Give me a break.

Yahoo reports what look like "solid" results, but the truth is a bit less impressive.

Ok, let's be straight - Yahoo sucks.

"First-quarter net income rose to $542.2 million, or 37 cents a share, helped by a $401 million gain from the stock sale of Chinese Internet company Alibaba.com Ltd."

So let me see if I get this right. Without that stock sale they would have made ten cents, and you can only sell a stock once.

This makes their "guidance" a total crock of crap, which they raised dramatically. There is no actionable lie there (you can fudge "guidance" all you want) which means this is nothing other than an attempt to shove a stick in Ballmer's eye socket.

If you're reading this Steve (do 'ya remember me? We've met dude) I have a suggestion for you.

I think Microsoft should gouge out Yahoo's eyes and ocularly penetrate these clowns. My suggestion would be to issue a statement that you have detected the "spin" in the earnings and you don't believe the guidance - at 10 cents annualized or 40 cents at a very aggressive 20 P/E the stock is worth $8.

Since you're a generous guy you thus offer them twice "fair value" for a "growth stock" (and they ain't growing) which means your offer is revised to $16/share, effective immediately.

And by the way Steve, I know you have the brass nuts to do it.

C'mon, make my day.

One of the remaining pillars holding this market together has been the Transports. How in the Sam Hell do transports do well with oil well over $100/bbl? I couldn't figure it out either. Well, now the cracks are showing up - Canadian Pacific (NYSE: CP) cut guidance in a serious way yesterday and Foundation Coal (NYSE: FCL), one of the "bright sector) folks in coal production, missed badly.

And UPS was out this morning with a nasty report - hitting lowered estimates but saying this:

"ATLANTA--(BUSINESS WIRE)--UPS (NYSE:UPS - News) today reported increased revenue in all segments with double-digit gains in both international package and supply chain and freight operations. A sharp decline in U.S. economic activity, however, led to a 9.4% drop in diluted earnings per share to $0.87 compared to a prior-year adjusted $0.96.
....
'We see no signs of economic strengthening in the second quarter,' said Kurt Kuehn, UPS’s chief financial officer. 'As a result, the company expects earnings for the quarter in a range of $0.97 to $1.04 per diluted share compared to $1.04 for the second quarter of 2007.'"

Ouch - for everyone else. They seem to be weathering the mess reasonably well, but this is a bellweather for the economy. FedEx, by the way, said the same thing, so the idea that there was a "transfer trade" between shippers has now gone out the window.

Next up in the "massage" game we have Merrill Lynch (NYSE: MER) that is now issuing $7.3 billion of bonds and preferred stock:

"The firm today began offering $7 billion of senior unsecured notes in its biggest debt offering, luring investors with yields over Treasuries that would be as much as triple what it paid a year ago. Merrill is also selling at least $300 million of perpetual preferred shares that yield about 8.625 percent."

Why is this news? Specifically because their lying sack of dogsqueeze CEO Thain just said a short while back (April 8th - two weeks ago):

"Thain repeated that Merrill, which raised $12.2 billion from investors including Korea Investment Corp. and Mizuho Financial Group Inc., doesn't need additional capital. 'We deliberately raised more capital than we lost last year,' he said."

Now that announcement was trumpeted all over the media and CNBC and in fact was responsible for a 100-point rocketshot that day in the Dow.

Where are the cops? This sort of intentionally false statement (you're going to try to tell me that Merrill put this entire offering together in less than two weeks, including getting it rated, in that amount of time?) needs to be prosecuted as an act of intentional market manipulation, which is flatly felonious in the United States.

Not that I expect anyone will prosecute Thain. After all every other financial has played the same game lately. Why not Merrill? Honesty seems to be in rather short supply, no?

Speaking of which, do you think ratings weren't quite honest during the "housing boom"? Perhaps there were a few "massages" in there, ala "Client #9" style? Well the SEC is wondering too (gee, a cop! Now that's a first!)

"The U.S. Securities and Exchange Commission is probing whether credit-rating companies changed the way they graded debt as the market for products tied to subprime mortgages boomed earlier this decade, its chairman said."

Heh Barney (Fife)! The horses are all gone but the barn's open! Quick - bolt the door!

Oh, and now that the cops have showed up (unfortunately they knocked instead of just kicking the door in), look at what Moody's decided to do:

"Moody’s Investors Service has decided that it’s finally time to downgrade investment grade subprime RMBS — you know, the Aaa-rated stuff? Between Monday and Tuesday, calculations by Housing Wire show that the rating agency has slashed ratings on 1,923 tranches from 232 seperate subprime RMBS deals from 2005-2007 vintages.

That total includes hundreds of formerly Aaa-rated securities, as Moody’s embarked on its largest round of downgrades to investment grade subprime MBS since the credit crisis began."

"Heh Pedro! The damn cops are at the door! Quick - flush the drugs down the toilet!"

The list is truly unbelieveable in its scope and size.