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Macy's to Reread Chapter 11?


Bankruptcy could be in the cards for retailer.


A puckered-chin hello from New York, where my beloved bulldog, Beulah, is nearing the end of her life due to a confluence of arthritis, collapsing joints and the generally tragic things which happen to aging bulldogs. Beulah is 11, which is about 125 in bulldog years. She's been loved her entire life, helped us raise two great kids and been part of my relationship with Mrs. Jeffmacke for almost as long as we've been a couple. With every good reason in the world to celebrate a doggie life well-led I've been weeping like an infant (intermittently and without control) all morning.

I can only come to one conclusion: both Rosie Grier and, by extension, the entire left-leaning "Free to Be You and Me" film lied to me. It's not all right to cry and I do not, in fact, feel even a little bit better. Several implications can be drawn from this, including: what if that outrageously talented Michael Jackson from the movie turns out be some sort of freak? What does the demonstrable untrustworthiness of the Left say about the new administration? Did the Democrats kill my dog and, assuming they did, can we trust them with our economy?

Here's what I'm doing when not weeping over an ancient dog and looking for someone to blame for my pain:

  • I sold a good chunk of my McDonald's (MCD) over the last few days. The stock looks headed back to the mid-50's, at best, and the currency issue we shook off in Micky D's last quarter isn't going away any time soon. Too cute? Not really. As discussed repeatedly, I'm trading two ways: grinding and taking advantage of people. Selling some MCD is the former.

  • The Woo Woo kid tells me Amazon (AMZN) looks like a good short. That's roughly like telling John Thain your body evacuates the same way regardless of what you spent on the collection point. I understand all the parts of Amazon and am batting a statistically impossible (in theory) .000 on the stock; a fact I freely admit to at every opportunity (check roughly minute 7:40). Amazon is not only on my "do not touch" list; it is how I describe how a stock can make the Do Not Touch List.

  • NetFlix (NFLX) is not on my do-not-touch list. Indeed, a pullback in NFLX would be a buying opportunity, from where I'm sitting. Why? Because I was wrong. NFLX has been able to create a user-friendly was for subscribers to download and watch movies without sending out the rapidly dying DVDs. Changing models on the fly is one heck of a corporate trick. From where I'm sitting, it's a trick-driving NFLX stock and I'd be a buyer when the momentum settled.

  • What am I liking would be willing to buy now if I didn't already own it? How about a little Health Net (HNT) or just about anyone else in the space? The stocks are rocking, rolling and they have the aforementioned lefties on their side. Works for me.

  • Mattel (MAT) turned in a quarter so ugly it's making shareholders wish they'd had the foresight to eat 2006's lead paint toys. On the upside, it's a societal positive that Mattel's court-won Bratz dolls are selling like bank stocks (read: horribly). The shock isn't that the creator of Bratz toys would be arguing where he worked when he came up with the ideas for little girl dolls dressing like hookers. The shock is they let him out of court after he admitted having the idea at all.

  • The great Satchel Paige used to say "Don't look back, they might be gaining on you." Satch was right but I couldn't resist looking back at Wal-Mart (WMT) to see if it was a) gaining on me b) a possible buy. What I saw was so hideous I felt more like Lot's wife than Mr. Paige.

  • I have one bank stock left. Morgan Stanley (MS). The position is smaller than a Bratz doll and the balance sheet is probably more dirty. That's what passes for "Best of Breed" these days in banks.

  • Slumdog Millionaire. See it. Take a date. Thank me later.

  • Finally, Woo Woo asks me which major retailer is going to be in Chapter 11 this time next year. Gun to head (actually, gun to their head), I'd have to go with Macy's (M). I worked there the last time they went bankrupt. You know how they acted? They ran a lot of 75% off sales and fired people. "Leverage and retail don't mix". Ken Macke himself told me that every time I implored him to lever up Target (TGT) and take that sucker public. As was generally the case when my dad was still My Dad and we disagreed; he was right and I was wrong. He literally lost his mind over 2 decades and there isn't a day goes by that I don't use something my dad taught me. Be nice to your parents, Minyans.

(Oddly, I started that Macy's bullet before the stock announced what sounds very much like the beginning of the end for the company as a non-bankrupt entity. What did I base the guess on? Black Friday when I hosted Squawk Box and asked Macy's CEO Terry Lundgren about his bank covenants. The man looked at me as if I'd asked for his ok to take liberties with his wife.)

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No positions in stocks mentioned.

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