[CNBCfix Fast Money Review Archive, August 2010]
[Tuesday, August 31, 2010]

Scott Nations: RIMM is
takeover candidate at $5

Scott Nations made one of the most remarkable Fast Money comments — ever — on Tuesday's Halftime Report.

"I love my BlackBerry, I hate the company, it's a takeover candidate at $5 because it's the next Palm," Nations said.

"$5! Wow!" said Pete Najarian.

Joe Terranova offered, "The problem for RIMM right now is they have made concessions in India." We think they've got bigger problems than that. But there you go.

Peter Schiff: Picking up
where he left off

Peter Schiff, who's no longer in the Connecticut Senate race despite a yeoman effort right up until the end, was asked about probably the only subject that gets him more stoked than Linda McMahon's aptitude for governance: The U.S. dollar.

"I'm optimistic on China. I think the China growth story is real. Ours is an illusion," Schiff said.

Joe Terranova said, "Gold tends to appreciate" in late summer/autumn. Tim Seymour, like Schiff, is actually in the gold bullish camp, though for the stated reason of diversification. Schiff disagreed with that, saying "Ultimately it's inflation that is driving gold."

That brought Simon Hobbs fully out of his, um, shell. "There is nothing underpinning gold. There is nothing to gold," Hobbs said.

"You've got it wrong. Simon, there is nothing to the dollar. Gold is real. Gold is tangible. Gold has intrinsic value," Schiff insisted.

Hobbs said he was concerned about the widows and orphans plunging into gold and experiencing a crash someday.

Tim Seymour, though, might've had the best counterpunch to Schiff, pointing out the Treasury market has made a "very, very happy investor" for anyone buying over the last 30 years.

"There were people who were very happy who owned mortgages in 2007," Schiff scoffed. "There were people who owned dot-coms in 1999 who were very happy. That can change very quickly."

"Those are terrible metaphors Peter," said Seymour.

"It is a bubble. People are gonna get destroyed in Treasury bonds," Schiff said.

Later, in one of the weirder Fast Money moments in recent memory, Simon Hobbs tried to ask Schiff a question about oil and China while Schiff stared into the camera. "All right but can I talk about this credit bubble stuff?" Schiff asked.

Hobbs paused, then, in what became another of his patented one-liners, asked, "Could you do China first?"

"Oh! I thought I was talking to your screener!" Schiff said.

At the end of the show, Seymour and Schiff were still going at it, with Seymour insisting the Fed is merely providing a "bridge" to a better economy whereas Schiff sees only a zero-sum game in lower mortgage rates, or something like that.

Peter Schiff, politician

There was a time — seems a long time ago — when we used to just think of Peter Schiff as a temperamental gloom-monger on cable TV.

We're happy to say, not any more.

Schiff gives a wide-ranging interview to Scott Benjamin of Housatonic Times with these interesting observations about politics...

"The people running for office do what their political advisers tell them to say and avoid other topics. I didn’t do that. I edited all of my speeches. ... I’m very frank, but that doesn’t necessarily get you the number of votes that you need ... You have to dumb your message down ... What is of concern is that nobody can get elected by telling the truth ... If I had gotten closer to Linda McMahon in the polls, she probably would have spent another $10 million on television and bought every advertising space that was available ... When I first met her, I asked if she had read my book, and she said that she didn’t understand economics ... I’ve heard her give many stump speeches. By and large, I agree with what she has to say. I would vote for her. ... Republicans fouled up when they were in charge. They sometimes are better when they’re in the minority, or certainly when it isn’t a Republican president and a Republican majority in Congress."

Of course, we don't agree with all of that. Successful politicians don't "dumb down" their message. They simplify it. Most of the public, including very bright voters, don't have a clue about China PMI or dollar/yen charts. That doesn't make them in need of dumb information. The truth is that most brilliant minds, in fact nearly all of them to be honest, disagree with the specifics of what Schiff says on TV. That's what he's unwilling to admit.

Nevertheless. Schiff is a thinker and a provocative person. He overachieved in his Senate bid and seems to have actually emerged with a sense of humor. He has a lot more to contribute to the national debate than angry soundbites, contrary to previous opinion.

Trading Your Passion
was a great idea

Have to admit, whoever came up with Trading your Passion was on to something.

It didn't hurt that the first subject was Karen Finerman on the tennis courts. This is one of the best Fast Money features. Joe Terranova on Tuesday offered a very sincere approach to healthy eating (and let's face it, probably tons of people who read this page could use some of that advice), and we learned later that we'll be hearing about Tim Seymour's band, which will be the first band footage shown on Fast Money since Dylan Ratigan's gourd days with Fountains of Wayne, you know, back in the time when The Commissioner was actually for banking profits before he voted against them.

Pete Najarian's segment Monday sort of ovepromised and underdelivered in that the footage had been seen months ago on another Pete segment, and brother Jon sort of indicated Pete's into radio announcing, which would've been worth hearing. Hate to say it, but Pete's too old for the game now. If his passion is merely watching football, how does that really make him any different than mopes like us?

Anyway, Terranova said Tuesday that "Healthy eating is now becoming affordable," and he recommends Whole Foods and Hain Celestial, even though there remains a "lot of disbelief."

We're not sure what the hook would be if Peter Schiff played Trade Your Passion.

Since Hurd, we’ve had
3PAR, buybacks ...

Gary Kaminsky, in a preview to the K-Call, called in to Fast Money on Tuesday and said he thinks consumer discretionary names like ANF and LULU are going to be in trouble after Labor Day.

And the greatest move by Simon Hobbs, a burgeoning comedy machine who turned in another big day and is rapidly proving to be possibly — possibly — the funniest host on CNBC, was to not ask Gary Kaminsky whether Kaminsky or Steve Grasso was the winner of the HPQ buy/don't buy brouhaha of a couple weeks ago.

(Then again, maybe Hobbs should've asked that question ... nah, not with Peter Schiff in the background.)

Tim Seymour said he's buying Intel, it's oversold. Steve Grasso pointed to technical averages; "the pivot point is 1,050." Guy Adami, who clicks with everyone but has a Koufax-Drysdale combo going with Simon Hobbs, said those people who think the market is due for a bounce should try FedEx.

Colin Gillis said Apple is going to present "an iPod Touch that's gonna bring in video chat." And shockingly, he said the company is building an "ecosystem around these platforms."

Motorola: The un-M&A

Simon Hobbs reported Tuesday that Carl Icahn has bolstered his MOT position.

"I'm already long Motorola," Steve Grasso said. "It's splitting into 2 different companies ... most analysts that follow the stock think that it's grossly undervalued at this level with the split that's coming up."

Guy who had 419,000 shares
bought 30,000 more

We always get a thrill when someone on CNBC agrees with this page, particularly on subjects that tend to fly under a lot of people's radar.

So Tuesday, we found ourselves pumping our fist when Gary Kaminsky on The Strategy Session took up Brian Moynihan's insider buy from last week.

"It is irrelevant, it is almost pathetic and who cares," Kaminsky said. "I mean, if Moynihan wanted to make a statement as an inside buy that was meaningful, um, 30,000 shares of a stock at 12, 13 dollars, irrelevant. I mean, if you wanna make a statement, go out and a buy a million shares of stock, take out a loan, I mean, the banks got a lot of money to lend, very cheap."

Right on.

We were stunned actually that Tim Seymour and Joe Terranova called BAC a buy on that news Aug. 23.

But back to Kaminsky on Tuesday. He concluded his point with this: "I'm not saying it's bad, I'm not trying to make a comment that it's bad. But to say 30,000 shares is a major, significant commitment on the part of a CEO of an institution, you can't do that."

But Kaminsky initially called the purchase "irrelevant, almost pathetic." He had it right the first time.

Moynihan's buy is actually a bad thing because it looks like a (very) weak attempt to secure an optimistic headline while the stock is flagging.

Moynihan had to know that any filing reporting such a purchase would be newsworthy. Fast Money even called it breaking news and interrupted whatever they were talking about to mention it.

Except instead of viewers hearing, "Brian Moynihan just went all in on the company he leads," they heard that he spent $391,000 to boost his personal share total a grand 7%.

Like Kaminsky said, if you wanna make a statment, buy a million shares. Put some of your own risk on the line. People would respect Moynihan for that. This isn't Exodus.com where you fear going to zero. Ken Lewis, per Yahoo finance, has 1.8 million shares and he's not running the company. Moynihan last year accepted an utterly massive job. Obviously he thinks he's up to it. Why not tell the world, "I'm going to do this; this company is going to be a success," and plunge all your cash into it? Where else is he going to put it, real estate? Money markets? Potash risk-arb?

Instead, all he did was call attention to a relatively small commitment.

People want to see a blood-and-guts leader put it all on the line for his own business and employees that he believes in, not a bureaucrat making a token measured risk feel-good measure.

Kate Kelly reported on insider transactions at the big banks (basically most people tend to be selling, for some reason) and even went so far as to call Citigroup "a very cheap stock," even though insider sales are high. "A lot of people think the stock is poised for a turnaround, yet there's been a lot of selling," Kelly said. (This writer is long C; no position in BAC.)

Sadly, Gary Kaminsky said one effect of 2008 is that insiders who saw Bear Stearns, Lehman, et al, are going to spurn massive positions in their own companies' stocks, perhaps forever. It's a "massive shift that will not change," Kaminsky said.

Remember when Gordon Gekko said, "Today, management has no stake in the company!!!"? Maybe he'll crow about that one in Part 2 in a couple weeks.

In 5½ minutes, Peter Fisher can’t decide if there’s a bond bubble

Lovely Becky Quick guest-hosted The Strategy Session again Tuesday for David Faber and welcomed BlackRock's Peter Fisher with what she called "the question of the entire summer" — whether there's a bond bubble.


"I just don't think that's a helpful way to think about it," said Fisher.

We take that as a "no." We think.

Fisher later said he thinks Treasurys are "fairly valued" given the economic circumstances, lending further credence to the "no" theory.

While reluctant to offer a specific answer to Quick's question, Fisher wasn't averse to trumpeting one of his own apparent calls. "In January I was pretty confident rates would go lower because the economy was gonna be weaker than people thought," Fisher said. "People were too euphoric about the strength of the economy. Right now I think people are probably a little too depressed about the economy."

So, 7 months from now, we'll check back and see if he did it again.

Slightly frustrated, Becky Quick posed her question to Gary Kaminsky. "I don't think we're in a bond bubble," Kaminsky said.

[Monday, August 30, 2010]

Adami: HPQ bid for 3PAR is diversion from Hurd saga

Guy Adami on Monday's Fast Money suggested something about HPQ's bid for 3PAR that probably a lot of people have been thinking, but few if any are really inclined to say.

"I think they were forced into a move because of what happened with Mr. Hurd," Adami said. "I think they're trying to get people's eyes off the ball."

Nobody on the panel commented on that, but that's an alarming assertion.

If true — and we have no idea if it's true, whether the company was planning something like this while Hurd was in charge — it's a very bad sign of leadership at HPQ, that it would be entering a price war for a company it only wants because its CEO was fired. (This writer has no position in HPQ, long or short.)

Curiously, HPQ's deal for PALM wasn't exactly well-appreciated by the Street, even though more bullish analysts shrugged and said why not, a billion dollars is a rounding error for H-P.

A billion here, a billion there, and it starts to add up.

It’s fair to say settlement
is now priced in

Simon Hobbs had his colleagues in stitches much of Monday's Fast Money, especially when, after a stumbling intro, he responded to Gary Kaminsky's "how ya doin?" with "I'm struggling."

Hobbs asked Kaminsky about the HPQ buyback, offering Kaminsky a chance to unload on the closet indexers. "A lot of the strategists who've been telling you to buy stocks for the last 10 years got a little excited," Kaminsky said, but then he reiterated a point from the Strategy Session, that if you look at the Intel chart circa 2005, when it announced a huge buyback, it basically didn't help the stock.

The impression around here — keep in mind we're not pros — is that what companies do with their cash is far less relevant to the share price than how much cash they're producing in the first place.

Kaminsky said that while on vacation that everyone keeps saying was so bad, he talked to a lot of non-financial people, people in manufacturing, apparel, homebuilding, who say forget the double-dip, we never had a recovery.

As for short-term concerns, Kaminsky said, "Financials are acting terrible."

Guy Adami, in another portion of the show, said the trading of Goldman Sachs (back to where it was before the settlement with the securities industry watchdog whose name Adami couldn't remember) "has to leave you scratching your head." Adami pronounced the market as being at an "incredibly precarious point."

Mike Darda, on the other hand, said stocks have probably priced in a worst-case scenario that won't happen, and that sentiment is at March 2009 levels. "I like U.S. equities. I like global equities," Darda said.

What happened to the Potash bidding war?

Mike Block, a semi-regular Fast Money guest in recent weeks who has made refreshingly blunt stock calls, took a turn in the Fast Money on-deck circle (that would be the Englewood Cliffs Prop Desk) on Monday and proved that doing live television might be a little more difficult than it looks.

Block was rather dour in expressing a few very terse "I'm not buying anything" market sentiments. He did make a good point about M&A. "Look at POT. We keep hearing about more bidders. Where are they?" he said.

But it was his attempted humor that needs to be shipped down to the minors for more seasoning. Referring to Darden Restaurants in Pops & Drops, Block offered, "You're here, you're losing money like a family."

Maybe INTC should buy POT

Not only was Hewlett-Packard taking a bit of a slamming Monday, but Intel wasn't exactly winning converts.

Joe Terranova suggested that INTC's recent acquisitions are a sign it's going back to the drawing board. "They're acknowledging that something's wrong with the business model," Terranova said.

Later, Jon Fortt pointed out that PCs are sort of having a "mid-life crisis," and that the basic problem for Intel is that its owned the market share in that sector about as much as it possibly can and now needs another outlet to grow.

And maybe McAfee isn't the answer. "You don't see a lot of people clamoring for mobile security at this point," Fortt acknowledged.

Oh man. Did we bungle a football reference, or what?

Last week we saw a teaser for the Fast Money "Trade Your Passion" series featuring Pete Najarian, showing that footage of Pete in a football jersey doing some drills.

This page suggested it was a Miami Dolphins jersey. That's what happens when watching on a fairly small, kitchen-sized TV set. We just assumed Pete or a producer picked up the thing at a sporting goods store so that Pete could tape the segment in something other than a sweatshirt.

As Shaggy would say: Zoiks.

Pete's "Trade Your Passion" segment aired Monday, and we realized it wasn't a Miami jersey, but Pete's vintage Sacramento Surge jersey from his days in the World League of American Football.

The Surge's Wikipedia page is quite helpful, pointing out that Pete played for the team in 1991 and 1992, and that the Surge actually won the championship in 1992.

It may have been the WLAF, but Pete had high-level NFL coaches, including Charlie Sumner and Jim Haslett.

Congrats to Pete, and the Surge. Next time before we comment on pro football on Fast Money, we'll make sure we know what we're talking about.

Fighting the tape

Dr. Mark Schoenebaum returned to Fast Money, speaking not quite as rapidly as before. "I think Genzyme is still a buy. Sanofi sent a bear hug letter to Genzyme," he said, but "probably the next step" is to go hostile. He thinks the deal will get done at $75 or $80.

He said Gilead would be his pick in the pharma/biopharma sector, because he evidently doesn't see much hope in the traditional names like PFE and MRK unlike the Hedge Fund Trade of the Week. He called Gilead a "cheap, out of favor stock."

Richard Volpe of RBS was brought on to discuss his firm's prediction of a correction in the bond market.

But one wonders why Volpe was on and not a colleague, when he immediately credited "our strategist, Billy O'Donnell," for making the call that Treasurys could see a bull-market correction over the next 4 weeks or so.

It's kinda like having Mandy Drury relay Brian Kelly's stock picks which ... now that we mention it ... is actually a rather appealing idea ... stop there ...

Guy Adami said he's not so sure about Treasurys and thinks it's possible to continue seeing "hordes of money coming in."

Pete Najarian said that despite the gloom in the markets, there is copper at $3.40, which will "make you scratch your head."

BP, on the other hand,
is apparently offensive

Joe Terranova took up the subject of oil on Monday, scoffed at the JPMorgan $65 call again, said it all comes down to China PMI, and recommended "big, defensive integrated names," specifically CVX, COP, SU, OXY.

Guest Ed Mills said the No. 1 question he gets is from people wanting to know what their tax rates are going to be next year.

Pete Najarian said there's "so much uncertainty" about the status of the Bush tax cuts.

Kelly taking flier on RIMM

Jon Najarian said Monday on the Halftime Report that Herb Greenberg's report of Steve Eisman's short in Strayer didn't scare him. "I'm long COCO," Najarian said, and he said Apollo looked to be rising also, so "This seems to be just an isolated bet on that one sector of the educational stocks."

Monday's Halftime Report was essentially an examination of Brian Kelly's complete book. "I am long RIMM," Kelly admitted, but "not very happily," based on a call-spread theory the shares would bounce on some international settlements. Kelly called that a "bad trade."

Kelly said the ag boom is a positive for names like Union Pacific and The Andersons. Simon Hobbs questioned if that's like a couple derivatives away and Kelly said no.

"I think VMWare's a great buy. I don't own it myself," Kelly said.

"I am long the yen," Kelly said.

Simon Hobbs asked Joe Terranova what he thinks about JPMorgan's oil call of possible mid-$60s by October. "I think what JPMorgan is doing here is they're playing Fast Money trader," Terranova said. "They want you to sell it."

Does Buffett do buybacks?

Gary Kaminsky, fresh off a "nightmare" vacation, opened Monday's Strategy Session with guest co-host Becky Quick by launching into buybacks.

"If you look at the history of buybacks," Kaminsky said, pointing to a chart with notable clunkers such as MSFT, INTC and T, "companies are really bad at buying back their own stock, for the most part."

Kaminsky offered a fictitious example of the shortcomings of buying one's own company shares instead of somebody else's. "Think about if each one of these companies ... if they had taken that same money instead of buying back their own stock, and bought Apple at the same time, think about the return for shareholders."

That made us instantly wonder: Does Berkshire ever do buybacks? The most recent direct article on the subject we found is from CNBC.com's Alex Crippen, who wrote in May 2009 that Buffett was not planning a BRK buyback but would not rule it out, only with a very high standard: "The stock price would have to be 'demonstrably below' a conservative estimate of the company's intrinsic value."

In January 2009, the New York Times noted Buffett's interview with savvy PBS business reporter Susie Gharib in which Gharib asked, "Would you ever be interested in buying back shares?"

Buffett responded, "I think if your stock is undervalued, significantly undervalued, management should look at that as an alternative to every other activity. That used to be the way people bought back stocks, but in recent years, companies have bought back stocks at high prices. They’ve done it because they like supporting the stock..."

So best as we can tell, not a very good idea, a reach at boosting share value that basically doesn't work.

We'll take it a bit further and suggest most buybacks, as with one-off sub-$1 million CEO purchases, are actually a contrarian signal of value in which edgy stakeholders are not making coolly calculated assessments of value, but rather desperate attempts at stopping a short-term slide (um, HPQ was the one announcing it Monday).

Kaminsky said nevertheless, it's better than doing nothing at all with the cash.

Greenberg: Eisman
is short Strayer

Herb Greenberg reported Monday on The Strategy Session that Steve Eisman "tells me exclusively today that he's short Strayer," citing disagreements between the company and the feds over the student-loan repayment rate. Greenberg said Eisman thinks we're "just in the early innings of this."

Gary Kaminsky said, in general, "You don't bet against these guys. For the most part they do much better, superior work."

Bob Profusek, in something of a Strategy Session exclusive, said in August he's usually out on the golf course, but the M&A world is actually "very busy right now."

He said the signature M&A move reflecting more of a transition from a board-centric environment to a shareholder-centric environment was Charles River's attempt to buy into China, which got rejected. "Fundamentally the market has turned from an investor market to a renter market," Profusek said.

Profusek said the 3PAR bid "makes no financial sense" at this time, emphasizing the word "financial." Gary Kaminsky said it's a "show me later" type of acquisition on the part of HPQ/DELL.

Guest King She spoke about Genzyme and reported a "potentially a very good chance that the deal could happen," he said in the mid-$70s.

Did Kyle Bass really
nail the Q2 GDP revision?

Over the weekend, we caught up on some of our CNBC reading.

One article at The Business Insider, which of course is one of our favorite Web sites, got our attention.

The headline says: "Kyle Bass NAILS It: Revised GDP Figure Is Exact Number He Predicted."

That raised some eyebrows, and not just for the all-caps word.

The article includes this sentence: "Bass said it'd be 1.6%. He was exactly right."

Also, the Business Insider article included a link to a Dallas site, saying "FrontBurner noticed Bass' awesome call."

We clicked on the link to FrontBurner, which also seems like a fine site, and saw this headline: "Kyle Bass Hits Bullseye with Revised GNP Figure."

(The term "GNP" is also something that might raise eyebrows, but no need to quibble.)

That article says, "In an appearance on CNBC, he said the Commerce Department’s 2.4 percent growth estimate for the 2nd quarter was too optimistic; it would come in, he said, at 1.6 percent. ... What I found interesting is that Bass nailed the figure precisely."

Only problem?

Bass never said on CNBC that Q2 GDP was going to be revised to 1.6% on Aug. 27.

What he actually said is this: "Our GDP, Q2 GDP, will be restated, or finalized, on August 27th. The Q2 number was 2.4%. I will be flat amazed if the revision isn't 1% or lower."

Then this: "If you just look at the inputs, if you take the time to look at personal consumption expenditures, and you do the back math, again this isn't hard but very few people do it, you come to a number of 1%. So, my guess is 1% on the 27th."

Not only did this page quote Bass' "1% or lower" on Aug. 17 (see below, PgDn), we even put it in the headline for that entry. (You'll find it said, and still says, "Bass: GDP actually 1% or less.")

We wondered, hmmm, despite this specificity, could Bass have possibly made separate forecasts in the same interview? Corrected/updated his own thoughtful commentary? Bass' appearance lasted about 15 minutes, with a commercial break splitting the 2 segments. We easily found both clips at CNBC.com (another reference to the fine work done by Allen Wastler's gang). 1) Never does Bass say "1.6%," and 2) the CNBC text scrolling at the bottom of the screen while Bass talks says "BASS: U.S. Q2 GDP WILL LIKELY BE REVISED TO 1% OR LOWER."

If that's not on-the-record at 1%, we're not sure what is.

We're big fans of headline-writing, so let's get back to those headlines: "NAILS it ... Hits Bullseye ..."

According to the bare minimum math knowledge we've got, Bass' forecast not only didn't nail the bullseye ... it was, at a minimum, off the mark by 37.5%.

In fact, based on his own terminology in that CNBC appearance, Bass is not congratulating himself with high-fives right now, but must be downright "flat amazed" at how wrong he was.

Or maybe, in the twisted world of debt and mortgage finance that Bass has, to his credit, mastered on some level, "1% or lower" is just a rounding error from "1.6%."

Doubt it.

If you don't believe us, see the actual video. The prediction in question occurs at the 7-minute mark, though if you skip ahead, you'll miss Gary Kaminsky giving M&A "5 out of 10" on his report card and David Faber saying, "I'm not just the dean of M&A reporters, I'm like the grandfather at this point, over 20 years."

CNBCfix.com: Not perfect. Just dedicated to 100% accuracy.

Jimmy Carter
vs. Ben Bernanke

Sometimes, news intersects in interesting ways.

Newspapers, TV/radio and Web sites reported Friday and Saturday on Ben Bernanke's insistence that the Fed is capable of preventing a double-dip.

They also reported that Jimmy Carter had brought home an American from North Korea.

Newshounds that we are around here, we actually jumped all over the Carter story first, because we (alone in the national media, apparently) were certain the U.S. taxpayer was funding this trip merely to remove a lone knucklehead from a country he had no business entering in the first place.

The Carter Center, we noted on our home page, calls the trip a "private mission" and says it was "not sponsored" by the government. Fair enough. Though Carter must get extended Secret Service for this type of venture; certainly somewhere along the line there were taxpayer costs to this extraction (that is, beyond the symbolic costs of sending former presidents to a country that engages in nuclear blackmail, repugnant control of its own citizens and almost daily threatens war against its neighbors).

We bring this up because it illustrates something: Banks aren't the only ones who get bailouts. All you have to do is go to South Korea, hop a fence, and a former president will come get you. Really, isn't that more ridiculous than some of the logic applied to Wall Street's (ongoing) lifeline?

Ben Bernanke's goal (more or less): 5% growth, 2% inflation, 5% unemployment.

Jimmy Carter's goal (more or less): World peace.

Bernanke will argue, as Tim Seymour likes to say, that the Fed's actions of the last couple of years is merely a "bridge" to get the economy back to long-term self-sustainability, and that unprecedented debt levels are necessary to avoid more short-term pain.

Critics (such as Kyle Bass, Peter Schiff, Peter Boockvar) will say we simply can't afford to keep charging our rent on the credit card, that the Fed's been politicized for easy money.

Carter will argue that his own form of bailout represents necessary dialogue for bringing opposing nations together; if they're not talking, they'll never have peace, and this just happens to be an opportunity for enhancing the dialogue.

Critics (such as just about any Larry Kudlow foreign policy guest) will say some leaders/nations are always going to hate us, and trying to be friends with everyone just doesn't work.

At what point, if ever, do troubled parties have to start taking their medicine ... When do we start saying to North Korea, you're not getting any more presidential visits or bogus nuclear "accords" that everyone knows you won't adhere to but allow Bush and Clinton to claim short-term foreign policy successes; if you want to continue embarrassing yourself detaining troubled tourists, fine. And when do we start saying to sectors of the economy, you're on your own, the federal spigot is off, easy credit is over, and moral hazard is back on?

Or better put: Who accomplished more last week: Ben Bernanke, or Jimmy Carter?

Good job, ProPublica

We promised (as if anyone waited with bated breath) to post a thought or 2 on the ProPublica report on CDOs that produced a Fast Money Halftime interview Friday with authors Jake Bernstein and Jesse Eisinger.

We're hardly experts on CDOs, to say the least. But the article seemed very thorough, an impressive amount of research and contact with banks and firms.

We note that on the Halftime Report, Melissa Lee sounded impressed, introducing the interview with, "Gentlemen, it is very nice to speak with you especially about such an important story."

Eisinger said the impetus for the story is to know, "As the housing market waned, why did the CDO business double?"

Honestly, this takes us back a bit to a point we made in our reviews of C. Gasparino's The Sellout and David Faber's And Then the Roof Caved In (hopefully we got all those words correct and correctly capitalized; it wasn't the niftiest choice of title). The point being, wonderful reporting, but it's really time for the layman and the taxpayer to move on. Reading more about this stuff is like watching endless 9/11 footage after breakfast. No need to ruin your day.

And so, we have to agree with Zachary Karabell. (Actually we really had to, because nobody else did on Friday.)

"Couldn't this be a little bit of a case of being shocked that there's gambling in Casablanca?" Karabell asked.

Kate Kelly makes a stock call

We were dismayed to hear from David Faber at the beginning of Friday's Strategy Session that "Gary Kaminsky's nightmare vacation continues: The weather's been lousy, his kids are sick, he wrecked the car..."

He also was shown on national TV as being a step slow on the tennis court, although we think that might've been a bit of a ham, given that Kaminsky is a competitive triathlete and mountain climber.

Anyway. Frank Aquila of Sullivan & Cromwell offered interesting advice for a certain 3PAR suitor.

"Dell has this perpetual matching right," Aquila said. "If I were them I would probably keep matching H-P until H-P goes away."

Ron Insana, who delivers much more per minute on Maria Bartiromo's Closing Bell roundtable than he did on The Strategy Session, said, "It's almost like RJR Nabisco ... it seems like there's as much interest in this company, which is a $2 billion acquisition for 2 extraordinarily large firms. Either it's a very slow news period David, or this company has something we don't know about that makes it integral to either H-P or Dell."

Steve Liesman reported from Jackson Hole, with the magnificent Grand Tetons as a backdrop (guess the Fed can only gather in rich communities where the big shots feel comfortable and can't help out the working Joes in Vegas like the SALT conference did), about some Fed minutiae that really shouldn't matter to anyone besides Peter Boockvar, Peter Schiff, Bill Fleckenstein and Brian Kelly.

"They are not changing their 2011 forecast," Liesman said. "Think about it. Had they changed the 2011 forecast, and downgraded it, then they would've had to, been required to step forward and really put in place, or come closer to, using those new QE measures. But he didn't."

Yeah. Uh huh.

Strategy Session guest Guy Lebas offered this: "1 phrase from Bernanke's speech this morning really struck me, which was that, he said the preconditions for a return to economic growth are in place."

But, Lebas said, "we've got this massive cultural factor" that makes things different, namely the fact that the 2008 crisis "broke consumers' faith in borrowing."

Lebas, on another subject, pensions, mentioned "The aging of our population. Not nearly enough has been made of this."

Kate Kelly made a brief appearance at the end with a remarkably rare (for her) description of big banks. "These stocks are incredibly cheap," Kelly said, citing book value. "Only Goldman of the major banks is trading at above book."

David Faber played a clip of Tony Robbins that apparently is in high demand at hedge funds. (So obviously the economy is back, if they're spending money on this). Faber said the trader that Robbins speaks of counseling is likely Paul Tudor Jones.

Robbins suggests maybe people need to lighten up because the economy could get a whole lot worse. That kind of information obviously didn't come from Lee Janzen or Leeza Gibbons.

Ron Insana, before lowering the boom, said, "You have to respect Tony Robbins, you know, for, for what he's done with his life..."

$3 mil. a year, at least

Ron Insana on Friday, discussing the wonderful fate of 3PAR, suggested maybe this is a "scorched earth" type of auction, in very curious terms.

"In our end of the TV business, we see this all the time, where you go out and shop for another bid just so your boss has to pay you more money," Insana reported.

If Trish Regan were to go shopping for another bid in that black leather jacket she wore while introducing The Strategy Session Friday, the earth would be more than just scorched.

[Friday, August 27, 2010]

Extended lunch

We were intrigued by Friday's Fast Money Halftime Report discussion with ProPublica writers Jake Bernstein and Jesse Eisinger about their CDO article. Unfortunately, we were a bit out to lunch Friday (figuratively), so we'll have to tackle it over the weekend, and hopefully take a crack at Ron Insana's day on The Strategy Session as well.

This caused us to look up
CSCO’s beta

Zachary Karabell ignited Fast Money in his rare desk appearances at the end of this week.

Maybe that's because he couldn't find a guest he actually agrees with.

Michael Block was 1 of 2 on Friday who raised Karabell's eyebrows, suggesting that CSCO is actually a crowded trade.

Block first said he thinks AKAM and MOS have gotten ahead of themselves, partly on takeover speculation. But then Block drew maybe a bit of skepticism from Melissa Lee when he explained why Bank of America of all names might be too crowded. "A lot of guys established large positions in the stock, around $10, up to 12, 13 dollars," Block said. "I think there's a lot of people still looking to get out of this trade."

Actually, we think that's probably a decent argument. There probably are a lot of people who got on board the banks in March-August 2009 and figured they'd ride it into normalization-land, and now might simply be giving up on a broken chart.

Karabell then asked Block about Cisco. And the response was, "I think a lot of guys are getting in too soon. This is a show-me situation," he said.

Melissa Lee asked Peter Boockvar on the Prop Desk to weigh in. Boockvar sort of agreed with Block. "People get into these value traps not knowing that the secular environment, uh, for them, these companies, have changed," Boockvar said. "Cisco for example has been in a, I guess a secular bear market for 10 years."

Karabell exacted a bit of revenge in the Final Trade, declaring, "I'm gonna go with that, uh, crowded Cisco trade, the crowded value trap. I think, you know, this stock can easily go up 20%, it'll be at the middle of where it's been, and they have incredible business behind them."

We're eager to declare a winner, so we looked at the charts.

Actually, before doing that, we took a look at beta. CSCO, according to Google finance, is 1.25 beta. Higher than we expected.

Nevertheless, Cisco shows impressive outperformance against the S&P for much of the last 5 years. For the charts 1 year and less, CSCO mirrors the S&P ... except for the month of August, which is where all of the S&P's outperformance occurs.

So either the recent divergence between CSCO and the S&P is a reason to buy CSCO for the mean reversion and eventual outperform ... or a new paradigm/sea change of sorts has just started happening this month.

We're inclined to think the former is more likely. But the latter can't be ignored. This wouldn't exactly be a popular Dennis Gartman trade, buying at the 52-week low.

Colin Gillis also got
the skeptical treatment

Zach Karabell also was detecting befuddling logic from Colin Gillis on the Fast Money set Friday.

Gillis said the Kindle's bubble has burst, more or less, clouding the e-book revenue picture, and thus, why the heck does Amazon have a stratospheric multiple?

"There's a lot of question as to, like, you know, where Amazon's gonna be making the money off. They're not gonna be making it on the hardware anymore," Gillis said. "The economics are still really questionable" of e-book pricing power.

All of that, he said, "Just doesn't justify a 46 multiple."

"Colin, I'm a little bit confused," Karabell said. "I think that you get a lot of attention on the Kindle, because media people like to focus on the medium of media, but most of Amazon's business is an e-commerce business."

Gillis said that's true, but with a struggling consumer, a 46 multiple won't cut it, and the "first-mover" advantage on the e-readers is apparently gone.

‘There’s an absolutely phenomenal touchdown and now the safety’s gonna get taken out to the woodshed’

Jon Najarian said the thing he's hearing from investors these days is that they're actually picking up stocks trading at 52-week lows.

Najarian said those people are more concerned about being in the right sector rather than the right stock, so as to avoid the risk of the "Right church, wrong pew."

Najarian said, "The more popular the tablets are, and iPads, well, the worse it is for Intel."

Joe Terranova said, why should anyone reach for HPQ and DELL when the model they're striving for already exists. "I think also when you look at what Hewlett-Packard and Dell are trying to do ... they're trying to become IBM," Terranova said. "I think you've gotta own IBM at this level."

Jon Najarian initially talked about playing poker with tarot cards. Then he talked about how Nike traded as Tiger Woods played golf on Friday. Zach Karabell said, "I think trading by rounds of golf is up there in the arcana of the hangman in the tarot cards."

Melissa Lee said Pete Najarian next week, presumably in that curious No. 50 Miami Dolphins jersey (we don't know of any Dolphins player who wore that except the late Larry Gordon), will talk about his personal athletic interests and how that helps him trade.

Pete's brother Jon said Friday that Pete enjoys talking football. "He loves describing it; he's been a color commentator on the radio," Jon said.

Ah. Now we know where the cliches come from.

"I'm off next week," said Melissa Lee, but "you'll be in good hands with Simon Hobbs."

52-week-low list is popular

Zach Karabell had the Fast Money line of the day Friday on the Halftime Report.

"They used to say that everybody knew the plot of Shakespeare's plays but they go anyway because it's sort of fun to see it happen, and I guess the same thing is true for Ben Bernanke's speech," Karabell said.

But then he actually followed it up with a 1-liner that might've been even better, "For all we know, Potash will make a bid for 3PAR next week."

Melissa Lee was at it again in snappy royal blue on Friday, but in fact Patty Edwards captured the week's glam crown with another day of impressive jewelry and new hairstyle. Next week, Patty said, "It's a week I'm gonna be at the beach." But maybe that's a good thing, because, "I'm lookin' at this market today and I feel like I'm in Bizarro world."

Edwards, like Zach Karabell on Cisco, thinks HPQ might be overdone. "I actually am in this name, I may pick up some more," Edwards said.

[Thursday, August 26, 2010]

Dr. J made ‘nice scalps’
on Cisco trades

Jon Najarian wandered a bit off the reservation in the category of political correctness on Thursday's Fast Money while discussing Cisco and his own great trades.

"I've made a couple nice scalps on this one, picking it up when people have oversold it," Najarian said. "I think it's right back to those areas again now Melissa."

Zach Karabell was more effusive on the stock however as sort of a sea-change or transformational type of play (our terms, not his): "I am a buyer, I'm a holder, I'm an owner," Karabell said. "I think this is an unbelievable entry point."

We couldn’t believe what
we heard Steve Cortes say

Sometimes on this page we philosophize about public perception, mass hysteria, media control, all that good stuff.

The key term there is "philosophize." (Another key term would be "on a podunk, revenue-free Web site in the middle of nowhere," but why punish ourselves.)

On Thursday's Fast Money, we learned Steve Cortes takes that kind of stuff fairly seriously — to the point he thinks the economy will actually improve merely if Ben Bernanke says it's improving.

"I think that the Fed chairman needs to start speaking more positively about the economy," Cortes said. "Otherwise, he's actually reinforcing the very deflation he's trying to prevent, because it creates such retrenchment."

Give Melissa Lee credit for jumping on that. "Yeah, but If he's not positive about the economy, why should he speak positively about the economy?" Lee demanded.

"Because he wants prices to rise," Cortes said. "It can be self-reinforcing. In other words, if he constantly talks doom and gloom ... we can actually be caught in a Japan-style deflationary trap that we otherwise might not be in. And the Fed's starting to debate this."

Wow. Talk about essay material.

Cortes is not correct. But we give him some amount of credit, like when Pfizer inadvertently discovered Viagra, for being onto something, a concept this page has floated more than once.

Every word of Bernanke is scripted and tailored. Correctly so. Certainly, extensive judgment and subjectivity, particularly to the order and priority of his comments, is a factor in what he chooses to say. But as a whole, he cannot speak anything but absolute truth. There are gobs of brilliant minds tracking every word, and if he were to exaggerate or take certain facts out of context, he would quickly be called out by those brilliant minds as a fraud, and confidence in the Fed would frankly disappear.

Furthermore, the notion of people rushing out to Best Buy just because Ben Bernanke gushes on CNBC is just inaccurate.

On July 9, this page reported on Gary Kaminsky's comments about consumer sentiment indexes. We branched out with the suggestion that sentiment indexes seem highly contingent on media, that media can surely be manipulated, and thus, if sentiment indexes actually are a leading indicator, it would make sense for certain powers to manipulate them; for example have Obama and Gaga and Jeter and a bunch of other celebs say they've never seen deals at the mall like they have in the last 2 weeks. If that's all it takes to return to 5% GDP, why not?

But this is a classic divide between the free Western world, where it is generally (though certainly not always) assumed that nothing is more important than the truth and there is no greater goal than the truth; and closed societies, who believe people are better off when only exposed to certain things.

Cortes' statement indicates at a minimum he believes an individual's commentary is a factor in people's opinion. That is probably not controversial; psych profs have done studies again and again showing this. But Cortes is taking that notion to the next level in his argument that an individual's commentary is a factor in people's action.

A lot of people gauge crime based on local newspaper headlines. When several high-profile murders happen in succession, people tend to get a sense that crime is out of control, when statistics usually indicate anything but. Do those people immediately put their house up for sale to move to Scarsdale? No, not usually.

This site has heard complaints from business owners who believed the only terrible thing about the 2008 economy was the media coverage of it. We think they have, on some level, a valid point, that relentless publicity about an economic free fall doesn't inspire even comfortable people to think about a shopping spree, and inadvertently affects the problem.

The truth is that even in the free Western world, we're more influenced by media (and its subjects) than we'd like to admit. That is why Cortes is partly correct. But we get enormous value in the truth that sadly is lost on many other nations, which is why his suggestion is wrong. Sometimes it hurts. This society is far better off in the long run because people like Ben Bernanke tell the truth, even if it costs us a few quarters of GDP recovery or occasionally gets politicians and appointed officials fired.

In case you think Cortes is totally loopy, know that Zachary Karabell did not dismiss the concept, merely the suggested messenger, on Thursday's Fast Money.

"And the problem is, Ben Bernanke is not Winston Churchill," Karabell said. "And that's no disrespect to Mr. Bernanke. He's not this avuncular, stirring, passionate figure, so looking to him for that is a losing game."

Cortes: Herd is wrong

Joe LaVorgna on Thursday said, "I don't think the chairman's gonna say anything new." LaVorgna also said, "The big drag in Q2 GDP is actually in imports."

Despite his skepticism of Ben Bernanke's commentary, Steve Cortes was saying Thursday that economic sentiment indicators are working now in the long investor's favor. "Bet against the herd; there is too much pessimism," Cortes said.

Zachary Karabell suggested the bull/bear divide is distorted by tiny sample size, saying a "small number of traders and bears are determining a large amount of sentiment."

Love to know how
that one turned out

Thursday's Fast Money was a blockbuster of a program featuring quite frankly too many interesting things to tackle in 1 day. Perhaps we'll have to credit Zachary Karabell for that, as the Zekemeister made a rare appearance on the desk.

One noteworthy segment was the phone interview with Charles Biderman.

"There's been 17 straight weeks of outflows from retail U.S. equity mutual funds," Biderman said. "Individual investors have thrown in the towel."

Karen Finerman asked Biderman when was the last time that happened, and what was the result in the stock market. "In '02 and '03 there was, uh, 10 months of declines, but not consecutive weeks without an inflow," Biderman said.

"Yeah but Charles," said Karabell, "that data, you're missing the other half of that data, which is that flows into foreign-listed funds have been increasing and have been showing positive data-"

"No that's not true," Biderman cut him off. "We've been, we've tracked that as well, we track thousands of mutual fund flows every day, and there has been some weeks where there have been inflows, but then again-"

"Wait, wait, it can't be not true and true at the same time," Karabell insisted. "There have been significant flows into foreign-listed equity funds, these are not debatable, and you're quite right, that the flows have come out of retail funds. But to make the blanket statement that the retail investor is gone, when they are clearly putting money into the emerging market and emerge (sic) market funds, strikes me as unsupported by the data that you yourself look at."

"Well that's not true at all," Biderman said with a chuckle. "I mean, I could give you the real data. We've had outflow of, in August, of 300,000, 300 million. There was an inflow in June of 2 billion, a month before that, an outflow of 6 billion. So we're not talking big numbers, we're seeing no real flows into global equity, uh, for the year to date. Yes, there is a 28 billion inflow, but that was primarily from January through April."

This one's way beyond our scope of knowledge. But it was a good debate featuring an important element rarely seen on Fast Money, conflict, the first indication of such always prompting Melissa Lee into another subject, for some reason.

"Let's agree to disagree," Lee said, moving on.

A double-eagle for 3PAR

Karen Finerman was ready to declare a 3PAR winner on Thursday's Fast Money.

And that evidently was HPQ.

"This should be a winning bid," Finerman said.

Jon Najarian said it's out of control. "This is just reaching ludicrous speed," he said.

But it was Zachary Karabell who had the best line, actually the best line of the day. "First of all the company's actually announcing that it's gonna be renamed 9PAR as of tomorrow morning," Karabell said. "To me this actually reflects kind of badly on HP and somewhat badly on Dell."

Tremendous charity idea: Auction tennis match with Karen

Fast Money on Thursday delved a bit into traders' personal lives. And what better place to start than Karen Finerman's athletic career?

While viewers got footage of K-Fine's serve and volley (um, OK, it was mostly serve and point), Karen narrated, "I started playing tennis when I was 6 years old ... I played the whole tournament circuit in Southern California."

That reminds us of a CNBCfix favorite, Elisabeth Shue, who is not from SoCal but is an elite tennis player, went to the Ivy League, good-looking, wealthy, famous, about Karen's age, but whatever, that's getting off the track.

Karen actually made a comment that sort of makes the eyes roll.

"Tennis is similar to trading. A lot of times you get something thrown at you, you don't have a lot of time to react, and you've just gotta go with your gut," Finerman said.

Um, maybe. Sure, yeah, uh, no.

A lot of traders (OK, primarily Eric Bolling on TV but probably a lot of others) like to note that the trading pits are chock-full of ex-jocks, as though athletics training somehow prepares one to trade stocks and bonds and futures.

We have no clue why trading pits are purportedly full of jocks, other than to suggest, it takes a lot of (brass) to put large amounts of money at risk, and people who are good athletes tend to have higher self-confidence from a young age.

But we're 100% certain Karen is a successful fund manager not because she plays tennis, but because she's smart. (We'd throw in the usual battery of extra compliments, but her husband's been on CNBC a few times now and no reason to tick him off.)

Gary Kaminsky nearly stole the feature in the tie-dyed do rag and "Call My Agent" T-shirt. But Karen was in va-va-voom, hair-pulled-back, tennis-outfit mode. (Were they really playing at 6 a.m. as Karen indicated? Some people are just going to bed at 6 a.m.)

Steve Cortes said it reminds him of, what else, a good pairs trade, going long NKE vs. short UA, because Under Armour is not international enough but too tied to football and baseball.

Patty: Rich Fast Money folks
just don’t get Big Lots

Who woulda thunk that Big Lots, of all names, would've stirred such Fast Money passion on Thursday.

Patty Edwards tried to make "The Pitch" for BIG. "The high end is not entirely solid," said Edwards, who also cited excess retail inventory coming into the ports, a stalled economy already reflected in the stock, and the assumption consumers are gonna be trading down.

Karen Finerman wasn't sold. "I've never loved the product mix because I've never understood exactly what it is," Finerman said, saying she liked Patty's mention of Dollar Tree better.

Zachary Karabell helpfully pointed out that Karen's in the "wrong demographic" to appreciate Big Lots.

Apparently, so is Dr. J, Jon Najarian.

"I just hate 'em, as a retailer. I mean, Dollar Tree or Dollar General, I just like 'em better, Family Dollar even, but, uh, I just hate walking in to that store, because the stuff that's on the shelves just is not attractive. But that might just be me," he said.

Patty defended her pick. "They've been cleaning up the stores a lot, but you know, frankly guys, I don't think we're their demographic, let's be honest here."

Curiously, guest Brian Nagel spoke Thursday about a stock that undoubtedly is in the Fast Money panelist demographic, Tiffany, and said, "I think the high end is actually in pretty good shape."

"I actually bought Tiffany's this morning," Edwards said.

"Less than $40, it's attractive," Nagel said.

So the bottom of the dumbbell is a buy, the top of the dumbbell is a buy, and the Apple ecosystem is always a buy because Apple is just an exception to everything, but other than all of that, the consumer's sorely hurting, as evidenced by those J. Crew comments ...

Shout-out: Keith Carradine

"McCabe & Mrs. Miller" is Warren Beatty in his glory decade, and it's Robert Altman. The gut feeling here is that, by modern standards, it's a little slow, not particularly violent, and a little overdone on early-'70s film cliché. Put another way, probably not going to have the long-term staying power it actually merits.

We'd call it a "Movie of the Week" selection, but unfortunately we haven't had any profound thoughts about it in relation to today's world of Fast Money.

Occasionally, though, this page gets put to bed amid a '70s music mix, and more than once, that's included "I'm Easy," by Keith Carradine. Carradine had a notable role in "McCabe," as a happy-go-lucky drifter in one of the most alarming and tragic scenes you will ever witness in a western.

Carradine, now 61, is not enormously famous, but enormously talented. You can hear "I'm Easy" on YouTube. Just make sure you come back.

Crew cuts

The J. Crew disappointment Thursday proved to be interesting food for thought on Fast Money.

Patty Edwards, a longtime JCG bull, reported on the conference call.

"The consumer has gone cold, is exactly what the CEO said on the call," Edwards said. But given where the stock fell, "I'm more interested in picking up some more frankly."

Karen Finerman seconded that. "I share that, Patty; unfortunately I've already picked up some more, going in to today, I own some versus an Abercrombie short," Finerman said.

Edwards implied the problem isn't J. Crew, it's the shoppers. "I think that this is not the only time we're going to hear this going forward," Edwards said. "I believe going into the holiday period, that these retailers have all overordered."

Quick-thinking Zach Karabell, taking a rare and welcome turn on the regular 5 p.m. Fast Money panel, astutely noticed a timing issue in all of this that we likely wouldn't have noticed ourselves. "Is this really an example of them seeing actual consumer slowdown, or because they're so immersed in the negative sentiment, they are simply concerned that that's gonna manifest itself?" Karabell asked Edwards.

"They said that the consumer has gone cold, and that tells me, that, you know, partly what I'm seeing in mall walks also, that the consumer is already pulling back on the spending that they're doing," Edwards responded.

But Jon Najarian, while trying to pretend he agrees with everyone and indicating JCG does look like a possible buy at this newfound level, affirmed Karabell's point, saying it appeared the company made its numbers for Q2, so what kind of time frame are they talking about as evidence of a slowdown?

Edwards said, "They ended the quarter end of July," like most other retailers.

Hmmm ... so not once did anybody ask about or suggest the possibility that maybe JCG for whatever reason is underperforming at this time, that people aren't as motivated to go to its stores ... even though that apparently is exactly what the stock market is saying.

We checked GPS and saw it up 2 cents afterhours, basically flat on the day. Aeropostale, a bit more, not as bad as JCG. ANF and AEO, worse, but only about half as bad as JCG.

If the truth is that it's solely about "the consumer has gone cold," then why wouldn't those other stocks sell off equal amounts?

The lede of the Reuters article says JCG cited "nervous" shoppers. How does JCG know if a shopper's nervous? Hiring Homeland Security as checkout clerks?

According to the conference call transcript at Seeking Alpha, Mickey Drexler said this: "What we see in our stores and what our store and online associates are telling us is that the customer is more selective with their purchases. More than ever, they are focused on newness."

"More than ever, they are focused on newness."

Notice he didn't say, "More than ever, they are broke (except for all the cash they somehow manage to pour into the Apple 'ecosystem')."

He said they're focused on "newness."

If we didn't know any better, we'd wonder if possibly — possibly — Drexler is quietly acknowledging they relied too much on recent big sellers and haven't updated the collection enough.

We have no idea what the truth is. All we know is how the stocks react. Assuming the commentary on Fast Money is correct, then other mall retailers figure to be shorts until they catch up with JCG's slide.

Stock of the year remains 3PAR

Brian Kelly on Thursday's Halftime said he's negative on oil but is wary of shorting crude, so, "I'm shorting the RSX."

Steve Cortes took the other side. "I'm very long oil right now."

Mall-walker Par Excellence Patty Edwards reported "Designer jeans are not selling the way they were."

Guest analyst Erika Maschmeyer of Baird said she likes J. Crew, a longtime Patty favorite, but isn't so high on Gap or JCPenney.

"The only good news for J. Crew is, Gap has traded even worse," said Steve Cortes.

Edwards remains a backer of WD40. "I think you can own it here," she said.

Edwards also spoke about transports as sort of a mixed bag. "I am in Alaska Air, still hasn't been pretty," she said, but, "What you may be seeing, especially in the rails, is a little bit of manufacturing activity pick-up." She said there's evidence of a "lot more shipping coming in to say, the Port of L.A." But, she concluded, "I'm still pretty cautious on this market."

JJ Kinahan said GLD options show expectations of a "gradual selloff of gold, over the next, you know 25, 30 days," but a floor nevertheless.

We think Steve Cortes at one point said, "A guy named Cortes isn't short Mexico." But because he said it so fast, as usual, and wasn't totally clear, it's possible he might've said "is."

Cox: Aon overly punished

We had semi-high hopes for The Strategy Session with Ron Insana making a guest appearance, but Insana's main contribution was merely telling viewers not to invest in Treasury bond funds, but just to buy the bonds.

Russel Bernard told David Faber, "Now is a great time to invest in the real-estate space if you know what you're doing."

"That's always the case, I would assume," Faber said.

Rob Cox reported on the lost market-cap of companies making recent M&A moves and how it seems to be outstripping the cost of the deal. Cox pointed to Aon as a company that, by standard metrics, seems to have added value by purchasing Hewitt Associates but has been punished disproportionately in the market.

[Wednesday, August 25, 2010]

Suggested material
for The Strategy Session

Overnight, we caught up with Wednesday's Kaminsky-less Strategy Session, which gave us some food for thought.

Not for what was said, really, but what was not said.

The guest was Dick Parsons. His presence coincided with a Strategy Session first, the panelists actually being seated. (Maybe it's because Parsons, according to Wikipedia, is 6-4.)

There's an old saw among lawyers to never ask a courtroom question that you don't already know the answer to.

Often the best journalism is when the opposite is true.

Parsons is an interesting guy. Are his interviews on CNBC typically interesting? Um, in this opinion, probably not.

But that doesn't mean it can't be done.

So we were disappointed to see a notably humdrum series of questions for Parsons posed by David Faber and guest co-host David Simon.

Before we offer alternatives, here's the order of questioning and Parsons' responses, scaled down for brevity. Much of it is exact quotes, but not all of it, so we're just gonna paraphrase it all.

David Faber: What is happening in the economy ... broad economy ... what are you seeing, what are your expectations?

Richard Parsons: It's nervous-making. It's nervous-making ... kind of gone into a stall ... no one has confidence.

Faber: That can become a self-fulfilling prophecy.

Parsons: Exactly.

David Simon: Are the banks lending?

Parsons: The banks are trying to lend, particularly in the housing, small-business area

Simon: In the '70's there were starts and stops, do you see that here now?

Parsons: I see the potential for it, because there are some good signs out there.

Faber: Is it simply getting employment up that will improve things?

Parsons: ... Sense of direction from Washington.

Faber: What about BASEL 3, is it important?

Parsons: It's hugely important.

Faber: Citi's bailout initially had to be taking up so much of your time; I assume that it is less so.

Parsons: I think Citi's turned a corner.

Faber: Why?

Parsons: In the first 2 quarters of this year, Citi made 7-plus billion dollars.

Faber: Given state of the consumer, it seems nothing is assured.

Parsons: Well nothing is assured; if the economy tanks we're all in trouble.

Simon: Is the yield curve decompressing gonna hurt the banks?

Parsons: Yes and no; was almost standing on end.

Faber: With cash stockpiles, companies face prospect of activism ... what are you thinking when you're a CEO today?

Parsons: What are gonna be my cash needs, and how confident am I gonna be.

Simon: What kind of CEO would make a bold move in this environment, and would shareholders understand it?

Parsons: They will, it's just that there's so much uncertainty.

Faber: Uncertainty, uncertainty, uncertainty, at some point you've gotta do what you've gotta do.

Simon: Once-in-a-lifetime opportunity to borrow at these rates.

Parsons: At today's numbers, yes, but if things don't go in that direction, you're gonna be overlevered.

Faber: (On media) What's your sense of the industry at this point?

Parsons: My sense of the industry is a lot of frustration.

Not that we're TV pros — hardly — but if there was an unpredictable, let alone interesting, answer in any of that, you'd need a magnifying glass to find it.

So how about this CNBCfix line of questioning instead:

Should the Comcast deal to buy NBC be approved, and is it a good move for Comcast that will force others to do the same?

The government bailout has apparently turned General Motors into a better company. Can the same be said of Citigroup?

Citigroup and Bank of America stocks have struggled for most of the last few years. Can the bank supermarket concept be declared a loser?

Records show you're buying about $22,000 in C shares every quarter. How did you arrive at that amount, how long do you plan to continue that, have you done well on those purchases so far?

Did Goldman Sachs get a raw deal?

Did Hank Paulson do the right thing in letting Lehman fail?

Will print newspapers and magazines exist 10 years from now?

Ted Turner in April was quoted as saying, that while you were both at Time Warner, "We had 5% of Google in a music merger and I said to Dick Parsons, ‘Dick, I think we ought to hang onto that Google stock.' This was about 10 years ago. He said, ‘That company's a bunch of bull---.'" Is that statement true?

What the heck was Gasparino thinking when he ambushed Geithner on the way to his car?
(OK, that one's only a joke.)

Keep in mind, Parsons, as far as we could tell, was merely a Strategy Session guest, and wasn't serving as Simon or many Squawk Box pundits do in sort of a guest co-host role. Thus, he should be treated every bit as a typical Maria Bartiromo-John Harwood-Gasparino interview subject, not as a studio colleague around who's just going to share economic generalities.

Most of the questions above, if asked, would be dodged. Parsons might be irritated about some of them. That's the way it goes. If Wednesday's episode is as interesting as it's gonna get, then what's the point of bringing him back anyway? More likely, while he'd certainly avoid many of our suggested subjects, he'd be impressed with the interviewers' persistence in asking honestly blunt questions about highly interesting subjects that he happens to be uniquely well-qualified to discuss.

How come Apple can produce so many great products amid such government uncertainty?

Occasional Fast Money guest Jason Trennert, who was not on the show Wednesday, apparently issued a research report in the morning covering for shy CEOs.

Melissa Lee reported that Trennert had written, "Legislative uncertainty is why companies are in fact hoarding cash."

Joe Terranova unfortunately backed that up. "Absolutely, I mean, there's clearly no certainty in terms of what the taxation policy going forward is going to be," Terranova said. "So if you are a CEO, managing your bottom line, you have to look forward and say, 'Well, I'm not going to increase my labor force with the unknowns out there right now.'"

Coincidentally, much of Wednesday's Fast Money was devoted to Apple. Gene Munster delivered a very thorough analysis of the company's pipeline and stock prospects. Nowhere did anyone talk about the "uncertainty" as a problem.

Munster: AAPL still has mojo

Gene Munster, whose rosy Apple reports used to be regarded annoyingly around here until we realized, man, this guy has basically been right all along, gave a comprehensive assessment of Apple's near-term outlook on Wednesday's Fast Money.

"There are times to be more optimistic on Apple and times to be less optimistic," Munster said. Right now, "there's more reasons for optimism."

Munster said there's going to be a new iPod Touch, but more importantly, he's expecting some "cloud iTunes initiatives," as well as an Apple TV.

Joe Terranova asked about holiday spending. "Safe to say it's gonna be an impressive holiday quarter for Apple," Munster assured.

Pete Najarian asked an even better question, whether the stock has risen so rapidly with such a high market cap that maybe it's "dead money" for a while. Munster acknowledged that Microsoft hit a ceiling, but "This is totally different," saying MSFT had "global, 90%-plus penetration" years ago while Apple in its "addressable markets" only has 5% penetration. "This story could very well continue for the next couple years," he said.

Pete Najarian did not say, like he normally does, that "it's all about the Mac," but he did refer to the "Apple ecosystem," saying, "FFive, when you look at these margins, Riverbed, another one of these names," Pete said.

Jon Fortt visited the Fast Money set again later and also mentioned the Apple "ecosystem," saying "that's where the iPod is valuable," getting consumers into pricier Apple products.

Brian Kelly sees AAPL as a reason not to like TIVO, asking why anyone would want a TiVo when there's an iTV coming out?

"Good point there," said Melissa Lee.

"Thank you," Kelly said.

Remember, AAPL doesn’t count when proclaiming consumer dead

We're always amused by pundits on CNBC who announce a thesis and manage to write off anything that might debunk that thesis as an exception.

Tim Seymour said Wednesday on Fast Money that AAPL looks like a "range trade."

Steve Cortes, who took an impressive workmanlike approach to Wednesday's Fast with sleeves rolled up, said, "Tim you know I agree with you in general about discretionary spending, but I do think that Apple is different."

Steve Cortes says he made a great call on BAC

Steve Cortes spoke about Bank of America on Wednesday and issued a disclaimer for anyone who might possibly think he exited a position too early.

"I covered my shorts on BAC yesterday, it was a great trade, it went down almost 10% in August," Cortes said.

The company, he said, "can't decide what it wants to be. It reminds me a little bit of Pat from 'Saturday Night Live,' who couldn't decide man or woman.

"On the retail side, it's not doing nearly as well as Wells Fargo and Chase," Cortes said. "On the institutional side, it's doing dreadfully, compared to GS and MS. And so I'm saying this is the worst in breed of the banks."

CEOs should lobby Obama to raise dividend taxes to avoid these types of discussions

Joe Terranova asked a very good question of Eric Jackson that unfortunately could've used a lot more time for a healthy debate.

Jackson was grousing that not enough dividends are being paid particularly in Silicon Valley. "Too many companies have way too much cash on their balance sheets," said Jackson.

Terranova, though, said "H-P and Dell need what 3PAR has," so it makes sense they would be fighting for its assets. "So there's a tremendous amount of value isn't there in 3PAR?" he asked Jackson.

"No, I think it's questionable Joe," said Jackson, who apparently doesn't have high expectations for recent Silicon Valley M&A. But Pete Najarian said he agrees with Terranova.

Gartman unimpressed
by his own segment

Dennis Gartman was brought on Wednesday's Fast Money to talk about silver gaining on gold, and inadvertently managed to convey the notion that the discussion wasn't even worth having.

It's "something to watch, not much to get me excited about," Gartman said.

"When silver gains upon gold, it tells you that something is going on in industrial activity," he said.

He also said maybe it's time for a Treasury break. "I've been very bullish of bonds," he said. "I think it's time to, uh, cash in a little bit" and visit the sidelines; the market's "probably due for a reasonable, decent correction."

Steve Cortes: Permacontrarian

Tim Seymour on Wednesday essentially told Fast Money viewers to ignore the housing number because it was so unusual. "The home sales number today, it was absurd, it was, it was freakish, as we like to say on this show, and it's unsustainable ... that will not continue," he said.

Steve Cortes said he's not really interested in Nouriel Roubini. "Permabears and permabulls, neither really brings much to the table, in my view," Cortes said, "and he's just a permabear, we hear about him a ton when we're below 1,100. We don't hear from him when we're above 1,100."

Melissa disses Dell

The Fast Money Halftime gang got some yuks in about Dell on Wednesday.

You know, the company that just launched a new phone.

"Almost nobody's talking about it. I wonder why," said Melissa Lee.

"You know, I had to search to find out that they had actually launched this thing," said Patty Edwards. "I gotta tell you that the Dell Aero, I don't understand why they're going in there, I don't understand what they think they're doing going into the cell-phone market. Beyond that, it's reminiscent of Microsoft's Zune. Stick to your knitting, and get it right."

"I don't believe in the Dell story going forward," said Joe Terranova, in a not-particularly controversial remark.

Melissa Lee asked Brian Kelly if he knows that "Aero" is also the name of a "chocolate bar made by Cadbury."

Terranova: GS buyable

Jon Najarian on Wednesday pointed out the VIX was heading up towards 29; "the last time we were there was July 6, when the S&P was around 1,018."

Joe Terranova said, "Today specifically I'm taking a look at buying some Microsoft, some Qualcomm, some Teradyne." Terranova also said, "I think you could own Goldman Sachs here."

Patty Edwards, though, said "I don't like the technicals, I'm not believing that this is gonna hold the way Joe is."

Edwards did say she still likes Corning. "I may be going in today and buying a little bit more just to average down my price; I do like the stock long-term," she said, but was down on American Eagle Outfitter's pop. "I think if this is anything, it's probably short covering. I'm not excited," Edwards said.

[Tuesday, August 24, 2010]

Trade of the month

Tim Seymour on Tuesday's Fast Money sounded amazed that Dell and Hewlett-Packard could actually be fighting over 3PAR.

"It's a $9.80 stock on Aug. 11. Now 27 bucks. Have they ever made money? They've never made a dime," Seymour scoffed.

Pretty good point, actually.

Jon Fortt was on the set again but didn't have as much to talk about Tuesday, except that only a couple companies such as AAPL and CRM are knocking the cover off the ball whereas the others are going to be inclined to look at growth via acquisitions.

Sonic Solutions CEO David Habiger, appearing at the end of the show in a very tight window, explained (sort of) what his company does. "We're in the background as a technology provider," he said, making it a point to say he's not really competing with the biggies.

Karen Finerman asked about the digital media environment in 5 years. "I think you'll have a variety of CE devices, like you do now, and the content that you use, is actually owned by you. So, you'll have a cloud, that's what we're building, and the content in movies and TV shows will go between devices and follow you, like a Gmail account," Habiger said.

Is it possible that in the near future everyone is going to own a copy of every film, song and book ever produced, or could we all just use one cloud as a giant lending laboratory and ship royalties off for every usage ... Nah, that couldn't work.

‘Brady Bunch’ effect wearing off

We probably shouldn't argue with Barry Ritholtz, given his impressive levels of stat-crunching and broad economic knowledge.

But why not give it a shot. After all, he's got a sense of humor.

The subject is Ritholtz's assessment of the housing market, delivered on Tuesday's Fast Money.

"There were a lot of secular drivers over the past half-century that no longer exist in housing," Ritholtz said. "You had the creation of the suburbs ... you had the demographic boom of the baby bubble ... and you had a 30-year bull market in bonds that have driven mortgage rates from 15% to under 5% ... all of those things are unlikely to repeat any time over the next decade."

Hmmm ... the bond market argument is a strong one. But if the rest of that is all correct, then presumably there just aren't going to be enough people to sustain the demand for housing we've come to know until about 2007.

And that can't be right, can it?

Ritholtz doesn't note that dual-income families are far more prevalent now than in the 1960s, many of those suburban types can thus afford a second home elsewhere, that people are far more mobile, that there is healthy demand for immigrants in high-paying tech fields that didn't exist decades ago.

Really, it just boils down to whether people in the future, in general, are going to be more prosperous than they have been. Unless the birth rate and/or productivity suffered significant decline, that answer figures to be yes. Capital eventually will find its way back into housing, hopefully not at the steroid pace of the 2000s, but whatever the natural market dictates.

Ritholtz's assessment of housing being a key component of the economy but losing some long-term catalysts, thus perhaps delivering an economic headwind, feels more like the tail wagging the dog.

Loves his work, thinks
he’s nuts (on this subject)

We're usually entertained whenever econ/financial pros on CNBC go to lengths to make the "Looks good on you though" Caddyshack-type of rebuttal about an argument they don't believe.

Barry Ritholtz was asked Tuesday about David Rosenberg's earlier Fast Money Halftime forecast that begins with the letter "D."

"I love David's work. I think he's overstating the case here," Ritholtz said.

Translation: Rosenberg doesn't get it, but all of us in this business make bad forecasts occasionally, and I don't want him to think I'm bashing.

Because while Ritholtz acknowledged, "We're very much in a muddling-along, weak recovery," he pointed to even Tony Robbins as a sign of unfounded pessimism and said a correction after the 2009 rally is not at all unexpected. The "downside has a little ways to go," Ritholtz said. "We're about halfway through that."

"What would L. Ron Hubbard do here?" asked Tim Seymour.

Steve Cortes said the doomsayers are suggesting no less than "The Grapes of Wrath" scenario.

Cortes apparently unimpressed
by CNBC programming

Steve Cortes indicated Tuesday on Fast Money that watching his own network was actually painful.

"Watching CNBC today was like watching a TV marathon of that show, 'Intervention'," Cortes said. "Uh, it was no fun at all, it was just complete dreariness."

Hopefully network honchos won't get on Cortes' case for that one; obviously he's probably not supposed to dis the programming, but everyone likely gets the point he's making. (And, gotta give Cortes credit for hipster points; we'd never even heard of "Intervention.")

Cortes, though, said, "I don't think that this is a crisis point; as a matter of fact, I think it's a buying point."

"This market is really technical right now ... the data is terrible," shrugged Tim Seymour.

Karen Finerman said she sees a rangebound market that might be nearing a bottom. "We took a little bit of our hedge off today ... At some point valuations do matter," Finerman said.

Finerman sort of pounded the table again for BP. "The stock traded below 35, which is where we bought it," Finerman said. "This stock is down $6 from where they plugged the well," she noted.

Joe Terranova said, "I do not believe right now in the Treasury story," one of the few comments we got from him Tuesday.

Entering bull flattener territory

Chart guru Jeff DeGraaf, who actually has a pretty good track record on Fast Money, buried the lede on his opening discussion about the fall elections. "The market's very good at figuring out who's a winner and who's a loser," DeGraaf said.

Which prompted Karen Finerman to smartly ask, what is going to happen, will Republicans gain the House, or what ... DeGraaf said, "What's presumed to happen is the Republicans take it back." But he didn't say whether he meant all of Congress or just the House or Senate, and that clarification was never offered.

DeGraaf talked about bonds. "I'm very concerned, not only about what's happening in the short end of the curve, but the fact that the long end of the curve coming down harder, producing what's known as a bull flattener, which is unprecedented at least in the U.S. economy over the last 80 years."

He said, "We actually think we'll undercut that 1,010 level" in the S&P.

Minimal airtime for Patty

Scott Nations suggested Tuesday buying the Dec. 107 TLT call for $3.75.

Melissa Lee decided to challenge. "Why not a call spread, Scott?"

"You know, that's a great question," Nations said, explaining there's not enough premium to be gained from selling.

Joseph Parkhill sang the praises of Dollar General, eliciting a rare appearance Tuesday from Patty Edwards, who barely got on the show despite handling the West Coast Prop Desk.

Edwards said, with enough shrugs to emphasize her point, that it seemed like there's a big difference in valuation between Dollar General and Dollar Tree.

Parkhill said based on next year's earnings, there isn't a big difference. "I still like Dollar General over Dollar Tree," he said, adding that he thinks concerns about WMT successfully invading DG's space are unwarranted, that DG is a niche little stop.

Melissa Lee was confident as ever while humming along in the director's chair in exquisite plum blouse. She also gave a shout-out to Gary Kaminsky, saying, "Gary, I know you're watching."

David Rosenberg makes
depression sound not so bad

David Rosenberg, one of our favorite Fast Money curmudgeons (not because he's necessarily right but because he has a point of view and is usually good for a soundbite), spent the beginning of his Halftime Report interview Tuesday playing down an apparently bold forecast or description he has just made (hint: it begins with a "D").

"What a depression is, is just a prolonged recession," Rosenberg said. "And the reason I say that is, despite everything the government has done to try and underpin the housing market ... still can't put a floor under the housing market."

Rosenberg also tried to stick it to the baddies from a couple years ago when he apparently was drawing deflation parallels. "I was actually drawing the comparisons to Japan where I was being absolutely vilified you know back when I was at Merrill a couple years ago," he said.

Brian Kelly asked Rosenberg a question that sounded interesting — and for us sort of requires Larry Kudlow or Arthur Laffer to translate, but they're not around — and seems worth noting. "When I look at the M1 multiplier, it shows that for every dollar the Fed's pumping into the economy, only 85 cents is being created," Kelly said. "Why doesn't that lead to a sovereign debt crisis in the U.S.?"

Rosenberg said that particular data doesn't necessarily signal sovereign debt crisis. "What it's telling you is, uh, that we're proverbial pushing on a string," Rosenberg said.

Moments later, Melissa Lee brought on Doug Kass, who a week ago announced some bullishness in the banking sector.

Kass said he disagrees with Rosenberg. "I think the market has already discounted a double-dip," Kass said.

Pressed by Melissa Lee, who seemed unimpressed by much of Kass' commentary, to identify a "catalyst" for what would make his bank stocks go up, Kass said he didn't see indications of a "material economic weakness" in the latter half of the year and referred to a "moderately expanding economy."

Then he attempted to deliver a personal facial to Brian Kelly, saying too many people don't appreciate moderation. "50% of the time the economy contracts in its given quarter, the S&P increases in value and does so by more than 9%, so I just can't be that negative now," Kass said.

"I do appreciate that," Kelly said.

"I covered my shorts on banks this morning," said Steve Cortes.


There wasn't anything wrong with Tuesday's Strategy Session.

But there wasn't a whole lot to talk about either.

Leon Kalvaria and David Simon and Kate Kelly joined David Faber in essentially finding mixed results in everything, whether it's companies pressured by shareholders to return cash or Goldman Sachs' prop trading.

Kalvaria noted, "Financial alchemy doesn't necessarily increase value."

David Simon commented on a possible DELL rebid for 3PAR. "I think it's a dumb move for Dell" if it happens, he said.

[Monday, August 23, 2010]

Chinese politicians for the next 40 years can say, ‘We have to end our dependence on foreign fertilizer’

Tim Seymour suggested some sort of international conspiracy regarding the attempted Potash takeover on Monday's Fast Money.

"The Chinese want a piece of this. I don't think politically, I'm sorry, I don't think the Chinese can get in on this deal, and I don't think they can get into the club," Seymour said. "I think there's a, uh, I actually think there's a, a closed club here."

Steve Cortes said the pursuit of POT wouldn't be happening if the facts on the ground weren't good.

"I actually bought BHP," Cortes said, because the bid is a sign business is "clearly" not falling off a cliff.

Jon Fortt: Kicking butt

Karen Finerman kick-started the HPQ dialogue on Monday's Fast Money, which felt maybe a tiny bit lacking only because Gary Kaminsky and Steve Grasso weren't around for another discussion as to whose recent Friday afternoon afterhours call was correct.

"H-P just cannot get out of its own way," Karen said. "The stock lost more in value, market cap today, than the entire bid for 3PAR ... that just didn't really make sense to me."

Then Jon Fortt, usually seen from that Silicon Valley bureau, showed up on the Fast Money set and, picking up from his impressive Strategy Session appearance earlier Monday, suddenly looked like he'd been doing this kind of thing for years.

"HP theoretically can get more out of 3Par than Dell can," Fortt said. "Even if they wanted to back out of this thing, eventually, think about it, they're making Dell pay more."

Fortt said it's still possible DELL isn't done bidding. "There's a chance. Dell has paid higher multiples for acquisitions in the past but they really don't wanna get into a cash war with HP," he said. He noted that some people talk about Oracle stepping in, but "I'd be surprised."

Later in the show, Fortt took up cloud computing with a decent summary of the sector, though his better work on that subject occurred on The Strategy Session. He indicated that while the sector's promising, "We're probably not gonna get dozens of the next Googles out of this group."

Fortt, we pointed out a couple weeks ago, seemed flat-footed and unprepared on Mark Hurd Day, which actually turned out to be a very interesting test for a new employee. It wasn't that he was caught off-guard by the news — everyone was — it was more the lack of newsgathering aggressiveness, a situation in his own backyard where you'd see a veteran like Gasparino half-breathless, acknowledging he knows little at the moment but pointing out he's got 50 calls in to sources, interrupting himself on-camera to read a press release or answer his cell phone, etc. Effort takes care of the glitches.

But we noted, Fortt's very new to the job and to national TV, and developing a rapport with hosts and pundits takes time. Monday he showed rapid acceleration in that department as well as a healthy knowledge of Silicon Valley. CNBC looks like it might have a new star on the rise.

CEO buys: Contra-indicator?

If we ever had the time to do a study, we'd predict that the study would show that CEOs aren't exactly the greatest at timing their stock purchases, and in fact, when it's a prominent company and the stock has been flagging and the purchase is under $1 million, such moves almost seem like a major reach at restoring confidence (say, for example, Jeff Immelt's Nov. 13, 2008 purchase of $822,000 in GE shares around $16.40).

Melissa Lee reported on Monday's Fast Money that Brian Moynihan just bought 30,000 shares of BAC.

"That's not a huge purchase for him," Karen Finerman acknowledged.

Steve Cortes said it doesn't change the fact he dislikes the shares, because of the company's linkage to the housing sector.

Joe Terranova on the other hand called it a "vote of confidence ... I think you wanna follow him in."

We didn't know until the Final Trade that Tim Seymour agreed. "Follow Brian T. Moynihan into BAC shares," Seymour said.

‘Olive branch to capital’

Melissa Lee on Monday took a moment to chat about Mary Ann Bartels' cascading technical predictions, noting that Bartels apparently said if 1,010 goes, then we could hit 950, which would then put 878 in sight.

Guest Jason Trennert though had a different view. "The cyclicals are probably the most attractive part of the market now. I don't think a double-dip is likely next year, and I think there's a lot of valuations that seem to be pricing in a double-dip," Trennert said.

Trennert's most interesting observation though concerned what he viewed as a conciliatory approach from the White House to Wall Street. Trennert said he feels "very strongly" that prior to the elections, there will be an "olive branch to capital."

Nishu Sood made an argument for homebuilders that sounds a bit like saying the Jets will be great if they can just average 31 points a game. "These stocks are ready to start recovering when the economy can deliver job growth," Sood said.

Karen Finerman asked Dan Eggers about utilities and the obsession with dividend tax rates. "Do these stocks trade at all on fundamentals?" Karen asked.

Eggers' answer essentially was "hopefully."

Flash: Pro golfer gets divorce

Steve Cortes revealed Monday, "I grew up in Chicago Heights, Illinois, and everyone in the cement business was a mobster."

That was a prelude to his argument that CX is showing the way down for homebuilding.

Anthony Scaramucci, who did something of double duty as a Strategy Session sub for Gary Kaminsky and later as a Fast Money guest, pointed to "Stocks' relative cheapness to bonds. It's the best that it's been since the early '80s."

His suggestion: "The Hedge Fund Trade of the Week this week is General Dynamics. OK, this is another classically cheap stock. It's in the defense industry, there's a lot of uncertainty about defense budgets right now," he said. "This stock is very cheap on a number of different metrics."

Karen Finerman, who looked good in white T-shirt and light blue vest, offered Compass Minerals as her Final Trade.

Mike Khouw suggested selling the Whirlpool Oct. 75 puts for $4 and buying the Oct. 85 calls for $2.75.

Melissa Lee reported, like every media outlet in America and probably worldwide, on the Tiger Woods split. "I think it's a pop for Elin, personally," Lee said.

The Pitch: Melissa for tiara

Melissa Lee brought up an "oldie but a goodie" on Monday: a revival of "The Pitch," in which a trader gets 30 seconds to promote a stock pick, but quite frankly this segment often used to fizzle. (Not always, but often.)

Brian Kelly took a shot with ANDE. "Andersons is long wheat, they own a bunch of silos in the Midwest," he said, but what many people don't know is that, "in July, the CME changed the rules on what they can get paid as a storage facility." Kelly said as long as those newfound spreads remain intact, there could be "possibly almost a 30% increase in storage rates coming up this year."

Of course, they know it now.

Melissa Lee, who had a ravishing new hairstyle Monday and looked like she could've glided right in to the Miss Universe pageant and waltzed away with the crown, asked Steve Cortes if he was about to disagree, but Cortes said no, on the contrary, "Brian Kelly, you had me at hello." Joe Terranova added, "I'd buy it too."

Steve Cortes provides the
happy thought of the day

On the Fast Money Halftime Report Monday, Steve Cortes dissed BK, and we don't actually mean Brian Kelly.

"It's very hard to get behind Burger King here," Cortes said, largely because its strength is with young men, who are bearing the brunt of unemployment.

That prompted hipster Melissa Lee to question if teenagers aren't the bread and butter for all fast-food joints. Cortes responded that McDonald's does much better with children.

"Children are completely unemployed," Cortes declared.

Someone, we're pretty sure it was Tim Seymour, chimed in, "In this country."

Greg Badishkanian, who unfortunately added very little for decision-making purposes on Burger King shares, predicted "Rising commodity costs are gonna be a headwind in late 2010."

Actually, isn’t the jury always out on every stock, all the time?

Aaron Rakers told the Fast Money Halftime gang, "I personally believe that Dell comes back here."

Jon Najarian, though, said he doesn't think Dell could "leapfrog" HPQ for 3PAR. "I really don't. I think Dell is gonna have to look elsewhere," he said.

Brian Kelly wasn't impressed with the deals' impact on the market. "They're not really constructive on the economy," he said.

Guest CEO David Brain of Entertainment Properties Trust proclaimed the movie business as "Very resistant to recession." Melissa Lee asked the obligatory Melissa Lee question, are you considering acquisitions. Brain said, "You bet."

Tim Seymour spoke about RIMM, saying "The jury is really still out."

Steve Cortes said, "I think talk of a bond bubble is really nonsense."

Only problem is, stocks basically
lead the jobs report

Guest Chris Hyzy proved to be one of The Strategy Session's best pundits, and not necessarily just because he thinks stocks are cheap.

Rather, it's the strength of his belief.

"Stocks are dramatically cheap. You're talking 5 or 6 decades cheap in terms of their value," Hyzy said.

Hyzy shrugged off lower multiples as mere math. "Inversely correlated savings rate goes up, P.E.s go down. We know that; that's what's been happening," Hyzy said.

He said "Absolutely, positively it's jobs" that are the driving force behind resurgence, though not the only factor. He said people are only dissatisfied with the recovery because it feels like so much has been pumped into it, when in fact we should be relieved at how strong it actually is.

Clouds lifting for Fortt

Jon Fortt, on the scene in Englewood Cliffs, is starting to find a groove after kind of a lukewarm beginning on CNBC.

Anthony Scaramucci asked Fortt a great question on The Strategy Session about cloud computing.

"10 years ago they called that application service provision. Now they're calling it cloud computing. It's catching on now. Why didn't it catch on 10 years ago?" Scaramucci asked.

"Well I think part of it is that the bandwidth wasn't there," Fortt said, saying now a lot of the promise has been realized. "The cloud is all about, think of it as a shift from having a generator outside your house to going to a power utility," he also said.

In the wake of the 3PAR pursuit, Fortt singled out Compellant, Commvault and Isilon as other possible targets in the space, listing as possible buyers DELL, HPQ, and "Cisco, interestingly enough, could be a darkhorse ... you could also see EMC."

Herb Greenberg said be careful about trying to catch a falling dagger in for-profit education. "This is only just the beginning!" Herb declared.

[Friday, August 20, 2010]

Will HPQ pick the next
Brian Moynihan?

Doug Kass on Friday's Fast Money indicated he's not afraid to catch a falling knife.

"I'm buying the financials," Kass told Melissa Lee while seemingly trying to speak to Karen Finerman during his segment. "I bought a lot of Citibank, Karen, and Bank of America today.

"I like JPMorgan as a core position," Kass added.

Lee made an excellent point, that people have been calling BAC cheap for weeks if not months, so why buy now. "I saw, um, capitulation, uh, on the part of, a number of, uh, large investors today," Kass said.

Hmmm. That "capitulation" claim is interesting.

According to Yahoo finance, BAC traded 164 million shares Friday, slightly above its 3-month average of 155 million.

BAC actually topped 164 million for 6 consecutive trading days July 15-22. The big day was July 16, when 438 million shares were exchanged ... and the stock plunged 9%.

If that seemed like capitulation, know that the next day, another 314 million traded, the stock fell 37 cents, closing at $13.61, higher than Friday.

Anyway, we're not trying to argue with Kass. Obviously he was talking about some kind of internal observation from knowing the players involved. We're only saying, by traditional numerical standards, Friday's BAC activity doesn't really merit "capitulation" declarations.

What's more, we'll just offer the fact that maybe the Street thinks Brian Moynihan stinks, which apparently (according to Charles Gasparino) is the opinion of Larry Fink, that when it came time to replace Ken Lewis, the board basically made it clear it wasn't thrilled about any of the candidates, and maybe the BAC multiple is just bound for contraction merely because nobody expects it to do anything. (And while none of that may actually be true except of course for Gasparino's report, it all might be something the folks at HPQ consider as a host of uninteresting internal candidates submit applications for the top job.)

Kass, meanwhile, said he was agreeing with the mildly bullish Steve Grasso and "divine Ms. F," even though we didn't notice Karen exactly pounding the table for the market on Friday's show. "I think it's approaching a time to re-risk," Kass said. "I've said for a while that we're in a Roy Rogers market," in a range of 1,020 to 1,150, but now we're "moving into sort of a Joni Mitchell market: I can see both sides now."

Kass sadly indicated he's a policy believer, saying the market is in a "vortex of tax and regulatory trap, and uh, the uncertainty of policy has created the paralysis."

Kass likes to talk about '60s and '70s music. Guy Adami on Friday mentioned Led Zeppelin and The Carpenters. "Karen Carpenter had one of the greatest voices of all time," Adami said. He is correct. Unfortunately much of her/their material was saccharine, but that's the way it goes.

BAC is (ticking) off Karen

Karen Finerman, unlike Doug Kass, was not advocating purchases of BAC shares on Friday.

"So far, it's been a value trap for sure," Karen said. "Much of our bet is expressed through the LEAPs of 2011, which are quickly eroding to zero. They're the 15 strike."

Finerman said if she had new money to put into the sector now, she'd rather put it in JPMorgan.

Guy Adami, surprisingly, of all people, appeared to agree with Doug Kass on long-term BAC, though Adami acknowledged short-term pain is quite possible.

"If you've been looking for an entry level, it doesn't get a lot better than this," Adami said.

Gotta hand it to him.
He was right.

Michael Block told the Fast Money gang on Friday that takeover speculation is driving him batty.

"I'm nervous about these crowded trades," Block said, singling out Intrepid Potash, Symantec and even Comcast, for its purported new business model. "I've seen this game before, and I've seen it end in tears," Block said.

Tears. Pretty sad.

The curious thing about this commentary is that it occurred just after Jon Najarian had gushed about how great his Akamai call was.

"Guess who was pounding the table for that on this very desk 3 weeks ago when it broke through 38," Dr. J said. "I told you folks if you were watching that this was a gift from the trading gods."

Dr. J also pounded the table several months ago for AK Steel, one of the worst stock recommendations in the history of Fast Money, so he's got some catching-up to do. But setting that aside for a moment...

According to Yahoo finance, AKAM traded below $38 for 3 days, July 30 and Aug. 2-3. Najarian said on July 28 during the AKAM afterhours earnings that "I think you buy it tomorrow morning," or even that night, pointing out it was down "$3" afterhours from its $44 close.

On Monday, Aug. 2, Fast Money, Dr. J again touted AKAM. "After earnings, I bought the stock just below 40. And that stock has gone right down here to 37. I'm short the 37 puts. So I'm betting that that stock goes back to the upside. In other words, I'm looking for some of the underperformers here, Joe. So that's why I'd be structuring into a trade in Akamai and perhaps even into Yahoo and Google."

Buying AKAM then was indeed a great call.

But "pounding the table"? Not exactly.

"Gift from the trading gods?" No, actually it was "structuring into a trade."

Like they say, history is written by the winners.

Even cheaper now

Jon Najarian's Akamai comments Friday led us to some recent Fast Money RIMM suggestions.

Joe Terranova on the July 30 Fast Money Halftime Report actually said, "I think the valuation is too cheap on RIMM, I think it's more towards 65, $70 stock."

On Monday, Aug. 2, Terranova compounded the future pain. "I added to my RIMM position today," he said. "It's a 60, $65 stock."

If it's any consolation, a couple colleagues were on board a day later, Aug. 3.

Steve Cortes said the charts were telling him AAPL was topping while RIMM (closed at $55.53) was bottoming. "I think it's worth a contrarian play here, long RIMM," Cortes said.

"I am long RIMM," agreed Brian Kelly. "I still think it could go higher."

Happy 60th, Dennis Gartman

Steve Grasso said Friday, "I feel negative below 1,087." But he explained why he's somewhat positive going into year-end.

"September's the most negative month in the marketplace, we've been talking about it on the desk, since 1942. But, midterm elections, stand to the point that we're gonna rally from October through the year-end," he said. "I think it's a bullish case."

Jordan Rohan talked about how important it is for YHOO to do something like buy Hulu or a big stake in Hulu. "This is exactly the type of deal that Yahoo's Carol Bartz needs to make," Rohan said.

We still can't figure out why Yahoo continues to be talked about on Fast Money about 10 times more often than Priceline, but whatever. (Sometimes it's more about how to not make money than how to make money.)

Karen Finerman recommended GHL and GS as derivatives plays on the M&A activity rather than trying to figure out what companies might be getting bought.

Patty Edwards said Leggett & Platt represents value, not a value trap. "They own the patent for the steel-coil bed spring," Edwards said. "They're running the company for the cash flow, not necessarily for the growth."

Melissa Lee saluted Dennis Gartman's 60th birthday, which she said is Saturday. "He's gonna stick candles in a pile of wheat," Lee joked.

Gartman's been doing this for 35 years, buying the stuff where the chart runs from the lower left corner to the upper right, you know, the stuff that hurts if you drop it on your foot ... and he's demonstrably good at it.

Look what you started,
Jodie Fisher

The HPQ debate/discussion has rapidly become our favorite subject on Fast Money. It's got passion, it's got conflict, it's got newsworthiness, it even has a little sex appeal.

The only thing it didn't have Friday was Gary Kaminsky, who surely would've spiced things up had he been skulking around the Fast Money Halftime Report set.

But not a problem. Quite frankly, Melissa Lee and the Halftime gang put together one of the best Halftime episodes in many a day thanks to a bacon-crisp opening 10 minutes.

Pete Najarian put Steve Grasso on alert by bringing up Mark Hurd. "Obviously there's still this overhang, who's gonna run this firm from here," Najarian said. "You just have to wonder still, and we still don't have those questions (sic)."

"I have yet to meet a client that sold it based on Hurd leaving," Grasso said. "Is that one of the components of the selloff? Yes. But it's also tied in with the huge selloff in the market. One of my partners just got long Hewlett-Packard, willing to take a flier out and hope when the conditions appear better in the environment as a whole, you're looking at Hewlett-Packard above 40, probably in the 43-44 range."

"I own it, and I'm going to continue to own it," said Patty Edwards. "It's painful right now, I'm hedged on it, but I think that over the long term, this is a quality blue-chip company, it was a quality blue-chip company before Mark Hurd got there, they're gonna be able to bring somebody else in. It's gonna be OK someday."

One troubling sign for HPQ is the lack of any interesting Fast Money speculation about CEO possibilities, an indication there's no one in the running whose appointment would give the stock a boost, as well as the company's insistence that the same agenda (which has underperformed recently anyway) will continue. So it'll likely be a humdrum internal candidate receiving the job out of necessity without actually earning it, and any kind of CEO premium or optimistic multiple in the shares looks unlikely.

Hurd, in fact, seems like evidence of The Baseball Manager Theory, which is that baseball managers deliver their premium results only in the first 1 or 2 years, and then after that become generic, expendable commodities, pretty much dependent on the business conditions around them, or the tail rather than the dog.

Steve Grasso said HPQ's problems at least aren't as bad as other companies'. "This is not, this is not a BP issue as, as well," Grasso said.

Actually, that's an interesting comment, and one we'll partly disagree with.

No, HPQ did not spill oil off the Pacific Coast and incur the wrath of everyone.

But in terms of stocks, HPQ and BP have something very much in common: Both delivered an extremely rare event that could not possibly have been predicted by an investor.

One of those events is further along than the other. People in those stocks before those events, and still in them now, are facing a potentially long wait just to return to pre-event levels, and in fact might experience some significant long-term destruction in value because of those events.

Before buying, those people undoubtedly looked at the stats, read the reports, crunched the numbers, listened to very smart people opine on the analysis ... and still got whacked.

In some ways, we're all just throwing darts at a board.

Levy: I was ahead
of the curve on RIMM

Jared Levy, who isn't on Fast Money a whole lot these days, took advantage of an opportunity on Friday's Halftime to crow about a RIMM call.

"You remember, 2 weeks ago, Monday, I was the only one who said 'Hey, we got- I don't like RIMM,' and everybody kind of pooh-poohed that," Levy said.

Then he threw a bit of a curveball, saying "Google has some upside here."

His explanation though sounded like something already well baked-in to the stock.

"Eric Schmidt said it best," Levy said. "In 2 days, in 2 days the world produces as much information as it did from the dawn of existence until 2003. Whoever sorts that information the best, distributes it, is able to monetize it, is gonna be the big winner here."

Patty Edwards was asked about surging Akamai. "Rumors that I'm hearing? Google," Patty said.

CEOs can boost demand
by appearing on Fast Money

JPMorgan analyst Chris Danely said Intel buying McAfee is like himself trying out for the Lakers.

"I don't really see much of the upside in this deal," Danely said.

Jared Levy said people probably would've preferred to see an Intel dividend boost rather than a McAfee purchase. Pete Najarian said it's not a mutually exclusive thing, "They could do both."

Najarian said there's little enthusiasm for DELL. "They've gotta do something to get you attracted into it," he said.

Pete also ripped the Morgan Stanley RIMM shot from $95 to $47. "This is a really late-to-the-party kind of call," Pete said.

"I think a lot of people are just sitting on their hands waiting for smoke to clear," said Steve Grasso, of the general market.

"Right now, nothing looks good in the S&P" in terms of technicals, said Jared Levy.

Patty Edwards said a recent Alaska Airlines Halftime CEO visit was convincing. "After we had the CEO on a couple of weeks ago, I actually went out and bought it for clients, still holding it," Patty said.

Is ‘monetizing content’ a problem for more than just newspapers?

Jerry Kent is CEO of Suddenlink, which we learned on Friday's Kaminsky-lite Strategy Session is a private cable operator.

Kent ventured into the newspaper/online/future/monetization type of commentary that always gets our attention, pointing out that music labels initially shunned the Web.

"The newspaper industry saw that, and they decided to embrace the Internet, and they put all their content online for free, and basically what they did is turn advertising dollars into digital dimes," Kent said. "You know, they haven't been able to monetize that business model."

Hmmm. There's a decent amount of oversimplification there.

First, it's highly doubtful newspapers were taking a cue from the music industry in the 1990s or early 2000s.

Newspapers started putting content online for free because of 2 reasons: It was equivalent to found money, and relevance.

By the late '90s most papers realized that all these print articles they were generating, paid for by print advertising and subscriptions, could easily be dumped onto the Web and draw gravy advertising revenue.

Equally if not more important is competition: If important news breaks in the morning or afternoon, and you do not put it online, readers are going to see it everywhere else hours before it shows up in your paper, at which point they likely won't care. Imagine a New York Times with no Web site, or pay-only Web site, the day Goldman Sachs got hit with an SEC suit. To leave those reports to other media as a way of forcing borderline readers to buy your paper a day later is not only extraordinarily optimistic and egotistical, but a disservice to your own reporters who are competing hourly for scoops.

Back to Kent. Newspapers didn't "turn advertising dollars into digital dimes" by posting free content. Classifieds dried up on them, eaten alive by Craigslist, eBay and the general Internet. Homebuilders, long a crucial advertising bloc, were fine through about 2006, then obviously went south. That part of the equation can return.

David Faber asked Kent several good questions about his business that sounded, coincidentally, like many of the things Kent was saying about newspapers. Namely, why will people ultimately need separate packages for cable TV, Internet, phone, etc., if we're getting to a point where you can just download whatever you want, and you may not always want to watch TV on a TV set but a tablet instead?

Kent said the key to the cable equation is value, particularly the program "some people call TV Everywhere. So the concept is, you can get your content anywhere, anytime, over any device," including cable, Internet phone, and according to Kent, at his company, that's "$4 a day" — or about $120 a month, in broader terms.

Kent predicted victory for Comcast's NBC bid. "It will probably get regulatory approval," he said.

Not this many values since
The Carpenters’ heyday

Bob Olstein, who sort of guest-hosted for Gary Kaminsky on Friday's Strategy Session, defended Intel's MFE purchase. "They took 1% paper and turned it into a — even though they paid 20 times earnings — that's making 5% on cash," he said.

"The merger & acquisition boom is just starting," Olstein predicted. And he's bullish on stocks too. "I have never had as many values in my portfolio, even more than I did in 1974."

Kate Kelly used a cliche Friday you often hear on CNBC during rough market patches, you know, the Eric Bolling favorite, the hedge fund grunts getting the "tap on the shoulder" from grim bosses telling them they have to unload some crappy position. Kelly said the job market on Wall Street may not be so hot, using, as an example, Credit Suisse's equity division, saying, "they're tapping people on the shoulder" to let them know, maybe they want to look for another job.

Mandy does it again

You see her new hairstyle and new outfit every day, and you think, yowza, Mandy Drury just can't get any better than this.

And then she tops it, as she did Friday while reading American baseball results on Squawk Box in an astoundingly cute rendition, even calling the San Diego Padres the "Pods."

"I love when she reads sports," said Joe Kernen.

[Thursday, August 19, 2010]

Apparently either everyone thinks it’s a bubble, or everyone doesn’t

Dan Greenhaus of Miller Tabak dared the folks on Thursday's Fast Money to call the bond market a bubble.

"Someone has to explain to me why, what is the case for meaningfully higher yields from here," Greenhaus said.

He went on to say, "Simply asserting that there's a bond bubble just because yields are lower than they have been doesn't make a convincing case."

Hmmm. Well, we'll try to make a more convincing one. That the rapidity in which recent money has plowed into Treasurys despite the fact most observers (not all, but most) don't see 2008-esque economic conditions is indicative of any type of asset that sort of "gets ahead of itself." (This page has no official opinion as to whether there's a bond bubble because 1) we're no experts on the bond market and 2) most of our predictions generally suck.)

Joe Terranova attempted a different argument that quite honestly we still haven't fully absorbed. "The entire crowd cannot be right. Everyone right now is hiding out in these Treasurys. Everyone can't be right," Terranova said.

As best as we can tell, that means Treasurys are the wrong play, because once "everyone" is on board the same trade, by definition it becomes not right.


Stock worth about 1/3 its value
5 years ago, sounds like a buy

We continue to get a chuckle, which is putting it nicely, that Fast Money continues to discuss Dell without mentioning that the company just settled a rather significant accusation from the SEC that involved executives paying personal fines over a purported years-long scheme, even though when Goldman Sachs got hit with 1 very specific investment claim and no accusations against specific execs, it was discussed multiple times daily in connection with the importance of GS' image and values (oftentimes courtesy of Anthony Scaramucci) and regarded with such importance as though the future of investment banking or securitization or whatever hinged on it.

(Whew ... that was a long sentence.)

On Thursday, Guy Adami ventured into Dell-land. "I think they're running their business better," Adami said, but it all comes down to margins (a favorite inside joke all day, for some reason), and people thinking about buying the stock should know, "It's been cheap now for the last $4."

Tim Seymour offered, "I like what's going on with their BRIC growth."

"Collar" was a term with some importance in the 1973 classic "Serpico," in which Al Pacino learns early in his police career that a crooked ring of cops parceled out arrest credits on not exactly honest criteria.

On Thursday's Fast Money, collar was significant only in that Tim Seymour's was decidedly out of whack for the first 20 minutes, and apparently none of the producers was able to get word to Tim until the commercial break.

Thill: Many companies
ripe, just not Symantec

Brent Thill of UBS expressed doubts Thursday about a looming deal for Symantec, largely because it costs more than McAfee.

But Thill suggested looking beyond Symantec. "The space is highly fragmented and there's many smaller vendors in the space that we think are ripe for consolidation," he said.

Brian Kelly gave Intel some mild props for buying MFE. "I like the strategic concept of it," he said.

Tim Seymour, though, said the market punished INTC for a reason, perhaps because broadband providers do a little bit of their own security and the future margins are a concern.

Guy Adami said the INTC purchase makes it seem like "this is 1999."

Drive for show,
putt for dough

Guy Adami, like Senator Geary at Michael Corleone's house, spoke rather bluntly to a CEO on Thursday's Fast Money, telling Dick's Sporting Goods boss Ed Stack, "The Golf Galaxy seems to be a bit of a failed experiment."

Stack disagreed, but only mildly. "Golf Galaxy's actually accretive to earnings," he said, and he acknowledged the company is closing 12 stores, "but it's 12 stores on the base of 91 stores," and it's something his management team inherited.

One thing's for sure. For a sport linked to the wealthy, most people dabbling in golf tend to be cheap. We don't know how many foursomes we've been in where one of the guys is talking about trading in the driver he bought 3 months ago, or how he bought his 3-wood used. Millionaires regularly pick up found balls on the course, rather than just buying a new box of Titleists.

Adami could've significantly enhanced this dialogue by broadening it to a general analysis of golf shopping. There's actually sort of a carefree thrill to buying gear in the pro shop even though instinct tells you not to. You're showing up for your outing, you forgot to bring a jacket, there's a few clouds on the horizon, so hey, why not a new waterproof windbreaker for $120?

Most purchases should be saved for the sporting goods shop that's got a healthy inventory. Clubs, bags, shirts, balls, box of naked lady tees, etc. The thing about clubs, you never really know how much you're going to like them until you've played a few rounds. So even those little test ranges aren't a whole lot of help. It used to be you really get what you pay for, but nowadays, golf club manufacturing is so advanced, that even cheap clubs tend to be pretty good. There was a notable CNBCfix outing once where a gent who joined the group explained how he had bought a pricey set of Ping irons, then coincidentally borrowed a relative's cheap Cobra set and found to his dismay he actually hit the Cobras better.

Meanwhile, Ed Stack acknowledged that toning shoes might be nothing in 5 years, but for the next 12 to 18 months, he thinks they're going to be relevant.

"I have toning flip-flops," Melissa Lee revealed.

Munster: Google should buy

On a day with plenty to talk about in terms of tech expansion, Gene Munster told Fast Money viewers that he expects to see Google spending in "2 big areas."

"One is mobile," Munster said, and "I think they're gonna spend more on media, which is an area they historically haven't spent on; it sounds a little bit out of the box," but TV advertising commands a bigger space than online advertising.

Munster even recommended, "They should acquire companies like shopkick."

Melissa Lee said, "I don't like to mention rumors, but the call activity on Akamai has been very, uh, heavy in the past couple of days ..."

Jon Fortt, discussing how HPQ was going to be handling its pending conference call, told Fast Money, "HP's trying to make it sound like Mark Hurd didn't matter at all."

Can't say we're the least bit surprised at that.

Guy Adami used that reference to make a Darrelle Revis-New York Jets analogy.

Peter Boockvar said the disparity between Asia and the U.S. means "This could be real decoupling ... in contrast to the failed thesis that we had in late '08, early '09."

Brian Stutland tried to make a point about upside calls in X, saying he would buy the Sept. 45 call for $4.50, and sell the Sept. 55 call for $1.25, but we mostly just noticed the off-camera laughing, apparently involving Guy Adami, culminating pretty much an hour's worth of inside/off-camera jokes.

Trying to get Dress Barn
on Karen’s radar screen

Longtime readers of this page (um, not a typo, there actually are some, God bless them) know that we've advocated, with virtually zero success, more commentary from Karen Finerman about Dress Barn (DBRN).

What we like is how Karen questions the name Dress Barn. You know, something like, "Who would name a business 'Dress Barn'?" We get entertained by little things like that.

A while ago, DBRN used to surface in the Pops & Drops segment of Fast Money. We haven't heard it mentioned for probably a year. For whatever reason, maybe because the Maidenform guy was on with Simon Hobbs a day ago, it suddenly occurred, how the heck has Dress Barn's stock been doing in the last year?

In fact, pretty good — at least for 1 year, in which it is equal or better than more vaunted names such as Fast Money favorite JWN. Since early May, it has stumbled like just about everything else.

Just for kicks, we compared DBRN 3-month performance with ANN and CHS, which reveals similar results; and with LTD and MFB, in which LTD and MFB actually dominate.

So ... um ... how to say this without turning red ... it looks like, as far as the summer goes, underwear is really kicking butt in the women's apparel business.

And evidently calling a women's apparel center a "barn" isn't enough to sink a stock.


You have to give Patty Edwards credit for refreshing honesty.

"I sold McAfee on Monday," Edwards admitted Thursday on the Fast Money Halftime Report.

Edwards added, "These deals need to make sense. Does this deal make sense? I think we're gonna talk about that a little bit later," which turned into a discussion with analyst Carlos Guillen.

Guillen, who was either hard to hear on the Fast Line or hard to understand, said, "I think overall investors have undervalued McAfee" and defended the price Intel paid, saying it will give INTC profitable expansion. He called INTC a buy.

Melissa Lee returned, in appealing purple dress. Steve Grasso got a photo on the NYSE floor with Stallone and Dolph Lundgren. Grasso said of the market, "Below 1,088 ya gotta be negative on the S&P. I think the next stop is gonna be 1,065." At the conclusion, he said, "I think it's overdone to the sell side. I think you're OK to buy."

If I can change, and you can change, then maybe we all can change.

Rose: ‘You don’t mess around’ with worker’s livelihoods

Expeditors CEO Peter Rose, known for blunt straight talk, rarely gives interviews, but came across as rather conventional on The Strategy Session on Thursday. Although he did make 1 remark that might startle a few people of heavy-capitalistic persuasion.

Rose said he was "chastised" a year or 2 ago for not doing layoffs, because people said "Well if you had done layoffs, your revenues would've been better." (We wonder if he meant "costs" instead of "revenues," we're not sure how layoffs boost revenues unless there's an inverse productivity principle going on there.)

But then Rose said this: "Well, we had 12,300 people to protect. You don't mess around with people's livelihoods."

He concluded, "It's really paying off this year."

Interesting that Rose used the term "protect," rather than a more conventional argument, such as, we wanted to preserve as many employees as possible to be ready once the storm passed.

If you're an employee, you've really gotta admire Peter Rose.

Peter Rose offers advice for
China business development

Peter Rose told David Faber and Gary Kaminsky, "We're still bullish on China," then gave would-be Asian entrepreneurs some tips.

"We did it the right way. Most people don't know how to deal in China. You don't go in and start talking about business right away, you build a rapport. We started off as a joint venture and now we own 100% of all of our offices there. We have 53 of 'em," Rose said.

Rose said China is rapidly adopting some capitalistic ideas. "They're already outsourcing to themselves. They're going north and west looking for cheaper labor." He said China also has a curious problem of "illegal immigration from Cambodia and Vietnam."

Rose said business is recovering nicely. "Last year was pretty much an unmitigated disaster, the worst I've ever seen. This year, we're already ahead of 2008 levels. ... July was very robust."

He said, "All this gloom-and-doom talk is just not the case." And as for a double-dip, personally, he said, "I don't see it."

He told Faber and Kaminsky, "Great day to be on, when the market's right down the porcelain fixture."

Herb Greenberg admitted he's actually a "fan" of Expeditors. "Ya gotta read this company's filings," Herb gushed.

Kaminsky: Comments poured in
on Druckenmiller news

Gary Kaminsky revealed Thursday that Stan Druckenmiller struck a nerve with the investing public. "You know, after the story yesterday, I probably got more e-mails, calls, feedback, commentary on this specific subject than anything since we launched this program," Kaminsky said.

Why? Kaminsky said it's because a lot of funds have struggled for performance in the last couple years, and there's the feeling, "We don't wanna be in business anymore because of the high-water marks."

David Faber noticed a problem with a graphic about other famous hedge fund types. "I don't know who that is, but I'm pretty sure it's not Steve Cohen," Faber said.

Kaminsky said McAfee isn't an exciting purchase. "Intel shareholders have to be a bit frustrated," he said.

[Wednesday, August 18, 2010]

Simon Hobbs apparently doesn’t read this stuff. Too bad.

Joe Terranova said on Wednesday's Fast Money, "I would imagine Simon doesn’t read a thing on the Internet about himself."

Hobbs' loss.

Simon Hobbs, as an occasional guest host, has got a rapport going with the Fast Money gang that is delivering some gangbuster programming — some of it so entertaining, we're re-watching it just for the entertainment.

Not only did Hobbs wake up Guy Adami, he and the Fast gang put in motion the best Jon Fortt segment — by far — since Fortt joined CNBC a month ago.

Based on some of the queries we get here, we're under the impression Hobbs is polarizing. Where he excels is in challenging, with provocative questions, his own CNBC colleagues, not just the featured interview guests. And, his breadth of opinion on how companies operate or should operate, is impressive, if sometimes disagreeable.

Hobbs comes across as a blue-collar scrapper, an impressive characteristic in the glossy world of television. Maybe most importantly, it seems like the dude's got a great sense of humor, which he needed when guest caller Eric Jackson ignored the Pause button Wednesday.

Is the government pulling
a Steve Schwarzman?

Phil LeBeau reported that General Motors, when it finally goes public again, will trade under the symbol GM and won't initially issue a dividend.

Karen Finerman said the fact this is in progress is "a good sign," that a year ago people probably wouldn't have been anticipating this so soon.

Then Joe Terranova said something that caught our attention. Terranova said it's going to be a "capitalistic type of company," a comment that drew raised eyebrows or snickers from Simon Hobbs and the panel. "We're gonna change the business model here a little bit," Terranova said.

The question that went unasked is this: If the present business model — whatever it is exactly, we don't know — is doing so well that the company is "leaner and meaner" and earning money and, as Karen Finerman suggests, able to launch an IPO ahead of schedule, why is it necessary to change it?

Or put another way: If the government is making money off its stake in General Motors, shouldn't the government hang onto it and keep making money?? Is this the equivalent of, say, the U.S. Treasury fictionally buying AAPL in 2003 and returning it to shareholders after a little uptick in 2004?

That's one extreme possibility. Here's another. Remember when Blackstone in 2007 made its celebrated IPO, which proved to be a great time for Steve Schwarzman to issue BX shares at the peak of its own market ... or when Sam Zell decided to sell Equity Office Properties (coincidentally, to Blackstone) at a similar peak the same year? Is there some reason it's important for the general public to start putting money back into GM risk, when it's apparently already able to start repaying the U.S. government.

Even Barack Obama said early in his presidency that he didn't want to be running a car business. The notion that the government might be doing a decent job with a turnaround play is no doubt shocking, if not alarming, to many. More than anything, these are the reasons the government feels compelled to start unloading so soon.

Here's a question we'd love to see Karen Finerman and the rest of the Fast Money gang address: Maybe the government bailout of GM "works" (at least that's what they're saying) because government and elected officials are actually highly accountable to the taxpayers, while the management and boards of most publicly traded companies somehow aren't nearly as accountable to their shareholders? Something like a jobs bank where dismissed employees get paid to do nothing for years may be OK to shareholders, but not to taxpayers and a 2-party political system sick of handing public bailout dollars to inefficient private businesses that never seem to get their (bleep) together.

We haven't chatted with Larry Kudlow and Arthur Laffer about this, but they'd probably say something like the best-case scenario would've been no bailout, then private investors in a bankruptcy situation pick over the GM parts like gearheads at the junk yard, and the company re-emerges the same way it is now, the detritus gone, but with 100% profit incentive among the new owners and no bailout costs to pay back. That's a good argument.

But maybe (gasp, are we mentioning Keynesian stuff here?) the GM bailout is actually a decent prototype for how select government intervention might improve the most wretched of bloated companies, as opposed to the banks, where the government did provide needed short-term cash but accomplished nothing fundamentally (at least that's what Dylan Ratigan says) except to cut a small number of people's pay and force Citigroup to sell some profitable divisions.

As always: If you're a GM employee or an autoworker or auto exec, 1) thanks for reading the site, 2) keep up the apparent good work, and 3) we think virtually everyone agrees it'll be great if/when American automakers are once again premier names, if they're not (Ford) at or approaching that already.

Pete Najarian said Wednesday on Fast that GM may be planning an IPO, but if Ford retrenches to $11.50, "that’s the stock I’d look at."

Market gets the best
of Stan Druckenmiller

Simon Hobbs talked about Stan Druckenmiller's retirement and started to say to his panel, if this guy is finding it hard to make money nowadays, "What the hell are you 4 ..."

We didn't catch whatever he said afterward, but it apparently was funny.

Guy Adami said Druckenmiller's operation "just got too big for themselves."

Karen Finerman basically agreed, saying "He's in a league by himself." Finerman told Hobbs that there's "stress every day" when you're a hedge fund manager, especially in markets like this.

The segment got curiouser (for lack of a better term) when Hobbs started asking the traders what's really a tremendous question, how are they making money in markets like this.

Joe Terranova said, "Try to identify where the tailwinds are." Pete Najarian explained that he sells upside calls on a stock like TEVA. Steve Cortes said he takes "night positions."

Druckenmiller might've actually been thinking about this in the last couple years, when he made a serious bid to buy the Steelers. (Our gut feeling is the league talked the Rooney brothers out of it because it wanted Dan to retain control, which is fine, but someday, Druckenmiller's deep pockets will probably come in handy.)

Redefining a crowded trade

Fast Line caller Eric Jackson of Ironfire Capital plowed through Simon Hobbs' stop sign when explaining the rationale for his recommendation of Tesla as a "great short."

"They've always lost money," Jackson said, claiming the company relies on government cash. He said Tesla CEO Elon Musk "has some real problems and peculiarities that need to be addressed."

Simon Hobbs said "the guy's not here to defend himself," which really shouldn't matter in this case for a stock call, but then struggled to stop Jackson from talking so he could let Karen Finerman ask Jackson about the fact it's already a "really crowded trade on the short side."

Jackson suggested buying calls on other plays in the auto industry as a hedge, then continued with his arguments about why Tesla stinks, including that it's reliant according to Jackson on one new model.

Wasn’t really much
for Siegel to rebut

A. Gary Shilling dialed into Wednesday's Fast Money, apparently under the notion of being goaded into a debate with Jeremy Siegel, which might've been entertaining had Siegel actually been on the show (talk about someone who wasn't there to defend himself).

Simon Hobbs brought up Siegel's WSJ op-ed, with Jeremy Schwartz, suggesting a bubble in the bond market. "I think he’s trying to catch up," Shilling said. "I’ve never, never, never bought bonds for yields. I buy 'em for the same reason the professor buys stocks: appreciation." Actually we were under the impression Siegel is a big fan of dividends, but whatever.

Joe Terranova said "valuations on Visa are very cheap right now," and Guy Adami said he likes V as long as it stays above $70. (This writer is long V.)

Mike Khouw recommended selling the November 15 upside call in AEO.

Guy Adami blew the whistle on the ridiculous Eric Schmidt gag.

Karen: BP looks good

One of the things Karen Finerman excels at is, when others are talking about bullishness in a stock, identifying what might be possible shorts as a result of that.

On Wednesday's Fast Money, Karen revealed that she finds BP appealing now. "I actually started buying some today," she said, pointing to an Aug. 6 short-term peak on the good news about the cap.

Unfortunately the segment ended about right there. Karen could've taken it a step further and addressed whether Clean Harbors might be a short. Or, in fact, if it may be a buy. The stock peaked for the year in June, around the worst moments of BP's crisis, reaching $72 intraday on June 21 before a reversal. As of Wednesday's close, it's $10 below that.

The CEO indicated on Fast Money weeks ago that the business is about much more than the Deepwater Horizon Spill and that it's only a small portion of the revenues. Right now, there are news articles every day offering differing views as to whether 75% of the oil is still in the Gulf or 75% has vanished. The outcome of that would seem to be important to CLH's future, as well as further government decisions about the extent of undersea drilling.

Steve Cortes spoke about bonds vs. oil, saying he's watched them "trade almost in exact opposition during the month of April." (We think he meant August, but whatever.) He then suggested that instead of shorting Treasurys, he would just buy crude, but negated his argument by claiming something big might be happening with Iran, only about the 5,000th time that statement has been uttered on CNBC.

Big day for Jon Fortt

Joe Terranova got Jon Fortt rolling, for the first time, with a great question Wednesday of Fortt's opinion on Gary Kaminsky's previous recommendation of a Microsoft purchase of Research in Motion.

"That’d probably be the worst buy in the world," Fortt said. "Why would Microsoft do that?" He said RIMM would be a huge cost, and Microsoft is already in the same proprietary e-mail space, it would be like spending $30 billion on "a lot like what they’ve got already."

Kaminsky wasn't around to argue; this subject could've been better yet. The gut feeling here is that it might be too late for this type of deal and that at this point, such a purchase might just be tieing an anchor to MSFT. But interesting discussion material.

Simon Hobbs pointed out that some people say RIMM is worth holding because it could potentially be bought, especially if the share price continues to slip. "That’s what we call acquisition support for the stock," said Joe Terranova.

Hobbs then asked Fortt if RIMM and Nokia could combine. Fortt said that might be more interesting, they're the same size in market cap with some non-overlapping strengths in manufacturing (Nokia) and e-mail software (RIMM), but they're in different countries with different cultures and at equal size, there'd be a question as to which side is really in control.

Fortt wrapped up his first impressive showing by pointing out that RIMM's future may be seen as hinging on consumer growth, and at this point that doesn't look terribly promising compared with the Droid.

Guy Adami said he thinks RIMM can be bought around $48; Terranova said much the same, that he thinks the bottom of the range is $45-$50. Pete Najarian said it's "just gotta get that next catalyst."

Karen’s gold question
remains unanswered

Karen Finerman seems to be sensing a philosophical victory in the gold thesis, reiterating on Wednesday's Fast Money, "I just continue to be perplexed by the gold-as-inflation-and-deflation hedge."

Simon Hobbs shrugged and said gold seems like one of those things where you don't even need a reason to be long, it just feeds on itself.

Pete Najarian, like Guy Adami usually says, warned of the always-lingering purported huge risk to the downside in gold. "When they pull the carpet out, this thing's gonna drop." Of course the carpet hasn't been pulled out in at least 10 years, but whatever.

Pete also said POT may be running its course, that in options land, the premiums got stretched, and "people are slamming the volatility in there ... they think this is it."

Steve Cortes said he likes X in part because it's a "heavily, heavily shorted name," unlike Nucor.

Does this mean
the world isn’t flat?

Ron Shah, who recently took a turn on Tim Seymour's Trading the Globe, spoke on Wednesday's Fast Money about the impact of India actually outsourcing some jobs to the United States because U.S. labor costs are cheaper.

Shah said that's not a negative for Indian companies like Genpact or WiPro. More interestingly, it prompted a mini-argument between Guy Adami and Simon Hobbs as to whether this type of development is actually going to make an ounce of difference in the U.S. job market (Hobbs indicated yes; Adami no).

Shah said the problem for America in all this is that "high-margin work is now shifting over to India," which "used to be our bread and butter."

But Steve Cortes was hailing Larry Kudlow and celebrating, saying, "This is a testimony to the efficacy of free markets."

Simon gets a Spanxing

Simon Hobbs on Fast Money recognized the entertainment value of his Halftime Report Spanx conversation with Maurice Reznik (see below).

Guy Adami couldn't believe Hobbs was talking about Spanx and asked Hobbs to "walk me through" that product. Hobbs said Spanx "holds people up," then started to get Karen Finerman involved in the conversation because "they've only got them for women I presume."

Karen said "Actually they have them now for men."

Great expectations

Puget Sound BizTalk Editor George Erb notes that "Straight-talkin', famously blunt" Expeditors CEO Peter Rose is scheduled to be on Thursday's Strategy Session.

"I bet CNBC hosts David Faber and Gary Kaminsky come up with some good questions for Rose. The real delight will be in seeing how he answers them," Erb writes.

Shout-out: Allen Wastler

This site is hardly going to brag (what the heck would we brag about anyway?), but one thing we're fairly well-experienced at is looking at mainstream-media Web sites, and even a decent chuck of non-mainstream-media Web sites.

Scores of them. Gobs of them. Pretty much daily.

That's not to say there's plenty of time to surf any given site for all its hidden virtues. Quite the contrary. The opinion here is that if you can't find something on a news site fairly quickly, or you can't find it without silly ads interrupting your reading or silly black background with white text that makes your eyes freak out later, it's borderline worthless.

We don't know Allen Wastler. But we've seen him on CNBC a few times, and we know he's the managing editor of CNBC.com. Quite frankly — and this comment is completely unsolicited by the way — CNBC.com is pretty good. One of these weekends we'll do a ranking of some of the most common sites, though even that is tricky because certain popular portals (WSJ, FT) involve metered or subscription material.

The search at CNBC.com, particularly for video, which is probably what many site visitors are seeking, is very useful and relevant. Most of the news articles on the home page have compelling headlines. There's a bit of an issue with headline hierarchy and, like most big-media sites, the home page is just too busy, particularly the "CNBC highlights" row in the middle that puts 6 images above the featured stories.

The Fast Money and Strategy Session portals seem to have one too many layers, though it's not worth the trouble to explain why they're a bit overloaded (but good grief, what's with the black background?). There might be an easier way for CNBC.com to allow home-page readers to scan all of a given day's blog headlines quickly so you could tell at a glance whether you want to read Jane Wells, or Julia Boorstin, or Darren Rovell, or a guest such as Peter Morici, rather than sort of having to wade through a blog index screen that seems more alphabetical than anything.

Anyway, bottom line, there's a lot of interesting stuff at CNBC.com, and most of it is easily accessible. Wastler writes his own blog, in which he is refreshingly candid about the various issues and limitations, as well as strengths, of a Web operation.

We're not the only ones who get something out of CNBC.com — overnight Wednesday, the Drudge Report had 3 active links from it, as well as a host of recent links in its archives.

Maidenform CEO fails to bring
models to CNBC set

Patty Edwards was holding court Wednesday during a spirited Fast Money Halftime Report helmed by guest-host Simon Hobbs. As the lone female on the set, Patty was the go-to trader for Simon Hobbs' interview with Maidenform CEO Maurice Reznik and more than lived up to the challenge.

Patty called Maidenform a "great" product with great results, but said the stock has had a big enough run that she'd probably prefer Limited Brands at this point, because "People are staying home more, they're buying more candles and bubble baths and bath and body works, and then putting on some Victoria's Secret lingerie."

Someone — we're not exactly sure who, but seems like it was Zachary Karabell — was heard chuckling, then Karabell was heard to say "Sounds like a good night Patty."

We wonder how much giggling Mel Lee and K-Fine might've done with this line of discussion on the heels of Tuesday's smaller-iPad discussion.

We also wonder why, if Domino's Pizza's CEO can ship pizza to the Fast Money set, couldn't Reznik have brought some people to present his own product?

Spanx hasn’t gotten
the attention it deserves

Someone seemed to get their underwear in a bunch on Tuesday's Halftime when Simon Hobbs evidently pushed a button when asking Maidenform CEO Maurice Reznik about shapewear.

"This is Spanx, the alternative to Spanx, essentially," Hobbs said.

Reznik grimaced and said, "We don't call it that at all actually; we are the alternative to that other company."

We don't really know what Spanx is, only that it's something of a startup success story founded by a cute woman who's often been on CNBC. That, and it's got a funny name.

Reznik indicated his company is plugged in to pop culture, saying he has a group called "CSI New Jersey" — or cost-savings initiative.

Terranova outvoted on WMT

Patty Edwards was so convincing Wednesday, Joe Terranova bailed at the first sign of disagreement.

Edwards was semi-lukewarm on Target but said, "If you're there, you're probably gonna be OK."

Terranova said, "These grocery sections in Target are beginning to work," but he thinks TGT has outperformed WMT for a while, and now he sees a "shift back to where Wal-Mart outperforms Target."

Edwards challenged that, saying with WMT, there's a "lot of management disarry going on right now."

"Patty is certainly the retail expert so I defer to her on that one," Terranova backpedaled.

"I think Wal-Mart is a great company with sustainability ... but ..." said Zachary Karabell.

Karabell: Ferts returning
to 2007-08 momentum trades

Zachary Karabell questioned the remaining upside in fertilizer names that have already run, pointing out a limited ceiling for POT, for example, from $150 to $170 compared with $110 to $150. "Those have really run, and they've become momentum trades," he said. He suggested MON, DD and DOW as maybe more promising alternatives.

Joe Terranova continues to see a perfect storm for fertilizer. "China is net short of potash, the world needs potash," he said.

Brian Kelly said "People are buying what they need, not what they have to," and added, "Yesterday I sold all my TLT, and I don't plan on being back in that for the rest of the year."

But if Brian Kelly had high hopes for his Fast Money Final Call appearance on the Closing Bell, he was disappointed, because he was largely preempted by breaking news on the GM (Zzzzzz) IPO.

Patty Edwards said, "I still think that gold is something that you wanna be holding in your portfolio."

Zach Karabell said, "The only gold that excites me is my wife's jewelry."

"Oh Zach, let's leave it right there," said Simon Hobbs, apparently sensing some kind of irreverence in progress.

"No, I mean, it's a useless trade," Karabell protested.

Karabell kicked off his appearance on Wednesday's Halftime saying "I'm only quiet because I'm listening to the mellifluous sound of my 3 colleagues," undoubtedly the first time "mellifluous" has appeared on this site. (We had to look it up, though given the context of the sentence, it was fairly clear what it meant.

Doug Kass adds a curveball
to his short-bonds thesis

Doug Kass startled us during Wednesday's Strategy Session with certainly one of the most controversial baseball declarations in recent memory.

"Well I think the greatest trade of the past decade was when the Boston Red Sox traded Manny Ramirez," Kass said. "So I think the greatest trade of the current decade is gonna be shorting U.S. bonds."

Forget the bond thing for a moment.

"Greatest trade?" For who?

Boston hasn't won the World Series without him, but there was a notable sense of relief when his schtick was shipped to L.A. and the Red Sox remained an elite ballclub.

He gave the Dodgers' lineup some punch, but they haven't been able to get by the Phillies.

Perhaps Kass is not a Boston fan (Yankees maybe?) and is merely saying he was thrilled when Ramirez was shipped out.

Anyway, there's definitely a much better trade. We'll think about it later.

Kass cited as evidence of a looming bond bust, "For the first time since 1962, the dividend yield on the Dow has eclipsed the yield on the 10-year bond."

Gary Kaminsky posed the question, as he has to others, of whether there's a "secular change" that will maintain the strength in bonds in a "New Paradigm" for a long time.

Kass, on the contrary, says it's "eerily reminiscent of uh, what Peter Schwartz and Peter Leyden wrote in Wired magazine. Remember they talked about the New Paradigm in 1997, The Long Boom. They said we're facing 25 years of prosperity, freedom and a better environment for the whole world ... I think there is no such thing as a New Paradigm."

Hedge fund industry
ain’t what it used to be

Kate Kelly reported on Stan Druckenmiller's announced retirement Wednesday, explaining "Duquesne will cease to exist" after unwinding.

Carl Quintanilla, subbing for David Faber and like a complete pro missing not a beat, suggested, "It's either a guy at 57 wants to work on his golf game, right, wants to retire with some grace, or it's a sign that the hedge fund community has challenges for years to come. Which is it?"

Gary Kaminsky said, "This is an absolute, 100% positive sign that a guy like Stanley, who is, in this industry, who's been able to generate alpha, has been completely frustrated by what we've had ... the last 3 years has been an incredibly frustrating and difficult time period."

Kelly said, "2010 he thinks is looking awful. He acknowledges that he missed a bond rally this year," though it wasn't clear if that meant he was short, or merely on the sidelines.

Kelly said, "One fellow hedge fund manager who's surprised and saddened by this, he says, the great ones are going one after the other, and we are left with a majority of levered beta players pretending to be hedge funds."

Guest Catharine Sterritt said there's maybe a little more room for Potash. "We're carrying a 160 takeover price on this situation," she said.

[Tuesday, August 17, 2010]

Around the world,
at the speed of light

One of the most interesting things about Tim Seymour's Trading the Globe on Tuesday was the disclosure at the end that the next episode isn't until Oct. 7.

It seems hard for a show to gain much traction if it's only on every 2 months. (The CNBC press release of a week ago actually said it airs again Sept. 23.)

Trading the Globe seems like another interesting attempt by CNBC to tap into a more "investment-grade" type of viewer in a low-risk half-hour format, following Options Action and drawing a few parallels with The Strategy Session in its higher level of dialogue.

Trading the Globe on Tuesday simply whipped around too fast. Seymour, who is capable of succeeding at an assignment like this, seemed to spend more time as traffic cop than host/commentator. The first 10 minutes brought a very brief summary of the BHP Billiton-Potash situation before abruptly swerving into a general Brazil M&A discussion and then global currencies, then a report from Emily Chan about the opening of the Hong Kong market. Organization seemed almost nonexistent.

Rebecca Patterson, though she unfortunately appeared to be looking into a ceiling camera, made some nice remarks on currency, and the thinking here is that in fact Seymour might have a bigger hit if he just did a half-hour program limited to currency trading. Seymour's other guests, including Brian "Beeks" Kelly, David Riedel, Ron Shah and Will Landers, provided plenty of expertise, but the extreme-soundbite-demanding format left little room for anyone to actually articulate a point. The show likely best served someone who already has a position in any of the countries or stocks mentioned, as opposed to someone just thinking about it who really wasn't left with much context about one opportunity vs. another.

Seymour rolled out what he called the "Ambassador's Index," and its very user-friendly comparisons with the Dow at CNBC.com is worth a look.

Why we can’t agree
with Anthony Scaramucci

A lot was said about Microsoft on Tuesday's Fast Money.

And so a very basic question came to mind, something so basic it wasn't mentioned on the show, but is definitely the first thing we would ask Steven Ballmer if we had the chance:

What, exactly, is the goal of Microsoft?

It seems like the unspoken answer is "any kind of computer program that makes money." And so it has been a collection of browsers, word processors, spreadsheets, video games, cable TV channel, operating systems, search engine, e-mail programs, digital media players and probably a few other notable experiments we've left out.

Anthony Scaramucci on Tuesday cited its purported virtues. "The Hedge Fund Trade of the Week is another boring name," he conceded at the outset. Then he made the common argument, P.E. ratio. "Microsoft is trading right now at 10.6 times earnings," Scaramucci said. "They have $4.25 in cash."

Yes ... but what is this company going to be in 5 years ... 10 years ... Just another deep-pocketed aircraft carrier that shovels money into its own uncool copycat version of whatever big new idea somebody else already came up with?

And if that's the kind of business these hedge funds are buying, how could they or anyone else actually be getting excited about this stock?

Notice what Scaramucci did not say: This company has a great new product. This company is going to do some Hurd-esque streamlining. Rather, he offered about as much incentive for buying MSFT as for buying a Treasury bond.

Karen: Even stodgy names
can be sexy

Gary Kaminsky, taking a seat on the Fast Money set Tuesday, returned to a suggestion he made months ago, that Microsoft should buy Research in Motion, which would cause people to view it as more of a growth stock again. "This is the kind of deal that makes sense," Kaminsky said.

But as he pointed out during Anthony Scaramucci's MSFT recommendation, for now, "it sits in that no-man's land" between perceived growth and value stocks.

Karen Finerman offered 2 reasons in support of Scaramucci, saying "You can't get in more liquid names than this," and "We've never seen big mega-caps like this at valuations like this."

Scaramucci said several hedge fund players are so big, they need to get in names like MSFT and other value plays he's cited as the HFTOTW because smaller stocks don't move the needle. "These guys have gotten gigantic, they have to find a home," Scaramucci said, "and the home is in these stocks."

Kaminsky insisted that from his own experience, "People didn't give us money to manage to make these type of investments, and pay the 2 and 20 performance."

"Just because these are big, big mega-caps doesn't mean they can't have alpha," assured Karen Finerman.

Hard to believe whom we
find ourselves defending

Guy Adami on Tuesday offered 1 reason besides P.E. that might draw people to MSFT.

"As much as I hate to say it, I think if Steve Ballmer left, or got bounced, I think that could be potentially very bullish for the stock," Adami said. "I just think they've gotten sort of old, sort of stale, and they need something to spice things up."

That point is made by a lot of people, including on Fast Money, but the more we think about it, the more we disagree.

While Ballmer runs Microsoft, Bill Gates obviously remains the kingpin. He's the wealthiest person in the United States, or close enough. This is a person whose thrills nowadays involve speeches at Davos & Aspen, meetings with heads of state and cash donations to unique schools in poverty-stricken areas.

Clearly, not someone willing to return to startup roots where his stock value is contingent on a Windows or Internet Explorer power grab.

No matter who's the CEO, MSFT is likely to remain the preservation-of-wealth-monster it's been for probably a decade.

Despite a lousy decade, its market cap is $213 billion, suggesting the upside remains limited as to how many more buyers there can be for this particular stock.

Maybe Microsoft actually gets a bad rap over its lost decade. In fact, ORCL is nowhere near its early 2000s highs. Neither is HPQ. Neither is INTC. Neither is CSCO. Neither is NOK. Neither is DELL. Neither is YHOO. Neither is MOT. Neither is FLEX. Certainly, neither was Sun Microsystems before Oracle saved it. All these charts remarkably show the same thing: Tremendously profitable companies all mysteriously peaking in stock-market appreciation in a notably tight window.

AMZN and EBAY have hung in there since the Y2K highs. But those names aren't the cash-printer that Microsoft still is, and they suffered a lot of grueling moments this decade.

Maybe the best beef about MSFT is that it got beat by AAPL in digital music and GOOG in search. But this is a company that faced a tumultuous antitrust investigation starting in 1998 that wasn't fully resolved until 2004. Many states still weren't satisfied. Music might've been a miss. But had Microsoft gobbled up search control in the early 2000s (assuming it was capable of doing so), surely it would've drawn Justice Department attention.

Maybe the business world just needs to accept Microsoft for what it likely is: An important company with a lot of useful products providing a large amount of desirable jobs that has mostly run its course as to how much it can change the world.

Analyst Colin Gillis told the Fast Money gang to expect a small MSFT dividend hike. "Most likely, we're gonna see that 2-cent lift," Gillis said.

Karen makes better point
than Barry Ritholtz

Barry Ritholtz played the "Bull Market or B.S." game on Tuesday's Fast Money. Melissa Lee said "Barry's a famous blogger, successful money manager, as well as a scholar." Now that's a pretty convincing introduction.

Ritholtz's presentation was to beware of gold and bonds.

"When I look at the Treasury market, the fixed-income market, I get a real 1998-sort of sense that you had with the dot-coms," Ritholtz said.

Ritholtz said bonds are reaching the point where everyone knows the gains can't continue forever, but it's just a matter of figuring out when they might stop.

Gary Kaminsky, on the contrary, suggested "There is a possibility that this is a massive secular change" of a push into bond investing, unlike with dot-coms, which many people quickly judged had little to no value.

Karen Finerman asked Ritholtz to "reconcile" the seemingly concurrently bullish arguments for gold and bonds; presumably gold would be rising if people feared inflation, which would sink bonds. "How is it both inflationary, and deflationary?" Finerman asked.

"Sometimes markets are just wrong," was Ritholtz's answer.

This is one we’ll leave
to Melissa and Karen

One thing the females on CNBC sure like to giggle about is the name for Apple's latest hit product.

And when Melissa Lee on Tuesday brought up reports that Apple might be working on a smaller, 7-inch iPad, she suggested it could be called "a min-iPad," which drew a noticeable laugh from Karen Finerman, but none of the males on the desk.

It's a chick thing. Have no idea why they're so fascinated by this terminology. Jane Wells couldn't stop cracking wise about this months ago and Erin Burnett was lacing her commentary with puns. Pass.

Time Warner-AOL was either
a 1 or 10, we’re not certain

Gary Kaminsky said the problem with getting excited about the BHP-Potash offer is that the M&A we're seeing now is all "1-off deals."

He said, "I sort of characterize the M&A activity today as maybe it's a 5 out of 10."

Karen Finerman though was more impressed. "I would put it higher than a 5 out of 10 ... I thought this was a very aggressive move," Karen said.

Kaminsky questioned why others didn't see premium value in POT a while back. "I spoke to some arbs today, and I think BHP Billiton has been the natural, thought-of buyer for a long time," he said. "Why didn't private equity, who, this would've been the perfect opportunity 6 months ago for them to step into something like this ... why weren't they looking at this company?"

"I think it's not a private equity-type of deal," said Karen Finerman.

Seymour: Short BHP

Joe Terranova said both at Halftime and on the 5 p.m. Fast Money that he's still buying POT.

"I think the price that this gets done — and I think it does get done — is north of 150," he said.

"I think there's a lot of bidders," said Tim Seymour. "I think the mining companies are actually gonna, you know, begin to absorb, uh, the ag companies."

Seymour added, though, that he thinks this deal will cost BHP. "I would be short BHP here, because I think they're gonna chase this one," he said.

"I think Mosaic is now an interesting target," Terranova said.

Guy Adami disagreed with Terranova, saying POT hit some of those transaction levels that traditionally signal a volume washout. "There's no reason to me to rush in here," Adami said.

Lee: Fast Money got e-mails
over Barnes&Noble slam

The subject of Barnes&Noble came up again Tuesday, and Guy Adami started to say something about it that worried Melissa Lee.

"Are you gonna mention charging admission again? We actually got a lot of e-mails about that," Lee said.

Instead, Adami mentioned Gary Kaminsky's upcoming book and said "Barnes&Noble has a huge launch scheduled for October."

If you build them,
you have to fix them

Patty Edwards on Tuesday reiterated a point she's made several times now on Fast Money, that foreclosures are a boost for HD.

"Home Depot's got that tailwind from the folks who buy foreclosures. It takes about $5,200 to rehab one of those things to move in," Edwards said.

Later in the show, however, guest Stephen Weiss argued that homebuilders are still feeling the crunch. "There's just too much capacity coming on," Weiss said.

Edwards also spoke about ANF, saying "Abercrombie's discounting like there's no tomorrow" and pinning a lot of hopes on non-U.S. expansion. Guy Adami asked if the stock is still shortable. Edwards said "You know, I think you probably can."

Karen Finerman said of Wal-Mart, "Their outside-of-the-U.S. business is really doing very nicely."

Colin Gillis was ready
for almost anything

Colin Gillis, congratulated by Guy Adami on Tuesday for his rapid-fire delivery of tech facts, indeed is getting pretty good at this Fast Money thing.

Gary Kaminsky demanded to know, "Why does Carol Bartz get this pass?"

Unfortunately Gillis didn't have a good answer for that one, saying, "Well so, OK, I think there's a couple things, this is a BIG turnaround effort..." before Kaminsky interrupted to say he'd love a chance to try what Bartz is purportedly attempting to do.

It's really not that big of an effort, in our opinion, at least not one that can afford a 10-year time horizon that it seems to be getting.

Scott Nations delivered the Options Action trade on buying a TLT September put for $2. The only problem was, the graphic showed the 104 put, while Nations twice referred to the "102" put. A check of the pricing at Yahoo (Carol Bartz's company) finance suggests the graphic was right and Nations meant $104.

Tim Seymour reassured, "We're not gonna turn into Japan."

"I still think we head lower," Guy Adami said.

Or maybe, ‘a tiny bit more’

We've noticed a nagging little thing about Melissa Lee's commercial breaks in recent weeks.

Even near the end of the show, Lee tries to convey the notion that the show is actually far from over.

For example, on Tuesday's Fast Money, Lee said while heading into a commercial at the 53-minute mark, "We've got much more Fast Money coming up next."

Seriously? By the time the show returns from break at that point, there's barely enough time to get a Final Trade from everyone.

Does Lee honestly believe that amounts to "much more" programming?

Why not be straightforward and just say "We'll be right back after this" or something like that?

It's not that we're concerned anyone's getting fooled. It just seems like an inadvertent way of playing dumb with viewers simply for the sake of cliche.

Lee announced that Simon Hobbs would guest-host on Wednedsay. "I'll see you all on Thursday," she said.

Terranova: Buy more POT

Joe Terranova said on Tuesday's Halftime Report that the Potash offer is no peak for the stock.

"Bought more today," Terranova said. "This is the perfect storm for the space."

Then, Terranova took a swipe at a prominent Wall Street firm. "July 14th Goldman Sachs puts out a report. The basis of the report is, stay on the sidelines in the fert space," Terranova said. But that's all changed rapidly, he said.

"It is all about China," said Steve Cortes.

Melissa, Cortes do not
have Facebook accounts

Melissa Lee delivered either a scoop or a near-scoop during the Halftime Report (a lot of times this type of data turns up on the Web before the biggies get into it) that Amazon is selling the Research in Motion Torch at a notable price.

"Apparently the Torch is now being sold there for just $99," Lee said. "It went on the market less than a week ago for $199."

Joe Terranova credited a colleague for NFLX analysis, even though Melissa Lee's segment about the stock hitting all-time highs seemed kind of odd given it was down about 2% at the time. "Steve Grasso made a brilliant point yesterday. This is a classic short squeeze," Terranova said.

Patty Edwards said there were bright spots in the WMT report. "Wal-Mart for example gave me a lot more confidence in what management is doing," Edwards said.

In general, "I think the downside in equities is limited," Terranova said.

Melissa Lee posed a social media question. "Steve Cortes, I don't know if you're on Facebook. I'm not," Lee revealed.

"I'm not," Cortes said, and they agreed they're 2 of the last 10 with that distinction.

Maybe 2008 was just
a warm-up

Kyle Bass, a source for David Faber in the exceptional "House of Cards" documentary who famously shorted mortgage securities, guested on The Strategy Session Tuesday and sort of saved the lede for the end.

"Given my outlook on the world, I don't know how you can be long stocks. I don't know how," Bass said.

Bass: ‘Enormous positions on
Japanese rates very cheaply’

Kyle Bass told The Strategy Session viewers Tuesday that the U.S. is delaying pain, but saved most of his skepticism for Japan.

"If you're gonna define the Keynesian endpoint, I define it in 1 simple sentence: When your debt service exceeds your revenue," Bass said. "The government has ¥40 trillion of receipts. They have the same amount of tax receipts in nominal terms that they had in 1985."

"That's frightening," said David Faber.

"And their expenses are 200% of what they were," Bass added.

Bass said that in Japan, "Last year the working age population peaked ... they're already in the Keynesian endpoint."

He likened the government's cash position to a pair of dubious operators. "What did Madoff and Stanford teach us. They taught us that you can keep a ridiculous Ponzi scheme going for a very long time. As long as you have 1 ingredient:"

"New buyers," said Gary Kaminsky.

"More people entering the scheme than exiting the scheme," Bass agreed.

David Faber asked Bass how and when this all implodes. And on that point, Bass seemed far less sure of himself.

"It's going to take time," Bass said, predicting Japan would have to pay higher interest to borrow externally. "The pricing of that asset using the Black-Scholes model is the best it's ever been. So you have this huge convex moment that you can put enormous positions on in Japanese interest rates very cheaply."

Bass: GDP actually 1% or less

Kyle Bass' outlook for the U.S. (hint: it's not so good) seems based on what he considers a Social Security obligation that no one's factoring in.

"Add 4 and a half trillion to debt," Bass suggested.

He said he has studied "personal consumption expenditures," which he said is easy for anyone to do, to determine a massive downward revision in GDP. "The Q2 number was 2.4%. I would be flat amazed if the revision isn't to 1% or lower," Bass said.

"I think ZIRP is a trap," Bass said. "I think the only way out of that trap is a painful restructuring down the road. ... I don't believe we can afford to have our rates move up."

Bass predicted the type of bubble-laden economy we've been trying to push down the road is sort of a centennial event.

"What we're seeing is a secular change," Bass said. "And a secular change happens about once every hundred years."

"Thank you for this uplifting appearance. It's really been helpful. I'm gonna start drinking," said David Faber.

[Monday, August 16, 2010]

Not a good week for the
Education Department

On May 27, Apollo Group closed at $53.18.

Why does that matter?

Because that day, Melissa Lee reported on Fast Money that investor Steve Eisman announced at the Ira Sohn conference that he was shorting APOL. In fact, he even apparently called for-profit education the new subprime.

On Monday, APOL closed at $40.98 — actually a big day, up 5%, and remarkably better than Strayer.

Fast Money guest Bob Wetenhall explained what was going on, and the answer is student loan repayment. "The magic number is 35%," Wetenhall said.

He said Strayer had been forecasting a rate north of 45%, but actually came in around 25%. Apparently, 35% is necessary to qualify for many types of federal aid.

Wetenhall said he has suspended his rating given the news and now calls Strayer a "regulatory play with a binary outcome."

Karen Finerman asked exactly how the 35% is derived and what this means. Wetenhall said the 35% refers to the percentage of student loans that are being repaid, but that only the government knows for sure how it will deal with a situation of a number below that.

Dr. J, Jon Najarian, sort of combined a question with a statement in asking Wetenhall if there's an added difficulty for these for-profits in that the students might have accumulated debt at other institutions, but the present institution is on the hook, statistically speaking, if the older debts aren't being paid.

Joe Terranova advises, "Do not catch the falling knife" in these stocks.

Melissa Lee said she thinks it's "almost irresponsible" for the Education Department to have some kind of "black box" formula for this that the investing public doesn't know about.

We also thought it was curious enough when we coincidentally posted on our home page Monday that the same U.S. Education Department is sending $115 million during the supposedly worst economy since the Great Depression to random school districts nationwide to help history teachers teach history better, which apparently means mentoring with historians and seminars that the government evidently will pay for, as well as field trips to historical sites that will hopefully help some junior high students realize who our 1st president was.

Will he unload, in case the
well starts leaking again?

Jon Najarian on Monday's Fast Money congratulated Whitney Tilson for Tilson's great call recently on BP.

This page doesn't disagree in the slightest. It was undeniably a great call.

What's interesting though is that no one on Fast Money talks about why it was such a good call.

The truth is, if the Deepwater Horizon were still gushing, or God forbid, worsened from June, BP stock could be in the teens today.

Tilson first mentioned his stake on Fast Money on June 8, a day the shares closed at $34.68. His argument was that cleanup projections were being overestimated by some, that many liabilities are deferred and not something that could wreck the company overnight, and that damages were paid with pretax money.

Without saying as much, Tilson was essentially betting at the time the leak would be capped at least by the early August relief-well timetable. Had the spill gushed out of control in July and put oil globs in Miami, the trade would've been a disaster no matter the financials.

There's hardly a large sample size for this type of event. Environmentalists right now still disagree on how much oil remains out there, how much harm has been done, and for how long.

Tilson crunched the numbers, assessed the known risks, and rendered a judgment. It was a sensational call. It's also a great reminder that financial fundamentals are sometimes trumped by external events in which even the greatest experts are reduced to guessing, or hoping.

A week later, more about
John Chambers’ comments

Joe Terranova opened Fast Money saying he's digging in to the tech space, with names such as MSFT, QCOM, LRCX, "even some Google."

Steve Grasso though said the problem with buying tech for anything other than maybe a short-term trade is that "The guys in the space are still selling it off of Chambers' comments."

Jon Najarian noted that DELL might've made an acquisition, but the only acquisitions seem to be happening in tech names and not across the broad market.

"I still cannot get on the Dell bandwagon," said Karen Finerman.

Gartman: Lingering
appetite for Treasurys

Dennis Gartman said Monday that Treasurys might seem like they're entering bubble-land, but "You don't wanna go short of something that the Fed wants."

Gartman also said, "I'm agnostic of gold," and at some point threw in one of his favorite words, "demonstrably."

Melissa Lee asked Joe Terranova why not play the miners rather than GLD if you believe there's a gold boom coming. "I just wanna play pure gold" was Terranova's answer.

Karen Finerman asked CNBC mainstay Tyler Mathisen a question about John Paulson's GLD holdings while Mathisen was discussing some 13F info. Mathisen didn't know the answer but asked a staffer (the answer came later) and expertly handled the uncertainty like a veteran.

Big ol’ jet airliners,
not carrying enough away

Jon Najarian reported Monday an interesting observation about the O'Hare Airport parking lot.

"It's been empty. For the last 3 weeks," he said.

Then he said he expects it to be quiet in trading-land until Labor Day. "I bet there's not a single desk that is even 50% staffed right now. Everybody's gone," he said.

That made us wonder ... if everyone's on vacation, shouldn't the airports be active? Don't some of the busiest flying days every year occur around holiday vacations?

Dunno. Too bad Peter Greenberg is no longer with CNBC to answer that one. Presumably people in Chicago, if they're going to fly somewhere and have a choice, would tend to do it more often in the winter than summer. So maybe an empty O'Hare parking lot in August is not unusual.

Dr. J didn't offer an airline trade over this, so we're guessing the observation requires a little more scrutiny.

‘All the risk is in the
fixed-income market’

Joe Terranova on Monday made one of those comments that can potentially come back to haunt.

"I believe right now all the leverage, all the risk is in the fixed-income market," and not stocks, Terranova said.

Jon Najarian noted the "TBT today traded almost record volumes."

Steve Grasso reiterated client interest in letter X and said of the steel sector, "At this point I think it's a buy." He also said, "I've seen clients moving out of Wal-Mart."

Melissa Lee narrated a nice segment on McKesson's pharmacy Health Mart idea. The personal touch is always appealing, but probably some of the biggest reasons people choose one pharmacist over another are proximity to their home and typical time they have to wait, which may not be addressed in the Health Mart program.

Steve Grasso joked that customers might not always want on-site tests done by their all-knowing pharmacist. Dr. J made a joke about having to cough when he walked into Wal-Mart as a hernia check.

Melissa Lee congratulated Anthony Scaramucci for a "nice haircut, by the way."

Lee also mentioned Tim Seymour's "premiere" of "Trading the Globe" on Tuesday night, even though Seymour's done at least one of those shows before, in 2009. Lee called it a "special." We thought the first one we saw last year was pretty good.

Fight on, Finerman

We always try to think positive here. And we virtually always think positive about Karen Finerman.

So it hurts, actually, to point out something that clamors for our attention.

Karen's most prominent picks are having a dreadful year.

It started in late 2009, when she pounded the table for GOOG, in the $600s and $500s, more than she has for just about any stock. Then on Feb. 5, Fast Money showed footage of Karen speaking at Bill Ackman's conference trumpeting CVS, saying, "we believe there's 50% upside from here." We don't know when she first jumped in, but CVS had been trading at $33 for weeks prior and disclosures say she still owns it. (It closed at $28.70 Monday.)

Her longtime mainstays, BAC, JPM and HPQ, are all having a bad year. We noted a week ago that Karen even recommended HPQ as her Final Trade twice the week of Mark Hurd's ouster.

July 22, she announced she had taken a position in RIMM. Exactly when, we don't know, but the stock closed at $54.56 that day. Still very early by Karen's metrics, but clearly, doesn't seem particularly promising at the moment. Karen said on Monday's Fast Money she continues "to be a nervous, not big holder."

Finerman is also listed presently as long FLIR, a stock she's mentioned a few times. It's had moments of decent tradability, but for 2010, not a winner.

We don't claim for a moment we could do any better. Nor do we have any knowledge of Karen's returns. As she always says, she's hedged, so she might be having a decent year thanks to other picks. It's entirely possible, as far as we know, that Karen's having the best year of anyone on Fast Money.

Nor do we doubt that all of those above-mentioned stocks could break out together in a hot market. 2010 — so far — seems to be the year of the value trap for Karen. For most if not all the fundamental case is still pretty strong (we sorta question that with RIMM and definitely question that with GOOG, but not the others).

On Monday, Finerman, making a point that Steve Grasso continues to make most frequently and convincingly of anyone on Fast Money, observed that "I think all stocks move together this year."

Of course, we're rooting for Karen, even if this entry doesn't seem like it.

Bill Strazzullo returns,
defines the Hindenburg Omen

It's been too long — way too long — since Bill Strazzullo turned up on Fast Money.

Melissa Lee brought Strazzullo into Monday's Halftime Report to discuss the "Hindenburg Omen," a neat combination of a pair of '70s movies that has managed to creep into enough public consciousness to merit a headline on the DrudgeReport.

Strazzullo said, more or less, fuhgeddaboutit, while providing a valuable service to the laymen in explaining exactly what the heck this trading-floor nonsense is.

"This is not something that we really follow," Strazzullo said. "Look, there are a number of these esoteric technical indicators out there ... The concept with the 'Hindenburg Omen' is that you're making a bunch of 52-week highs and lows at the same time. Normally it's one or the other. When you're doing 'em both at the same time, it's a sign of uncertainty."

Strazzullo assigned the market a range of 1,050 to 1,125.

Gratuitous Mandy reference

Amanda Drury showed up on Closing Bell in new hairstyle and vivacious new blue dress, but we'll only talk about Fast Money.

Melissa Lee, in striking pink, at the opening of the Halftime Report, said Monday that sales of Research in Motion's Torch are "lackluster," and Patty Edwards didn't argue.

"You know, one of the analysts out there, I think it was the guy, Kaufman Bros., said he spent an entire half day playing with one of the torchers, and it wasn't bad. Not a ringing endorsement," Edwards said.

Pete Najarian said he's got a position in RIMM that is "not working out very well at all." Even so, "I still like it at these levels."

Najarian called the premium being paid by Dell for 3PAR "a little bit unusual."

Stock of the month: NFLX

Melissa Lee pointed out Monday that NFLX has a "forward P.E. of 48."

"I don't understand it," said Patty Edwards. "I'm a little perplexed."

Steve Grasso offered a pretty good answer. "Ut's an open-ended growth story with a short, short squeeze happening as we speak now," Grasso said. "You're probably gonna see new all-time highs."

But Grasso couldn't resist another technical level, saying people are taking a flier on names they missed. "It looks like they wanna rally 'em back to that 50-day moving average of 1,087 let's call it on the S&P," he said.

Dennis Gartman asked himself a question about wheat. "Is it over? I really don't think so." He reiterated a bullish call for regional banks in the Midwest who will benefit from healthy farmers. "They're going to have a wonderful several years going forward," he said.

In a steel discussion, JJ Kinahan said, "AK Steel used to be kind of a darling of this industry."

No. 386 poured it on, saying, "People in the space like letter X and they short AK Steel."

Actually, the downfall of AKS started the day after Jon Najarian recommended it because of the "quarterly pricing" change.

How good of a job
is Brian Moynihan doing?

Charles Kantor, managing director of Neuberger Berman, talked about BlackRock and the prime brokerage business on Monday, and in the process introduced a sexier topic.

"Brian Moynihan was in our office last week in Neuberger, we were fortunate to host him," Kantor said. "I think very consistent with his overall message, which is, fit and focused. Slim down the firm to the core assets that he wants to own. I think those for him are consumer, wealth management, and investment banking."

Then came this aside: "He sold piece of businesses in Mexico, in Brazil recently."

Hmmm. Mexico may not be high-growth ... but getting out of Brazil?

According to the company, Ken Lewis retired Dec. 31, and Moynihan assumed the CEO position Jan. 1.

Here are some stock results from Jan. 1 through Friday's close:

JPMorgan: down 10%
Wells Fargo: down 4.3%
Citigroup: up 17%
Morgan Stanley: down 12.5%
Bank of America: down 12.2%

Make of that what you will. But in putting that list together, something else was noticed.

Not only did Moynihan start his current job Jan. 1, so did James Gorman.

Both replaced celebrated CEOs with a lengthy record of accomplishment who maybe were nudged out because of lingering bailout fatigue (or in Mack's case, a lousy quarter in mid-2009) and perhaps weren't quite ready to hand over the reins.

Obviously, neither of the successors is having a big year.

Like we said, make of that what you will.

Gary Kaminsky asked Kantor if the BAC brass feels any sense of "desperation" to satisfy frustrated shareholders.

"Brian Moynihan's trying to attract the long-term investor to Bank of America," Kantor said, and then in what implicitly amounts to a sell recommendation, "If you have a short-term time horizon, you probably don't want to be involved in Bank of America."

Hmmmm. "Long-term horizon" is often a stalling term used by underperforming execs. Curmudgeon Chris Whalen, to his credit, was heard carping on Fast Money last year that BAC would get rid of Lewis without a succession plan. This page, by the way, strongly recommended Karen Finerman for the BAC job in September. Seriously.

Gary Kaminsky gets a dig
at the Wall Street Journal

The Brian Moynihan discussion Monday came during a larger BlackRock discussion, specifically a WSJ report saying BAC is "exploring" sale of its BlackRock stake.

Gary Kaminsky noted the board members of BlackRock and said BAC could do this quietly, if it so wanted. "I would say that this is something that could be done upstairs," he said.

Guest Charles Kantor said BAC CEO Brian Moynihan, in a recent meeting, "described CCB as a strategic asset. And he didn't provide the same labeling to the BlackRock investment."

Kaminsky concluded, "The bottom line here is that, uh, and I think that this is something the Journal missed, this is not new news. This is something that has been going on for some time. And if Bank of America wants to sell, I suggest, there will probably be somebody that wants to take them out of the entire position."

Finally, Mary Thompson
graces the Strategy Session

Monday viewers of The Strategy Session got a treat when CNBC beauty Mary Thompson made her first appearance on the show, to discuss the prime brokerage business.

Thompson said it's an industry in "transition."

"What you're seeing right now is less leverage in the system. And as a result, those prime brokers are making a little less money," Thompson said. She also noted, "There is increased competition," and that she's hearing "B of A and C being very, very aggressive right now on pricing." She added there's a question as to "what kind of a marketplace are these prime brokers going after."

Sam Hocking of BNP had no regrets, saying when BNP bought BAC's prime brokerage division, "We caught it at the right time."

David Faber said noted mortgage-security short Kyle Bass will be on the show Tuesday, to speak of the "possibility of ultimately a Japanese default."

A passenger who did this
would be having a long chat
with Homeland Security

You're reading an Internet site, so you've heard of Steven Slater.

Not surprisingly, Slater has benefitted from society's approval of colorful public displays no matter how notorious the culprit, whether it's a flight attendant who didn't do his job and walked out on his colleagues and customers before running away like a coward, or an alleged double-murderer in a Ford Bronco on the highway.

Jimmy Pethokoukis, on "The McLaughlin Group" this weekend, even incredibly tried to link Slater's apparent appeal to Obama fatigue. "Maybe, maybe America's looking for a little passion," Pethokoukis said. "Maybe they're tired of sort of the cool, technocratic attitude they've seen from some of their leaders over the past year."

Yeah, sure, that's gotta be it.

Without question, we need pop culture heroes. Who can resist a Gaga story? The difference is Gaga works for a living. Slater's useless. He's unfortunately reached public consciousness enough to creep into Fast Money, when Jon Najarian brought him up on Friday's show, but in case you're afraid it's a sign the world has gone to heck in a handbasket, note that the Good Doctor still felt compelled to explain who Slater is, the guy "who got dumped on the head by the bag at the JetBlue plane."

Movie of the week:
‘Bonnie and Clyde,’ the anti-hero

"Bonnie and Clyde," the landmark film by Arthur Penn categorized as "New Hollywood," is famous for ushering in a new level of screen violence. Today, "Bonnie and Clyde" almost looks quaint, a few gunshots here and there, minimal nudity.

Like most works of art, it's more about the time it was made (1967) and not so much the time it depicts.

The cinematography is mesmerizing. The faces are some of the most legendary, Beatty, Hackman, Dunaway, at or near the beginning of their spectacular emergence. Beatty's Barrow is remarkably similar to later characters he will play in "McCabe & Mrs. Miller" and "Shampoo," a scatterbrained person of overwhelming charisma that nearly takes him far enough, but not quite.

Anti-heroes aren't restricted to youthful agitators. Dirty Harry, General Patton and Michael Douglas' William Foster (in "Falling Down") represent the other end of public frustration. "Bonnie and Clyde" came about in the late '60s, pegged to a younger demographic even though it would've been their parents who likely heard the real Bonnie & Clyde story firsthand. The critical reaction, at least initially, was not kind. Roger Ebert claims to be the only prominent reviewer to give it an "ecstatic" endorsement in its original release.

Even in independent cinema, there are decided boundaries. Pulling off the anti-hero requires conformity. The values have to bend the envelope, but not shatter it. Thus we have a criminal enterprise that murdered in the double-digits and stole massive amounts of ammunition depicted in a movie where they never intend to hurt anyone, essentially only shoot after the cops fire first, treat their captives, befriend the disadvantaged including an African-American sharecropper. They're even done in by their own generosity, freeing an officer who will later kill them. These are disenfranchised youth, not out to hurt people, just have a little fun, and if death occurs along the way, it's merely collateral damage.

That word, "fun," seems to be the values cushion. Shortly after "Bonnie and Clyde" came films like "The Thomas Crown Affair," "Butch Cassidy and the Sundance Kid" and "The Getaway." Criminals ranging from brilliant to stupid, who do it for the thrill and nothing else, or "strictly business" in the case of Michael Corleone. The word "malicious" is missing from their description, preserving them as bankable if objectionable art.

By 1973, "The Brady Bunch" was teaching Bobby that Jesse James was no hero, and in 1974, Steve McQueen was playing a by-the-book courageous firefighter in "The Towering Inferno."

"Bonnie and Clyde" remains undeniably relevant. To this day, you will read about Barrow and Parker, on a first-name basis of course, in the lede sentence of an Associated Press story about a "grisly slaying." The movie though endures not only for its stars and cinematography but its proof that values are a matter of perception, that people presented with the same facts can draw different conclusions, explaining far more than just a 2-hour film but perhaps the strength of individuals such as Fidel Castro, Hugo Chavez and Yasser Arafat.

As Steven Slater reaffirms, there's always a healthy appetite for sticking it to the establishment.

[Friday, August 13, 2010]

Seymour: ‘Plunge protection team’ may backstop GM IPO

Tim Seymour on Friday's Fast Money was pounding the table for a stock that doesn't actually trade yet.

It used to trade, not too long ago, around oh, about zero.

Melissa Lee delivered the breaking news that General Motors may offer 20-30% of its IPO to retail investors.

"Any way you can get exposure to this IPO, I say you get in line," Seymour said.

"This company's gonna come back lean and mean," he added. "It's a very interesting story."

Guy Adami didn't seem to think that 20-30% for retail investors was particularly charitable. "How magnanimous huh," Adami shrugged.

Melissa Lee credited CNBC colleague Erin Burnett for "spearheading" the movement to open up the IPO to taxpayers/retail investors.

But moments later, Lee suggested there could be a big "backlash" if a lot of people get into it, and it doesn't trade well, while at least in China, the government massages IPOs.

Seymour said there's a "plunge protection team" and shrugged, presumably meaning ... well, we're not quite sure what, but probably something about how the U.S. government would try to prevent IPO investors getting screwed, in other words, pricing it safely well below what they believe it will actually trade at.

There are several ways this dialogue could've gone, such as, if the government does indeed price it well below the expected trading range so that the winners of some kind of retail IPO lottery aren't screwed, then aren't the taxpayers getting screwed because the IPO price is too low?

And if the company is truly now a "very interesting story," does that mean the government is better at capitalism than all the previous people running GM for decades?

If not, then why in the world would a recently bankrupt company, which had been troubled and flagging for decades, suddenly be considered a hot IPO?

Dennis Gartman said he doubts the GM IPO will be a "blowout." He said it would be "politically untenable" if it wasn't open in some way to retail investors.

Hopefully, GM buyers will do better than those who jumped all over CBOE in June.

Mark Haines finally gets
a Fast Money shout-out

Fast Money guest Mike Block indicated Friday that maybe Doug Kass shouldn't declare victory just yet on that lows-of-the-year-already prediction of a month ago.

Block said he thinks the market will "test the early July lows, that means 1,010 on the S&P 500."

He said he's waiting for several companies to "show us something," namely CSCO, JCP, HIG. (Question: Instead of waiting for those uninteresting names to show him something, how about just buying something that's working?)

Dan Greenhaus said he expects the Bush tax cuts ultimately will disappear only for those making — most of you can consider yourselves spared — more than $200,000 individually or $250,000 MFJ.

Greenhaus, proving he reads CNBC.com, said "Mark Haines wrote a great blog" on the subject.

Haines wrote that he's undecided about whether it's a good idea to raise taxes now, but that statistics he researched show smaller hikes don't kill growth. He even paraphrases a "Jerry Maguire" quote.

The gut feeling here is that it's a lot simpler than that, that it's merely an insignificant political debate over percentage points, kind of like how a grand total of 4 percentage points in the unemployment rate is the difference between boom times and "decession."

Guy Adami said people might want to take a crack at RIMM only because this is the "1st meaningful pullback we've seen in a while." But nobody on the panel really saw much of a catalyst for it.

Patty Edwards used the term "trepidatious," undoubtedly the 1st time that word has appeared on this site.

Did you notice,
Joe had a red shirt

Jon Najarian for some reason brought up Steven Slater in his Fast Money remarks Friday, perhaps because he was tapped to open the show and someone had to do it.

Najarian wondered whether Slater, Maxine Waters, Charlie Rangel or John Chambers had the worst week, then used that as an analogy to declare, "This was a lousy week for trading."

"Tryptophan has hit us," he said.

Melissa Lee put far too much effort into a PIMCO allocation question that Dennis Gartman mostly dismissed out of hand, saying PIMCO's just a giant that has to shuffle its money around to different bonds. Gartman said right now it's a "quasi-deflationary environment."

Guy Adami was again pointing to Japan, that sample size of 1 for a modern U.S. comparison. "These bond runs can go on for quite some time," Adami said.

Joe Terranova, whose red shirt got far more commentary than it likely deserved, said Dynegy "should just take the money and run."

Would you vote
for Peter Schiff?

Fresh off a better-than-expected defeat in the Connecticut Republican Senate primary, Peter Schiff landed one of the world's most desirable consolation prizes:

Being interviewed by Amanda Drury.

Schiff spoke with Drury on Friday's Closing Bell. It wasn't the type of Schiff you're accustomed to hearing on Fast Money. He methodically argued that Europe is doing better but Asia still is producing higher returns.

He said, "We're mainly buying the companies that export into the emerging markets, into China." He added, "The way you stimulate an economy is you get the government out of it. ... I think the euro is gonna gain quite a bit of ground against the dollar."

Schiff is controversial enough, it seems like he'd be a tough vote for Senate.

His temperament is the problem. On Fast Money he doesn't seem to be a good listener. He talks over people and wants to argue.

People in Connecticut, and anywhere else, want someone who will listen to them and represent them, not an economic soothsayer.

Then again, we don't know what's so great about voting for Linda McMahon.

Schiff maybe should've bowed out earlier for party's sake. But as this week's election articles indicate, he gave it maximum effort up until the end, and even changed a few votes outside the polling places.

And that's impressive.

Long gold? Root for Democrats

Joe Terranova said on Friday's Halftime Report that "everything lines up perfectly here" for gold.

But not all of his colleagues agreed.

"The November election, the closer we get, if they think the House is gonna be overturned and go to Republican control, gold is gonna be sold off, and you could see some sell side getting in in September and October, ahead of those elections," said Steve Grasso.

"I gotta ask Steve, why would that be?" Terranova said.

"Because then, why would you think it would be, because there'd be less printing, there's a, there's a premise that there'd be less printing if there's more gridlock in Congress, less printing of money, so people would lighten up on their gold positions," Grasso responded.

Grasso added, "It's a premise, that's the normal thing. People buy it out of inflation."

Is Kass’ low-for-the-year
prediction in jeopardy?

Doug Kass suggested on Friday's Halftime that a policy overhaul is in order.

"I think the market's upside and the economy's progress is basically constrained and, and mired by this vortex of liquidity, tax and regulatory, uh, traps," Kass said. "It won't change until the administration adopts a new playbook."

Kass made one of the most tired "Caddyshack" jokes, about the free bowl of soup with the shirt, etc...

Terranova might've had the bright red shirt, but Mel Lee's va-va-voom U-shaped red top made headlines.

Steve Grasso asked CLF CEO Joseph Carrabba to comment on steel stocks and address whether they're undervalued. We're not sure Carrabba answered the question (check that: we don't really think he answered it at all), but he said his company shouldn't be lumped in with the basic U.S. steel market. "We've got very high prices, we're sold out for the rest of the year in all of our products," he said.

The interview was so short, Melissa Lee didn't have a chance to ask if he was planning to buy anything in the near future or be acquired by someone.

But at least he called Lee "Melissa" and not "Michelle." Pete Najarian, as expected, called the stock a buy.

Patty Edwards said Friday, "The bottom line is, the consumer is not feeling the love of this economy at this point in time."

But then Patty pointed to that argument as a possible rationale for buying PCLN or NFLX, saying "The consumer absolutely is trading down" and those stocks represent a play on that.

Pete Najarian said not to think you can nail the next Dynegy. "You don't wanna buy any of these names with the anticipation that they are gonna get bought out," Pete said.

Steve Grasso said he thinks some Ford buyers might bail for the General Motors offering. "The longer we wait for that GM IPO the better it is for Ford," Grasso said, but he stipulated, "For the longevity, Ford's a better buy longer-term."

If you were chucking your real estate overboard, hold on

Commercial real estate expert Jim McCaughan on Friday's Strategy Session delivered a takedown of sorts to fellow expert Scott Rechler's July 27 "other shoe to drop" thesis on the show.

"Rechler was talking about the gap that will emerge from the lack of CMBS financing. The problem with his thesis is, that the gap is already getting filled," McCaughan said, pointing to greater activity by the banks, balance sheets way bigger than they used to be and large pension funds and sovereign wealth funds being active.

"I think he's out of date talking about the CMBS gap," McCaughan said.

McCaughan said real estate financing is in much better shape than a few years ago in its bubble-causing era, and thus, "even if there's a double-dip recession, I think you'd be better off in real estate than equities," he said.

You may not be keeping score,
but Gary Kaminsky is

Gary Kaminsky on Friday's fairly non-splashy Strategy Session trumpeted a call he made a few days earlier.

(Whew ... Thankfully, it had nothing to do with HPQ.)

Kaminsky told David Faber, "I did think however that you were gonna congratulate me on my prediction on Monday for saying that we were gonna beat last week's record despite the fact that it was August, in the high-yield issuance market this week."

"Did you actually say that on Monday?" Faber asked.

"I might've said it on Friday," Kaminsky conceded.

"Congratulations on your great prediction about junk bond issuance," Faber deadpanned.

Kaminsky said he hates to say it, but markets are in kind of a "Don't fight the Fed" mode.

[Thursday, August 12, 2010]

Still no job for Mark Hurd,
6 days later

Melissa Lee, in some of her best hosting, raised the issue of a shareholder suit against HPQ board practices with her skeptical Fast Money colleagues Thursday.

We have no idea if there's any merit to the suit, but it was impressive of Lee to not let her panel entirely dismiss it.

In fact, it's a rather interesting claim.

Karen Finerman though isn't buying it.

"The way that I understand to have happened, that the board did its duty. It investigated the claim and it found to be that it wasn't, it had no merit. There were other issues the board talked about, the expense reports," Karen said.

"Just think about this. If they're right that the board should've disclosed it. I could be a short seller. I could send a letter tomorrow saying 'Hey, I think you need to investigate XYZ.' The board has no duty to disclose that. They shouldn't disclose it in fact. There needs to be some filter, some vetting process," Finerman continued.

"Do you think it's unreasonable that the board took 5 weeks to resolve the situation? I don't," Finerman asked/answered. "To me, it's a very big situation."

Jon Najarian agreed with that. "There was no smoking gun here. I don't think they had any fiduciary duty to the shareholders to tell them that somebody accused any man or any woman at Hewlett-Packard of doing this, let alone Mark Hurd," Najarian said.

Lee persisted in asking, do people have a right to know.

Gary Kaminsky actually found himself nodding about what he was hearing, saying "I'm gonna actually agree with Jon and Karen on this one." Kaminsky said the bigger issue is, "They got rid of somebody who had created the shareholder base."

The dividing line here is not insignificant. Lee is in the media business, that's her meal ticket. The others are financial pros who do media on top of managing money (Kaminsky has done both).

The general media belief is that important news should be disclosed.

We should probably find a legal opinion before plunging into this one. The Wall Street Journal article does not quote experts as to whether there is a strong case here, but seems to take the filing seriously.

It seems like it all worked out rather fairly; the news was a surprise to everyone at the same time and no one got an advantage. (Although, that raises another issue of afterhours trading, which is, why wouldn't HPQ release it on Saturday, when no trading is occurring and people have time to think about it.)

On the other hand, the board investigating a CEO for conduct that might get him fired doesn't seem like a regular occurrence in any company, and does seem like a material event.

How's that for a wishy-washy analysis.

Karen: BKS rise was ‘stupid’

Karen Finerman, talking about being short Barnes & Noble (which is also shorted by Whitney Tilson and as far as we could tell a staggering number of others), said the early report of a deal for a Yucaipa board seat(s) should have indicated a takeover was off and not been good for the stock.

"To me that was stupid, the stock shouldn't have been up," Karen said.

"So right now, to me, the biggest risk in the short, I don't think it's fundamentals, I think it's a deal," she added.

But in her opinion, that's a long shot, because it's "almost impossible to believe that you could get an LBO done in this environment in this name," she said.

Guy Adami indicated that BKS tends to give away a service for free without charging for a whole lot, suggesting it "should just charge admission." Melissa Lee agreed. "It's true, it's true. Or they should charge for use of their bathrooms," she said. "Much better than a public library these days."

Adami: Maybe Harvard
students study too hard

A little discussion about smoking involved a little dig about Harvard — but this time, the Hedge Fund Trade of the Week occurred without any controversy.

Anthony Scaramucci on Thursday touted Lorillard, for the usual HFTOTW reasons, low P.E., healthy dividend.

Karen Finerman patted him on the back for that one, saying how much she likes international smoking plays. Patty Edwards concurred but for more than just international growth, it's also the risk of further lititgation in the United States (gee whiz, they already shipped all those state attorneys general more money than the Gulf cleanup for supposed state smoking-prevention programs that essentially ended up in the general fund; what more are they supposed to provide?).

Jon Najarian, famously a critic of stodgy HFTOTW calls, happened to be on the show as well, and agreed with Patty, and didn't argue with Scaramucci, saying of LO, "I'd buy that as well."

Preceding the segment was a go-round in which Guy Adami told Melissa Lee, "You go to Harvard, that's what you work on, Norwegian krone vs. wheat. You go to Georgetown, you have a good time, you smile like me all the time."

"Don't take down my school," Lee said, then introduced Anthony Scaramucci as a "Harvard man," although as Adami pointed out, he's really more of a Tufts guy who happened to go to Harvard Law.

Scaramucci said he would agree with Melissa, but "I can't pick on Guy Adami because he's the only person selling my book."

Google incrementally picking
itself apart. Maybe.

Colin Gillis said Thursday, "We do like Google in the back half of the year."

But then he added sort of a damning qualifier.

"The payback on a lot of these acquisitions, it's gotta be really unclear if they're creating or destroying value, but you know the reality is most of this destroys value," Gillis admitted.

"I love buying Baidu on the dip, and I did just that," said Jon Najarian.

Melissa Lee appeared to trip up Joe Terranova on a comment about PC sales. "Wait a minute. You said that you liked Microsoft the other day because of the PC refresh cycle," Lee said.

"No no no, what I said with Microsoft is I like it on a mean reversion trade relative to the rest of the space because it has underperformed," Terranova said.

We know from further down this page that Terranova did indeed say that a couple weeks ago, but aren't sure about Lee's claim about the PC cycle.

Ryan Wuerch, the boss of Motricity, was squeezed into such a tight interview segment, we weren't even sure by the end of it what his company does, let alone whether it's intriguing.

Guy Adami said with a big market comes competition, and margin squeezing. Wuerch indicated, Not a problem.

Wuerch also called Carl Icahn a "great friend of this company."

Adami recommends 3 names

Guy Adami, who's back in that mode of saying the market's tumbling again, actually singled out several stocks to possibly go long on Thursday's Fast Money.

"You could own Cisco here. Your stop is pretty well-defined, I think you stop out at 20 and a half," Adami said.

"Cat's a name you might wanna look at," Adami added. And he also said, "NTAP might be interesting around here."

Adami briefly spoke about gold.

"My history with gold is, I traded gold for 14 years when it only went down," he said. So while he's aware it's basically been going up for years, he warns again that when it falls apart, it can hurt. Melissa Lee asked if that's still the case now with ETFs and Adami indicated it can still be painful.

Joe Terranova said he likes gold because there's a "fanatic change in the marketplace."

Like food and oil in core CPI,
there is AAPL & consumer spending

Patty Edwards on Thursday pointed to one of her favorites, JWN, as possible proof of the strapped consumer.

"They are saying that inventories are stronger, or higher rather, than they should be," Edwards said. "It's looking like the consumer slowdown really is playing out."

(Except all those people buying iPads, iPhones and iPods. Those are different consumers, not part of the mainstream, buying products they need, not stuff they might want. That's our observation, not Patty's.)

Patty added, "I followed Jon in this morning, picked some of the Cisco up."

Guest Stephen Weiss made some pretty good points in a short time about bonds vs. stocks, saying those markets are "both a little bit right." Like Anthony Scaramucci, he touted Lorillard, and also mentioned VZ and a recent Gary Kaminsky favorite, master limited partnerships. (VZ is not a Kaminsky favorite, but the MLPs are.)

He also interestingly noted that a company like JNJ would be tempted by the bond yields to buy back its shares yielding 3%.

Guy Adami not only thinks the Chinese are better capitalists, but "I happen to think we're turning into Japan."

Maybe the most refreshing news of the day was from Karen Finerman, who said, "We've actually started to take off some of our hedge today."

Karen ‘astounded’
by calls for stock splits

Beset by technical glitch, Toni Sacconaghi's criticisms of Apple's cash management were delayed on Thursday's Halftime. Thus, the meat of the reaction came on the 5 p.m. show.

Sacconaghi was arguing that large investors are growing frustrated with Apple's cash hoard. He argued that a 4% dividend would provide a healthy return without really doing much of anything to the $46 billion that's already there.

On the 5 p.m. show, Karen Finerman said that what's occurring now is a "terrible capital allocation," and she recommended Sacconaghi put together a shareholder proposal (which she said anyone can do) that would "at least force the board to address the proposal."

Melissa Lee asked a great question to Karen, "Why don't you do it?"

"I'm thinking about it," Karen said.

Guy Adami however was having trouble with the notion that too much cash was such a bad thing and pointed out that an alternative would be to blow it on an acquisition that doesn't work. "Maybe that's the best use of their cash right now is to have it sitting around," he said.

He even told Sacconaghi, "Seems to be, maybe not, I don't know, but to me it's a bit of a nitpick. Apple shareholders, unless they bought it yesterday, have been doing incredibly well."

But at 5 p.m., Karen said, "They have so much cash, this is not an either/or."

But Karen's strongest point was saved for e-mailer Shane in North Hollywood, who wondered why AAPL doesn't just declare a 10-for-1 split.

"The idea that a 10-for-1 split, I, I recognize that sometimes that works, it always astounds me because, it's the same thing," Karen said.

"It's a decimal point people!" chimed in Adami.

"It's ridiculous. It's ridiculous. I understand that it could work, for a minute, but I, I just, I don't get that at all," Karen said.

CSCO at $21 — ‘a gift’

Jon Najarian said on Thursday's Halftime that it's time to take a plunge into CSCO.

"I was able to buy it right around 21 today. I think that's a gift, like Akamai," he said. "I think this is a multi-week wait."

We knew we couldn't get out of more references to John Chambers' optimism/pessimism on the conference call, and Dr. J reminded that when Chambers said 3 months ago it doesn't really get any better than this (actually, that's the Old Milwaukee slogan), that Chambers was right, it was time to sell.

Dr. J, further illustrating he swims in the deep end of the trading pool, also reported, "I was in the triple-short Nasdaq ETF, and I did sell that just over 61 this morning."

Steve Cortes said, "To me the semiconductor sector is just boring." He prefers to get his excitement from biotech.

Tilson: BKS is toast

Whitney Tilson told Halftime viewers Thursday that there's really not much hope for Barnes&Noble. "We think the business is in permanent decline. We can't see anything that can reverse it," Tilson said.

Steve Grasso said that "people have been using steel as a proxy for China, and I think there's a lot better look-through with ... copper, vs. using steel."

But he added, "My guys are bullish on steel at this point, specifically letter X."

Guy Adami again floated the interesting idea that hasn't gained much traction on the show, that maybe a name like GIS should be a good short with wheat going gangbusters.

Steve Cortes said he still likes fertilizers, particularly MOS, because POT's already had a good run.

Grasso said for the overall market, "1,088, that's the level you gotta watch. That's the 50-day moving average ... same way as on the way up, you need to confirm the move so we need to close below it for a couple days before we start throwing out all our positions on our balance sheets."

Jon Najarian reminded viewers again he hit it big in the VIX a day earlier. "Ya gotta be nimble, ya gotta take 'em when you got 'em and the VIX gave you a lot yesterday," he said.

Jon Najarian said he hasn't shopped eBay at least for a while, but Guy Adami is in fact doing just that. "I bought a Pete Najarian rookie card," Adami said.

Najarian: GS doesn’t make mistakes (or something like that)

Jon Najarian said Thursday that a recent upgrade by GS is a good omen for the economy.

"I don't think Goldman comes out and upgrades Simon Property Group and Blackstone if they're really thinking that deflation is the biggest concern on the boards," Najarian said.

Steve Grasso, however, pointed out they're capable of getting it wrong. "Let's remember their timing is not impeccable, so let's all, all take it with a grain of salt on that as well," Grasso said.

That prompted a curious defense of GS by Melissa Lee, who got Grasso to agree with her that untimely upgrades happen "across the board."

Steve Cortes essentially agreed with Najarian that he doesn't see deflation, citing different evidence, that of the copper and commodities markets, but can't get the bond trade correct. "I am among many investors, many traders, who have unsuccessfully bet against the Treasury market. And I've given up on doing that; it's finally worn me out."

30% of an NFL team
for sale in September

Darren Rovell is one of the most underrated CNBC personalities. The sheer volume of his scoops is extraordinary. Some days, if you're looking at Yahoo! or Google news, it seems like his name crops up about 5 times, "CNBC's Darren Rovell reported..." etc.

On Thursday, he joined sports business broker Sal Galatioto, who might be No. 1 in his business, for one of the best Strategy Session confabs yet.

Rovell said it used to be 30% down if you wanted to buy a sports team, then finance the rest. Nowadays, he said, "If you have a team with good cash flow, you're basically at 50/50 right now."

Nobody disputed that, but Galatioto pointed to the record prices for the Chicago Cubs and Golden State Warriors and strong price for the Texas Rangers as evidence of a healthy market.

But "You don't hear about all the teams that no one's interested in," Rovell argued.

Galatioto acknowledged "there's a real biforcation in value" between teams in the top 10 media markets and all of the rest.

There are several good angles that might've been discussed had the segment been longer. One is that the stadium, and/or stadium control, is a critical issue with the value of any sports team. Dan Snyder bought what's now FedEx Field in his purchase of the Redskins (assisted by Galatioto) which has massively boosted franchise value thanks to Snyder's savvy expansion and marketing arrangements. Jerry Jones has the same deal in Dallas; obviously the Yankees, Red Sox, Cubs ... while the Minnesota Vikings, for example, would be presumed to be at a stadium deficit, since the owners can't or won't build one on their own and the legislature has balked for decades.

We mention all that for this reason: Some of the real visionaries among America's mayors are the ones in the '60s, '70s and '80s willing to put public dollars into lavish stadiums. To many people that's an offensive waste of money when schools, etc. are struggling. The (sad?) truth is that there are few things that motivate a public like a pro sports team.

As one example, consider U.S. Senator and former Indianapolis Mayor Dick Lugar. His city had a racetrack. Lugar and his successor, William Hudnut, wanted Indy to be a sports destination beyond auto racing. They built the RCA Dome without a team to play there. Baltimore, on the other hand, throughout the late '70s and early '80s balked at a new stadium for the Colts and Orioles. The departure of the Baltimore Colts was indeed shameful. But if you don't think the Colts are a big deal to Indianapolis now — along with all the Final Fours and concerts — you're mistaken. As further vindication, consider what Baltimore, Cleveland, Houston and St. Louis did only after losing football teams.

Then there's the matter of spectator sports being maybe, aside from oil and/or moviemaking, the premier industry of the 20th century, and the fascinating notion of whether anyone will care about the Yankees and Red Sox a hundred years from now, or will they be replaced by other pastimes.

Gary Kaminsky asked Galatioto about how franchise owners would go about it if they're looking for cash and decide they want to "monetize my stake." Galatioto said it's difficult to do in the public markets because of disclosure issues, but private limited sales do happen. "I can't tell you the team, but we're launching a sale of a 30% interest in an NFL team in September," Galatioto said.

3% just isn’t good enough
in Topeka

Brian Belski on Thursday's Strategy Session somehow tried to paint interest in the stock market as a "greed" thing.

Belski was asked what would lure people from bonds into equities. "To me it has to be something fundamental with the stock market, meaning people have to get excited about stocks, and you know this as well as anyone Gary that greed really drives that," he said.

So, if you're excited about stocks, you're "greedy."

Belski ended up making one of those circular-type arguments that seems bubblelike, in other words, the stock market will go up once it starts to go up. There is "so much pent-up cash on the institutional side," he said that if stocks could gain double digits this year, for the 2nd year in a row, then "Mom and pop in Topeka Kansas look at their portfolios at the year-end, they say 'I'm making 3% on my bonds, and the stock market's up 50% the last 2 years,' some of that will be greed to go back into equities."

Greed. There's that word again.

There are logical, mathematical ways to define stock market interest. "Greed" is for the poets.

High-yield out of control?

Bond expert Tim Backshall said on Thursday's Strategy that "high-yield ... is the most troubling area for us quite frankly in terms of valuation."

He called it a "good example of how far things have run."

"As you reach down that yield spectrum, your risk is becoming as high as, if not higher in some cases, as the equity side," Backshall warned.

Gary Kaminsky asked how to know when the bond rally will stop, when it could presumably run for another 12 months and could be a "secular" change. Backshall agreed that it's hard to avoid the inflows. "We're getting this money, we have to put it to work," he said.

[Wednesday, August 11, 2010]

Was Simmons ailing
in his last interviews?

This entry is not an attempt to make fun of a person, only an honest observation.

Seeing the headline late Sunday night about a prominent oil analyst found dead in his home, we were floored to learn it was Matthew Simmons, who made a couple of controversial (to say the least) appearances on Fast Money on June 1 and June 8.

Analyzing Simmons' jaw-dropping comments, it's a question not of where to start, but where to stop.

He suggested using a nuclear bomb to stop the BP Gulf leak.

He said other companies could've stopped it but only wanted to work for the military.

He said the leak everyone knows about is not the real leak and a much bigger leak is occurring nearby and that oil is sitting on the floor.

He said he'd rather own Enron stock in 2001 than BP in June.

He said Goldman Sachs upgraded BP to a buy. (It had actually downgraded BP a day before his appearance.)

He predicted BP would be out of business by the end of summer, saying, "I think BP's not gonna last as a company more than, more than a, a matter of months. I'd be surprised."

After his Fast Money appearances, Simmons gave this interview to Fortune posted June 9.

In that one, he says, "There's a lake at the bottom of the Gulf of Mexico that's over 100 miles wide and at least 400 to 500 feet deep of black oil. It's just staying there. And only the lightest of that is what we're seeing hitting the shores so far. If a hurricane comes and blows this to shore, it could paint the Gulf Coast black. ... as long as it's in BP's hands, they're going to spin the information as long as they can. ... They have about a month before they declare Chapter 11. They're going to run out of cash from lawsuits, cleanup and other expenses. ... there isn't enough money in the world to clean up the Gulf of Mexico."

He acknowledged he was working on a project to "create 50 megawatt offshore wind turbines."

Simmons was controversial, but no crackpot. He advised George W. Bush. His notoriety, at least in this decade and prior to his BP statements, we've come to learn since his Fast Money appearances, stems from a view that the low-hanging fruit of global oil reserves is nearly gone and that the world was approaching peak supply. Unfortunately, many descriptions about him refer to a 2007 prediction of $100 a barrel, and Fast Money viewers know all too well that every business pundit is famously correct about something (and not-so-famously incorrect about other predictions).

In the article on his death, Reuters reported that Simmons was cut loose from the investment bank he founded and led for 35 years, Simmons & Co., a week after the Fortune interview.

The actual press release on Simmons' announced retirement is very telling in declaring a split: "Though Matt is no longer affiliated with Simmons & Company International, we wish him well..."

One would think that heart problems would not affect the mind. Is it possible Simmons was experiencing some form of paranoia before his death?

Suggesting a nuclear detonation ... claiming a massive concurrent spill that is not acknowledged (to our knowledge) by any other expert in the Gulf ... bizarre hatred of a single company ... denouncing BP "spin" ... accusing Goldman Sachs of a nonexistent upgrade ... predicting Chapter 11 for an enormously profitable company within a month ...

Incredibly, it is not BP that is gone by the end of summer, but Simmons.


(This passage was updated to include the Bush adviser reference and text of press release.)

Grasso was right — barely

If you thought the Steve Grasso-Gary Kaminsky sparring over HPQ was over on Friday, you were wrong.

Kaminsky was crowing Wednesday during a call to Fast Money.

"Send my love out to Steve Grasso," Kaminsky said. "I saw Hewlett-Packard on the new low list, new 52-week low, and guess what, you know what the Cisco news is gonna do? Another new low on Hewlett-Packard tomorrow."

Melissa Lee chuckled, then segued into bond yields. But then Guy Adami reverted to the subject.

"Not that Stevie needs my defense, but to defend Steve, I think, in Hewlett-Packard he gave us a very defined trade, with a very defined stop that frankly would- worked on Monday," Adami said. "I mean it's easy for me to say in retrospect but..."

Jon Najarian seconded that. "It was a true Fast Money trade," Jon Najarian said. "And he did just what he said. I congratulated him on the trade. I said, you know, I pinged him and said, 'Great trade, I bought it with ya in the afterhours,' and he said 'I'm out of it,' and that was Monday. So I mean uh, if you get a 2 or $3 pop folks, put it in your pocket as fast as you can, before anybody else can get it, because somebody will take it."

Grasso wasn't on the show to speak for himself.

We want to declare a winner, so we checked out the HPQ chart on Google finance.

It is true that if you had bought HPQ in Friday's afterhours, and sold it in Monday's premarket, you basically were guaranteed a profit.

You could've sold it any time in Monday's session above $42.47. So as long as you bought it Friday below that level, you were OK, for a day, but note it gradually creeped up over $42 by Friday evening.

Tuesday, you could've sold it up to $42.91.

Had you shorted it Friday afterhours, it would've taken 3 trading days to pay off, as Kaminsky noted.

Conclusion? Both were right. Grasso's trade was not particularly huge, maybe a 2.5% gain if you were lucky, requiring a very fast turnaround and possibly sticking anyone who tried it and didn't sell fast enough. So not one to crow about really. But it did work, meriting the defense it got Wednesday.

Another quarter of commentary
about John Chambers’ tone

Dan Niles of Alpha One Capital Partners, a noted recent semiconductor bear, was sort of nodding and saying "uh huh" when Melissa Lee asked him about Cisco's report.

"Now you're starting to see the customers coming out and admitting that they've got a demand slowdown problem," Niles said.

"Something changed very dramatically at the end of June into July, across the globe."

Niles said a couple times that semiconductor and chip maker stocks can go far lower than you think and far higher than you think.

Gary Kaminsky said he got instant messages after Cisco's previous earnings call from people gushing about how John Chambers is never this bullish, yada yada yada. But Wednesday, Kaminsky said, he's hearing people say Chambers is just being cautious.

"You can't have it both ways," Kaminsky complained.

We'd be thrilled if CNBC never again covered a Cisco conference call and never again reported on the nature of Chambers' commentary. But that's wishful thinking.

By the way, Jon Fortt delivered breaking news on Chambers. "He just said he's having more trouble reading these signals than he ever has before," Fortt reported.

2 positions: Cash and fetal

All those sick of hearing money managers talk about "uncertainty" likely weren't too enamored with Wednesday's Fast Money.

"There's a lot of uncertainty out there, and we've been getting more defensive," said Whitney Tilson.

Anthony Scaramucci said there's still a lot of "unpredictability" from the federal government.

Tilson did call MSFT "crazy cheap." Scaramucci said that "Most of the hedge funds that we canvassed today are only talking about a 5 or 10% correction."

Guy Adami tried delivering a speech at the beginning of the show. "We have become Japan," he said, at least as evidenced by the bond market.

Then, not surprisingly on a day down 200 Dow points, he reloaded for the umpteenth time his bear forecast. "I've been faked out a few times on the downside. I'm probably gonna get faked out again," he conceded.

Unfortunately, the Fast Money fashion coordinator arranged for Karen Finerman and Melissa Lee to be decked out in dueling orange Wednesday.

Dr. J says he struck it rich,
in a trade you’re too late for

Jon Najarian on Wednesday was more than happy to tell Fast Money Halftime viewers how he hit the jackpot on a VIX call spread, specifically the September 45s.

"What I did was, I bought the 37.50 calls out there in September and I sold those 45 calls. That puts me in a spread whereby I make some nice coin. I'm up 40% today versus this time yesterday on that spread," he said.

By contrast, Patty Edwards' suggestion of a profitable trade didn't sound nearly as sexy. "You know, I've been using both stocks with a dividend yield; I've also been for the bond portion of our portfolios, I've been using real short-duration instruments but actually taking credit risk," Edwards said. "And maybe, maybe, people think I'm a moron for doing this, but I think if you do your homework, you can find some good solid companies and get much better yields than you're gonna get out of the Treasurys."

Hopefully, someone’s hands
are on the steering wheel

Donald Straszheim of ISI, on the Fast Line on Wednesday's Fast Money Halftime Report, said not to worry about China.

"They've got their foot on the floorboard now, not on the brake, not on the accelerator," Straszheim said.

A. Gary Shilling was the latest Fast Money personality to remark about the Fed (what are we up to, about 15 personalities making those remarks?), saying "I think the Fed is really telling us that they don't know what to do."

Patty Edwards admitted, "I've been in the bunkers ... we're hedged at this point ... I don't like the way this market feels today."

Patty also made an analogy about a tube of toothpaste in a door frame.

Amanda Drury went from a humdinger Tuesday to a pink turtleneck Wednesday.

Score one for capitalism

Robert Gensler, who we learned Wednesday is the twin brother of Gary Gensler, who frankly has been a pretty good Democratic guest for Larry Kudlow for a long time despite not being in the majority on that program, made an interesting comment on The Strategy Session about business survival of the fittest, comparing the U.S. to Japan.

"I don't think it's a lost decade because I think the big difference is, is in our economics thing, we tend to fire people, move on, restructures," Gensler said. "It's difficult in a social sense, but in an economic sense that can help out, and so the restructuring tends to happen faster here."

There are actually other more basic reasons, including more people, more younger people, more diversity, but Gensler's point is excellent.

We would, however, take it a step further and point out that American capitalism nowadays is not particularly as pure as Gensler suggests. Firings tend to be difficult. CEOs understandably don't want to do it; people's health insurance among other things is at risk. (Which is why there's actually a decent far-right argument for government takeover of health care; it would theoretically more easily free up companies to fire and hire and thus better allocate labor to the industries where it's needed most and make our overall economy more productive, but then again, maybe it wouldn't get any easier to fire and it would just add another layer of stagnant bureaucracy.) This page is well aware of struggles in the media (as 1 example) industry, print, TV and radio together, where the restructurings are not happening at a particularly fast clip and a lot of popular brands (Newsweek, previously BusinessWeek which has gotten a Bloomberg boost) are being held together by Scotch tape and accepted as money-draining nonprofits. (If you work for Newsweek or know someone who does, know that we're pulling for Newsweek and all journalists, just recognizing the economic realities of the time.)

Rebecca Patterson said, "I actually do think Japan is worse off than America on most fronts ... Their fiscal drag is gonna be a lot bigger than ours in the coming years."

A "fiscal drag." Now that's a drag.

Gensler unfortunately missed Gary Kaminsky's closing thought from the day before, noting "There's a tremendous uncertainty" in the business world.

Business at record high,
superstar wife

Herb Greenberg on Wednesday's Strategy Session started to talk about business development companies, or BDCs, and suggested he was going to explain why they aren't going gangbusters right now.

"This should be the sweet spot for BDCs," Greenberg said.

To help address why it isn't, or is, the TSS crew welcomed a call from private equity honcho Lawrence Golub — whose more significant role in our opinion happens to be as Karen Finerman's husband.

Golub said what crushed a lot of BDCs in the last cycle is that they didn't know what they were buying and cared far more about the balance sheet than whether they were getting paid back.

"We're out working directly with the borrowers," Golub said. "What blew up in the last cycle is a lot of the BDCs owned things they didn't understand."

He claimed exclusivity in pay structure. "We're the only BDC out there where we get paid our incentive fees only based on cumulative long-term performance," he said.

For those who think the market is weak, he said, "We're seeing a lot of activity. August will probably be our all-time record high for new lending."

And, he said things are basically only looking up. "We've already seen the recession," he said. "Flat, as a lender, is terrific. Flat is all we need to make good returns and pay high dividends."

Gary Kaminsky noted he's had experience in the BDC market at Neuberger.

Kate Kelly, for no other reason other than maybe there's not much else to talk about in deal-land, gave an incremental progress report on GM. "I'm hearing that the filing of the IPO paperwork, the initial S-1, could be as early as next week, although it's still up in the air."

[Tuesday, August 10, 2010]

Herb Greenberg’s 1st question
was simply too long

Fast Money welcomed IPO Basher and GAAP worrywart Herb Greenberg onto Tuesday's show to 1) make a point about cloud computing, then 2) conduct an interview with Rackspace CEO Lanham Napier.

Greenberg's introductory remarks were perfectly fine. "There is no real standard of what cloud is," he said. "Where do you draw the line?"

Then, given the chance to question Napier, Herb spun together the Gettysburg Address in asking a question, then a conditional question, about sales picking up in the 2nd half, or something like that.

We could go back and type in the whole transcript, actually, but why? Napier, probably wondering "what the heck was he asking again," gave the standard "everything's going great" CEO answers, and too much of Herb's point was over our heads.

Brian Kelly said he likes the name, even though "they are levered to the small- and medium-enterprise," which might be struggling. Pete Najarian questioned why the valuation would "spook" Kelly. Kelly said it doesn't because cloud computing is a "paradigm change."

Karen coolly withstands
the Fed fallout

Karen Finerman on Tuesday seemed to be having the type of day that sort of cried out, "Why the heck did I show up for work today anyway?"

Karen wore an attractive necklace with new blue dress, but said she read the parts of the Fed report, and they "didn't seem like that big a deal."

She found Joe LaVorgna's gloom over the Fed position not particularly contagious.

She quietly pointed out, "The problem with the banks right now is they're not lending enough."

She looked like she had already checked out when asked to give her Final Trade. (It was lightening up on PM.)

But if there was a saving grace, it was her question to Hugh Wynne about the impact of dividend tax rates on utility stocks. "I don't think the utilities move," Wynne said, pointing out dividend yield relationships with Treasury bonds. "I think that's priced in to the utilities already."

Economists traumatized
by Fed statement

Pete Najarian gave Joe LaVorgna a low-five upon LaVorgna's arrival on the Fast Money set Tuesday.

For what?

Until LaVorgna can predict something more accurately than the monthly "we're above consensus in job growth expectations," let's keep the celebration to a minimum.

LaVorgna actually sounded just about as bummed out as Peter Boockvar, although to LaVorgna's credit, he did actually laugh at the "Love Boat" joke at the end of his segment.

LaVorgna said the Fed made it look "like they're hitting the panic button," which is not what he would've prescribed.

"I just would've left well enough alone," he said. "I think monetary policy's extraordinarily easy. The economy will grow. Just leave it alone."

He told Tim Seymour it's entirely possible the Fed downgraded its GDP outlook, but "We won't know for sure for 3 weeks."

Karen Finerman seemed to not be buying LaVorgna's contention about the panic button, asking if they couldn't just make another minor adjustment. "They've constantly been reactive," was the best answer LaVorgna could supply.

LaVorgna reported he is "newly married."

CSCO to remain dull

Tim Seymour said Tuesday that Intel and AMD are saying business is good, even if an analyst is doing channel checks indicating otherwise in PC land, so "who am I gonna believe here?"

Seymour said the Fed's report means "risk back on."

Simon Leopold talked about one of the world's most boring stocks, CSCO, and hailed its "pretty low multiple," but downplayed talk of a dividend. "I don't think it's imminent."

Too bad. Because once that's initiated, you know the stock will just start flying through the roof.

Dennis Gartman thinks the Fed position is "deleterious to the dollar," and we always love using "deleterious" when possible.

Pete Najarian said the market is missing banks. "We need the financials I think for us to get to the next level," he said. And he said "absolutely" the metallurgical coal industry is a buy on any pullback.

Scott Nations suggested buying the December 28 put in ADM, in part because it's an 8% differential.

Mandy = heavenly

It would be negligent of this page not to include a shout-out for Mandy Drury's appearance on Closing Bell Tuesday. It looks much better on TV, but here's a video clip if you missed.

Does Peter Boockvar need
to find a hobby, or what?

Peter Boockvar on Tuesday's Fast Money weighed in on the Fed statement, and not surprisingly he's skeptical that it's inflating the economy too much.

And you wouldn't believe how seriously he takes all this.


"What scares the hell out of me is somehow they think that interest rates already are not low enough," Boockvar said. "The benefit to what they've done I think is so much below where the cost of this is going to be." He said those costs include credibility, rising commodity prices and misallocation of capital.

Karen Finerman tried to reassure him that lower rates may be a byproduct of the Fed's goal but isn't the Fed's goal. Tim Seymour positively used the term "bridge" again.

Those arguments didn't work, so Melissa Lee tried humor, with another "Love Boat" joke.

"I wish I could smile, but the Fed actually frightens me," Boockvar said.


Joe Terranova reminds viewers
Gartman made a bad call

Joe Terranova on Tuesday's Fast Money said that all he can say about Dennis Gartman's views on the Fed and gold is that he disagrees.

And maybe, that he's been more correct.

"Dennis was looking for that parabolic move in gold a couple of months ago," Terranova said. "And you know, we didn't actually get that. We're on opposite sides here. ... I think the path to gold is higher."

Tim Seymour said he agrees with Terranova.

This is the risk of spouting
facts on TV on the fly

During an opening session Tuesday on Fast Money that involved several "Love Boat" jokes, Tim Seymour at one point referred to "Burl Smith ... Gopher, also now a U.S. senator..."

"Congress, I think," Karen Finerman said.

Um, not for a while.

Fred Grandy, a Republican, ran for Congress in 1986. A popular congressman, he inexplicably took on Iowa's mildly unpopular Republican incumbent governor, Terry Branstad, in 1994, and of course, running against a fairly entrenched incumbent of his own party, he got beat, and that was the end of it. Grandy hosts radio shows now.

Just what the world needs:
‘Pirates of the Caribbean 4’

One of the all-time best Fast Money guests, Rich Greenfield, returned Tuesday to the Fast Line on the Halftime Report and said Disney has a couple things in its favor. "Tourism to Florida is definitely heating up," Greenfield said, pointing to "incremental demand" thanks in part to Universal's Orlando project.

Greenfield said the Disney unit to watch is cable television, specifically ESPN and the Disney Channel, but he said indications from other companies are "continued strength in advertising."

Greenfield said, to our surprise and only slight horror, that "'Alice in Wonderland' was a billion-dollar film." Much worse, he referred to the "Pirates 4 franchise."

Norfolk Southern CEO Wick Moorman said economic signs are decent. "We don't see much sign of domestic steelmaking slowing down," he said. "We're not that apprehensive right now."

Steve Cortes asked a tremendous question, pointing out that Union Pacific has outperformed NSC and is it because of UNP's exposure to Western routes and thus the Chinese market. Moorman tried to brush that off, saying business in the East and to Europe is just going gangbusters.

Brian Kelly, astoundingly, said he's long Intel, but owns puts. Jon Najarian said if you were fortunate to catch a gain in HPQ on Steve Grasso's advice afterhours Friday, you better take the money and run.

Good question

Kate Kelly reported on the dwindling returns, exacerbated by fees, that money market accounts are delivering.

And David Faber posed a tremendous question.

"You're telling me essentially I put my money with Bank America or JPMorganChase in a savings account right now, I'm going to get a yield that's a bit higher than what I get in a money market," Faber said.

"That's right," Kelly said.

"So why wouldn't I do that?" Faber asked.

Gary Kaminsky jumped in. "Well first of all the broker has tried very hard to have you keep your money in the money-market fund," Kaminsky said. "In fact many of the institutions are losing money. They're losing money running these money market funds. That's one of the, sort of dirty little secrets of Wall Street. And they want you to keep their assets in-house so that if you decide to buy stocks or if you decide to do something longer-term, the assets are there."

Kaminsky concluded, "It's a loss leader business."

Phone guest Rich Repetto pointed to Schwab as having difficulties with that very subject. "On the money market funds themselves in the broker, they've had to what they call waive fees, because they can't invest this money and earn enough to make their usual fees," he said, saying Schwab waived $113 million in the last quarter.

Kaminsky said, "Money market PMs are sorta like the last guy in terms of the ladder. At the lunch buffett, you know, when all the fixed income money managers get together, it's like, the guy who's running the money market fund, he's at the end of the line."

Sometimes, the chart says a lot. Kaminsky & Faber showed a money-market graphic of the top yields of 2005 (4.5%) vs. 2010 (1.7%) and noted that many people now just as in 2005 are relying on these things for income.

First time we’ve seen Liesman
on-air without a jacket

Gary Kaminsky and David Faber opened Tuesday's Fast Money with the observation that in a short period of time, quantitative easing has become the talk around the Fed. "I think it's kinda crazy," Kaminsky said, that things have changed so quickly since mere months ago, when rate hikes were seen on the horizon by some.

Steve Liesman, one of the best Strategy Session and all other CNBC programming guests because he likes to weigh in with a theory, told Faber and Kaminsky, "You're both wrong by the way."

Liesman said Ben Bernanke has already telegraphed the potential for change, citing Bernanke's "semiannual testimony, and he has a paragraph or section this long (makes hand gesture) about exit strategies and with one single oblique line about getting back in. It was just July 21."

But then Liesman acknowledged, "Change in policy is unprecedented, I think in terms of the, changing of debate, it's a really 180 degrees in 3 and a half weeks."

Gary Kaminsky asked Liesman about Bernanke's performance. "Is he doing a good job right now? I think everybody agrees that he did a good job in 2008. It was triage at that time. But right now it's not triage."

"My personal feeling is that he's made a mistake in slipping back into this moderator role," Liesman said. "I think they lowered the DEFCON level too quickly."

He predicted the reports Tuesday would be "something more of a promise from the Fed to act if things get worse," and isn't that pretty much what every Fed statement says?

Gary Kaminsky said the markets should not complacent about long-term easing. "I think regardless of what happens this afternoon, if the market starts to price in no Fed action, in some cases I heard it could be as far as 2 years out at this point, um, I think that's a problem," Kaminsky said.

Kaminsky: Netflix deal a sign
future maybe isn’t desktop

Near the end of Tuesday's Strategy Session, Gary Kaminsky and David Faber spoke about Netflix in a discussion that could've filled an entire half hour.

It was about the future of how we're going to watch movies and TV, but also about how a leading media company is aggressively trying to stay atop the wave.

Netflix is impressive in that it's not Blockbuster. (This writer has no position in NFLX.) To think that 10 years ago, Blockbuster was still opening stores. We don't doubt that someone from Blockbuster could probably say "See, we tried this, and this, and this, we just didn't sit around in the 2000s waiting for people to come in our stores," and they'd probably be correct.

But the end result? It is what it is.

There remains a curious friction between TV sets and computers. For whatever reason, the public wants both, and not a TV that doubles as a computer, even though nowadays that seems highly capable.

The gut feeling here is that years from now, most people are gonna wanna subscribe to HBO or Starz and watch "Chinatown" on their 50-inch HDTV or whatever the next generation version is.

But maybe that's not the future; maybe future TV will be like logging on to a computer and just streaming (live or otherwise) whatever it is you want, maybe a la carte.

The gut says politicians will resist that for a long time because a decent chunk of people still don't have cable, and they'll prevent things presently on "free" TV from being subscriber-based (this is already a demand in the Comcast-NBC takeover). But premium cable might be at risk. If you can download whatever you want on your TV, who would need HBO?

Anyway, Kaminsky said the legacy desktop computer makers, such as DELL and to a lesser extent HPQ (gosh, those are a pair of stellar CEO stories we've seen recently!), are at the biggest risk from this growing movement toward tablet or laptop devices.

"All that out of a Netflix-Viacom deal. That's why I love this show," David Faber said, referring to what Kaminsky said, not this page's speculation.

Guest Blair Effron, a noted dealmaker, spoke at length about consumer conservatism and that companies are simply reluctant to do deals, the M&A pace is not strong. But he was a bit light in terms of ideas for playing this or what might change the scenario for the better.

At the end of the program, Gary Kaminsky summed up what should be heard after a lot of these CEO and money manager interviews: "You know what? Life is uncertain. The world is uncertain." (This page will add for those people: 1. Stop whining about future tax rates that you don't even know about. 2. Stop complaining about the consumer. 3. Stop saying "geopolitical.")

[Monday, August 9, 2010]

Why hasn’t someone else
hired Mark Hurd?

Karen Finerman raised quite an interesting HPQ point on Monday's Fast Money.

"The thing that's ridiculous to me, since this broke on Friday, and it did trade a little bit on Friday: $9 billion of lost market cap. Is he really worth $9 billion? That seems, that 30 million they're paying him to leave, was a pretty good deal then," Karen said.

We had to think for a moment to interpret the last sentence. We think what she was saying is that the high severance was merited because of perceived value to the company, and not that there was some kind of benefit from paying $30 million, because obviously, they'd be $9.03 billion in the hole on that trade.

Karen also noticed: "Only 9% of the float traded today ... 9% is not everybody heading for the door."

Good points, but let's cut to the chase.

If Mark Hurd is truly worth $9 billion in market cap, why hasn't another company already scooped him up?

If he's truly regarded as creating billions in value, how could any company in good conscience not immediately hire this person?

And if the HP board honestly believed Hurd was worth $9 billion, why would they fire him over a case in which they don't even believe harassment occurred and the purported victim doesn't even want him to be fired and is satisfied with how the matter was handled, when people who have not purportedly created nearly so much recent value such as Michael Dell and Ace Greenberg (how about Martha Stewart, who actually went to jail) have been protected by their boards? Even a recent president didn't lose his job for something in this category that was actually worse.

Forget about just stocks and personal wealth and how it feels to golf with Hurd now if you're an HPQ board member who knows Hurd's wife and who's familiar with the harassment claim ... H-P has a staggering 310,000 employees. Those people's long-term future depends to some degree on management. If you're a board member who's disgusted by what Hurd might've done (again, there was no affair, apparently, and the worst thing that's come to light is a fudged expense report), is it really in the interests of your employees to put the company's future (as perceived by the stock market) under a cloud?

If Hurd is the phenomenal wealth-creator that some say, surely we will see him in a new job ASAP. Motorola's struggled for a long time and now has co-CEOs, Nokia needs no introduction, Intel's been flat forever ... if you're a shareholder or employee of those companies, would you be more interested in a guy's ability to turn your company into a feared powerhouse that rains money, or more concerned that he fudged an expense report to conceal his interest in some woman?

Ah, but maybe Hurd hasn't been hired somewhere because he's under some sort of non-compete. We did a Google search for "Hurd" and "non-compete" for recent articles and found none. And why, if you're getting fired from a job you want to keep, would you agree to a non-compete anyway?

Or, maybe Hurd's not really worth $9 billion, and the stock market is just getting it wrong.

World Series of Poker,
pretty much every week

Tim Seymour broached an interesting subject that could've used a lot more time during a Disney go-round on Monday's Fast Money.

What, exactly, is the cash cow that supposedly is ESPN?

Seymour wondered aloud if DIS is paying itself and asked David Bank, "As a guy that watches ESPN, you have to ask the question, are they paying themselves for all this kind of self-congratulatory, I mean, half, half the commercials it seems like, on the network are their own little, you know, media guy walking around with the mascot from Purdue."

Bank didn't answer that directly, but said a double dip is "not in the advertising economy."

Our impression is that ESPN's crown jewel is its demographics, the 18-45 male, who make it a must for cable providers. If you're a cable company and you want to offer CNN, USA Network, The Weather Channel, Bravo, A&E, but not ESPN, forget it.

Now, what is ESPN getting in ad sales? The NFL is as big as it gets, but they have to pay steeply for that. SportsCenter must be the meal ticket. It airs in reruns that get watched several hours a day. A lot of the live sports programming is college level, including lightly watched sports such as softball and lacrosse.

Presumably, the gold mine is the SportsCenter rerun. The program is already a sunk cost the 1st time, but still commands ad dollars during the replays. Everything else probably breaks even or worse — aside of course from cable fees.

It makes you wonder, why didn't Murdoch or Ted Turner long ago try to duplicate and beat ESPN? Visionary only goes so far.

"ESPN is a fantastic franchise," Seymour said.

Bank said of Disney, "I think over the long term it's an interesting stock."

Ya get whatcha pay for

The Fast Money gang on Monday didn't seem terribly impressed with the new commodities ETF, based on inventory trends, as highlighted by Kurt Nelson.

Honestly, we had trouble figuring out what exactly this ETF does or is for. Nelson said it would try to ease the problem of contango. Apparently it's intended to trade as some kind of overall commodities barometer.

Guy Adami said it didn't sound to him like it was really actively managed. Nelson agreed, saying it's "purely statistical, purely quantitative."

But there is some kind of active management to it, which Nelson indicated comes with low fees.

Tim Seymour said that "for an active strategy in an ETF plan, these guys are working very hard for not a lot of money," and then threw up his hands, like "what are they thinking?"

Maybe an off year
for global warming

Dennis Gartman told Fast Money viewers Monday, "This is gonna be the best several years that American farmers have had in a long, long while."

"I think that you're gonna see corn prices be dramatically higher a year from now," Gartman added.

Brian Kelly showed he's well-versed in economic geology. "When you look around the world at some of the food-growing areas, the temperature and the moisture in the ground there is very low for this time of year," Kelly cautioned.

Karen Finerman was talking about the attractiveness of dividend-paying stocks, but warned about tax changes, "that is a big caveat."

We normally don't take up Fast Money male fashion, but Joe LaVorgna had a decent Gekko look going Monday, and Eamon Javers delivered a segment in impressive cream-colored summer suit. Javers talked about Nestle & Mars and spying and Dumpster diving, and we weren't really sure about the relevance, but whatever.

Karen has another outfit
that will draw page views

The Fast Money gang at 5 p.m. was just as lukewarm on Research in Motion as the Halftime crew, in a highly lackluster opening segment that lagged on Fed talk.

Melissa Lee, referring to guest William Power, who said RIMM was "near fair value," asked, "Can we call it a value play if he believes it's fully valued? I don't know, I don't get that."

Karen Finerman talked about the "noise" subsiding in the U.A.E. controversy. Tim Seymour said hey, the P.E. used to be a lot higher. Melissa Lee said how can historical P.E.s really matter at this point.

Joe LaVorgna, experiencing (to our knowledge) his 1st day on the Fast Money Prop Desk, said of the Fed, "I don't think they do anything."

It would just be wrong not to point out the treat that Mandy Drury provided viewers in her choice of attire for Closing Bell on Monday.

But we can't overlook Melissa Lee's smooth royal blue/sleeveless/v-neck dress.

Karen Finerman had a fabulous new blue/white striped outfit with white sweater.

Guy Adami, fresh off a vacation to Napa, looked like he's getting a little shaggy on top, perhaps employing some Seymour-esque hair gel.

Guy Adami made a "Will Power" joke about NutriSystem while having fun with a guest's name.

Those who took a pass on the live show in favor of golf maybe had the right idea. In fact, that's a tremendous idea.

Melissa catches Fast guest
in a gotcha moment

Eric Jackson of Ironfire Capital dumped all over Mark Hurd on Monday's Halftime.

Jackson complained that Hurd got a big pay raise in 2008 while issuing HPQ pay cuts in a matter of "pure hypocrisy," that he was the "4th-highest paid CEO in America in 2008," and that he put family matters on expense reports, info that Jackson found in SEC filings.

"If people cheat on the small stuff, in terms of expense reports, there might be some stuff going on with the big stuff as well," Jackson said. "It wouldn't surprise me in all this to see some earnings readjustments and one-time charges come out in the quarters ahead."

He also said with Hurd gone, there are big "integration issues."

But then Jackson ventured down his own path of hypocrisy.

"The strongest internal candidate is Todd Bradley," Jackson said.

Melissa Lee pointed out that Bradley was highly paid right along with Hurd.

Jackson even agreed.

"Bradley's comp was way, you know, way up along with everybody else's," Jackson said. "He also racked up something like $300,000 worth of personal aircraft time-"

"According to your logic, that would be more of the same!" Lee said, realizing she had a gem.

"I, I, obviously, uh, the guy's gonna have to do a mea culpa," Jackson mumbled.

Not a good day for
California Republicans

David Faber earlier Monday singled out Meg Whitman as making a dubious deal with Skype. Eric Jackson on the Halftime Report warned about HPQ potentially making a bigger mistake: "What if they pick another Carly Fiorina?"

Melissa Lee asked Patty Edwards if she's ready to plunge into HPQ. "I was ready to pull the trigger and I backed off this morning," Edwards said.

Melissa Lee seemed to draw curious "7 weeks" parallels between Hurd's situation and Carly Fiorina's situation and an analyst meeting.

Pete Najarian said Hurd did an "absolutely incredible" job.

Steve Cortes said IBM is a clear beneficiary here.

Melissa hanging on
to her BlackBerry

Melissa Lee once again was used as a pawn in a Fast Money RIMM discussion on Monday's Halftime.

"You're not gonna get rid of your Research in Motion device yet are ya?" Pete Najarian asked Lee.

"No," Lee said.

Najarian said the P.E. for the stock is attractive and there remains plenty of room in the space.

Steve Cortes said on valuation and risk/reward, think RIMM and not AAPL. "Time to take profits in Apple, and perhaps put money to work on RIMM," he said.

Jared Levy conceded RIMM can be a "great covered-call play" but he's just not into the stock, "They're just not sexy."

Patty Edwards was the most lukewarm. "You know at 10 P.E. I think that there is a little bit of grace that you can give the stock at this point in time," Edwards said.

Steve Cortes reminds viewers
he made a good euro call

Steve Cortes said on Monday's Halftime, "I'm actually getting skeptical of the euro here. I loved it a few weeks ago when people hated it," he said, but now he's interested in shorting it, even though he's not at the moment short of it.

Ben Thompson: States likely
aren’t in crisis mode

Ben Thompson of Samson Capital uttered a sentence on Monday's Strategy Session that maybe should've led the whole program.

"The likelihood of a state running into a true cash-flow crunch is extremely low," Thompson said.

Even David Faber seemed a bit taken aback by that one, and demanded an explanation.

"One they don't have rollover risk," Thompson said. "What you don't have is that impending need for massive borrowing at the state and local government level. California's the only one that's really tested it."

Interesting. We can't say we knew that, or even know enough to disagree, but will note that in these stories we've been reading about state debt problems, basically all it seems like they're doing is moving the stuff that used to get paid in 3 months back to 5 months, and if the legislators themselves don't seem to care, why should anybody else?

Thompson said Illinois had a recent much-watched offering that impressively tightened after issuance. He also offered a handy tip: "New York City Transitional Finance Authority at a 2.87 or 2.90 ... AA, AAA credit," he said.

Thompson also did a Trade School on munis: "The value of tax-free income just rises as your tax rate rises," he said.

IPO Basher Herb Greenberg
finds a new target

Herb Greenberg told Strategy Session viewers Monday that Skype is "gonna be continuing that old march of profitless IPOs."

"7% of its customers — 7%! — generate most of the revenue," he said.

"They do not mention Vonage, but they do mention Google," Greenberg added. Then he credited pal Paul Kedrosky for what is, with all due respect, a fine point but not exactly a terribly groundbreaking one: "This is the old freemium model" that will determine whether Facebook or Zynga can do it.

David Faber explained why eBay once bought Skype (and, intentionally or not, sorta hung Meg Whitman out to dry): "The ability to talk to the potential seller and buyer would have taken friction out," Faber said, but "nobody ever fully understood ... exactly a lot of the rationale."

Count us among those nobodies.

"I used Skype 1 time," Gary Kaminsky said.

About the same odds
as Steelers winning Super Bowl

Gary Kaminsky said Monday that Mark Hurd "was a banker's delight," and bankers are sorry to see him go.

"I think Mark Hurd will be in that category as somebody who knew how to do deals, because he knew how to make those integrations work, and he knew he had created this culture where he could cut costs but keep people motivated at the same time, which is a very difficult thing to do," Kaminsky said.

Kaminsky said the thing to keep in mind in these markets is that "huge amount of managers that are relatively underperforming."

Kate Kelly spoke about big banks' trading results for the 65 trading days of Q2. "JPMorgan I believe had the least down trading days after a perfect 1st quarter, and I believe B of A had, uh, the most at 12," Kelly said. "To be fair to these guys, those aren't a ton."

Kelly also spoke of VAR, or value at risk. "Value at risk is the amount of money they estimate they could lose on a given trading day," she said, and that Goldman Sachs had a 1-in-20 scenario, or 95% confidence opinion.

That brought back painful memories for Gary Kaminsky. "When I listen to Kate talk about VAR and Goldman Sachs, you know what I think about ... I think about that, that fateful meeting I was at one time at Lehman Brothers where one of the chief risk officers was telling everybody 'You've gotta get your VAR up! You've gotta get your VAR up as high as Goldman!' And uh, we know what happened there."

HPQ was Karen’s Final Trade
twice last week

This one's bound to be a Fast Fire.

In a remarkable coincidence, Karen Finerman named Hewlett-Packard as her Final Trade on Tuesday and Wednesday this week.

On Tuesday, Karen said, "I like HPQ. We've seen some of their competitors come up with good earnings. We haven't heard from them yet."

Oh, we heard from them. Did we ever.

On Wednesday, Karen said, "Still like HPQ."

It's always refreshing to know that even the great ones get it wrong sometimes.

Karen’s fashion success

Despite her HPQ glitch, all was not lost for Karen Finerman on Wednesday's Fast Money.

We wouldn't make this kind of thing up. (We could make it up, but we don't.)

One of the queries this site got late this week went as follows: "who was the designer of karen finerman's orange blouse and scarf?"

That kind of analysis unfortunately is well above our pay grade. Not that we don't try.

Maybe Karen can provide the answer on the air next week, or at least on the Web Extra?

We've said before on this page that the gals on Fast Money should chat more about where they shop, perhaps bring in someone like Isla Fisher, talk about fashion, etc. It would boost the female viewership of Fast. People like that.

Karen's outfit indeed was attractive, chic. Congrats to Karen.

[Friday, August 6, 2010]

What if it were AAPL ...
Or BRK ...
Or AMZN ...
Or F ...

CNBC neatly put together a couple hours of Hewlett-Packard special report programming Friday evening.

And if Maria Bartiromo would've ever stopped talking, she might've realized she was burying the lede.

What if someone like Steve Jobs or Warren Buffett were found to be in the same situation as Mark Hurd?

Would their boards fire them?

The gut feeling here says no.

Which leads to a bigger conclusion: That maybe Hurd simply wasn't a particularly good CEO.

And therefore, this firing isn't a very big deal.

The person who was actually making this point — and oblivious to the fact he was making it — was CNBC contributor Jeff Sonnenfeld, on the Lawrence Kudlow program.

Sonnenfeld mentioned more than once that the company had to evaluate whether any other HPQ employee, hit with the same allegations, would be fired. And if the answer was "yes," then Hurd had to go, in accordance with company policy.

Which, if you believe that rationale, is equivalent to saying the supposedly star CEO had no more clout than the data-entry clerk.

And if you're a CEO who fits that description, you should be fired and give someone else a chance.

But forget about that above roster of megastar CEOs.

Consider a situation involving 80-year-old Alan "Ace" Greenberg, according to an impressive account by Charles Gasparino in The Sellout.

Gasparino writes that a woman at Bear half of Greenberg's age made a harassment claim and demanded $10 million.

According to Gasparino, Jimmy Cayne, already having long ago forced Greenberg into near-irrelevance, nevertheless quietly settled with the woman for a lesser amount, purportedly to spare Greenberg the embarrassment of tabloid headlines.

Many think Michael Dell is a little over the hill in terms of leading DELL to greatness. His stock is $13. Michael Dell wasn't accused of fudging an expense report for $20,000. He actually paid the SEC $4 million to settle a civil claim over a company scheme to make its quarterly earnings numbers, which cost the company itself $100 million.

And he's still on the job. The DELL board's presiding director, Sam Nunn, even praised the settlement in a statement.

Yet the HPQ board, rather than defend its CEO, did just the opposite.

"The board is valuing long-term principles over short-term, uh, performance," Sonnenfeld said.

Actually, it smells like just the opposite. The stock's no better than it was 3 years ago, nowhere near the same league as AAPL and AMZN. Over the last couple years, it actually remarkably mirrors GOOG. Hurd's most recent splashy move was buying Palm April 28 when HPQ traded at $53.28.

We could credit Herb Greenberg for making this point, which he sort of did, but only in such a clumsy, backdoor way over 2 or 3 programs in which he said "GAAP" about 500 times (that's not much of an exaggeration).

Donald Luskin, a good pundit and reliable instigator for Larry Kudlow, also was on the right path, at one point declaring "Mark Hurd was not Steve Jobs."

Lance Ulanoff was close. He said, well into Larry Kudlow's program, that it seems absurd for a CEO to be fired over the case that's been disclosed. "I'm like, wait a minute, a successful CEO of a major tech company is being dismissed for expense reports??" he said.

But then later he said, "Mark Hurd was doing a fantastic job of running this company."

No, we don't know the details either, and it's only the first day of reporting on this subject. But keep in mind insider Quentin Hardy told Larry Kudlow viewers he'd been talking to both the Hurd camp and the HPQ camp, and the stories are basically the same. And that Gloria Allred, the woman's attorney, says there was no sexual relationship.

"Fantastic job."


Maria obviously doesn’t
watch Options Action

Maria Bartiromo is extremely good at what she does, and we even hesitate to take a dig at her on this page.

She's obviously an ideal person to anchor the special reports on the Mark Hurd situation.

But the endless yakking from scenic Lake Tahoe, of all places, where Bartiromo is usually interviewing bigwigs in sweaters at some rich guy's conference, quickly reached repetitive stage, the only arrangeable on-set guest being a guy who wrote a book about Facebook.

The funniest part? When Maria introduced a Fast Money segment by referring to "Mike No."

This is one of those situations where any veteran CNBC viewer knows, we've gotta hear from Bill Griffeth, we've gotta hear from Sue Herera, we've gotta hear from Tyler Mathisen, we've gotta hear from Mark Haines, and we wanna hear Bill Griffeth, Sue Herera, Tyler Mathisen and Mark Haines talk about Mark Hurd.

That never happened. None were apparently available.

Gary Kaminsky told Maria Bartiromo basically what he told Fast Money viewers an hour earlier. Melissa Lee excellently held up her end of the bargain, coordinating a little Fast Money chatter and even delivering a shout-out to the digital age, rebutting Gary Kaminsky's suggesting that some institutional money managers may not have even known Friday evening that Hurd had quit. "Come on, people know," Mel said.

Not a big day
for the new guy

We noted below that Jim Goldman probably would've loved to have postponed his CNBC departure by about 2 months.

His replacement, Jon Fortt, didn't exactly set the world on fire with his first major Silicon Valley story since landing at CNBC.

Fortt was tapped just after 4 p.m. Eastern to deliver the breaking news, then essentially admitted he didn't know why it was happening, and it was left to Mary Thompson to fill in the blanks.

From the Bartiromo special report in the Mad Money slot through the Kudlow show, Fortt got less airtime than Donald Luskin and Jeff Sonnenfeld. On Kudlow, he delivered an "update" that was a curious mix of repetitive information, Hurd epitaph, knee-jerk analysis and feature-writing and didn't engage with any of the other pundits.

No question, it takes time in TV to find a groove and develop a rapport with people. Fortt is probably hardly ever in the same building with the hosts he's dealing with. Not being fully comfortable, that's understandable. His comments Friday indicated a decent level of knowledge about HP. Yet he seemed caught off-guard; instead of seizing control of a big story in his domain, he easily ceded it to others. It was a missed opportunity. There'll be others.

Jim Goldman would love his
old job back on a day like this

The Mark Hurd departure apparently caught CNBC off-guard.

We link on our home page to the official Hewlett Packard press release, explaining Hurd's departure and why.

The release is stamped 4:05 p.m. Eastern time.

At 4:07:45, on The Closing Bell, Maria Bartiromo abruptly went to Jon Fortt in Silicon Valley to deliver the breaking news. Only a 3-minute turnaround, pretty fast actually.

However, after several minutes of conversation downplaying any possibility of health issues, and after several questions from Bartiromo to Fortt about why Hurd is resigning, Fortt said, "I have not seen any details. I will be chasing that down."

Approximately 4:10:32, CNBC producers flashed on the bottom of the screen, "HP: Resignation follows investigation into sexual harassment claim." Mary Thompson came on shortly thereafter and read the release.

Evidently someone planted Fortt in a chair at 4:07 and forgot to hand him a copy of the release that was apparently posted at 4:05 p.m.

Gary Kaminsky pays close
attention to what he hears
on Fast Money


Yesterday, over a mild spat between Doug Kass and Brian Kelly, we suggested people shouldn't take stock-picking personally. (Unless it's with Charlie Gasparino, who always likes a good battle, but he's wrapped up in Geithner-ambushland now.)

Unfortunately we forgot to ship an e-mail to Steve Grasso and Gary Kaminsky.

Grasso spurred a mini-donnybrook when he predicted on Friday's Fast Money that HPQ would suffer a "fall follow-through on Monday. But I think it's buyable at this level."

Kaminsky, opining on the Fast Line, said he disagrees. "Half the people that own this stock," Kaminsky said, "are there for the management. Hurd has a tremendous following."

Grasso shrugged and said those people evidently were "dead wrong on management at this point so maybe they get an improvement."

"Steve, Steve, you gotta consider the type of people that own this stock before you sort of jump out there and say that I think you might chip away at this on a Monday," Kaminsky said.

"No no no, we're talking technical levels at this point Gary," Grasso replied. "We're not talking about me doing an armchair psychologist on the CEO, because obviously the CEO had some faults."

Grasso then irritably posed a question for Kaminsky: "Do you think that the institutional ownership come Monday is going to dump Hewlett Packard based on this?"

"This is all I can tell you Steve," Kaminsky said, drawing a scowl from Grasso and forcing a cut-away. "This is a company that's got a high, very high, correlation with the ownership as a result of management. Some companies do. Some companies don't."

"You should be careful before you say that people are gonna dump it for that purpose. That was my point. So we'll agree to disagree on that one," Grasso concluded.

"I have no idea. But this is a situation where most of the owners that are in the name are major believers in the management and what they've executed," Kaminsky insisted.

Now, we're about to crawl in a hole and get out of this storm. No rulings, opinions, whatever. (Except for 1 thing: What's wrong with armchair psychologist? We do that all the time on this page.)

"So much for a quiet Friday," Kaminsky said.

Karen sides with Steve—

Steve Grasso pursued his argument Friday against Gary Kaminsky — by enlisting Karen Finerman — even after Kaminsky hung up.

"This doesn't make you, as you said before, you're not gonna dump your shares come Monday," Grasso asked Finerman in the form of a statement.

"No. Certainly not," Karen said.

But it's worth noting that Karen said at the top of the program, "I don't think anyone needs to jump in, buy HP right now."

Anthony Scaramucci sort of stood up for Gary, saying "this is a little bit of a cult of personality with Hurd" and as a result, he predicts the company will pick an internal candidate. He would add, "Just by luck, I've had the opportunity to meet several of these people at the World Economic Forum last year ... very tight-knit group of people."

Fortunately, the gang was chuckling later about the Gary-Steve scrap, with Melissa Lee hailing Grasso's Halftime call about something to do with the markets. Anthony Scaramucci said don't praise him any more, or Gary will be out there shouting through a sunroof or something.

Earlier, though, Scaramucci and Karen Finerman found disagreement on whether Hurd's departure illustrates a flowchart problem.

"There's really no succession plan that we know of," Scaramucci said. But "I don't think it's a failing to not have somebody immediately ready to take this spot," Karen said.

Karen: ‘How dumb’ of Hurd

The Mark Hurd situation fortunately brought gorjus Mary Thompson onto Fast Money, who reported Hurd is getting some kind of settlement with the company that might be around $40 million or $50 million.

Melissa Lee said the whole desk was rolling their eyes at that.

"It's criminally stupid if it's not criminal. It's ridiculous. How dumb," said Karen Finerman.

But Mel Lee wondered, as did we, whether Karen meant "the package or his actions or both?"

"You know, the package, he does create a lot of value, I don't know about that. The actions are idiotic," Karen said.

Greenberg: Maybe Hurd
is overrated

Herb Greenberg, at the very tail end of Fast Money, said Hewlett-Packard is a "perennial restructurer right now."

"How strong of a grower, really is HP," Greenberg asked.

But Karen Finerman said investors aren't pricing in much growth anyway for HPQ.

"How do you deal with the, with it, when the guy people were there for, they were there for the guy, not for the growth, is what you're basically saying, correct?" Greenberg sputtered.

"No I think that's what you're saying," Karen said.

Greenberg said HPQ will "no longer have the Mark Hurd premium," which drew "good point" from the panel.

Karen reaches for analogy

We always acknowledge that TV, particularly live TV, is tough business.

And spouting facts on the fly based on breaking news is no piece of cake.

So we're happy to cut Karen Finerman some slack after she claimed on Friday that former Boeing CEO Harry Stonecipher was "very popular and successful" when he got forced out over an affair, "then they got Mulally in after that."

Actually, "Mulally" went to Ford, and it was McNerney that Boeing got.

But back to Stonecipher. He was CEO a grand total of 15 months, 69 when he resigned, more or less a caretaker after the sudden 2003 resignation of Phil Condit, who had been the real muscle in the company.

Grasso backs Terranova

One of the interesting side conversations from Friday's Fast Money HPQ-fest was Joe Terranova's contention that "this is the type of event for IBM that is very bullish."

To us, that seemed a reach. Analyst Louis MiScioscia apparently shares that view, telling Melissa Lee he sees "nothing over the near-term" that is bullish for HPQ competitors on the Hurd news.

But Steve Grasso concurred with Terranova on IBM. "I definitely think they gain market share off of this," he said.

Perhaps a name change
would matter here

Patty Edwards made a curious observation on Friday's Fast Money Halftime Report about the prospects for Alaska Airlines.

"Well-run airline. Great marketing. I think it's a buy here," Edwards said.

That was curious, only because of the marketing point that Edwards made just moments earlier.

"So many people hear 'Alaska Airlines,' think you're only flying to Alaska," Edwards said to CEO William Ayer. "How much of your revenue comes from places other than Alaska flights?"

Ayer responded, "Alaska's about 20%, and so the rest of the system makes up the balance. ... Our big hub is Seattle, but we're flying all over the country."

So "great marketing." Even though "so many people" think the business only deals with Alaska, when 80% of its revenue comes from elsewhere (we're not sure how that's measured, whether it's the departure location, etc.).

Nevertheless, Edwards is undoubtedly an expert on this airline, because she lived for a time in Alaska.

Ayer (not to be confused with William Ayers) gave a great interview and should be invited back to Fast again soon. Melissa Lee, who wore flattering pink top with long sleeves buttoned up above the elbow, came well-prepared with a fuel-hedging question, although longtime Fast Money viewers know that's been the standard question for JetBlue's Dave Barger since the beginning of time. Lee pointed out that an analyst apparently think Alaska Airlines isn't hedged to $85. "We're 50%, uh, at 78 for the balance of this year," Ayer said, trying to explain he's not totally locked in to bad prices if oil drops. "It's basically insurance," he said.

Mahaney: Google venturing
into online travel

A discussion about Priceline on Friday's Halftime Report brought this interesting comment from Mark Mahaney.

"Google is making a play in online travel," Mahaney said. "We don't think they're gonna go to the end with it but they are attempting to acquire this company ITA."

Hmmmm ... we've already suggested on this page that if Google is going to attempt a paradigm-shifting move, it should consider MA (this writer has no position in MA but is long V).

Goodness only knows about antitrust concerns with that. But the belief here is that any kind of significant foray into online travel, as Mahaney suggested, would also arouse regulators. You Google "Alaska Airlines flight Hawaii" and get the Google offering prominently displayed above the Priceline offering ... er no, it wouldn't work that way, Google's too nice.

Mahaney attached a number to a common observation about PCLN, saying, "70% of Priceline's profits come out of Europe," so it's also a euro play.

He said growth prospects remain bright. "You have 3, 4% of all hotel reservations worldwide are online, that's gonna increase dramatically." From here, he sees a "modest, 10% upside" in the shares. "Our price target's $325."


RIMM is much-discussed this week, with good reason. Patty Edwards said Friday, "I'm starting to look at Motorola. I think that they are getting a lot of traction with this."

Pete Najarian, on the other hand, said it's all about Fast Money, not long-term business models, and as a result, he jumped into RIMM calls because he's seeing support in the low $50s.

Steve Grasso cast the tie-breaking vote on Patty's side. "I think the better bang for your buck is Motorola, riding those Droid sales," Grasso said.

Edwards said the jobs report indicates "the retailers are going to be under pressure ... I don't think that you're going to see a resurgence the way everyone has been expecting. I'd be pulling out."

Joe Terranova was asked by Pete Najarian what to do with Potash and the ag names here. Terranova said he's "maintaining my exposure to Mosaic" while reducing exposure to POT. "Clearly Potash is more more volatile," he said.

Jerry Castellini raises
provocative point

Jerry Castellini delivered what sounds like it could be one of those Business 101 points on Friday's The Strategy Session.

"You can only see so much growth in the top line before you have to put money into productivity, money into expansion, or somebody else is gonna take your market," Castellini asserted.

Interesting. Let's mull.

Notice that Castellini twice used the term "money." But nowhere did he use the term "ideas."

Some guys, named Jimmy Cayne, Dick Fuld, Stan O'Neal, and others, pumped a lot of "money" into mortgage-market "expansion."

How'd that one turn out?

In 1994, Wal-Mart, Best Buy and Target had far more money than Jeff Bezos did and were pursuing typical business "expansion." How come those names aren't the No. 1 online retailer?

Then there's the old saw from Gary Kaminsky about how 9 out of 10 business acquisitions fail.

Bottom line: Any allocation of any capital is a risk, even down to buying a pack of gum at the 7-Eleven. While most everyone would agree that productivity is important, the notion that companies "have to put" money into expansion to prevent losing market share is just wrong. Delivering a superior product prevents the loss of market share.

Perhaps Castellini merely meant that, yes, some companies will wisely spend money and others will blow it; the point being that in aggregate, the data says they're not doing that now, when business conditions and historical trends suggests they will be compelled to. Fair enough. But capitalism really isn't as pure as it sounds.

Kronthal: 2.25% on 10-year
by end of 2010

Gary Kaminsky wasn't terribly impressed with President Obama's remarks on the economy Friday.

"He used the word invest," Kaminsky said. "There's nothing that I heard today that gives you the incentive to go out and invest."

The Strategy Session guest Jeff Kronthal said that if you're expecting economic fireworks anytime soon, forget it.

"A lot of the data has reinforced our views that we're in for a long slog," Kronthal said. "Consumer leverage is very very high. The leverage in the whole financial system that got built up over 8 to 10 years is not gonna turn around in 2 years ... Interest rates are gonna stay low for a very long time."

How low on the 10-year? "I think we can go to 2 and a quarter pretty easily ... by the end of the year."

Jerry Castellini said Kronthal's views are shaped by being an income statement guy, whereas Castellini's more of an income statement guy. He said low mortgages, job growth (however slow) and the amount of money consumers can spend is rising, indicating something better than a long slog.

Gary Kaminsky stomped on economists in a closing quip. "All these economists are reactive," Kaminsky said. "They move after you see the data. By the end of next week, everybody on the Street will be sub-2%. Nothing new there. That's what happens. That's why these guys aren't proactive, they're reactive."

Herb Greenberg’s title on
Strategy Session: IPO Basher

Herb Greenberg visited The Strategy Session on Friday, and admit it, you already knew what he was going to say.

It's a "ridiculously uninspiring week" in the IPO market, Greenberg said.

But maybe an exception? Greenberg pointed to DLC Realty Trust — only to spend more time recommending against it than for it. "They may need to borrow money to pay the distributions because they're gonna have so much debt," Herb said.

Gary Kaminsky astutely sensed what was happening and jumped to Herb's defense. "Just for those that think that Herb only wants to come out here and be negative," Kaminsky said, he's apparently been helping people figure out which IPOs are pricing at the lower end of the range, in a point about value that we didn't quite understand in the soundbite.

"Gary, it's not about negativity, it's about looking at the risk before the reward, OK?" Greenberg insisted.

[Thursday, August 5, 2010]

Apparently Brian Kelly p---
in Doug Kass’ Cheerios

Stock-picking should never be taken personally. But apparently Doug Kass has had enough of Brian Kelly's bearishness.

Kass, evidently Republican-leaning, said his nickname for Kelly is John Kerry.

Incredibly, a flummoxed Kelly couldn't figure out why and needed Joe Terranova to explain it to him.

You might think Kass was just using Kelly as a punch line for a tired attempt at a joke. But then the two went at it, talking over each other, with nary a chuckle, until an irritated Kelly got Kass to explain what would make him turn bearish. For now, Kass said, "I'm still slightly, uh, net long."

Easy to be hard,
and other purported ironies

Doug Kass told Melissa Lee on Thursday, "You're probably too young to remember Three Dog Night Melissa, but we all know one is the loneliest number that you'll ever do." That prompted a cute shrug from Lee.

If Melissa happens to find herself in Arkansas on Sept. 18, she can catch TDN in concert. "Some of the other older bands are a little more than a tribute band with, maybe, 1 original member, but Three Dog Night has 4 original members," the organizer says.

Doug Kass offers LaVorgna free bowl of soup with that hat

Doug Kass on Thursday made sure everyone knows he thinks Joe LaVorgna's doing a great job.

"I listened to Joe before," Kass said during his own segment on Fast Money. "He's, uh, you know, Joe does exceptional work, but he's among a number of bullish guys, unemployment and the economy, over the last 12 months who've been looking for job growth since the 4th quarter of 2009."

So ... major pundit ... spouting predictions and analysis on national TV ... wrong (according to Kass) for 12 months straight ... but doing "exceptional work" nonetheless.

Perhaps Don Wakamatsu is also doing "exceptional" work with the Seattle Mariners this year.

"We are in the decade of the temporary worker," Kass proclaimed.

One of these months,
Joe LaVorgna will be right

For a moment Thursday, it almost sounded like Joe LaVorgna was talking about socialism.

"I don't even think we need small businesses to do their part at this point," LaVorgna said on Fast Money. "All we need are the big companies, who've got that record cash flow, who have that pristine balance sheet, to basically go out and, and, and hire some people, and I think over time you'll start to see it filter down."

"Small business ... do their part."

Maybe instead of worrying about the creation of payrolls, we should be concerned about creation of value. That if Citigroup is not hiring you for a bank job, then it's either a sign that 1) you should find your own avenue to meet that demand, or 2) there is no demand. And that it's not the obligation of small business, big business, or in-between business to personally solve Barack Obama and the Fast Money worrywarts' employment-outlook problems and "filter-down" scenarios.

LaVorgna asserted Thursday, "We're due for a month where the consensus is gonna be a surprise to the upside, vs. the downside like it's been the last few months."

Anthony Scaramucci said, "The recovery is still way out there, way longer than we want it to be."

Scaramucci: RIMM
will make a deal

Anthony Scaramucci on Thursday started one of those conversations that always ends way too abruptly on Fast Money, like stepping on a rake when you don't see it in the grass.

Scaramucci predicted that Research in Motion will realize, if it hasn't already, that the only thing it can do in this U.A.E. fiasco is cut a deal.

He said Google proved this by trying to get tough in China. For some reason, Tim Seymour apparently thought Scaramucci was going down another path and questioned this.

"They didn't push the Chinese government around, they got pushed around," Seymour said.

"Well they tried to," Scaramucci said, adding that the bottom line is, "You have to deal with autocrats."

Seymour then basically took a page out of Zachary Karabell's repertoire. "Hillary Clinton went to China a couple months back representing the interests of every major tech company in the United States. And lost," Seymour said.

Scaramucci would seem to be correct, in RIMM's case, about cutting a deal. He's also correct about dealing with "autocrats," and no, he wasn't referring to Ed Whitacre and Alan Mulally.

What he didn't bother to say is that so much of conflict is about leverage — not the garbage at Lehman and Bear, but the amount of influence one is capable of wielding in life.

China doesn't need Google. Does the U.S. need Google? It's a fine service, and we mean that with sincerity; brilliant minds working there, prints money. But it's something short of essential. What would happen without it? We'd get search results with the Wikipedia page in the top 3 every time from bing, Yahoo, etc., instead.

Now, what if KFC said it wanted to bolt. Now there is likely some leverage. (Fictional example) KFC complains about restrictions or taxes, closes most of its locations, angry diners start questioning what the Party's doing, what are you doing to my chicken, etc.

So who has more leverage, the U.A.E. or RIMM? Tough call. The U.A.E. can probably get away with a standoff here better than RIMM can.

So Scaramucci's prediction of a deal is probably correct.

No one asked if this was not a scoop, but a leak by the White House to gauge opinion

We were intrigued, to say the least, when Melissa Lee opened Thursday's Fast Money with a reference to the DrudgeReport.

Not necessarily a big surprise. Newspapers are either clueless, or just refuse to admit, that the World's Most Important Headline is not something on the front of the New York Times or Wall Street Journal, but the home page of an online aggregator.

Cable TV on the other hand doesn't have the same inhibitions and in fact often relies on the DrudgeReport (that means you, Chris Matthews) to drive subject matter.

Perhaps that's why Fast Money made something of a political exception Thursday and brought on Jimmy Pethokoukis to discuss his report that the government may be planning a surprise relief package in the form of limited Fannie/Freddie forgiveness for parts of underwater mortgages.

"I trust my sources," Pethokoukis said. "There's been some pushback by Treasury. But there has not been any pushback that's been by the White House itself. It's been strangely silent."

Pethokoukis said there's a sense that David Axelrod and Rahm Emanuel, as opposed to Tim Geithner and Larry Summers, are masterminding this endeavor, something that is "being hatched by the political team and not by the good folks over at Treasury."

But Pethokoukis couldn't provide very many specifics about how such a plan would be implemented, though the actual article has interesting details.

Regardless of the facts, should this ever come to fruition, Anthony Scaramucci wasn't buying.

"It's a disaster for contract law, OK. You will unsettle markets if you implement a policy like this," he said.

It's an interesting report. Is this really a legitimate project in the works? Fast Money justified the discussion of this topic by its placement on the DrudgeReport. Curious.

The developing Fast Money war that always feels 1-sided

It seems like, on any given day, either Jon Najarian or Anthony Scaramucci is on Fast Money.

But not both.

Thursday was Scaramucci's turn to play the Hedge-Fund-Trade-of-the-Week contest.

The subject was Kraft. "6 weeks ago this was the hedge fund trade of the week," the Moochmeister said, before injecting sarcasm in the lightest way possible. "I know that you're not supposed to own boring stocks when you're a hedge fund person, but we're supposed to really own stocks that go up and beat expectations."

Actually, it was May 27. That day, KFT closed at $29.06. It closed Thursday's afterhours session, per Google finance, at $30.51. Up 5%. The S&P 500 since then is only up 2%.

So, a good call. At least until Tim Seymour got ahold of it, identifying wheat costs as a "headwind," and that it's "only gonna get worse for these guys going forward."

Quite frankly, wheat discussions are boring. Said Jim Bower, "I can never remember a drought that has come in so quickly and in such intensity ... kinda caught a lot of people off guard."

Scaramucci on Thursday offered his latest Hedge Fund Trade of the Week. "Another boring hedge fund name, OK," he said, and it's Crown Castle International, a cellular tower play. There were no questions about it afterward.

The most important day ...
since a month ago

We've noted before that Joe Terranova tends to slip in purported stock-market maxims that may not always hold up to tight scrutiny.

On Thursday, he said, "Unemployment-report days historically tend to be big momentum-changing days in the market."

They do? Our impression is just the opposite, that everybody always finds their own personal Labor Dept. data thesis tucked somewhere in the numbers, and by the end of the day, as a trade, it doesn't mean jack.

Tim Seymour scoffed at CROX. "My daughter owns Crox, and I think they're kids or their women's, but that's just me."

Tim, Karen agree on something

hhgregg (now there's a brand name that's hard to get adjusted to and doesn't seem particularly catchy) CEO Dennis May talked about business Thursday on Fast Money.

When Karen Finerman asked him specifically to make comparisons to Best Buy, we got interested.

May said his stores "clearly have a, a very strong mix of business and appliances. It's around 40% of our business," he said, calling it "somewhat unique in the electronics channel."

"We compete on price but we clearly differentiate through service," he added, because of a "very knowledgeable sales force."

Apparently the implication is that 40% appliances is higher than Best Buy (we weren't able to look that up or confirm). The main hook though seems to be friendlier customer service than what many shoppers get at Best Buy.

In short, he's implying he's got more refrigerators, and that a doofus isn't going to try to sell you a 3-year service warranty contract.

May, though, wasn't convincing enough for Tim Seymour and Karen Finerman — who pounded the table for Best Buy. "I think there's a lot of upside," Seymour said, pointing to the chart and the demand for small electronics. "I agree with everything Tim said," Karen said.

This one could’ve used
a little more backstory

Karen Finerman on Thursday's Fast Money went off on a tirade on departing Omnicare CEO Joel Gemunder. It had something to do with Gemunder's "ridiculous, uh, severance package," Finerman said. "What a crock, from beginning to end, happy to see him go."

We discovered that Omnicare announced Gemunder's retirement over the weekend, along with a $16 million severance, just before reporting earnings, which stank beyond even low expectations, and the WSJ wrote that Gemunder's retirement was actually a push from the board.

So there you go.

Cortes: CME, CBOE guys
have got it wrong

Steve Cortes told Fast Money Halftime Report viewers on Thursday that he thinks all of those traders in Chicago are flat-out wrong about the ag boom.

"The reason they doubt it is they all tell me, the U.S. crop is so substantial, we're gonna have an absolutely record crop," Cortes said. "What I think they don't see is that this is part of a massive emerging market demand for resources."

Patty Edwards said the trade is to look at "who's already hedged for this," and she mentioned Domino's Pizza as one company that apparently is, based on Pat Doyle's recent comments. "They're hedged out through the end of the year," Edwards said, calling DPZ a "safety play."

No. 386 said, "My guys are still shorting food and beverage regardless of the hedges in that sector."

Weinswig called it ‘Nordstroms;’
Patty correctly said ‘Nordstrom’

Patty Edwards said on Thursday's Halftime that the retail numbers revealed a "lot of promotions even in the teen space" and that results from ANF weren't maybe as great as some said. "The fact of the matter is, the teenagers do not have the money," Edwards said.

Debbie Weinswig said the high-end stores, Neiman, Saks, Nordstroms, etc., outperforming "across the board," not so much in apparel, but handbags, shoes, accessories.

"We've had a bit of a love-fest with Macy's, and that definitely continues," said Weinswig, who said the department stores were gaining a bit from the specialty stores. Patty Edwards said she's not high on department stores but likes JWN.

1 down, 19 to go

Charles Koppelman, chairman of Martha Stewart Living Omnimedia, visited The Strategy Session Thursday and, when not touting Martha Stewart business (whatever happened to that appeal that was going to bring all the truth out anyway?), said today's consumer is taking "pride" in value shopping.

And, he includes himself in that group.

"Recently I bought an $80 cashmere sweater at Macy's," Koppeman said. "As opposed to, you know, a $1,500 sweater at another luxury store. And, I love the sweater, I wear it all the time. Uh, it may not last as long, so I can buy 20 of 'em. ... I was happy with that."

Koppelman, like seemingly everyone else on CNBC Thursday, praised Terry Lundgren's gang. "Macy's has terrific management," he said. "They know what they're doing."

Relax: Goldman will be OK

Uh oh. Kate Kelly — this time in sharp glasses — for the 2nd day in a row launched The Strategy Session with a Goldman Sachs inside baseball report.

Something about GSPS and GSAN.


Important stuff — if you ever happen to run into Charles Gasparino or Anthony Scaramucci at a cocktail party.

Otherwise, we'll pass.

Gary Kaminsky said not to worry about funding, no matter what kind of enterprise Goldman Sachs has got going. "I assure you, they could price this thing in a day," Kaminsky said.

Haven’t heard the term
‘oversubscribed’ for a while

Kathy Smith, who co-founded Renaissance Capital ("Today, when you think about IPOs, you think Renaissance Capital"), told The Strategy Session on Thursday that "The IPO market is really not that exciting these days, but it's not a market to give up hope on."

Smith added, "Our data shows that, uh, so far this year, almost half of the IPOs that are being priced are priced below the IPO range. So, there's already heavy discounting put on."

Gary Kaminsky brushed off reports about any possible hesitancy by GM's Ed Whitacre to do an IPO as indicative of trouble at GM. "This is about the IPO market," Kaminsky said.

Scott Page of Solomon Page (which happens to be the same name as a mildly coveted NFL Draft prospect a few years ago who turned into only a mildly usable player) said banking hiring is going gangbusters in Asia and other parts of the world.

Melissa’s adjustment

Watching Wednesday's Fast Money, we were thinking, "Gosh, Melissa Lee looks hot in that green dress."

At some point we wondered why we hadn't noticed it earlier on the Halftime Report, but never bothered to investigate.

Turns out Melissa wore a white sweater over the green dress on Wednesday's Halftime, saving the best for the 5 p.m. show.

[Wednesday, August 4, 2010]

Breaking news?

If you had high hopes for Wednesday's Fast Money, they were probably dashed immediately.

Melissa Lee opened the show by turning to the FT's Francesco Guerrera, who delivered some kind of report about some shocking new evidence that banks are flagging in July.

We couldn't really figure out what he was talking about. Karen Finerman almost reacted like it was some kind of a prank, saying it's "way, way too early to throw in the towel."

"I don't really get it," agreed Tim Seymour.

But, in the "Looks good on you though" category, Seymour said, "This is a good story to point out that it's been a difficult environment for banks to navigate." But he said Morgan Stanley had good earnings in Q2.

Barry Ritholtz is capable of more entertaining debates than this

Barry Ritholtz wasn't exactly finding a lot of takers Wednesday for his deflation thesis on Fast Money.

"We think deflation is actually taking place in the real world," Ritholtz said, then quoting David Rosenberg, "Deflation is a fact, inflation is merely an opinion."

But Tim Seymour, like Shelley Bergman much earlier on The Strategy Session, wasn't exactly on board with that "fact" angle, pointing to the things Peter Boockvar said a day earlier (when he also, incidentally, indicated he wasn't totally sure whether the government or the underlying assets were paying off the Fed's MBSs).

"The commodity boom is essentially a weak U.S. dollar boom, it's a printing-money boom," Ritholtz said. "It's not really based on prices going up because of so much excess demand, it's been a function of, the measuring stick is getting smaller, so the prices look larger."

Sooners, ’Horns take note:
It’s Nebraska’s year

Dennis Gartman said Wednesday there are more legs to the wheat rally, just maybe not right now.

"Would I pay $7.50 to buy wheat right now? No, not after this run that's gone almost parabolic," Gartman said. "But as I say in my newsletter, the grain market is, you buy weakness, you do not sell strength. This still has a great way to go, after a correction."

He added, "This is gonna be one of the great years for American agriculture. The American farmer isn't gonna have a year like this again in a very long time."

Pressed by Melissa Lee for a trade, Gartman, apparently thinking that most of the Midwest lives on a farm, said, "Look at the local bank in your area. The Peoples Bank & Trust of Keokuk, Iowa, if there is such a thing." Karen Finerman quipped "crowded trade" to that one.

Karen fears déjà vu

Karen Finerman, God bless her, not just because she looked great and was jesting humorously as always, but because she openly expressed what we'd been wondering ever since we saw Kate Kelly on The Strategy Session Wednesday talking about Goldman Sachs' new plan.

"I don't get how it creates value," Karen said.

We don't either, but we're sure it does, because The Bove, Richard X. Bove, said so during an interview on TSS.

Karen said she's a "nervous holder" of Research in Motion right now because she knows what happened to GOOG once this country-blockage thing gained traction, shortly after she pounded the table for it on Fast Money.

Kirk Kerkorian has his
work cut out for him

Steve Cortes' only notable problem is a tendency to overprogram. He's good, very good actually, at rattling off the picks and making a point.

He's not so good at incorporating prepackaged lines into an otherwise smooth delivery.

Wednesday he was touting Las Vegas Sands as breaking out of the typical casino-trade pack because it's an Asia play. His comparison was to MGM, failing to acknowledge MGM has issues beyond gambling and that WYNN's chart in fact remains quite similar to LVS.

But whatever. An otherwise decent pick was marred by, "Moe Green has left the Tropicana and gone to Asia."

But you don't buy him out. He buys you out.

"I'm fading this move in the yen," Cortes said.

Joe Terranova said he got rid of his UAUA shares and then said something likely to get him in hot water with Jon Najarian. "I would step back on the whole consumer theme."

The type of comment you won’t be able to make in U.A.E.

Zachary Karabell announced Wednesday on the Fast Money Halftime Report he's buying RIMM, based on that big-enough-pie-for-everyone theory.

"By the way, just for the record, before the break, on my BlackBerry, I bought more shares of BlackBerry," Karabell said. "Because you know, I think, this is a world where you're gonna have at least a duopoly, probably a triopoloy, treo-opoly, uh, between Apple, RIMM, maybe the Android phone, but Android's the one that's cutting into Apple, not RIMM."

Joe Terranova, meanwhile, said he ditched RIMM. "I got out of it," he said.

Terranova said he thinks GS is a buy here and ready for a "breakout." He said he thinks you can get long refiners here, but that BP in his opinion still has "reputational resistance."

Karabell sniffed at talk about buying media companies on a perceived advertising upturn, conceding there might be a short-term pop, but that there are many other places far more intriguing than the "chronically struggling advertising space."

moment for buying equities

Guest Shelley Bergman spoke in rather stilted manner Wednesday on The Strategy Session.

But he certainly gave viewers some interesting food for thought.

Bergman said the great bond run is overextended and that equities are spring-coiled because there simply won't be enough bad news to hold them down. "Fixed income across the board; you're probably in the 8th or 9th inning," he said.

"No, I don't believe the deflation argument," he told Becky Quick.

"I've been doing this for 25 years Gary and I've never seen the risk to reward" in equities, he told Gary Kaminsky.

Bergman said he arrived at this view "actually in the last 60 days."

Kaminsky noted, there's "2 sides to every discussion." Kaminsky also showed a cover of his upcoming book, Smarter Than the Street.

Movie of the Week:
The Catch-22 of ‘Rain Man’

Oscar pundits like to say that the best ticket to an Academy Award is to play a character with disabilities. "Rain Man," by Barry Levinson, supports that notion, delivering a statue for Dustin Hoffman's portrayal of Raymond Babbitt as lead actor. That recognition overlooks the tour de force of Tom Cruise and, worse, shortchanges the meaning of the movie.

It's a story of Cruise's character. He thinks life is all about fast cars, fast women and fast money (lowercase; the show hadn't been invented yet). Through faults of his own and his parents', he fails to appreciate value in certain things and certain people and hasn't adequately learned what really matters. He changes. By the end, he gets it. As Hoffman is performing his schtick, Cruise masterfully controls several scenes, notably 2 in which he appears in the left corner watching Raymond, at the casino bar and at the psychiatrist's office.

However, the script, by Ronald Bass, perhaps unknowingly throws a moral curveball.

Much of Charlie's appreciation for Raymond stems from Raymond's ability to win just enough — coincidentally just enough — money to rescue Charlie's business and even get back his pawned watch. If they made no money in Vegas, and Charlie arrived in L.A. to a professional liquidation, bonding with Raymond would probably not seem so important, but in fact Bruner's check just might. A cynic could say, with justification, that "Rain Man" incredibly depicts the worst of human values, that a fellow human being's worth is essentially limited to whatever financial gains he/she can bring us.

That's the half-empty approach. The half-full view says that once Charlie began to accept Raymond, life started working for him again. Instead of his near-bankrupt existence, Charlie was actually going to make it as a human being, meaning whatever amount of money/support/luck he needs, he's going to get, somehow. You take care of the people around you, they'll take care of you.

And honestly, isn't that the way it really works?

[Tuesday, August 3, 2010]

Tim Seymour style

Apparently, we should've gotten a load of this Nielsen report for ourselves.

Colin Gillis, who visited the Fast Money set on Tuesday to talk about the RIMM Torch and other phone issues, mentioned an intriguing element of Q1/Q2 smartphone data that we hadn't heard before.

"50% of RIMM users wanna switch away from a BlackBerry," Gillis said.

HALF the users are dissatisfied??

Ouch. (This writer does not own a RIMM device nor any position in RIMM shares.)

Tim Seymour, at first, said "so what" to that.

"But they can't. I'm locked into a BlackBerry because I have to use one at work. I've got no choice," Seymour said. "I'm an IBM operating-system guy, and I don't see myself ever shifting."

Then, Seymour launched into a consumer's manifesto that not only sounded like the opposite of survival of the fittest, but borderline loopy.

"I'm gonna go buy this new phone, because I think what they've given me last year is an inferior product that's getting better," Seymour said.

So he bought an inferior product ... which makes him interested in going out and buying some more.

There's a tip for CEOs: Build something crappy to heighten demand.

That must've been the Pinto strategy of the '70s; who would want to buy a Cadillac after driving one of those ... Can't wait to see the next Charlie Sheen flick after "The Arrival," because after all, plenty of room for improvement ... We're rooting for the Detroit Lions, because chances are, after that 0-16 skid a couple years ago, they're only gonna get better...

This is where we really miss Jeff Macke, who would've pointed to some analogy about some grocery stores having floors so grubby he'd never go near them with anything less than a hazmat suit, and certainly not with repeat business.

Gillis said "There's not gonna be major lines" when the Torch comes out, and that RIMM is in a tough position of facing pincer-like competition from Apple and Android.

This is the most underrated element, and Gillis didn't go nearly far enough. The problem is that some of the world's undeniably greatest businesspeople — the Apple guys and Google guys — are invading your space. (Maybe we should say the Microsoft guys too, but they've mostly sucked at business for years.)

It doesn't matter what businesses these guys enter, really, it's a threat. If Steve Jobs and Sergey Brin said they were going to start selling metallurgical coal to China, you better believe nerves over at Cliffs Natural Resources would start rattling.

Peter Boockvar sort of admits
he doesn’t know

Karen Finerman not only looks great, she wields a mean point.

Peter Boockvar guested on Tuesday's Fast Money at the end of the nearly 20-minute opening segment; though if he had anything new to say, we missed it.

(Oh yeah. He said, "We need some certainty in policy...")

Most of his point was about the Fed being out of bullets and how it's time to (Zzzzz) delever and get away from this thing about borrowing money out of "thin air," etc.

He complained about the Fed's mortgage purchases. "The MBSs they have on their balance sheet are basically pseudo U.S. Treasuries," he said.

Boockvar probably figured that would go unchallenged ... until K-Fine demanded a little accountability.

Finerman asked, "When they come due, when they run off, when the life of the mortgage is over, are they getting paid back by the U.S. government or are they getting paid back by the underlying pool of collateral that secures the, the MBS?"

"Well, it's probably a combination," Boockvar replied, "because the underlying securities in some of these MBSs are certainly not money-good, but they're guaranteed to be at par by Fannie/Freddie so it doesn't really matter in the eyes of the Fed whether they're, uh, getting paid off, uh, individually by the, uh, by the mortgage holders, again-"

"Why doesn't that matter?" Finerman interrupted.

"... because they are Fannie & Freddie guaranteed," Boockvar continued.

"Why doesn't that matter?" Finerman repeated. "It would seem to matter, if the underlying mortgage is paid off by the borrower, isn't that therefore shrinking of the balance?"

Boockvar tried to slither away from that point of contention, referring to "delinquency rates that are still extraordinarily high, so that's proving that some of these securities are not getting paid off."

Right. But the ones that are ...?

Point being (we're only interjecting/speculating here because we're not economists and certainly aren't going to spend precious time reviewing the Maiden Lane stuff again), the MBSs held by the Fed do have some value. It's not quite the shell game that Boockvar suggests.

Tim Seymour, the guy who looks forward to buying updated models of "inferior" products, defended the Fed as providing a "bridge" to a better economy. "We all need to save, and people should not overspend or live beyond their budget. But this is about a bridge to tomorrow," Seymour said.

What would really be interesting would be GOOG or MSFT taking a look at MA

Melissa Lee, perhaps taking a page from Cramer, was apparently trying play Speculative Tuesday on news that Barnes&Noble is up for sale.

We're talkin', REALLY Speculative Tuesday.

First, Lee suggested maybe Amazon would take a look at BKS.

That notion practically offended Karen Finerman, who sounded aghast.

Amazon's "whole business is not being in the bricks-and-mortar business," Finerman asserted.

"Maybe they would just get rid of bricks and mortar side, and absorb the e-reader books," Lee said. "I mean, these are just, you know, we're just sort of speculating."

Let's absorb that one for a moment. Amazon buys one of its cheap competitors that is saddled with gobs of stores, so it can get rid of the stores, just to sell an additional line of e-books.


Finerman pointed out there could be antitrust conditions in that scenario.

First YHOO, maybe BKS:
Talk about setting sights high

If the AMZN-BKS combination didn't sound overwhelmingly goofy, consider this offering from Anthony Scaramucci on suitors for Barnes&Noble.

"This may sound crazy, but actually Microsoft could be a potential buyer," Scaramucci said. "Microsoft wants to own software content and real estate. They wanna get stuff on these iPads, they wanna get stuff on tablets, and they wanna get stuff on your phone."

Hmmm ... Microsoft would be interested in buying BKS ... to fulfill its strategy of getting "stuff on your phone"??


Presumably, MSFT can get all the real estate it wants in this market, especially the stuff in SoCal, Florida and Vegas.

Nevertheless, Melissa Lee defended the notion. "They are opening retail locations, aren't they. I mean it wouldn't necessarily be so far off the track to acquire, you know, retail locations as well. I don't know, we're just, you know, tossing this around," Lee said.


"I'm actually long Borders group," said Steve Grasso, pronouncing himself a "hoper" because the stock hasn't performed as he might've wished for.

Sounds like the BRIC
needs to learn the Laffer Curve

ArvinMeritor boss Chip McClure gave a nice little interview to Fast Money on Tuesday — and happened to elicit one of the standard Fast Money CEO questions that needs to be dragged to the recycle bin.

It's the one Karen Finerman asked Tuesday: What does the Street not like about your stock, because your earnings were good and the stock stumbled.

We're all for tough questioning (good grief, did you see what Charles Gasparino had to say about CNBC's questioning Tuesday??), but this question is so useless as to be almost annoying.

(Sigh ... just a minor segue here ... let's hope Gasparino was specifically pursuing Geithner to ask questions about important government information ... and that the Charliemeister, who displayed a notable interest in the Bush tax cuts, hasn't been capitulating into advocacy journalism better practiced on shows like "The Kudlow Report.")

CEOs, while they better be plugged in to their stocks, can't be expected to have the same kind of trading expertise as the Fast Money crew. Most people would probably say that's a good thing, that they should run their businesses for long-term gains, not to micro-manage reactions to quarterly earnings announcements (um, Michael Dell was doing that for a while at Dell, a recent news story shockingly overlooked by Fast Money).

And whenever they get asked about it on Fast Money, the answers tend to fall into 2 camps: where there is either outright fibbing, or just plain cluelessness.

McClure's answer to Karen's question was, "Our tax rate, because of the fact that there, we do have a position in Brazil, and China, and India, our effective tax rate for this quarter was actually 82%."

But in fact, the Associated Press account of the ARM report makes no mention of 82% tax rates, but does say, "the company said the September quarter now under way would result in slightly lower revenue and adjusted income than in the April-to-June quarter due at least partly to seasonal trends," which is probably the real answer to Karen's question.

Steve Grasso said the stock may be fine for the long haul, but "Technically it's a little toppy."

Steve Grasso sort of
sat this one out

Anthony Scaramucci on Tuesday got another chance to defend making PFE his Hedge Fund Trade Of The Week a couple times in the last few months.

Of course, Jon Najarian didn't happen to be around to explain again why he hates it.

Melissa Lee introduced the segment, with quite the animated gesture, as deciphering PFE between a "value trade and a value trap."

"Some people don't like the fact that some hedge funds own Pfizer," Scaramucci said. "But let's just put the facts on the table. It's a very cheap stock, low expectations in the marketplace, a 4.5% dividend yield."

We don't really wanna take sides on this one, but gotta admit, if that's the best argument hedge funds can make for owning this, then why does anyone really need a hedge fund?

Scaramucci also said PCLN is now showing "older and older" demographics. Is that a good thing or a bad thing?

Gary Kaminsky cracked a joke at Scaramucci's expense via a Fast Message that Scaramucci didn't really "get" until the gag was over.

Brian Kelly, who was nearly as quiet as Steve Grasso, said to consider TJX and GameStop as "trade-down" types of plays.

Doug Kass apparently sends
Fast Money crew lots of e-mails

Fast Money viewers were treated Tuesday to a rare appearance from Jane Wells, covering the Whole Foods earnings release.

Tim Seymour said WFMI is a company with a "niche clientele." That's kinda how we describe this site, or maybe should.

Seymour also said people who use Tide detergent might go generic. (At least we think that was his point.)

Someone mentioned an e-mail from Doug Kass, and Melissa Lee said, "Oh yeah ... which one?" before snickering.

One thing that would've been great to hear would be Melissa's evening plans. After all, she looked great in black/navy dress, and people want to know these things ... got a date, or no date; there's no wrong answer, maybe planning a meal, going to a party, just felt like dressing up before a quiet night at home, etc.

Not only is CNBCfix.com impressed by Jane Wells, you should see the gushing by Nicole Lapin via Twitter, where she usually spends the early morning tweeting "Thanks!" to all the males complimenting her on her appearance, after jetting out to L.A. to do some Worldwide Exchange a bit closer to Christine Tan. "Meeting @janewells in person redefines what you believe to be the perfect combo of brains, beauty and wit," Lapin writes.

Steve Cortes indicates he
made a great call on the euro

Steve Cortes told Fast Money Halftime viewers Tuesday, "I was a big euro bull when nobody liked it, and now I'm starting to get on the other side of the trade. ... I'm actually looking to sell it here."

JJ Kinahan rains
on RIMM’s parade

Pete Najarian on Tuesday's Fast Money Halftime Report made the smartphone industry almost sound like newspapers.

You know, that "s" word — "survive."

Najarian said he thinks Research in Motion is up to the Apple challenge.

"We've always said, it's not just 1 that survives," Najarian said, "but they're in for a big fight right now." He said RIMM estimates might come down, providing a "great opportunity" to get into the stock.

Melissa Lee pointed out that in a Nielsen survey, "Android phones actually outsold iPhone sales."

Steve Cortes said he thinks RIMM is "worth a contrarian play." (Talk about damned with faint praise.)

Brian Kelly was semi-enthusiastic, saying "I got long on a call spread ahead of this."

JJ Kinahan dumped all over the stock. "I'm not long RIMM," he said. "To me they're in a bit of a panic right now." Kinahan pointed to the Nielsen report Lee mentioned and said that while RIMM share from Q1 to Q2 "went from 39% to 33%," Android surged from 6% to 27%.

Strategy Session interview
begins with a correction

Rick Santelli wasn't around on Tuesday's Strategy Session to hear Jimmy Grosfeld's housing-recovery plan.

Too bad. That might've juiced up the segment a bit.

Becky Quick introduced Grosfeld as a "founding director of BlackRock," who was taking part in "his first-ever interview on television."

Grosfeld started off with, "Thank you, I'm not a founding director, I'm just a director."

We always try to point out here that we know TV is difficult, it's hard to be quick-witted and entertaining and everything when you're staring into lights and cameras and listening to voices in your ear. Grosfeld probably could've used a few previous interviews in his back pocket, virtually turning The Strategy Session into a Strategy Symposium and defying the music to keep playing as he spoke into the commercial break.

The highlight was his argument against the feds' homebuyer tax credit — not enough "skin in the game" for buyers — in favor of his own plan, which aims to help people little by little.

"It is a temporary ... mortgage ... subsidy ... program to subsidize a home buyer during that homebuyer's early years of owning a home," Grosfeld said, citing a specific example.

"I'm suggesting we give these customers a $200-a-month subsidy."

President Obama, are you listening?!!

David Simon: Sanofi
alone in Genzyme interest

Tuesday's Strategy Session did have glamourous Becky Quick, but could best be described as falling short of real fireworks.

David Simon of Twin Capital said Sanofi may as well be negotiating against itself. "I don't think there's anybody else to buy Genzyme besides Sanofi," Simon said. "If there were other people, the company would've been put up for sale. It wasn't."

Gary Kaminsky said it's possible Ford is being hurt because GM is gaining market share.

Phil LeBeau took the lead role in an interview with GM's Don Johnson, but it was Becky Quick who asked Johnson if retail might be struggling vs. heavier government sales. "Our percentage of government hasn't changed significantly," Johnson said.

Gary Kaminsky, proving again to be the glue man, later in the program told Quick, "You asked a great question."

"That you gave me!" Quick credited.

[Monday, August 2, 2010]

The outcome of August 2010
remains unknown

Every so often, you hear one of those little sentences tucked into Fast Money that sorta makes you scratch your head.

Joe Terranova on Monday said, "The first trading day of the month is generally a referendum on the previous month's trading activity."

A referendum on the previous month's trading activity.

Somehow, that one sort of rang the logic-detection meter (or is that the missing-logic-detection meter?).

So we have the previous month's trading activity. It's over, done with. It happened.

And now, in the new month, we're having a referendum evaluating the activity in July that has already happened.

So instead of indicating where the market is going, trading on the 1st day of the month restates where it's already been.

And July's trading shouldn't be judged by where the market actually went in July — up 7% in the Dow — but by what happened Aug. 2.

It sounds kinda like saying, there was a baseball game last night. It ended. There's a new game today. And the 1st inning of today's game is a referendum on last night's game. Even though the 1st inning of today's game doesn't, to our knowledge, change the score or anything else having to do with last night's game, and in fact may turn out to be wildly different.

We get the feeling Terranova was merely trying to pigeonhole a ridiculously broad observation into a neat little thesis. That is to say, every new day's trading is the only vote that counts. That even though July was great, if Aug. 2 had stunk, then you might want to rein in some of that bullishness you were feeling in July.

Or perhaps instead of "referendum," Terranova was intending to say something like "extension." Or "reversal." Whichever. This would require stats to back up. We happened to notice that after a January that pushed the Dow down 3.46%, the first day of trading in February saw the Dow up 118. The 1st day of May, the Dow rose 151 ... after a grand 1.40% gain in April. The 2nd day in May, it wiped out that 151 with a 225-point drop.

In case you're wondering if the 1st day's climb of 151 was an indicator for the rest of the month, the Dow finished May down 7.92%.

Hate to say it, but the referendum thing sounds like gobbledygook.

Tim Seymour, reporting from
our Beirut bureau

Ya gotta chuckle at how these guys in the commodities world will on any given day reach for some global news story to justify a heightened-tension thesis.

Tim Seymour announced Monday on Fast Money that "a missile fell in Jordan today, killing somebody. Who knows if it was intended for Israel or not, but the point is, unrest in the Middle East."

Is that all? Surely there must've been a kidnapping somewhere in a Nigerian oilfield. Maybe some warship spotted near the Strait of Hormuz?

Brian Kelly took a common CNBC refrain up to another $10 increment notch, saying "$90 oil's not gonna be good for the consumer."

Melissa Lee and Steve Grasso disagreed over whether the Halftime Report debate on gold was a "heated" one. Grasso said no. We'd weigh in, but we don't really want to get on Melissa's bad side or anything.

"I'd actually be buying the miners," said Tim Seymour.

A facial from Dr. J

Jon Najarian playfully taunted his colleagues Brian Kelly and Steve Grasso on Thursday's Fast Money over Kelly's remark about wearing a bear suit. "I bet it's plenty hot in those suits today," Najarian said.

Steve Grasso, ever gracious, praised Dr. J's assessment of market conditions in July. "Kudos to you for spotting it early," Grasso said.

Dr. J said if they forced him, he'd take some credit. "I think a lot of folks just get carried away with these stupid polls, like that Michigan sentiment thing. There are much better ways to track where money is really going."

We gotta agree with that. The thing is, everyone (um, that includes you, Karen Finerman) on CNBC claims that consumer sentiment numbers really are backward-looking and don't matter much, except every month it always somehow turns out to be "such a big drop this time, oh my, that it has to be taken seriously as a reason the market was down XXX points..."

Maybe a bit too much
inside baseball

If you saw the beginning of Monday's Fast Money, heard the discussion over the expectations of the HSBC version of the China PMI number, and actually knew what these people were talking about, then you should pat yourself on the back before considering getting a life.

For anyone still wondering, it turns out that "July's slide was anticipated."

Poor Nokia. Not even
part of the conversation

Melissa Lee on Monday referenced that Web site, blackberrycool.com, that Karen "Here Today, Gone Tomorrow" Finerman was talking about last week.

Impressively, the site, according to our random inspection, either has yet to notice the attention it's getting on Fast Money, or is taking it all in stride.

Steve Grasso said that even though Jon Najarian pointed out several positive things about RIMM, people Grasso talks to don't care and don't want to hear it, it's an iPhone world now.

Jon Najarian said he's tired of people getting their "underwear in a bundle" over Apple purportedly being No. 1 when RIMM still has a bigger smartphone market share.

This one, you could skip

Carter Braxton Worth, normally a silky smooth telestrator, was notably clumsy Monday after his standard opening line, "Sure."

Worth's point was that the markets ran up so fast in July, it's asking too much to think there's much gas left in the tank short-term.

"Is the setup for a big move a preceding big move?" Worth asked. "Odds of that are very low."

Joe Terranova asked Tim Seymour what Seymour's middle name is. Seymour said "Joseph."

Patty crushes one
out of the park

David Riedel said one sector in China has him a bit concerned.

"You know what, I'm scared of the energy space in China, way too much government regulation there," Riedel said.

Tim Seymour disagreed, saying he likes Chinalco, though he conceded Riedel's other China plays sounded good to him.

Seymour said he thinks POT was a buy pulling back around $105, despite fears of the parabolic move expressed by the Zekester at Halftime.

Melissa Lee mentioned Herbalife, which she called "fertilizer for your body." Lee credited Patty Edwards for trumpeting this name, which is 100% correct; we first heard Patty tout it March 2 at $41. A legit contender at this point for the call of the year.

On Monday's program, Patty recommended Staples and Aeropostale as back-to-school picks.

Joe Terranova said there's a problem with Skechers. "Customer service is not that good in the store. They've gotta work on that," he said.

Brian Kelly said he actually bought PFE. Why? "Essentially 1% risk and an upside of 20%," he said.

Joe Terranova shrugged that one off, calling it "slow money."

Syniverse boss oblivious
to acquisition scenarios

Automotive analyst Itay Michaeli had some interesting points to make about the industry, saying margins are better than any time in the last 10 years. Specifically, he pointed to BWA, saying it's in the "right place at the right time" with a "very robust backlog."

Syniverse Holdings' Tony Holcombe unfortunately mostly just spoke in corporate cliche-speak. Melissa Lee asked the Standard CEO Question, which is, are you going to make an acquisition or get taken over, this time about 3 questions into the interview. Lee said there are rumblings that Oracle or IBM could be interested. Holcombe said all he and his management team are focused on is execution, which is probably what 32 coaches are saying right now in training camp.

Mike Khouw suggested people long VLO can sell the September 18 call for 50 cents, and those who don't own the stock can sell the September 16 puts for 50 cents.

Karabell predicts UAE threat
against BlackBerry is a bluff

Zachary Karabell on Monday's Halftime Report was eager to plow into the weekend story about the United Arab Emirates supposedly planning to block BlackBerry services.

"I will bet money — I don't know how much, don't force me to — that this will not happen," Karabell said, "but it's not exactly an earnings mover for RIMM."

Steve Grasso said, "This is a typical move for RIMM" in terms of the stock trading down around the time of an announcement, just after a runup. He likes Apple instead.

Brian Kelly said that if UAE is serious about being a financial center, this is "not a good move."

1,090 from Thursday
is apparently history

No. 386 reported on Monday's Halftime, "We have to close above 1,113, let's call it 1,114 now in the S&P for this still to have confirmation on this move, break out to the upside."

Kelly covers gold short

In Monday's gold discussion on the Fast Money Halftime Report, it was Tim Seymour and Brian Kelly vs. Melissa Lee and Steve Grasso.

Kelly said he "covered my gold short and went long gold."

Seymour said he thinks gold has corrected, and "It's time to get back into this trade."

Lee, though, questioned if investors won't ditch gold for higher-beta plays. Grasso said he sees people selling gold into strength.

Zach Karabell said, "There is no inflation trade except raw materials. I mean that's it."

Kelly says Fed has
changed his mind

Melissa Lee told Brian Kelly on Monday's Halftime she's noticed "how giddy you are" these days.

Kelly said he's reversed, or at least softened, his bear stance because "The Federal Reserve, over the last 2 weeks, has really signaled, that if anything bad's gonna happen, they're gonna step on the monetary gas pedal."

Zachary Karabell was back, in impressive jacket, took a cue from Larry Kudlow in talking about his favorite Asian economy. "If there was a Chinese word for Goldilocks, it would probably be, well, Goldilocks," Karabell said.

Repeating a favorite theme, Karabell said people who doubt official Chinese economic statistics should look at Vale and Freeport, knowing they "are not deceiving about the robustness of their sales."

"The risk trades are working again," said Tim Seymour.

Karabell said he owns Potash and Monsanto but warns that the recent run in POT has been steep.

Seymour pointed to food producers. "The sugar trade I think is really hurting these guys," he said.

Jim Carlson of Amerigroup said Melissa Lee's mention of a Citi report expecting 600,000 new Medicaid clients is a bottom estimate. "We should see anywhere from 600,000 to a million new members" starting in 2014, for 3 years after, Carlson said.

Karabell joked at the end that buying Pfizer is like investing in cash.

Strategy Session guest suggests
other guests are clueless

David Barse, CEO of Third Avenue Management, apparently isn't terribly impressed with the typical CNBC guest.

Introduced by Becky Quick as a Strategy Session exclusive Monday, Barse immediately called out — without specifying program or network — "various guests" over their "macro" calls.

"They just get it wrong. Right? They spend all day trying to figure it out, and most of the time they're wrong," Barse said.

We wouldn't begin to speculate about certain people, whether he means Strategy Session or something else, but we'll infer he's talking about people who appear on CNBC.

Barse trumpeted Hong Kong property stocks, saying much of it is controlled by billionaires. "Their skin is in the game in a big way," he said. His biggest holding is Henderson Land.

Barse isn't lacking TV business chutzpah — he even interrupted Abby Joseph Cohen later in the program.

There’s an outside chance
Abby Joseph Cohen will
read this page

Becky Quick introduced Abby Joseph Cohen on Monday as making her "Strategy Session debut."

Cohen painted a rosy outlook for the market. "Many investors have just been sitting on the sidelines," she said.

"Over the last several days, we have seen 2 things," Cohen continued. "No. 1, we've seen that earnings in the United States have been not only good, but dramatically better than expected."

"Abby, Can I interrupt you," said David Barse. "Is that a top-line earnings improvement, or is that just firms doing better jobs in managing their costs?"

Cohen said it was a great question, and that indeed, "it's top-line and bottom line."

Finishing her initial point, Cohen said while some people might think Europe's purported resurgence might actually be bad for the U.S., "The impact is extremely favorable."

"We think there's a lot of wiggle room for interest rates to rise and equities to still look attractively priced," Cohen concluded, pointing to a "1,250 to 1,300 sort of range."

"We don't see a double-dip," she said.

Gonna be a good week
on The Strategy Session

Gorjus Becky Quick, Squawk Box star and undeniably as popular as any CNBC female personality (that's not us talking, that's visitors to this site and others), guest-hosted The Strategy Session for David Faber Monday, as announced last week.

Quick and co-host Gary Kaminsky chuckled about previously doing Squawk Box together, but this time not having Joe Kernen in the way of the dialogue. "I just never thought we'd be standing asking the questions," Quick said of the biggest change.

Quick effortlessly charmed, chirping "goodbye" to Peter Boockvar with a wave once Boockvar's phone call abruptly ended.

Quick flagged Kaminsky for nearly saying "The Box."

She also landed a "Jersey Shore" joke about "The Situation."

Gary Kaminsky pointed to the European bank rally vs. U.S. banks for the last 6 weeks. "Maybe Europe is in a better position than the United States for 2011," Kaminsky suggested.

Peter Boockvar says the growth in China and implication for global companies has reached the point where it's "going to feed on itself."

Rebecca Patterson said there's a "big short-covering rally" in Europe. "I would start averaging in to short-euro positions."

Kate Kelly reported that junk bond fees have plunged to less than 2% in 2010.

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