a bankruptcy.

…

[The] decision on whether to accept the deal should have rested with the bondholders — not presented as a government ultimatum. Protecting the interests of secured creditors is the point of bankruptcy law

Au contraire! That WAS the point of bankruptcy law. Did you get that memo? Now bankruptcy is a place where secured creditors get screwed for political purposes and unsecured claims walk away with the keys to the company, while people ahead of them in line get a quarter for bothering to front the company money when it was needed most. In this case, the unsecured claims forced the filing by being so onerous and non-market, not unlike the market participants who took the most housing risk from 2004-2007, caused the US to file for bankruptcy protection (coming to a theater near you in 2021) and now are looking for handouts, so they can throw other people’s good money after their own bad. While it may be poetic that the UAW will own this slop of shit that makes cars that no one wants to buy, it’s also not fair.

What does this mean? I urge you to consider never lending any secured money to a troubled company, especially one in a political industry that employs a lot of people. It doesn’t matter what kind of collateral you have, or what kind of lien, or whether it’s Debtor-of-Possession or super ultra 1st priority magic loans, you’re risking your patient’s life investors’ money.

Recommendation: Short secured, long unsecured politically supported claims. Short existing bankruptcy law.

An email sent to JD on Monday

from:Hopman, Bret < [redacted]@condenast.com>
to: “Hopman, Bret” < [redacted]@condenast.com>

subject: Details Magazine

Good afternoon,
In the upcoming June-July issue of DETAILS (on newsstands Tuesday, June 2), we have a piece that looks at [something probably boring and that won’t be talked about on your site because there is a much better subject for your site].
Here’s the link to the story: [Redacted].
If you are interested in running something online, please be sure to show the cover (attached).

Please let me know if you have any questions or need anything else.

Thanks for your consideration!
Bret

My reply:

Bret Hopman,

I am confused. Is this a request that we run something online about it? Or are you giving us permission (thanks!)?

I’ll give you an idea of how we do things on the internet. You post something in your men’s magazine, I may or (more likely) may not give a shit enough to read it. If I were to give a shit enough to read it, and I was able to find some means of reading it, at that point I may or (more likely) may not give a shit enough to write anything about it on the internet’s most prominent satirical investment site. If, by some minor miracle, like the one that allows that oragutan in Australia to paint beautiful art or the one that allows people like you to navigate the internet and breath through your mouth at the same time, I chose to write anything about it on the internet’s most prominent satirical investment site, I would NOT in any way ask you how I should write about it nor would I care what your opinion was on the subject of whether or not to include the cover in the post. Bret Hopman of men’s magazine Details, get over yourself.

Sinceringly,
Mr. Juggles
longorshortcapital.com

Submitted by user The Paleofish

Conventional wisdom has held that the transportation of narcotics requires a suitcase for the purposes of concealment and convenience of carriage. Today we learn that Chilean innovators have thrown convention out the window and created suitcases made entirely of cocaine. Moviegoers and cocaine enthusiasts know that this was basically the plot of Traffic (spoiler alert!).

The benefits of this innovation will trickle down to all of us in myriad ways. Cocaine prices should drop as cocaine trafficking efficiency increases. Instead of carrying merely the cocaine they could fit into a suitcase, they carry that much PLUS the suitcase itself all in one trip! And for vacationing miniballers who agonize over the decision of “clothes or cocaine” when packing for their destination of chioce, they can just bring both in their cocaine case with the addeded benefit of being safe from Johnny law.

I know I’ll sleep easier tonight. What’s next, making people out of cocaine?

Recommendation: Long Chilean cocaine producers; short Bolivia and Bolivian pride; long chile (because it’s delicious).

When an observer with a trained eye looks at Exxon Mobil’s (NYSE: XOM) 3 month stock price chart, an interesting picture presents itself.

For those of you who do not have a CTA, you’d look at that and see a normal chart, nothing that screams “Trade Me.” But for those of us who are more gifted in the technical arts, we hear voices screaming in our heads saying “Buy Buy Buy” in the days surrounding April 20th. That’s because during that span of time XOM was trading within the “neck” range of a text book Bactrian Double Hump & Pump formation. Let me tease it out for you.

As you can see, the chart is clearly showing a picture of a two hump camel. And if you know anything about two hump camels, you know that when you are traveling from butt to head, after you clear the second hump their neck declines precipitously before a rapid ascent. If you can buy a stock in that desirable neck range, you are likely to experience a short term pop. This is a historically* proven tradeable phenomenon. Here is an overlay of an actual two hump camel:

Aside from the neck, after you plateau in the head range you enter an uncharted area. The stock price becomes dependent upon whether the man holding the reins of the camel decides to jump or not, something that is unknowable to even the most gifted technical analyst.

*Definition of “history” employed in this context is not universally accepted, but is permissable under SAAP

A contact named “Lilley” sent me an email with the subject title “Zoo auctions piantings by orangutan”. She had me at “orangutan,” I didn’t even have to open up the attachment called “fluoresent.rtf” that was appended to the textless message to know that I am very long all zoo auction piantings by orangutan. To show that this is a real investable trend, here is an article about orangutan art fetching as much as £14k.

After his death Nonja inherited his paints and carried on the good work, in spite of a boyfriend called Vladimir who eats her artwork if not locked away in his cage.

Keepers believe Vladimir, who tried painting himself but kept making holes on the canvas, is jealous of his girlfriend’s success.

Recommendation: This is not just chatter, but likely insider info, so be careful how you use it. “zoo auction piantings by orangutan” are likely to go way up, sky is the limit for all simian art. Hold’em if you got em, buy’em if you don’t.

We previously published a brief for investors on How to Hold Based on Insider Information that resulted in a lot of our readership profitting substantially. But correspondence we have received from some readers in jail indicates that some investors are unclear on a second important part about insider trading, the often neglected “getting away with it” part of the buy, sell or hold.

1. Have a position in a company which issues tradeable public securities (stocks, options, bonds, etc).
2. Obtain material non-public information from insiders of this same company.
3. Buy, sell, do not buy or do not sell any of this company’s tradeable public securities.
4. Send a letter to the SEC detailing at length the ways in which you are using material non-public inforomation to profit. The at length part is crucial so pretend like you are writing a doctortal thesis that you have to defend against people who will never read it because it was too long and too boring.
5. Profit.

Note: You might recognize Step 4 from How to Commit Financial Fraud and Get Away With It