• Enjoy your evening.

"This is our xxxxing city. And nobody is going to dictate our freedom."

-- Big Papi (Boston Red Sox slugger David Ortiz)

American Meb Keflezighi wins the Boston Marathon.

Enjoy your evening.

• At $86.76.

I added to my PowerShares QQQ (QQQ) short at $86.76 today.

• According to Bloomberg, it's Mark Fields.

Break in: According to Bloomberg, Mark Fields will be named Ford's (F) next CEO.

• Run, don't walk, to read Charles Murray's 'Does America Still Have What It Takes?'

Run, don't walk, to read Charles Murray's "Does America Still Have What It Takes?" 

• The company has accused an affiliate of 'self-dealing.'

On Reuters:

"• New York banking regulator accuses Ocwen Financial (OCN) affiliate of potential 'self-dealing.'

"• New York regulator-Altisource Portfolio's (ASPS) Hubzu unit may charge higher fees to Ocwen-serviced properties."

I am a buyer of Ocwen on weakness.

• A penny light.

Northwest Bancshares (NWBI) reports first-quarter results.

A penny light -- no biggie.

More analysis to come.

• My largest long is Monitise, and my largest short is Berkshire Hathaway.

Largest long: Monitise (MONI.L/MONIF).

Largest short: Berkshire Hathaway (BRK.B).

• I just slipped back into a net short position based on the rally from the day's lows.

• Must-see lecture.

Away from our charge of making money, this recent one-and-a-half-hour lecture by David Brooks at the 92nd Street Y in New York City is a worthwhile viewing.

The lecture forms some of the basis of a new book Brooks is working on and is wonderful food for thought.

• That was quick.

I have covered my AstraZeneca (AZN) short for a quick profit.

• I wanted to emphasize a few observations.

I was doing some additional research on Bon-Ton Stores (BONT) over the weekend.

I wanted to emphasize a few observations.

First, with an operating margin projected to be only about 3% in fiscal 2014 -- this compares to an industry average of its peers in excess of 8.0% -- Bon-Ton has launched the following initiatives that could bring the company back toward its peers:

• a series of expense reduction initiatives;
• fulfillment center expansion (which will yield cost benefits);
• reallocation of floor space designed to emphasize better selling brands; and
• enhanced marketing efforts (incorporating digital and loyalty programs to drive both bricks and mortar and online sales.

Second, in part due to above, Bon-Ton should have an outsized earnings recovery with fiscal 2015 year earnings likely to exceed $1.50 a share, up from $0.50 to $0.60 a share this year.

Third, the departure of President and CEO Brendan Hoffman (by February 2015) opens up an obvious potential door in which a takeover is possible. (Note: Hoffman's decision was solely based on his reluctance to commute from the company's headquarters in Milwaukee to his family in New York City. In addition, Hoffman is rumored to be a candidate for a top job at J.C. Penney (JCP).)

Fourth, I continue to view two private department stores Boscov's and Belk as possible acquirers of Bon-Ton Stores. (Boscov's in particular has done a good job in acquiring properties in less than primary locations.) Publicly held Dillard's (DDS) is another potential suitor.

Bon-Ton Stores is on my Best Ideas list.

•   I am market neutral now.

But my next move is to get net short ... again.

• I am adding to my AstraZeneca (AZN) short at $67.35 now.

• More ursine musings from Sir Mark J Grant.

"I want you to believe...to believe in things that you cannot." -- Bram Stoker

For those of you that believe Mr. Putin and what he says, or the deals that he makes with the West, I fear that you are in for a very unpleasant and shocking experience. His word is not his bond as has been proven in Georgia and now Crimea. He will say what he likes to accomplish his goals and justify it all by the ends that he wishes to achieve. Chamberlin and the rest were gullible and moronic until confronted by Poland and forced to the wall and I fear that Mr. Kerry is not fairing much better. As the Press reports agreement and many believe what they have read I take a different road knowing that deals with Devils are never what they seem.

"The last I saw of Count Dracula was his kissing his hand to me, with a red light of triumph in his eyes, and with a smile that Judas in Hell might be proud of." -- Bram Stoker

To think that these black hooded and Russian armed "nationalists" in the Ukraine are anything but the handmaidens of Count Vladimir's choosing is to subscribe to the likes of Tinkerbelle  wafting pixie dust about to fix the financial problems of Kiev.  According to a Bloomberg article on Sunday, Putin stated the following on Russian TV yesterday, "Let me remind you that the Federation Council of Russia gave the president the right to use the armed forces in Ukraine. I very much hope that I will not have to exercise this right." The editors of Bloomberg View put it succinctly, "There's another problem, and no other way to put it: Putin lies. He lied about the role of Russian troops and infiltrators in Crimea (which he now acknowledges) and he's lying about their role in eastern Ukraine."

"And so you, like the others, would play your brains against mine. You would help these men to hunt me and frustrate me in my designs! You know now, and they know in part already, and will know in full before long, what it is to cross my path. They should have kept their energies for use closer to home." -- Bram Stoker

I fear the day will come when Mr. Putin, under the guise of rescuing the Russian speaking people in the Ukraine, will rush in to protect the very people that he has paid, bribed and issued promissory notes to of various kinds to incite the mischief. Their actions will provide the cover for his foray. I regard his meetings with America and the EU as little more than chicanery reminiscent of that fellow from Berlin some decades past.

"It's a matter of indifference to me what a weak western European civilization will say about me. I have issued the command." -- He who cannot be named, 1939

In my view Russia is on the march. It may not just be the Ukraine but Moldova, Latvia and perhaps the rest of Georgia before the dust settles. In fact, Mr. Putin's ambitions may be wider than that. It may be the reunification of the entire Soviet Union that is on his mind. His foray into the Crimea was met with little more than rhetoric and political outrage. History teaches us, time and again, that when despotic leaders are trying to expand their empires that threatening words are always overcome by guns and bayonets.

"Our toil must be in silence, and our efforts all in secret; for this enlightened age, when men believe not even what they see, the doubting of wise men would be his greatest strength." -- Bram Stoker

I do not know if it will be some kind of war but you can count on U.S. Treasuries being supported by Mr. Putin's actions. To minimize Russia and Mr. Putin's effects on the bond markets will be a mistake in my mind.

"Welcome to my house! Enter freely. Go safely, and leave something of the happiness you bring." -- Bram Stoker

• The Gospel according to Peter Boockvar.

As we get deeper into the Spring and further away from a disruptive winter, the key question for the economy is whether it can enter the realm of 'escape velocity.' This, instead of just a weather rebound, is the key for Fed policy and the timing of its exit strategy for both QE and the inevitable rise in short term rates. This in turn will be the key determinant of the stock market which unfortunately will then circle back to the economy as the Fed has made the stock market the driver of economic activity (aka wealth effect). In physics, 'Escape Velocity' is defined as "the speed  needed to break free from the gravitational attraction of a massive body, without further propulsion" according to Wikipedia. 'Propulsion' in this case is clearly Fed largesse. As this largesse will be with us for a while however, whether via QE and/or abnormally low rates, we won't know if 'Escape Velocity' is possible for years to come and instead will have to look at the economy in shorter term snapshots as the Fed SLOWLY reduces accommodation. We know there have been a few stops and starts in the past few years and with every stop brought the next wave of propulsion. Unfortunately we've become so addicted to the propulsion. That said, the American economy can be a powerhouse again but only when weaned off, no matter the short term pain.

We enter the week with the US Citi surprise economic index being less negative vs the prior week as it rose 14 pts to -26.1 off a week that was the lowest since the Summer of '12. The Spring economic rebound is taking place and hopefully we'll see further confirmation this week with new home sales, durable goods, markit.com PMI's and claims. We'll also see existing home sales but that will reflect contracts signed during the winter so won't be a reflection of Spring attitudes. Bottom line, with the data seen in the last few weeks and those to come in the next few we'll likely continue to see the rebound but will have to wait for evidence on the sustainability of it, aka 'escape velocity' or something close.

A further hint of a Spring economic rebound was seen in the NABE quarterly survey of 72 US members "on business conditions in their firms or industries, and reflects Q1 '14 results and the near term outlook." The NABE said after a tough winter, "survey participants continue to report strong expectations for increased growth over the course of 2014." Industry Demand fell to 44 from 53 but that is still up from 30 in the quarter prior. Positively, Capital Spending rose to 32 from 20, the best since early '12 and hiring plans for the next 6 months also improved. Of note too, higher wages and salaries were at the highest level also since early '12 with the caveat that the NABE said "survey respondents note that they expect wage growth to remain fairly subdued, rising between zero and 3% over the next 3 years." Income growth is the key missing piece of 'escape velocity', outside of cap ex, in this recovery.

The only thing of note overseas was the trade data in Japan. Exports in March rose just 1.8% y/o/y, well below the estimate of up 6.5% and on a volume basis, exports actually fell. The weak yen, while not helping exports much, did cause imports to rise 18.1% y/o/y (volume growth was 11.6%), more than the estimate of up 16.2% as higher energy prices continue to be a problem and why nuclear will likely be turned back on soon. The Nikkei was little changed in response to the data.

• I doubt this story.

A London Sunday Times article suggests that Pfizer (PFE) considered acquiring AstraZeneca (AZN), but the talks stalled and will not resume.

I am doubtful of this story and I have shorted AZN, +$6 in premarket trading as the company's management has stressed their tactical strategy is to get smaller, not bigger.

The acquisition of AZN would be an about-face in strategy and, arguably, creates as many problems as it fixes.

•  Next contestant is Nigel Incubator-Jones. His best friend is a tree and in his spare time he's a stockbroker.

The average weighted earnings beat (to consensus) in the first quarter of 2014 has been only +1%.

But remember, consensus EPS expectations are essentially manipulated and based on the guidance from investor relations departments and managements. They are framed to be beaten. As such, it's like Monty Python's Upper Class Twit of the Year Competition where one of the events is for the contestants to jump over matchboxes.

The message of first-quarter numbers? It will likely presage a relatively meaningful profits disappointment this year relative to consensus (S&P earnings of $120 a share), a core feature of my cautious market argument.  

So, when the business media is all a flutter with this week's "important" earnings releases, pay them no mind as beating EPS consensus (which typically occurs about 65-70% of the time) is the "Upper Class Twit of the Year."

• With a longer timeframe, a short bond position still makes sense.

The yield on the 10-year Note ripped higher on Friday and I suggested that those with a trading and short-term timeframe might consider trading out of some of their short bond positions.

The competition from non-U.S. yields continues to put pressures on yields (to the downside) over here. They serve, for the time being, almost as a magnet for lower U.S. yields.

Our 10-year Note yields 2.70% compared with:

• Germany 1.5%
• Itay 3.12%
• Spain 3.09%
• UK 2.67% 
• Japan (the graveyard of bond shorts) 0.61%

But for those that have a longer and multi-year timeframe, a short bond position continues to make a a lot of sense and represents one of the best reward vs. risk asset classes. 

• I expect a modest selloff.

General Motors (GM) was hit with two separate and negative news items over the the weekend, on recallsand a large ($12 billion) capital investment planned in China.

I expect the shares to sell off modestly at the get-go today and I plan to add to my long in this name.

• Turning to headwinds.

I remain bearish on bank stocks as much of the industry's core income determinants have or are turning from tailwinds to headwinds.

Here is an example of why FICC results are weak.