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British Petroleum, Pound Get Jolly Rogering


The most massive UK retreat since Dunkirk.


Hello from New York, where I'm mighty happy to hear Steve Jobs is doing well - and so is the market. Whatever you may think of Cupertino, 1) I'm unnaturually close to my iPod and 2) The gang at Apple (AAPL) certainly has a sense for the dramatic. Congrats to Mr. Jobs on his corporate version of the Rockne-esque rally.

Still think the co-founder's health doesn't matter to Apple's stock? Let's just say it was a good quarter - but I'm not sure it'd be bucking a down-32 NASDAQ tape in a normal situation.

Here's what else I'm watching, both on and off the health front:

  • McDonald's (MCD) turned in a typically McAwesome quarter this morning, giving the stock a little boost. The McDonald's story isn't one you expect 10% hops and pops from. The company is a plugger and chugger; last quarter, it did both.

  • One thing no longer helping US multinationals: The weakness of the US dollar. I'm long the UUP dollar ETF, both as a sort of general portfolio hedge, and because it's simply a very easy chart and story to love.

  • Meantime, "sound as the pound" is more dated than Mike Myers' movie career. Professor Krueger notes the British pound (FXB) is enduring the most massive UK retreat since Dunkirk. We'll see if things end better - but the Brits have some hard work in front of them.

  • Odd that a total lack of liquidity, a "flexible" set of market rules and heavy leverage would come back to haunt those Russian oligarchs. The ghost of Churchill has that going for him, even if he's still stewing over British Petroleum's (BP) rogering by both Putin and the markets today.

  • In light of the comments coming out of the Washington testimony of former Standard & Poor's and Moody's (MCO) ratings agencies executives (such as "originators of structured securities 'typically chose the agency with the lowest standards, engendering a race to the bottom in terms of ratings quality'" and "We rate everything... Including cows"), I owe some apologies for some of my recent pieces.

    Like the one in which I compared the ratings agencies to Dr. Kevorkian, or the one back on May 22nd, when I suggested that Moody's primary job was to "justify their existence." Now that I'm clear that the RAs existed to engage in a race to the bottom of the barrel of ratings quality, I feel I may have been slightly obtuse. My bad.

  • Also in defense of the ratings agencies' intellectual process: "Cows," the near-classic 80s song by the Suburbs. They have limited vocabularies and skinny feet - both fine attributes in barnyard animals.

  • While we're clarifying, a mystery emailer we'll call "Pappa Kass" wrote in after last night's show to suggest that "tTings are much worse for Las Vegas casinos than Mack Truck suggests (when I offered that selling Ford (F) to buy MGM Mirage (MGM) was a lateral trade).

    a) I think both casinos and autos are debt-laden and generally headed for zero, or at least much lower.

    b) As I mentioned, the Wynn (WYNN) treated me like P-Diddy. I hadn't been to Vegas in 5 years. The tables were empty, and they treated me like a superstar (great tables at top restaurants, club entries, etc.) for betting moderately (at best) on blackjack for a few hours - and this in a casino which paid an estimated $1 million for each hotel room (mine was comped).

    And that's leaving the invevitable crackdown/shakedown by Macau out of the model. From where I'm sitting -- trying to remember the blackjack "book" while being mocked by a guy who recognizes me from TV -- it's very, very early to be buying casino stocks.

  • Today's frightening commuting question: What to do with the 10-point move in the SDS double short S&P 500 position? I tell you, if there's a downside to commuting in at 2:30 (and I'll grant you, that's a big "If"), it's that trading and commuting remain more or less mutually exclusive activities.

    So you know I took a less-than-gutsy one-third of the position off. I suspect I'll be too early, rather than too late.
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