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The solution to wasting money, spend more / Bernanke the Sphinx + a fun party game / a CAPS short

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May 02, 2008 – Comments (4) | RELATED TICKERS: BWLD

Good morning CAPS friends.  Here are this mornings random musings. 

 

I got a good laugh out of this headline this morning: Bush wants $770 million more global food aid.   Don’t get me wrong, world hunger is a huge problem and I feel terrible for all of the starving people out there, but this has to be the most absurd thing that I have seen all day (it’s still early).  The government has had a very large part in creating the food inflation that is causing all of this hunger.  It has caused the prices of grains to skyrocket by throwing money at farmers and ethanol companies through its absurd corn ethanol boondoggle and by weakening the dollar by spending too much money and racking up a huge deficit (I know that this is not the only reason why the dollar is weak, but it is definitely a major contributor).  So what is its solution to the problem?  Admit that producing ethanol from corn is a mistake and pull the plug on its blending requirements and subsidities so that our farmers can use their land to plant crops that will be used for food?  Of course not, that would make way too much sense.  Instead they have decided to spend even more money to help the people that our waste has put in this mess to begin with.  Unbelievable.  No wonder the federal deficit is so massive.

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Man I wish that I has the time to use a graphics editor to superimpose Bernanke's face on the Sphinx :).  I'll add that to the list of things that I'll do when I am able to retire at age ninety-five.  Despite all of the criticism that they received for doing so, I believe that the Federal Reserve did the right thing by issuing a neutral statement on its future monetary policy (see article: Fed statement for traders: blah, blah, blah).  What I don’t like is the cryptic way that they worded it.  Why do they insist upon writing riddles instead of coming right out and saying that their future moves will be data dependent and that they will cut rates or leave them where they are depending upon what happens in the economy?  Perhaps they are trying to trick people into thinking that they have a plan, when in reality they have no idea what they are going to do.  I don’t know, but as I said despite their strange way of saying it I agree with the point that they got across...none.  Why on Earth would they want to paint themselves into a corner by saying that they will not cut rates any further when it is entirely possible that the economy could begin to crumble or another financial institution will collapse?  I’m not saying that either of these things will happen, just that they should not destroy what little credibility they have left by saying that they won’t cut rates in the future when one of these things is possible.  The April jobs number will be very interesting today.  I can’t wait to listen to CNBC’s the simulcast of it on XM on the drive to work.  Man, I’ve really become an economic nerd.

On a  related note, while surfing around this morning I came across this funny Ben Bernanke Party Game:

Try to identify the chart in the background of this picture.  Any guesses?  If you're wrong, you have to do a shot of Tequila.

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Buffalo Wild Wings (BWLD) reported a great quarter this week.  Good for them.  In my heart I badly want this company to succeed.  I love going there and it is an official Motley Fool recommendation that has done very well for subscribers.  Having said this, I used the monster 20% spike in the company’s stock that day to short them in CAPS (not in real life).  As I have been saying, I believe that the massive food inflation, the inevitable spike in meat prices, a potential slowdown in consumer spending, and the coming rise in the minimum wage are going to give a lot of restaurants problems.  I am sure that BWLD will remain profitable, but I am having a hard time believing that its management will be able to hit the 25% earnings growth target that for some reason it continues to tout.  The Wall Street Journal has an excellent piece that echos my fears that a delayed spike in meat prices will eventually catch up with BWLD: The Chicken Dance .
 

That’s all for now.  Have a great weekend.

Deej

No position in BWLD

4 Comments – Post Your Own

#1) On May 02, 2008 at 9:57 AM, columbia1 wrote:

??? something tied to morgage rates???(30yr.fix)

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#2) On May 02, 2008 at 10:30 AM, TMFDeej (99.40) wrote:

Wrong, do a shot.  I'll be nice, it doesn't have to be tequilia.  You can choose Jagermeister if you'd like.

Deej

P.S. I actually have no idea what the chart is, but I want everyone to drink so I'll keep telling people that they're wrong.

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#3) On May 02, 2008 at 12:58 PM, columbia1 wrote:

I got the day off, might as well start the weekend off early-ok that might be a 90 day chart of the odds Clinton will get the nomination, which you can clear see she will either break-out, or go down in flames with-in the next week???

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#4) On May 02, 2008 at 6:56 PM, nuf2bdangrus (< 20) wrote:

Maybe its his EKG?

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