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05cc00179eb6717f75c1cef64e5abf41 | https://www.cnbc.com/2009/10/21/an-interview-with-governor-tim-pawlenty.html | An Interview With Governor Tim Pawlenty | An Interview With Governor Tim Pawlenty
Is the dollar's demise a sign of global declinism for America?
VIDEO0:0000:00The Dollar's Demise
Will this decline blow up the bull market economic recovery?
Joining me to discuss last night was distinguished Minnesota Republican Governor Tim Pawlenty. Mr. Pawlenty also happens to be a leading GOP presidential contender for 2012.
Questions? Comments, send your emails to: lkudlow@kudlow.com
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b53940b03b3e04279e35e967aca99758 | https://www.cnbc.com/2009/10/21/apples-rise-dells-demise.html | Apple's Rise, Dell's Demise | Apple's Rise, Dell's Demise
The mid 1990s was a tumultuous period for Apple Computer . The computer maker was quickly losing market share as their premium-priced hardware failed to attract a broader following. Also plaguing Apple was the failed launch of its latest piece of technology - the Newton handheld - in which the company had invested a great amount of resources over the years.
Its struggles and falling stock price triggered two chief executive changes in as many years. First, it was CEO Michael Spindler who gave way to Gil Amelio in 1996. Then just one year later, Amelio himself was fired, and Apple co-founder Steve Jobs took the helm as interim CEO, with Apple's stock slumping around 12-year lows, hovering around the $3-$4 range.
At the time, the outlook for the company was far from encouraging. In fact, shortly after Jobs assumed his duties as interim CEO, rival Michael Dell, CEO of Dell Computer , was asked at an IT conference what he would do to fix Apple Computer. Dell's response: "What would I do? I'd shut it down and give the money back to the shareholders."
How the times have changed though. On the heels of yet another impressive earnings report on Monday and the unveiling of its consumer-oriented iMac line of computers on Tuesday, Apple's stock has defied all expectations, approaching all-time high levels once again, largely on the success of its iconic line of iPod music players.
Since 2003, Apple shareholders have had much to cheer. In many ways, the company has turned the tables on rival Dell Computer. Continuing a recent trend, shares of Apple (up 133%) have far outperformed shares of Dell (up 50%) this year. In fact, prior to this year, in each of the past 6 calendar years, Apple's stock has dramatically outpaced shares of Dell. Furthermore, for the four straight years between 2005 and 2008, shareholders saw Dell's stock price fall each year.
Most impressive, since the end of 1997, Apple has surged a jaw-dropping 5,957%, while Dell and the Nasdaq Composite has gained just 46% and 38%, respectively.
Comments? Send them to bythenumbers@cnbc.com
bythenumbers.cnbc.com
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345f565ef531eb6cc3d32d4d207ef51f | https://www.cnbc.com/2009/10/21/big-biopharma-earnings-opportunities.html | 2009 is turning out to be a better year for Big Pharma than initially feared. Oh sure, there’s the ongoing threat of generics coming onto the market, but, you can easily make the argument that this year wasn’t half bad.
The industry dodged a bullet over the summer on health care reform, leaving company executives relatively upbeat on how their firms will emerge from the changes.
A report by IMS Health says prescription drug revenue will likely climb about 5% in the US next year with worldwide sales growing as high as 7% though 2013.
Also swine flu sparked a surge of new sales.
Considering, over the past 3 months the Health Care SPDR is up only 7% while the S&P is up almost twice that, is the space about to catch up?
Quite possibly. And we could see big moves in the space as soon as Thursday. Just take a look at the firms reporting!Thursday's Pharma Earnings
-Celgene-Bristol-Myers -Merck-Schering-Plough -NovartisMeanwhile on a related note -- after hours Amgen reported a better-than-expected profit as cost cuts and lower taxes helped offset a steep decline in sales of its Aranesp anemia drug, but regulatory concerns about its osteoporosis drug sent shares lower.
What’s the trade?
I’m a buyer of Amgen on weakness, adds Guy Adami.I like Amgen too, says Pete Najarian. Personally, I thought the numbers they put up were astounding.For me the best name in the space is Abbott Labs, says Joe Terranova.
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)CNBC.com with wires
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f3b31d0f212145c282ce574e8a955520 | https://www.cnbc.com/2009/10/21/bill-gross-and-the-pony-express.html | Bill Gross And The Pony Express | Bill Gross And The Pony Express
It's no secret that Pimco's Bill Gross may be the most passionate stamp collector in the Billionaire's Club.
He's also generous with his treasures.
Bond King Talks About His Stamp Collection
Gross is about to auction off potentially a few million dollars worth of his stamps to help fund a wing of the National Postal Museum at the Smithsonian, located in an old post office off the mall in Washington DC. He wants to help create a Mecca for stamp lovers. Most of the museum's current collection is "buried in a basement" says Gross, and his plan is to help bring those stamps out into the open for the public to see.
Wait 'til you hear what he's giving the museum.
But first, here's what he's auctioning off next month through Spink Shreves Galleries, a series of stamps from the Confederate States and British North America (Canada).
One is a 10-cent stamp from Victoria, Texas, from 1863, which Gross paid $115,000 for ten years ago.
Source: Spink Shreves Galleries
Here's a stamp of a very young Queen Victoria from 1851, which may go for as much as $150,000.
Source: Spink Shreves Galleries
This strip of three 2 Pence stamps from 1857 is valued at $200,000, called "one of the great rarities of Newfoundland."
Source: Spink Shreves Galleries
Possibly the most highly sought after stamp is this 1861 envelope bearing the world's only known example of a stamp mistakenly issued as a mirror image of its intended design. It's called the "Mount Lebanon, Louisiana 5 cent Postmaster's provisional," and Gross paid $385,000 for it. Ten years ago. Imagine what it's worth now.
Source: Spink Shreves Galleries
And you though paying 44 cents for a stamp was a lot.
Then there are the stamps Gross is giving the Smithsonian to display. They include the famous upside down Jenny airplane stamps, of which 100 were printed before someone realized the mistake. There's also the earliest known usage of an official postage stamp of the United States. But, to me, the most fascinating story involves the Pony Express. Gross says a Pony Express mailman was attacked by Indians, who "scalped the rider". His horse wandered around and eventually died. Two years later, a wagon train found the dead horse. Letters were still inside the saddlebags. The pioneers picked up the letters and had them delivered. Bill Gross has at least one of the envelopes which carried those letters. "Even if you're not a stamp collector, that's pretty cool," he says.
CNBC Alternative Investing, Stamp Collecting - Start Small
In all, Gross says he probably owns 10,000 stamps in a collection worth "eight figures, maybe low nine...it's kind of embarrassing to talk about." As for the stamps he's giving away, "It's probably not of the same caliber with other Smithsonian exhibits...but it is pretty cool." He knows that if most people had a few million dollars and were given the choice of buying a diamond or "a piece of paper" they'd probably buy the diamond. He'd go for the paper every time.
Questions? Comments? Funny Stories? Email
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8830d3445ec92ea722295b8b14bc6b5b | https://www.cnbc.com/2009/10/21/bing-to-incorporate-twitter-facebook-updates.html | Bing To Incorporate Twitter, Facebook Updates | Bing To Incorporate Twitter, Facebook Updates
AP
The PR folks at Microsoft , Twitter, and Facebook are refusing to comment right now, but in a few hours some interesting news could come out of the Web 2.0 summit in San Francisco when Qi Lu from Microsoft's Online Services Division takes the stage.
Microsoft is expected to announce it will incorporate both Facebook and Twitter's real time updates into Bing search results. The deals would be non-exclusive and separate from each other, and would represent a mind-shift for how Microsoft thinks about search.
Slideshow: 10 Biggest Tech Blunders in the Last 25 Years
Why is this a big deal? It would be the first time social status updates were incorporated into search results, and it would be the first time MSFT's search engine incorporated data that Google didn't have. Google has been in talks with Twitter about including Tweets in its search results, though nothing has been announced yet. It'll be interesting to see how it plays out for both Microsoft and Google: obviously not all Facebook status updates will be included, as many users keep theirs private, and users may get to select whether these updates are included in search results or not. But no matter what, these will be two huge new data streams. Twitter has some 54 million monthly users and Facebook has a reported 40 million updates—DAILY.
Google to Release Music Search Page: Sources
Microsoft says they "won't comment on rumors or speculation," and Facebook had pretty much the same response. But COO Sheryl Sandberg and VP Engineering Mike Shroepfer are speaking at Web 2.0 in San Francisco later today (2:30 pm pacific, 5:30 eastern).
I wouldn't be surprised if by then they're answering questions about what role Facebook status updates will play in Bing's search updates. If this announcement doesn't come today as expected, I bet it will come soon. And I also expect Google's announcement to be around the corner.
Check out my post on why you should want Tweets in your search results.
Questions? Comments? MediaMoney@cnbc.com
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6e46914b39f211259be6381640ed12df | https://www.cnbc.com/2009/10/21/charts-predict-dollar-may-hit-160-low-vs-euro.html | Charts Predict: Dollar May Hit $1.60 Low vs Euro | Charts Predict: Dollar May Hit $1.60 Low vs Euro
The dollar is likely to sink further against the euro and could hit the lows of July 2007 at $1.60, Roelof van den Akker, chartist at ING Wholesale Banking, told CNBC.
VIDEO2:5202:52Charts: Dollar May Hit $1.60 Low vs Euro
"Momentum keeps rising, confirming the uptrend," Akker said when looking at a chart for the euro versus the dollar.
"As long as the 50-day moving average line in the daily chart at 1.4550 remains intact we are remaining bullish for a further rise toward 1.5370 to around 1.60 for the euro/dollar," he said.
The dollar has been in a steady decline against the euro since early March as U.S. interest rates have remained near zero in response to the financial crisis. The weak dollar has helped to push the price of many commodities higher, such as oil and gold.
"It's highly interesting because there's still a high correlation between a higher euro and higher equity prices, so keep this in mind please," he said.
- Watch the video above to see Roelof van den Akker's predictions for European stocks.
For the Investor:
Market Tips: Stocks to Lose 5-10% Then Move HigherSmall, Mid-Caps Poised to Ride the Recovery
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b84679772a5179403085683c3cba483a | https://www.cnbc.com/2009/10/21/classic-cars-increased-in-price-60-hagerty-index.html | Classic Cars Increased in Price 60%: Hagerty Index | Classic Cars Increased in Price 60%: Hagerty Index
Classic cars are increasing in value more rapidly than stocks and residential real estate, according to one index.
Hagerty’s Cars That Matter Index, which tracks the prices of the 25 most sought after post-war, classic cars, found that the index retained its value as home prices and the Dow Jones Industrial Average dropped in a three-year period.Since October 2006, values have increased 60 percent. Gold prices are the only other investment that has stayed on par with the index.
Slideshow: Investing in Vintage Cars
McKeel Hagerty, CEO of Hagerty Insurance, which publishes the car pricing guide Hagerty's Cars That Matter, thinks prices have risen because of more awareness and acceptance of car collecting as an investment."Baby boomers have accepted driving in a classic car as a sign of success," he said.
Alternative Investing - A CNBC Special Report - See Complete Coverage
“Even though we’re living in this kind of frugality era, owning a ‘67 corvette is not considered piggish to some, Hagerty adds.
Among the cars included on the list include the 1960-63 Ferrari 250 GT, the California Spyder SWB and the 1965 Shelby GT350.
The cars selected in the index are chosen by how much in demand they are, and how accessible they are to collectors.
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d53c869b996acd72f6b86a868c8c8b82 | https://www.cnbc.com/2009/10/21/cnbcs-checkerboard-programming-for-the-week-of-1019-all-times-are-et.html | CNBC'S CHECKERBOARD PROGRAMMING FOR THE WEEK OF 10/19 (ALL TIMES ARE ET) | CNBC'S CHECKERBOARD PROGRAMMING FOR THE WEEK OF 10/19 (ALL TIMES ARE ET)
Mon, 10/19:
8PM/1AM -- The Business of Innovation #3
9PM/12AM -- Biography on CNBC #1 - Ray Kroc
10PM -- The Entrepreneurs #1
Tue, 10/20:
8PM -- Porn: Business of Pleasure
9PM/1AM -- Executive Vision #4
10PM/12AM -- Biography on CNBC #2 - Sam Walton
Wed, 10/21:
8PM/12AM -- Biography on CNBC #4 - Ben & Jerry's
9PM/1AM -- American Greed #12
10PM -- American Greed #13
Thu, 10/22:
8PM -- Marijuana Inc: Inside America's Pot Industry
9PM/12AM -- The NEW Age of Walmart
10PM/1AM -- Biography on CNBC #5 - Home Deport
Fri, 10/23
8PM -- Trading the Globe (30 minutes)
9PM/12AM -- The Suze Orman Show
10PM/1AM -- American Greed #14About CNBC:CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.
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892e25eb938b91fa314a1d1955e1f5f0 | https://www.cnbc.com/2009/10/21/credit-suisse-overhauls-compensation.html | Credit Suisse Overhauls Compensation | Credit Suisse Overhauls Compensation
As Wall Street looks forward to a new era of blowout bonuses, the unthinkable is happening, at least at Credit Suisse, the big Swiss bank. It said on Tuesday that it would radically change the way it paid its employees.
In a break with longstanding industry practices, Credit Suisse intends to alter the mix of salaries and bonuses for its top employees, tie the bonuses to a specific financial measure and effectively claw back the payouts if the bank’s fortunes dim.
The move will not necessarily reduce compensation at Credit Suisse, which is moving aggressively to compete with American banks on Wall Street. But the shift nonetheless brings Credit Suisse in line with pay practices endorsed in September by the Group of 20 nations and puts the bank ahead of resurgent rivals like Goldman Sachs, some of which are contemplating similar changes but have yet to make their plans public.
sCredit Suisse building signAP
Goldman, for its part, announced new pay principles in May, which it says embrace best practices on compensation.
A year after Washington rescued the financial industry, bonuses are once again front and center as some big banks roar back in profitability. Goldman, for instance, is on track to award bonuses that could rival the record payouts it made at the height of the boom.
But the likelihood that Wall Street will enjoy big paydays as many ordinary Americans are struggling has angered some policy makers and created a public relations headache for banks. Many are struggling to defuse the resentment directed at the industry.
The Credit Suisse plan will cover roughly 2,000 employees in the United States. Top executives will receive a greater portion of their total compensation in the form of their monthly cash salaries, while bonuses will be split evenly between cash and stock.
The stock will vest over four years, and the cash portion will pay out in three. But both components will be adjusted based on the bank’s performance over that period, with a particular emphasis on its return on equity, a closely watched financial measure. The performance of an executive’s business will also be taken into account.
By tying payouts to a specific measure like return on equity, Credit Suisse will essentially be able to take back bonuses in the event the bank’s fortunes take a turn for the worse. Credit Suisse earlier introduced a bonus plan linked to some of the bank’s troubled assets.
Claw-back provisions are becoming increasingly common on postcrisis Wall Street. Critics say the industry’s decades-old bonus culture, which focused on short-term profits, encouraged the excessive risk-taking that led to the crisis. Morgan Stanley introduced provisions for a portion of its employees’ bonuses last year, and another Swiss banking giant, UBS, imposed similar rules on deferred pay.
But Credit Suisse executives and compensation experts said the bank’s plan was the most detailed and comprehensive yet to take back pay if senior executives — and the bank — failed to perform adequately.
See the Latest Insider Market Activity
“As far as we know, we are the first major bank to announce a compensation structure that is consistent with the best practices laid out at the recent G-20 summit,” Brady W. Dougan, chief executive, said in a statement.
The bank is also introducing a minimum share ownership requirement for members of management committees and the executive board to align the most senior executives’ pay with shareholders’ interests, although it did not specify the new thresholds.
Lynn A. Stout, professor of securities law at the University of California, Los Angeles, said Credit Suisse’s four-year stock deferral was at the outer limit of what many banks were considering.
She said many other banks were thinking of changing compensation practices along similar lines to rein in practices that made multimillionaires out of many financial executives during the housing bubble.
“You get a sense that there is a cultural shift in boardrooms and a new awareness about looking to the longer term,” she said.
At a meeting of the G-20 last month, leaders agreed on recommendations to defer bonus payouts for several years and reduce the incentives for people to take short-term gambles, although they avoided any explicit call for a ceiling on remuneration. The return to big profits at some banks and big bonus payouts, even at firms that received billion-dollar federal bailouts, has raised questions about whether compensation should be even more tightly controlled.
In the summer, the Securities Industry and Financial Markets Association, a financial industry trade group, put forward guidelines on best practices, which included tying bonuses more closely to long-term performance and a more independent role for bank compensation committees.
The Federal Reserve is now preparing to release its own guidance on compensation for the more than 5,000 banks it regulates. It would cover staff at all levels within banks, not just at the most senior levels, and would apply to Goldman and Morgan Stanley, which became bank holding companies last year.
In broad scope, the new rules being considered depart from the largely hands-off approach that dominated bank regulation in the United States for the last three decades. They give banks freedom in how they structure their compensation. The rules are intended to inhibit pay plans that encourage reckless behavior by rewarding only short-term gains. But they would not stop million-dollar pay packages or address issues of fairness.
Slideshow: Highest Paid CEOs
The stimulus bill that President Obama signed into law this year restricts companies that accept federal bailouts from paying bonuses that exceed one-third of an executive’s total annual compensation.
Now, Kenneth R. Feinberg, the administration’s pay czar, is due to publish by Oct. 30 his finding on pay at the seven major banks that still have not returned large amounts of federal support.
His report will include judgments on the 25 most heavily compensated executives at each of the banks — citing pay levels and composition of pay, and whether compensation is properly aligned with performance.
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f4fda4f0916e34eccafed826c518ce61 | https://www.cnbc.com/2009/10/21/csx-ceo-economy-turning-to-the-positive.html | Cramer was looking to CSX to say good things about the economy when it reported earnings on Oct. 13, and sure enough the company came through. Not only did the railcar outfit beat analysts’ estimates, but management followed up a rather bullish outlook.
Cramer's 12 Stocks to Play the Recovery
“We feel the worst of this recession is likely behind us,” the company said on its conference call.
Cramer called CSX a “best-of-breed railroad with top-notch management,” which has a “better handle on where the global economy is going than almost any other company.” Put simply, investors can trust what CSX has to say.
That’s why Cramer invited CEO Michael Ward back to the show. The Mad Money host wanted to know what to expect in the fourth quarter and beyond for both the company and the economy. Watch the video for the full interview.
Call Cramer: 1-800-743-CNBC
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com
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99da6074206605a8ebcf6154e4126abd | https://www.cnbc.com/2009/10/21/did-the-mets-really-make-money-off-madoff.html | Did the Mets Really Make Money Off Madoff? | Did the Mets Really Make Money Off Madoff?
The headline in the Wall Street Journal this morning was certainly baffling: “Mets Win One: Owners Made Money Off Madoff.”
The reporters did a great job of unearthing the fact that a recent bankruptcy court filing revealed that two accounts associated with the Mets Limited Partnership MADE $48 million off Madoff.
Before we go any further, let’s get to the issues.
1. If the Mets Limited Partnership deposited $523 million and withdrew $571 million, how much are they entitled to keeping? The question will come down to when they withdrew the money. If it was within the last six years, they might have to give all their fictitious gains back. If the Mets Limited Partnership got a standard Madoff return (10 to 12 percent), this money was likely only active for one year. To go from $523 million to $571 million is a 9.1 percent gain.
CNBC Special Report - Scam of the Century, The Madoff Story
2. All this is really a moot point if the Mets primary owners Fred Wilpon and Saul Katz did lose a significant amount of money from Madoff. The Mets have said that any money invested in Madoff will not affect the operations of the team. However, it’s hard to ignore the fact that Wilpon’s name appears 22 times on Madoff’s client list and that former Mets general manager Steve Phillips, who worked in the team’s front office from 1990 to 2003, said he “heard Bernie Madoff’s name once a week every week for 13 years.”
3. The key will be another offseason to observe the Mets actions. The Mets had a relatively quiet offseason last year when all this came out, but they also had the second highest payroll in baseball. Stuck with a team that might not be as good as they thought they were and a new ballpark that won’t automatically fill itself, the spending habits of this offseason will be a bit more telling. If the Mets ownership thinks their gains are going to have to be returned, look for them to be conservative. Johan Santana’s contract over the next two seasons is worth $43.5 million.
Questions? Comments? SportsBiz@cnbc.com
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6799a224e18f13cf46ea9917abfd6e09 | https://www.cnbc.com/2009/10/21/eli-lillys-economic-measuring-stick.html | Eli Lilly's Economic Measuring Stick | Eli Lilly's Economic Measuring Stick
The folks at Eli Lilly probably cringe every time I go here, but the company this morning reported that third quarter U.S. sales of the erectile dysfunction drug Cialis sprung 13 percent to nearly $159 million.
In the earnings press release LLYsays Cialis sales were "driven by higher demand and, to a lesser extent, increased net effective selling prices." Net effective selling prices? Who says that? Speak plain English, please. "We jacked up the price because we know we've got a red hot drug people want." How's that? Okay, maybe it's a bit over the line, but you get my point.
On "Squawk Box" this morning, my colleague Carl Quintanilla suggested Cialis' success may be a function of the recession. People are staying at home more and you know what. The per pill cost of Cialis ain't cheap but, I guess, it's slightly less expensive than the cost of two people going out for dinner and a movie. Recently Lilly's been running full-page newspaper ads with giant coupons for Cialis.
But it also looks like Cialis is continuing to take share from Pfizer's Viagra. PFE reported yesterday that Q3 revenue in the U.S. for the ED original fell one percent to $232 million. So, it's still the impotence fighting drug of choice in America, but Cialis keeps gaining on it. GlaxoSmithKline, Schering-Plough (soon to be Merck) and Bayer share Levitra, which isn't much of a threat.
Group of Securities
Worldwide, PFE's Q3 Viagra sales clocked in at $466 million, down eight percent. While LLY's global Cialis revenue jumped five percent to nearly $400 million.
Pfizer's tagline for awhile was "Viva Viagra." Because it lasts 36 hours, the French have nicknamed Cialis "Le Weekend." So, maybe Lilly should try "Cialis: C'est si bon."
Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman
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f66793f7eb2f015cc3e1968da75b8632 | https://www.cnbc.com/2009/10/21/falling-vix-a-very-bad-sign-market-expert.html | Falling VIX a 'Very Bad Sign': Market Expert | Falling VIX a 'Very Bad Sign': Market Expert
The CBOE Volatility Index (VIX), considered the measure for fear in the market, dropped to just above 20 on Wednesday. Should investors be paying closer attention to the figures? Lincoln Ellis, managing director at the Linn Group, and J.J. Burns, president of J.J. Burns & Co., shared their market insights.
VIDEO0:0000:00Afternoon Market Check
“We haven’t missed much of anything, because you’re seeing a continued contraction of spreads in the corporate bond market,” Burns said.
“Your average high-yield bond is up better than the stock market at this point.”
Burns said he is invested in stocks “selectively” and said he likes the larger cap stocks that have the “ability for pricing power.”
CNBC Data Pages:
Dow 30 Stocks—In Real Time Where's the US Dollar Today?Track the VIX Here
“And those are telecommunications,” he said. “Specifically, companies like Apple—companies that have a broad dispersion of products that people want.”
In the meantime, Ellis said the VIX falling near 20 is a “very bad sign” and a “sign of complacency.”
“The equity market had a life of its own, particularly since July,” he said. “A lot of it has to do with the dollar issue that we’re seeing again reflected in trade today.”
More Market Intelligence:
S&P 1,000 is New Support Level: StrategistArt Cashin: S&P's 'Very Important' Resistance Level NowMarket Insider: Dollar Dump = Hot Trade
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The Biggest Holders of US Government Debt
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Bank of America
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Google
Google to Release Music Search Page: Sources
______________________________
Disclosure:
No immediate information was available for Burns or Ellis.
______________________________
Disclaimer
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6fe721880e30e50d2bf14105179a19e6 | https://www.cnbc.com/2009/10/21/forget-dow-10ksp-1000-is-new-support-level-strategist.html | Forget Dow 10K—S&P 1,000 is New Support Level: Strategist | Forget Dow 10K—S&P 1,000 is New Support Level: Strategist
Some investors wonder whether the Dow 10,000 has become the new support level. Additionally, the CBOE Volatility Index (the VIX), widely considered the best gauge of fear in the market, dropped to just above 20, the first time since August 2008. Jerry Webman, senior investment officer and chief economist at OppenheimerFunds, and Mike Rubino, president of Rubino Financial, shared their market outlooks.
VIDEO0:0000:00Dow 10,000: New Support Level?
“The problem with the Dow that it’s 30 stocks and it’s so vulnerable to what any of the 30 will do,” Webman told CNBC.
“Let’s look at the 1,000 on the S&P—I think that’s the new support level. We’d have to get some surprises in major companies' earnings, in central bank preemptive action or some other geopolitical problem to break us back below 1,000 on the S&P.”
Webman said we currently have low interest rates, lots of stimulus, pent-up demand and global demand, so “we’re going to continue to see major domestic stock indicies continue to creep forward.”
Additionally, he said we’re going to see more growth internationally.
But Rubino believes the low VIX level merely suggests that there are too many people on the bullish side, which is a contrary indicator.
CNBC Data Pages:
Dow 30 Stocks—In Real Time NEW: CNBC's Dow Sector TrackerTrack the VIX Here
“[Markets are] going to drift sideways to slightly higher possibly, but we really think all the risk is on the downside because of the economic conditions,” he said.
“If we look out three months, we’re expecting maybe a 10 percent increase, but we think all the indicators from the fundamentals of the economy suggest that we’re going to head lower sooner than later.”
Rubino said this economy will not go any further without consumers—especially the baby boomers.
“The baby boomers became savers, not spenders and they’re the biggest generation—they’ve affected everything in this economy for the last 50 years.”
More Market Intelligence:
Art Cashin: S&P's 'Very Important' Resistance Level NowMarket Tips: Stocks to Lose 5-10% Then Move HigherMarkets Overbought — But Drop Unikely: BlackRock's Doll
Rubino Likes:
iShares MSCI-Pacific ex Japan
iShares MSCI-Emerging Markets
Claymore/BNY
Webman Likes:
S&P Technology
S&P Consumer Staples
iShares MSCI Emerging Markets
______________________________CNBC Slideshows:
Twenty Stocks Ready to Pop
______________________________
______________________________ Disclosures:
No immediate information was available for Rubino or Webman.
______________________________
Disclaimer
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45b8fb5e40016690b731a45c214a5566 | https://www.cnbc.com/2009/10/21/google-to-release-music-search-page-sources.html | Google to Release Music Search Page: Sources | Google to Release Music Search Page: Sources
Google will launch music search pages next week and include ways for consumers to buy songs for download, according to people familiar with the matter.
Google HeadquartersAP
The music pages will package images of musicians and bands, album artwork, links to news, lyrics and song previews, along with a way to buy songs, they said. They spoke on condition of anonymity because they weren't authorized to speak publicly about the deal before next Wednesday's announcement.
The package is similar to how companies get individual pages for Google's financial news service.
Song previews and sales will be provided by online music retailer Lala and iLike, a music recommendation application bought by News Corp's MySpace this month. Song previews will appear in Lala or iLike online music players, and users won't have to navigate away from the search results page.
The effort marks a new way for Google and the recording companies to promote alternatives to Apple's iTunes, the leader in song downloads.
Major recording companies — including Vivendi's Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI Group — pitched the idea to Google a year ago and are cooperating with the project, according to one person.
They will benefit by sharing revenue from song sales with Lala and iLike, while making the discovery, experimentation and buying process simple for people who use Google to search for music.
Google improves itself as a destination for music discovery. Although Google won't get a share of song sales, it will collect revenue from advertising that will be shown with the search results, according to the people familiar with the plans.
The development comes as compact disc sales continue to plummet even as sales of individual song downloads are on the rise.
Overall music sales have slid nationwide in seven of the past eight years and recording companies are searching for new ways to tap audiences online and collect revenue from advertising, licensing and downloads.
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c32979388a462523a3675652eb4f65e2 | https://www.cnbc.com/2009/10/21/halftime-report-can-market-rally-continue-as-oil-prices-climb.html | Both the S&P and Dow gave back earlier gains on Wednesday with the bulls unable to drive advances despite strong earnings reports from both tech and the financials.
However the Fast Money traders are also focused on natural resources and action in the dollar . The prospect of U.S. interest rates staying at exceptionally low levels for longer than most other major countries sent the greenback sliding.In turn crude oil and other commodities continued their march higher. But can stocks continue to climb if oil prices climb as well?
VIDEO0:0000:00Fast Money Halftime Report
Instant Insights with the Fast Money traders
Yes, they can. I think the commodities story will be the story through the end of the year, explains Fast Money trader Joe Terranova. Money managers are chasing returns. That factor combined with a weak dollar and worldwide stimulus spending should lead to a commodities led recovery. And I'd play it with long positions in Bucyrus and Joy Global .
I’m concerned about the levels in the S&P, counters Brian Kelly of Kanundrum. We’ve got rising oil prices which means rising prices at the pump. Don’t forget BofA and Wells both said today they’re seeing consumer credit issues. If consumers can’t afford gas then how are they going to buy things at Walmart and TJMaxx and other stores.Don’t forget unemployment, adds Danielle Hughes of Divine Capital. If you don’t have a job where is the money going to come from? It begs the question, what's the driver of this market -- is it fundamentals or money on the sidelines chasing returns? But with that said, there’s money out there and it needs a place to go and for the time being I think it goes into commodities.I'm watching the Vix, which hit a 52-week low, says Jared Levy of Peak6. It suggests that complacency is growing in this market. If the market continues to drift higher, I’d look at put protection for your long positions.---------
MORGAN STANLEY SURGING AFTER EARNINGS BEATThe financials helped lead the charge higher on Wednesday buoyed by Morgan Stanley earnings which showed a profit after 3 consecutive quarters of losses.The firm cited strong trading revenue and improved investment banking as the factors largely responsible for their gains.
What’s the bank trade?For me the issue with Morgan Stanley is sustainability, says Brian Kelly. I can’t help but wonder how sustainable their profits will be in the long term.Elsewhere in the sector, Wells Fargo and U.S. Bancorp helped drive gains after their results showed impressive revenue from their respective mortgage writing businesses.---------
TOPPING THE TAPE: YAHOO
Technology also showed strong gains after results from Yahoo! beat profit and sales expectations – they also said advertising showed signs of life last quarter. Meanwhile both Apple and Google made 52-week highs.
What’s the trade?
Even with Google and Apple at 52-week highs, I’m still bullish on the space, says Joe Terranova. I think Google goes to $600 and Apple goes to $250. Tech seems to have a lot of cheerleaders, muses Danielle Hughes, and perhaps with good reason. Of all the tech companies that have reported about 78% have beaten. But I’m also growing concerned that things have gotten quite lofty.
---------OIL RALLIES PAST $80
Oil prices jumped to $80.05 a barrel on Wednesday, matching its one-year high hit the previous day, after a U.S. government report showed a smaller than expected rise in crude stocks.
"The market is interpreting this report as bullish, but I think crude prices may be rising just because the report didn't contain any bearish surprises," muses Gene McGillian of Tradition Energy.---------
TAKE YOUR POSITION: EBAY
Shares of eBay hit a new 52-week high on Wednesday ahead of the company’s earnings report.
What’s the trade?I’d play eBay conservatively with an out of the money put spread, says Jared Levy.
---------
DOLLAR CONTINUES DIVE
As we mentioned above, the dollar edged lower against the euro and higher-yielding currencies on Wednesday after a brief recovery from a 14-month low versus a currency basket fizzled out.
The greenback had earlier stabilized as investors booked profits on recent sharp gains in higher-yielding and perceived higher risk currencies. Failure by the euro to test the key $1.50 level also buoyed the U.S. currency.
However, currency investors didn’t find the rally convincing with sentiment towards the greenback still downbeat on the prospect of U.S. interest rates staying at exceptionally low levels for longer than most other major countries.
What’s the trade?
If you think the dollar continues to get weaker I’d suggest playing it with long positions in the FXE , FXA or FXC , counsels Dennis Gartman.
---------
TRADE TO GO: MINING PLAYS
As we mentioned above, Joe Terranova suggests watching Bucyrus and Joy Global. I think they’re both great plays on global recovery. It feels like we’re having a commodities led recovery and these stocks are the way to play it.
---------CALL THE CLOSE
Joe Terranova: I’m a buyer.
Jared Levy: I’m a buyer into the close
Danielle Hughes: I’m a buyer too.
Brian Kelly: As long as the dollar is weak I’m a buyer.
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)CNBC.com with wires
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9c0301a9731984cb365d7fadf831d5af | https://www.cnbc.com/2009/10/21/has-socal-lost-its-mojo.html | Has So-Cal Lost Its Mojo? | Has So-Cal Lost Its Mojo?
I'm at the Milken Institute State of the State Conference, and the state of the state in California isn't good. Pimco's Bill Gross refers to our way of managing money as "Doo Doo Economics".
Next year, however, we will elect a new Governor, and each candidate believes he or she can fix things.
Miracles do happen.
But there is one sign of real change in California—the power is shifting north.
Inflation Might Be Tame, But College Costs Keep Soaring
For most of the last half century, the Governor's mansion has been occupied by Southern Californians, nearly all of them Republicans: Reagan, Deukmejian, Wilson, Davis, Schwarzenegger.
Golden Gate BridgePhoto by: Thierry
Only the father and son team of Pat and Jerry Brown came from Northern California. Northern California was the Golden State's first power center, thanks to the gold rush.
Last century, power shifted south with the growth of the defense industry and a little business called Hollywood. Sure, tech in the Silicon Valley made a good run and recapturing the state's center of gravity, but that boom went bust.
Now, however, tech has made a comeback, and it's also nurtured a new generation of political hopefuls: Ebay's Meg Whitman, Insurance Commissioner Steve Poizner, former HP CEO Carly Fiorina (who is contemplating a run for Senate). Interestingly enough, all three are Republicans. The Silicon Valley is not what I would call a conservative stronghold. Perhaps liberalism has morphed into libertarianism there—government should help entrepreneurs, or get out of the way.
The other gubernatorial candidates also hail north of California's Mason-Dixon line (which I draw north of Paso Robles and Bakersfield). Jerry Brown is back, and also vying for the job is San Francisco Mayor Gavin Newsom, along with former US Congressman Tom Campbell.
Not a single southerner on the list. I'm sure there are minor candidates from down south who will file to run, but the answer is clear: the north will win this war. Tech has rallied, while So Cal's dependence on real estate and, well, a bunch of other industries, has lagged.
Will the power shift last? "I think it may just be a blip," says State Controller John Chiang (whose home is in Southern California). Ross DeVol of the Milken Institute points out that while the candidates hail from the north, "look where the go for fundraising." South. This is still where the money is, and that has to count for something. Will the south rise again?
Correction: This post has been updated to include Mr. Campbell's correct title.
Questions? Comments? Funny Stories? Email
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5d7d3f1fa5dd7171f705dc61482999d0 | https://www.cnbc.com/2009/10/21/house-committee-votes-to-end-heath-insurance-antitrust.html | House Committee Votes To End Heath Insurance Anti-Trust | House Committee Votes To End Heath Insurance Anti-Trust
A House committee has voted to strip the health insurance industry of its exemption from federal antitrust laws as senators announced plans to take the same step.
Healthcare coverage and the hastle of forms
The moves Wednesday signaled a growing determination by Democrats to punish the insurance industry for its criticism of President Barack Obama's health care overhaul agenda.
The House Judiciary Committee voted 20 to 9 to repeal a 1940s law that exempted the health insurance industry from federal controls over certain antitrust violations including price-fixing.
Lawmakers said they wanted to include the legislation in a larger health care overhaul bill taking shape in the House. In the Senate, Majority Leader Harry Reid announced plans to repeal the antitrust exemption as part of its health care legislation.
If enacted, the switch would mean greater federal regulation for an industry that recently has stepped up its criticism of portions of a health care bill moving toward the Senate floor.
In a statement, the major industry trade group, America's Health Insurance Plans, said the industry already was one of the most regulated in the country. The focus on the industry's antitrust exemption, it said, was "a political ploy designed to distract attention away from the real issue of rising health care costs."
The move against the antitrust exemption came as Obama appealed to congressional Democrats not to let internal differences sink his comprehensive plan to remake the nation's health care system. "The bill you least like" improves coverage for millions, he said in New York. "Let's make sure that we keep our eye on the prize."
After months of struggle, Democratic leaders in the House and Senate hope to have legislation ready for votes in both houses within a few weeks, and plan on having a compromise measure ready for Obama's signature by the end of the year.
Progress has been slow, particularly as Democrats squabble over whether to allow the federal government to sell insurance in direct competition with private insurers, and if so, under what terms. Obama's remarks appeared an attempt to place that and similar disagreements in a larger context -- a decades-long attempt to provide insurance for millions who lack it while cracking down on insurance industry practices such as denying coverage on the basis of pre-existing medical conditions.
Insurance industry officials have been involved in discussions for months with the White House and key congressional Democrats over proposed legislation. They repeatedly said they would accept a series of new restrictions, as long as the legislation required Americans to purchase insurance, thus assuring insurers millions of new customers.
The tone changed last week after the Senate Finance Committee approved legislation that exempted an estimated 2 million individuals from the requirement to purchase insurance and greatly reduced the penalties on those still subject to the requirement.
In a report paid for by the insurance industry, the accounting firm PricewaterhouseCoopers said the legislation would add $1,700 a year to the cost of family coverage in 2013 when most of the major provisions of the Senate Finance Committee bill would be in effect.
The White House, Democrats in Congress and other supporters of the legislation attacked the study as flawed and deceptive.
Within a few days, Leahy convened a Judiciary Committee meeting to air the possibility of revoking the industry's antitrust exemption.
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863dfa4bc6308a7c1c5b5d35ff9c3685 | https://www.cnbc.com/2009/10/21/housing-market-has-bottomed-banking-analyst-bove-says.html | Housing Market Has Bottomed, Banking Analyst Bove Says | Housing Market Has Bottomed, Banking Analyst Bove Says
AP
The biggest problem that banks have faced was the fall in the housing market, and this seems to have bottomed, Rochdale Securities banking analyst Richard Bove told CNBC.
"I really believe that the industry has bottomed, that we're not going to see further crashes in home prices or in home sales," Bove told "Squawk Box."
Analysts are no longer happy with banks breaking earnings and revenue forecasts and are now looking at early stage delinquencies, he said. If that figure improves, then the stocks of the banks which beat earnings estimates are likely to rise, he added.
"It's all on expectation on what future numbers will be and for that people are going to keep an eye on these early stage delinquencies," Bove said.
VIDEO0:0000:00Bove on Wells Fargo, Morgan Stanley Earnings
Morgan Stanley and Wells Fargo beat earnings estimates Wednesday.
"I think Wells Fargo is proving itself to be a stand-out with these numbers," Bove said.
Wells Fargo's profit rose 60 percent in the third quarter, as revenue from mortgage banking surged, and the bank reported earnings per share of 56 cents, from 49 cents a year ago.
Bank of England governor Mervyn King called for a separation between banks' classical functions, such as simple loans and taking deposits, and risky, speculative operations, to avoid a new crisis. Bove said new legislation being examined in the US will in effect do that.
"I think if you look at legislation currently in front of Congress it will do exactly what Mervyn King is talking about," he said, saying that the change will come from the different capital and regulatory conditions imposed on the two types of banks – so called 'utility' banks and investment banks.
Disclosures:
Disclosure information was not available for Dick Bove or his company.
Disclaimer
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ec9f6c774940e81667169c6dc4bfa17d | https://www.cnbc.com/2009/10/21/in-fraud-case-a-deal-that-lost-millions.html | In Fraud Case, a Deal That Lost Millions | In Fraud Case, a Deal That Lost Millions
Raj Rajaratnam, the authorities say, masterminded one of the biggest insider-trading schemes in a generation.
But if Mr. Rajaratnam was trading on insider information, apparently he was not very good at it.
Raj Rajaratnamcnbc.com
A close examination of the trades that led to his arrest last week reveals a startling fact: In all, Mr. Rajaratnam lost millions from what prosecutors characterize as illegal trading.
One bad trade, in the shares of the chip maker Advanced Micro Devices , cost his hedge fund, the Galleon Group, $30 million. That loss more than wiped out the profits that prosecutors claim Mr. Rajaratnam and his accomplices reaped with their scheme.
Prosecutors highlighted the winning trades in a case that they say stretched from the secretive world of hedge funds to some of the country’s biggest technology companies. They did not mention the losers.
Profitable or not, insider trading is insider trading. And Mr. Rajaratnam, who maintains he is innocent, might have broken the law even if he lost money on his trades.
See the Latest Insider Market Moves
But the fact that some of the investments soured, and that, in all, Mr. Rajaratnam lost money, could be powerful evidence for defendants. Inside information is, by definition, information that is material to investors, and thus could cause a company’s stock to move in a direction that will be obvious in advance.
For example, if a company’s stock is trading at $75 and someone learns that the company will be taken over for $100 a share, that information would be material. But routine corporate news — a retailer announcing new store openings, for instance — is generally not considered material.
VIDEO0:0000:00Galleon to Wind Down
“The violation is trading on material nonpublic information,” said Robert A. Mintz, a former federal prosecutor who now heads the white-collar defense practice at the law firm McCarter & English. “There’s no requirement that that trade results in a gain to the defendant. But if it turns out to have been a money-loser, it obviously gives the defense some fodder to argue that the information was not material.”
Utpal Bhattacharya, a professor at the Indiana University Kelley School of Business and the co-author of a study on insider trading convictions from 1995 to 2004, said that convicted defendants had profited in every one of the cases he examined.
“A loss is likely to weaken the prosecution’s case,” Mr. Bhattacharya said. But he added that prosecutors had wiretaps in which defendants expressed concerns about their actions, which could strengthen the case.
A spokesman for the United States attorney’s office in Manhattan said the office could not comment beyond the criminal complaint or press statement from last week.
That statement refers in its headline to a “$20 million insider trading case” and explains that Mr. Rajaratnam and other defendants “are charged in insider trading schemes that together netted more than $20 million in illegal profits.”
A one-page graphic released by prosecutors mentions six trades made by Mr. Rajaratnam that netted Galleon, his hedge fund, total profits of $20.6 million.
Missing from that handout is a 2008 trade that moved badly against Mr. Rajaratnam and Danielle Chiesi, who also is charged in the fraud case. Ms. Chiesi worked at New Castle Funds, another hedge fund, and is accused of supplying insider information to both Mr. Rajaratnam and New Castle.
From August 2008 to October 2008, Mr. Rajaratnam ordered Galleon to buy at least 16 million shares of A.M.D., a computer chip maker, according to the federal criminal complaint against him and a related complaint by the Securities and Exchange Commission.
During the same period, New Castle bought about 2.5 million A.M.D. shares, according to another criminal complaint that focuses on Ms. Chiesi.
Galleon and New Castle bought the shares because Mr. Rajaratnam and Ms. Chiesi received information from an I.B.M. executive in August that the government of Abu Dhabi would invest billions of dollars in A.M.D. as part of a deal for A.M.D. to spin off its manufacturing facilities, according to the complaints.
But the possibility of a deal between A.M.D. and Abu Dhabi had been rumored before Galleon and New Castle began buying.
“Some analysts speculate that the spinoff will require a substantial investment from the government of Abu Dhabi,” The Austin American-Statesman reported on July 18.
Galleon spent $85 million to $90 million on the 16 million share purchases that are disclosed in the two complaints, an average of about $5.50 a share. But as global stock markets plunged in September and October, A.M.D. shares sank too. By Oct. 6, Galleon’s shares in A.M.D. were worth only about $68 million, a loss of roughly 25 percent. On Oct. 7, A.M.D. announced its deal with Abu Dhabi. Its stock closed about 8 percent higher that day, but was still significantly lower than Galleon’s purchase price.
Galleon then held on to nearly all its A.M.D. stock after the deal was announced, and A.M.D. stock resumed its plunge during the rest of October.
The criminal complaint acknowledges that “most of the shares, however, were held until at least later in October 2008,” at which point A.M.D. stock was trading between $3 and $4 a share and Galleon had lost about $30 million. A person close to Galleon confirmed the figure.
The fact that Mr. Rajaratnam lost money on the trades could mean he and other defendants will receive a short sentence even if they are convicted, said Steven D. Feldman, partner in the white-collar criminal litigation practice at Herrick, Feinstein.
CNBC Slideshows
Painted Portraits of Wall Street "Villains"A Gallery of Financial Criminals
“The higher the gain, the higher the recommended sentence,” he said.
Mr. Feldman added that prosecutors might choose to remove the A.M.D. transactions if and when they formally indict the defendants.
Mr. Rajaratnam and the other defendants were arrested last week on a complaint from prosecutors. They have not been formally indicted, a procedure that requires a grand jury’s vote.
Mr. Feldman, who once worked as an assistant federal prosecutor in the securities fraud department in Manhattan, said the lack of an indictment, as well as the fact that there were two separate complaints, indicated that the investigation might have been chaotic at the end.
“Traditionally, you’re going to want to bring these cases by indictment,” Mr. Feldman said. “The fact that they didn’t is evidence they were rushed.”
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dc6130f88e3d8df7a5284b52972ac7d4 | https://www.cnbc.com/2009/10/21/indices-hit-new-highs-so-where-are-the-investors.html | Indices Hit New Highs So Where Are The Investors? | Indices Hit New Highs So Where Are The Investors?
Are investors in for a rude awakening?
With all the major indices hitting new highs, you'd think U.S. investors would be flocking to stocks.
Think again.
Look at these stats from the last five weeks of mutual fund flows:
U.S. stock funds: $18.1 b OUTFLOWS Global stock funds: $2.9 b INFLOWS Bond/hybrid funds: $70.7 b INFLOWS
Source: ICI
That's right: investors are continuing to take money OUT of U.S. stock funds, putting tiny amounts INTO overseas stock funds, and are continuing to THROW MONEY AT bond and hybrid funds (which can invest in stocks and bonds).
Why Dollar's Continued Slide May Undermine Global Status
Bottom line: throughout all of 2009, investors have avoided U.S. stocks and poured money into bond funds, and that trend shows no sign of abating.
The theory? "Seems like investors think bond funds are safe, and don't go down," one trader said.
Yikes!
Elsewhere: Stocks little changed on the Fed's Beige Book report, though the commentary could best be described as "subdued."
US Slowly Clawing Out of Recession: Fed's Beige Book
Example: "reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered."
Commercial real estate came in for an especially downbeat observation: "with conditions described as either weak or deteriorating across all districts."
_____________________________
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Questions? Comments? tradertalk@cnbc.com
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ca9e534b268c2a7ad79bdb05a3d705e9 | https://www.cnbc.com/2009/10/21/is-new-endorsement-company-the-future.html | Is New Endorsement Company The Future? | Is New Endorsement Company The Future?
Source: BAT
The New York Times recently had a story on Brand Affinity Technologies (BAT).
It’s a company that seeks to match up corporations and athletes for endorsement deals four days or less.
Right now the business is mostly online, so a company can pick an athlete and, if the deal is accepted, that athlete’s name and likeness can be in the ad almost immediately.
Here’s my take on the idea.
First, let’s talk about what I like.
There are a lot of these small deals that local and regional companies want to do, but they don’t know how to contact the athlete.
This will help.
Phony Beatlemania?
“The only guys that seem to be getting deals are the top two guys in any market,” said BAT chief executive Ryan Steelberg. “But the reality is that there’s a ton of supply in terms of athletes that don’t have deals and that’s why this makes sense. With the explosion of regional sports television and the Internet, people know who every player on their favorite team is, not just the stars.”
While it’s not the most genuine of endorsements, this is the easiest pitch an athlete will do. All they need to do is grant permission to use their likeness and it’s free money.
“The guys don’t have to spend a half a day making an appearance for the company,” Steelberg said.
What I’m skeptical about is the size of these deals. We saw an offer from a company looking to do an online ad with a pretty good football player in the $3,500 range. The guy makes about $60,000 every quarter of football he plays. Is it worth his trouble to take that deal? Consider the fact that if his name is associated with this company all over the Internet, he will have a hard time endorsing another brand in that category. If you’re an offensive lineman who got the deal, I can see taking the money and running. But if you’re a wide receiver who has more upside, it doesn’t seem like the right quick cash to take.
America's Most Impressive Golf Homes
Steelberg said that his company hasn’t experienced any of this backlash. Since starting up earlier this year, he says he has done roughly three dozen deals and only one athlete turned the offer down. Steelberg says the average deal is slightly larger than the deal I saw. The average deal nets the player between $7,500 and $10,000.
The other catch is that I’m not sure the big time agencies would want to let their athletes know that they are getting deals through this site. Imagine if you are a top agency like CAA and you’ve pitched your clients on your unique ability to get them marketing deals. If your clients find out you are getting them deals through this Web site, it might look worse than getting no deals at all.
Steelberg says that he doesn’t feel like his company is competing with the agencies and cites the fact that 85 of them, including Athletes First, has put their clients on his site.
I think this can work. It breaks down the stigma that athletes have to get big money or nothing. I’m just not sure that the level of money being offered for these deals is going to be enough for multi-millionaires to consider. So far, it seems that from the number of deals these athletes have accepted, I’m apparently wrong about that point, but we'll be watching.
Questions? Comments? SportsBiz@cnbc.com
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79cfde464df0da392c79a2e5c554c6ce | https://www.cnbc.com/2009/10/21/is-worst-of-jobmarket-blues-over-for-hardest-hit-states.html | Is Worst of Job-Market Blues Over For Hardest Hit States? | Is Worst of Job-Market Blues Over For Hardest Hit States?
Fewer states reported unemployment-rate increases in September than the previous four months, signaling a turning point may be near, according to a government report Wednesday.
Woman filing for unemployment
In September, 23 states and the District of Columbia posted a rise in unemployment rates on a month-to-month basis, vs. a total of 27 and the capital district in August, according to the Bureau of Labor Statistics. In the previous four months, an average of 35 states posted increases.
Another 19 states showed a decline in rates—versus 16 in August—which was also the most in five months. Eight states saw no change in September.
Slideshow: States with the Highest Unemployment Rate
Even hard-hit Michigan, with the highest rate in the country offered reason for hope. Though the jobless rate rose from 15.2 percent in August to 15.3 percent in September, the lever has has been hovering around 15 percent since June, a sign that the situation is leveling off, according to the state's Department of Energy, Labor and Economic Growth.
“The state jobless rate, which rose sharply by five percentage points from December 2008 to June 2009, has stabilized somewhat since June,” said Rick Waclawek, director of DELEG’s Bureau of Labor Market Information and Strategic Initiatives in a statement.
Christina Bristow, the Michigan regional operations manager at Adecco, a worldwide hiring firm, has seen an increase in the hiring of temporary workers in the state, a development that typically precedes full time hiring by six months.
“What we’re seeing—starting in August—is an increase in positions coming in,” said Bristow, who oversees 14 offices in Michigan. “Manufacturing is the main industry that we’re seeing the growth in.”
Although hiring is down from last year, Bristow said, the last two months have shown growth, signaling that companies are beginning to hire again. In downturns, she added, companies lay off their temporary workers first and then rehire them first when the economy begins to improve.The modest, but nevertheless welcome, improvement comes as national labor market trends continue to provide hope that the worst is over and a recovery is in the wings.
The number of unemployed hit 15.1 million in September, double what it was at the end of the economic expansion in December 2007.
Weekly initial jobless claims hit a ten-month low recently. Though still around 500,000, initial claims have remained below their late March peak of 674,000, another key metric for economists. What’s more, continuing claims have seen a sharp drop-off lately.
Job erosion also appears to be improving, although on a somewhat erratic basis. Non-farm payrolls did fall more than expected in September, but that followed month-to-month declines in several previous months.
Economists are now projecting an increase in payrolls by the end of the year or early 2010.
The BLS report on state jobless rates, however, was not without black marks. Three states—Nevada (13.3 percent), Rhode Island (13 percent) and Florida (11 percent)—all posted record highs in the 33-year history of the survey.
That kept them in the top ten, along with California (12.2 percent) and South Carolina (11.6 percent). North Dakota (4.2 percent) had the lowest rate of unemployment, followed by South Dakota (4.8 percent) and Nebraska (4.9 percent).
Slideshow: States with the Highest Unemployment Rate
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51b048752c5dbcb1b4608e33685d169c | https://www.cnbc.com/2009/10/21/late-selloff-drags-dow-below-10000.html | The Dow slipped below the psychologically important 10,000 level on Wednesday after the market took a turn for the worse in the last half-hour of the session, causing indexes to finish at their lows of the day.
Negative sentiment was triggered by comments from widely followed analyst Dick Bove who cut his view of Wells Fargo saying loan losses were mounting.
Ironically Wells as well as Morgan Stanley and U.S. Bancorp were among the financials behind the market’s strength earlier in the session – after they posted quarterly earnings above Wall Street's forecasts.
It just shows you how susceptible we are to bad news right now, muses Stephen Massocca of Wedbush Morgan. We've got such an extended stock market that a feather of news is enough to cascade it down almost 100 points.
VIDEO0:0000:00Word on the Street
What’s the trade?I’m concerned by what Dick Bove says, muses Guy Adami. I think Wells goes to $25 and I’d play it from the short side. And I'm also concerned by the market's sharp turn lower late day.
I think the selloff was technical, adds Joe Terranova. What I’m watching now is the dollar . If the sell-off was triggered by fundamental fear and not technicals we should see a flight to quality and the dollar will rally. If we see that happen, then there will probably be more downside to come.I also think the sell off was technical, muses Tim Seymour. I think volatility was cheap and the machines were in charge. I don’t expect to walk in Thursday morning to a sell-off.------------CONSUMER SHARES HIT BY HIGH OIL
U.S. crude oil futures ended on Wednesday above $81 a barrel, the highest in a year, lifted by government data showing an unexpectedly large drawdown in gasoline stockpiles last week.
Meanwhile, shares of Walmart , Home Depot and other consumer names closed lower with investors fearing that higher oil prices will hurt an already struggling consumer.What’s the trade?
Oil above $80 is a problem, adds Pete Najarian. Consumers may have no idea what’s happening with prices at the grocery store but almost every consumer can tell you what gas prices are doing. Everyday they drive by filling stations and see the price of gas tick higher and it impacts their psychology.
And oil didn’t budge when the market turned lower, adds Joe Terranova. This could be a problem for the rally going forward.
Looking at energy, if you’re in Apache it’s time to get out, counsels Guy Adami.
------------TOPPING THE TAPE: APPLE HITS NEW ALL-TIME HIGH
Shares of Apple hit a new all-time high on Wednesday after UBS raised its price target on the stock to $280. Meanwhile Yahoo! closed with gains after the Internet company beat profit and sales expectations – they also said advertising showed signs of life last quarterShould you stick with tech this earnings season?With Apple I’d still take a shot on the short side, says Guy Adami. If the market is reversing Apple should go with it.------------
GOV'T ORDERS DEEP STREET PAY CUTS
According to published reports, the Obama administration plans to order companies that received huge government bailouts last year to sharply cut the compensation of their highest paid executives.
The seven companies that received the most assistance will have to cut the annual salaries of their 25 highest-paid executive by an average of about 90 percent from last year.------------ BIG BEAR ROARS
The last time market guru and U.S. Senate cadidate Peter Schiff spoke with Fast Money he was bearish on the recovery to say the least.
You might remember on October 5th he said, "The US economy is not recovering from anything. It's getting sicker. It's not going to be a "U" or a "W" - there is no letter to describe it because there is no recovery. But there is a lot of inflation. You talk about the market. The market is rising because of inflation - nothing else."
Wait until you hear what he tells the traders now! Watch the video and see for yourself.
VIDEO0:0000:00Weak Dollar Strong Market?
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)CNBC.com with wires
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a3ed68a28a11e78fd86dc5144da958cf | https://www.cnbc.com/2009/10/21/lightning-round-total-irobot-bg-foods-and-more.html | Total : Cramer endorsed TOT and its 5% dividend yield.
Cramer's 12 Stocks to Play the Recovery
B&G Foods : Cramer wanted to do more research on BGF before making a call.
Cognizant Technology Solutions : Cramer is bullish on Cognizant.
iRobot : Sell iRobot, Cramer said.
Call Cramer: 1-800-743-CNBC
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com
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e1917c1e3ae0e756f70f34f464afe27c | https://www.cnbc.com/2009/10/21/mad-moneys-jim-cramer-visits-fast-money.html | If you read the Mad Money website regularly (so excellently produced by my colleague Tom Brennan) then you already know that Cramer is bullish on the recovery. And if you don't read it regularly, you should. It contains lots of great market insights.Here's a excerpt.
Believe it or not, the economy will recover. Cramer’s good news, which he shares in his new book, Getting Back to Even, is that “sooner is actually a whole lot more likely than later.” If that’s the case, then investors should know how to play it. Luckily for them, Cramer pulled together 12 stocks that he thinks will most benefit from an economic rebound.
The Fast Money traders are among Cramer’s biggest fans. So, you can only imagine what happened when the Mad Money host dropped by Fast to reveal that Caterpillar , BHP Billiton and Visa are three of his top recovery picks!
We were going to write about it here... but then we realized it's a few minutes of TV that really has to be seen to be believed. Watch the video now -- and enjoy!
VIDEO0:0000:00Mad Meets Fast
And that’s just the tip of the iceberg. Cramer has nine more recovery names for you. Click here to check out ‘Cramer’s 12 Stocks To Play The Recovery’
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)CNBC.com with wires
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b7e13ee1114f88f2e7f4954ce86f18b1 | https://www.cnbc.com/2009/10/21/market-tips-stocks-to-lose-510-then-move-higher.html | Market Tips: Stocks to Lose 5-10% Then Move Higher | Market Tips: Stocks to Lose 5-10% Then Move Higher
Global stocks were in the red on Wednesday as profit taking in technology stocks pushed Asian shares lower. Experts told CNBC there is a small correction ahead, then stocks can move upwards from there.
Equities to Head Higher
Equities may correct 5-10% but they will move higher into the new year, says Karl Eggerss, chief trader at LafferFrishberg.com.
Time to Take Some Money Off the Table
Right now is a beautiful time to take some money off the table, advises Odd Haavick, MD & CEO of Charles Monat Associates. Haavick & Kirby Daley, senior strategist at Newedge Group talk strategy, in this installment of "Protect Your Wealth."
Upbeat on Banks & Tech Plays
Financials and tech stocks are attractive investments, says Greg Bundy, vice chairman at AIMS Financial Group. He tells CNBC he likes Citigroup and U.S. tech stocks.
Q4 Earnings Outlook Still Uncertain
As John Fitzgibbons, partner & head of wealth management at ThinkEquity still sees uncertainty for earnings in the fourth quarter, he tells CNBC how he is investing in light of this.
Dollar Upside Seen in 2010
Adrian Foster, Asia Pacific head of financial markets research at Rabobank sees dollar upside through 2010.
Asian Currencies May Weaken Against USD
The U.S. dollar could rebound against Asian currencies over the next few weeks, predicts David Mann, FX strategist, global markets at Standard Chartered Bank.
Cautious Over Aussie Short-Term
Don't buy into the Aussie now, says Ed Ponsi, president at FXEducator.com. He tells CNBC he is concerned about the Aussie levels short-term.
Finding Growth in Asia
Singapore is well placed to become a global arbitration center, says Peter Martyr, chief executive partner of Norton Rose. He talks to CNBC about growth areas in Asia that are contributing to its business.
Play China with BHP
BHP Billiton is the easiest way to play China, says Greg Bundy, vice chairman at AIMS Financial Group.
Nissan CEO: Yen Strength a Big Threat
The yen's recent strength is a big threat for the Japanese auto industry, said Carlos Ghosn, CEO of Nissan. He also sheds light on his strategy for the electric car business.
Property Sector to Provide Support for HSI
The property sector will provide support for the Hong Kong market, says Alex Wong, director of asset management at Ample Capital.
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14e2ffa1ace16add5c29ee9b021ce501 | https://www.cnbc.com/2009/10/21/markets-are-overbought-but-drop-not-likely-blackrocks-doll.html | Markets Are Overbought — But Drop Not Likely: BlackRock's Doll | Markets Are Overbought — But Drop Not Likely: BlackRock's Doll
Investors digested a mixed bag of earnings on Wednesday and left people wondering if the economy is still on its way to a recovery. Bob Doll, vice chairman and global CIO of equities at BlackRock, shared his market outlook.
VIDEO0:0000:00Bob Doll's Market Insight
“Markets treated [the earnings news] well until the last couple of days,” Doll told CNBC.
“We’re getting some guidance for companies that say businesses are improving, but we need to see more of that. I think the markets are running just a little tired.”
While earnings results are seeing improvements based on revenue growth, Doll pointed out that much of it is around inventory replenishment—and not enough around final demand.
“That’s what we’ll need to see kick in, and hope we do in the fourth quarter.”
CNBC Data Pages:
Dow 30 Stocks—In Real Time Where's the US Dollar Today?Complete Earnings Coverage
In the meantime, Doll said although the markets are slightly overbought, “these things can correct themselves by going sideways for a while. They don’t have to go down.”
“As long as we have this sluggish recovery, we’re going to have authorities fighting to get growth coming back, in this period of slowly but surely improving growth,” he said.
He doesn't foresee a double-dip recession happening. "There will be moments where we wander, but I do believe that we’re on a slow but noticeable improvement.”
More Market Intelligence:
Market Tips: Stocks to Lose 5-10% Then Move HigherThe US Dollar's Fall: Why You'd Better Care6 Stocks You Should Consider: Investment Researcher
______________________________CNBC Slideshows:
Financial Crisis: Where Are They Now?
______________________________
______________________________CNBC's Companies in the News:
State Street
Caruso-Cabrera: State Street, Jerry Brown and Politics
Berkshire Hathaway
Buffett: 'Enormous' Economic Progress Over Last Year
General Electric*
Comcast
GE, Comcast Keep Options Open Amid NBC Deal Talk
*GE is the parent company of CNBC and CNBC.com.
______________________________
Disclosure:
No immediate information was available for Doll or his firm.
______________________________
Disclaimer
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f51156d2442e9bc40a7299c89a58cd6f | https://www.cnbc.com/2009/10/21/poll-is-obama-justified-in-cutting-executive-pay.html | Poll: Is Obama Justified In Cutting Executive Pay? | Poll: Is Obama Justified In Cutting Executive Pay?
The Obama administration is going to order the companies that received the most government aid to slash the compensation to their highest paid executives.
The seven companies are: Bank of America, American International Group , CitigroupGeneral Motors,GMAC, Chrysler and Chrysler Financial.
Total compensation for the top executives at the seven firms will decline, on average, by about 50 percent, according to the person familiar with the administration's decision.
We would like to know what you think. Take our poll and let us know if you think it's a good idea—or not.
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79a01b71f90ed0d84ac5f5c1f3c3fa21 | https://www.cnbc.com/2009/10/21/pops-drops-sandisk-northern-trust.html | Following are the day’s biggest winners and losers. Find out why shares of SanDisk and the Brazil ETF popped while Northern Trust and Altria dropped.
POPS (stocks that jumped higher)SanDisk (SNDK) popped 10%. The flash memory maker posted much better-than-expected sales and profit on strong demand in the mobile phone market. - Giddyup, exclaims Pete Najarian.
VIDEO0:0000:00Stock Pops & Drops
Brazil ETF (EWZ) popped 2%. Investors apparently believe the sell-off triggered by new taxes on foreign investments was overdone. - There was also chatter Brazil may back away from the tax, explains Tim Seymour.
St. Jude Medical (STJ) popped 3%. Although the company reported lower quarterly earnings, investors instead focused on the company’s higher sales as well as comments that suggested long- term goals remained intact.
Cree (CREE) popped 12%. The LED lighting manufacturer posted quarterly earnings and revenue well above Wall Street expectations and forecast strong results going forward.
Tupperware (TUP) popped 8%. The container maker reported better-than-expected earnings largely due to cost cuts and strength in emerging markets; they also raised full-year outlook.
DROPS (stocks that slid lower)
Northern Trust (NTRS) dropped 6%. Although the firm swung to a profit in the third quarter the results fell short of analysts' expectations. - I think this stock goes lower, speculates Guy Adami.
Altria (MO) dropped 3%. The company posted lower-than-expected quarterly sales due to increased prices related to a federal cigarette tax increase and because customers cut inventories. - I'm a buyer above $18.72, says Joe Terranova.
Continental Airlines (CAL) dropped 13%. Although this airline turned a profit, it also said going forward fares will likely remain challenged.
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your e-mail to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)
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d1c75ff8cf0ee816f15467f15c6c0a0e | https://www.cnbc.com/2009/10/21/sallie-mae-speculation-pays-off.html | What’s the best way of “Getting Back to Even” – the title of Cramer’s new book – after the horrible market declines we saw throughout 2008 and early 2009?
Cramer's 12 Stocks to Play the Recovery
Speculation, the Mad Money host said Wednesday.
Of course, the so-called experts advise against managing your own money, telling you instead to dump your nest egg in an index fund. But Cramer couldn’t disagree more. He believes everyday investors, Mad Money’s viewers, have what it takes to pick winning stocks, even if there’s a bit of risk involved to keep things interesting.
In fact, that’s the whole reason he recommends speculation. For a lot of people, stock research can be tedious and boring. So the edge-of-your-seat fun that comes with a long shot can keep people in the game.
SLM Corp. certainly kept things interesting. The stock jumped 21% on Tuesday alone, thanks to a massive earnings beat, and it’s up 62% from Cramer’s June 5 [31128943] recommendation, which is when he called it his speculative stock of the year. At the time, most investors thought President Obama’s intended reforms for the student-loan industry would kill Sallie Mae, but Cramer’s research seemed to predict a different outcome.
Not only was SLM trading below $7 back then despite a previous buyout offer of $60 a share, but also CEO Albert Lord told a banking conference at the time that, reform or not, his company would stay in business. Not to mention, Sallie Mae was packing $2 of earnings power per share and trading at just three times earnings.
Management said today on its conference call that the 26 cents a share earned this quarter should jump to 50 cents to 55 cents next quarter, over $1.50 in 2010 and even more in 2011. So while Cramer urged SLM shareholders to take some profits, he said the stock’s “got room to run.”
Call Cramer: 1-800-743-CNBC
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com
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5680837f8d6abe47e6aa3cfea0a7b94c | https://www.cnbc.com/2009/10/21/six-overlooked-insurance-policies.html | Six Overlooked Insurance Policies | Six Overlooked Insurance Policies
When insuring your assets, one misstep can leave you with an expensive loss.
Insurance PoliciesiStock photos
"Never risk more than you're prepared to lose," says Jack Hungelmann, a veteran insurance and risk management specialist and author of "Insurance for Dummies."
Experts typically urge people to purchase insurance coverage in five risk areas: major medical bills, destruction of home, major lawsuits, long-term disability and premature death, Hungelmann says.
"A good insurance program is a balanced one that covers all five major risk areas," he says."
But what about less obvious forms of insurance? In some cases, a little extra coverage may go a long way toward securing your financial future.
Following are six policies you might need, even if you don't realize it.Backup of sewer and drain coverageThis type of policy covers damage resulting from backup of the sewer system, as well as sump pump overflow. Such damage may result from flooding due to heavy rainfall during a power outage.
Coverage for a sewer or drain backup is recommended if your home is connected to a public sewage system, especially if you have a finished basement and a sump. Your need is even greater if you live in an area with considerable rainfall.
"Claims from standing sewage (or) water in a home can easily be in the tens of thousands of dollars," says Bill Wilson, associate vice president of education and research for the Independent Insurance Agents & Brokers of America and director of Big "I" Virtual University.
Coverage for a sewer or drain backup is typically inexpensive, costing $50 per year on average, Wilson says. That makes the coverage a relative bargain for an event that occurs more often than some might think.
"While losses aren't common, they aren't rare," says Wilson.
Hungelmann says it's important to choose the right amount of coverage for any disaster that might strike.
"If your basement fills with sewage or flood water, you're going to have a real mess on your hands," Hungelmann says. "Be sure that you have enough coverage to rebuild if such damage occurs."
Identity theft coverageIdentity theft coverage pays for out-of-pocket costs to restore your identity if you fall prey to this growing crime. Such costs may include legal fees, long-distance phone charges and other expenses you incur while trying to clear your record.
According to Wilson, some insurers are now providing limited identity theft coverage for free. This protection often is offered as part of a homeowner policy.
"Otherwise, it typically costs between $30 and $80, but the coverage amount varies widely from a few thousand (dollars) to five figures," he says.
Although Hungelmann says identity theft insurance is not crucial, he believes many people can benefit from the coverage.
He suggests purchasing coverage that includes the services of a coach who actually walks you through the process of restoring your identity.
"(An identity theft recovery) coach will tell you what your rights are, send you sample letters, let you know who to call and stay with you until the problem is resolved," Hungelmann says.
_____________________________________More From Bankrate.com:
_____________________________________
"Having a coach is 80 percent of the value of this type of insurance."
Business in the home coverage
This type of coverage protects home office furniture, equipment and supplies used for business purposes. It's a good idea for anyone who keeps at least a few thousand dollars worth of these items in their home, Wilson says.
"Most homeowner policies limit coverage for damage to property used in a business to $1,500 or less on the premises and $500 or less off the premises," he says.
Many standard homeowners policies cover property as long as it is not used "primarily" for business purposes, he says.
"So, if you used your home PC occasionally for business, the limitation probably would not apply," Wilson says.
However, other homeowners policies will not cover any furniture or equipment that is used for business purposes at any time.
"Under that restriction, the limitation would apply to a home PC if it's ever used for business," Wilson says.
Business in the home insurance also covers liabilities that most standard homeowner's policies do not.
Next: Auto, earthquake, others...
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914a1c846de594cbe9accf4814984636 | https://www.cnbc.com/2009/10/21/spend-more-time-w-tim-part-3.html | Wish you could spend more time with Tim? You can! All this week the Ambassador is making more of his expert advice on overseas action available for you - only on the web!
#3 Emerging Market Trader Toolbox: Currencies
No investing strategy is complete without exposure to the biggest, most liquid market in the world: currencies. Tim Seymour’s got a lesson on how to add them to your emerging market playbook.
VIDEO0:0000:00Emerging Market Trader Toolbox: Currencies
Turn the page to check out other Trading The Globe extras compliments of Tim Seymour !
#2 Emerging Market Trader Toolbox: ETFs
Not ready to go stock-picking in markets far, far away? Tim Seymour explains how ETFs use diversification to give you lower risk exposure to emerging markets.
VIDEO0:0000:00Emerging Market Trader Toolbox: ETFs
#1 Emerging Market Trader Toolbox: ADRs
VIDEO0:0000:00Emerging Market Trader Toolbox: ADRs
Tim Seymour breaks down ADRs – or, American Depository Receipts – the best way to get a slice of an emerging market company right here at home.
Below you'll find info about the final Trading The Globe extra that Tim Seymour has planned for you!-----------
#4 Emerging Market Trader Toolbox: The Emerging Middle ClassIt’s not just about commodities anymore. Tim Seymour reveals the best way to trade the consumer in emerging markets, home to the world’s fastest growing middle class.
* coming on Thursday
______________________________________________________Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to .Trader disclosure: On Oct. 20th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman's Firm Owns (BAC) Preferred, (BAC) Call Spreads, (BAC); Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm Owns (TGT); Finerman's Firm Owns (UNH) Calls; Finerman's Firm And Finerman Own (WFC) Preferred; Finerrman's Firm And Finerman Own (WMT); Finerman's Firm Is Short (UNG), (IJR), (MDY), (SPY), (IWM), (USO); Finerman Owns (AAPL); Najarian Owns (BX) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (LAZ), Is Short (LAZ) Call, Owns (LAZ) Puts; Najarian Owns (MGM) Calls; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), Is Short (YHOO) Calls; Najarian Owns (TEX) Call Spread; Finerman's Firm And Finerman Own (FLS); Finerman's Firm Owns (DRI); Seygem Asset Managemnet Is Short (PBR); Seygem Asset Management Is Short (EWZ); Seymour Owns (CHL), (EWZ), (AAPL), (BAC), (CAT), (MGM)
GE Is The Parent Company Of CNBCFor Chris MutascioStifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (BBT) In Next 3 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (BOH) In Next 3 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (CMA) In Next 3 MonthsStifel, Nicolaus & Co. Is A Market Maker In (COBZ)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (COBZ) In Next 3 MonthsStifel, Nicolaus & Co. Is A Market Maker In (CVBF)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (CVBF) In Next 3 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment BankingCompensation From (CYN) In Next 3 MonthsStifel, Nicolaus & Co. Or Affiliate Provides Or Provided In Past 12 Months Non-Investment Banking, Securities Related Services To (CYN)(CYN) Is Or In Past 12 Months Was A Client Of Stifel, Nicolaus & Co. Or AffiliateStifel, Nicolaus & Co. Or Affiliate Has In Past 12 Months Received CompensationFor Non-Investment Banking, Securities Related Services From (CYN)Stifel, Nicolaus & Co. Is A Market Maker In (FITB)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (FITB) In Next 3 MonthsStifel, Nicolaus & Co. Is A Market Maker In (GBCI)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (GBCI) In Next 3 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (KEY) In Next 3 MonthsStifel, Nicolaus & Co. Or Affiliate Provides Or Provided In Past 12 Months Non-Investmet Banking, Securities Related Services To (PNC)(PNC) Is Or In Past 12 Months Was A Client Of Stifel, Nicolaus & Co. Or AffiliateStifel, Nicolaus & Co. Or Affiliate Has Received Compensation For NonInvestment Banking, Securities Related Services From (PNC) In Past 12 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (RF) In Next 3 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (STI) In Next 3 MonthsStifel, Nicolaus & Co. Is A Market Maker In (UMPQ)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (UMPQ) In Next 3 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment BankingCompensation From (USB) In Next 3 MonthsStifel, Nicolaus & Co. Is A Market Maker In (WABC)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment BankingCompensation From (WABC) In Next 3 MonthsStifel, Nicolaus & Co. Or Affiliate Has Received Investment BankingCompensation From (WFC) In Past 12 MonthsStifel, Nicolaus & Co. Expects To Receive/Seek Investment BankingCompensation From (WFC) In Next 3 MonthsStifel, Nicolaus & Co. Or Affiliate Provides Or In Past 12 Months ProvidedInvestment Banking Services To (WFC)(WFC) Is Or In Past 12 Months Was A Client Of Stifel, Nicolaus & Co. Or AffiliateStifel Nicolaus Maintains A Business Relationship With (WFC)Stifel, Nicolaus & Co. Is A Market Maker In (WFSL)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment BankingCompensation From (WFSL) In Next 3 MonthsStifel, Nicolaus & Co. Is A Market Maker In (ZION)Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (ZION) In Next 3 Months
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d99c03b3c632329a1eab3fae498dab61 | https://www.cnbc.com/2009/10/21/stimulus-spending-has-saved-one-million-jobs-pelosi.html | Stimulus Spending Has Saved One Million Jobs: Pelosi | Stimulus Spending Has Saved One Million Jobs: Pelosi
Responding to criticism that the Obama administration's $787 billion in stimulus spending hasn't done enough to boost employment, House Speaker Nancy Pelosi told CNBC Wednesday that the recovery package passed in January has created or saved one million jobs, and without it, the economy would be in much worse shape.
Nancy PelosiAP
She did say, however, that more needs to be done.
"It's not enough to say we saved jobs, and we haven't created enough," she said.
As a result, the administration is considering short-term initiatives to help businesses boost hiring, such as a $3,000 tax credit for adding new employees, Pelosi said.
It has discussed extending health benefits from COBRA, so that people who have lost their jobs "have some relief," she said.
The government's multi-billion investments in health care and energy are also designed to create more jobs, she said.
See the Full Transcript From the Interview
Speaking about health care, Pelosi said she thinks the final version of health care reform will include a public plan, adding that it will definitely be present in the final version of the House's bill.
"With the public option what we're saying to people is, 'As you are mandated to have insurance, you're free to choose the insurance provider that you wish,'" she said. "'It may be who you had before...but it may be the public option.'"
VIDEO0:0000:00One On One with Pelosi
"It's a consumer choice. And that is very popular with the people."
Pelosi said that reform is urgent in terms of the rising deficit, and businesses can no longer carry the weight of health care and be competitive in the international economy, she said.
"We will make it more affordable for businesses, as well as individuals, and for the government," she said.
Despite ongoing talks about health care reform, Pelosi said the administration is still moving forward with financial reform, as well. She said she expects a bill to be ready by as early as next week.
These reforms have received criticism from constituents who believe they are a sign of the presence of big government. But Pelosi argued that they are a way to increase competetiveness among businesses, which has caused the consumer to get the short end of the stick.
And while the TARP funds distributed to Wall Street were unpopular among many Americans, Pelosi said the government had no choice but to dole out the $700 billion in rescue money.
"It caused a great degree of anger in the country, frankly, the major investment that was made that has not reached Main Street," she said. "But the fact is we had to do it to prevent a collapse of our financial institutions."
Although many of the administration's reforms have received resounding criticism, Pelosi said she's not worried about the popularity of Democratic party.
"I'm very confident about the support that is there for a strong Democratic majority, which I know we will sustain in the next election."
Slideshow: A History of Government Spending
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593e482fc8f1ae1b447dbfa8549a10d5 | https://www.cnbc.com/2009/10/21/take-your-position-amazon.html | With Oppenheimer raising Amazon to ‘Outperform’ from ‘Perform’, what should you expect when the e-tail darling reports earnings, Thursday?Shares of Amazon slipped modestly on Wednesday one day ahead of earnings. That move comes despite word from Oppenheimer analyst Brian Nagel that "upside surprises to sales/earnings per share estimates should drive the shares near term."
He added that the slowdown in sales that began at the company in 2008 had bottomed out and started to reverse in the second quarter of this year and he lifted Amazon’s outlook to ‘Outperform’ from ‘Perform.’
Meanwhile, Brigantine Advisors analyst Colin Gillis predicted "solid" quarterly results, saying the company may beat his earnings estimate of 31 cents per share.
However, he cautioned that consumers' growing interest in nonphysical products — such as digital downloads of movies and music — puts Amazon in a vulnerable position, and he'll be keeping an eye out to see if the company's media segment sees sequential growth for the first time this year.
It’s also worth noting that Amazon may be in the throws of a price war.
Amazon cut the price of the Kindle to $259 partly as a preemptive move to compete with a rival gadget from Barnes & Noble , which also sells for $259.
In addition, Amazon is locking horns with Walmart and Target – both slashed the price of 10 upcoming best-sellers on their respective websites to $8.99 in an attempt to win some marketshare.
What’s the trade?
I think Amazon is the online Walmart, muses Joe Terranova. I expect to see aggressive strategies lead to top line growth. The stock could go north of $100.I think Amazon is set up to not go higher, counters Mad Money host Jim Cramer on Fast Money. The stock is more expensive than Apple. I'd wait for the bears to come in and hammer Amazon below $90.
What do you think? We want to know!
> Click here for Karen Finerman’s Barnes & Noble trade
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)CNBC.com with wires
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a81860d87616ea317163c0818a817aa7 | https://www.cnbc.com/2009/10/21/take-your-position-american-express.html | With BofA and Wells citing consumer credit issues, what should you expect from American Express earnings, Thursday?In a recent research note, FBR Capital Markets analyst Scott Valentin said American Express' credit performance has far exceeded his expectations. "While we still believe that industry losses will not peak until second quarter of 2010, it appears that American Express has managed to right the ship much faster than peers," he wrote.
Meanwhile, Fox-Pitt Kelton analyst Bill Carcache is also upbeat going in to the results, calling for earnings of 46 cents per share, well above the consensus estimate. On average, analysts are expecting third-quarter earnings of 37 cents per share on revenue of $5.9 billion, according to a poll by Thomson Reuters. That would compare with a profit of 70 cents a share and revenue of $7.16 billion a year earlier.
If analysts are correct, it would be the eighth straight quarter of profit declines at the company.
VIDEO0:0000:00Take Your Position: American Express
What's the credit card trade?
It seems to me valuations for American Express are fair and there’s limited upside, muses JoeTerranova.
In the space I like Mastercard and Visa much better says Credit Suisse analyst Moshe Orenbuch. “They have much broader reach as networks and can process a wider range of transactions.”
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)CNBC.com with wires
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0f6eeb9eb28dcdfec751f4bfc74b2fb5 | https://www.cnbc.com/2009/10/21/the-ugly-truth-gm-and-chrysler-were-in-worse-shape-than-many-thought.html | The Ugly Truth: GM and Chrysler Were In Worse Shape Than Many Thought | The Ugly Truth: GM and Chrysler Were In Worse Shape Than Many Thought
Almost 7 months after President Obama decided to save both GM and Chryslerby sending them through bankruptcy, it's becoming clear just how close the White House came to letting Chrysler go under and how little the auto task force thought of GM. Today, the former head of the task force, Steve Rattner, has spelled out his view of the events in Fortune Magazine. He's also addressing the topic at a speech in Washington, D.C.
GM & Chrysler
Some of what Rattner wrote should not surprise us. It's been well documented how Chrysler was a shell of a company. Were it not for the lifeline it received from the Bush administration at the end of last year, the automaker was certainly headed for bankruptcy, and possibly liquidation. But even after the Auto Task Forcegot involved with Chrysler and started looking at it's options for the automaker, there were some in the White house who said the best option was to let Chrysler go under. Were it not for the fact Chrysler failing would blow a hole in the economy and cause 300,000 people to lose their jobs, the President would not have signed off on a managed bankruptcy with Fiat taking control of the company.
CNBC Special Report - The Fall Of GM
As for GM, Rattner makes it very clear he found the executives and board of the automaker to be out of touch with what it needed to do to save itself. Rattner amplifies what critics have said for decades about GM: it was steeped in a culture that refused to change. Not surprisingly, Rattner was an advocate for removing former CEO Rick Wagoner and half the GM board. Even as the Auto Task Force was considering installing Fritz Henderson as GM's new CEO, Rattner had doubts about whether GM could change.
Since the bailout and bankruptcy, Fritz Henderson has talked repeatedly about making GM a leaner, more responsive company.
VIDEO0:0000:00GM's Road to Recovery
This morning on Squawk Box he reiterated that strategy saying, "It (GM corporate culture) has got to change it is one of the priorities that I have on my list one of the top priorities if you will how we change the culture."
If there's one thing to take away from Steve Rattner's comments, it's this: the problems of GM and Chrysler were allowed to fester too long. For that, the blame goes squarely on the previous board of GM and the people who run Cerberus Capital. Even as the automakers were hemorrhaging cash, they failed to move fast enough to address the situation. That ultimately left the federal government as the only option to save GM and Chrysler.
Bookmark Alert: Track All the Dow Transports Here
_____________________________________Click on Ticker to Track Corporate News:
- Ford Motor
- Toyota Motor
- Nissan
- Honda Motor
_____________________________________
Questions? Comments? BehindTheWheel@cnbc.com
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9514bf38db3c8ca79c77c9061c39b8cd | https://www.cnbc.com/2009/10/21/time-to-end-tarp-for-big-banks-equity-analyst.html | Time to End TARP for Big Banks: Equity Analyst | Time to End TARP for Big Banks: Equity Analyst
Treasury Secretary Timothy Geithner said that the Obama administration will end some of the TARP programs by the New Year. What does this mean for the financial sector?
VIDEO0:0000:00The Outlook for Financials
Mark Lane, equity research analyst at William Blair & Co., and Fred Cannon, co-director of research and chief equity strategist at KBW, shared their insights.
Lane's View:
“The environment is more stable and the companies are comfortable taking a little bit more risk,” Lane told CNBC.
“But the improved trading results we see this quarter was not really driven by increased risk-taking, it was driven a lot by better execution, by continued favorable competitive environment and not undue risk.”
Recommendation:
Lane’s firm has a rating of “Market Perform” on Morgan Stanley stock.
Cannon's View:
Cannon said it’s “time to phase the [government] programs out...the large banks in particular.”
“A lot of the programs have worked and it’s time to start scaling them back and get the TARP money back," he said. "With that said, you still have some big issues with the regionals and these commercial real estate losses that are still in front of us.”
Dow 30 Stocks—In Real Time Track the Dow Jones Bank Index HereWhere's the US Dollar Today?
The Treasury has spent more than $454 billion through the TARP programs. And 47 recipients have paid back nearly $73 billion.
“Most of the large banks will be able to pay it back… Where you may see losses is the fact that we’ve seen a dozen of the small banks defer their payments on TARP—you’re going to see some losses in that group, so you could see $10 to $20 billion that may not come back,” he said.
Art Cashin: S&P's 'Very Important' Resistance Level NowPisani: Wells Fargo's Loan Loss 'Top'Markets Are Overbought — But Drop Not Likely: BlackRock's Doll
Cannon said big banks have access to liquidity programs and as long as that remains in place, the government can scale back the TARP programs.
“The only issue is that they need to have them at the ready, in case we see any kind of liquidity scare for any reason as we go into 2010,” he said.
______________________________CNBC Slideshows:
World's Safest Banks
______________________________
______________________________Top Financial Companies:
JPMorgan
Goldman Sachs
Morgan Stanley
Citigroup
Bank of America
______________________________ Disclosures:
No immediate information was available for Cannon or his firm.
______________________________
Disclaimer
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9b84daf3e2085fbd71471aad00e6fee1 | https://www.cnbc.com/2009/10/21/viceroy-bean-counters-vision-or-value.html | Viceroy: Bean Counters - Vision Or Value? | Viceroy: Bean Counters - Vision Or Value?
Upon peering into its crystal ball late last year, the Economist dubbed 2009 "The Year of the CFO"— which sounds like a pretty exciting prospect for a guy like me. But in its article, the magazine went on to posit, “Recession, credit crunch and the increasingly complex nature of global companies will all play directly into the bean counter’s hands.”
Excuse me … bean counter? I think of myself as having a pretty thick skin, but that’s harsh.
“We will hear less of ‘vision’ [from CFOs] and much more of ‘value." Clearly these people didn’t ask for my thoughts on the matter. Vision and value are hardly mutually exclusive. If solid value and values aren’t at the heart of a company’s vision, then it’s set up to fail. A company whose leaders can’t maintain strong vision while steering through crisis is a company that will lose value! Take a look at Jim Collins’ latest book, "How the Mighty Fall."
To be sure, this economy is forcing corporations into some tough decisions, and CFOs are often charged with making those calls. No CFO can wave a magic abacus and tell everyone that it’s all going to be OK. No CFO is happy that the recession is forcing us to cut costs and scale back. Not many would deliberately choose to be parachuted into the midst of a contracting economy with all the pain and distress we’re seeing.
However, amid all the woe, there is something I’m looking forward to, and it is in fact related to value. It’s a return to the acknowledgement of real and fair value. Exactly what constitutes real value is hard to say; the credit bubble played havoc with realistic valuation. Remember the $580 million News Corppaid for MySpace, and the eventual $3.1 billion eBayhanded over for Skype? Talking about the real value in those purchases sounds surreal at a time when we’re dealing with multi-billion dollar bailouts, Madoff’s $50 billion shenanigansand a U.S. budget deficit of more than $1 trillion.
All these figures are beyond the imagination of most people. What we all understand is the cost of a cup of coffee o a bag of groceries or a tank of gas, and whether the combination of price, quality and service is better value at this place or that place. When budgets are tight, we look more critically at what we’re getting for our money. Instead of pulling out the plastic for an impulse buy, we’re envisioning the characteristics that make something worth our cash. We’re reminded that we need to guide ourselves by markers that have value beyond money—things like family, friendship, community and betterment of society.
So yes, 2009 may turn out to be the year of the CFO, but in my world that doesn’t have anything to do with sitting behind a desk counting beans. To me it’s a year of remembering values, revitalizing vision and guiding my team forward with a steady hand.
STOCKS MENTIONED IN THIS POST
_________________________Anthony Viceroy, President of Global Operations, Porter Novelli
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d44ef8b743ee94a118d45b80a9769a77 | https://www.cnbc.com/2009/10/21/vix-poised-to-cross-below-20.html | VIX Poised to Cross Below 20 | VIX Poised to Cross Below 20
The CBOE Volatility Index , or investor fear guage, is about to cross below 20 for the first time since August of 2008. This morning the VIX hit as low as 20.10.
The VIX is used as a measure of expected volatility in the month ahead. Values above 30 are usually associated with higher investor fear and volatile times while values below 20 tend to imply a calmer time.
On average historically, the S&P rises on days that the VIX crosses below 20. The VIX has crossed to close below the 20 marker 142 times. Avg gains for the S&P when this happens...
Avg S&P gain on day VIX crosses below 20: up 82% of the time, avg gain of +.74%1 week later: up 56% of the time, avg gain of +.26%1 month later: up 57% of the time, avg gain of +.73%3 month later: up 65% of the time, avg gain of +.95%6 month later: up 63% of the time, avg gain of +2.57%
Excluding the 10 occurrences since the 2007 market highs (i.e., during the financial crisis), the longer term avgs go up:
1 month later: up 61% of the time, avg gain of +1.3%3 month later: up 70% of the time, avg gain of +2.3%6 month later: up 68% of the time, avg gain of +4.9%
Comments? Send them to bythenumbers@cnbc.com
bythenumbers.cnbc.com
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bbafdc642aa828d9bcbd0be9564ff5c0 | https://www.cnbc.com/2009/10/21/web-extra-freeport-mcmoran-goes-higher-says-seymour.html | Freeport McMoRan hit a 52-week high on Wednesday, so why does Tim Seymour say the company is priced very cheap?
This content is only available online - you won't find these trades on TV.
VIDEO0:0000:00Fast Money Web Extra
______________________________________________________Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)
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98535a68d159a56c29ad758accef5e96 | https://www.cnbc.com/2009/10/21/wells-fargo-tries-to-call-the-top-in-credit-deterioration.html | Wells Fargo Tries to Call The Top in Credit Deterioration | Wells Fargo Tries to Call The Top in Credit Deterioration
When will loan losses peak? That's the big question if you hold banks.
Wells Fargo is now looking for consumer losses to peak in the first half of next year, and for total credit losses to peak in 2010, "absent any further deterioration in the U.S. economy."
Markets Are Getting Harder to Please: Strategists
But it will be rocky getting there. Both nonperforming loans (delinquencies) and net charge-offs (loans they don't think they will recover) increased in the quarter, but the company notes that "the rate of growth of nonperforming loans has declined each quarter so far this year."
In other words, still big losses, but incremental improvement.
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The Dow 30 in Real TimeThe CNBC Stock Blog
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Questions? Comments? tradertalk@cnbc.com
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cfd466c440bed0869b2ef98d4565b3de | https://www.cnbc.com/2009/10/21/whats-got-traders-nervous-now.html | What's Got Traders Nervous Now | What's Got Traders Nervous Now
Traders get nervous as crude oil closes at new highs. Oil over $80 for the first time in a year has stock traders talking, worried that higher commodity prices would again be a burden to consumers.
Peter Boockvar and other traders have noted the big move in commodities this month:
1) gasoline and crude futures today rising to a one year high 2) corn near 4 month highs 3) wheat at a 2 month high 4) soybeans near 2 month highs 5) sugar near a 28 year high 6) cocoa at a 30 year high
The Carbon Challenge - A CNBC Special Report - See Complete Coverage
The average gallon of gasoline is at a 7 week high at $2.60, just $0.10 away from a one year high.
While high commodity prices might be a big help to commodity stocks, and the weaker dollar is a big help to multinationals, it is a major headwind for other stocks if it continues.
High commodity prices mean those companies that are U.S.-based and more dependent on consumers will see their top line and their margins erode.
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The Dow 30 in Real TimeThe CNBC Stock Blog
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Questions? Comments? tradertalk@cnbc.com
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8634b710ba86d57fc7380064b30a5f7c | https://www.cnbc.com/2009/10/21/where-to-invest-amid-the-pessimism-market-pros.html | Where to Invest Amid the Pessimism: Market Pros | Where to Invest Amid the Pessimism: Market Pros
The Dow bounced back on Wednesday after a quick drop at the market open. So how should you be invested? Tommy Williams, president of Williams Financial Advisers, and Joe Heider, president of Dawson Wealth Management, told investors where they see opportunities in this market.
VIDEO0:0000:00CNBC Market Edge
“I think the market is headed upward,” Williams told CNBC.
But he does see potential pitfalls: “I have to say, the investor is persistently pessimistic in the face of all this very positive economic news. They have been buying, but they’re still pessimistic and there’s still some concern.”
Williams said although the economic indicators are positive, the market has come “very far, very fast” and investors should be careful to advance and protect their gains.
(Scroll down to see both guests' sector recommendations. And check out CNBC's newDow Sector Tracker Page.)
In the meantime, Heider also said the market is headed upward, but will be choppy during the earnings season.
CNBC Data Pages:
Dow 30 Stocks—In Real Time Oil, Gold, Natural Gas Prices Now Where's the US Dollar Today?
“It’s not only about earnings, but it’s also about topline revenue,” he said. “Investors are going to pay particular attention on 'are these companies growing?' —not simply cutting costs to improve earnings.”
Heider said he sees "broad-based investment styles" across the world such as in Asia—in particular, China, Malaysia and India. Additionally, he likes Canada because of that nation's resources.
“We think that the dollar will continue its downward trend versus other world currencies,” he added.
More Market Intelligence:
Art Cashin: S&P's 'Very Important' Resistance Level NowMarket Tips: Stocks to Lose 5-10% Then Move HigherThe US Dollar's Fall: Why You'd Better Care
Williams’ Sector Picks:
Information Technology
Consumer Discretionary
Industrials
Heider’s Sector Picks:
Low-Risk Fixed Income
Blue Chips Domestically & Internationally
Technology
Health Care
______________________________CNBC Slideshows:
20 Stocks With Potential To Drop
______________________________
______________________________Top Tech Companies:
Google
Apple
Microsoft
Dell
Intel
______________________________ Disclosures:
No immediate information was available for Heider or Williams.
______________________________
Disclaimer
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e6744013f92f7f81172e94fa585d7498 | https://www.cnbc.com/2009/10/21/yahoos-big-original-content-push.html | Yahoo!'s Big Original Content Push | Yahoo!'s Big Original Content Push
On the heels of Yahoo!'s better than expected earningsafter the bell Tuesday, the web giant will announce a partnership later today that represents a new focus on original content. I have the early scoop: Yahoo! is about to announce it's partnering with ad giant WPP's Group M Entertainment to together produce new branded webisodes, both companies bringing in advertisers, together developing concepts that will work for them.
This is Yahoo!'s first production partnership with an ad agency as it pushes to distinguish its inventory, giving advertisers starring roles in popular web shows to engage with users.
Media Giant Wrestles With a Shifting Identity
VIDEO0:0000:00Yahoo Partners With Group M
Yahoo! already has ten branded shows that run on its various sites — news, finance, sports, etc.
Some are huge hits, like "Tech Ticker," sponsored by Scottrade, which averages 450,000 streams daily.
All-in, these shows reached 16.3 million unique US visitors last month. But Yahoo's self-produced shows comprise just ten percent of its video views, and the company says advertisers are consistently demanding more original content to match their marketing message.
By partnering with Group M Entertainment the company will be able to ramp up its original content output — it aims to make 20 percent of the video on its site original within a year. Group M brings its proven track record, it produced branded hits like "In the Motherhood" for Unilever's Suave and Sprint . Now the team will be able to draw on their relationships with both company's clients. And Yahoo will be able to draw on the trends it can extract from its 500 million users online patterns.
Trends Gone Wild - 10 Curious Game-to-Movie Conversions
Back when Terry Semel ran Yahoo, content creation was also a priority, but this time around neither Yahoo now WPP will take much risk on new productions. They won't start making any of the shows until an advertiser/sponsor is signed, sealed and delivered. Gartner analyst Mike McGuire points out that the success of the new shows all hinges on the appeal of the content, which is the big challenge Hollywood faces every day. But here Yahoo has the advantage of a low cost of entry — webisodes can be made inexpensively inexpensive — its huge built-in audience, and the fact that it can carefully track how its users react to the content.
Yahoo's push to make and own its own content is a different approach than rival Google , which has said repeatedly that it's not a content creator. Google defines itself as an aggregator or a curator, but it says it's not interested in shooting its own web shows. CEO Carol Bartz is really distinguishing her strategy by putting value on original content; we'll see where she takes it from here.
Questions? Comments? MediaMoney@cnbc.com
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3c4761313ea9e617725130280d93ae09 | https://www.cnbc.com/2009/10/21/your-first-move-for-thursday-october-22nd.html | Here’s our Fast Money Final Trade. Our gang gives you tomorrow’s best trades, right now.
Tim Seymour recommends long S&P 500 "because it held 1076, an important technical level.”
Guy Adami suggests shortIntel .Joe Terranova prefers longGoldman “between $170-$175.”
Pete Najarian says Deere is a buy due to unusual options action.
VIDEO0:0000:00Fast Money Final Trades
Click here to see other Final Trade posts.
______________________________________________________Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to .
Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil FuturesFor Joe TerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Peter SchiffSchiff Owns Yen & Foreign CurrenciesSchiff Owns GoldFor Moshe Orenbuch(AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) Is Or In Past 12 Months Was A Client Of Credit SuisseCredit Suisse Provided Investment Banking Services To (AXP), (COF), (DFS), (MA), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Provided Non-Investment Banking Services To (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Expects To Receive/Seek Investment Banking Compensation From (AXP), (COF), (DFS), (V), (MA), (JPM), (C), (BAC) In Next 3 MonthsCredit Suisse Has Received Non-Investment Banking Compensation From (AXP), (COF), (DFS), (JPM), (C), (BAC) In Past 12 MonthsCredit Suisse Is A Market Maker In (MA)Credit Suisse Owned 1% Or More Of (V) As Of End Of Last Month
For Jim CramerCramer's Charitable Trust Owns (V)Cramer's Charitable Trust Owns (WFC)Cramer's Charitable Trust Owns (PPG)Cramer's Charitable Trust Owns (CVX)
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1bc207482c2b9bae4961a83f786da89f | https://www.cnbc.com/2009/10/22/10year-bull-market-starting-chief-investor.html | 10-Year Bull Market Starting: Chief Investor | 10-Year Bull Market Starting: Chief Investor
Approximately 35 percent of S&P companies having reported so far. What do the results tell us for stocks going ahead? Neil Hennessy, portfolio manager and CIO of Hennessy Funds, and Steven Stahler, president of Stahler Investment Group, shared their market outlooks.
VIDEO0:0000:00Market Bull vs. Bear
“The markets have gotten ahead of the economy quite a bit,” Stahler told CNBC.
“And if we consider the news coming out today and through this earnings period as good news, I don’t think the targets were set high enough to make it such great news.”
Stahler expects the Dow to cross the 10,000 mark several times by the end of the year.
"I just don’t see any really great news—it’s all incremental better news than the worse news that we had."
More Market Intelligence:
How to Invest in Financials: Laszlo BirinyiBad News: Stocks Are Stalling on Good NewsFalling VIX a 'Very Bad Sign': Market Expert's Warning
Stahler advised investors not to trade into the market and said he is attracted to the BRICs (Brazil, Russia, India, China).
“They’re working together and setting some policies,” he said. “And I think that’s a place to go for some time. They’ll own half the world’s economy in the next 10 years.”
Counterpoint: 10-Year Bull
On the other hand, Hennessy said markets are in a 10-year bull run. “We’re in for a really good run, particularly looking at pessimism out there by the investor,” he said.
“If I’m going to be investing in the long term, you have to look at the low-end retailers or the low-end manufacturers of whatever they are manufacturing,” he said.
“I don’t think people are going to go back and change spending habits to the high end any more. I think people are going to go for more for less and that will go for the next 10 years.”
Hennessy Likes:
Del Monte Foods
Darden Restaurants
Ross Stores
Stahler Likes:
S&P Energy
DJ REIT Index
______________________________ CNBC Data Pages:
Dow 30 Stocks—In Real Time Where's the US Dollar Today?New: 'Sector Watch' Data Page
______________________________CNBC Slideshows:
The S&P 500's Leanest Companies
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______________________________ Disclosures:
No immediate information was available for Hennessy or Stahler. ______________________________
Disclaimer
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5fb597e07e006fdd57c611f3ce6f7aab | https://www.cnbc.com/2009/10/22/2010-could-be-very-good-for-transports-analyst.html | 2010 Could be 'Very Good' for Transports: Analyst | 2010 Could be 'Very Good' for Transports: Analyst
Profits and sales were down for another quarter at UPS, but investors will be looking ahead to the upcoming holiday season to see if the world's largest shipping carrier—and the U.S. economy—are on the road to recovery.
VIDEO0:0000:00UPS Earnings Analysis
Arthur Hatfield, transportation analyst at Morgan Keegan, shared his analysis of the transport firm.
UPS' challenge is "still the economy, but within the numbers, while they were very negative year-over-year, we started to see some sequential improvement from the second quarter,” Hatfield told CNBC.
“Margins were down year-over-year, but they were flat relative to second quarter. Volumes even in the U.S. were up about 1.5 percent in the third quarter relative to the second quarter.”
CNBC Data Pages:
Dow 30 Stocks—In Real Time Track the Dow Transports HereComplete Earnings Coverage
Hatfield said he sees some early signs of U.S. economic improvement this year despite the weak economy.
“We’re not getting back to where we were in early 2008 or 2007 overnight—it will take some time—but directionally, things are getting slightly better,” he said.
Hatfield's Recommendation:
Hatfield said he has an “outperform” rating on UPS and expects the company to see a pickup in profitability next year.
“Fourth quarter is going to be difficult, but we will see some sequential improvement again,” he said. “But I think 2010 could be a very good year for transportation companies.”
More Market Intelligence:
Falling VIX a 'Very Bad Sign': Market Expert's WarningMarket Tips: Stocks at Back-End of RallyArt Cashin: S&P's 'Very Important' Resistance Level Now
______________________________CNBC Slideshows:
Biggest Dividend S&P 500 Yields
______________________________
______________________________ Companies That Reported Earnings This Morning:
McDonald's
McDonald's Posts Strong Profit, Predicts Solid Sales
AT&T
AT&T Results Top Estimates with iPhone Help
Merck
Merck Beats Profit Forecasts, Helped by Cost Cuts
Xerox
Xerox Reports Earnings Drop But Raises Outlook
______________________________ Disclosure:
An affiliate of Morgan Keegan & Company received compensation for products or services other than investment banking from UPS in the past 12 months.
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Disclaimer
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65a60e7d6ac7bf03ada8cf97a83885f3 | https://www.cnbc.com/2009/10/22/american-express-profit-sales-beat-expectations.html | American Express Profit, Sales Beat Expectations | American Express Profit, Sales Beat Expectations
American Express reported a profit that fell from a year ago but topped Wall Street's expectations as the credit card company trimmed costs, a decline in consumer spending stabilized and bad loans eased.
Net income fell to $640 million, or 53 cents per share, from $815 million, or 70 cents per share, a year earlier, the largest U.S. credit card company by purchases said in a statement.
The third-quarter results included a $180 million non-recurring benefit associated with the company's accounting for a net investment in consolidated foreign subsidiaries
Excluding that benefit, American Express posted adjusted earnings from continuing operations of 44 cents per share.
Sales in the most recent quarter came in at $6 billion, compared with revenue of $7.164 billion in the same period a year ago.
Analysts who follow American Express, a component of the Dow Jones Industrial Average, expected the company to turn in a profit of 38 cents a share on a topline of $5.922 billion.
The percentage of loans the company considers won't be repaid dropped to 8.9 percent in the quarter from 10 percent in the second period. However, that is still well above the 5.9 percent rate a year earlier.
American Express shares traded slightly lower in late trading. Get after-hours stock quotes for American Express here.
VIDEO0:0000:00Feinberg Talks Pay Cuts
The stock saw a boost of almost 4 percent during the regular trading session , closing at $36.44.
Total card spending fell 11 percent in the United States from the third quarter of 2008. However, it showed an improvement against a 16 percent contraction in the second quarter.
"Overall billings have stabilized during the last few months and we saw indications that spending by corporate cardmembers is beginning to pick up," Chief Executive Kenneth Chenault said in a statement.
"We generated substantial earnings this quarter due, in part, to the reengineering efforts that have successfully lowered our expense base," he said.
In the U.S. card service business, net charge-offs—a measure of bad loan write-offs—fell to 8.9 percent from 10.0 percent in the previous quarter, although they were up compared with the third quarter of 2008.
Slideshow: The Biggest Types of Personal Debt in the United States
"At the start of the year the economy appeared to be in a freefall ... Today, while there is still reason to be cautious about high unemployment levels, we are seeing broad-based improvements in credit quality," Chenault said.
Provisions for losses decreased 13 percent to $1.2 billion.
Analysts have said American Express, which relies on affluent and corporate customers more than its peers, is recovering faster from the financial meltdown as economic jitters ease.
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Clarification: An earlier version of this story reported American Express' earnings from continuing operations of 54 cents a share as the number to be compared with analysts' estimates. But the appropriate number for comparison is the adjusted earnings from continuing operations of 44 cents a share.
- AP and Reuters contributed to this report.
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098eacb3ad6c594d379d3401309cc64a | https://www.cnbc.com/2009/10/22/balloon-boy-the-halloween-costume.html | Balloon Boy: The Halloween Costume | Balloon Boy: The Halloween Costume
By balloon boy business opportunity, we're not talking about a reality show cashing in on the Heene family.
We're talking about the Balloon Boy Hoax Halloween Costume, being sold for $19.99 by Plantraco Microflight, a company that usually sells model airplane kits and related merchandise. Why not? These people know how to make small things fly.
The costume comes with a flying saucer balloon made of "mylar-like" material which, when inflated, measures 38" in diameter, plus an attachable gondola. There's also a "Hello My Name is Falcon" nametag "for added realism."
The website has even created its own "balloon boy hoax video", where you see three "brothers" disobey their father (wink, wink) and launch the balloon, claiming Falcon is on board. Oscar-winning acting this is not, but I did laugh at the end when you hear "dad" say off camera, "Quick, someone call Wolf Blitzer at CNN."
"When I saw that thing landing in Colorado, I knew it was a hoax," says Plantraco and Microflight Managing Director Bud Kays. "Helium and mylar are my thing."
Hot, Hotter, Hottest Halloween Costumes of 2009
Kays says he was gripped by the balloon saga until he could get a perspective on how small the balloon really was, and that wasn't until he saw it on the ground with a man running toward it. He says the balloon would not have been able to lift more than maybe 20 pounds. "That's when the wheels went into motion," Kays said, and he came up with the idea of making a little money off the incident with a special costume. His company already had UFO-shaped balloons in stock, but they had to design and manufacture the gondola using a laser cutter at their facility...in Saskatoon. Their website went up Tuesday, and they sold 180 costumes the first day, with no publicity. "I think we'll sell 1,000 pieces by next Thursday," Kays says.
The company hasn't gotten any hate mail yet accusing it of exploiting the Heenes, and, as much as I want to call this a case of American entrepreneuralism, it's 100 percent Canadian. Even with the Loonie so strong against the dollar, Kays' company is still making a healthy profit.
Already some sales have led to sales of other merchandise on the website. Kays is hoping more people buying the costume will look around at some of the model and remote control airplanes and say, "Oh, boy, for Christmas, my husband might like that."
Update: Bud Kays tells me that due to media coverage (like this blog), he now expects to sell 2,000 to 3,000 costumes by next Thursday. "I have to bring more people into the office just to assemble and pack these up!" he says. "It's nuts."
Questions? Comments? Funny Stories? Email
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34545cca0d17f2c281f463f242b3678e | https://www.cnbc.com/2009/10/22/certified-forest-products-a-great-choice-for-the-environment.html | Certified Forest Products: A Great Choice for the Environment | Certified Forest Products: A Great Choice for the Environment
Thiru Murugan
There is not much debate that the environmental issue at the forefront of our minds these days is climate change.
There is also no doubt that by taking care of our forests we can address a lot of environmental challenges – including some related to climate change.
Just think for a moment what forests provide.
They are natural filters – removing carbon dioxide from the atmosphere and storing carbon as plants, leaf litter and soil.
They provide habitat and support biodiversity, they regulate water flows and protect water quality. They offer enjoyment and recreation. They also support local economies, and deliver a stable, and renewable, supply of the wood and paper products.
That’s right.
The many benefits of natural forests are often found in managed forests that supply the products we use every day. And the economic value is an added incentive for owners to manage their forests with care, and to maintain them as forest rather than selling them for profit – which often results in the forests being turned into malls or subdivisions.
At The Conservation Fund, we have long recognized this.
We know that forests offering value economically and socially are more likely to continue offering value environmentally.
That’s why we work with many partners to help communities develop sustainable solutions that integrate economic return with environmental quality.
That’s also why we certify our forest lands to a credible third-party certification program, and make sure we always ask for wood and paper products with on-product labels that show the fiber is from responsible, legal sources.
Third-party forest certification began as a response to market concerns about questionable forest activities, primarily in developing countries, and has become an important tool to promote sustainable forest management and responsible procurement around the world.
The Carbon Challenge - A CNBC Special Report - See Complete Coverage
Only 10 percent of the world’s forests are certified and half of these certified lands are found in North America.
That’s likely because we have a choice of credible programs – such as the Sustainable Forestry Initiative and the Forest Stewardship Council. These programs have been endorsed by respected organizations and governments around the world, including the United States, Canada, the United Kingdom, Japan and France.
An on-product label that says a product is certified to a program such as SFI or FSC delivers assurance you are making a choice that represents conservation of biological diversity, protection of special sites, sustainable harvests, respect for local communities, and much more.
WHAT? Owning a Pet Worse than Driving a SUV: Report
In the United States and Canada, we are extremely fortunate. At a time when global deforestation and degradation account for 17 per cent of greenhouse gas emissions worldwide, our forest land area is actually stable, if not increasing. At a time when illegal forest activities are contributing to deforestation and habitat destruction, we have laws in place to keep our forest lands healthy and resilient, making them less susceptible to wildfire, insects and disease.
And on top of that, we have the option of buying independently certified wood and paper products that we know come from responsible and legal sources.
_____________________Larry Selzer is president and CEO of The Conservation Fund (www.conservationfund.org), an environmental non-profit that works with many partners to demonstrate sustainable conservation solutions by integrating economic and environmental goals.
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56a7ff503749d62ff47dceec3733967a | https://www.cnbc.com/2009/10/22/could-hvcc-be-history.html | Could HVCC Be History?? | Could HVCC Be History??
Since most of you who don't live and breathe the gastro-intestinal system that is Congressional legislation, I wanted to flag a major move on the always controversial Home Valuation Code of Conduct.
For those four of you who've never heard of the HVCC (because you've either been in a coma or trapped under something heavy), these are the new appraisal rules generated by the New York State Attorney General in conjunction with Fannie Mae and Freddie Mac.
The rules are designed to put a firewall between appraisers and mortgage brokers/lenders, but have resulted in a massive slowdown and widespread complaints in the appraisal process nationwide.
The House Financial Services Committee has just passed an amendment to the Consumer Financial Protection Agency Act to sunset the HVCC.
At The Crossroads - CNBC Special Report Investor's Guide to Real Estate
This amendment was offered by Rep. Gary Miller (R-CA) who introduced legislation earlier this year for an 18 month moratorium on the HVCC, along with 112 cosponsors. Miller wants regulators to come up with one set of standards to oversee the industry.
“While I am supportive of ensuring accurate appraisals, I have repeatedly expressed concern that the HVCC has potential to increase costs to consumers, significantly hinder a consumer’s ability to obtain legitimate and reliable appraisals, and adversely impact small business professionals who work in the very neighborhoods where these consumers are looking to purchase homes,” said Congressman Miller. “In fact, since the implementation of the HVCC on May 1, there are numerous examples of higher costs for appraisals, poor service, the inability to use one appraisal for more than one lender, questionable quality of appraisals, and the inability to make corrections to inaccurate information on an appraisal report.”
Now before all you realtors and mortgage brokers get all excited, remember this is just a committee vote. I will say it was passed by voice vote, so that means there were no objections. The bill will be voted out of committee later today and then have to go to the House floor in some form and then of course there's the Senate, etc.
Questions? Comments? RealtyCheck@cnbc.com
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11102c07a14f27f324326211566029cc | https://www.cnbc.com/2009/10/22/farr-good-earningspay-attention.html | Farr: Good Earnings—Pay Attention | Farr: Good Earnings—Pay Attention
Corporate earnings reports have been overwhelmingly positive thus far for the third quarter reporting season. We are encouraged. However, as our attached quarterly newsletter points out, we have become somewhat concerned that the economic recovery has become highly dependent on a series of government stimulus initiatives.
The removal of any or all of these initiatives, which have cost the Treasury and future generations of Americans dearly, could have negative implications for a stock market that has risen over 60% since the March lows.
The program at least risk, in our opinion, is the $8,000 tax credit for first-time home buyers.
Congress is expected to not only extend this program through mid-2010, but they are also mulling its expansion to include all home buyers (not just first-timers).
While this program and others like it will undoubtedly continue to lend support to a consumer struggling with job losses, stagnant incomes and housing price declines, we fear there must come a day of reckoning as the budget deficits roars through the stratosphere.
Until then, however, the bulls take us higher.
History Lessons
On September 30, 1929, the Dow Jones Industrial Average traded at 381. Two months later, at the end of November, it traded 198. By the end of April, 1930, it had regained considerable ground, almost 50%, to trade at 294, and from there things got ugly yet again. The 1929 stock market crash was just the beginning. Following the April, 1930 recovery, the DJIA followed a one-step-forward, two-steps-back pattern until it bottomed in July 1932 at 41. The years 1932-1937 were very good to investors, and then share prices moved lower until the beginning of World War II. The Federal Reserve misjudged the 1932-37 recovery and removed stimulus before sustainable end demand materialized.
Following the initial years of the Great Depression, the country went through the feel-better stimulus period similar to the one which we are enjoying now. However, the Federal Reserve’s Open Market Committee (FOMC) removed the training wheels before the toddler economy was secure, and the economic contraction was renewed. Chairman Bernanke is a great student of the 1929 Market Crash and Great Depression. He knows the downside of stepping back too early, and Central Bankers the world over know the inflationary ramifications of keeping stimulus around too long. There is not a lot of room for error. Stock investors seem to expect that the FOMC will get this timing just right. We certainly hope they do, but we’re worried…and skeptical.
Poll: Is Obama Justified In Cutting Executive Pay?
Federal Reserve Vice Chairman Donald Cohn said, in the first week of October, "we must begin to withdraw accommodation well before aggregate spending threatens to press against potential supply, and well before inflation as well as inflation expectations rise above levels consistent with price stability." So, they’re reminding us that they appreciate the precarious balance. My favorite line came from Chairman Bernanke himself last week when he said, "Accommodative policies will likely be warranted for an extended period. At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road." Well, that certainly clears things up. Later, Bernanke said that the Fed would look to remove stimulus when, “the time was right.” Wow, again!
Here and Now
This market is a classic example of when and why not to fight the tape. Benjamin Graham said it best 60 years ago, "markets can remain irrational longer than you can stay liquid." Market timing does not work as a long term strategy, so stay invested, but pay close attention to what you own. Solid balance sheets, free cash flow, earnings growth and management matter more now (in a relatively high market) than ever.
__________________________________________________ Michael K. Farr is President and majority owner of investment management firm Farr, Miller & Washington, LLC in Washington, D.C. Mr. Farr is a Contributor for CNBC television, and he is quoted regularly in the Wall Street Journal, Businessweek, USA Today, and many other publications. He has been in the investment business for over twenty years.
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89bda28118833c6a988528d342dec4e7 | https://www.cnbc.com/2009/10/22/first-on-cnbc-cnbc-transcript-cnbcs-jim-goldman-sits-down-with-microsoft-ceo-steve-ballmer-today-thursday-october-22.html | FIRST ON CNBC: CNBC TRANSCRIPT: CNBC'S JIM GOLDMAN SITS DOWN WITH MICROSOFT CEO STEVE BALLMER, TODAY, THURSDAY, OCTOBER 22 | FIRST ON CNBC: CNBC TRANSCRIPT: CNBC'S JIM GOLDMAN SITS DOWN WITH MICROSOFT CEO STEVE BALLMER, TODAY, THURSDAY, OCTOBER 22
Steve Ballmer, Microsoft CEO
WHEN: TODAY, THURSDAY, OCTOBER 22ND
WHERE: CNBC'S BUSINESS DAY PROGRAMMING
Following is the unofficial transcript of a FIRST ON CNBC interview with Microsoft CEO Steve Ballmer. Excerpts of the interview will run throughout CNBC's Business Day programming today, Thursday, October 22nd beginning at 6AM ET.
All references must be sourced to CNBC.
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JIM GOLDMAN: Steve Ballmer, the chief executive of Microsoft, it's a very big day, very big week, very big year for Microsoft, no question. The-- the big Windows 7 rollout. Thanks very much for being with us.
STEVE BALLMER: Pleasure.
JIM GOLDMAN: So-- give me a sense about Windows 7. We've all seen it. Some of us have had the chance to play with it. The reviews are generally very good. Your sense of the upcoming Windows 7 juggernaut. How big a deal is this?
STEVE BALLMER: Well, I think Windows 7 will be one of-- one of the bigger, maybe the biggest product to hit the technology industry this year just because, you know, Windows is used on about a billion computers around the planet. There'll be another 300 million machines that ship this year. And the diversity of PCs that ship with Windows 7, with the added simplicity that Windows 7 brings, I think it's-- a pretty banner year.
JIM GOLDMAN: This has been under development obviously for a very long time. What were the marching orders? When Windows 7 was gettin' ready, I mean, you know, we saw XP and-- and then we dealt with Vista and we'll talk about Vista in a second, but-- when the Vista sort of development ended and that was in the marketplace and you started workin' on Windows 7 what were the marching orders for your team here to make Windows 7 the operating system that Microsoft really wanted in the marketplace?
STEVE BALLMER: A couple-- three things. Number one, we said let's-- let's make sure we have regenerated our team, 'cause-- at the end of Vista, you know, people wanna move, do other things. And we really have a first class team that-- that-- was put in place for Windows 7. And the team said to-- to me and I said to them, "We're gonna try to refine this thing. We're gonna try to support the new hardware, refine what we set out with with Vista and enable some-- some new things in user interface," and the team just did that I think very well.
JIM GOLDMAN: Looking at-- now that we have Windows 7 out there-- what are consumers, what's the enterprise going to notice first. What is the big innovation leap that this brings to the table that Windows hasn't seen in iterations past?
STEVE BALLMER: Well, I mean you're always responding to changes in the hardware and input from customers and your own vision. And I think that things everybody's gonna react to are, "Wow, this is simpler. Wow, this feels snappier. More responsive. I think that's the-- the stuff everybody's gonna respond to."
And then on top of that it's loaded with, you know, kind of the ability to support a range of new hardware. New features. And everybody'll find little gems, features, things that they fall in love with. But speed, responsiveness, simplicity. That was kind of what customers told us they wanted and that's what we focused on givin' 'em.
JIM GOLDMAN: Looking at the adoption curve of what you anticipate for Windows 7, how significant it is going to be for Microsoft? I mean in-- again, in years past, when Microsoft has come out with an operating system, it-- you know, you have owned the market. And there-- we always talk about competition, but it seems like nowadays-- and maybe we say this every few years or so, that the competition is getting stiffer.
That we are moving to the cloud. That we are seeing Apple make inroads in the marketplace. We're seeing Google start to dip its toe into an OS and get involved. We're seeing Linux-based systems I guess out there but certainly not gaining the momentum that people thought that they would, but they're still out there nonetheless. Do you feel more of a competitive threat now or is 95-plus percent market share still good enough and everybody else is an also ran?
STEVE BALLMER: Well, I mean we've had a lot of good competition for a lot of years and we continue. The competitors change, but we've had good competition. And people were pushing and doing various things and-- and we've done a good job, by and large, and we continue to have a very strong position. I think most estimates would say we're about the market shares that-- that you cited.
So-- you know, despite the-- the efforts of others-- people like the diversity. People like the application base that Windows provides. And-- if we do our job well in (CHUCKLES) Windows 7-- we have a-- I think a very-- and I think we have. You know, we have to get in the market and show the range of new hardware and software that will be available. But I'm expecting pretty good adoption.
JIM GOLDMAN: We are seeing a pretty big transitional shift in hardware right now. I mean the whole world is mobile. The whole world seems to be goin' after the cloud. The whole world seems to be looking at aps on the go. Entertainment on the go. Digital this, that, on the go. It all seems that. Does Windows 7 address that in a fairly compelling way so that Microsoft can seize on all of these trends and the moment-- the momentum that we're seeing in hardware?
STEVE BALLMER: I think the trend really is to see, you know, more and more intelligence in the client and more and more intelligence in the cloud. And then to access that, as you say, wherever you are. And when you see the range of small PCs, light PCs, long battery life PCs. In addition to on the other end when you're not on the go and people were tryin' to enjoy digital entertainment, all in one, big screen-- PCs, I think the range of alternatives is phenomenal.
And we are hitting the sweet spot of this notion of-- let's call it the digitization of entertainment. And-- I think we're in the sweet spot of that. Mobility. You aren't gonna find lighter, faster-- PCs on the market than you will running Microsoft Windows.
JIM GOLDMAN: Is too much made of the competition? I mean I guess all of us in the media and analysts on Wall Street are always lookin' for the horse race. You-- you love the David and Goliath story. We're not really talking about David and Goliath though when you're talking about Microsoft versus Google. You know David there.
You're not talking about David and Goliath when it's Microsoft versus Apple. Ain't no David there with $36 billion in cash sittin' in the bank down there in Cupertino. Do we make too much of the competition? And if so, how do you get over that? Because it just seems like that-- that message of Microsoft innovating, Microsoft dominating-- gets lost out there in the noise?
STEVE BALLMER: Well, I don't I know. I think at the end of the day it's all-- you know in a sense that is the-- for investors, who I-- would assume you consider your primary audience, (LAUGHTER) for investors they-- they do wanna know where value's gonna get created and-- and not. And the truth is it'll-- value gets created by innovation widely adopted.
And the innovation part, you look at the products. You evaluate 'em. You can talk about 'em. The widely adopted is the quality of the innovation and whatever the competition brings to the table. And sure, we've got good competition. We're tryin' to give Google a little competition with our Bing search engine. They deserve a little competition.
There tryin' to come into our core turf. And so far they haven't had a lot of success and, you know, we're edgin' up, but slowly in their core turf. But, you know, it doesn't surprise me. You focus in on the competition, I have to focus in on making sure we get the right products in the marketplace. And that we do very well versus the other guys.
JIM GOLDMAN: So is Windows 7 the right product in the marketplace? I mean if you read the reviews everybody keeps talking about this being the most robust, the simplest, the most intuitive-- operating system that Microsoft has come up with that it has closed the gap if you will between what Microsoft has offered and say what Apple has had on the marketplace in years past. Are you confident that this is the right product at the right time for you?
STEVE BALLMER: Oh, I-- look, I think Windows Vista was right the product, not-- without-- not without-
STEVE BALLMER:--some issue.
JIM GOLDMAN: I mean but-
STEVE BALLMER: But also Windows 7's the right product. I mean we-- there's a reason why 96 out of 100 people pick a (CHUCKLES) Windows PC versus a Mac. And I think we've got the right formula. We have a better execution than ever against that formula according to reviewers. And certainly I have pride in the work that we've done. But at the end of the day you can't beat the diversity of applications, the diversity of hardware, the diversity of price points that the Windows PC has to offer. And the-- you know, that's-- that's fundamentally important.
JIM GOLDMAN: Let's talk about a-- little bit about the competition out there because-- we do spend a lot of time talking about this. And Apple does generate an enormous amount of headlines. And you and I have talked about this in the past. Google as well. You mentioned that they are starting to-- encroach upon your turf-- in small steps, as it were, as you try to go after them too.
Give me a sense from your perspective what's happening in the industry right now, because it seems like everybody is partnering. Everybody is working on strategies. Everybody is dealing with this Google threat. Is too much made of this Google threat or is there real, palpable concern that Google sets its sights on a market and goes after it and will become a serious threat?
STEVE BALLMER: Well, I think you have-- sort of-- search and things that are not search. You know, in the area of search it's clear Google has a dominant market share globally. Very strong position. One of the strongest I've ever seen in the tech business, but-- but, you know, we're hopeful that through innovation maybe we can-- we can-- make a bit of a dent in that.
On the other hand, you say what about Google in these other markets and so far Google has really no proven track record of success outside the area of search. Now they're a well financed company and, you know, we'll see what happens. And we certainly take them very seriously. But their-- their real success record is with search where they are dominant. And now they're tryin' to, you know, elbow their way into adjacent markets, distributing their browser with their search and, you know, YouTube and the like.
And, well, you know, we'll see what happens. In our areas of strength we certainly feel like we understand our customers with Windows 7 and our products, we listen very well to those customers. End users as well as hardware vendors and software vendors. We're gonna continue to push down that-- that path and we think we got some really innovative ideas with Bing that we'll use to-- to push the pace of innovation in the search business.
JIM GOLDMAN: Let's talk about Bing-- while we're on the topic of search and Google because-- there-- there seemed to be some good market penetration when you were right out of the gate earlier in the summer of this year. And then you read the market data and there's these incremental increases. Then there was news from Nielsen or Coms Granner (PH), I don't remember which. But somebody recently said that-- there was actually a decline. That maybe Bing had peaked.
Again, we go back to the horse race situation. You told me in May, "Look we'll be very happy with incremental improvements and this is a long-term strategy. Don't watch the month-to-month." And look at what we're all doing. Watching the month-to-month. Frustrate you and your team or is it still head down and we're doin' exactly what we set out to do?
STEVE BALLMER: Head down, we're doing exactly what we set out to do. You know, I'm-- at the end of the day the question you have other ask yourself is will there be innovation over the next several years in search? I think the answer can be yes. Now there needs to be some competition because as, I think we all would probably agree, the user interface and experience for search hasn't changed much in the last four or five years.
And our opportunity's to push the pace. And we pushed it with Bing 1.0. And there'll be a Bing 2.0 and a Bing 3.0 and a Bing 4.0. Bing, Bing, Bing, Bing, Bing. We're gonna keep pushin' the-- the pace of innovation and the-- and the user experience and the business model. And we'll see where we get. We're gonna give it a run but there's no question Google's got a-- you know, quite a dominant position.
JIM GOLDMAN: And how important is Yahoo! In that equation? I mean now that we have a little time behind us since the deal, such that it was-- was struck-- you know, the-- people out there suggest that Microsoft made out like a bandit with this deal. No cash up front. Access to what you needed access to. Yahoo! was kind of on the ropes. What's your sense?
STEVE BALLMER: Well, it's a-- I think it's a win-win deal I think. Folks who-- who say to the contrary just-- aren't getting it. I mean in-- if you say, "Where's Yahoo!?" YahoO! still has a position from an economic perspective in the search business. They get 88 percent of the revenue that they ever got without any of the costs. It sounds like a great way to play search for them.
For us what we get is a scale of search queries in the U.S. which we think will enable us to improve-- the-- both the algorithmic side, as well as the relevance of our advertising. So we think it's a win for us, it's a win for Yahoo! and hopefully-- well, as soon as we get through our regulatory process, you know, we want to-- move forward quickly.
JIM GOLDMAN: Let's talk about-- we'll get to regulatory process. I got some other questions for you on that front. But let's talk about Apple for a second. We talked about Google. You know, there's a lot of focus on Apple and innovation and the company's-- Macs are selling exceptionally well. Still a-- a flew on the elephant's butt, if you will, if you look at what the--
STEVE BALLMER: It's still four percent. I don't know why anybody thinks they're selling incredibly well. They-- I admit they've gone up from-- whatever it is, 2.5 percent to 3.2 percent. And they're doing well.
JIM GOLDMAN: That's a 50 percent increase.
STEVE BALLMER: They're doing well. That's right. They're doing well.
JIM GOLDMAN: So I mean does it-- this has gotta get under your skin. I-- I mean-- here we-- we focus on Mac sales and, you know, we-- we talked about the 2.5 million that they sell a quarter. Their retailing strategy is robust to say the least. I mean go by an Apple store, I'm sure you have. iPhone continues to gain momentum in the marketplace. They're banking an enormous amount of cash. Snow Leopard got great reviews. Do you even care about what happens to Apple?
STEVE BALLMER: Well, sure. We compete with Apple. I mean ap-- Apple's a good competitor. It's a good competitor. One we compete well with. I mean it's amazing people can say, "Apple-- Apple says tell-- sells 10 million PCs." There'll be 300 million Windows PCs sold in the same timeframe. So it is interesting to me that people spend so much time talking about the three percent of the market in that case.
Now it's different in phones and in-- in portable-- entertainment devices. You know, Apple's-- again, a number three player in smart phones. But certainly the most talked about number three player. Nokia, REM (PH), we with our Windows phones, we're kind of neck and neck. Probably just a shade behind Apple on-- on that. And it is interesting.
But-- and it doesn't frustrate me. Apple does-- you know, does interesting work. The market wants to talk about it. I just wanna compete with it well. And-- I wouldn't trade our 300 million new users a year for their 10 million. I just wouldn't do it. I-- I kind of like what we're doin' and the way we're servin' the market.
JIM GOLDMAN: The ad campaigns seem to resonate. That you've-- you've finally hit Apple where it hurts. Let's talk about price. You've made famous the so called Apple tax or the Mac tax. It worked. And it came at a-- at a really good time in the economy. It came at a good time for Microsoft.
Is that still a success? Is that message beginning to resonate? Do you look at that and say, "Finally people are getting it. We have Windows 7. We have the better price. We have the dominant market. And then there's Apple." And finally the consumer is coming around to that? Or is it more of a case where Apple still has the cool factor, we beat 'em on price and people settle for us?
STEVE BALLMER: I-- I don't think so, Jim. I think the consumer really gets it. I mean consumers aren't-- you know, are very smart. In aggregate they buy what they wanna buy. With-- with our ap-- with our advertising or without our advertising, with Apple's advertising, without Apple's advertising. They buy what they wanna buy.
And 300 million of 'em-- a year choose to buy ours because there is choice. There is a variety of price points. There's a variety of form factors. And that doesn't take anything away from Apple. They do-- a nice job I'm sure. For their user base. And, you know, we'll tell the story in our advertising 'cause the imp-- story's important to be told.
But the consumer had this figured out. It didn't matter what-- we said or competition said, the consumer sees right through it. They seem to the quality of the software. They seem to the variety of hardware and applications. And-- and they vote with their feet every day.
JIM GOLDMAN: Let's talk about the mobile idea here because-- we-- we mentioned iPhone. Google obviously seeing some traction now with-- with Android. Signing deals with Verizon and we're expecting now a Dell phone on Android with AT&T sometime next year-- if you believe the hype.
There seems to be an enormous amount of competition on the mobile side. Lots of dynamic innovation in that sector. Are you confident that-- mobile-- the mobile OS at Microsoft is gonna address that when you come out with your-- I mean I know you just came out with 6.5. But when you come out with mobile 7.0, when you deal with, you know, sort of the-- the new innovations that are out there, are you confident that Microsoft is in the right place to take advantage of all of the growth that we're seeing on the wireless side?
STEVE BALLMER: Well, let's have the phone side. You can get wireless PCs--
JIM GOLDMAN: Okay.
STEVE BALLMER:--these days, so really let's say on-- on the phone side. On the phone side I think-- you kkw, they're-- it's a-- it's-- the wild wild west, so to speak. It's a wide open opportunity. Nokia's the market leader globally. Not so present here in the U.S. We did a partnership with them to do some things this-- this last summer. You know, Apple, us, Google.
You know, but if you look at the strategy, I like our strategy for Windows phones. Again, we're emphasizing diversity. We're emphasizing choice. That's really important to us. We're working with the broadest set of hardware manufacturers and the broadest set of operators of anybody in the-- in the-- in the marketplace.
You know, some guys-- a couple of our competitors build software, service and phones. We choose to s-- focus in on the software and enable the services and the phones, which I think is the right path for it. I think it's a strategy that'll lead the highest volume, but we've gotta prove it in the marketplace.
And-- we'll see. The next-- this generation that we just launched of Windows phones, more complete than ever before in terms of providing a nice kind of experience right out of the chute from the phone manufacturer. New marketplace-- available on top of Windows phones. And-- and we'll push forward. But it will be competitive. There's no question. A lot of work to do.
JIM GOLDMAN: You look at the handsets that HBC (CLEARS THROAT) and Samsung. I mean these are really nice, slick devices. Again, we focus on iPhone and Blackberry and whatever is runnin' Android nowadays because that makes for interesting, you know, media. But you look at-- at-- sort of the impact that Android is having, does-- does that become more of a threat to you or is it so much of an also ran down there low on the totem pole that you're not worried about it yet. Or is it over the horizon? Give me your sense of-- I don't imagine there's a lot of handwringing about Android up here in Redmond, but maybe there is?
STEVE BALLMER: Well, it's a-- it's another, you know, form of good-- form of competition. We'll see what happens with it. I mean we have been competing in the mobile world against Linux the whole time and Android's just a-- kind of another form of Linux. Right? It's-- it's completely open source, which means you don't have to get compatible systems from different vendors.
It's-- it's not what we're buildin' with-- with Windows Mobile and Windows phones, which is something which is adaptable, extensible and flexible. But at the same time provides kind of a standard level of functionality for developers and end users to count on. But-- but we'll see.
I mean every day, you know, we get to come to work and try to build new products and talk about 'em and sell 'em and promote 'em and-- we've had good success. You know, Android's a-- recent entry. I don't know. Maybe-- maybe we'll see other entries come in and-- based on Linux. I don't know. Chrome. There's the thing called Lemo. There'll be a lot of Linux-based entries. I think our strategy-- has-- has real merits versus those strategies and versus strategies of the guys who are doing everything in one. Hardware, software, service.
JIM GOLDMAN: So back in May when we asked you about the Zune phone the last time-- you told me pretty categorically that there wasn't going to be a Zune phone. So here we are in October, just a few short months later, and if you believe the media-- jeez, the-- the Zune phone is-- is-- is gettin' ready for might. Steve?
STEVE BALLMER: I'm not a very fickle guy. There was no Zune phone. There is no Zune phone. No matter what the media wants to write.
JIM GOLDMAN: That's pretty categorical again. You know, you're nothing if not consistent.
STEVE BALLMER: I-- I try to be.
JIM GOLDMAN: What about XBox mobile?
STEVE BALLMER: XBox mobile?
JIM GOLDMAN: Yeah. Where-- where's this device?
STEVE BALLMER: No-- certainly no-- no announced discussion of anything (LAUGHTER) called XBox Mobile. I mean that-- I don't rule out the possibility of bringing our gaming environment. We've said we're gonna bring our gaming environment to Windows phones. So you will see technology, certainly from the XBox, come into-- the Windows phone environment.
JIM GOLDMAN: Let's talk about Microsoft as a company for a little bit because here's a company that, you know-- you've had a challenging 2009. You've had some excitement. You've had some issues. We're watching this global economy continue to sputter. On a macro basis you travel the world. Give me a sense from your perspective right now where things are at economically. On-- on the global scale are we finally seeing the seeds of recovery from your standpoint or are we still stuck in this morass of, well, gloom?
STEVE BALLMER: I'm not an economist and I-- hesitate to make predictions. I do know that we-- we all built up a (UNINTEL) wave of debt. Now it's essentially being refinanced and some of it's being refinanced through the government. And I know that that has led to a decrease in-- in employment, which is not a very good thing.
Certainly we have-- it feels, at least now, like we have stabilized, which I-- I think is fantastic and credit wherever it's due on that. I think, you know, we-- we oughta say, "It's great. We've stabilized." I'm-- I'm enough of a historian to say that in past times stability didn't always stay. Recovery didn't always come. Hard to predict. So I won't predict.
We have-- redone our cost base to try to be appropriate for the range of economic outcomes that we anticipate. And-- like everybody else we'll see where the economy goes. In the meantime we're gonna focus in on buildin' some great products.
JIM GOLDMAN: So does Windows 7 usher in that massive upgrade cycle that so many people are so hopeful of?
STEVE BALLMER: Well, I think one of the things that-- that people don't really understand very well about our financials is that most of our Windows revenue-- comes with the sale of new computers. So if the question is, "Do I expect, necessarily, to see a surge in new computer buying?" I think that's as much dependent on the economy, frankly, as it is our Windows 7 product.
I think we've built a good product and we'll see what it does to-- to stimulate, but we still are in-- you know, not the-- not the best anyway of economic times. But we've got the-- a great product. And if anything has a chance to-- to stimulate the market a little bit I think it's Windows 7.
JIM GOLDMAN: Well, yeah, but I mean you're meeting with customers now. I mean you must have a sense of what the build out is. I mean what does HP tell you? What does Dell tell you? What does-- what-- what are you even hearing from Intel as far as--
STEVE BALLMER: All of us in the computer industry are talkin' to one another, but the real question is number one, what happens with the consumer over the holiday season, which we can talk about as long as we life. We-- we-- we work really well together. And yet at the end of the day-- you know, what's the economic climate and what the-- what's the consumer gonna do over Christmas. And what's gonna happen with IT budgets for calendar year '10? Those are-- those are the two big questions.
JIM GOLDMAN: And-- and do you have any insight?
STEVE BALLMER: You know--
JIM GOLDMAN: Just between you and me.
STEVE BALLMER: Just between you and me? I actually don't. I mean I talk to plenty of folks and there's plenty of opinions. I'd say on the business side people are still cautious. They are cautious because it's the prudent thing to do I think for most business people. On the consumer side I read and-- listen-- to the same kind of numbers you do. And we're just gonna have to wait and see what happens this holiday season.
JIM GOLDMAN: Tell me about the latest with the European Union right now. I mean we're-- we're getting hints and fits and starts of news out of this. Is-- is this gettin' squared away? Is this finally done? And then I have a follow up as far as-- where the EU goes next. But let's start with you-- and Microsoft. This has been-- a burr under your saddle for god knows how long.
I-- I imagine there's light at the end of the tunnel here. That this is finally gonna be behind you. Give me a sense of where you're at today and also from your perspective whether this is justified. Whether you're gonna fight. Intel continues to fight. Give me your sense of all of this?
STEVE BALLMER: Well, we-- we are in market tests now. We've made a set of proposals to the European Commission. They-- were enthusia-- they're enthusiastic about the proposals, but under European law the process says now they got out for-- a formal market test. That's I think about a 30 day period.
After which they, you know, can talk to us again or-- or conclude-- I think in general they conclude, because we've done a lot of talking to get to this point. But they're gonna see what the constituents say and-- and it would be my anticipation, because we've already made a lot of changes. We made-- a proposal in July which we had plenty of opportunity to get market feedback and-- and amend before the commission went to market test. I'd be my-- hope that-- within 30 days or so we will be in a position to largely ratify the proposals that we've made. And-- put the-- the matters with the European Commission behind us.
JIM GOLDMAN: How sick and tired of the EC and their process are you? I mean this has been goin' on for so long. I-- I don't know-- I mean you and I have talked over the years about all the anti-trust things and all the issues facing Microsoft. I read an interview that-- that you and I did years ago about Big Johnny in the classroom. And I said, you know, if-- if the teacher keeps comin' back-- and says, "Johnny must be doin' something wrong," I meant at s-- some point you gotta bel that Johnny's doin' somethin' wrong.
And I think your response was along the lines of, "It's not that Johnny did something wrong. It's just that Johnny's much bigger than anybody else. If he falls funny he's gonna hurt somebody so Johnny's gotta be really careful." You've go the EC out there. Basically an activist organization on a competitive level for, some will say, European-based companies tryin' to compete with Microsoft.
Now you've got an Obama administration that's putting teeth in the FTC, the FCC, the SEC. It seems like government is getting very involved in how businesses are run. And, more importantly, how businesses like your compete. Is there a new world order at work here? And are you having to dramatically shift the way you're doing business and adjust? Or is-- it's gonna be business as usual at Microsoft? We'll pay the fines if that's what happens but basically we're movin' ahead with the way we've always done things?
STEVE BALLMER: No, no, no. Nobody-- I mean at least not around here we don't say, "We'll pay the fines and move on." I mean we're-- we work hard to be in compliance with the-- legal framework around the globe. When you have a large market share sometimes the legal framework has to get written after you get the position.
I mean we've been-- we've been-- sort of under investigation, working on writing the legal framework that governs us with the U.S. Department of Justice. That's the consent decree which has been enforced now for a number of years here in the U.S. with the European Commission. So no, it's-- we have been living under this regime-- of regulation-- for a number of years now. And we work hard at it. It's important to us to comply.
So in a sense-- I don't know what it feels like for the rest of the world. I don't feel like there's been a big world change because we've been living-- in this world now for-- for a number of years. And, you know, it-- it comes with success I guess. And-- I wouldn't turn down the success if our market position with-- with some of our products and if this is the consequence then-- then so be it.
JIM GOLDMAN: I-- I just wanted to-- to follow up with that briefly. You know, you've got IBM that's-- in the government's eyesights now. Apple. Intel. I mean it just seems like the list is getting longer and longer and longer and they're going after everybody-
STEVE BALLMER: Google.
JIM GOLDMAN: Google.
STEVE BALLMER: And their books dealer. Sure.
JIM GOLDMAN: So I mean-- is that a concern? Or is it-- do you just look at that and say, "Well, it's-- still happenin'. More of the same."
STEVE BALLMER: It's been our world, so-- it's been our world and-- government has to do its job just as we need to do our job. I can speculate what I'd like. I can do a lot of things. But I know people are workin' hard tryin' to do their jobs appropriately. We've-- we've run the gamut on that. I think we're almost-- seeing the-- light at the end of the tunnel here in Europe. And-- I think that's just the-- the way of the world.
JIM GOLDMAN: Last question for you. Looking at your position as CEO of this company, you've been doing it a long time. We're a financial network so you have to ask the stock price-- question. And I-- and I've has-- have asked you this before. Stock has been sort of in a very narrow range during your tenure. A better part of a decade now. This is a pretty exciting time for Microsoft. New operating system. Big advances in mobile. Big changes with the cloud. Lots of innovation--
STEVE BALLMER: Bing.
JIM GOLDMAN: Bing. Let's not forget Bing. How could I with you sittin' there tellin' me Bing. Bing, Bing, Bing. DO you get frustrated that Wall Street isn't gettin' their arms around the Microsoft story? And how do ya reassure investors who parked their money in Microsoft stock, which doesn't seem to perform the way your colleagues in the market also perform. Apple, Google, Research in Motion, even Oracle. Do you get frustrated, one? And two, how do you reassure them that this is the place for their money and that the job you, Steve Ballmer, are doing as CEO is the right one? Are you worried about your job?
STEVE BALLMER: I'm not worried about my job. I do worry about shareholder value. Number one, I'm a shareholder. I'm one of-- I'm our second largest shareholder.
JIM GOLDMAN: I was gonna say a pretty big-
STEVE BALLMER: There may be an institution above me, but otherwise I'm right behind Bill Gates, so I think like a shareholder. A long-term shareholder, mind you. But a shareholder. That's number one. Number two, as a shareholder I know the best thing we can do is to grow operating income and generate cash.
We do more of the latter, because we don't have a lot of CapEx the way the oil companies do, than anybody around. And, you know, we've made over $20 billion pre-tax operating income last year. A substantial growth over the period of time. I don't know what it would have been when I took over in 2000. And I'm proud about that. And I point to that to shareholders.
I think somebody-- you know, I can't keep track every day of what's goin' on in China, but (UNINTEL) what's it's goin' on the Chinese stock market, I think only Exxon mobile has a higher market capitalization than we do. And so in some sense is-- you know, growing that, probably a little tougher. I feel some days like we're the ceiling on the market. And if the ceiling goes up everybody goes up with us.
But we're gonna keep driving operating income, cash generation. We're gonna continue to pay dividends and buy back when that looks like an appropriate thing to-- to go do. And we're going to at the same time invest the $9.5 billion we invest in R&D to give this company a growth future. We have grown-- at $9.5 billion. Nobody in the world spends more and R&D than we do. Nobody better get more out of their R&D investment than we do.
And if we do that right we'll be sittin' here in a number of years and operating income will have risen. And-- we'll be-- we'll be talking about the performa-- another strong performance by the company financially. And in the long run that's gonna reflect itself appropriately in the price of the stock.
JIM GOLDMAN: Right. Steve Ballmer is the CEO of Microsoft on the eve of Windows 7 official release, thanks very much for being with us.
STEVE BALLMER: Thanks Jim.
JIM GOLDMAN: Thanks.About CNBC:CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.
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321d66a8eb1d8fcd45fbadbdf3f802b1 | https://www.cnbc.com/2009/10/22/food-inglorious-food.html | Food Inglorious Food | Food Inglorious Food
You gotta eat.
After the bell, Chipotle Mexican Grill annihilated street expectations with third quarter earnings of $1.08 a share, up 83 percent from a year ago, compared to the expected $.88 from analysts. The chain showed same store sales rose 2.7 percent, while revenues rose nearly 14 percent to $387.6 million (slightly below expectations). Chipotle even increased operating margins almost a half a point to 25.5 percent. The company plans to open 120-130 this fiscal year and another 120-130 stores next year.
The Cheesecake Factory also beat street expectations with earnings of $.27 a share, $.29 if you exclude a pre-tax charge, a more than 52 percent gain from a year ago. The street was expecting $.24. They also beat on the topline, with sales of $400.6 million for the quarter, better than the $397 million analysts were predicting. However, same store sales fell 2.8 percent.
"When we think about restaurants, we kind of have to split it between fast food, such as your McDonald's and Burger Kings of the world, and casual dining, like Brinker, which owns Chili's, and Darden, which owns Red Lobster and Olive Garden," says Steve West of Stifel Nicolaus. West says that the casual dining stocks did a good job beating expectations the first half of the year through cost cutting, but that investors may now move away from "higher beta, higher risk stocks back into the higher quality, like McDonald's." Investors now want to see profit growth based on consumer spending, not cost savings. For example, McDonald's beat the street on both earnings and same store sales, profiting handsomely from lower commodity costs, but also consumers looking for value. Brinker also beat the street this week, but the stock fell as profits seemed to come more from lower costs than from more traffic. "Deep discounting and promotion on some of their products is actually eating away at some of that savings," says West.
VIDEO0:0000:00Steve West on Restaurants
West has "Buy" ratings on McDonald's, Chipotle, and Panera.
"I do have a buy on Darden, but right now it's just not working with the shorter-term dynamic of the consumer," he says.
"But, with Darden, they will continue to outperform the industry average on their sales results." He says that's because the company focuses on segments in casual dining "that are underpenetrated--which is steak, seafood and Italian." In contrast, he says the "bar and grill segment" is overpopulated with perhaps as many as 7,500 stores. "Those are the kind of guys that I'd be staying away from," West says, "like a Brinker that owns Chili's, or a DineEquity that owns Applebee's. Those guys will continue to struggle on a same-store sales basis going forward."
Stocks Worth Chewing On
Here's more of our interview with Steve West.
Chew On This - Suze Orman's Top 10 Money Tips for Women
Questions? Comments? Funny Stories? Email
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54a44f1c4285aae8263ccac3f53a5a67 | https://www.cnbc.com/2009/10/22/get-3-smartphone-plays-on-the-cheap.html | TriQuint Semiconductor took a big hit on Thursday after missing the Street’s revenue estimates and offering reduced guidance. The company also warned that a Korean handset maker, thought to be Samsung, would slow production. As a result, the stock dropped to $5.84 from Wednesday’s close of $8.10 on the news, a 28% decline.
Cramer's 12 Stocks to Play the Recovery
But Cramer doesn’t think the move was justified. TriQuint largely was dragged down by its exposure to regular mobile phones, rather than smartphones, and Korean company’s cutbacks seem to be an isolated incident. While the Mad Money host did admit that he should have told investors to take profits much earlier in TQNT – he first recommended it on June 12 – he said the stock is attractive at this level, calling the sell-off “an opportunity to buy.”
On a related note, Skyworks Solutions and RF Micro Devices , both members of Mad Money’s Mobile Internet Index, also fell today, as a result of TriQuint’s quarter. It’s true that Skyworks and RF Micro do a lot of business with Samsung, Cramer said, but now the potential bad news is priced into their stocks. The mobile Internet is a “massive, multiyear theme,” so investors should use the 4% and 5% dips, respectively, to buy SWKS and RFMD at a discount.
“The worst that happens is [they] go down further,” Cramer said, “and you get to buy some more and lower and better prices.”
Call Cramer: 1-800-743-CNBC
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com
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b81cebbc62543102f1cf93fcd5040801 | https://www.cnbc.com/2009/10/22/good-new-is-bad-news-again.html | Good New Is Bad News, Again | Good New Is Bad News, Again
China's GDP rose 8.9 percent in the third quarter from a year ago, about in line with expectations, but still the biggest gain in a year. Stocks in China dropped on concerns the government may end the stimulus program there, but the government reiterated it would keep its loose monetary policy.
Mixed Bag: Weekly Job Claims Rise; 4-Week Average Falls
What's up with the Dole IPO? Big-name IPO, set to price tonight, looks weak. There is now a separate $300 million convertible offering as well, which came out of the blue. Huh? Original terms were to price 35.715 million common shares at $13 to $15; now price talk is closer to $12 for the common. The stock underlying the convert is owned by majority shareholder David Murdock, who took Dole private in a $1.4 billion deal in 2003. He was the CEO of Dole, beginning in 1985.
Hyatt also announced this week the terms of its IPO, though not when it would go public.
Elsewhere:
1) Traders talking about comments from Moody's lead U.S. analyst, Steven Hess, that the U.S. could lose its triple-A rating if it does not reduce the deficit to manageable levels in the next 3-4 years. He made the comments in a Reuters interview.
2) Shipping giant UPS reported earnings of $0.55, a few pennies ahead of consensus, and said "[a] stabilizing economic environment led to improving volume trends during the quarter."
However, the holiday outlook is cloudy: "our customers have widely differing views on their outlook for the holiday season."
Fourth quarter guidance of $0.58-$0.65 is about in line with consensus.
3) PNC trading up 6 percent pre-open, reported earnings well above expectations. Net charge-offs (loans the bank does not expect to recover) declined by 18 percent, which is very good news indeed.
CEO Rohr said the "economy has stabilized."
4) McDonald's is up 2 percent after its Q3 earnings beat estimates ($1.15 vs. $1.11 est.). Global same-store sales rose 3.8 percent, led by a 5.8 percent rise in European comps. Same-store sales rose 2.5 percent in the U.S. and 2.2 percent in Asia, Middle East and Africa.
5) J. Crew up 13 percent after boosting its Q3 and Q4 guidance. As with a string of other retailers recently, the apparel retailer cited improving sales and margins for the raised outlook.
Q3 earnings are now seen between $0.54 and $0.59, up from $0.30-$0.33 and better than Street expectations of $0.36. Q3 comp. store sales are expected to grow in high single digits, while margins are likely to improve by 5 percentage points.
Sales for Q4 are also seen higher, with comp. store sales now rising mid to high single digits.
6) Shares of Black & Decker rise 2 percent after beating earnings estimates by a penny, helped by a more favorable tax rate and improved margins from tighter cost controls. While a 20 percent decline in Q3 revenues was inline with expectations, sales continued to be very weak across all segments.
Q4 sales are expected to decline at similar rates, and earnings for the current quarter are now seen at $0.68-$0.78, above estimates of $0.50.
CEO Nolan Archibald anticipates "continued stabilization of demand, but not a near-term rebound."
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The Dow 30 in Real TimeThe CNBC Stock Blog
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Questions? Comments? tradertalk@cnbc.com
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505f6ec906a3d30a06f89139ccb70ead | https://www.cnbc.com/2009/10/22/home-buyer-tax-credit-fraught-with-fraud.html | Home Buyer Tax Credit Fraught with Fraud | Home Buyer Tax Credit Fraught with Fraud
Am I surprised? No. Am I disappointed? Sure.
The first time home buyer tax credit, which has been credited with adding 355,000 home buyers to the market so far that would not have bought a home without it, and which is under heavy pressure on Capitol Hill to be extended and expanded past its Nov. 30 deadline, has been a haven for criminals.
Slideshow: States Where the $200,000+ Crowd Lives
What I thought would be a snoozer hearing in a House Ways and Means subcommittee this morning has incensed and amazed me. Testimony from the Hon. J. Russell George, Treasury Inspector General for Tax Administration, reports hundreds of millions of dollars, yep, your and my tax dollars, have been paid out to scam artists and just plain cheater buyers through the housing tax credit.
Now don't get me wrong.
I am aware that our entire tax system is played by criminals as well as usually law-abiding citizens who just want to cheat themselves into a few extra dollars.
There's no way any tax credit could exist without some fraud, but what gets me here is the lack of foresight that the IRS showed in implementing at least some filters to rid this particular credit of the most audacious fraudsters.
Mr. George began his testimony, "I am very concerned by the findings of our audit in the states that are involved."
He then went on to enumerate the crimes:
74,000 claims filed by buyers who already own a home Cost: $500 million 19,300 claims filed for homes that had not yet been purchased Cost: $139 million 580 claims filed by "children," some as young as four years old Cost: $4 million
Total so far: $643 million paid out in potentially fraudulent claims.
And don't forget, many many home buyers have not yet filed their returns.
So were some of these mistakes? Perhaps.
But Linda Stiff, Deputy Commissioner for Services and Enforcement at the IRS, testified before the same committee that "The IRS has already identified over 160 potential schemes resulting in scores of criminal investigations. We have also selected more than 100,000 returns for examination." She then told the committee that 8000 taxpayers are under "criminal investigation."
Slideshow: Million Dollar Homes—Today vs. Two Years Ago
When asked buy a committee member if she thought the fraudulent claims might just be honest mistakes, she replied, "Based on what we've seen thus far, it's too early to weigh in."
Now here's what gets me. Mr. George told the committee:
"In a memorandum that TIGTA issued to the IRS on November 25, 2008, we recommended the IRS ensure that information on each line of the Form 5405 [the home buyer tax credit form] was transcribed for paper returns and that the information from the form be used to validate claims for the First-Time Homebuyer Credit. We also recommended the IRS require that taxpayers attach documentation to substantiate a home purchase in order to verify eligibility for the Credit. In a response to our memorandum, the IRS disagreed with both of TIGTA’s recommendations...the IRS considers the requirement to supply documentation burdensome..."
Until May of this year, the IRS did not have filters in place to identify whether or not those claiming the credit were in fact first time buyers. When Mr. George's people looked into that, they found the 74,000 taxpayers "had entered information on their individual income tax returns for one of the prior three years ...including deductions for home mortgage interest, real estate taxes, deductible points and qualified mortgage insurance premiums."
I'm thinking those are kind of hard to miss, when they're on the IRS's own forms!!
And even when the IRS implemented examination filters to identify erroneous claims in May of this year, "the age of the taxpayer receiving the Credit was not one of the specific filters implemented..." says Mr. George's report.
Once again, a no brainer there. Let the children of the world unite and buy U.S. homes!
Okay, now to be fair, Ms. Stiff launched a strong defense. The IRS was faced with implementing two different home buyer tax credits, one from the previous administration (a $7500 credit that had to be paid back) and one from the current administration ($8000 yours forever). Stiff enumerated various outreach and education programs that the IRS used and then added:
"Administering the FTHBC poses challenges similar to those the IRS confronts with other refundable credits --namely, it has a number of eligibility rules and the Federal government lacks third-party data sources which can be used to verify taxpayers' eligibility for the credit."
There is no question that the first time home buyer tax credit juiced the housing market in 2009. Almost 1.5 million buyers took advantage of it, and through the credit the government added nearly $10 billion in home purchasing power to a housing market that was on life support.
As we debate the pros and cons of an extended or expanded home buyer tax credit, we must scrutinize the filing process itself further and spend as much time debating the safeguards for said credit as we do its potential merits.
American Greed-Some People Will Do Anything For Money
Questions? Comments? RealtyCheck@cnbc.com
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c0a227ea2edd0fcc158b435471c82693 | https://www.cnbc.com/2009/10/22/i-want-a-new-drug.html | I Want A New Drug | I Want A New Drug
I'm about to head out to my 30th high school reunion in L.A. this weekend. 30 years! Impossible. Seems like only yesterday that I saw my parents off to their 25th. Time flies.
Yep, that's me with the big 70s, part-in-the-middle hair and the stylin' light blue, plaid polyester sportcoat.
The pharmaceutical industry is sometimes accused by critics of inventing medical conditions to create a drug market. Think restless leg syndrome and other problems that are such easy targets for funny commercial spoofs on shows like "Saturday Night Live."
Well, I've got an idea that would either make good fodder for a comedy show skit or, perhaps, offer a steady stream of revenue forever for some bold, innovative drug company.
It's a vaccine or just a four-hour antidote for high-school-reunion anxiety.
I've even got a proposed commercial name: "Reunaphoria."
This shouldn't come as a surprise, but I wasn't Big Man On Campus in high school. I was editor of the school paper and drum major of the marching band. Those are two geeky things that definitely don't make you part of the "in crowd." Sure, I had a strong circle of friends and a good time, but I think because I wasn't a popular BMOC or even a "surfer" that, in one of the strangest psychological phenomena, old insecure feelings immediately wash over me the moment I step foot into the hotel ballroom where the reunion's being held. Surfer, by the way, refers to the coolest clique designation at the time in my little section of the San Fernando Valley. You were either a surfer, a lowrider, a stoner or, for girls, a soche. I'm just guessing how that was spelled. It was a euphemism for stuck-up.
Class of 2009 - Where Are They Now? Inside The Crisis
So, some of you might ask why I might subject myself to the emotional torture. Well, I go, frankly, because I want to and also because the ritual is a bit of a family legacy and tradition. My mom was always on the reunion planning committee up until her 55th reunion shortly before she died. And this could probably rarely be repeated in today's transient culture, but three generations of Huckmans went to my high school. Both of my parents, my two siblings and I, and my brother's three kids all went to the same high school. Plus, I won't deny that I'm proud of myself.
No doubt, reunions are strange rituals. Not to mention, they've become a lucrative little industry for reunion planners as most people are simply too busy to sit on reunion planning committees anymore.
Love, Love Me 'NOT' For This Beatle Mania
In general, it takes about 10 years to develop a new drug. So, I figure by the time my 40th rolls around I might be able to talk to my doctor about "Reunaphoria." Until then, a deep breath will have to do the trick.
Please feel free to share your favorite/worst reunion story with the new Pharma's Market Comment Section.
Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman
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fc2216ec95c14a883aa3e27bfe62c75c | https://www.cnbc.com/2009/10/22/kemps-keys-to-growth-and-exceptionalism.html | Kemp’s Keys to Growth and Exceptionalism | Kemp’s Keys to Growth and Exceptionalism
I believe that free-market capitalism — on the supply-side and along with King Dollar — is the best path to prosperity. That’s the model my late dear friend Jack Kemp successfully espoused to President Reagan more than 30 years ago. It’s the incentive model of economic growth. It conquered the inflation of the Carter years, and launched a 20-year prosperity that saw the creation of 45 million new jobs and a twelve-fold stock market increase. It’s the model that expanded the investor class to 100 million strong through the Clinton 1990s.
US Slashes Top Executive Pay At Seven Bailed-Out FirmsHas The Obama Team Gone Too Far On Pay - Vote Now
I spoke this week at the launch of the Jack Kemp Foundation in Washington, and I emphasized this model along with the universal, timeless economic principles on which it is based. Today this model seems all but forgotten in the nation’s capital, but I firmly believe it is just what we need to reignite American economic growth and exceptionalism.
Here are the model’s critical components:
First, a sound dollar — King Dollar. Second, low and flat tax rates to incentivize positive economic behavior by making it pay more, after-tax, to work, invest, and take risks. Third, free trade. Fourth, limited government.
Fifth, market-driven solutions to ameliorate poverty and provide everyone with new opportunities to climb the ladder of success.
Jack Kemp believed in growing the economic pie, not redistributing it. And he believed in growing it large. He would have hated today’s notion of a “new normal” — of 2 percent growth and high unemployment.
He also disagreed with raising top marginal tax rates, and he certainly would have opposed the extravagant spending-and-borrowing schemes that we’re saddled with today. We’ve clearly gone off the supply-side path — off the winning path that Jack helped build.
Growth, empowerment, opportunity, and incentives — those were Jack’s key words. Now, more than ever, these principles must be revived. They are essential to America’s greatness. To her boundless optimism. To her prosperity and success.
Questions? Comments, send your emails to: lkudlow@kudlow.com
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033098618ca5f39d5c9ee79cf43e9b92 | https://www.cnbc.com/2009/10/22/lightning-round-ot-china-mobile-barrick-gold-wynn-resorts-and-more.html | China Mobile :China Unicom is a better pick, Cramer said.
Cramer's 12 Stocks to Play the Recovery
Melco PBL Entertainment : Go with Wynn Resorts instead, Cramer said.
Research in Motion : Don’t buy RIMM, Cramer said, until it goes below $60.
Barrick Gold : Cramer would rather see investors in SPDR Gold Shares or Agnico-Eagle Mines .
Cramer's charitable trust owns China Unicom.
Call Cramer: 1-800-743-CNBC
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com
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f6f3f7c7cf9bf378f8b1e8b6c1904a68 | https://www.cnbc.com/2009/10/22/longest-monthly-streak-for-the-nasdaq-in-14-years.html | Longest Monthly Streak for the Nasdaq in 14 Years? | Longest Monthly Streak for the Nasdaq in 14 Years?
There’s still a week-and-a-half left in the month, but the markets are currently maintaining yet another month of gains. This month, the Dow Industrials is up 2.4%, the S&P 500 is up 2.3%, the Nasdaq Composite is up 1.3%, while the Russell 2000 is clinging to a 0.1% gain.
If these gains continue to hold at the end of next week, the Dow would have its 7th month of gains in the last 8 months. On the other hand, the S&P, Nasdaq, and Russell haven’t had a monthly decline since February and each is on pace to have its 8th straight month of gains.
>> Top Stocks Since the Rally Began
Such a streak is rare. The last time the S&P was up 8 months in a row was between June 2006 and January 2007. It’s more impressive for the Nasdaq & Russell though. The Nasdaq hasn’t had an 8-month winning streak since the tail end of its 10-month streak in 1995, while the 8-month winning streak will be the Russell’s first since its own 8-month streak 14 years ago.
Take a look at some of the best and worst movers so far this month (data as of close on October 21):
Top 5 Dow Industrials Components
CAT up +13.77% for the monthCVX up +9.29% for the monthUTX up +7.34% for the monthXOM up +6.85% for the monthDIS up +6.45% for the month
Bottom 5 Dow Industrials Components
TRV down -2.46% for the monthT down -3.96% for the monthVZ down -4.10% for the monthGE down -5.42% for the monthBA down -6.50% for the month
Top 5 S&P 500 Components
LXK up +29.39% for the monthHOG up +23.22% for the monthSLM up +23.17% for the monthMCO up +22.73% for the monthBTU up +20.61% for the month
Bottom 5 S&P 500 Components
IPG down -17.95% for the monthBSX down -22.47% for the monthMI down -25.53% for the monthPCS down -29.59% for the monthMBI down -33.63% for the month
Top 5 Nasdaq 100 Components
ADSK up +13.15% for the monthJOYG up +12.89% for the monthGOOG up +11.14% for the monthAAPL up +10.56% for the monthCERN up +9.35% for the month
Bottom 5 Nasdaq 100 Components
GENZ down -9.34% for the monthCMCSA down -10.49% for the monthNVDA down -10.98% for the monthWYNN down -12.15% for the monthVRTX down -13.19% for the month
Comments? Send them to bythenumbers@cnbc.com
bythenumbers.cnbc.com
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972b257cc319a1cf38c7bbabc8f01448 | https://www.cnbc.com/2009/10/22/market-tips-stocks-at-backend-of-rally.html | Market Tips: Stocks at Back-End of Rally | Market Tips: Stocks at Back-End of Rally
Global stocks fell on Thursday, tracking Wall Street's overnight losses as some corporate earnings disappoint. The dollar rose while oil and gold took a breather. Experts told CNBC markets are heading for a down period, so it may be wise to invest in safe-haven gold.
Down Trend Seen for Markets
Markets are at the back-end of the rally and are heading for a down period, says Matthew Kidman, portfolio Manager at Wilson Asset Management.
Gold's Broad Appeal Remains
Gold still has broad appeal, says Richard Kang, chief investment officer at Emerging Global Advisors, hence its current high price is not a surprise.
Stick to Gold
Stay in gold as it will continue to be a good investment, says John DiPlacido, oil trader and president at Energex.
Dollar Will Continue to Weaken Vs. Euro
The U.S. dollar will continue to be weak, says John Kyriakopoulos, head of currency strategy at National Australia Bank, especially against the euro.
Outlook for US Dollar Remains Weak
The outlook for the U.S. dollar remains weak, says King Lip, portfolio manager at Baker Avenue Asset Management.
Focus on Higher Quality Banks
Focus on higher quality banks like JP Morgan, says King Lip, portfolio manager at Baker Avenue Asset Management. He tells CNBC that one of the major problems going forward is how banks will cope when interest rates are no longer low.
Clear Path Ahead for Autos
Expect the key Japanese automakers to perform better than expected, says Andrew Phillips, analyst with KBC Securities Japan. He discusses the outlook for the industry.
Bullish on Emerging Markets
Richard Kang, chief investment officer at Emerging Global Advisors, explains why he sees the long-term trend gravitating towards emerging markets. He shares his upbeat outlook.
Valuations in Sri Lanka Remain Attractive
Valuations in Sri Lanka remain attractive, according to Ranjan Hulugalle, director of First Guardian Equities. He reveals where he is finding investment opportunities.
Bullish on China
Alvin Chong, head of research at Sun Hung Kai Financial is bullish on China in the long term. He explains why valuations there are still not very demanding.
Hot HK Sectors to Bet Your Money On
Steve Tse, research manager at BEA Union Investment Management favors Hong Kong-listed mainland banks, energy stocks and construction plays.
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2f5064b9bbd0760e62cbb5913c8c0d49 | https://www.cnbc.com/2009/10/22/nucor-ceo-job-crisis-still-threatening-recovery.html | Cramer may be the sultan of stocks, but Dan DiMicco’s the Buddha of American business. On Mad Money, the enlightened Nucor CEO is the go-to guru for all things US economy, which is why he’s a regular guest on the show. Even the White House has summoned him for his expertise.
Cramer's 12 Stocks to Play the Recovery
“No one has a better handle on this issue,” Cramer said.
Two weeks ago, DiMicco told Mad Money that the real crisis in this country was jobs. Well, after this morning’s worse-than-expected jobless claims, with states getting 11,000 more applications for unemployment than anticipated last week, the situation’s much the same. Cramer said he couldn’t believe in a true recovery until the number drops below 400,000, and that won’t happen without an act of Congress.
But that has been DiMicco’s whole point: The private sector can’t do it alone. Washington has to step up. Otherwise its inaction could hurt an already fragile economy, which includes a struggling steel industry. Nucor may have reported an upside surprise, but its business is under some serious pressure right now.
Both those topics drove the most recent conversation between Cramer and this top-notch manager. What’s the state of the steel industry? How should the government approach the employment problem? Watch the full interview to see what DiMicco had to say.
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a25e6d4f5f705fddf90b0f4d551950ed | https://www.cnbc.com/2009/10/22/pick-a-winner-for-900-return-motley-fool.html | Pick a Winner for 900% Return: Motley Fool | Pick a Winner for 900% Return: Motley Fool
If the last five years are anything to go by, then a strategy of picking individual stocks beats just buying the major indexes – provided you pick the winning stocks, research from financial Web site the Motley Fool showed.
Stocks upCNBC.com
The FTSE-100 has risen just 13 percent over the last five years, an average return of around 2.5 percent per year, the research showed. But the top performing stock in the index, Autonomy, has risen more than 900 percent over the same period.
"Allocating, say, a small portion of a share portfolio to just one or two of the companies that have outperformed the index … would have delivered better returns than investing in the index alone," the Motley Fool said in a statement.
Looking back on the main gainers of recent years, some of the returns seem very tempting. The ten top-performing shares in the FTSE have risen over 400 percent in the five year period, the report said.
Usually, people prefer to invest in an index as putting all one's capital in a few stocks is risky because the chance of picking out a loser is as high as that of picking a winner.
Here are some of the top stocks highlighted in the report: Tullow Oil up 765 percent; Randgold Resources up 694 percent; Vedanta Resources up 539 percent; Antofagasta up 285 percent.
Aside from the basic resource sector, which has clearly done well over the last five years, insurance group Admiral also performed well and rose 260 percent.
The financial crisis has a lot to do with the weak performance of stock indexes over recent years. The historical average is around 11 percent per year, but the slump in 2008 helped knock the average return over the last five years down to 2.5 percent per year for the FTSE.
Slideshow: 20 Stocks With Potential To Drop
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9ca71741f25b7a04f10a55641b53fd8e | https://www.cnbc.com/2009/10/22/schork-oil-outlook-where-are-the-green-shoots-now.html | Schork Oil Outlook: Where Are The Green Shoots Now? | Schork Oil Outlook: Where Are The Green Shoots Now?
Key takeaways from yesterday’s DOE report:
Let’s pick up where we left off yesterday… at the moment, refiners have apparently given up on making gasoline. Yesterday’s report appeared to confirm the prior week’s reported collapse in gasoline production. Over the last two weeks (October 09th and 16th), gasoline production averaged 8.46 MMbbl/d. That represents a drop from the prior two-week average of 803 Mbbl/d or 8.7%.
That is the second largest non hurricane-related drop in output since 1982, as far back as the DOE provides data. Mind you, gasoline supplies are comfortable for this time of year. As of last Friday supplies stood at 206.95 MMbbls; that places inventories on the higher end of the 2003-07 range. Therefore, there has been relatively little movement on the front-end of the NYMEX RBOB curve.
However, as we look ahead to next summer’s driving season, the market it is clearly growing uncomfortable with regard to supply (see chart in today’s issue of ). For instance, since the beginning of this month, the ratio on the cross-seasonal Mar’10/Apr’10 spread has tightened from 0.936 to 0.946. Furthermore, the ratio between the Apr’10 (the first summer-graded contract) and the Sep’10 (the last summer-grade contract) has shifted from a 0.996 contango to a 1.004 backwardation.
Get Plugged In: Toyota And Honda Take Cautious Approach With Electric Cars
On one hand the flattening in the crude oilterm structure in New York will incent refiners to transfer the extant glut in oil supplies into products. That is pretty much a given in light of the difference in the carry markets between WTI and the products. However, we can not lose sight of the fact that the front of next summer’s marketing year is gaining on the back. That usually occurs when the market perceives tightness in the future availability of supply… and that is usually a bullish signal.
Refinery activity continues to lag. Over the last four reports throughput averaged 14.3 MMbbl/d. That is 569 Mbbl/d or 3.8% below the 10-year average, exclusive of outliers in 2005 (Hurricane’s Katrina and Rita) and 2008 (Hurricane’s Gustav/Ike). The drop in throughput coincides with the plunge in the NYMEX 3:2:1 crack spread we saw in September. However, since the beginning of October the yield on the so-called refiner’s crack has been on the mend. That could translate into greater than expected demand for crude oil once refiners return from maintenance.
Slideshow: Nature's Fury-12 Most Expensive Hurricanes in U.S. History
In the meantime, less output is a corollary of less input. That seems simple. With less crude oil going into the teapot, there is less steam coming out of the spout, hence the dearth of gasoline production. What’s more, given the premium on nearby heating oil cracks, refiners want to maximize distillate production anyway. Whereas gasoline output is down near historical lows, distillate output is right around its five-year average. Therefore, despite the spike last week in implied oil furnace demand for space-heating, the reported draw in overall stocks was well within the historical parameter.
Before we leave off, we have to say something about demand… or the lack thereof. As we just said, weather-related demand was stout last week. For example, New York City saw 108 combined degree days. That is 51 days or 90% above normal. Minneapolis saw an additional 99 days, 94% above normal.
On one hand we did get a large draw in propane, but in light of the brutal cold in the central U.S. last week, the reported 1.3 MMbbl draw seems reasonable. On the other hand, a meager 0.23 Mbbl (-0.5%) draw in PADD 1 heating stocks (>.05%) does not seem reasonable.
Oil, Gold, Natural Gas Prices Now
In fact, according to the DOE’s product supplied estimate, aggregate demand over the last four weeks averaged 18.8 MMbbl/d (see chart in today’s issue of ). That is 1.6 MMbbl/d or 8% below the 2003-2007 average. In fact, a year ago at this time the global economy was staring into the abyss, yet current demand is only 0.5% greater this year.
Oh yeah, a year ago NYMEX WTI average $91.94. This year WTI averaged a relatively modest $71.01 for the four weeks ended last Friday. All those alleged green shoots from the summer notwithstanding, oil over the last month traded at a 22% discount compared to last year, but that was only good for a 0.5% uptick in demand. Just think how strong demand is going to be now that the year-on-year price comparisons have crossed.
Read what other CNBC Contributors are saying...
_________________________
Stephen Schork is the Editor of, and has more than 17 years experience in physical commodity and derivatives trading, risk systems modeling and structured commodity finance.
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5165d81340868b7212ef68d0e9bc21f2 | https://www.cnbc.com/2009/10/22/sell-block-the-death-of-the-data-center.html | By almost all metrics, looks like a great stock. The data-center company reported an upside surprise on Wednesday and announced a much-praised acquisition. The share price is just $4 from its 52-week high of $100, a 121% jump year-to-date. And of the 25 analysts that cover EQIX , 16 rate it a buy and nine say it’s a hold. Not one recommends selling.
But they’re wrong, Cramer said Thursday.
Cramer's 12 Stocks to Play the Recovery
Because only telco analysts follow Equinix, he said, these Wall Street researchers have missed the introduction of a game-changing technology that will make the date-center business model obsolete.
“All of these stocks, especially Equinix,” Cramer said, “are in the danger zone.”
These data-center firms own buildings in which they house the Internet’s servers. It’s a cost-prohibitive venture for the carriers themselves, so they outsource the work to companies like Equinix. Well, cost prohibitive until now, that is.
Intel last week on its conference call referenced brisk sales of its new family of Nehalem DP processors for servers, one of which takes the place of eight to nine older-generation servers. That means Equinix is about to have eight times more space than normal, in a commercial real estate business where growth is measured by the square foot. Cramer said it was doubtful the company could lease that extra space given the ailing commercial real estate market.
The analysts largely consider just the growth of Internet traffic, which before Intel meant more servers, and in turn, more space for those servers. That was great business for Equinix. But now the company’s clients don’t really need to outsource this work, what with cheaper, better product on the market. These clients can run their own data centers, leaving Equinix with a lot of empty warehouses.
Cramer chose to pick on Equinix specifically because of that aforementioned acquisition. The company will buy Switch & Data Facilities for $689 million, which the analysts herald as a key network expansion and enhancement of market position. But such a move in a business that’s about to get a lot weaker probably won’t pay off.
“Get out of the data-center stocks,” Cramer said. “I see an industry that’s about to be brought low by new technology, so I think you should sell, sell, sell.”
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06a963c65dca55ed47e32ebd239a8c04 | https://www.cnbc.com/2009/10/22/topshop-billionaire-on-venture-with-simon-cowell.html | Topshop Billionaire on Venture with Simon Cowell | Topshop Billionaire on Venture with Simon Cowell
Topshop owner and retail billionaire Sir Philip Green has spoken to CNBC about his closely-guarded business venture with Simon Cowell, the American Idol star, saying details will be available soon.
VIDEO1:0401:04Topshop Billionaire on Venture with Simon Cowell
The venture is "work in progress" and we will hear more "hopefully before the end of the year," Green told CNBC.
Rumors first surfaced in late June that Green and Cowell were working together to create a global entertainment group – but both parties have been tight-lipped about any details.
It was speculated that the pair, who are also close friends, will create a venture that will hold all the rights to Cowell’s hit TV shows – as well as allowing Cowell to roll out entertainment concepts worldwide.
Asked by CNBC if this venture should be something that big media companies – like CNBC parent NBC Universal – should be watching, Green said: “There's a vision. I think it would be fair to say that Simon's got a proven track record in the market place of producing winning shows. Hopefully outside of the TV area there's things to do in a lot of other areas in relation to the program, the brand.”
"What else can we do? Let's see what we can develop. Work in progress. My night job," he added.
- Watch the Sir Philip Green comments above.
Video - Arcadia Profit Rises 13% on 'Efficiency'
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536c0d15d424546faadf9b1dfe40f21c | https://www.cnbc.com/2009/10/22/toyota-and-honda-take-cautious-approach-with-electric-cars.html | Toyota And Honda Take Cautious Approach With Electric Cars | Toyota And Honda Take Cautious Approach With Electric Cars
The Tokyo Motor Showis a case study in the electric car split. Some companies, like Nissan are trumpeting future EV models and talking about the coming age of electric vehicles. Heck, CEO Carlos Ghosn, echoing his comments in Frankfurt, Germany has used the Tokyo Show to announce Infiniti will have an electric model here in the U.S. In the next couple of years. Compare that with the very cautious approach at Toyota and Honda.
In the last couple days both companies unveiled electric cars and talked about the future of EVs. Aah, but unlike Carlos Ghosn, the executives at Toyota and Honda are much more cautious about the future demand for going green. In short, they question how many people will want to drive and electric car, and where they'll drive those vehicles.
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Toyota president Takeshi Uchiyamada said, "I think electricity will play a part but the cost and performance of the battery is insufficient in the lithium ion batteries available today. That's why we think short-distance electric cars will be popular at first. Even then, we don't think they will replace all the cars in side the cities today." That's a polite way of saying; you'll see a smattering of electric cars here and there- mainly urban areas- but don't expect a huge presence of electric cars on the road for many years.
The Carbon Challenge - A CNBC Special Report - See Complete Coverage
What about Honda?
President & CEO Takanobu Ito says his firm would consider building a green sports car, but in the meantime, when it comes to Honda rolling out its first EV, Ito says, "We haven't decided on an exact date but my feeling is that we want consumers to be able to experience what Honda thinks will be a fun electric car in the not too distant future."
Slideshow: America's Greenest Companies: 2009
So why are the two auto makers who have been leading the industry in developing gas-electric Hybrids not jumping up and down and proclaiming electric cars are coming and we'll have the first ones! Part of the reason is the concern over cost. While the cost of developing lithium-ion batteries is dropping, they are still not cheap. And there are plenty of questions in the industry about when the cost of those batteries will be low enough for car makers to price EV models at a point the public will clamor for them. Coming off two of the toughest years Toyota and Honda have ever gone through, both companies are keeping a closer eye on how they spend their money.
Slideshow: Green Cities of the Future
This doesn't mean Toyota and Honda will ignore electric cars as they start to roll out and become more popular in the years to come. But both companies will eventually be there.
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e1092048dd014f30aef00725f5c25d7e | https://www.cnbc.com/2009/10/22/two-deals-hint-at-revenue-for-twitter.html | Two Deals Hint at Revenue for Twitter | Two Deals Hint at Revenue for Twitter
Twitter gets 55 million monthly visitors, it has raised $155 million in venture capital, and it has generated intense interest from Hollywood to Iran. But it hasn’t earned much revenue and certainly no profit.
Back-to-back deals on Wednesday to make the company’s steady stream of posts available to Microsoft and Google’s search engines may point to a potential new source of cash. How large, however, is not known. The terms of the deals were not disclosed and Evan Williams, Twitter’s chief executive, said in an interview that revenue was “not the focus of the deals.”
Microsoft said it did not plan to put ads on its Twitter search service for now, and Google said ads might appear at a later date.
Twitter
The deals represent the latest evidence of the intense interest in what is known as the real-time Web — the constant stream of posts and updates on Twitter, Facebook and similar services. Unlike traditional Web pages and blogs, that real-time information has not been easily integrated by search engines.
Microsoft has already included Twitter data in a service of its search engine, Bing. It demonstrated the service at Web 2.0, a technology conference in San Francisco. Google said that it would offer a similar feature soon.
The deals are not exclusive and fit into Twitter’s approach to doing business, Mr. Williams said. He raised the possibility of reaching similar agreements with other companies.
“A core of our philosophy has always been that Twitter is a distributed network and there’s multiple in points and out points that serve different users and different uses,” Mr. Williams said.
Unlike most Web companies, which seek to drive users to their Web sites, Twitter has said it does not care whether users see it through third-party applications on phones or computers or through sites like Bing.
“It’s ‘let a thousand flowers bloom,’ ” Mr. Williams said. “Other folks will attack the problem differently and present it in a different context that makes sense for different use cases.”
On Wednesday, Microsoft also said that it had reached a separate agreement to soon include status updates from Facebook in Bing, but it gave few details of what that service would look like.
Sheryl Sandberg, Facebook’s chief operating officer, said that only status updates that were public would be shared with Microsoft.
Several search startups, including Twitter itself, have search services tailored to uncover Twitter posts and other “real-time” data. But none has yet figured out how to mine the most relevant results in the way companies like Google have for Web search, Mr. Williams said.
Twitter has experimented with one way to do it, showing users which topics people are most actively talking about on the site.
Bing will experiment with different approaches to show users the most relevant results by filtering out duplicates and trying to rank posts in order of importance based on who their authors are and other factors.
Slideshows
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“We are bringing you the best of real time right into the Web results,” said Yusuf Mehdi, senior vice president for Microsoft’s online audience business group, who demonstrated the service at the conference.
For now, Bing users interested in searching Twitter will use a separate service, at bing.com/twitter. Eventually, the company plans to further integrate Twitter search into Bing.
Google plans to offer a dedicated service to search Twitter and to blend Twitter posts into its main search results.
Marissa Mayer, Google’s vice president for search and user experience, said that access to Twitter’s trove of real-time data would “improve our relevance, our comprehensiveness and our quality.”
Brad Stone contributed reporting.
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dfa3c9bfb1ce250a6880003cf70a706a | https://www.cnbc.com/2009/10/22/will-banker-pay-cuts-trim-share-price.html | Investors are beginning to wonder if some of the Street’s top talent may pack up their bags and gallup out of Dodge due to government mandated pay cuts.
On Thursday the Treasury outlined plans for the seven companies that have not paid back TARP money to make deep cuts to their top executives' compensation.
They are Bank of America , American International Group , Citigroup , General Motors, GMAC , Chrysler and Chrysler Financial.
VIDEO0:0000:00Off the Record
Companies that have repaid the bailout money, including Goldman Sachs and JPMorgan , are not affected.
The cuts apply to the 25 highest-paid executives, and according to published reports, their total compensation, including salaries and bonuses, will be cut dramatically. Most basic salaries will be less than $500,000, an average cut of 90%.Will the move send top talent running for the exits?
CNBC's Charlie Gasparino says yes. “I talked to people at Merrill and Citi and they told me, if they cap my salary I’m gone.”
So what’s the trade?Tim Seymour tells the desk the action in the options market speaks volumes -- at least in Citi. Investors are selling upside calls in Citigroup above $5.50. It suggests they don’t think the stock can go any higher than that.What do you think? We want to know!
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .Trader disclosure: On October 22nd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (CEPH) Call Spread; Najarian Owns (LAZ), Is Short (LAZ) Calls, Owns (LAZ) Puts; Najarian Owns (RIMM) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO) Call Spread; Finerman's Firm Owns (CLX), (MSFT), (NOK), (WMT); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO), (UNG), (CAKE); Finerman's Firm Owns (YUM); Finerman's Firm Owns (BKC); Finerman's Firm Is Short (CPKI); Terranova Owns (SUN), (HES), (NOV), (GS); Seymour Owns (MSFT); Seygem Asset Management Is Short (MELI)For JoeTerranovaTerranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)For Bill FleckensteinFleckenstein's Fund Owns (MSFT)Fleckenstein's Fund Owns (LLY)Fleckenstein's Fund And Fleckenstein Own GoldFleckenstein Owns (LLY)CNBC.com with wires
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fe644b8bec163b551bb82228145787eb | https://www.cnbc.com/2009/10/22/windows-7-open-ballmer-on-the-outlook.html | Windows 7 Open; Ballmer on the Outlook | Windows 7 Open; Ballmer on the Outlook
That big whooshing noise you might be hearing today is a massive and collective sigh of relief out of Redmond that Microsoft can get that Vista yoke off its neck and now focus the world on Windows 7 instead.
The event gives me the opportunity to hear from CEO Steve Ballmer, who sat down with me at company headquarters for a wide-ranging, 30-minute interview about the operating system release, competition with Apple and Google , his thoughts on the oft-rumored Zune phone, and even whether he's worried about his job after a decade of virtually zero movement in the company's share price.
VIDEO0:0000:00Ballmer on Windows 7, MSFT
I found a typically ebullient Ballmer, but thoughtful and analytical too. Equal parts bombast and business-like. And supremely confident since the market might focus on the horse race between Microsoft and everyone else, but he focuses on sheer numbers and dominance and how to maintain it.
Windows 7 is a triumph for Microsoft, plain and simple. I've spent some time with the software, I found it simple, slick, sometimes fun, far more intuitive than its OS predecessors. Yes, it closes the gap with Apple, but Snow Leopard, to me, still offers the clear advantage.
Ballmer doesn't seem to care about that though. It's not about a comparison to Apple, he tells me. It's about bringing innovation to his customers who should be very pleased with this version of Windows.
"I think Windows 7 will be the biggest, one of the biggest products to hit the tech industry this year," Ballmer tells me.
"Just because Windows is used on about 1 billion computers around the planet. They'll be another 300 million machines that ship this year, and the diversity of PCs that ship with Windows 7, the simplicity that Windows 7 brings, I think it's a pretty banner year. I think the things that everybody's going to react to are: Wow, this is simpler; wow, this feels snappier, more responsive," he says.
On competing with Google: "I think you have Search, and things that are not Search. In the area of Search, it's clear Google has a dominant market share globally, very strong position, one of the strongest I've ever seen in the tech business, but we're hopeful through innovation, maybe we can make a bit of a dent in that."
"On the other hand, what about Google in these other markets? So far, Google really has no proven track record of success outside the area of Search. They're a well-financed company, and we'll see what happens. We certainly take them very seriously, but their real success record is with Search, where they are dominant, and now they're trying to elbow their way into adjacent markets, distributing their browser with their Search, YouTube and the like, and we'll see what happens."
On Microsoft's Search engine Bing: "Will there be innovation over the next several years in Search? I think the answer can be yes. Now there needs to be some competition, because I think we all would probably agree the user-interface and experience for Search hasn't changed much over the last four or five years. And our opportunities to push the pace, and we pushed it with Bing I, and then Bing II and Bing III and Bing IV. Bing, Bing, Bing, Bing, Bing! "
"We're going to keep pushing the pace of innovation, the user experience, and the business model, and we'll see where we get. We're going to give it a run, but there's no question Google's got a dominant position."
On competing with Apple and the focus on Apple's growing market share: "Still 4 percent. I don't know why anybody thinks they're selling incredibly well... I admit, they've gone up from whatever it is, 2.5 percent to 3.2 percent, and they're doing well. (So I say, but yeah, even that's a 50 percent increase.) They're doing well. (He smiles.) That's right."
This has got to get under your skin, I ask. Do you even care what about what happens to Apple?
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"Sure we compete with Apple. Apple is a good competitor. It's a good competitor. One we compete well with. It's amazing: people say Apple sells 10 million PCs. There will be 300 million Windows PCs sold in the same time frame. So it is interesting to me people spend so much time talking about the 3 percent of the market in that case."
"Apple again, is a number 3 player in smart phones, but certainly the most talked about number 3 player. Nokia, RIM , we with our Windows phones, kind of neck and neck, probably a shade behind Apple on that. And it is interesting. It doesn't frustrate me. Apple does interesting work. The market wants to talk about, I just want to compete with it well, and I wouldn't trade our 300 million new users a year for their 10 million. I just wouldn't do it. I kind of like what we're doing and the way we're serving the market."
I asked about Microsoft's ad campaign taking on Apple. I said, it seemed Microsoft was saying, "We have Windows 7, we have the better price, we have the dominant market, and then there's Apple and finally the consumer is coming around to that, or is it more a case that Apple still has the cool factor, we beat 'em on price and people settle for us."
He seemed taken aback by this: "I don't think so Jim. I think the consumer really gets it. Consumers... they're very smart. In aggregate, they buy what they want to buy, with our advertising, without our advertising, with Apple's advertising, without Apple's advertising. They buy what they want to buy. And 300 million of 'em a year choose to buy ours."
We're posting our entire interview. In an upcoming post, Ballmer on the Zune phone, and his job security. Take a listen. It was interesting stuff. And we'll be running clips all day long. I'm very curious about your thoughts on what Ballmer says. Drop me a note and let me know.
Questions? Comments? TechCheck@cnbc.com
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9e1c51eeae73aa69ae4f99ef2d0f86a8 | https://www.cnbc.com/2009/10/23/100th-bank-failure-of-the-year.html | 100th Bank Failure of the Year | 100th Bank Failure of the Year
More banks have failed in 2009 than the rest of the decade combined. The latest data from the Federal Deposit Insurance Corporation (FDIC) shows that the 100th bank of the year has shuttered its windows Friday. Partners Bank in Naples, FL became the latest victim to the economic downturn. The closing of six banks in addition to Partners were announced later Friday evening bringing the total to 106 for the year. Since the Dow and S&P peaked in October 2007, over 130 banks have met their end, with ~80% of them happening this year.
The National Bank of Commerce in Berkeley, IL and the Bank of Clark County in Vancouver, WA were the first two banks to close on January 16. Since then, Georgia has had the most failures with 20 closings this year and 5 last year. Illinois is next in line with 17 this year followed by California with 10. Twenty states have yet to see any closures.
Georgia laws have facilitated many smaller community banks over larger giants. The population boom in Atlanta led to many more opening in the past two decades, only to be unable to withstand the financial crisis of 2008-09. At the end of 2008, GA had 344 banks which was more than California, despite CA having a popluation four times that of the southeastern state.
VIDEO0:0000:00Bair: More Bank Failures to Come
(FDIC Chairman Sheila Bair discusses bank failures.)
Less competition in GA may help bigger banks like Bank of America , SunTrust , and Wells Fargo , which bought Wachovia, gain share.
Comments? Send them to bythenumbers@cnbc.com
bythenumbers.cnbc.com
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17a71779ea39441c788c347297dafea5 | https://www.cnbc.com/2009/10/23/7-oil-and-gas-stocks-you-need-oppenheimer-experts.html | 7 Oil and Gas Stocks You Need: Oppenheimer Experts | 7 Oil and Gas Stocks You Need: Oppenheimer Experts
Oil prices are up almost 140 percent from the 52-week low and up 82 percent year-to-date. Oppenheimer & Co.’s Fadel Gheit, managing director of oil and gas research, and Scott Burk, senior analyst of oil services and ocean shipping, told CNBC where they see investment opportunity. (See their stock picks, below.)
VIDEO0:0000:00Big Opportunities In Oil?
Oil is "absolutely a place to invest,” Gheit told CNBC. “But you really have to take the whole ride of the volatility. I do believe that oil prices will remain inflated for the next few months.”
Gheit said the price of crude will remain more connected to factors other than supply and demand: the US dollar, global tension and speculation are all factors.
“In my view, [the move in oil] is pure speculation,” he said.
Energy/Fuel Prices Charts:
Crude Oil Futures
Natural Gas Futures
Heating Oil Futures
“I still believe that demand does not support [the current price]…But the CFTC* is not doing anything about it, the U.S. government is not doing anything about it. OPEC is happy about $50 oil 6 months ago and now they’re happy about $80 oil. We already have $80 oil and we can get even $100 oil.”
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Gheit said investors can make money with energy stocks that have “momentum.”
“Natural gas prices have been depressed for a very long time, they’re likely to rebound... So we are still bullish on natural gas stocks,” he said.
“But we think oil will be a place to invest for the long run. Oil is not going to go out of fashion anytime soon, but the investor has to be careful when the stock gets overvalued. They have to pull back a little bit.”
CNBC Data and News Pages:
Dow 30 Stocks—In Real Time Energy Sector Headlines and FeaturesWhere's the US Dollar Today?
In the meantime, Burk underscored that if the U.S. dollar continues to weaken, it will help oil prices.
“Specifically for the offshore drillers,” he said. “There’s a correlation of 93 percent between oil prices and stocks.”
He added that oil prices should stabilize in the $70 to $80 range.
Burk Likes:
Atwood Oceanics
Pride
Diamond Offshore
Gheit Likes:
Apache
Devon
Chesapeake
Anadarko
* Commodity Futures Trading Commission
______________________________CNBC Slideshows:
Which Oil Nations Make Money?
______________________________
______________________________ Disclosure:
Burk does not own shares of ATW, DO, PDE
Gheit owns shares of DVN, but does not own shares of APC, CHK.
______________________________
Disclaimer
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5732a87fad09c0be978fed225e090ed5 | https://www.cnbc.com/2009/10/23/busch-fed-fueling-stocks.html | Busch: Fed Fueling Stocks? | Busch: Fed Fueling Stocks?
As US corporations continue to report better than expected earnings for Q3, it's hard not to be upbeat and positive on the outlook for the stock market. Honeywell, Amazon, Kia Motors, and Microsoft all beat expectations as 77% of companies in the MSCI World group have exceeded projections. The reasons for this outperformance are multifactoral from extreme cost cutting via job losses to an improved revenue stream. , 15 out of 17 companies reporting in the last 24 hours beat expectations.
Money appears to keep flowing back into equities and the rally continues to extend. However, I believe there's more at work than meets the eye. From the research I did for my book, World Event Trading, the one over arching investment rule for equities over time is this: buy when the central bank is easing. It's not perfect, but it works.
Slideshow - Central Banker Report Cards 2009
As most know, the Chinese have done what most around the world wish they could do. They have "encouraged" their banks to lend and lend the banks have. The Chinese had targeted 5 trillion renminbi of loan volumes and by the end of July over 7 trillion in loans have been provided. This is high powered, high velocity money. This lending has spilled out into all areas of the economy and has bled into the equity markets as well. Some research has estimated that as much as 20% has ended up buying stocks. Anecdotal evidence of pig farmers hoarding copper has shown up as well.
This leads me to contemplate that something similar may be occurring in the United States and the UK. The QE programs have essentially printed money and put it into the banking system. Unfortunately, this money is not high velocity as it has sat on the bank's balance sheets. The loan surveys for the UK, US, and some bank earnings reports have shown a drop in demand/volume of loans. However, we know that Goldman and Morgan Stanley reported large earnings due to trading. Is this related to cheap funds provided by the Fed?
More importantly, does it matter why stocks are going up as long as they go up? Not really, but we may be missing the trade here. Unlike China, velocity has remained subdued in the United States. If this were to change, then we could experience a similar market reaction as China did this year as money spills into speculation. This is not a market call for the next 5 minutes, but one for the next 12 months until the Fed tightens. It may help explain why stocks have not had a major pullback.
Granted, the Chinese are expecting to see inflation jump to 5%, but this is the price the Chinese are willing to pay to jack up the economy. Will the Fed be willing to do the same thing? With the US dollar under attack, the answer appears to be yes.
Stocks Mentioned Here
________________________ Andrew B. Busch is Global FX Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece and
and you can follow him on Twitter at
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a2179d6236a298db924d3fa4a221629e | https://www.cnbc.com/2009/10/23/buy-stocks-with-growth-value-anomalies-analyst.html | Buy Stocks With 'Growth Value Anomalies': Analyst | Buy Stocks With 'Growth Value Anomalies': Analyst
Nearly 80 percent of S&P companies have beat earnings expectations—is this due to low earnings estimates or is it a sign that the recovery is real? Michael Cuggino, president and portfolio manager at Permanent Portfolio Funds, and Tyler Dann, senior research analyst at Invesco Aim, shared their ideas. (See their stock picks, below.)
“To some extent, there are some bright spots in the quarter,” Dann told CNBC.
“At the same time, it’s getting beaten over the head repeatedly—and then finally not having that happen. Things are really not better, but you don’t feel as bad. That’s kind of how things have been.”
CNBC Data Pages:
Dow 30 Stocks—In Real Time Complete Earnings CoverageWhere's the US Dollar Today?
Dann said far fewer companies are exceeding sales estimates and investors are giving a “hall pass for better earnings with a little tepid sales.”
“We look for growth value anomalies,” he said. “Companies that are still growing, but are facing temporary controversy, which means that valuation have become depressed.”
More Market Intelligence:
7 Oil and Gas Stocks You Need: Oppenheimer ProsMarket Coach: Top 3 Trading Questions—Answered!Falling VIX a 'Very Bad Sign': Market Expert
In the meantime, Cuggino said investors shouldn’t discount the cost-cutting effects on earnings, adding that it’s “a healthy thing.”
“Sales forecasts continue to be light in most cases. That is an overhang on potential future growth, although I think that’s going to take care of itself with the growing economy going forward,” he said.
Dann Likes:
Nokia
Symantec
Cuggino Likes:
Morgan Stanley
FedEx
BHP Billiton
Cuggino Avoids:
Big Banks
______________________________CNBC Slideshows:
Rich Roads: The World’s Most Expensive Streets
______________________________
______________________________ Disclosure:
No immediate information was available for Cuggino or Dan.
______________________________
Disclaimer
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f71f461a3fa1180ff6ee4286efe8357f | https://www.cnbc.com/2009/10/23/charts-predict-upside-target-of-11600-for-the-dow.html | Charts Predict Upside Target of 11,600 for the Dow | Charts Predict Upside Target of 11,600 for the Dow
Aside from the London stock market, indexes in the U.S., Europe and China should carry on upwards, according to Daryl Guppy, CEO of Guppytraders.com.
The Shanghai Composite looks set to rise to 3,400 after a small correction, Guppy told CNBC Friday.
"We may expect to see a mild pullback developing. But it's very clear trending behavior towards 3,400 at the moment," he said.
The upside target is 11,600 for the Dow Jones Industrial Average, according to Guppy.
VIDEO2:3202:32More Upside for Dow, Dax, Shanghai Composite
"What we really need to see is the market pull to 10,200 and to successfully break through that. A successful break above 10,200 gives us an upside target of 11,600," he said.
If Germany's DAX index breaks above a key resistance level of 5,700, it "clears the way for a very solid and stable move towards 6,500," Guppy predicted.
The FTSE-100 index is nearing the 5,300 level.
"What we're seeing is some consolidation resistance coming in at this level, so we expect to some movement between 5,100 and 5,300," he told CNBC. "A break above 5,300 sets an upside target of 6,100."
Track Stock Funds, Bond Funds, Money Market Funds and ETFs Here
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9a5739f004ff3609318f242e908797fc | https://www.cnbc.com/2009/10/23/chrysler-financial-to-cease-business-within-2-years.html | Chrysler Financial to Cease Business Within 2 Years | Chrysler Financial to Cease Business Within 2 Years
Chrysler Financial, once the exclusive lending arm of the storied automaker, will liquidate and go out of business by Dec. 31, 2011, according to a letter from the U.S. Treasury Department.
The long-anticipated move will cost the battered Detroit area thousands of jobs as it struggles with an auto industry downturn and the bankruptcies and government-run restructurings of Chrysler Group and General Motors.
Last summer, Chrysler Financial employed 3,900 people, many at its headquarters in the Detroit suburb of Farmington Hills, although it has been reducing its work force. In September, Michigan had the highest unemployment rate in the nation at 15.3 percent.
Chrysler Financial is in the process of shifting much of its loan business to GMAC under orders from the government, with GMAC becoming the preferred lender for both GM and Chrysler.
The Treasury Department said in the letter to Chrysler Financial dated Thursday that the lender will liquidate its business and repay lenders and investors.
Chrysler Buildingzoonabar
New Chrysler loans are going to GMAC, but Chrysler Financial continues to service loans that it made previously on Chrysler vehicles. Chrysler Financial's portfolio has dropped from $45 billion last summer to the current $26 billion.
The Treasury letter says Chrysler is following a Treasury directive to liquidate, and is "pursuing a successful wind down of its operations by Dec. 31, 2011."
The letter was among documents released as the Treasury Department on Thursday ordered Chrysler Financial and six other companies that received billions of dollars in government bailouts to halve total compensation for their top executives.
Chrysler Financial, though, was allowed exceptions to some pay limits in order to keep top executives and other employees while it winds down. The lender is not paying its employees any stock compensation because it is in the process of liquidating.
Messages were left for Chrysler Financial spokeswoman Amber Gowen. A spokesman for Chrysler Financial owner Cerberus Capital Management would not comment.
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716fa252a760780613373c09c006c64d | https://www.cnbc.com/2009/10/23/cit-reaches-tentative-deal-with-goldman-report.html | CIT Reaches Tentative Deal with Goldman: Report | CIT Reaches Tentative Deal with Goldman: Report
CIT Group, struggling to restructure billions in debt and stay out of bankruptcy court, could finalize a deal in the next 24 hours with Wall Street bank Goldman Sachs over a disputed payment on a $3 billion loan, according to a published report.
CIT has reached a tentative deal with Goldman , The Wall Street Journal reported online late Thursday, citing unidentified people familiar with the matter.
The deal, which reportedly has Goldman trimming $1 billion off the total owed, would end lengthy negotiations between CIT's bondholders committee and the New York-based firm over a $1 billion payment Goldman was due if CIT ends up seeking Chapter 11 protection.
Under terms of the new deal, CIT would pay Goldman about $300 million if it enters bankruptcy court, the paper said.
CIT Group inc.Photo by: Americasroof
CIT's losses have been mounting as its borrowing costs have outstripped its income amid the credit crunch. The company, one of the largest lenders to small and mid-sized businesses, received $2.3 billion in federal bailout money last fall and a $3 billion emergency loan in July from some of its largest bondholders but still needs to trim its debt to survive.
The Goldman agreement would open the door for CIT to also get billions in new financing from its bondholders, which it could use to reorganize either through a successful debt swap or in bankruptcy court.
The new loan — which is contingent on a Goldman deal being made — would be arranged by Bank of America Merrill Lynch and raised among as many as 50 of CIT's bondholders, the paper said.
Earlier this week, billionaire investor and CIT bondholder Carl Icahn offered to loan the company the $6 billion in new financing it was seeking if it would halt its current debt exchange offer. Icahn has criticized the board for pushing an exchange offer that he said unfairly favors large bondholders at the expense of smaller investors and that also undervalues the company.
But some say Icahn's offer just replaces debt with debt, and therefore doesn't really alleviate CIT's problems. CIT's current debt exchange offer is aimed at getting enough bondholders to agree by Oct. 29 to trim the company's near-term debt by $5.7 billion.
CIT warned Monday in a regulatory filing that it might still have to file for bankruptcy protection even if it completes a debt restructuring. Because CIT is one of the nation's largest lenders to the retail industry, some economists say the company's potential collapse could hurt a U.S. economy struggling to recover from recession.
The company, whether it restructures in or out of bankruptcy court, will soon have new leadership. Jeffrey Peek, CIT's chairman and CEO, announced last week he would retire at the end of the year.
Slideshow: Cramer's Recovery Stocks
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fe978706204321af29a1b1279d1e8dc0 | https://www.cnbc.com/2009/10/23/dollar-could-capitulate-if-govt-policies-fail.html | Dollar Could Capitulate if Govt. Policies Fail | Dollar Could Capitulate if Govt. Policies Fail
The U.S. dollar could go into freefall and capitulate if policies that the government has put in place start to failand if the deficit starts to grow, said Scott Redler, chief strategic officer at T3LIVE.com.
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34e39acc177a7199c00e7dfdbe0c9a04 | https://www.cnbc.com/2009/10/23/dollar-dumping-will-remain-the-hot-trade.html | Dollar Dumping Will Remain the Hot Trade | Dollar Dumping Will Remain the Hot Trade
The dollar slumped to a new 14-month low Wednesday, and it could continue floundering well into next year.
The green back was trading at $1.50 to the euro Wednesday, a key psychological milestone. It also fell to a level near 75 on the dollar index, well below its year high of 89.62 and another important round number. The dollar index represents a basket of currencies, but the majority weighting is the euro.
"The dollar is just in a funk, and nobody lifts a finger to help it," said Brian Dolan of Forex.com. "We had Euro zone meetings Monday and Tuesday. They voiced their concerns but showed no signs of any action to counter the euro strength. All the feed back loops are in perfect motion here. We got some oil inventory data that was oil positive and that added to the dollar's woes."
Currency strategists say there is little to stop the dollar decline until U.S. officials convince markets they have the fortitude to curb deficits, or the Fed makes a move on rates.
As the dollar wobbled Wednesday, stocks moved higher and commodities climbed in a tightly linked trade that has been dominant in the markets for months. Oil closed in on the $82 level, and gold also made gains, moving up to $1062.80 per ounce.
Slideshow: The World's Biggest Gold Reserves
"What I think is remarkable is just how little U.S. officials have said about the weakness in the dollar, and as long as it's orderly, they seem comfortable with it," said Deutsche Bank currency strategist Adam Boyton.
The weak dollar is a double-edged sword for the U.S. economy. A soft dollar gives U.S. companies a pricing edge in foreign markets, helping the balance of trade, but it also adds fuel to rising commodities prices, triggering fears of inflation.
"I think among U.S. officials, there is increasingly an acceptance that until the fiscal deficit gets reigned in, the dollar is going to stay weak. That doesn't mean it weakens forever. .. I think in the next year, the best we can hope for the dollar is euro dollar at $1.40," Boyton said. He said he expects the low range for the dollar to be $1.55 to $1.60. The dollar hit an all-time low against the euro of $1.6038 in July, 2008.
Runaway Market?
The euro at $1.50 doesn't necessarily mean it will reach $1.60 but it is certainly on its way. "Clearly, the Fed needs to provide a picture that it's still in control...They cannot be passive at this point," said Boris Schlossberg of GFT Forex. "If they don't want to face a runaway market, they need to get much firmer in their rhetoric and posture even if it means they have to shave five percent off the Dow."
Fed Chairman Ben Bernanke's comments earlier in the week but Schlossberg said he wasn't convincing enough when he warned about the growing federal budget deficit. "They need to to get a lot tougher with the markets. The markets will always take things to the extreme. The Fed cannot afford to be exploited at this point," said Schlossberg.
Economists, for the most part, do not expect the Fed to tighten before the second quarter of next year, and many see it holding off well after that.
Schlossberg agrees the Fed can't take action on rates right now, and it's in a tough spot. "They need to see unemployment rates level off," he said. "Bullish for the dollar would be (weekly jobless) claims below 500,000."
"If we continue to practice a policy of benign neglect, it's conceivable the euro could make new highs not because of any fundamental reasons in the Euro zone, but because of lack of confidence in the dollar," he said.
Boyton said the Fed will probably be ready to raise rates by the time the dollar reaches $1.60 per euro.
"If the ECB (European Central Bank) tightens before the Fed next year, I think we could see $1.60. If the Fed gets going in April or May, I think $1.55 could be the peak. At $1.57, the euro dollar is as overvalued as the dollar was in the pre-Plaza accord period in the mid 1980s," Boyton said.
Hot Trade, Easy Money
The dollar slid Wednesday ahead of Chinese GDP, retail sales and industrial production data, to be issued late Wednesday New York time. "There was a big boost today from rumors China's going to have good numbers tonight. We had a micro rally today and they want to see a confirmation of it when the official release is made tonight," said Schlossberg.
Dolan said Wednesday's trigger for dollar selling were the same factors that have been pushing it lower. "It's the same momentum basically. What we saw today from 8:30 a.m. on was concerted selling by a a lot of European names. We heard the Russians were buying the euro dollar too so basically it's the hot trade and easy money," he said.
Questions? Comments?
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b2f3ba2da30acd6169aa3dd80f483c9e | https://www.cnbc.com/2009/10/23/dow-30-keep-beating-the-street.html | Dow 30 Keep Beating the Street | Dow 30 Keep Beating the Street
With American Express' report after the close yesterday and Microsoft's earnings report this morning, two thirds of the Dow 30 have now reported. Here is a summary of how things stand in terms of EPS and revenues to date.
So far, an astounding 90% of the 20 companies have beaten EPS estimates while 55% have beaten estimates on the topline. This compares to 78% of the S&P 500 beating on earnings and 62% beating on revenues. Caterpillar has had the biggest EPS surprise, coming in at 967% above expectations. 3M leads the Dow on revenue surprises with a 7.3% surprise.
>> See Biggest Surprises on the S&P 500
Despite the surprises, more than half of the Dow components that have reported so far are trading down from their closing prices just before their announcements. Travelers has seen the biggest gains since its announcement. See the table below for the details.
Comments? Send them to bythenumbers@cnbc.com
bythenumbers.cnbc.com
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5381098ebd91d2d293bcb1d935aae7e9 | https://www.cnbc.com/2009/10/23/earnings-season-five-things-weve-learned-so-far.html | Earnings Season: Five Things We've Learned So Far | Earnings Season: Five Things We've Learned So Far
A cursory look at quarterly earnings this month suggests corporate America is regaining its foothold and ready to run again. But a look at the stock market's reaction indicates otherwise.
A trader at the New York Stock Exchange.Photo: Oliver Quillia for CNBC.com
So goes the dichotomy of third-quarter earnings, in which positive surprises have outweighed the negative by about 4 to 1 though stock gains have been muted.
In fact, since the Dow crossed 10,000 on Oct. 14, stocks have done almost nothing despite a flurry of beats from some of Wall Street's biggest names.
Investors' reaction, in fact, has been decidedly undecisive to all the seemingly good news.
"The overall market really seems fatigued at this point in the rally," says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. "The key question is, is this just a pause because solid earnings were expected and then we take off from here, or has the market petered out and we're due for a pullback?"
That's just one of the issues to consider as these five trends seem clear from the halfway point in a robust earnings season:
1. Things Aren't That Bad
If there's one thing that inspires near-unanimous agreement in the market, it's that the worst is over, especially compared to the horrid state in which Wall Street found itself a year ago.
That's been reflected in earnings such as Friday's spectacular report from Microsoft as well as other sound beats from market titans such as JPMorgan Chase, 3M and Caterpillar, each in its own way a gauge for how well some of the most beaten-down areas have rebounded since the depths of the financial crisis.
"The move in Microsoft is of the magnitude that we haven't seen in a couple years," Art Hogan, managing director of Jefferies, told CNBC. "This is significant news."
That the market as a whole hasn't done cartwheels over the moves isn't necessarily worrisome to some experts. Perhaps the market has just taken a healthy pause after a more than 50 percent runup in the past seven months, a healthy alternative to a major selloff that earnings disappointment could have engendered.
"I don't think it's a bad thing for the markets to take a breather here," says Tom Higgins, chief economist at Payden & Rygel in Los Angeles. "This is good for the market at this point."
2. Things Aren't That Good, Either
The primary indication most market pros sought from this season was a growth in revenue—the "top line"—rather than merely profit driven by cost cutting to the bottom line. The latter phenomenon was almost solely responsible for powering second-quarter earnings, where upside surprises beat the downside 3 to 1.
They got what they were looking for, but to varying degrees.
In fact, in some cases strong top-line growth wasn't even good enough. Goldman Sachs was the poster child for a firm posting powerful revenue gains that still disappointed because analysts didn't like where the growth came from.
VIDEO0:0000:00Your CNBC Edge
"What we wanted to see going forward is organic earnings growth driven by core businesses," Higgins says. "If you take financials for example, (they gained with) strong trading activity, which is fine in the short run. In the long term you want to see banks increasing lending and have that driving profitability. That's where they should be making their bread and butter, not trading and rising asset prices."
Moreover, while most of the big names topped expectations, the overall picture for the industry was mediocre.
Of 39 banks sampled by Keefe, Bruyette & Woods, 19 banks beat, 19 missed and one hit—hardly numbers indicative of a strong turnaround.
The results, KBW said in a research note, "indicates the great disparity among (quarterly) earnings results."
3. Investors are Stuck in the Middle
One of the primary reasons the markets haven't moved much in the past few weeks is that investors actually were expecting a strong quarter and, with the news now passed, will need more convincing to keep up the breakneck buying pace.
"We're at equilibrium here based on corporate profits, earnings and expectations," says Michael Cohn, chief investment strategist at Atlantis Asset Management in New York. "The market tells you what's going to happen in the future, and when expectations are fulfilled it sells on the news.
"There's not really all that much to look ahead to. The market made its prediction, the prediction's coming true, now the jury is out for the next quarter."
And there could be a bit of disappointment out there that earnings didn't post even stronger beats on analyst estimates—part of the "whisper-number" factor in which traders often decide on their own what the real earnings number should be.
"It leads me to believe there's a certain amount of financial engineering going on within authorized generally accepted accounting principles, but nonetheless earnings appear to be surprisingly good," says Emily Sanders, president of Sanders Financial Management in Atlanta. "The magnitude of earnings beats speak to the fact that we're against very low expectations, but still our view of the economy is that it really has not turned around yet and is still less worse than it was a year ago."
4. Will the Patient Stand on its Own?
Investors often pay as close or closer attention to earnings outlook than the actual numbers themselves. But forecasts are even more important this year as the government prepares to lower the curtain on economic stimulus measures.
"The economy will have to stand on its own two feet more than it has up to this point," Sanders says. "We have been awash in a lot of liquidity, but the downside of all that is starting to be foremost in people's minds."
While the market engages in a lively debate over whether inflation or deflation poses a greater threat, there is consensus that the Federal Reserve and Treasury will have to be skillful in how they deploy their respective exit strategies.
Bel Air's Flam compares the mission to that of Capt. Chesley "Sulley" Sullenberg's daring landing of a passenger jet in the Hudson River on Jan. 9.
Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner will have to "pull a Sulley," Flam says. "You've got to land the economy on the Hudson here. You pull back too quickly and you can kill any budding growth, and if you do it too slow you can spur inflation. They have to touch down just right."
5. Sitting Tight
Market analysts continue to worry about a lack of market conviction, and reticent investors are likely to continue to be the norm.
Equity fund inflows actually increased last week to $6.55 billion—the biggest number since May—but many advisors are telling their clients to tread carefully.
"We're playing it defensive," Sanders says, adding that her firm is doing a lot of short-term trading and sticking with dividend-paying stocks. "Short-term there's a lot of competing interests to resolve some of the big, open issues like financial regulation, health care—the market doesn't like uncertainty."
For Cohn, this is setting up as a good time to collect some profits until the market shows it's ready for another leg up.
"I would take a few chips off the table here," he says. "No one ever lost taking a small profit."
Slideshow: 20 Stocks With Potential to Drop
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bd1c76bceacc89c256baa997b14e3ae0 | https://www.cnbc.com/2009/10/23/exchanging-views-with-oppenheimer.html | Exchanging Views with Oppenheimer | Exchanging Views with Oppenheimer
The Exchange
Closing Bell continued our "Exchange" series Thursday, broadcasting live from the Oppenheimer & Co. trading floor.
On a busy day, 65 million retail and institutional trades are made, with technology, health care and consumer ranking as the most heavily traded sectors.
Big Opportunities in Oil
With oil prices bubbling 82% so far this year, Maria Bartiromo caught up with Oppenheimer's finest oil analysts - Fadel Gheit, Managing Director of Oil and Gas Research and Scott Burk, Senior Analyst of Oil Services and Ocean Shipping.
Gheit told Bartiromo that he expects "oil prices to remain inflated for the next few months." He is also in the camp that believes that this move in crude prices is "pure speculation", adding that supply and demand fundamentals "do not support $60 oil, let alone $80 oil."
Burk added that the weak dollar will be a positive for energy stocks, and that specifically for the offshore drillers, there is a "93% correlation between oil services and prices". Burk's top picks given the current weak dollar and high oil price scenario are Price International and Atwood Oceanics. (Disclosure: Burk has no disclosures)
Gheit meanwhile, is recommending "stocks that have the momentum". His favorites are DevonEnergy, Chesapeake Energy and Anadarko Petroleum.
Gheit Likes Stocks With The Mo
(Disclosure: Gheit owns XOM and DVN)
Banking on Banks
Another sector that has been on a tear is the banks. The KBW banking index has surged more than 140% since March lows.
VIDEO0:0000:00Checking Market Day
Chris Kotowski, Senior Research Analyst of Large Cap Banks and Brokers at Oppenheimer & Co., did not think this rally was a "head fake". He believed that stocks bottomed earlier in the year "because the Fed hung out the green flag, saying the water is safe with the stress test."
Kotowski's gauge - measuring the inflows of problem assets into the banking sector - has grown "steadily every single quarter." This quarter also saw record levels, but also marked the first time since the onset of the crisis, that "the net inflow of problem assets was flat." A peak in the rate of inflow problems, according to Kotowski is definitely a positive.
The technical perspective also confirms the positive outlook for banks. From his analysis of technical trends, Carter Worth, Chief Market Technician of Oppenheimer Asset Management said "financials are still underowned and it's alright to be overweight the group." Backing up his call with some market stats, Worth said that financials were 22% of the S&P at the start of 2007, hit a low of 9% in March and now it's back up to 15%. Worth thinks financials will "stabilize around 18% and that he expects the outperformance to continue.
Catch us Thursdays as we continue our "Exchange" series from Wall Street's top trading floors.
Liza Tan contributed to this article.
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The Dow 30 in Real TimeThe CNBC Stock Blog
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c968e5e518186ab43e64d5a1d4587e16 | https://www.cnbc.com/2009/10/23/fast-action-turning-coal-into-diamonds.html | The traders think coal stocks may be among the big movers next week.
How can you use options to turn coal into diamonds? Find out from Options Action trader Stacey Gilbert!Gilbert suggests looking at Massey which reports earnings next week. "Here's a stock where the implied volatility is on the lower side. If you look at what the options market is pricing in -- in terms of the upcoming earnings -- it's almost half that of what we've seen over the last several quarters. To me that makes it much more attractive, from the perspective of volatility."Gilbert goes on to say she thinks Massey has potential upside - because of it's exposure to metallurgic coal and a strong presence overseas."I'm a buyer of the November 31 calls," she says. "They were offered at $2.30 when I bought."STACEY GILBERT'S TRADEMassey Energy - Stock at $31.00 Buy Nov 31-Strike Call For $2.30HOW'S GILBERT'S TRADE MAKES MONEY Massey StockProfits above $33.30 Losses Below $33.30
"The break even is if the stock trades above $33.30," Gilbert explains. "If Massey does have a big upside move around earnings, you don't have to hold until expiration. You have the volatility component and I believe you're getting that volatility component at an attractive level. So there are two plays here, attractive volatility and a bullish upside.
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .Trader disclosure: On Oct. 23th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm And Finerman Own (PDE); Finerman's Firm And Finerman Own (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO), (UNG); Finerman's Firm Owns (AET) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm Owns (BCR; Finerman's Firm Owns (STJ); Seymour Owns (FXI); Seymour Owns (EEM); Seymour Is Short (PBR); Grasso Owns (AAPL), (ABK), (ASTM), (BAC), (BGP), (C), (COST), (PRST), (V), (WMT), (FAZ); Terranova Owns (WYNN); Terranova Is Short (AXP), (POT), (OIH), (FCX)GE Is The Parent Company Of CNBCNBC Universal Is The Parent Company Of CNBCFor Steve Grasso:Stuart Frankel Corp. And Partners Own (CMCSK)Stuart Frankel Corp. And Partners Own (CUBA)Stuart Frankel Corp. And Partners Own (GERN)Stuart Frankel Corp. And Partners Own (HSPO)Stuart Frankel Corp. And Partners Own (LMT)Stuart Frankel Corp. And Partners Own (MSFT)Stuart Frankel Corp. And Partners Own (NWS.A)Stuart Frankel Corp. And Partners Own (NXST)Stuart Frankel Corp. And Partners Own (NYX)Stuart Frankel Corp. And Partners Own (PDE)Stuart Frankel Corp. And Partners Own (PRST)Stuart Frankel Corp. And Partners Own (RDC)Stuart Frankel Corp. And Partners Own (ROK)Stuart Frankel Corp. And Partners Own (TBT)Stuart Frankel Corp. And Partners Own (TLM)Stuart Frankel Corp. And Partners Own (XOM)Stuart Frankel Corp. And Partners Own (XRX)Stuart Frankel Corp. And Partners Own (SDS)Stuart Frankel Corp. And Partners Are Short (QQQQ)Stuart Frankel Corp. And Partners Are Short (CL)
For JoeTerranova:Terranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)
For Stacey GilbertSusquehanna Capital Group Is A Market Maker In (MEE)For Dennis GartmanFunds Managed By Dennis Gartman Are Short British Pound SterlingFunds Managed By Dennis Gartman Own Crude OilFunds Managed By Dennis Gartman Own Australian DollarFunds Managed By Dennis Gartman Own Canadian DollarFunds Managed By Dennis Gartman Are Short YenFunds Managed By Dennis Gartman Are Short EuroFunds Managed By Dennis Gartman Own GoldFunds Managed By Dennis Gartman Own Corn
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159b28ed8351846893e807285a31b64b | https://www.cnbc.com/2009/10/23/fda-halts-food-label-program-could-mislead-consumers.html | FDA Halts Food Label Program; Could Mislead Consumers | FDA Halts Food Label Program; Could Mislead Consumers
The Smart Choices nutrition labeling program, created voluntarily by nine large U.S. manufacturers, is halting after federal regulators said such systems could mislead consumers, officials with the labeling group said Friday.
FDACNBC.com
Industry leaders launched the program this year to highlight foods that meet certain nutritional standards with a green label on package fronts.
The Food and Drug Administration said Tuesday that such programs may mislead consumers about the health benefits of certain foods, and it told manufacturers it will crack down on inaccurate labeling. It did not criticize specific products or label programs or give a timeline for enforcement.
Food makers, grocers, health organizations and others have created an array of voluntary nutrition labeling programs. Regulators say the breadth of criteria can confuse consumers.
Smart Choices, which includes Kellogg , Kraft Foods and General Mills , has been criticized for including processed foods that are high in sugar, such as Froot Loops cereal and Cracker Jack snack food.
Officials with Smart Choices in Washington, D.C., said Friday that the group will "postpone" active operations and not encourage wider use of the logo while the FDA investigates labeling issues.
Smart Choices stood behind its nutritional criteria, saying the program's criteria are based on federal dietary guidelines and its efforts are a step in the right direction. Board member Richard Kahn said the group supports the FDA's effort.
"The impetus for the Smart Choices program was that there were and are too many systems," he said. "We applaud the concept of having one system nationwide."
He noted the group informed the FDA about Smart Choices during all stages of its development.
Manufacturers that currently use the logo can continue to do so, Kahn said.
The FDA said it is working to define the criteria manufacturers must meet to make certain nutrition claims on product fronts. The agency plans to work with manufacturers, nutritionists and others to design a standardized system to help consumers select healthy foods.
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46de08d32c672586e2b7f50349bd1134 | https://www.cnbc.com/2009/10/23/fed-considering-bank-charge-to-cut-systemic-risk-bernanke.html | Fed Considering Bank Charge to Cut Systemic Risk: Bernanke | Fed Considering Bank Charge to Cut Systemic Risk: Bernanke
U.S. Federal Reserve Chairman Ben Bernanke Friday laid out his most detailed description yet of the central bank's post-crisis approach to regulation and said requiring big banks to hold more capital was under consideration.
US Federal Reserve Board Chairman Ben S. BernankeAP
Speaking at a conference sponsored by the Boston Federal Reserve Bank, Bernanke outlined a number of steps regulators around the globe are mulling to lower the risk that any one firm's problems could destabilize the financial system.
He said regulators were also consider requiring a greater share of bank capital be held in the form of common equity, and a possible call for some firms to issue contingent capital, a debt-like security that can convert to equity in times of stress.
"We are working with our domestic and international counterparts to strengthen the standards governing bank capital, liquidity, risk management, incentive compensation and consumer protection, among other areas," Bernanke said.
Leaders of The Group of 20 major economies agreed in Pittsburgh last month to find ways to change the behavior of banks and rein in the type of excessive risk-taking that fueled the credit crisis that shook the world's financial system last year.
On Thursday, the Fed stepped into the thorny issue of executive compensation, issuing guidelines to tie compensation at the thousands of banks it regulates more closely to the risks those firms take.
Bernanke Presses for Action on Reforms
On Friday, Bernanke said it was imperative to push forward with regulatory reforms even though financial conditions had "improved considerably."
"With the financial turmoil abating, now is the time for policymakers to take action to reduce the probability and severity of any future crises," he said.
VIDEO0:0000:00Bernanke Takes Questions
New York Federal Reserve Bank President William Dudley, in remarks to a banking group on Oct. 13, had discussed the possibility of a capital surcharge for systemically important banks.
Dudley said imposing a surcharge would be one way to tackle the problem of some banks being viewed as "too big to fail," or having the implicit guarantee of government support.
Bernanke said that to beef up oversight, which he acknowledged fell short in spotting risky practices that contributed to the meltdown, the central bank would conduct more comprehensive reviews of banks and demand more reporting.
Responding to a question from the audience, he said the Fed is unlikely to repeat the extensive stress-tests done on major U.S. banks earlier this year.
Still, "many of the lessons, particularly looking at the system as a whole, trying to identify system-wide exposures, system-wide practices that pose risks, will be part of our basic tool-kit going forward," he said.
The Fed's examination of capital buffers at the nation's 19 largest banks earlier this year helped restore confidence in the financial system and made it easier for banks to raise private capital.
"We will conduct more frequent, broader, and more comprehensive horizontal examinations," Bernanke said. U.S. regulators traditionally have conducted bank-by-bank examinations.
Demanding extra capital for banks that are too big to fail makes sense, said Ray Soifer, an independent bank consultant in Green Valley, Arizona. Such banks are getting an implicit government guarantee for free, so there is merit to creating a cost for that expected support, Soifer said.
Congress is wrestling with regulatory reforms aimed at avoiding a repeat of the crisis that helped push the U.S. economy into its deepest recession since the 1930s.
President Barack Obama has pushed lawmakers to wrap up their efforts by year-end, but the process is likely to drag into next year as Congress wrangles over details.
Another senior Fed official said authorities need to cooperate across borders to plug gaps in financial oversight and prevent a repeat of the recent financial crisis, even as national authorities adopt local approaches.
"Deficiencies must be fixed on a global basis to forestall gaps and regulatory arbitrage that could undermine the effectiveness of regulation," Federal Reserve Vice Chairman Donald Kohn said at the same conference as Bernanke.
"But at the same time, regulations must be passed and implemented nationally," he said.
Slideshow: Central Banker Report Cards
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b1225a02a9439848fad5390d3072b61a | https://www.cnbc.com/2009/10/23/follow-the-money-into-emerging-markets.html | It seems new taxes on outside investors looking to play Brazil can’t dampen enthusiasm about emerging markets.
New results show that that over $4.9 billion poured into emerging market stocks this week, bringing net inflows to more than $50 billion this year, according to EPFR Global.
And all the BRIC nations were beneficiaries – that’s right China, India, Russia and Brazil.
Earlier in the week Brazil stocks tumbled after the nation slapped a 2 percent tax on financial inflows to discourage hot money investors. But it seems investors have shrugged off the issue – and the possibility that other nation’s may follow Brazil’s lead.
Considering the EEM is up over 60% year to date while the Dow’s up about 13% over the same period – you may want to follow the money into emerging markets.But how should you game it? Remember this is a generational trade. We're talking about a middle class that poised to explode, explains Tim Seymour.There a companies trading today that could be the bellwethers of tomorrow. Embraer may be the Boeing of tomorrow -- Itau Unibanco Banco may be the BofA of tomorrow and Dr. Reddy's Laboratories may be the Glaxo of tomorrow.But however you game it, I'd make sure to get country exposure, consumer exposure and exposure to commodities, Seymour concludes.
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .Trader disclosure: On Oct. 23th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm And Finerman Own (PDE); Finerman's Firm And Finerman Own (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO), (UNG); Finerman's Firm Owns (AET) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm Owns (BCR; Finerman's Firm Owns (STJ); Seymour Owns (FXI); Seymour Owns (EEM); Seymour Is Short (PBR); Grasso Owns (AAPL), (ABK), (ASTM), (BAC), (BGP), (C), (COST), (PRST), (V), (WMT), (FAZ); Terranova Owns (WYNN); Terranova Is Short (AXP), (POT), (OIH), (FCX)GE Is The Parent Company Of CNBCNBC Universal Is The Parent Company Of CNBCFor Steve Grasso:Stuart Frankel Corp. And Partners Own (CMCSK)Stuart Frankel Corp. And Partners Own (CUBA)Stuart Frankel Corp. And Partners Own (GERN)Stuart Frankel Corp. And Partners Own (HSPO)Stuart Frankel Corp. And Partners Own (LMT)Stuart Frankel Corp. And Partners Own (MSFT)Stuart Frankel Corp. And Partners Own (NWS.A)Stuart Frankel Corp. And Partners Own (NXST)Stuart Frankel Corp. And Partners Own (NYX)Stuart Frankel Corp. And Partners Own (PDE)Stuart Frankel Corp. And Partners Own (PRST)Stuart Frankel Corp. And Partners Own (RDC)Stuart Frankel Corp. And Partners Own (ROK)Stuart Frankel Corp. And Partners Own (TBT)Stuart Frankel Corp. And Partners Own (TLM)Stuart Frankel Corp. And Partners Own (XOM)Stuart Frankel Corp. And Partners Own (XRX)Stuart Frankel Corp. And Partners Own (SDS)Stuart Frankel Corp. And Partners Are Short (QQQQ)Stuart Frankel Corp. And Partners Are Short (CL)
For JoeTerranova:Terranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)
For Stacey GilbertSusquehanna Capital Group Is A Market Maker In (MEE)For Dennis GartmanFunds Managed By Dennis Gartman Are Short British Pound SterlingFunds Managed By Dennis Gartman Own Crude OilFunds Managed By Dennis Gartman Own Australian DollarFunds Managed By Dennis Gartman Own Canadian DollarFunds Managed By Dennis Gartman Are Short YenFunds Managed By Dennis Gartman Are Short EuroFunds Managed By Dennis Gartman Own GoldFunds Managed By Dennis Gartman Own Corn
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f4812f6e1242adf04381df4e7d045c84 | https://www.cnbc.com/2009/10/23/freddie-macs-secrecy-pacts-face-court-test.html | Freddie Mac’s Secrecy Pacts Face Court Test | Freddie Mac’s Secrecy Pacts Face Court Test
WASHINGTON — One year after the government took over and bailed out Freddie Mac, the giant mortgage finance company, federal regulators are blocking former employees from revealing information to investors who are suing the company for fraud, lawyers for shareholders say.
The Treasury has propped up Freddie Mac with more than $50 billion in taxpayer money since the company nearly collapsed more than a year ago, and officials warn that the company will probably need additional billions in the months ahead.
Federal prosecutors in Virginia and the Securities and Exchange Commission are already investigating whether the company misled investors about the risks it was taking with securities backed by subprime mortgages and no-document loans.
But in a battle that will surface on Friday in a federal courtroom in New York, the company and its primary government overseer, the Federal Housing Finance Agency, are trying to enforce secrecy agreements that scores of former employees signed as a condition for receiving severance payments when they left the company.
In their class-action lawsuit against Freddie Mac, three big union-based pension funds charge that Freddie Mac executives defrauded investors by concealing the company’s exposure to high-risk mortgages, its mounting losses and its inadequate capital position.
At the hearing on Friday, lawyers for shareholders will argue that Freddie Mac’s secrecy agreements amount to buying silence from willing witnesses who may have crucial information about what the company’s top executives knew at the time they were assuring investors that all was well. The lawyers will ask a judge to invalidate the restrictions, a move that Freddie Mac and federal regulators will say the court has no right to do.
“Federal dollars are being used to bribe people, to buy their silence,” said David George, a lawyer representing the pension funds in a class-action lawsuit.
Under the secrecy provisions, former employees would be permitted to answer questions from government prosecutors and investigators in any criminal case or in a regulatory proceeding.
But, barring a court order, the former employees are prohibited from cooperating with anyone involved in a civil lawsuit against Freddie Mac.
Several former employees, who insisted on anonymity, confirmed that they were eager to talk with the shareholder group and said they might have valuable information.
“I would say more, but I don’t want somebody knocking on my door and asking for $50,000 back,” said one former employee who worked on Freddie Mac’s internal financial controls. “It’s almost like bribery; I felt that I was supposed to sign the agreement, take the money and keep all their secrets.”
The severance deals were so strict, according to former employees, that they prohibited those who accepted them from saying almost anything about their old jobs or even about the secrecy pledges themselves.
“I was told that in volunteering to take a buyout, I couldn’t even talk about the agreement or it would be off the table,” said an 18-year veteran of Freddie Mac, who insisted on anonymity because of the restrictions. “I was told that you don’t talk about the terms of agreement, you don’t talk to the news media and you don’t talk to attorneys involved in lawsuits against the company.”
Lawyers for pension funds that have filed a class-action lawsuit against the company say the secrecy provisions have already muzzled at least two dozen former employees with potentially important information.
Spokesmen for both Freddie Mac and the Federal Housing Finance Agency said they could not comment on the case because it is in litigation.
In a legal brief filed in August, the Federal Housing Finance Agency refused to confirm that the secrecy pacts even existed, saying their existence was “hypothetical.” But if the restrictions did exist, the agency continued, neither shareholders nor the courts had any authority to interfere with them.
Though secrecy provisions have become a common feature of corporate severance deals, legal experts said this appeared to be the first time that federal regulators have invoked them to thwart investors. And because Freddie Mac is now effectively owned by the government and is receiving a vast taxpayer bailout, the case has already raised alarms among some public officials.
Rob McCord, Pennsylvania’s state treasurer, said his state had lost millions of dollars on Freddie Mac shares that became almost worthless in 2008. Though Mr. McCord is not a party to the class-action lawsuit, he said Freddie Mac’s secrecy agreements were thwarting taxpayers as well as shareholders, and making it harder to prevent similar debacles in the future.
“I would be greatly concerned if Freddie Mac, by conditioning departing employees’ severance payments on contractual gags, is preventing investors from learning what really happened,” Mr. McCord wrote in a letter on Wednesday to Freddie Mac and to many members of Congress.
He added, “Given that Freddie Mac is supported by tax dollars, the public has a right to hear from former employees.”
The dispute highlights the conflicts that face federal policy makers as the government tries to rescue giant corporations ranging from Freddie Mac to the American International Group to General Motors.
On one hand, the government has a responsibility to uncover fraud and other corporate misconduct, especially at companies being bailed out by taxpayers. At the same time, officials are trying to protect taxpayers by rehabilitating the companies as quickly as possible. Paying out money to shareholders, even if they were defrauded, increases the cost to taxpayers.
Freddie Mac and its sister company, Fannie Mae , are government-sponsored corporations that finance and guarantee trillions of dollars worth of home mortgages. Both companies became insolvent after the housing market and financial markets imploded, and both were taken over by the government in September 2008.
Lawyers for shareholders, citing provisions obtained from former employees, said the secrecy provisions explicitly prohibit employees from voluntarily helping anybody trying to sue Freddie Mac.
Stephen Singer, a shareholder lawyer who has led class-action lawsuits against numerous subprime mortgage lenders, said the Freddie Mac restrictions could, if upheld in court, make it difficult for shareholders to sue companies for fraud and misrepresentation.
“These restrictions are more sweeping than anything I’ve seen before,” said Mr. Singer, who is not involved with the Freddie Mac case. If they were upheld, he added, shareholders would find it much more difficult to sue corporations because courts will generally not force company executives to testify or to produce documents until after the shareholders have provided solid evidence of fraud and misrepresentation from voluntary witnesses, often former employees.
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8dfe99273e89edb99f17dabb27e887c0 | https://www.cnbc.com/2009/10/23/googling-tweets.html | Googling Tweets | Googling Tweets
Maria Bartiromo recently sat down Google’s Marissa Mayer who heads up the company’s search products and user experience about Google’s licensing agreement with Twitter. Now, Google will receive a stream of Tweets to enhance Google’s search results.
So how is it going to work? Mayer said, “This will enhance search. Twitter is a way for people to communicate but it’s also a wealth of information around what’s happening right now all around the world. By harnessing all the Tweets will help the users that are searching for that information at that moment.”
This is just another opportunity for Google to dig deeper into search, “fills a key part of the Google experience for users to find the latest information”, said Mayers.
Too Much Info?
VIDEO0:0000:00Googling Tweets
But is too much information a good thing? What about the overwhelming factor? How do you sort through all that information?
Google is not worried because “sorting through information is our business”, said Mayer.
The company sorts through web pages, they will do the same sorting through Tweets. Mayer thinks Google “will achieve very good relevance.”
What’s the next biggest thing in tech right now?
Mayer said it’s the concept of “sensory revolution”, based around mobile technology. “If you think about what Tweets really are they are people around the world acting like sensors feeding in data of what’s happening and so first time we’re seeing we’re seeing data on a mass scale being able to sense what the world is like and help other people find that information out.”
Tech Wars - On TV
Innovation is Recession-Proof
As for how the sector is doing in the current environment, Mayer said, “there’s never a recession in innovation. To get us out of a recession, innovation is a big driver. It’s what’s new, what’s changing what’s merging.”
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The Dow 30 in Real TimeThe CNBC Stock Blog
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Questions? Comments? Write toinvestoragenda@cnbc.com
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aadca3d772629bf90be2d222f36c33c5 | https://www.cnbc.com/2009/10/23/halftime-report-market-at-nearterm-top.html | Both the Dow and S&P traded lower on Friday with energy shares dragging down the market largely due to lower oil prices.The bulls couldn’t gain traction despite a report that showed existing homes sales surged to their highest level in over two years.
Of the three major indexes, the Nasdaq fared best after a positive outlook for the holidays sent Amazon to a 10-year high and strong sales of Windows software and Halo video games sent Microsoft surging.
But the tech space was not without its dark spots. Disappointing results from Broadcom and MEMC Electronic sent the SMH tumbling.
Is Friday's sell-off simply profit taking or are we heading into a period of weakness? What's your market 'tell'?
VIDEO0:0000:00Fast Money Halftime Report
Instant Insights with the Fast Money traders
Right now 1080 is holding on the S&P, explains Scott Redler of T3. Looking at the technicals, if we break above 1100 if should clear the way to 1120. And if we break below 1080 we could slide to around 1043. But as long as we hold 1080 on the S&P I’m a buyer into the close.
In the long run I still expect stocks to go higher, adds Steve Grasso of Stuart Frankel. However in the next couple days I think we go lower. (On Fast Money’s 5p show Grasso has said many times that he believes money managers chasing performance will send the S&P higher through the end of the year.)This week we’ve seen the stock market decouple from the dollar , adds Jim Iurio of TJM. To me that shows a little confusion and suggests we could be at a near-term top. I’m a seller into the close.
Looking at tech, I’m impressed by Amazon and Apple , muses Jeff Tomasulo of SMB. They’re both selling products that people want and they’re both gaining market share. But I’d wait for a pullback. Be patient.
I would never enter a stock at a historic high, counsels Redler. Wait for it to build a base.
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FINANCIALS ROLLING OVER
Financials rolled over on Friday with investors booking profits in Goldman, Morgan and other large financials ahead of the week-end.
However, investors remained solidly bullish on Capital One, which reported its first quarterly profit of the year on Thursday.
What’s the bank trade?
Options action suggests we could see a sharp pull back in financials, explains Jim Iurio of TJM.
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ALSO TOPPING THE TAPE: TIVO
Jon Najarian has spotted unusual options activity in Tivo .
I’m seeing a lot of out of the money call buying, explains Najarian. Calls vs puts are trading at a 300 to 1 ratio. That suggests something is coming and could send the stock zooming to the upside.
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CALL THE CLOSE
Steve Grasso: In the next couple days I think we go lower.
Jeff Tomasulo: I’m a seller.
Scott Redler: As long as we hold 1080 on the S&P I’m a buyer.
Jim Iuorio: This week we’ve seen the stock market decouple from the dollar. To me that shows a little confusion and suggests to me we could be at a hear-term top and I’m a seller.
______________________________________________________Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .Trader disclosure: On Oct. 23th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm And Finerman Own (PDE); Finerman's Firm And Finerman Own (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO), (UNG); Finerman's Firm Owns (AET) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm Owns (BCR; Finerman's Firm Owns (STJ); Seymour Owns (FXI); Seymour Owns (EEM); Seymour Is Short (PBR); Grasso Owns (AAPL), (ABK), (ASTM), (BAC), (BGP), (C), (COST), (PRST), (V), (WMT), (FAZ); Terranova Owns (WYNN); Terranova Is Short (AXP), (POT), (OIH), (FCX)GE Is The Parent Company Of CNBCNBC Universal Is The Parent Company Of CNBCFor Steve Grasso:Stuart Frankel Corp. And Partners Own (CMCSK)Stuart Frankel Corp. And Partners Own (CUBA)Stuart Frankel Corp. And Partners Own (GERN)Stuart Frankel Corp. And Partners Own (HSPO)Stuart Frankel Corp. And Partners Own (LMT)Stuart Frankel Corp. And Partners Own (MSFT)Stuart Frankel Corp. And Partners Own (NWS.A)Stuart Frankel Corp. And Partners Own (NXST)Stuart Frankel Corp. And Partners Own (NYX)Stuart Frankel Corp. And Partners Own (PDE)Stuart Frankel Corp. And Partners Own (PRST)Stuart Frankel Corp. And Partners Own (RDC)Stuart Frankel Corp. And Partners Own (ROK)Stuart Frankel Corp. And Partners Own (TBT)Stuart Frankel Corp. And Partners Own (TLM)Stuart Frankel Corp. And Partners Own (XOM)Stuart Frankel Corp. And Partners Own (XRX)Stuart Frankel Corp. And Partners Own (SDS)Stuart Frankel Corp. And Partners Are Short (QQQQ)Stuart Frankel Corp. And Partners Are Short (CL)
For JoeTerranova:Terranova Works For (VRTS)Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (CAL)Virtus Investment Partners Owns More Than 1% Of (CLB)Virtus Investment Partners Owns More Than 1% Of (DLR)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (DBA)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (UA)
For Stacey GilbertSusquehanna Capital Group Is A Market Maker In (MEE)For Dennis GartmanFunds Managed By Dennis Gartman Are Short British Pound SterlingFunds Managed By Dennis Gartman Own Crude OilFunds Managed By Dennis Gartman Own Australian DollarFunds Managed By Dennis Gartman Own Canadian DollarFunds Managed By Dennis Gartman Are Short YenFunds Managed By Dennis Gartman Are Short EuroFunds Managed By Dennis Gartman Own GoldFunds Managed By Dennis Gartman Own Corn
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c54101e4c4229fbaa84ada9e97f694d1 | https://www.cnbc.com/2009/10/23/hirschhorn-viewer-questions.html | Hirschhorn: Viewer Questions | Hirschhorn: Viewer Questions
VIDEO0:0000:00Hirschhorn: Questions & Answers
(Video: Market coach Doug Hirschhorn, PhD, answers your questions.)
Q: What do you think are the most important characteristics for a trader?
Q: I’ve been burned by the markets in the past and my confidence has been shattered. How can I re-engage in the process.
Q: How can I learn to be more aggressive in my trades? I often find I have the right idea, but I miss out on opportunities where I think I should be making more money.
Think better, invest smarter.
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f35ea2266bf1a43ca2f5af66f5ed2442 | https://www.cnbc.com/2009/10/23/homebuilder-etf-options-explode-on-market-surge.html | Homebuilder ETF Options 'Explode' on Market Surge | Homebuilder ETF Options 'Explode' on Market Surge
Upside option activity exploded in the XHB homebuilder exchange-traded fund when the market surged yesterday afternoon.
The SPDR S&P Homebuilders ETF ended the session up 4.06 percent to $15.38 on more than double the average daily stock volume. The XHB is up 18 percent in the last three months.
Volume in the November 16 options ballooned to 126,799 calls, more than 17 times existing open interest at the strike. Most of the large trades priced for $0.25 to $0.30 in a strong buying pattern, according to .
More Options Tips from Jon NajarianOptions Tips from Pete NajarianRead The CNBC Stock Blog
The bulk of the option activity was concentrated in a 10-minute interval in the afternoon when the market neared its peak for the session. The trades pushed overall options volume to almost 12 times greater than average for the XHB, whose main holdings are Lennar , Owens Corning , and Williams-Sonoma .
For the calls to be profitable, the stock would need to rise roughly 6 percent or more before the options expire on Nov. 20. Overall calls at all XHB strikes outnumbered puts traded by more than 9 to 1.
___________________________Options Trading School:
Options Terminology: GlossaryBasic Strategies — with ExamplesOptions Basics: The ABCs
___________________________
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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of .
___________________________
Disclaimer
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a7650737c37f621af6be2bdc8257fbc9 | https://www.cnbc.com/2009/10/23/how-is-vick-doing.html | How Is Vick Doing? | How Is Vick Doing?
Michael VickAP
It has been two months and 10 days since the Philadelphia Eagles signed Michael Vick.
So how is Vick doing from an image standpoint?
Animal activists certainly aren't protesting enough to get any attention anywhere, but that doesn't mean Vick is close to signing endorsement deals.
E-Poll Market Research has done some extensive polling work on Vick and here are the numbers.
Before Vick was charged in connection with the dogfighting ring, E-Poll surveyed the public five times on their sentiment of Vick. The percentage of people who said they liked him ranged from 42 to 59 percent during that time. Since being charged, E-Poll numbers show that the majority people dislike Vick and things haven't really changed since he was signed by the Philadelphia Eagles.
Did the Mets Really Make Money Off Madoff?
On Aug. 10, three days before Vick signed with the Eagles, E-Poll's survey revealed 75 percent of the population disliked Vick. A survey taken this Wednesday revealed that the percentage that disliked him had only dropped to 71 percent. The percentage of people who said they liked him was 13 percent, which is virtually unchanged from when he was first charged.
"He's going to have to score a lot more touchdowns if he's ever going to get back to being a viable endorser on a national level," said Randy Parker, marketing consultant for E-Poll. Despite taking the trouble to sign him, the Eagles (3-2) have hardly utilized the quarterback. Vick hasn't scored or thrown for a touchdown and his longest run is 11 yards.Two friends of Michael Vick are opening a restaurant today in Lynchburg, Va., named "7," which is of course Vick's number. Vick has no financial stake in the establishment.
Questions? Comments? SportsBiz@cnbc.com
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0c52d31caad898e5b8866c8999eeb8ae | https://www.cnbc.com/2009/10/23/is-rick-perry-a-texas-supplysider.html | Is Rick Perry a Texas Supply-Sider? | Is Rick Perry a Texas Supply-Sider?
I posed this question to Texas Republican Governor Rick Perry on last night's show. Click on the video to hear what he had to say.
VIDEO0:0000:00Supply Side Solutions
Questions? Comments, send your emails to: lkudlow@kudlow.com
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1a3c434168257556340c8ecf59609ab5 | https://www.cnbc.com/2009/10/23/law-firms-pay-new-hires-to-work-for-public-good.html | Law Firms Pay New Hires to Work for Public Good | Law Firms Pay New Hires to Work for Public Good
If things had gone according to plan, Lindsay Murphy would be a big-city tax lawyer by now. Instead, the recent law school graduate found herself doing legal aid, listening to complaints about raw sewage bubbling up into the bathtubs of a Mississippi Delta housing project.
Murphy is among hundreds of newly minted lawyers who've been forced by the recession to take a detour on their way to the nation's top firms, spending up to a year helping out nonprofits for as little as a third of the salary they'd expected.
From San Francisco to New York, high-powered firms are postponing the start dates of new hires they recruited before the economic meltdown. Many are paying the "deferred associates" stipends to spend a year doing public interest work until the business slowdown ends.
For cash-strapped nonprofits and government law offices, the free help is an unexpected silver lining. And the young lawyers and the firms that pay them say they are benefiting from valuable training and hands-on experience.
Murphy, 25, started her public interest fellowship at the University of Mississippi's Civil Legal Clinic in August. She has helped poor clients with housing and tax problems and traveled this month to the poverty-ridden Delta with other attorneys and law students to investigate one low-income neighborhood's sewer problems.
AP
"This is what this profession is for — it's for helping people," said Murphy, who focused on corporate tax early in law school at Ole Miss. "I had lost sight of that."
Nobody has an exact count of how many law firm associates have been deployed to public interest law offices, but experts say it's likely in the high hundreds.
The list of firms paying such stipends include some of the biggest legal names.
Murphy, for example, is one of 59 public interest fellows from Morgan, Lewis & Bockius, whose Dallas office she plans to join next year. Ropes & Gray is paying 51 incoming associates to do public interest work. Orrick, Herrington & Sutcliffe has 45 participants. All are international firms with large offices around the country.
The economic downturn has meant less work for law firms, fewer experienced attorneys leaving jobs and thousands of lawyers laid off. From August 2008 to August 2009, total law office employment fell by nearly 26,000 jobs, a mere 2 percent but striking for an industry accustomed to constant growth.
While a few firms rescinded offers entirely, most have taken pains not to lose graduates they recruited and hosted as summer associates in 2008. They offered stipends for the deferral period, in many cases tying the stipends to public interest work at nonprofits or government law offices.
"We knew them well, we'd invested time in recruiting them and working with them over the summer," said Eric Kraeutler, firmwide hiring partner at Morgan Lewis.
Most deferred associates remain in big cities. A few, like Murphy, are spending the year away from the major legal centers. Two of the 30 public interest fellows from the firm Mayer Brown are working overseas — one in Brazil and the other in Namibia.
Slideshow: Colleges That Bring The Highest Paycheck
A reduced income can be a hardship for law school graduates who had been counting on bigger paychecks to pay off student loans. But many deferred associates say they're grateful to have a job.
Albinas Prizgintas is among 28 associates who elected a yearlong deferral from Wilmer Cutler Pickering Hale and Dorr. The firm is paying him $80,000 for work helping the unemployed and domestic abuse victims at the Legal Aid Society of the District of Columbia.
"It would seem almost absurd to be angry about $80,000 when every day you're dealing with clients who are hoping that any day that check comes in," said Prizgintas, 27. His salary is also far higher than the typical $40,000 starting wage for a legal aid attorney.
In exchange for reduced income, deferred associates get more experience in court and interacting with clients than they could get early on at big firms, said Esther Lardent, president of the Pro Bono Institute, which encourages public interest work by commercial law firms.
While big firms generally perform a certain amount of pro bono work each year to stay in good standing with their professional associations, the work of deferred associates doesn't count in most cases because associates are not yet employees of the firms, she said.
Not all nonprofits can accept free legal help. Some lack resources to train and supervise new lawyers or equip them with computers.
For those able to accept the assistance, it comes at a perfect time. The recession has heightened demand for legal services for the poor, while budget cuts and a slowdown in foundation grants and private giving have put pressure on many public interest offices to scale back their work.
At Legal Aid of D.C., a hiring freeze has left three of 26 attorney positions vacant. The organization has taken four deferred law firm associates for the year and two for shorter periods. They help with research and client interviews, freeing up staff attorneys to take on more cases, said Eric Angel, the group's legal director.
There are some concerns that law firm fellowships are making it harder for those intending to enter public interest law to land jobs. But the nonprofits insist deferred associates aren't taking anyone's place since they wouldn't have the money to hire anyway.
Public interest law offices can expect more free labor ahead. Many firms have announced plans to defer next year's crop of new attorneys too — and some hope sending recruits into the field before bringing them on board full-time will become a permanent feature of legal hiring.
The arrangements were "a creative response by the firms to what was a very ugly crisis," said Barbara Arnwine, executive director of the Washington-based Lawyers' Committee for Civil Rights Under Law, which has eight law firm fellows. "My wish going forward is that what you can do in good times."
Slideshow: Hot States For Green Jobs
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f2e532db7ca1205b8a61333a86ff9d0d | https://www.cnbc.com/2009/10/23/market-outlook-stocks-could-struggle-amid-buyers-fatigue.html | Market Outlook: Stocks Could Struggle Amid 'Buyer's Fatigue' | Market Outlook: Stocks Could Struggle Amid 'Buyer's Fatigue'
Stocks could struggle in the week ahead as the market's 7-month rally shows signs of tiring.
There is another barrage of third quarter earnings reports, including names like ExxonMobil,Procter and Gamble,Aetna and Verizon.
A trader at the New York Stock Exchange.Photo: Oliver Quillia for CNBC.com
But investor focus should shift to economic news with the first look Thursday at third quarter GDP. The number is significant in that it should mark the end of the recession with the first quarter of growth since second quarter, 2008.
Economists expect a number of 3 percent or better, after the second quarter's decline of 0.7 percent.
The Dow in the past week had its good days and bad, ending barely changed at 9972, down 0.2 percent. The S&P 500 gave up 0.7 percent to finish at 1079, and the Nasdaq lost 0.1 percent to end at 2154.
Friday's market though was choppy, with the Dow losing 109 points, and traders said the week ahead could start on a sour note.
"I'd say it's buyers' fatigue that's set in," said John O'Donoghue of Cowen. "The stock market seemed to be going up on bad news for a certain period, and now we have what's perceived as good news, which is fine for some of the earnings reports, but now all of a sudden it seems the market's got it fully priced in."
Earnings for the most part have surprised on the upside, but O'Donoghue said it's clear investors have become more concerned about the lack of revenue growth.
Dollar Dilemma
Another source of tension in the markets will continue to be the weakening dollar, which has moved lower as risk assets, like stocks and commodities have moved higher.
There is a growing chorus of concern that the shrinking green back is inflationary, making everything from oil to wheat more expensive, and diverting investors from U.S. assets longer term.
Investment strategist Richard Bernstein said he views the weak dollar as a risk.
"The way I view the weak dollar is not so much as the world is coming to an end..but I will say I'm very concerned by what a weak dollar does. It hampers or dampens the effect of monetary and fiscal policy," said Bernstein, CEO of Richard Bernstein Capital Management.
Yet, some economists, like Deutsche Bank's chief U.S. economist Joseph LaVorgna say it is not a problem for now because it helps the balance of trade and boosts American companies' foreign profits.
"You have an orderly decline in the dollar, and I expect that to continue and don't look at it as a negative," said LaVorgna.
LaVorgna said the September durable goods report, due on Wednesday is a key headline for the week because it will give more information on demand in the current quarter, but the GDP number is likely to get more attention.
He said third quarter growth could be as high as 4 percent.
"If that growth is weaker than expected because of inventory liquidation that keeps the powder dry for even bigger gains in Q4. What matters more is the mix. A lower headline number because of lower inventory liquidation is more bullish for growth than a high headline number from inventory building," LaVorgna said.
LaVorgna said in a note Friday that if the durable goods inventories are weaker than expected, he would trim his third quarter GDP estimate and add more growth to the fourth quarter.
He expects September durable goods orders to show an increase of 1.5 percent.
Jefferies managing director Art Hogan said GDP is the big number for stocks in the coming week.
"GDP is going to be a surprise. If you track the estimates, they continue to inch higher and the reaction will be 'Yea, it's going down after that.' But the delta between the first quarter and third quarter is going to be eye poppingly big," he said.
"There's going to be a 9 percent swing between the third quarter and first quarter GDP number. That's slightly above consensus but that's going to wake people up," he added.
VIDEO0:0000:00Market Radar
Another focus for markets is the record week of Treasury issuance in the week ahead, starting with Monday's 3- and 6-month bills and 5-year TIPS auctions.
The Treasury auctions $44 billion in 2-year notes Tuesday; $41 billion in 5-years Wednesday, and $31 billion in 7-years Thursday. Bonds were under pressure in the past week.
The yield on the 10-year rose to 3.475 and the 2-year climbed to 1.000 percent, its highest yield since Sept. 29.
Whither Stocks
Traders were cautious about Monday's market as Friday trading came to a close.
"The big earnings catalyst is taken out of it," said one trader, noting the market no longer moved higher on good earnings news Friday.
Hogan also said the market could see some selling pressure in the coming week.
"On balance, I think you're going to wake up Saturday morning and see everyone turned negative all of a sudden. I think that becomes its own worst enemy. I think people will come back in and buy the dips. Everyone is looking for a 10 to 15 percent pull back, but I'd be surprised if we get 5 percent," he said Friday afternoon.
Bernstein said the market is behaving as it typically would at this point in the cycle.
There was a sharp increase and now it is getting ready to advance more slowly.
"Early in the cycle you get a multiple expansion type of market...this has happened more quickly than people expected," he said.
"The next phase is you get an earnings driven market, and earnings driven market has a much slower advance. We're not quite there yet, but we're on the cusp," he said.
"The indicators that one would look at are actually getting healthier. That argues that earnings growth in 2010 may be much stronger than people think," he said.
Bernstein said he still thinks lower quality stocks will lead, contrary to what some strategists believe. He said history shows that they lead in every turn in the cycle.
In 1991, for instance, low quality stocks were up 91 percent in a year. This year, they are up 120 percent so far.
Bernstein said he still likes lower quality stocks and would balance them with Treasurys in a portfolio.
Hot Commodities
Wet weather in the farm belt has delayed the harvest and pushed prices for corn, wheat and soy beans to 4-month highs.
The move in grains came, as oil climbed above $80 per barrel and the dollar continued to sink.
On Friday, soy beans continued to rise, even as stocks and other commodities slid.
"It's an issue for sure. It's preventing people from retrieving record-sized crops that are out there," said Gavin Maquire, director of research at E Hedger. "It's an interesting scenario. The supplies are plentiful. They're well above early season estimates but because we can't get our hands on them, everyone who needs fresh corn and soy beans is paying through the nose for them."
Outside the New York Stock Exchange in lower Manhattan.Photo: Oliver Quillia for CNBC.com
"If you go three weeks out, the tightness dissipates pretty quickly. The problem with the weather is there is no end in sight. People can't seem to look beyond the current rain clouds," said Maguire.
He said soy beans cannot lay in fields for long and will be first harvested, followed by corn.
Maguire said he thinks prices will drop once the harvest is able to get underway.
"A majority of the gains are due to strong commodities as investors diversify away from the U.S. dollar.
There's no reason for wheat to be where it is, because there's no shortage of wheat anywhere on the whole planet and wheat prices are up by the same degree," he said.
Some traders though say the world oversupply fundamentals are shifting and that could be impacting wheat.
Econorama
Besides GDP and durable goods, investors will get some fresh housing news in the coming week.
The S&P/Case Shiller home price index is released Tuesday, and new home sales for September are out Wednesday.
Consumer confidence is issued Tuesday, and consumer sentiment is released Friday.
Weekly jobless claims are due Thursday.
Personal income and spending and the employment cost index are reported Friday, as is the Chicago purchasing managers index.
Treasury Secretary Timothy Geithner speaks Tuesday at the SIFMA conference in New York.
Earnings Central
Monday's reports include Verizon,McGraw-Hill, Baidu, RadioShack, Masco, VF Corp, and Alberto Culver.
On Tuesday, British Petroleum, Daimler, TD Ameritrade, U.S. Steel, Valero, Visa, Apollo, Boston Properties, Cephalon,Panera Bread, Norfolk Southern, and McKesson report.
Ashland Oil, BorgWarner, International Paper, Interpublic, Owens Corning, WellPoint, Akamai, Goodyear, Glaxo SmithKline, General Dynamics, Southern Co, SAP, Conoco Phillips, and Owens Illinois release results Wednesday.
ExxonMobil, Procter and Gamble, Aetna, Allergan, AstraZeneca, CME Group, Colgate-Palmolive, Detusche Bank, Avon Products, Eastman Kodak, Apache, AutoNation, Barrick Gold, Burger King, Expedia, Kellogg, Noble, Royal Dutch Shell, and Office Depot are among companies reporting before the bell Thursday.
After the bell reports that are expected from MetLife, Mohawk, Varian Semi, BMC software, Genworth, and Hertz.
Friday's reports include Chevron, Aon, Estee Lauder, Arch Coal, Cigna, Duke Energy, Simon Properties, Weyerhaeuser, Sanofi-Aventis and Constellation Energy.
— Questions? Comments?
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49e3fbe8d471068592d02a7a97aecd88 | https://www.cnbc.com/2009/10/23/markets-end-the-week-in-the-red-tech-outperforms.html | Markets End the Week in the Red, Tech Outperforms | Markets End the Week in the Red, Tech Outperforms
On a mostly negative week for the markets, where tech outperformed and the NASDAQ 100 was the only major index positive for the week, the Dow finishes in the red to close below the 10,000-mark on Friday.
The Dow hit a new closing high for the year on Monday of 10,092.19, and a new intraday high of 10,119.4The highest close EVER for the Dow was on 10/9/2007 when the Dow settled at 14,164.53, the highest close ever for the S&P was 1,565.15 on 10/9/2007, and the highest close ever for the NASDAQ was on 3/10/2000 when it closed at 5132.52Since the March 9 lowthe S&P is up 59.58%, the Dow is up 52.32%, the NASDAQ is up 69.83%, and the Russell 2K is up 75.02%
Index Impact:Caterpillar (CAT) had the most positive impact on the Dow, up over 5.5% for the week *Year-to-date, American Express (AXP) continues to be the top Dow performer by % gain, up over 86% YTDBoeing (BA) had the most negative impact on the Dow, down over 6% for the week*YTD, Verizon (VZ) continues to be the worst Dow performer by % loss, down almost 15% YTDApple (AAPL) had the most positive impact on the S&P & the NASDAQ 100, up almost 8.5% for the week *YTD, the top S&P performer by % gain continues to be Tenet Healthcare (THC) up over 403% YTD*YTD, the top NASDAQ 100 performer by % gain continues to be Liberty Media (LINTA), up almost 287% YTDGeneral Electric (GE) had the most negative impact on the S&P, down almost 6% for the week*YTD, Marshall & Ilsley (MI) is the worst S&P performer by % loss, down over 56% YTDAmgen (AMGN) had the most negative impact on the NASDAQ 100, down almost 8.5% for the week *YTD, the worst NASDAQ 100 performer by % loss continues to be Cephalon (CEPH) down over 30% YTD
Sector Impact: 9 out of 10 S&P sectors were negative for the week led by Materials, down nearly 2%. Information Technology was the only positive sector, up about 1% for the week.
Materials was hurt by Pactiv (PTV) down almost 9% for the weekTechnology was helped by Lexmark (LXK) up over 24% for the week Year-to-date, 9 out of 10 sectors are positive led by Tech, up almost 49.5% in 2009Telecom continues to be the most negative sector year-to-date, down nearly 8%
Commodity Impact:
The AAA
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d14ad0969c244071e10ee7500aaf64ab | https://www.cnbc.com/2009/10/23/obama-says-cynical-claims-are-attacking-energy-bill.html | Obama Says 'Cynical Claims' Are Attacking Energy Bill | Obama Says 'Cynical Claims' Are Attacking Energy Bill
President Barack Obama said Friday that opponents of his energy bill are disputing the evidence of global warming in a cynical ploy to undermine efforts to curb pollution and steer the nation to greener energy sources.
President Barack ObamaCNBC.com
Obama said some opponents "make cynical claims that contradict the overwhelming scientific evidence when it comes to climate change -- claims whose only purpose is to defeat or delay the change that we know is necessary."
Obama said the nation's economic future is tied to its environmental promise, describing innovation as key to righting a flagging economy, saving the globe's natural resources and ensuring U.S. competitiveness.
"I do believe a consensus is growing," Obama told his audience at the Massachusetts Institute of Technology.
Using familiar refrains from his campaign and his administration as Congress mulls its next move on the climate bill, the speech was designed as a nudge for lawmakers to act on a top priority of the president's.
"The nation that wins this competition will be the nation that leads the global economy," Obama said. "I am convinced of that."
Slideshow: America's Greenest Companies
Next week, the Senate environment committee will take up its version of a global warming bill. The legislation would cut greenhouse gases by about 80 percent by 2050 -- as the president called for in his campaign -- and require more domestic energy to come from renewable sources such as wind, solar and hydropower. The House passed a similar bill in June.
But with work still to be done on health care and deep divisions in Congress over the best approach to climate change, the chances the Senate will pass a climate bill by the end of the year are slim. That means U.S. negotiators are likely to not have firm targets set before 192 nations gather in Copenhagen, Denmark, to hammer out a new treaty to slow global warming.
"This should not be a partisan issue," Obama said, urging bipartisan answers on a day largely devoted to raising campaign money for fellow Democrats. "The closer we get, the harder the opposition will fight."
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1d30da5ac6dde37be760ef2d6468e2e8 | https://www.cnbc.com/2009/10/23/pay-cuts-but-little-headway-in-what-matters-most.html | Pay Cuts, but Little Headway in What Matters Most | Pay Cuts, but Little Headway in What Matters Most
And then the country’s pay czar descended from the mountaintop, or at least from his Washington law office, and handed down his rulings. And for his 175 subjects — er, I mean the 25 most highly paid executives at the seven big companies that still hold billions of dollars in government assistance — his rulings were painful.
Kenneth R. Feinberg, the Treasury Department's special appointee for executive compensation.AP
You’ve heard the details. The pay czar slashed cash compensation. He insisted that stock compensation be held for two to four years.
Guaranteed bonuses? Gone. Retention bonuses? Eliminated. Pay tied to performance? In. “The strategic construct is that their compensation should be tied to the performance of the company,” the pay czar, Kenneth R. Feinberg, said in an interview Thursday.
On the face of it, this all sounds quite reasonable. Clearly, Mr. Feinberg tried hard to balance the desire among angry taxpayers to see pay curbed at the companies they had to save last year, and the executives’ wish to retain talent and pay competitive salaries. (Not to mention the government’s desire to get back the billions of dollars that were used to bail out these companies.) For this narrow goal, he largely succeeded.
But there was always a loftier goal for Mr. Feinberg. When he first took this thankless assignment from the Treasury Department in June, the hope was that when he made his rulings, he would help change the ethos of executive pay, not just at the seven companies that came under his purview, but all across Wall Street and, for that matter, across corporate America. When asked by a CNBC reporter on Thursday whether he believed the pay structure he established would lead to changes across Wall Street, he replied, “I hope so.”
But the truth is, it won’t. No pay czar can do that. That’s something only shareholders can do.
In the first place, Mr. Feinberg’s “strategic construct” differs only in degree from pay policies that already exist on Wall Street. Last year, Morgan Stanley overhauled its compensation plan to give the top executives 65 percent of their pay in stock — and much of that deferred. What’s more, Morgan Stanley employees have to defer a chunk of their cash compensation, so that it can be clawed back if the deals they have made go sour. Over at Goldman Sachs — where compensation practices aren’t exactly being heaped in praise these days — partners made no more than $220,000 in cash last year and the rest in stock. And the firm’s partners have to hold onto 75 percent of their stock until they retire.
In other words, much of Wall Street has already moved to better align pay with longer-term performance. Firms have decreased the cash component, and increased stock awards, with strings attached that force them to hold the stock for long periods of time. But that isn’t exactly keeping pay down, which — and let’s be honest here — is what most of the country really wants to see, given how the nation’s bankers helped put us at the brink of financial ruin.
The executives affected by Mr. Feinberg’s ruling aren’t exactly going broke either. For instance, when you add up both the cash and stock components, 14 of Citigroup’s highest-paid executives still stand to make $5 million to $9 million each. And if the company eventually recovers, pays back the bailout money, and sees its stock rise, Mr. Feinberg’s decision to put so much of compensation into stock is going to create huge windfalls for them.
Also, it’s worth noting that certain contentious pay issues were either ignored or shoved under the rug. Ken Lewis, the soon-to-be-retired chief executive of Bank of America , has declined to take a salary in 2009, at Mr. Feinberg’s urging. But he is still going to get around $70 million in retirement pay — which Mr. Feinberg could do nothing about. And so Mr. Lewis will soon join the ranks of other top Wall Street executives who walked away with millions after doing a miserable job. That’s the kind of pay practice that makes people justifiably angry.
And the American International Group is contractually obliged to make bonus payments of nearly $200 million in March 2010. The company has promised to try to reduce that amount by 30 percent. But once again, there is nothing Mr. Feinberg can do because those bonuses were already written into contracts — and there is a high likelihood that the bonuses will create another furor in Congress, just as they did earlier this year.
Ira Kay, who heads the executive compensation practice at the consulting firm Watson Wyatt, said that in purely economic terms, he believed Mr. Feinberg’s rulings wouldn’t make much difference in the way companies paid their top brass. If anything, it gave banks that have already given back all their bailout money an advantage in hiring people from the likes of Citi , Bank of America and A.I.G., which remain government wards.
But Mr. Kay did think that all the publicity surrounding Mr. Feinberg’s rulings would add to the general message that the country is unhappy with the excesses of executive pay. And boards of directors, he added, were getting that message. The more publicity surrounding executive compensation issues, he said, the more board members are motivated to pare back things like “gross ups” and other excesses.
Nell Minow, the co-founder of the Corporate Library and a fierce proponent of executive compensation reform, didn’t even think that was particularly likely. “The only way you’re going to change things is to throw the bums out,” she said caustically.
The “bums” she had in mind, of course, were corporate directors, especially the ones who sat on the compensation committees. Right now, it seems likely that Congress will pass a “say on pay” bill, giving shareholders the right to vote thumbs-up or thumbs-down on executive pay. (It has already passed in the House of Representatives.) But that is just a starting point, since, after all, say-on-pay would be only an advisory vote, and wouldn’t be binding on the board.
Instead, Ms. Minow believes that shareholders need the ability to vote directors off the board if they feel they are doing a bad job — on executive pay or anything else. Right now, the deck is so stacked that is nearly impossible, especially since many companies don’t allow simple, majority votes to elect (or reject) directors. But the most straightforward way to shrink the oversize pay of Wall Street executives — and, more generally, curb the excesses of executive pay — would be to make directors more accountable to the company’s shareholders.
As well-meaning as Mr. Feinberg is, and as diligently as he worked through his assigned task, he shouldn’t be the pay czar. No one person should be. That’s a job more properly reserved for shareholders. You know, the ones who own the company.
Slideshow: Highest Paid CEOs: 2008
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