[CNBCfix Fast Money Review Archive, August 2011]
[Wednesday, August 31, 2011]

Answer is: Not Vancouver

Mel Lee indicated on Wednesday's Fast Money she hasn't spent much time chatting up Patty Edwards and Joe Terranova about hobbies.

Guy Adami asked Lee who won the Stanley Cup this year.

"I have no idea," said Lee.

Most insider buying
— since ‘sometime in 2008’

Charles Biderman's commentary-in-a-blender on Wednesday's Fast Money basically required a magic decoder ring to interpret, if interpreting it was even possible.

There were inflows, then outflows, of gold; there was a lot of CEO buying but then all that buying continued but slowed ...

Dr. J, Jon Najarian, tried asking a fairly simple question but gave up.

Biderman said the last time there was a large amount of insider buying was March 2009, but this is "much bigger than that" and the most since "sometime in 2008," which "probably was a mistake.

Which means, they tend to buy when things get low, but sometimes they get lower.

Except Biderman tried to joke at one point that these insiders actually know what they're doing, because, "in a casino, is the house better at playing the game than the players?"

Tim Seymour scoffed at the implications and returns of the AK Steel CEO's buying now and previously in March 2009. "I may sound like a broken record here," said Seymour, but this doesn't mean jack.

Flash: Analysts might be wrong

We basically agree with Tim Seymour's market call, but listening to Tim Seymour is getting old, so it was refreshing actually on Wednesday's Fast Money to hear Stephen Weiss talk about actually buying something.

"I actually bought, uh, Freeport yesterday," Weiss said, as well as TCK this morning, thoug he did allow that he expects the market to go south again by mid-September.

Jon Najarian, who has been in the "maybe it's not so bad" camp recently, said he expects "data points in September that could be a lot better."

Guy Adami retracted a comment he made a day earlier on the "50% correction" level for the S&P 500, saying "it's more like 1,235."

Guest Paul Hickey said there's a "crisis of confidence" that has caused the analyst community to go berserk in slashing forecasts.

Hickey conceded there are "genuine causes for them to cut estimates," but he hasn't seen this level of takedowns since 2009 (see, that's a theme now), and that we may not be headed for recession, and it "could set the stage in October for a really nice bounce."

Brian Kelly revealed, "I am short JJC."

You could've made a trip to the fridge when Tim Seymour began his opening statement, and then, when you got back to your chair, still heard him talking, after the tiresome "first of all" segue, because Melissa Lee refuses to get down to business and cut off/refocus the speeches.

Had about enough
of wireless provider analysis?

Guy Adami said on Wednesday's Fast Money that the selloff marks a "huge opportunity to get into letter T."

Guest Clayton Moran said performance by affected stocks shows the Justice Department's AT&T position was "correctly addressed by the market today." Moran said it's "unwise" for Sprint to try to team up with T-Mobile because it's apparent the Justice Department doesn't want T-Mobile acquired. He said he likes SBAC as a result of this.

Another guest, Craig Moffett, said much later, "I think this is actually bad news for Sprint," and that he likes Comcast and Time Warner.

Dennis Gartman addressed a topic we didn't really know about: whether the Canadian housing market is overheated. "I don't think it's bubbly yet," Gartman said, but it's on his radar screen, though he said Canadian banks weren't as foolish in handing out loans as American banks were.

Gartman said he doesn't want to fight history by buying stocks in September and early October and the trick is to make a list for late October. Why this trend occurs, he said, "is really quite beyond me."

Dick Bove called in the Fast Line Wednesday to explain why Bank of New York Mellon is rightfully making a change at the top, citing an "excessive amount of conservatism that just doesn't belong in a public company."

Do you remember ...
the 21st night of ...

Fast Money on Wednesday did a sweet tribute to "See You in September" by The Happenings.

Dr. J not sold on ‘coincidence’ of Randall Stephenson comments

After Gary Kaminsky was defending AT&T chief Randall Stephenson (see below), Jon Najarian sounded not quite so sure on the subsequent Fast Money Halftime Report Wednesday.

Najarian said that with Stephenson being on CNBC Wednesday morning, "that smacks of something way beyond coincidence to me," and "I don't think he was being completely honest."

"Both A&T and Verizon are going to be hurt by this," Najarian said.

Steve Cortes did some extrapolating, saying, "Among these names, I really prefer Verizon," strictly for dividend, but that bigger picture, "Washington remains I think in an anti-business environment … that is not productive in general for risk assets."

Zachary Karabell said "I think that's an overstatement Steve," and defended the DOJ, saying they have to do something like this under every administration, "that's their mandate, that's what they do."

Cortes insisted it's "part of a broader theme that is very anti-employer."

Patty Edwards said it's a rare moment but she agrees with Cortes; "I like Verizon."

Steve Grasso said he's been buying Sprint as a "falling knife" but that this move is a "huge catalyst to the upside." Karabell said that even though some people on CNBC have said Sprint should try the T-Mobile deal now because it might work for them, "I don't think they go for an equally big merger that's equally likely to face anti-trust action."

Karabell said "I own American Tower." Jon Najarian said he likes AMT as well as CCI and SBAC.

Steve Cortes wonders again how emerging market stocks can go down if U.S. stocks are going up

While Zachary Karabell trumpeted Joy Global and worldwide resource demand on Wednesday's Halftime, Steve Cortes couldn't resist a question about India's stock market, which Judge Scott Wapner said he anticipated.

Cortes questioned the demand from India given its stock performance. "I don't think national domiciled stock markets necessarily track or need to track underlying economic activity," Karabell responded.

"We can't trade GDP; we trade stocks," Cortes concluded. (Good thing he didn't say MON is in big trouble and that Roundup is being slaughtered by Chinese or Japanese competitors, or the conversation would've been a really long one.)

Karabell and Cortes also traded jabs about the S&P direction. Cortes complained about an "overexuberance about QE3," but Karabell said that even if the recent rally seems false, stocks fell an "equally unmerited" amount at the beginning of the month.

Karabell told Judge Wapner he should trademark the "Bernanke Blanket" comment before someone else does; "you gotta do the ™ thing with the circle," Karabell said.

Patty Edwards said she owns JOYG but "I am not adding today," but that she also likes AXE.

Jon Fortt said of Facebook getting into music, "I'm not really sure this is bad for Pandora," which is exactly what Facebook wants everyone to think.

Patty Edwards said at one point "I cannot be a specialist in everything," which prompted Zach Karabell to crack, "if being a specialist at things stopped people from saying things on television, we'd have a lot of dead air time."

Skeptical viewers forced to pick between CEO & government apparently pick government this time

Most of the time, people on CNBC tend to side with business in disputes with the government.

Gary Kaminsky apparently caught a backlash on that Wednesday, explaining on The Strategy Session that "the nasty e-mails I have received in the last half hour would make people think I'm either dumb or naive, and I'm neither."

Guest host Brian Sullivan asked, "You're getting nasty mails? Congratulations. you've made it."

Kaminsky, referring to comments about the AT&T deal early in the day, insisted, "not all CEOs in this country are dishonest," and he believes the AT&T/T-Mobile plan is truly intended to be pro-growth.

Guest Keith Moore said "We expected this proposed transaction to encounter a lot of problems," except he didn't expect this problem to happen so soon. Referring to the breakup fee which Sullivan cited a couple times as enormous, Moore suggested AT&T would be inclined to spend money to fight because it would "cost a lot less than the $3 billion."

Gary Kaminsky said there are "unbelievably interesting ramifications" from the Justice Department action.

Brian Sullivan reported during the broadcast that the CWA union issued a statement saying "the decision to fight the deal is wrong" and "bad for jobs." Sullivan cracked that it was nearly 30 years when the government broke up AT&T, and now Uncle Sam is "making a return call."

No 3-handle on 10-year
for ‘a couple years’

Jeff Kronthal returned to The Strategy Session Wednesday to talk about those bond yields he's been forecasting to be low, asserting that despite certain personal stats, "our total leverage in the system really has not come down over the last couple years."

Kronthal said don't expect a 3-handle on the 10-year soon. "I think it's a couple years away," he said, saying the "upper end of high-yield" is the place to look now for yield.

John Harwood delivered breaking news about Barack Obama giving a speech next week in which (this is our assessment, not Harwood's) he's probably going to say we've got a crisis of confidence and Congress was "silly" to let this debt debate thing paralyze the public and that "make no mistake," JPMorgan isn't going to stop opening branches just because the Dow's down 500 points.

Harwood said it'll be a "fascinating moment next Wednesday."


Brian Sullivan brought on ISDA general counsel David Geen to clarify/rebut the zinger about the Greek bank guy who's calling the shots that Sullivan crowed about a couple times yesterday but apparently now regrets slightly. "I did not mean to imply that he was the single guy making the decision; maybe it came out that way," Sullivan told viewers, then praising Geen profusely for speaking for about 90 seconds and insisting he's dying to have him back on again sometime.

[Tuesday, August 30, 2011]

They can laugh, but he’s likely making more money than the
Fast Money gang, and not losing it in the stock market

Guy Adami said that Icahn-related slide in LGF marks a "tremendous opportunity to get back in the name."

Jon Najarian cracked that if BKS doubled its Nook sales, it must be to "17." (But how would they sell a half-Nook?)

Dr. J told a funny snake joke for his Final Trade.

Darren Rovell, with a few too many graphics and numbers crammed into such a short segment, said that Michael Vick is only going to get $1.88 million, or 11%, of his $17 million salary.

Guy Adami said he's not trying to be a "wise guy" but wondered if Vick knows this. Rovell said "I doubt it." Tim Seymour, apparently auditioning for "The NFL Today," questioned "how did the Eagles give this guy this kind of a contract" given Vick's propensity to "break down."

It’s almost unanimous,
but for Jon Najarian

While basically everybody else on Tuesday's Fast Money warned (in various ways) people to stay out of the market, Jon Najarian gamely tried to offer reasons to buy, only to be shot down by his colleagues every time.

Najarian told guest Kevin Giddis that the consumer confidence number is just a "poll" that doesn't reflect actual spending. "We keep seeing people pushing us, trying to knock the consumer off the edge and push them into a recession ... but we're not actually seeing it," Najarian said.

So, while we wondered who all these "people" are who are exhorting Americans not to go shopping (lessee ... SPG shorts?), Giddis didn't really answer or fight that assertion but concluded that confidence is important as somewhat of a forward indicator. "Without confidence, you're not gonna get people to spend," Giddis said.

Najarian also posed the question to Tim Seymour whether the Dax is so "hammered" that it must be a buy now. Rather than agreeing, Seymour said the opposite: "If global growth is shot, Jon, I think the Dax remains shot ... I think you stay on that Dax short; I think it's a great short."

Dr. J, citing "this guy Cooper down in Florida" who's in the OptionMonster circles, insisted that with housing, "there's bids under the market," and that all the people who were "underinvested in this sector as it fell off a cliff, now they're trying to get back in." Steve Grasso seemed not terribly impressed by the bids under the market and said it happened from a "humongous short squeeze."

Najarian gave a rather mechanical take on the VIX and didn't seem nearly as concerned about its implications as his colleagues were, saying futures show people are betting that volatility will remain in the market. Tim Seymour said that's a noticeable change in market sentiment from 6 weeks ago. Najarian said if you have a lot of positions, maybe the best way to lock them in is to "sell a whole bunch of premium into it," and that for those insulated people it's "manna from heaven."

All well and good, but Mike Khouw took it much further, saying he would've expected volatility to come in a lot more, and it's actually "really quite extraordinary" for implied volatility to be this high, and it's all "boding ill for September."

Dan Niles: ‘I don’t think the holiday season is going to be that great’

Anyone watching Tuesday's Fast Money looking for market encouragement from Dan Niles had to be disappointed.

"Quite honestly we went back to a short position today" for the whole market, Niles said.

Niles said that, contrary to Melissa Lee's assertion of this being a good time for tech names, this is actually the "season where you have the most risk ... this is the time period where you have some of the ugliest preannouncements."

He said "we've bought some RFMD" and that he also bought AAPL on the Steve Jobs news, but "we've hedged that out with other shorts in the PC chain." He also opined, "I don't think the holiday season is going to be that great."

Hilariously — more hilariously than he undoubtedly realized — Niles closed with a dig at P.E. ratio-watchers, pointing to HPQ and saying it might have a good dividend and look cheap, but if the fundamentals aren't there, "that's a really stupid reason to own a stock."

Years and years later,
Fast Money still worried about AMZN’s P.E. ratio

Melissa Lee asked her Fast gang on Tuesday whether they think Amazon can meet Sarah Rotman Epps' lofty tablet sales forecasts.

"No. Not unless they give 'em away," said Jon Najarian.

Steve Grasso argued that the tablet is still a plus for Amazon; "it's a whole new reason to buy this stock."

Tim Seymour couldn't get past the 93 P.E. ratio, saying "this is where Amazon kills you," and that with consumption headwinds, "I don't think is sustainable at Amazon."

Guest Neil Herman, who said he appreciated the chance to make his case on Fast Money for a much bigger MSFT dividend, says the 1-time variety has "not much of an impact on the stock."

Tim Seymour said hiking the dividend is "waving the white flag" and that's not what the company is doing, evidenced by the Skype deal.

‘This market is about gaming the Fed’

Guy Adami on Tuesday's Fast Money predicted stocks could continuing rallying into month end, but "I think it's gettin' a little long in the tooth here."

Steve Grasso agreed, saying "I think it's clearly overdone to the upside" but that he can't get in the way right now.

Tim Seymour said "I don't think hedge funds have been all that active," and then said he wants little part of what's going on. "First of all, this market is about gaming the Fed ... not what I do for a living," he said.

Steve Grasso said actually "it's pension fund rebalancing."

Seymour said the rally of the last few days "is all going on with credit spreads widening," then revealed he's an alumnus of the "Hackley Day Camp."

Jon Najarian referred to Melissa Lee as "M. Lee" (not "Emily") and said the "universal trade" is that around the world, "everybody's buying gold," which Dennis Gartman just recently said is a massive bubble.

Guy Adami made what these days is a rare "benign tape" reference, saying he thinks Church & Dwight can go higher. Brian Kelly said "I think the euro goes higher" but that money that's going into German equities rather than bonds is "dumb money."

Tim Seymour is better at making points to guests than asking them questions

Mark Zandi, who according to Melissa Lee at the end of his interview on Tuesday's Fast Money thinks there's now a 40% chance of recession in 6-12 months, said he expects more QE, but it'll be late in the year or next year.

He said "that was a really bad number" for confidence and blamed it on the "spectacle in Washington."

Tim Seymour argued the number is based more on the decline in stocks. In what rapidly became a circular conversation, Zandi said it's a "lack of confidence" that has affected stocks and there's a risk of it being "self-reinforcing" that is "very scary if they can't stem it."

Kevin Giddis said the Fed has gotten a "little bit disturbing with the dissension" not seen since 1992, and that indications are that it's "gonna be a long economic growth pattern, at worst a double-dip recession."

Tim Seymour, in a clumsily handled question, told Giddis that Europe must be responsible for bond yields this low because U.S. activity doesn't merit it (even though he also said the stock market's all about "gaming the Fed"). Giddis said the bond market is affected by many factors and "it's got yields where they probably should be."

Giddis concluded the Fed, investors and consumers are all "confused." Brian Kelly agreed and said you can buy the TLT.

After this page makes an
‘Eight is Enough’ reference,
Steve Cortes mentions show on air

Early Tuesday morning, this page actually sort of complimented Steve Cortes on his BAC short last week — despite the fact the shares went up 3 days in a row — because we speculated he likely got it right after the huge Buffett bounce and thus had gains through Monday even if he was still holding.

On Tuesday's Halftime, Cortes confirmed that trade worked, saying, "I shorted it that day, I added to shorts here today again at 8 and a quarter," saying the risk is to $8.50.

He said he's short because of "the Treasury yield curve ... it's actually flattening." And so, "I think BAC is very overvalued here."

Coincidentally enough, also early Tuesday morning, this page (see below), referring to Rich Ilczyszyn's corn forecast, made a Dick Van Patten-"Eight is Enough" reference, and imagine our surprise at hearing Cortes say hours later on Tuesday's Halftime that BAC was topping out and, "When I was a kid, one of my favorite shows was 'Eight is Enough'."

(One of these days we'll look it up, but either Susan or Elizabeth was the hottest. Also David's girlfriend Janet, played by Joan Prather, was a fox.)

We'll keep doing what we can to supply the Fast Money gang with punchlines.

Let’s hope the Amazon tablet doesn’t have a 3-second delay like Sarah Rotman Epps’ video connection

When Forrester analyst Sarah Rotman Epps and Judge Scott Wapner weren't talking over each other on Tuesday's Fast Money Halftime Report, Epps managed to say that "Amazon, if they play their cards right, could be the strong No. 2" in the tablet wars.

But she conceded her 5 million sales possibility in Q4 requires a lot of ifs, including a price "significantly below" the iPad. But she said the Kindle is proof Amazon can do this sort of thing.

Patty Edwards also cited the Kindle and said "I absolutely think that they do" have a chance to succeed at this and, in the obligatory tech-device-derivative-trade chat, said the "component suppliers" such as Nvidia are worth a look.

Steve Cortes said "optionality" twice and that MSFT is appealing for the dividend and any possible innovation that might accidentally happen. "I would get in," he said.

Apparently that ‘false, safe harbor’ in gold is the real deal

Brian Kelly said on Tuesday's Halftime, "I still think that we are in a bear market rally here" but that the market caught a bid.

"It's more like a sugar high to me," Kelly said. "I'm not shorting anything right now."

Steve Cortes said the U.S. is still the place to be, "If you have your hopes pinned on emerging markets you're gonna continue to be disappointed," but he couldn't get too excited after the S&P's weekend run.

"1,200 I'm not nearly so enamored," Cortes said, adding he "put some risk-off trades on," and "I'm actually long gold."

The funny thing about that is, just last Wednesday (see below), Cortes claimed, "I think the public was sold a very false, supposed safe harbor in gold" and predicted a "very painful down move."

So much for that.

Pete Najarian on the other hand said "I think silver goes higher."

Patty Edwards said everybody's hoisting the "gone fishing" sign but she does think ags are strong; "I like Potash, I like Syngenta here," although she didn't delve into the curious Zach Karabell-Scott Nations MON/Roundup Chinese/Japanese flap (see below).

You know it’s a tough
economy when ...

Guest Brian Sozzi made the most eye-opening comment on Tuesday's Fast Money (other than that "Eight is Enough" thing) when he claimed "Wal-Mart is being viewed an expensive shopping trip."

Sozzi said the rise in dollar stores is fueled by the "rapid rise in food stamps."

He trumpeted Dollar General, saying they have some fruit machines and "they're gaining more of the total consumer shopping visit."

Patty Edwards said those stocks look fine, but "I just haven't had a good opportunity to get in," a comment that brought her some mild flak on Twitter.

Edwards scoffed that homebuilder analysts have called 8 of the last 2 bottoms. She did say "I'm long" CBI.

Pete Najarian said MCD's Europe headwind could be offset by emerging markets gains. (This writer is long MCD.) "I think there's still upside," Najarian said.

‘Diversify’ is one of those
Wall Street slogans devised for retail investors that sounds sophisticated and is always heard when markets stink

JPMorgan's Michael Falcon guested on Tuesday's Strategy Session and had 1 word on the mind:

"Our story is one of diversification ... diversifying ... diversified ... diversified ... diversifying ... diversify."

(Yes, those are all the times he said it.)

See, pros call it "hedged," but that doesn't sound safe enough for retail investors.

Falcon almost flat-out refused to give specifics about where markets are going and what sectors look best but only stressed basically that one should be dabbling in everything to get the cream of the crop in yield, and that it's too easy to make rash decisions. "If you run to cash now, that's a bad thing," Falcon said.

Gary Kaminsky asked twice about how Falcon's advisers would've projected 10-year S&P returns a decade ago, hypothesizing it would've been 7-8% which didn't happen, and how they'd project them now. Falcon suggested for the former that selective dabbling could've been better than Kaminsky indicated, and for the latter he simply isn't making any market calls, which is an indirect and perhaps oddly refreshing example of a money manager frankly admitting he doesn't know if a sector of securities he thinks you should be "diversified" into are actually going to make any money for 10 years or not.

Falcon and guest host Brian Sullivan, who's a self-deprecating comedy machine and also gets to work with Mandy, had a briefly hilarious misunderstanding about the definition of "savings rate," with Falcon defining it in the way we'd expect, the percentage the average person is saving, which he said is 6%. Sullivan meant the return those people are getting presumably for basic "saving" and said, "I was like 6%, hand it over."

Steve Liesman interrupts discussion on definition of ‘default’ with discussion on definition of ‘dissent’

Throughout this summer's market tumble and Euro crisis, Peter Boockvar has been looking better and better.

Boockvar said on Tuesday's Strategy Session that banks holding Greece paper were told to write it down 21%, but it's actually trading at 50%, and "probably even worse than that."

But the thrust of the segment was the uncertainty not around the global economic/U.S. banking system, but the definition of "default," which makes one wonder how governments could spend all these decades issuing debt and apparently never thinking about that one.

Brian Sullivan said "I was just diving into the ISDA Web site because I've got nothing better to do" and twice pointed out with incredulity that it's a former Greek banker who's enlisted with the responsibility of determining default and whether something is a "credit event."

"There's a lot of semantics around the question of default," Boockvar agreed.

Sullivan said, shocker, "The banks are using shoddy accounting," and Gary Kaminsky opined, "Mark to market only is relevant if the actual market is there to absorb the mark that you've put."

Steve Liesman broke in with breaking news about household name Narayana Kocherlakota (he's a Fed bigwig) "defining his dissent very, very narrowly" regarding easing or whatever it is the Fed is doing.

Gary Kaminsky said he heard Peter Boockvar say in the background, "This is pathetic," and Boockvar affirmed that he thinks the Fed doesn't get it and that "cheap money has gotten us into more messes." Liesman said to the contrary, Kocherlakota disagrees with Boockvar; "he thinks QE2 worked."

[Monday, August 29, 2011]

Rich Ilczyszyn: Bernanke gave stocks, commodities ‘green light’

Most of the panel was cautiously bearish on Monday's Fast Money.

But not Rich Ilczyszyn.

The odd thing was, it was Tim Seymour who basically twice in the program scoffed at what he thinks are ridiculous bullish weekend characterizations of Ben S. Bernanke's statements Friday, before praising agriculture, which brought agreement from Ilczyszyn, who went on to make just the opposite point about Bernanke. (Yeah, that was even confusing to write.)

"Let's quote Wapner's Bernanke Blanket too," Ilczyszyn said. "You look at, uh, the meeting over the weekend, giving us a forecast for their 2-day meeting in September, I think that gives the green light for stocks. I think that gives the green light for commodities. This could be your bull story now."

Unlike Dick Van Patten, the Ilchynmeister indicated 8 might not be enough, for corn, telling Melissa Lee, "Well listen, short term, I think we gotta get an 8 print out," but "veterans" are saying "you could see $9," before hinting he might want to get as adventurous as Tommy Bradford: "This is also carrying up soybeans and other markets, as I think we could potentially go a lot higher," said Ilczyszyn, who appeared to be saluting the Carolina Panthers in choice of shirt and tie.

Melissa Lee for some reason slightly condescendingly re-addressed Ilczyszyn with both names as "Rich Ilczyszyn," which means she ultimately said "Ilczyszyn" 3 times, and asked how likely the CME would be to raise margin requirements on corn. Rich Ilczyszyn responded that he hasn't seen any price activity to warrant that yet but they've probably got an "algorithmic equation" for deciding on it.

Scott Nations, Zachary Karabell debate Monsanto with dueling Brag Trades

Scott Nations on Monday's Fast Money unloaded on MON, saying its products "don't do what they're supposed to do" and that the company's in a "ton of trouble."

Zachary Karabell sounded almost offended by this analysis, responding, "You take that short, I'll take that long. I disagreed with you in the high 40s, I disagree with you in the high 60s, and we'll see if I disagree with you in the high 80s."

Nations insisted, "It's, it's, you know I hated when it was 70 and went down to 40."

Evidently Melissa Lee was oblivious to this long-running dispute, opening the segment apparently expecting a bull call by saying to Nations, "You're looking at Monsanto."

Even more bizarre, Nations first said Roundup "is getting killed by Chinese generics."

Moments later, Nations said Roundup "is getting killed by Japanese generics."

Steve Cortes’ embarrassing flip from bull to bear looks even more embarrassing Monday

Monday's Fast Money really put that old "price is truth" saw to the test.

Tim Seymour utterly refused to believe it, twice mocking the weekend analysis of Ben S. Bernanke's remarks and insisting the global financial situation was no different than several days ago.

The financials Monday represented a "massive short-covering rally," Seymour said, and "I'm at least cynical on the market's interpretation of facts and fundamental analysis, and therefore, I think today's rally is something you sell."

Todd Gordon was next most emphatic, predicting an S&P slide and saying "I think the Swiss franc, uh, is going to weaken as the overall risk trade heads lower ... I think the yen is still gonna be the new safe haven currency."

Dennis Gartman, who said there's obviously no "new manna from monetary heaven," and Guy Adami said they agreed with Seymour but less emphatically, and indicated they didn't really want to fight this tape, at least not yet.

Zachary Karabell agreed with Tim Seymour on financials but not necessarily on the contagion/fallout to the rest of the markets. Stephen Weiss said he agreed with Seymour and Adami but "I'm not much like Zach, although I have the amount of hair that Zach has, almost, actually better."

"That would be a good stock," Karabell said.

BAC still yet to reach
high of Buffett Day

We might as well get used to BAC getting 5 minutes of every Fast Money episode for at least the next month or 2, and even us amateurs recognize quite well that when a stock with obvious signals pointing one direction ends up going the other direction however temporarily, the frustration can be maddening as hell (and we're just not gonna take it anymore).

Guy Adami carped that with news of the China Construction Bank sale, "the timing to me seems odd," either "visually or optically."

Zachary Karabell pointed out it's ultimately about the share price, which is a "capital-raising issue" if the shares get too low.

"It was really clumsy," said Tim Seymour, arguing that strong buyers will rip off desperate sellers.

Steve Cortes said on Thursday he shorted BAC Thursday morning, which might've actually been a good trade depending (as always) on the price he got despite the stock's productive last several days.

Flash: Irene wasn’t as bad as a lot of people feared

Dennis Gartman said when it comes time for Germans to vote on further bailouts for Greece, it'll be "very ugly," and Greece just needs to get out of the euro.

Zachary Karabell downplayed the likelihood of that, insisting Germans recognize the risk and can't afford to take it, and telling Gartman there's a "binary thing that you're maybe underestimating ... there's really no way you can get to a scenario of Greeks- Greece leaving the euro, without a complete unraveling of the system in a truly cataclysmic fashion."

We're getting sick already of the endless speculation about insurance stocks in the wake of Irene (what does it matter when 499 of 500 S&P stocks, or roughly that, go up?), but that didn't stop Monday's Fast Money from bringing on Randy Binner to estimate that Irene's damages are probably at the "low end of that range."

Seamus Fernandez at the end of the show predicted PFE will get a boost from whatever the new drug is and that he hasn't raised his target but there's "still about 20% upside from here," with a target of "22-23 bucks."

Stephen Weiss for the umpteenth time recommended COP and goofily said maybe he was supposed to sing his Final Trade.

Zachary Karabell drew a sharp red state/blue state divide between Dunkin Donuts and Starbucks, which quite honestly seemed a stretch, and then indicated it should be a no-brainer where he stands. "I think that that probably is an obvious answer to all," he said. "I mean, seriously, you know ... I would clash in a Dunkins wearing this."

We’re out of the woods

Carter Worth, feeling the momentum from his recent seen-the-low-for-the-year call, said on Monday's Fast Money Halftime Report that the risk-on trade is back, and "we're thinking 1,250 on the S&P."

Worth recommends a long SPY, short XLP position, though he allowed that people could also do the version of going long higher-beta and short the S&P.

Worth said while September and October have historically been rough, "we can have a decent September" because of the sharp tumble in August, and that "by all accounts," the indicators show we've bottomed for 2011.

Notably, no one was declaring Monday "sell the rallies," though Steve Grasso, who unlike last week didn't talk about European "Depression" and said 1,210 is the next level to watch on the S&P (that'll probably be exceeded by the time the 5 p.m. Fast Money starts), said "I'm a little hesitant to call in a bottom just yet."

Stephen Weiss disagreed with Worth's suggestion of abandoning the staples, saying he's staying with Coca Cola. "I won't get crushed if the bottom falls out," Weiss said.

BAC closing in on Anthony Polini’s price target

Last week, Brian Kelly was about as gloomy as one could get on Europe and the banks. Suddenly on Monday's Halftime, he was touting the Greek bank deal like it was Peyton Manning returning to the Colts lineup, pointing to JPM and WFC as beneficiaries of BAC's rise and saying "I'd buy both of those on pullbacks."

Zachary Karabell was skeptical of the whole Greece catalyst thing and asked if this was something like a "2-day trade." Kelly conceded "this is a trade only," that it merely made the Greece banks "too bigger to fail," but then he allowed that it's "maybe even a weeklong trade."

Stephen Weiss called the Greece deal "lipstick on a pig" and said JPM should not be bought for that reason but because it's "dirt cheap on earnings."

In case you missed Greg Locraft on Friday, he did the same thing Monday

Judge Scott Wapner missed Friday's Halftime Report, so he brought back Greg Locraft apparently for a redo.

We've practically got Locraft's insurance basket picks memorized now, Travelers, Chubb, Ace, Renaissance Re and Axis.

Locraft insisted these stocks despite hurricane season "tend to outperform in the 3rd quarter" and people have been able to "lean in to the Irene fears." He said, "At the end of the day, the last few days of media coverage has really been probably one of the greatest advertising campaigns in history for the property casualty insurance industry."

Steve Grasso said D-RAM was fueling the MU push, and in the refiner space he likes CVI and SUN.

Stocks up; not a word about how the ‘machines’ are running things

When things look bad, maybe they're actually good.

Guest host Brian Sullivan, using charts from a hedge fund guy who told him "don't use my name," spent a healthy amount of time on Monday's Strategy Session trumpeting how great Russia and Indonesia bounced in the '90s because "defaults can free up capital to reinvest in the domestic economy."

Whatever the case, the notion of the Greece bank deal as justifying Monday's market move, "I find it completely unviable," Sullivan said. "This whole thing could be scuttled by Finland."

Gary Kaminsky, back from a London trip, said that meanwhile, 47% mutual fund managers in the U.S. who are paid to beat the S&P 500 are actually "missing the benchmark by 2 and a half percent," but he wasn't as excited about the Jack Bogle argument as Brian Sullivan was.

Kaminsky said if those managers for whatever reason are not long a name like AAPL, it's the same as being short, and "you can relatively underperform for only so long."

"That was the feeling that drove a lot of the equity performance in the last part of 2010," Kaminsky said.

47%, "that's a big miss," said Sullivan. "Throw a dart, man."

Kate Kelly finds Gary Kaminsky’s Citibank quip remarkably funny

It was all Kate Kelly could do on Monday's Strategy Session to not crack up during what curiously became a Laff-a-lympics on BAC and Zynga.

It started when Brian Sullivan, insisting he was only being sarcastic, asked if Bank of America could sell Countrywide.

Kelly actually said that for Countrywide, "Chapter 11 has been a discussion, uh, that's been bandied about for quite some time," in probably the most interesting sentence of the day, adding Brian Moynihan actually was asked about that on a conference call, to Sullivan's great surprise. "The charge for that would be monstrously huge," Sullivan conceded.

Gary Kaminsky asked rhetorically, "What is a core business, and what is a non-core business." Kelly listed off bits and pieces of company (needless) capital-raising, including one $700 million deal, and then, apparently running light on material, felt compelled to toss in the filler copy, "they touch 1 in every 2 American households" while suggesting either Kaminsky or Sullivan must do business there.

"Not me. I'm at Citibank," said Kaminsky, which got the smirking going.

Kelly said Zynga's having timing issues and a "back and forth" with the SEC that is pushing the IPO to "October at the earliest," but could barely keep a straight face as Sullivan said "I bank at Zynga" while she added amid giggles, "I bank at Facebook." (It wasn't exactly George Carlin.)

Gary Kaminsky said not to forget about Buffett as a source of BAC direction now; "he's gonna have a say too."

Hopefully Karen Dynan
wasn’t paid by the minute

Karen Dynan of the Brookings institute was asked on Monday's Strategy Session to make a call on the Fed, and just like the question, she punted.

But she did manage to stress a couple times that there's a "2-day meeting" in September.

Brian Sullivan reached for one that didn't work, saying it's maybe not good if the Fed punted back to Congress, because "Congress has about 72 men on the field right now."

That sounds like a bench-clearing brawl.

Sullivan asked if the economy's in a mere soft patch or trending downturn. Dynan said, "I don't know the answer to that question," saying we've "gotten better economic data recently," but that's apparently what 2-day meetings are for, and that a "lively discussion" is "appropriate right now."

Brian Sullivan started to refer to Herb Greenberg as "Greenf-" then called him "Bob Greenfield" on purpose.

(Like we said, it wasn't quite a George Carlin-caliber production.)

Gary Kaminsky experiencing
power outage

Gary Kaminsky rolled back onto Monday morning's Squawk Box from his vacation a little electricity-challenged. "I am without power," Kaminsky told co-hosts Andrew Ross Sorkin and Michelle Caruso-Cabrera, whose hot red top was capable of charging up several city blocks.

Kaminsky said Europe is just waiting for Germany to sign off on a bank fix. "There still needs to be a massive recapitalization at some point; I think it's gonna be a TARP, TARP-like event. It has to happen. It just has to happen," he said.

[Friday, August 27, 2011]

Superfox Michelle Meyer
surfaces on ‘Money in Motion’

We've been lamenting for years that Michelle Meyer, The World's Cutest Economist®, hasn't been on Fast Money since Karen Finerman joked about that "after-school job" thing.

Fortunately, Double-M hasn't abandoned CNBC altogether, and in fact turned up on Friday's Money in Motion, which seemingly every week is providing such quality Web site fodder (although nothing as great as Rebecca-Patterson-bikini-shower-in-gold-gone-wild references) that we can't help but watch.

Meyer said of the next jobs report, "I think it's gonna be a pretty soft report, sub-50,000 for total payrolls. I think it's likely that the unemployment rate increases further," but all you really care about is the picture, right?

Jeff Kilburg does the
résumé-style, name-dropping
Brag Trade

Jeff Kilburg, who needs a little more time with the Fast Money gang to reach Rich Ilczyszyn/Andy Busch status, said on Friday's Halftime that "I don't think the market- the equity market truly grasped the severity and the gravity of the Aug. 9 remarks of keeping rates at zero out till 2013," which we think means he believes the market thinks the economy is better than it really is.

Then Kilburg went off on a weird tangent, saying, "Back in my Lou, uh, Holtz days," the coach used to insist of players, "WIN," or "What's Important Now." And so, "all eyes are on Trichet," Kilburg concluded.

In the 1970s, "WIN" meant "Whip Inflation Now," not one of Jerry Ford's most successful ideas.

Pop Tarts are a buy here

Patty Edwards, to her credit, was offering gobs of trades on Friday's Fast Money Halftime Report.

Unfortunately, nearly all were reaches as 1-off Irene plays, an observation made by guest host Simon Hobbs.

Darren Rovell, stationed at a New Jersey Wal-Mart, said everyone's leaving the store with bottled water but asked, "How do you invest in this."

Edwards took this question a bit too seriously — fortunately not quite as seriously as in her prime time appearance this week where she trumpeted runs on toilet paper — and said Coca-Cola and Pepsi are in the bottled water business, Hormel's a name to look at "because of Spam," plus "Pop Tarts, I believe that's Kellogg," and of course, chocolate, though it's worth noting she didn't mention one of CNBCfix's official favorites, Fudge Stripes, which is Keebler, which is Kellogg (but the last pack we got from the grocery store was stuck together or broken in every row, so we vowed not to write about them this month).

"Seriously Patty-" said Simon Hobbs.

"Seriously!" Patty actually insisted.

"Do you think there will be a real bump in these guys' profit streams as a result of this," Hobbs continued, skeptically.

"Well you gotta balance it with the fact that they're also going to be closed," Edwards said, but then she noted WMT beat the government into New Orleans post-Katrina, but that sounds like more a WMT play than a Pop Tarts play.

Later, Edwards suggested Alaska Air, because there's little East Coast exposure, as well as TAL, but Brian Kelly said in regard to airlines, "oil's much more important than a 1-day storm."

Edwards Called the Close by saying "discretionary mall stocks" may take a hit from a lake of sales this weekend on the East Coast, which feels like her best argument of the bunch.

Simon Hobbs’ graphic of Manhattan underwater didn’t seem to faze Steve Grasso or Pete Najarian

Steve Grasso on Friday's Halftime also had an Irene shopping list, but he curiously doused it just about as quickly as he trumpeted it.

"Look at my list here," he told guest host Simon Hobbs. "I have Holly Corp., HOC," plus WNR, CVI, TSO and VLO. "You wanna stay away from those East Coast refiners; you wanna go to the mid-cons. And if you see them all, they're up 6%, 5%, 4 and 3/4%. Those are the ones that you get bang for your buck. They also are higher beta plays, so you have to be careful here. And depending on how this storm shakes out, you could see a reversal in these names."

Given all that, pass.

Grasso also was skeptical of the insurers, saying that after the day's pop, if the storm is bad, "these are the first ones that probably reverse."

Grasso said that amid the central banker speeches, "I don't want people to rush out and buy this market straight up."

Pete: Expect 8-10% moves daily in BAC (while it continues to not raise capital)

Pete Najarian implied, without taking this point far enough, that people who want to be a hero should maybe zero in on BAC, because we can "expect to see 8 to 10% moves each and every (sic, redundancy) day."

Patty Edwards backpedaled from that one, saying BAC is "way too volatile for me and my client base."

Brian Kelly questioned the Chinese Construction stake sale (see below), asking, "Why are they selling off one of their growth assets?"

Steve Grasso, who has bought the shares recently, said "I am a little skittish with the last couple days' headlines."

Andy Busch awaits with
arms crossed the next question from jacketless Simon Hobbs

Andy Busch, quickly becoming one of our Fast Money favorites for various reasons though he's not quite at the level of the Ilchynmeister Rich Ilczyszyn, was asked by Simon Hobbs on Friday's Halftime about the Swiss franc and barely got going before launching into a Brag Trade regarding CHF/euro.

"Last time I was on I believe I, I mentioned that it was a good idea to take your longs- I'm sorry, to take your shorts back at 105, anything below there was a good deal ... we're gonna have some resistance between 118 and 120. If you want to sell this thing, that's the place to do it," Busch said.

Busch, echoing a common CNBC theme Friday, said the central bankers aren't really the fall guys here, but that "politicians have refused to lead fast enough and strong enough."

Kelly: ‘High chance’
the Greece bailout fails

While Judge Wapner was presumably battening down the hatches somewhere on Friday, Fast Money Halftime Report guest host Simon Hobbs ... ugh ... actually said that Ben S. Bernanke was "kicking the stimulus can into September."

Pete Najarian followed moments later ... double-ugh ... by saying, "kicking the can to September."

Brian Kelly said "Your trade off of this is most likely TLT again, but only on weakness." Patty Edwards said "Take at least a little bit of your hedges off at this point in time (sic common "in time" redundancy) ... we've got Trichet tomorrow."

Kelly said he thinks there's a "high chance" the Greece bailout fails, but Edwards said she checked the Greece credit default swaps, and "it's not as bad as we thought it was 3 weeks ago at least in some people's eyes."

Luckily for Kelly, Simon Hobbs didn't announce on-air this time whatever e-mails Kelly has been sending regarding his more deeper thoughts on the European situation (see below).

Steve Grasso suggested Europe is sort of wagging the tail here, pointing to the Dax Thursday. "It was a heavy short squeeze, and we followed," he said.

Brian Kelly once again refers to himself in 3rd person

Either a sign of out-of-control ego or simple cluelessness, Brian Kelly Called the Close on Friday's Halftime with an eye-rolling way of taking a dig at Patty Edwards, saying, "BK's not a buyer of canned meat or this market."

Pete Najarian said the VIX tumble is an opportunity. "I absolutely would be long premium at 34 levels ... something could happen over the weekend," Najarian said.

Patty Edwards did have one non-Hurricane trade in her arsenal Friday, which was TIF. "I think you could actually step in and buy at this point," Edwards said.

Pete Najarian said he got his wife an iPad rather than something from Tiffany for her birthday, which prompted Brian Kelly to ask how he pulled that off, a risky joke that was endorsed by the sight of Patty Edwards chuckling about it, so Kelly's off the hook.

Najarian said "I think there's more upside to come" in AAPL. Steve Grasso said retail names can get bid up, then sold off hard. "I think you have to wait a little bit," Grasso said.

And now, another episode
of The John Paulson Session

Apparently there wasn't enough news in the business world Friday to preempt another CNBC report on John Paulson's account balance, rapidly becoming the network's 2nd- or 3rd-favorite subject after 1 or 2 of those drinking games that Jane Wells tweets about.

David Faber pointed out that "Paulson had cut his holdings in Bank of America." Kate Kelly, who, if it's OK to say this, was huggably cute in her baby-on-the-way gray top, said that Paulson's last redemption report wasn't bad, but "there will probably be a new round of redemption requests as we head toward the end of the year."

But then Faber and Kelly chatted about how well Paulson had done in gold and that he offers "gold-denominated" entry into his fund, and in fact given all that he might actually be coming out ahead.

Make of that what you will.

Meanwhile, it’s 2008 in Europe

Tim Backshall returned as a guest Friday to deliver what's become The Strategy Session Meal Ticket.

Backshall pointed out there's "quite a continuing disconnect between the way equity markets are behaving and the way credit markets are behaving," which is another way of saying what Kevin Lockhart and Gary Kaminsky and to some extent Jeff Gundlach were implying more than a month ago, that bond indications are not exactly bullish on the economy.

"In the paaaast, we've tended to see the credit market is correct," said Backshall, who noted that if you go beyond Greece and looked at a weighted balance of sovereign risk index spreads in Europe, it's twice last year at Jackson Hole time. He said the ECB liquidity measures are the spookiest, that when banks are pulling $500 million a day, "that tells you that there's issues over there."

As far as U.S. high-yield, Backshall said there are certain signals "We're heading into a very tough environment ... We hear a lot about a heavy issuance calendar coming after Labor Day, and this market is just not ready to soak up that kind of supply right now."

Meanwhile, subsequent guest John Ryding asserted "The economy isn't as weak as it's been portrayed in the GDP data" and that there's a "pretty healthy gain in profits" in Q2. He said of GDP, "2%'s not at that stall speed that people are worried about," but that "fear has really filtered our view of the world."

Brian Moynihan raising more (needless) capital (Part 2 or 3)

Kate Kelly reported Friday that Bank of America apparently is going to raise some more nonessential capital with a "sale of at least half of its 10% stake in China Construction Bank," which Kelly said could bring $8.5-$9 billion, "to a group of about a dozen sovereign wealth funds and institutions."

Kelly pointed out BAC originally got this stake at $3 billion, and as David Faber noted, maybe it won't actually raise that much (unnecessary) capital because there will be a "significant capital gain."

Kelly played the report straight, as she probably should, saying the company insists this isn't motivated by a need to raise capital, "this is the company sort of line (sic) that we're hearing ... more of a BASEL 3 thing."

[Thursday, August 25, 2011]

Léo should call Berkshire

Many times for the layman it's best to do the "Rounders" Trade®, based on the really-not-great poker movie that continues to provide us with adequate metaphors, the "Trade" meaning essentially not paying attention to information, but the reactions of the pros who are paying attention to the information.

And so, based on how the Fast Money gang spoke Thursday on Halftime and the 5 p.m. show about the BAC-Buffett deal, we've gotta think this is neutral-to-negative for banking stocks, BAC included, even though Whitney Tilson's e-mail suggested otherwise. (And if paying Warren Buffett money is really what it takes to stop a share slide, shouldn't Léo be doing that with his PC proceeds?)

Brian Kelly echoed Doug Kass (see below) but not as effusively, saying it's "not a smart deal" for Bank of America, and if it was somehow a smart deal, then the truth was "they needed capital."

And so, "I think Moynihan is probably on his way out," Kelly said, saying he agrees with Kass, although Kass had sort of already indicated that Karen Finerman and Whitney Tilson had talked him out of that belief (but Kelly can take heart because Mr. C. Gasparino predicted that on Twitter this week).

Karen Finerman never trashed the deal but unleashed all of her admiration not at BAC but Buffett for securing these terms. "In other businesses, besides financials, you can let the rumor-mongering go," Finerman said, explaining why Brian Moynihan did this, but for Buffett, who got a 10-year warrant, "that's an incredibly valuable piece of paper."


Nick Colas: The next
Warren Beatty

Nicholas Colas visited Thursday's Fast Money set to talk about volatility. He said there are fears in the high-yield market of liquidity drying up, and quite frankly, his segment was quickly drying up, by the time he told Pete Najarian that gold would bottom once there was a cataclysmic high in fear, but "we're not there yet."

That was when Melissa Lee called on Steve Grasso, who replied, "No I'm good. Thank you though for checking. His voice- his voice actually relaxes me." Then Grasso turned to Colas and asked, "Are you on valium?"

"Do you want some?" Colas joked (and let's hope this segment wasn't under the influence).

Anyway, we suddenly couldn't help but notice, as Colas cracked a smile during that segment, there was a slight resemblance to 40-something (maybe late 30s) Warren Beatty. Not a perfect match of course, but something that makes you think, "I know I've seen this before ... in 'Shampoo,' or something."

Which now makes us 100% convinced it's long overdue for a Who-Would-Play-The-Fast-Money-Stars-In-A-Movie post, and we're particularly eager to roll out the selections for Karen Finerman, Melissa Lee, Patty Edwards, Jane Wells and Rebecca Patterson, for the latter quite possibly being a certain "Mighty Aphrodite" Oscar winner ... pushing Gary Busey for Tim Seymour might be a stretch but seems doable ...

Hopefully, it'll go over better than the John-Denver-and-Gordon-Lightfoot-in-the-iCloud thing.

Colas, unfortunately, closed with a way-too-nerdy joke that drew not a single laugh from even Pete Najarian, who chuckles at everything: "Without Paul Volcker, how do you call a top in gold?"

Brian Kelly insists Fed should boost FDIC insurance to $1 billion

It's curious how the Fast Money gang will go on and on about how there's very little the Fed can do, only to offer their own suggestions anyway.

Thursday on Fast Money, Brian Kelly sounded like he must've been sampling some of Nick Colas' valium, claiming it would be a big boost to the world financial situation if the Fed raised FDIC insurance from $250,000 to a billion dollars.

"There's so much money out there, it needs a safe home," Kelly said, while his colleagues recoiled in amazement.

Mel Lee brought Mike Khouw in to ask why. "I don't see how that helps," Khouw said.

Kelly insisted it would stop money from sloshing around in search of safety and provide a stabilizing place for people to put their money.

The camera caught Khouw laughing this one off.

Kelly said he was looking to buy some TLT going into Friday morning.

David Carr tries too hard to make a cultural statement

We always get suspicious when someone is labeled a culture critic or pop culture expert or any other similar title for people who really just specialize in churning out quotes, some of them dubious.

So the Spider Sense started tingling when Melissa Lee brought on David Carr of the New York Times on Thursday and introduced him as "business columnist and culture reporter."

Sure enough, Carr described Steve Jobs' AAPL quite loopily: A "secular religion of sorts that we've all bought into," but "it's lost its illusion of infallibility" and will now be treated like any other company.

Guy Adami, who expertly snuffs this stuff out like few others, argued that Apple hasn't been getting an "infallibility" premium but in fact is already actually treated worse than most companies because the multiple is much lower than what a company of this success should command.

Carr first tried to argue, "Where do you think that discount comes from" and said it's because they keep beating the comps and "the market just shrugs," before conceding that Adami's right.

Steve Grasso said if you start hearing rumblings about a dividend or buyback, "that's probably your sign to exit the stock."

A rare Karen Finerman joke that wasn’t that funny

Melissa Lee was dressed a little overconservatively Thursday as is often the case, but hit a home run in that navy dress, which will be a hit for whoever got to take Melissa to dinner.

Martin Fridson said on Thursday's Fast Money that the high-yield bond market indicates there's a "62% probability of recession in the United States. I think that's somewhat overdone."

Gregory Locraft said he's puzzled why insurers are trading as low as they are, saying Irene is throwing "another log on the fire" amid what's been a tough year, but there are "improving fundamentals" and right now seems like an "excellent entry point." He said he likes Travelers, Chubb and Ace, plus Renaissance Re and AXS.

Karen Finerman joked that "it's sort of ironic that Omnivision didn't see this coming."

Doug Kass: Moynihan either
‘lied’ or is ‘plain stupid.’
Grasso: ‘Depression’ fear in Europe

In a startling, action-packed opening to Thursday's Fast Money, Doug Kass denounced BAC's deal with the Oracle of Omaha.

"Moynihan did get fleeced by Buffett," Kass said, citing the "extraordinarily heavy cost of capital."

Sounding almost personally offended, Kass said Brian Moynihan either "lied" or is "plain stupid" regarding his capital-raising comments.

Kass even chided Karen Finerman's analysis, saying the price of the warrants is a "lot more than a billion dollars Karen."

He concluded, "I sold my Bank of America stock … this is a company that buys high, and they sell low."

K-Fine though fought back, telling Kass she completely disagreed with his contention that this means the end of Moynihan. "I really gotta take the other side of that," Finerman said, saying no board is ever gonna fire a CEO for doing a deal with Warren Buffett.

Kass conceded Finerman was probably right.

Guy Adami sort of scoffed at the deal, suggesting it was done by people "in a little bit over their head." Finerman said it's a good deal, at least, "for Mr. Buffett, yes."

Adami even brought up a Jackson Hole conspiracy theory. "The timing strikes me as a little bit odd," he said.

Meanwhile, Steve Grasso said, "This is really turning into a depression, with a 'D', in Europe," and this page will have more on Thursday's Fast Money later.

Cortes: BAC-Buffett deal
is ‘frightening development’

The Fast Money Halftime gang seemed almost unanimous on Thursday re: Bank of America, and Steve Cortes was the most quotable.

"I shorted it this morning," Cortes said. "To me that is scary, it's reminiscent of 2008 … I think this is a frightening development."

Guy Adami was nearly as quotable, saying if Brian Moynihan has been correct about his capital needs or lack thereof, he could've just said to Buffett, "BAC trades on the New York Stock Exchange, knock yourself out."

Judge Scott Wapner said, "This sort of questions Moynihan's credibility."

Pete Najarian gave a too-long description of trading in the BAC August 8 puts and even included a Brag Trade; "they've exploded as the session's gone on … I've already taken some profits there," but most notably, he predicted, "I think we may see Bank of America ease back toward $7 in the next week or 2."

Steve Grasso said he didn't want to be the "last animal in with the shot at the carcass" but that actually turned out to be guest Josh Steiner, who pointed out, "Not a lot has changed here … all these problems can't be solved by Warren Buffett's investment." Steiner said the flattening yield curve will bring "enormous pressure" on banks and "snowball into the 1st half of next year," and that longer-term bank forecasts are dubious because the "assumptions you have to make to get there are pretty ridiculous." He did say he likes "some of the large regional banks" including PNC and USBancorp.

Judge Wapner calls out Cortes for embarrassing bull/bear market flip

For the last week or so, Steve Cortes has been trumpeting the "Jeffersons" market (you know, "movin' on up") and preaching the U.S. as an island of calm.

Apparently not any more.

Citing Bonasera, Cortes told Scott Judge Wapner Thursday he got royally spooked by the Dax. "I believe in America. But I do not believe in Europe," Cortes said.

"You were bullish 2 days ago and you were bullish yesterday," Wapner complained.

"Scott it's Fast Money baby," cracked Cortes, saying he now even thinks Europe can provide a bid for gold, where he has covered his shorts.

Guy Adami said the ultimate trade in this turmoil is "get back into the gold market," and he said he thinks silver bottomed May 5. Steve Grasso said for S&P traders, "1,155 is your next level of support."

Jon Najarian said he likes BRCM and OVTI, the latter unfortunately proving a disaster afterhours.

Guy Adami said Qualcomm is "finally" giving people a chance to get in.

Peter Misek said the AAPL selling was weak; "we'd be buyers." Steve Cortes admitted, "I do have an iPhone, I'm a terrible trader of Apple … it does not make money for its partners."

Steve Grasso didn't seem too concerned about Irene from a trading standpoint because it's not in the Gulf. Jon Najarian said to look at BGG. (And remember, Patty Edwards predicted runs on toilet paper.)

Taking away the ‘echoes’ of 2008? This sounds exactly like 2008

Kate Kelly on Thursday's Strategy Session offered background on Buffett's BAC purchase that actually really makes you wonder what's going on here.

"It does go with his folksy image," Kelly said of the bathtub part, conceding it was "clearly a whirlwind deal … 24 hours … early yesterday morning seemingly out of the blue … exceptional in nature."

Hmmm. So a company that had no need to raise capital is suddenly doing an "exceptional" transaction pieced together in 24 hours.

She said for BAC, it "isn't a ton of capital to raise," and that for Buffett, "I think it's still a pretty sweet deal."

David Martin curiously said this deal happened because they're "trying to take away some of the echoes of 2008," which is odd given that famous GS deal, but that the banks "really have 2 problems," first being the economy, and then "Bank of America's biggest issue is litigation."

Kelly asked Martin what he thinks of the "borderline hysterical" trading recently in BAC.

"It is August … markets can get somewhat illiquid," Martin said, but then he took an odd tangent, saying there's "clearly lack of confidence" in "good leadership" worldwide, with people wondering "who's in charge."

Martin did say he sees "extraordinary opportunities" in emerging markets, which sounds like those CNBC commercials we hear, and said in the U.S. we're just "trying to get to the root of some of our problems," specifically "housing market," and we don't see why it's tricky to get to the bottom of that; no one wants to buy one.

Keith Bachman said he still likes Apple and only lowered his price target because "we think the multiple's a reflection of longer-term earnings power" and there could be some pressure there after Steve Jobs' exit despite the company's ongoing greatness.

Meanwhile, if you’re interested in some real trouble …

Scott Minerd on Thursday's Strategy Session said the Dax drop feels like a "tremor before a major quake."

And that didn't sound too good.

Minerd said there's a "degree of uncertainty around the bailout" and then proceeded to knock what sounds like a ridiculous Greece-Finland deal in which Greece apparently got debt that its previous debt doesn't allow.

"The policymakers don't get it," said Minerd, adding there's a bigger question anyway as to, "is there enough collateral there anyway" for more debt, prompting David Faber to note the Parthenon is still left.

Minerd warned further about the state of the Eurozone and how they're going to have to deal with structural problems, because "there is not enough capital in the system to take the haircuts on sovereign debt."

David Faber initially said the Dax drop was "reminiscent of our Flash Crash" and then questioned "how much the machines are running things," but backed away from that HFT boogeyman angle.

[Wednesday, August 24, 2011]

It was the City of Champions,
Sister Sledge was playing
‘We Are Family,’ and the
Steelers brought home XIII and XIV

Jeff Saut, who's a fine CNBC guest actually even if he tends like Jeff Harte to be a little too bullish maybe, demonstrated mightily on Wednesday's Fast Money that there is such a thing as taking chart analysis too far.

Saut indicated he's convinced the market is bouncing back, because "I have been using the October '78 and October '79 declines as a pattern."

So, with a sample size of 2, from a distant economy and geopolitical time that is as relevant today as Samantha Sang, what could possibly go wrong?

The best patterns from '78 and '79 were the ones run by Stallworth, by the way.

Saut said he likes energy names with yields, specifically EP and LINE.

When it comes to gold,
Dennis Gartman sounds
a lot like a Steelers fan

The gold battle on Wednesday's Fast Money pitted Dennis Gartman vs. Tim Seymour and Guy Adami.

Seymour complained, "Everybody that's saying gold is a bubble, um, is wrong. ... I'm gettin' kind of sick of the bubble chat," which was actually brought up by Gartman at Halftime.

Adami followed, arguing, "Central banks are not trading gold, they're buying gold and they're putting it away, it won't come back out .. this is just a hiccup I think."

Gartman took issue with that, saying, "Guy just said that central banks don't get rid of gold. Well that's just- that's not true," before Adami immediately interrupted him in a race of who could be the fastest to quote previous central bank gold sales, with Adami acknowledging Britain did it in 1999 under chancellor of the exchequer Gordon Brown but claiming 9 out of 10 times the banks are buying.

Gartman said Bank of Canada "emptied their coffers" at some point. "Central banks do indeed sell gold," he said.

"This was a bubble that did in fact burst," Gartman concluded, using the term "extant" a few times while suggesting the U-turn in gold is based on movement in Washington on entitlement reform.

The funny thing is, a week ago, Aug. 17, Gartman was asked if gold was a bubble and he said "I suspect not yet."

And a day before that, Aug. 16, he complained mightily not about the U.S. debt debate that he now thinks is so significant, but the Sarkozy-Merkel press conference that he found disastrous and summarized as, "it really is bullish for the gold market." Evidently Europe has cleaned up that problem, and the U.S. has achieved a significant milestone in Social Security restructuring in the last 8 days.

It's a lot like hearing how Lawrence Timmons can't tackle, then cheering the sack the next play.

Worth: S&P low in for year

Carter Worth on Wednesday wasn't quite as bearish on gold as Dennis Gartman, but he was bearish at least in the short term.

"The presumption is that gold's gonna come in to around 1,600. That's the bet," Worth said.

"At the rate we're going, that would be tomorrow," joked Karen Finerman.

Worth said that as one alternative, "We like platinum here." But more significantly, he also dabbled in an S&P 500 forecast, saying it's "better to be buying than selling" right here, and "the lows were made just this week or 2 ago, 1,100 in our estimation."

At the end, Tim Seymour questioned, "How many cliches do you think he can get into 1 sentence there?" But Worth is not a cliche machine, certainly nowhere near the level of Dennis Gartman.

Adami: ‘We’ll probably rally again tomorrow’

Guy Adami said on Wednesday's Fast Money he's not really bullish, but, "You have to be impressed by the S&P ... It feels like we'll probably rally again tomorrow."

Tim Seymour said people have been getting the ducks in a row prior to the Fed announcement, which he thinks might disappoint despite revised expectations. "I don't know anybody that thinks he's actually gonna come out and give a QE3 announcement," Seymour said.

Karen Finerman, wearing an exquisite outfit (above) estimated to cost roughly seventy-four hundred dollars, also cautioned against belief in the Fed put. "I really do hope that this is not a rally with a hope of 'Bernanke's gonna send us another lifeline.' Because if it is, I think it'll end up being really disappointing," Finerman said.

Guy Adami said that out in "J-Hole ... the reality is, nobody knows."

Terranova: AAPL will be
$400 in 2 weeks

Guy Adami said given all the trading volume of the week, he's finally thinking "BAC starts to look interesting."

Karen Finerman said it was "absurd" to think JPM is going to take over BAC.

"Baseless is a very nice powerful word there," agreed Melissa Lee.

Karen Finerman said activity in PSS suggests there's an activist involved.

Tim Seymour made a couple jokes about boat shoes or was on the receiving end of the jokes; we can't remember.

Joe Terranova said, "See you in 2 weeks and Apple will be 400 when I get back."

Fast Money came dangerously close to reporting John Paulson's account balance again Wednesday, but Dennis Gartman only referred to him without naming him, and while the hedge fund gold positions chart was shown twice, nobody actually mentioned Paulson's name.

Mike Block so thoroughly tramples on the Raymond James BAC call, Judge Wapner flails at defending it

Mike Block has been away from Fast Money for ages but roared back onto the scene Wednesday demonstrating more homework than Steve Cortes did in 3rd grade and much more than Judge Scott Wapner obviously bargained for.

Wapner brought Block into the BAC conversation by actually arguing what Block was about to say, that the Raymond James call about valuation by Anthony Polini really doesn't matter if the economy struggles.

"I'll tell you what Scott. This thesis sounds very familiar to me," Block said. "Now Mr. Polini has had a strong buy on the stock since October 13th, 2008. And at that time the stock was trading with a 22 handle, and he slapped a $36 target on it. A month- a little more than a month ago, he had a $24 target on the stock. Now there's nothing in his thesis that's incorrect ... but this is not a new call. This is a valuation call, this is a recovery call, and I think this is the perfect value trap right here."

A $24 target just more than a month ago. By a pro who's paid to assess these things. And to think yesterday, the Fast gang was calling Henry Blodget "irresponsible."

Hearing that, Judge evidently felt sorry for Polini and stammered, "I understand but to put- but to be fair to, to the analyst, look, everybody is, is dumping on the stock, he comes out and points out specifically A, B, C and D, why may, why now may be a good time to take a look at it. I-I-I understand, look, I understand he's had a strong buy on it, uh, you know, since, uh, 10 years ago, whatever ..."

"The story's still the same. You know the risk/reward is better down here," Block said. "I'm not trying to disparage him, this is very difficult."

"You're not trying, but you just did," Judge cracked.

"Sorry pal. Give me a call. Buy ya a drink," Block said.

Guest predicts new S&P low

Moments after the Anthony Polini conversation, Judge Wapner brought on Keith McCullough, who wasn't exactly singing the praises of banks.

"Well I think Mike's right," McCullough said. "Raymond James is not the source of financials. Uh, I think you be short all the financials and particularly the big ones like Bank of America. ... They already need to raise capital."

Moreover, "I think the S&P's going lower. I think it's gonna make a new year-to-date low," McCullough said, which puts him at odds with Doug Kass.

McCullough said "we're short the financials" and that "The Bernank's in a box" and simply can't and won't do anything. "There's a reason why nobody remembers Arthur Burns very well," he said, and he's right about that; we don't remember Arthur Burns.

Steve Cortes then joked, "Keith put Bernanke in a box. Nobody puts baby in a corner, right? I mean come on," and 3 of his 4 colleagues — Mike Block and Brian Kelly and Judge Wapner — chuckled, while Patty Edwards merely rolled her eyes like it was the worst joke she'd ever heard.

Gartman on gold: ‘one of the great bubbles of our time’

Wednesday's Fast Money Halftime Report was as action-packed as they come and included this startling comment from Dennis Gartman on gold.

"This was in fact one of the great bubbles of our time," Gartman said. "I think this thing could go down another $150 in a very short span of time."

Steve Cortes claimed, "I think the public was sold a very false, supposed safe harbor in gold" and predicted a "very painful down move."

Cortes then cited a chart going back to 1980, prompting Scott Judge Wapner to say "This isn't 'The American Experience' Cortes, this is Fast Money Halftime my man."

"I don't know if you can remember 1980 if you're old enough, I don't remember a lot, I was in 3rd grade, I had a massive crush on my teacher, who was very cute," Cortes continued, eventually claiming that if you overlay the recent gold chart with 1980's bubble peak, it's the same thing, and how's that for a sample size of 1 based on the 1980s economic scene that is as relevant today as Supertramp.

Patty Edwards was wise to this, saying, "If you look at a chart of the Nasdaq going into 1999 to 2000, the gold chart looks eerily similar. August of '99 was actually a bear trap, and the market went a lot higher. Just sayin'."

Dennis Gartman said, "I bet we go to 1,650 in the course of the next month and a half."

Judge Wapner asked Mike Block to comment on "Newport Mining" in Pops & Drops.

Kelly: ‘People are confused’

Steve Cortes once again seemed to be the only one gushing about buying opportunities on Wednesday's Fast Money Halftime Reprot.

"I added to longs yesterday on Johnson & Johnson," Cortes said.

Brian Kelly on the other hand asserted, "People are confused. And when there's confusion, that is a correction."

Mike Block told Judge Wapner, "I think we're stuck in the mud Scott, and that's the big problem here," adding Bernanke won't announce a QE3, but perhaps "mechanisms," but "there's a lot of wishful thinking."

Patty Edwards predicted, "I don't think Bernanke's gonna say anything ... the safest place frankly is on the sidelines with a list."

David Faber doesn’t ask Glenn Hubbard about that ‘Inside Job’ interview

David Faber divided his Wednesday Strategy Session time between Glenn Hubband and Wayne Lin and managed to put together one of the sleepier episodes in recent memory, which might've been spiced up a bit had Faber asked Hubbard his reax to having a notable role in an Oscar-winning film.

Hubbard spoke to this week's Fed activity and said, "I'd be very surprised if there were a radical QE3," because it would probably only have a modest effect on growth while raising inflation fears.

If it did happen, Hubbard said, "I don't think it would have a big positive effect on the economy," and that, "going forward, I think inflation remains a concern."

Hubbard actually claimed, "Uncertainty is really holding back a lot of households."

Lin also referred to "uncertainty," specifically regarding the status of the EU and the euro, but also complaining about the debt-ceiling handling; "our leaders were not able to negotiate that."

He said he thinks Europe is favoring austerity at the expense of growth but cautioned, "I think default is a really severe word … my personal opinion is they're headed down the wrong path."

Lin a couple times mentioned allocating a portfolio among equities and commodities and REITs, because "nominal bonds don't preserve purchasing power."

David Faber also slightly pressed Lin on CNBC's every-other-day boogeyman, HFT. Lin offered a "pragmatic" thought as well as a broader market thought, saying "that last hour of the day really moving like you wouldn't believe," and that his firm makes sure of the strategies it uses, "they cannot be front-run." But he said trading and computers evolve and people will ultimately figure this out.

[Tuesday, August 23, 2011]

Tim Seymour: If rumors true, BAC is ‘absolutely something’ that could be nationalized

This site has no opinion/position whatsoever on the merits of Henry Blodget's Bank of America article. (And to that, as LeRoy Neiman said after the "Rocky III" Thunderlips match, "thank God.")

We're more than happy to let others duke it out. And while most on Tuesday's Fast Money were slamming Blodget's post, Tim Seymour indicated there's some smoke here ... the type of smoke that could lead to what Seymour described as the Geithner-indicated "nuclear option" in which "the government just takes it over."

"If Bank of America is all it is in terms, in other words, the allegations right now their (sic) balance sheet, it's absolutely something that could be taken over," Seymour said.

Karen Finerman seemed slightly taken aback. "But we are so far from anything remotely close to that," Finerman said.

Seymour argued that this is why BAC is a popular short. "This could go to, you know, the proverbial zero if it's nationalized," he said.

Score one for Tim Seymour

Once again, we have no clue about BAC finances and no opinion on Henry Blodget's conclusions.

But we got a tingle in the spine at hearing how Tim Seymour described the Internet and Blodget's presence during Tuesday's Fast Money.

"What I think is goin' on here, is first of all you have a circular situation, where again, you have- this is what's goes (sic) on in the blogosphere. And you know, say what you want, but this guy has an enormous audience, and, and it was very interesting that Bank of America made this personal ... you do with that what you want at home. I mean, that's what bloggers are for."

It's not quite like those "I am loved" buttons of the '80s. But it's close.

CNBCfix analysis: BAC was waiting for a post from someone like Blodget

This page is not judging the merits of Henry Blodget's article (sorry, just a necessary disclaimer), but it will judge the media reaction.

The gut feeling here is that Bank of America was waiting to jump on someone such as Blodget, very well-known on Wall Street and to some or many (including apparently Melissa Lee) a dubious source of credibility.

Tim Seymour pointed out that the blogosphere is full of all kinds of commentary on Bank of America. Some of that, pro or con, undoubtedly has more traction than others. Seymour said Blodget is well-read, and Stephen Weiss said Zero Hedge is well-read. (Naked Capitalism probably is too.)

For various reasons BAC wouldn't be likely to acknowledge Zero Hedge or Naked Capitalism or anything not owned by Arianna Huffington; that would be perceived as a blow to its stature. But BAC also likely is concerned about momentum that certain rumors can achieve on the Web. So BAC is using a "mainstream" target, which would be Blodget, to indirectly rebut the sites it doesn't want to publicly acknowledge.

The gut here is that — no disrespect to Blodget — it's really not much different than if BAC had responded to CNBCfix.com (we're not part of this btw), and doubts about the bank will only fester from this point.

On that point, it wasn't just Tim Seymour calling the response "interesting," but in fact the Fast Money gang actually seemed unanimous.

"It was irresponsible if you ask me," said Stephen Weiss. "The only thing that was more surprising was that B of A felt the need to come out and respond to what he said. I'd rather (the bank) said nothing actually."

Karen Finerman said, "I'd rather they kind of say nothing," it could be a case of, "do they protest too much."

Weiss felt so strongly about this he added later, "That's a sign of desperation ... It's just poor, poor management, poor guidance to respond to all that."

Is it ‘irresponsible’ for a writer to express an opinion on a bank’s condition, or do we still have a First Amendment?

Karen Finerman, like Stephen Weiss, used the "i" word on Tuesday's Fast Money regarding the Henry Blodget-BAC article.

Finerman cited the article's passage on BAC commercial real estate exposure and the "very, very vague notion that that should be written down, doesn't say how much, doesn't say if that's written down already. I just thought, I agree with Stephen, I thought the piece was irresponsible, it puts Bank America (sic) in a very difficult situation, do you respond or not."

We're aware that there are some vague rules we don't understand about how certain people in the financial profession can't or won't say certain things about companies.

But how is what Blodget wrote more "irresponsible" than guests such as Peter Schiff regularly appearing on Finerman's own show claiming at times that hyperinflation is on the horizon and gold is headed to $5,000 as the dollar gets obliterated?

Imagine if only qualified people were allowed to "responsibly" evaluate Barack Obama's re-election prospects.

A blogger questioning the valuations of a bank that's been halved in barely 3 months hardly seems like shouting "fire" in a movie theater, or 2) worse than a guy saying on TV that your money is safe at Bear Stearns, or 3) same guy saying months later on the "Today" show not to buy any stocks with money you'll need within 5 years, or 4) same guy being criticized on-air last week by his own colleague Simon Hobbs for 2008-like suggestions (it's a few pages down now on the home page).

Or is the only "responsible" type of analysis that can be disseminated the type from our ratings agencies that gave passing grades to all those subprime mortgages?

Melissa finds it ‘interesting’ that someone cites a blog

In contrast to Tim Seymour, Melissa Lee on Tuesday's Fast Money seemed hardly ready to congratulate Henry Blodget (and this zinger is OK, because we're going to make it up to Melissa below).

"This is the same Henry Blodget who was banned from the securities industry since 2003," Lee said, before adding, "it struck me as interesting that he cites other bloggers in his work as a blogger."

Well, what is so "interesting" about citing "other bloggers"? Doesn't Lee occasionally cite TechCrunch (um, that's a blog) on her show, as well as that Research in Motion blog Karen used to talk about a year ago?

Or is the monopoly on news wisdom — such as, say, daily reviews of CNBC programs — performed only by the giants such as New York Times and Wall Street Journal?

Didn't think so.

Stephen Weiss: ‘People like to plant stories’ at Zero Hedge

Stephen Weiss on Tuesday's Fast Money took a page out of the Dennis Kneale/Charles Gasparino/Michelle Caruso-Cabrera playbook, which is, taking a swipe at Zero Hedge.

"Zero Hedge for example is, um, is one that lots of hedge funds look at, lots of money managers look at, and they have- the guy that runs it has the ear. Now I'm not saying that he's not doing his own work, his own proprietary work, but- people like to plant stories there," Weiss said.

"Right," said Melissa Lee, before using air quotes to follow up with Karen Finerman.

Zero Hedge responded to the Fast Money commentary on Twitter: "Apparently evil hedge funds plant stories in Zero Hedge... that is news to us."

Patty predicts run on toilet paper

Patty Edwards and Jon Najarian got a brief moment of Prime Time Fast Money on Tuesday night, and Brian Sullivan asked Edwards what stocks to buy in the wake of the earthquake.

Edwards said "people are going to be changing their spending patterns ... stocking up, they're going to be looking at disaster preparedness" ... and thus will be buying a lot of diapers and toilet paper.

Yes, that's what she said.

Edwards said after 9/11 there was a "huge run on Spam," and she mentioned Costco, Target and Kimberly Clark to play this theme.

She also said Dominion Resources looks oversold on Tuesday.

Dr. J made one of the thousands (millions?) of jokes about the quake improving D.C. (or Obama inheriting the quake from Republicans or S&P downgrading the quake to 3.8 etc.) and mentioned BGG and PHII.

If the pundits are all unanimously negative how come the most common trade heard on Fast Money these days is that the banks are undeniably going to be higher within years?

It was practically Joe Terranova vs. the panel on Tuesday's Fast Money, until Doug Kass entered the fray late.

"I'm guilty of premature selection so far," said Kass, referring to his call of banks going up 10-15% in 3 months. He then told Melissa Lee that on the last show they discussed this, about the factors Kass likes being more intermediate term in nature, "That was a very good question, and I should've listened more closely perhaps."

(Note: It was Bruce Berkowitz who told The Strategy Session recently he was guilty of "premature accumulation.")

(Note II: Either term is optimistic, preferring the concept "early" over "wrong." That's why this page just calls it the Dr. John Trade® and leaves it at that.)

Kass sort of reiterated his predictions Tuesday, albeit now with an extended time frame. "I strongly believe that we're gonna see 50%-plus gains, perhaps as much as a doubling, within the next 6 to 15 months," he said.

He claimed that all the pundits are "unanimously negative on financials" and that he is reassured after e-mailing Karen Finerman during the day that things are looking good. In fact, Kass practically made it sound like it's 1999, offering, "There's gonna be no double-dip" ... initial jobless claims and retail sales indicate no recession ... rates anchored at 0 for 2 years ... inflation contained ... corporate balance sheets great ... 55% of stocks yielding more than the 10-year ... risk premium at record lows ...

Seymour: Germany
‘basically on the precipice’

While Joe Terranova suggested viewers buy some stocks around these levels, he wasn't persuasive to his Fast Money colleagues Tuesday.

"Love Joe, but I have to, I mean, I don't know why you feel like you have to get in as a trader today," said Tim Seymour, citing market "head fakes" and questioning, "if we are getting this QE3 trade why does gold sell off."

"But it did," Terranova said.

Seymour continued, "Why is Germany basically on the precipice?" and concluded this is a "very, very dangerous tape."

Karen Finerman said if you buy stocks now, make sure it's for the right reasons. "I would not be buying stocks right now because you think Bernanke's gonna bail you out on Friday," Finerman said.

Brian Kelly said the earthquake "didn't shake my bearishness at all."

Terranova insisted, "The further downside potential, the response, the sensitivity to negative news, it seems to lessen more and more." He did say that he "stepped in, bought Amazon today."

Terranova, Kelly:
Looks like bottom for oil

Joe Terranova did at least find 1 ally on Tuesday's Fast Money when it came to crude.

"I think oil is bottoming here," Terranova said.

Brian Kelly pointed to the reaction to Libya and said, "If anything I think you wanna be long oil at this point."

Tim Seymour though questioned, "Where does oil get the bid," but then, in another case where he talks too much and talks himself into an opposing point, eventually said, "I think you guys are right."

Stephen East said Toll Brothers is getting stung by "lack of volume" and said the homebuilding stocks imply a "significantly worse economy" ahead. But he said this sector always overshoots in both directions, and "This is a risk-appetite trade no doubt about it."

Craig Berger listed QCOM and BRCM as good AAPL derivative plays and suggested this is the time of year to look at semiconductors.

Stephen Weiss complained that gold is "too much of a crowded trade," and that at the few cocktail parties he attends, "everybody talks about the gold they own." (That's slightly different than Steve Cortes, who claims it's the amount of gold commercials he sees on CNBC.)

Guest George Gero was allowed to do a lengthy flashback to his career in 1974 (we won't call it a Brag Trade because it wasn't like that, but did get a bit tedious) and said he sees support in the $1,800 to $1,825 area. Even so, "I think this is a very overcrowded trade," he said.

Melissa Lee, whose royal blue top and white skirt (above; the blurriness is from the fast-moving CNBC camera) might've been her No. 1 outfit of the year, indicated the Fast Money team wasn't taking the earthquake too seriously, evidenced by the gag picture of Ferraris bolting Goldman Sachs.

We’ll have to look up those Chinese-consumer-as-a-percentage numbers sometime

It was hard to find anything on Tuesday's Fast Money Halftime Report that Steve Cortes did not want to buy.

"I am adding to longs. I am very excited about this market," said Cortes, saying he's finding "incredible bargains" and has bought Southern Co., WMT and JNJ.

This despite the fact he maintained his at-least-2-year-old theme that the Chinese economy can't work, saying he doesn't believe "12 men in Beijing to successfully land an economy of that size … hard crash-landing is on the way in China."

That brought him into an argument with Joe Terranova, who according to Judge Scott Wapner indicated with the look on his face he didn't believe Cortes' thesis that stocks can surge if emerging markets are as bad as Cortes says.

Cortes said to look at oil's drop. Terranova told Cortes he was looking at the wrong oil. Then Cortes said "The consumer as a percentage of the Chinese economy, that percentage is actually going down."

"Statistically that is incorrect on both fronts," Terranova said.

"No it is correct," Cortes said.

Patty ‘totally not getting into this market’

Tuesday's Fast Money pitted an interesting matchup of bullishness (Steve Cortes) vs. pessimism (Patty Edwards and Brian Kelly), with Joe Terranova serving sort of as one of those Supreme Court swing votes.

Edwards, who again got to go last, said "I am totally not getting into this market," adding that as for QE3 hopes, "I don't think that Bernanke has the right ammo for the right gun … so I don't think he comes out with anything."

Kelly said if you believe there's just a mild economic pullback right now, stocks are attractive, but "for me it's hard to get real excited about stocks" because of the general "distrust" of banks and other "very worrisome signs to me."

Guest Fred Cannon said for BAC, it's "completely different than it was in 2008" and he doesn't see a capital raise, but there's an overhang that's "just gonna plague earnings for a long period of time."

And, "Don't underestimate Goldman," Cannon said.

Patty Edwards said "I have absolutely no reason to get into either of those names" but if that day should ever come, she'd probably try JPMorgan.

Judge Wapner referred to Dick Bove as an "influential banking analyst" and noted Bove is trumpeting how cheap the banks are. Terranova agreed, pointed out many bounced off lows in the morning, and "I would even be interested here in Goldman Sachs."

Tyler Mathisen delivered breaking news of BAC actually responding to Henry Blodget's article, if you can believe that (which suggests they're taking Patrick Daugherty's advice a little too seriously — see below).

Joe Terranova said the mid-continent refiners "are the stocks you wanna buy." Colin Gillis trumpeted AAPL (there's a new story), mentioned the "ecosystem," and said he's keeping "Sept. 22 free on our calendar."

Patty Edwards revealed she sold a bit of gold on Tuesday. "I did trim — not jettison — trim my position this morning," Edwards said.

Just before a public slam of Henry Blodget, guest questions BAC’s public defense of itself

David Faber on Tuesday's Strategy Session did a lot of curious ad-libbing about Dominique Strauss-Kahn's destination, but Sean Egan offered the most interesting speculation, about the AAA U.S. rating from S&P, saying that in the wake of Deven Sharma's exit, "There's no question that his removal makes it easier for S&P to reconsider its position."

He said there are issues such as the $2 trillion mistake, France being AAA, whether democracies are good at figuring this stuff out, and the general leaks related to the situation.

Guest Patrick Daugherty was brought on to discuss high-yield but lost much of his air time to the Strauss-Kahn reports. Nevertheless, Daugherty said there's a lot of fear out there, and so "from our perspective it's a great opportunity to buy," specifically citing senior secured debt that is "yielding right now an average of 6.7%."

But then he and David Faber really delved into LIBOR in the deep end of the Strategy Session pool.

Daugherty said it's not at all like 2008 for Bank of America, which he said was his "alma mater" and admitted he's "biased" but he questioned "why hold onto that" China construction stake it didn't sell, something he called "curious." He also suggested BAC execs aren't out defending the company prominently enough.

[Monday, August 22, 2011]

HFT guys apparently
took Monday off

We figured with Monday's stock market dwindling from its early gains, someone on Fast Money was bound to cite high-frequency trading as the cause of the dropoff, surely from making all those "phony" prices that ended with the Dow up only 37.


Instead, during a roundtable conversation on Goldman Sachs, Tim Seymour claimed, in an unbelievably long soliloquy that included a "first of all" and "by the way" segue and somehow went uninterrupted by Melissa Lee, "People around the world are starting to take a, a view in going after market manipulation. And again, I think some heads have to roll on this."

Can't wait to see some heads roll.

Guy Adami would entrust every cent he owns to Lloyd Blankfein

As Monday's Fast Money gang digested the news about Lloyd Blankfein getting a lawyer and Kate Kelly referred to the Abacus situation, Guy Adami as expected offered the most passionate defense.

"The investigation should be not at Goldman Sachs but the people who bought into this thinking it was gonna go higher," Adami said. "I've known Lloyd for a long time, frankly, if he opened a hedge fund tomorrow I'd give him every cent that I have. The man is above reproach in my opinion."

(But if you give the same person "every cent" you've got, doesn't that violate basic money management rules about diversifying?)

Karen Finerman looking chic and sharp as always somehow got to bat leadoff (usually the women on Fast Money are inexplicably the last ones to comment at the beginning of each show) and called the GS news like it is. "We just can't possibly know" what to make of it, Finerman said, adding it's "very premature to make a giant leap."

Kate Kelly delivered a fine, all-encompassing report on the extent of Goldman's legal issues, prompting Tim Seymour to say, in the form of a question, "There's nothing extraordinary about this at all," which brought sort of a non-answer from Kelly, who just sort of stated or restated several observations, before agreeing, "I do think it's common though for somebody in his shoes, uh, to lawyer up, absolutely."

Guest Anton Schutz also didn't have much to add other than to say maybe JPM is the best choice now of the big banks. Scott Nations said there was option activity in $60 September GS puts, or a "lottery ticket," and he can't believe the stock would reach that level.

Troubling stock market continues to pressure Doug Kass’ every-day-in-August-selling-looks-about-to-end forecasts

For all those hoping the stock market has indeed hit the Doug Kass low for the year, John Roque surfaced on Monday's Fast Money to indicate otherwise.

"This is just prelude to lower levels," said Roque, pointing to the chart of course.

Dan Greenhaus said "too many people" think Ben S. Bernanke will outline another QE at Jackson Hole and that it really won't be like 2010.

And we can't believe he said it, but he actually did: "Trichet's 2010 speech is every bit as interesting as Bernanke's 2010 speech."

Anthony Scaramucci, after first saying "my tweet signal is tattoo50," said hedge funds have been taking up short S&P positions, partly because they're concerned about retail investors' reaction if the Fed can't goose the markets, adding he thinks Ben Bernanke doesn't have "political ammo" to do a QE3.

Tim Seymour credited Karen Finerman for suggesting last week "Mark Hurd basically left a burning body ... you may not have put it quite like that."

Seymour also cut off Joe Terranova's explanation about the Libyan oil situation that didn't really sound terribly illuminating.

Dennis Gartman addressed WTI at $84 and said, "I wouldn't be short down here at all," and he also said, "I think gold's getting very sporty on the upside," forcing Melissa Lee — who looked good in snug navy dress but is still dressing too much on the conservative side; maybe she should check out the Ann Taylor LOFT that Patty Edwards says is on fire — to ask him a couple times to define "sporty," which just means lighten up a bit.

Amelia Bourdeau said "I would like to be short the euro against the U.S. dollar," then made a noticeable giggle after Mel Lee ended the segment.

Guest Kevin Hunt wastes no time in launching into a Brag Trade

Judge Scott Wapner welcomed HPQ analyst Kevin Hunt onto Monday's Fast Money Halftime Report, and Hunt had barely finished saying thanks for having me on before explaining to viewers his HPQ track record.

"Quick background, I've been pretty bearish on HP for a number of years," Hunt said, "and, you know, I think the rest of the world has sort of figured that out with the last 2 quarters."

"Rest of the world has sort of figured that out." (Man, is our Brag Trade Lexicon getting more action-packed by the day.)

Later he identified a "bullish case" for the stock with a $47 target, then a $38 target, as well as a "worst case, these guys are the worst managers in the world" $11 scenario, and said that comes out to a weighted $32, and so, "anytime under 29 it's pretty good risk/reward."

What if financials went up, and the rest of the market went down?

JJ Kinahan said right at the outset of Monday's Fast Money Halftime Report, "We cannot go up without the financials going up."

We knew that would draw a response from Kinahan's colleague Zachary Karabell, and the Zekemeister didn't disappoint. "I don't agree with JJ that we need the financials" to lead the market up, which then prompted Scott Judge Wapner to revise Kinahan's own comment that he really meant that he just means the financials can't go down for the overall market to rise, which prompted Kinahan to interject, "that's exactly what I'm trying to say."

Karabell said that's great, then we all agree. Karabell also said of the XLF, "I've been short," while Pete Najarian said put activity in BAC has been "astounding."

Steve Grasso pointed to 1,119, then 1,118, as key S&P levels as traders get "really squishy" before the expected 1,101 test.

Tom Wadewitz was an excellent and chipper guest, saying FDX looks a little oversold; "we think there is a lot of bad news in the stock," calling UPS more of a defensive play, and explaining "FedEx has more exposure to Asia, and UPS has more exposure to Europe."

Worst cliche on Fast Money finally gets on Judge’s nerves

Guest Tres Knippa, whose name was compared to Rich Ilczyszyn's on Monday's Fast Money Halftime Report, unfortunately told viewers we're "just kicking the can down the road."

But he did have some quality thoughts to share, saying oil eventually "tests $70," and that "crude is trading as a proxy to the stock market."

Knippa predicted endless QE after Judge Wapner cut off his Washington/Eurozone tirade about kicking the can; "We are gonna have 3, 4, 5, 6 and infinity."

JJ Kinahan said the retail investor is in gold, and the problem is, as he told someone last week, they might make $50, but they could lose $300. Pete Najarian wondered why they just don't "buy a call spread" and totally define their risk.

Zachary Karabell cautioned that "you've gotta be really careful" about making a negative call on the global economy when half the $50 trillion might be U.S./Europe but the other half is dynamic emerging markets. "Hey Zeke I'm not sure whose point you just proved," carped Steve Grasso. "You sound like Yogi Berra."

Dick Grasso apparently doesn’t think Uptick Rule has slashed the S&P multiple

Former NYSE boss and Gasparino book subject Dick Grasso tried to douse Marvin Schwartz's recent claim that the Uptick Rule would accomplish anything.

"Other than feeling good about reinstitution the uptick rule, how do you determine what an uptick is in a world where the same stock trades in 80 places," Grasso told David Faber on Monday's Strategy Session.

Faber noted that both Schwartz and Leon Cooperman denounced high-frequency trading. "I think they are both correct and incorrect," Grasso said, saying that those who are just out to "scalp" the system or participate in "trend following" indeed aren't providing any benefit, but that another category provides important liquidity.

Grasso said Schwartz's comments about HFT providing no useful liquidity are "true and untrue." Grasso added, "What is the uptick in a world of 80 different markets," saying "there are 5 big HFTs" in a "relatively discreet community" and that they should be able to sit down and work out a system that people think is OK.

Faber said Schwartz "brought this to the fore at least" and did so "vociferously."

Eventually Grasso got to Side B of Reasons Stated on CNBC for August's Stock Market Decline, which is, "We watched this debt ceiling debate and everyone was vomitous," and that the country is "totally devoid of leadership" on both sides of the aisle.

Brent ultimately will go down ‘precipitously’

In one of the understatements of the day, Shawn Matthews on Monday's Strategy Session said banks are "going through a tough time."

Matthews also said "spreads are definitely increasing" for investment grade. He said playing Treasurys at 2% "certainly is an aggressive play here," and that probably over time people will lose some money at that, so there is a search for higher yield.

Fadel Gheit said the oil markets aren't going to cave like Gadhafi, explaining, "First of all we don't know where he is," but asserting that eventually, "Brent crude will go down precipitously from here."

[Friday, August 19, 2011]

Sure getting tired of hearing how John Paulson’s account did

Analyst Rich Kugele on Friday's Fast Money Halftime Report wasn't buying the recent Karen Finerman thesis that Mark Hurd didn't exactly leave HPQ in stellar shape.

"I mean I think officially the company is now a mess. It's clear that Léo has squandered his inheritance," Kugele told Scott Judge Wapner.

But Wapner argued that one, suggesting, "he was sort of handed over a bad hand, wasn't he?"

"I don't think so," Kugele said. "He clearly walked into a company that was executing well and just needed tweaks."

Yeah, sure, "tweaks" ... like a new board and a new meal ticket. Those kinds of tweaks.

(Gosh, are we defending Léo? What's going on here?)

Judge then asked the most relevant question of the whole HPQ conversation, whether at this point there's "little risk in getting in on this stock. Wh- what else could possibly happen here?"

Kugele dismissed that as being "probably a 2-year turnaround even if he's right," and that potential investors "probably are talking in the upper teens."

Even The Contrarian Steve Cortes conceded "I can't get into this one," but for a PC play likes INTC, "I actually bought this morning." Pete Najarian admitted of HPQ, "I've owned it unfortunately from a lot higher levels."

In the latest chapter of CNBC's most bizarre fascination, delivering almost hourly updates on John Paulson's account balance, Judge Wapner said Paulson's HPQ holdings are down $230 million. Oh. Boy.

At the end of the program, we hear once again that HFT is the problem

Steve Cortes said on Friday's Call the Close to "be long," and Jon Najarian (looking a bit like Ordell Robbie in "Jackie Brown") agreed, saying "I think the bottom holds."

But Dan Dicker made the most eye-opening prediction, citing the "rise of the machines. The high-frequency guys are gonna tell everybody not to be long over the weekend. I'm selling."

‘LOFT is on fire’

Silver pitted Dan Dicker & Pete Najarian vs. Steve Cortes on Friday's Halftime Report.

"I love this one Judge, I really do," said Dicker, saying the gold/silver ratio could go from 44 to 35.

"I think we see more upside in the SLV," Najarian said.

"I think this is a mania," scoffed Cortes, referring to both gold and silver. "I think they both stink ... anecdotally when I watch CNBC about every 3rd commercial is about gold and that alone makes me wanna short it," and of course the other 2/3 of commercials are for MagicJack. Cortes said there's resistance at 42½ for silver.

Tim Seymour dialed in for a sleeeeeeeeepy emerging markets segment, claiming "EM valuations are at an extraordinary place," but because of the global growth situation, "you have to temper your desire to jump in with 2 feet," which means maybe those valuations really aren't so extraordinary.

"I like Turkey, I like Brazil the most," Seymour said. "The banks are the best positions," including Banco Bradesco.

Camilla Sutton did the Money in Motion preview, saying she'd go long euro because it could reach 1.50 by year-end.

Judge Wapner made a crack about Pete Najarian's finding of option interest in BAC. "I thought the unusual activity you were gonna say was that it was going up," Judge said.

Patty Edwards said "The Gap story is still messy ... there's nothing really to see there." However, Edwards pointed to Foot Locker and Ann Taylor. "They're starting to get ANN going, LOFT is on fire," Edwards said.

We figured being all-caps, "LOFT" must be an acronym, but apparently it just means "loft," with emphasis.

Patty to Steve: You won’t find SUVs, $100 gas tanks in Wal-Mart parking lots (for the most part)

Steve Cortes on Friday's Fast Money Halftime Report trumpeted WMT like it was the cure for cancer.

"I am adding to my Wal-Mart longs," Cortes said. "I think that shoppers because of the end of QE and the decline in energy prices, they're gonna have more money to spend, they're not filling up their SUV for a hundred dollars. Back-to-school shopping is gonna be a bit easier for them, but they're still gonna go for the deals at Wal-Mart."

Patty Edwards wasted no time jumping on that. "Nothing personal Steve, but the people who shop at Wal-Mart for the most part are not driving SUVs and filling up $100 gas tanks. Just sayin'. They're at Target, which I happen to own. They're also at Nordstrom," Edwards said, calling the recent drop in JWN "absolutely ridiculous," with a binary type of assertion.

"I picked more of it up this week," Edwards said, saying if the Saks' forecast of general high-end dropoff was legit, "Nordstrom would have warned. Trust me on that one."

Edwards also said she picked up some WLT, because "the world has not slowed down that much."

Fortunately Edwards didn't pick up any of the Philadelphia Eagles, given what happened to them Thursday night, a game Edwards apparently watched in its entirety despite 1) being preseason and 2) not featuring her favorite team, but at least she noted she wasn't "emotionally invested" in the outcome.

Dan Dicker suffers
Dr. John Trade

Dan Dicker was unbelievably candid on Friday's Fast Money Halftime Report, revealing, "I bailed on most of my Apache position yesterday, could not take the pain anymore ... screaming at the screen."

Dicker added, "All of these E&P guys, EOG, Cabot, they should be monster, Kodiak, every one of these should be great buys."

But like most of the market, they're not. At least not now.

Pete Najarian referred to him as "Dan Dickers."

Najarian said "silver, I like that," and "the lines in New York City, you can't even get into a Starbucks."

Gary Kaminsky, Kate Kelly argue over which one is saying a fallacy

The best part of Friday's Strategy Session was saved for last, when Gary Kaminsky and Kate Kelly tussled over the job market for Wall Street bankers who are producing profits.

Whether human beings regularly sell themselves short in the job market is a long-running interest of this site, and it could've been a fascinating topic for the whole half hour of Strategy Session, but unfortunately was relegated to the final closing minutes, when Kelly reported on the prospect of further bank layoffs even with the holidays not too far away.

"I'm afraid there's a lot of chatter about it," Kelly said. "The economic fundamentals are not improving; banks are very nervous."

Kaminsky piggybacked onto a different problem, that banks pay a lot of high producers in RSUs, which for many are now underwater, and those people will be coming to management and demanding, "I wanna be reloaded."

"Gary, where do you go?" said Kelly, questioning the notion they can threaten to leave.

"That's the fallacy; good people can always go, Kate," Kaminsky said.

"But to a hedge fund, to a mutual fund?" Kelly asked.

"They won't say it, but they know, if there's a decent producer who wants to move a business from firm X to firm Y," Kaminsky started to say as David Faber played referee.

Finally, Kelly said, "I think what you're saying is a fallacy. I think if you're a very top producer, you do have mobility. Everybody else is gonna be out of luck right now."

One issue here is why anyone should ever tolerate being paid in company stock, unless it's a CEO or very high-ranking executive, even if that's been SOP on Wall Street.

But the bigger issue is the dividing line in Kelly's comment, between the "very top producers" and "everybody else."

The truth, based on our armchair psychological analysis and reading gobs of news articles for a long time, is that most people who are employed don't vigorously assess and test the job market constantly because they're simply not interested in changing. They get accustomed to the social environment and the balance between perks/limits, such as knowing they can show up late when they've got doctor's appointments but also knowing the limits to how much money or vacation time or promotion they'll get. A lot of people fear what would happen if their own companies think they're looking; others think changing jobs often looks like a negative, which it might unless you're moving upward.

Both of those concerns are probably a little overrated. What's true is that when companies go on hiring binges and when companies go on firing binges, a lot of the people who end up in either one of those directions are what they call in the NFL a "JAG" (not to be confused with "Jagov" or commonly "Jack-off") — or "Just A Guy," an eminently replaceable player who provides no edge but fills a hole while the playmakers on the team determine the wins and losses.

If you're someone who has realized how to create value in this world, you'll find someplace to go.

If he got restricted GE stock from the time of his hiring, he’s still underwater

David Faber chortled Friday at the notion of getting RSUs. "Yeah I'm still waiting for GE to do that for me. Hah. Been waiting a long time," Faber said.

Gary Kaminsky said at the end of The Strategy Session, "I'm on va-ca in 6 minutes."

Gary: HPQ looks like AAPL —
not now, but post-Sculley

The 2nd-most interesting topic on Friday's Strategy Session was the middle one (see, we're working our way back here), in which Gary Kaminsky and David Faber unloaded on the HPQ disaster.

Gary Kaminsky said the post-Hurd leadership is reminiscent of the saviors Apple brought in after John Sculley exited but before Steve Jobs came back. "That's what this feels like to me," Kaminsky said.

David Faber pointed to the changing of the HPQ board and that half the members hired Léo and the other half were hired by him. "This does feel just terrible," Faber said.

Gary Kaminsky referred to a Strategy Session episode a year ago in which he outlined the lack of share ownership on the part of the HPQ board. "It feels like an extremely weak board," Kaminsky said, going on with Faber to bash the much-higher-priced and dubious buybacks that have been occurring this year, which Faber said cut even come back to haunt the credit rating. "What a terrible allocation of capital for shareholders," Kaminsky said.

No doubt about it, this one's a real disaster.

David Faber should get some props for noting that investing legend Marvin Schwartz, who was just on the show yesterday complaining that the Uptick Rule has cut the multiple of the S&P 500, had trumpeted HPQ a while back on The Strategy Session, a sign that even the greats such as Schwartz and Karen Finerman can be horribly wrong, and why again do so many regular joes think they can beat the market?

A day ago we thought it was HFT. Turns out it was the handling of the debt ceiling

The sleepiest part of Friday's Strategy Session was the beginning, in which Robert Rodriguez couldn't resist a couple Brag Trades over the state of the economy and how Congress has sunk the stock market.

Rodriguez decried "total ineffectiveness in the government" and asserted, "unless the government addresses cuts immediately and now (redundant, sic) as opposed to postponing (also redundant), the markets will vote completely negative on these agreements. The government and the Congress are still delusional."

He continued, "As I said last week, the economy- economic stats would be lowered. Uh, they came out negative after I was on your- on CNBC last week."

He also said, "As I mentioned more than 2 years ago that, that last time we had a credit crisis this emanated at the corporate level. I said the next time it will occur at the federal level or the sovereign debt level." David Faber said that confuses them because wouldn't rates be going up in that case. Rodriguez said they could go down then up.

George Goncalves took a page from Jimmy Carter's playbook and applied it to Barack Obama, citing a "lack of leadership which has really resulted in a crisis of confidence we have right now."

Gary Kaminsky demanded of Goncalves, "So you are absolutely seeing institutions not buying commercial paper of European banks."

Goncalves qualified that as much as possible. "That is being done in- and you're seeing that in the, you know, the weekly stats that come out. So that's all, that's all public information," he said.

Rodriguez said "This has been a complete mess on monetary and fiscal policy," and that to stop it, the government must "start looking at real cuts and not the fraud that you've been perpetrating on the American public."

Gary Kaminsky had trouble again getting the right graphic on the screen but pointed to his 3-point formula for navigating the markets next week, starting with lower yields, "I think it continues next week," and "I encourage you to continue to raise cash," and "pay attention to what's happening in high-yield."

Kaminsky made a prediction on the 10-year, saying, "I think we'll see it go through 2% next week David and stay there."

[Thursday, August 18, 2011]

Karen: Léo’s plan is like renovating the kitchen on the Titanic

Longtime HPQ backer Karen Finerman apparently sees a sinking ship.

"It's not like rearranging deck chairs on the Titanic, it's deciding, 'Oh, let's renovate the kitchen' while the Titanic's going down," Finerman said.

Finerman saw strange priorities in buying Autonomy while junking other lines.

"I gotta tell you, I really don't get it. ... On a few levels I don't get it that they're gonna go out and pay, I don't know what it is, 30 times earnings, $10 billion they're gonna spend on 30 times earnings when they can use that $10 billion to buy their own business that's trading right now at 7, or 6. What does that tell you. ... that is a lot going on."

Finerman also complained that "again information leaked out during the day ... something is off there."

But in case you're ready to bail on the CEO, Finerman said (as she did on yesterday's Web Extra, see below) the company was overrated when Mark Hurd was leaving and invoked the CEO on a first-name basis; "that wasn't all on Léo."

Back when Dr. J was trying out for the Bears ...

They saved him for the end, but A. Gary Shilling once again reiterated Fast Money's Oldest Brag Trade on Thursday.

"I've been a bull on the, on the long bond since 1981 when I said we're entering the bond rally of a lifetime, 15 and a quarter at that point," Shilling crowed.

Then, he neatly paired it with an incredibly recent Brag Trade. "It served us well today; in our portfolios we're up about 5%," Shilling said.

Shilling declared, "We forecast a recession for next year."

‘Quick’ 10, but maybe in the wrong direction

Melissa Lee on Thursday's Fast Money asked Doug Kass about that call for a "quick" 10-15% pop in the banks he made a day ago.

Kass said that would be realized "I think in the next 2 or 3 months and probably, um, an increase of 50 or 100% in the next, I would say, 6 to 12 months for the group."

Kass complained at one point that HFT was "exacerbating the sector's weakness."

He's standing by his low-for-the-year call on the S&P and figures it may get down to 1,130 or 1,150. "I see no evidence of a double-dip," Kass said, but he was unable to answer a couple people's questions about what the catalysts for the banks will be other than long-term, it'll be great for them.

Kilburg: ‘Machines’ will ‘take over’ 10-year at 1.67

Doug Kass wasn't the only one on Thursday's Fast Money singling out high-frequency trading (see, this is what happens on 400-point days).

Jeff Kilburg said it's even permeating the Treasury bond market. "I think you're gonna see the HFT, those high-frequency trade systems, come in and try and test out what Melissa alluded to, that 1.67, which is an old, old historic low," Kilburg said.

He then predicted a "1.75 test," but "once they get that 1.67, the machines take over and it could really get ugly pretty quick."

Does this mean A. Gary Shilling's bond Brag Trade is actually based on HFT?

We're trying to figure this out ... the HFT crowd is forcing people to sell stocks.

And buy bonds.

Not as many people would be selling stocks today, or buying bonds, otherwise.

And yesterday the market was flat, so evidently the HFT guys decided to take the day off from manipulating the stock and bond markets because, who knows, maybe they had a golf outing.

Got it.

So what would reinstating the Uptick Rule do for the 10-year? (See below).

Kilburg, like A. Gary Shilling, had a Brag Trade, although Kilburg wasn't claiming his occurred to him in 1981. "I called that yesterday on CNBC yesterday morning, people looked at me like I had 3 heads, that I was saying we're going to test that 2.03%, and we did, but now we have to realize, are we gonna muddle here for a little bit, are we gonna go after that 1.67? I think we're goin' after it."

Karen Finerman asked a great question, about what the low yield does for U.S. borrowing amid all the debt debate. Kilburg never answered the question, instead making a bizarre comparison to 401(k) returns and saying the low yield is the "trump card."

Melissa Lee said John Roque is also tracking the 10-year and finds we're "on track to test those 1945 lows which would be 1.67% on the 10-year yield."

Dr. J: 500-point gain possible

Those looking for a bright spot in stocks could take heart from Jon Najarian Thursday, who said on Fast Money that he was "looking for that capitulation buy" in the VIX and it happened, "now people have protection in place."

Karen Finerman asked if that means Najarian would be a seller of the VIX and buyer of the S&Ps. Najarian said that's what he's doing, and "I would not be surprised at all to see a 500-point move in the other direction very soon."

That wasn’t the greatest
Oval Office moment of all time

John Bollinger said on Thursday's Fast Money that "we just made an important low in the market" about a week ago, and that lows often retest in a W shape, and so the bands are suggesting a continued dip down for a few days before some bounce, but we won't know for sure for 3 or 4 days.

He also said "I think it's a bit early yet" for the banks.

Brian Kelly channeled his best Jimmy Carter, declaring at the outset of the show that "this is a crisis of confidence."

Guy Adami actually invoked the March '09 low, then this year's high, and found 1,020, or the July 2010 S&P level, as a 50% correction. "That's the 1 point you gotta be looking at," he said, noting banks have been trouble since January, not just in August.

Joe Terranova said right now the market's in a "very vulnerable place."

Guy said CHD "may still be in play." Adami also made a Marsellus Wallace reference to Melissa Lee, who was wearing ultra-conservative navy/black Thursday, but it wasn't clear that Melissa understood it, even after Jon Najarian congratulated Adami for it later.

Guy Adami’s nighttime tips

If you feel trapped in the stock market and are wondering what to do, consider Guy Adami's Call the Close on Thursday's Fast Money Halftime Report.

"If this is keeping you up at night, you know what, if you fail to plan, or you plan- if you plan to fail, so, call your advisor and find out."

And what ... the ... heck ... was that ...

Tyler Mathisen then opened Power Lunch citing the "happy note from Mr. Adami."

2 out of 3 ain’t bad

Patty Edwards, in chic new hairstyle again Thursday, trumpeted gold once again, saying "this is about a long-term secular thesis" and noting she has owned it 2 years, which is code-speak for "house's money."

Steve Grasso also gave gold the green light, but for his own favorite reason, that "we haven't dealt with our entitlement programs."

Zachary Karabell admitted he'd been wrong on the gold trade recently and conceded the demand for it but still managed to slip in, "it strikes me as the ultimate in emotional trades."

Peter Boockvar more bearish than most of the Fast Money gang

Peter Boockvar guested on Thursday's Halftime and declared the Fed is out of tricks and that they don't really work anyway. "I do expect continued contraction in the global economy, in the U.S. economy," Boockvar said.

Guy Adami said he reads Boockvar's e-mails and basically agrees and that "People don't wanna hear what people like Peter have to say. Nor do they wanna hear what a Dick Bove had to say a couple weeks ago."

Actually we always wanna hear what Dick Bove says and that's why we've already credited the Dickster with the likely 2011 Fast Money Trade of the Year.

But Adami's right, in general people don't wanna hear bad forecasts, for good reason; do you think Jets fans want to hear that they've filled up the roster with quantitative easing and won't make the playoffs?

Zachary Karabell said he agreed with Boockvar that it'll "feel" like a "pretty stuck economy" and that the "political process" will "augment" that sentiment. But then Karabell pointed to a disconnect between successful companies and GDP growth and that models are overrating the correlation.

Patty Edwards had her own take, saying, "I don't think we're going into a recession," but that we're "slogging uphill through 3 feet of snow both ways to school and back."

"What I fear more than recession is actually stagflation," Edwards said.

Edwards also said, "The consumer is not dead, and not dying anytime soon."

‘Everyone can be the armchair technical analyst at this point’

Guy Adami on Thursday's Halftime Report had no use for HPQ during the daylong rumor mill, saying, "I'm saying stay away right now."

Patty Edwards said "I never trade these rumors," but if you want to, at least "do it with options."

Zachary Karabell revealed "I was short some HP 32 puts which I actually covered," then made a bigger-picture statement on the company that rings true, that like Cisco, Dell and Nokia, HPQ seems like a big name "caught on the wrong side of an inflection point."

Jon Fortt delivered some HPQ updates and said "my Spider Senses are tingling," which is one of this page's lines.

Steve Grasso said 1,121 and 1,101 are the lower S&P levels to watch. Judge Wapner was skeptical. "How the heck can you make any sense of any of these technical levels," Judge asked. Grasso said it's about fib retracements, etc., but acknowledged in these markets, "everyone can be the armchair tech- uh, technical analyst at this point."

Kayla Tausche got a short HPQ update in late. We'll tackle her problematic wardrobe over the weekend.

Marvin Schwartz: Restore Uptick Rule, see ‘permanent, dramatic’ increase in share prices

The market was down sharply Thursday, which means the high-frequency trading guys, who evidently took Wednesday off, were back ruining the purity of Wall Street.

The latest to take up this cause on CNBC was investing legend Marvin Schwartz, who offered a startling prediction on Thursday's Strategy Session.

Restore the Uptick Rule, Schwartz said, and "you would see a dramatic increase in the valuation of stocks, and you'd see it on a permanent basis."

‘Social value’ and ‘stock market’ heard in the same comment

Actually, David Faber's HFT conversation with Marvin Schwartz on Thursday's Strategy Session went just like every other HFT critic's appearance on CNBC.

The host asks how the retail investor is being harmed.

The guest says something like "you wouldn't believe how much volume they're doing" and never answers the question.

(Regular disclosure: This page does not defend HFT nor even really know what it is.)

Faber began by asking about "the machines" and "the power of the high frequency traders to distort market moves," indicating that he apparently believes in the premise.

Schwartz called HFT a "major, major negative for the stock market ... it doesn't do anything for the economy. It doesn't add any value to the economy. It doesn't add any social value."

Then Schwartz said that Charles Munger "essentially said the same thing" in a CNN interview in May.

Fair enough. But since we're now talking "social value" of Wall Street, we should note that Schwartz didn't mention something even more recent from Charles Munger's business partner, who questions the social value of carried interest and billionaires paying lower effective tax rates than their office staff.

Leon Cooperman considers
running for president

It's notable that Marvin Schwartz was discussing HFT and the Uptick Rule on Thursday, a day of a market plunge, and that the subjects never came up during his initial Strategy Session appearance in January, when he called the market "significantly underpriced" and predicted new highs in the Dow and S&P within 2 years.

As we waited Thursday for Schwartz to explain how the viewer is being hurt by HFT, we got, "These high-frequency traders, uh, begin the day owning nothing, and they end the day owning nothing," and if holding stocks for more than a day is the criteria for stock market social value, then they might as well 1) cancel Fast Money, or 2) at least cancel the Najarians.

Schwartz also cited the recent WSJ article about the HFT crowd cleaning up Aug. 8 while overall stock market value plummeted, which 1) still doesn't answer the question of how the retail investor was affected, 2) the article didn't mention any regulatory concerns until the 14th and 15th paragraph and only those 2 paragraphs in a 25-paragraph story, and 3) isn't it curious that people complain about "machines" making money during selloffs but that nobody complains on The Strategy Session about Kyle Bass or John Paulson making money from the plunging housing prices.

Schwartz scoffed at the notion of adding liquidity, saying it's "useless liquidity. It has no lasting value ... it heavily, heavily consists of front-running."

He said "there was no high-frequency trading 4 years ago," until July 2007, "when the SEC removed the uptick rule ... where are the regulatory bodies."

Perhaps the regulators should just make it illegal to ever sell stock, ever.

Fellow legendary guest Leon Cooperman slightly got into the act, but was much more measured and without the verve.

Cooperman said he's in favor of restoring the Uptick Rule. Schwartz claimed restoring it would bring S&P multiples back up to more historical levels. David Faber asked, rather amazed, if the Uptick Rule is "responsible for the reduction in the multiple"? Cooperman wouldn't go there but suggested it's actually the "issue of leadership in Washington" where there's all kinds of Oz-like people with no brains, no courage and no heart.

Cooperman cracked that he was telling some investors he was considering maybe a move to "basically run for the presidency" and offered a "9-point program" to fix things. "No. 9 point was to outlaw or severely control high-frequency trading and credit default swaps," Cooperman said.

That prompted Gary Kaminsky to ask why regulators haven't addressed it. Cooperman's best response was that "Wall Street is on par with whale dung" and the regulators don't want to do anything to help it out.

Cooperman leaned slightly into the stock conspiracy theory area when he said "there's no economic reason for markets to go up 5% a day and down 5% a day," while David Faber argued mildly that it's changing assessments of the financial world.

"You may think that I'm smoking something," Schwartz acknowledged at one point.

No, only that no one on CNBC has adequately explained how a retail investor has lost money because of HFT, or adequately explained why regulators aren't stopping it, that it only surfaces on days of big market plunges, and that it seems mostly like a scapegoat or excuse for people who are either defending recent bullish calls and/or have made a career out of a risk-taking industry (stock investing) that for many retail users in the last dozen years has actually destroyed a decent amount of value without any help from the high-frequency gang.

Cooperman: Fed ‘nowhere near out of bullets’

When not complaining about HFT, Marvin Schwartz — who is good at the soundbite and should be on TV more often for that reason — and Leon Cooperman were busy being optimistic on the economy and stocks (which also suggests to us that HFT is doing long investors a favor by wrongly pounding valuable stocks, but that didn't come up, whatever).

Cooperman said he had breakfast with Bill Dudley and that economic growth is going to improve and that the Fed is "nowhere near out of bullets."

Then Cooperman told David Faber he was unleashing a list, "with your permission," of all the reasons this isn't 2008, including that banks were insolvent then and not now because they raised cash ... Corporate America's in excellent shape ... The consumer savings rate is much higher ... Debt-GDP went from 100 to 90 ... Business inventories ... Oil price declines ... Lower dollar ... Zero interest rates ...

"How long is that list, my God, where are you," Faber cut in, apparently stopping Cooperman before he got to a lot of people's favorite, "the NFL settling its lockout which is good for Disney, Viacom, beer, etc."

Schwartz said there's not going to be a recession, even though "we can talk ourselves into it" (perhaps the regulators should take a stab at general economic conversation as well).

Curiously at odds with Cooperman's point about oil price declines, Schwartz insisted "the real price of energy is the Brent price" which is up for the year and that's why he likes energy names, because the world's nearing max capacity.

Schwartz took up the Guy Adami argument with IBM, saying it's already forecast it will make $20 a share in 2015.

Cooperman said "There's an old expression, regrettably, and it's kinda more right than wrong ... in bull markets who needs analysts, in bear markets who needs stocks."

Gary Kaminsky asked both Schwartz and Cooperman why they continue to invest. "It's exciting, it's challenging," Schwartz said. Cooperman said what else would they do, "mine coal"?

[Wednesday, August 17, 2011]

There’s no leverage in the
non-levered fund, evidently

Kate Kelly and David Faber appeared together on Wednesday's Fast Money and carried on at some length about John Paulson's returns in turning the show into a mini-Strategy Session, as if Cramer had suddenly appeared to do the Lightning Round.

Melissa Lee first introduced the conversation as though they were talking about the past week, which raised eyebrows when Kelly said Paulson's "flagship fund was down 34% through Friday's close," but the screen text later clarified that 34% is actually for the whole year and not one week.

Melissa Lee let Kelly and Faber banter a while, then tried to interrupt so Karen Finerman could ask a question, only to have Faber ask a question first. "Karen, I'm curious as to what you think about that; you know, how much do you have to cut risk if you're ever down 34. Not that you ever would be," Faber asked, an odd way to put it to say the least.

"Obviously the way the math works you have to be up 50% to get back to whole," Finerman said, before finally asking her own question, about how much of the non-leveraged Paulson fund is actually levered.

"I don't think there's any leverage in the non-levered Karen," said Kate Kelly, and that's where mopes like us get lost.


Daily CNBC fashion critique

If you're one of those people who's still scared of the markets, you probably should've gotten a load of the Fast Money mango-candle conversation on Wednesday, in which there was no fear to be found on any of the traders' faces.

Instead, they went to the Westfield Topanga in Canoga Park with an on-location sizzling Jane Wells, who according to Melissa Lee was at the "largest mall in the San Fernando Valley. Wow, Jane!"

"If my husband came home with a mango candle, we would have a lot of discussion about that," Wells said, in another classic deadpan before showing a clip of "Michelle," a woman at the mall in an "Addicted to Love" T-shirt with her daughter who said that for back to school, they're basically wearing summer clothes now, but she'll shop for cooler weather stuff later, for now her daughter's just getting maybe some shoes and shorts.

"OK now that is an L.A. mom. THAT is how we roll," Wells said, after the clip ran.

That allows an opportunity for a brief fashion critique. Melissa Lee did amp it up a bit with layered, shimmering green that flattered, but Jane once again stole the show in soft mint rounded V-neck.

It was Joe Terranova who brought up the curious case of Michelle (above), saying one look at her, and "you'll understand why Limited Brands is doing well." We agree; Michelle is a prime candidate for Victoria's Secret, no question. We'd prefer to see her in something different if we were going to, say, a banquet, but what she had Wednesday clearly indicated potential.

Wells got the Victoria's Secret joke, saying, "I suppose she was going there next. No, I tell ya, they're a dime-a-dozen in this mall, guys, come on down."

Evidently, we should.

Wells also reported that "my favorite new metric" is from Brean Murray; "they look at Facebook fan comments" for various retailers, and we gotta think if you're paying someone for that kind of analysis, you might consider paying someone else.

"The Apple store here has a line out the door," Wells added, even though the Mac site was apparently down earlier.

Tim Seymour asked Wells, on behalf of Terranova, "is there a Merry Go Round or a Chess King at that mall?"

Sometimes, we’re happy just to successfully execute a sacrifice bunt

Joe Terranova impressively rolled out the baseball cliches on Wednesday's Fast Money, saying some people are looking at BAC and C as "home run" trades, when the smart money says "it has to be a Pete Rose type of a trade, not a Dave Kingman type of trade," meaning he likes JPM or WFC instead.

Karen Finerman quietly delivered another awesome line, "I was there for Pete Rose, and then I …"

Tim Seymour tried to impress with his baseball-nickname knowledge, saying, "I don't think Kong has made it onto the public eye in a long time." Ron Insana sort of did the same but only after some prodding, saying, "he was with the San Francisco Giants," but nobody mentioned Kingman's trivia high points, that he played for 4 teams in 1977, also that he hit probably the longest home runs in Wrigley Field history, and in '76 was briefly giving the Maris record a chase before injuries curbed his season.

In actual stock news, Insana said, "This is pure speculation on my part but I don't think that Bank America (sic) and Merrill Lynch stay married." Insana called this moment the "2nd great chance since 2009 to get back into the financials."

And we thought the ‘machines’ were running things

The Fast Money gang, evidenced by mango candles and Victoria's Secret and a host of other inside jokes, didn't sound too worried about European debt on Wednesday.

Joe Terranova said the fundamentals "clearly suggest" there's no recession. Guy Adami said "I do think the market wants to push lower" but that he can see a bear-market bounce. Ron Insana predicted "unconventional policy measures" by the Fed can lead to another 2010 Jackson Hole-esque binge.

Tim Seymour said "I'm one of those guys that thinks, we're gonna retest," but at the end of the show asserted, "there's a little more sanity I think in markets now … definitely an environment where I think people can now focus on fundamentals." But what happened to all those shares held "hostage" by HFT and 3x ETF programs?

Viewers don’t see Karen’s takedown of Mark Hurd

On Wednesday's Fast Money Web Extra, which we'd kind of forgotten about recently and figure everyone else has too, Karen Finerman questioned the legacy of Mark Hurd at HPQ, suggesting he cut R&D to boost the bottom line, and long-term hurt the company.

"I think he should've left it as a goat" rather than hero, Finerman said. "In fact on his watch, things weren't so fantastic."

Tim Seymour like Finerman referred to the new chief on a first-name basis. "I think the pressure's all over Léo," Seymour said.

Melissa gives Joe an unusually hard time about CACI trade that went bad

Dennis Gartman told Melissa Lee on Wednesday's Fast Money how he characterizes gold. "First of all, it's not a safe haven … it is a refuge," Gartman said, and happy trading with that.

Gartman said he doesn't think gold is a bubble now, "I suspect not yet." He also tackled crops. "You can't be short of corn," Gartman said.

It seemed like Melissa Lee was requiring an unusually long explanation from Joe Terranova about why he got zinged in CACI and why he sold. "Cutting a loss. … Bad trade. It happens," Terranova said.

Karen Finerman defended Staples. "I think it's cheap here," saying too much is made of Amazon getting into the business because Staples is already huge online. "I think that threat is way overdone," Finerman said.

"I think Target's also attractive here," Finerman added.

Jimmy Iuorio said "I like buying September 53/50 put spread" for the QQQ. Guy Adami said that Lazard "put a price target of 65 bucks" on Covance which might pan out based on the Carlyle-PPDI deal.

Karen Finerman said "I have no position" in BKS but then said what gets our Spider Sense tingling, "I wouldn't be long or short here" (but this writer has no position in BKS).

Executive producer of The Decathlon Dave Maloney talked a little trash at the end of the show, particularly when the Fast gang volunteered to enter Pete Najarian. "Sure but he's gonna lose," Maloney said.

Is Dr. J so hard-up he needs to trim a few dollars from his monthly movie-watching bill?

We always kinda figured, or maybe just liked to assume, that the Fast Money gang is a rather affluent set that enjoys the process of money raining down on one's life.

But according to Jon Najarian on Wednesday's Fast Money Halftime Report, they're actually pinching pennies just like the rest of us.

Najarian explained that he ditched the DVD option on his Netflix pricing plan, and "saved a few bucks a month from that."

It seems hard to believe that someone cashing in seemingly every day on buying the rips and selling the dips would care about "a few bucks" for movies, but even more curious is the benefit Najarian indicated from that cash flow, saying "I'll be spending them over at Redbox."

Evidently the net amount of DVDs he'll end up with will be greater than had he just kept the NFLX package. Or maybe it's the instant gratification angle of the Redbox.

One oddity of money is that it's often not about the reality of the impact, but the principle of paying or not paying for value, like why Tim Seymour might haggle over the price of his car repairs when it's not gonna change anyone's life if he's charged $600 or $800.

Dr. J was debating a report by Michael Olson, informative but not the most glib Fast Money guest, that 24% of NFLX subscribers say they'll be increasing their usage of Redbox under the new pricing plan.

Zachary Karabell called the conclusions into question, saying that people jaded with NFLX (this writer is long NFLX) have many other options besides Redbox. Olson conceded that's a "great question" but said these are people used to going to Blockbuster who just want the simple DVD.

Najarian pointed out that Coinstar has taken a bigger August plunge than Netflix, and "I like Coinstar down there at that level."

CNBC.com video sucks

Trying to watch more CNBC video at CNBC.com recently, we've discovered it's often not worth the trouble.

Many months ago the site went to a more deluxe video system, which for most videos offers a transcript in an adjacent box, as well as stock and market information and room to comment. (Some video is still in the older format.)

The problem is that we've found, on multiple computers, basically new and old computers, with multiple networks, or basically everywhere we've tried it, that each video constantly "buffers" about every 30 seconds, and when you're trying to listen to Steve Cortes, that's obnoxious as hell.

We thought this was the type of thing Akamai is supposed to fix; maybe that's why the stock's been horrible.

Karabell: Notion of U.S. confiscating European gold sounds ‘unbelievably farfetched’

Zachary Karabell wasn't on the gold bandwagon on Wednesday's Halftime, saying, "I would rather be short or out at this point."

Pressed by Scott Judge Wapner on European concerns, Karabell said, "I don't think we're going to a new gold standard," and that he heard recently "on air" someone saying that the U.S. would confiscate European gold, and in Karabell's mind, these "armageddon scenarios are unbelievably farfetched."

Dr. J said he "made a little money to the downside" on GLD puts, which presumably can come in handy when "Atlas Shrugged" or "Hangover II" turns up in Redbox.

Someone’s bound to be wrong

Brian Kelly and Stephen Weiss found themselves colliding headlong into a European debate on Wednesday's Fast Money Halftime Report.

"The press conference was a disaster," Weiss said, but Kelly asserted "there's a bull market in safety" and that the euro being commandeered by France and Germany is a "safe asset."

"Short the euro is my single favorite trade here," Weiss said.

Najarian: Gloom-mongers capable of talking us into a double-dip

Zachary Karabell said on Wednesday's Halftime that despite the gloom from Europe, "There is another reality out there … there are consumers who are spending," as well as "a lot of Europeans on vacation" including Germans in Greece, and that the debt-austerity obsession is "glossing over" legitimate bright spots.

Jon Najarian concurred that recession bluster is a fad. "I believe it is overdone," Najarian said. "We can talk ourselves into a double-dip here," he added, conceding it's been an "anemic recovery" and not what an incumbent president needs, but corporate reports have been strong and it's only a case of "we're missing on whisper numbers."

Stephen Weiss even admitted "I did buy Deere today."

Brian Sozzi admitted, "I ultimately do not know what's going to happen in the second half of the year," but praised Costco; "that's what you wanna look for here."

The "Zeke"meister credited Patty Edwards for outlining the unique situation of Saks and its flagship NYC store.

Jon Najarian said TZOO has been hopping but for not really a concrete reason, and it "looks like we could be getting near some sort of a washout in this particular stock."

Doug Kass sent a message to Judge Wapner saying he's buying XLF because "the selling is overdone" and he can see a "quick" 10-15% pop.

If China stops buying U.S. debt, don’t take it personally

Stephen Roach of Yale predicted on Wednesday's Strategy Session that the Chinese economy has a 5-year plan to move away from its more unsustainable export-to-U.S. approach and become more consumer-driven.

The result, Roach said, is that unlike now when they need to park the trade surplus in U.S. Treasurys, they'll gradually stop buying, "not because they're mad at us, not because they're disappointed with the way that we manage our fiscal- but just because they don't need to do it."

And the sluggishness of the American consumer will accelerate that, he said. "This is China's wake-up call," he said.

David Faber quickly cited his own research, telling Roach, "You said this in 2006."

"I was definitely early and probably wrong" for being so early, Roach conceded, in somewhat of a Dr. John Trade.

Roach said "it all starts with the American consumer" and pointed to what he said is the signature stat, in the 14 quarters since Q1 2008, of "average annualized growth in U.S. consumer spending in real terms, 0.2."

He said the American consumer is hammered. "They borrowed more than they ever should've, they squandered their savings," and that housing won't bounce to the rescue. "The drag is over but it's not gonna lift the economy again for many years," he said.

In what was either a compliment or a dig, Roach told David Faber and Gary Kaminsky, "You guys on Strategy Session should become more Chinese because they're the only economy in the world that actually understands the word strategy," and we're thinking, for PC reasons (and we don't mean the Dell desktop variety), it's a good thing for Roach that Melissa Lee isn't a Strategy Session host.

A 2-week pass, roughly
just like the New York Giants

Gary Kaminsky and David Faber brought on Jefferies' Kevin Lockhart to assess high-yield and its indications for the stock market, but Lockhart was stuck in "uncertainty" mode, and Kaminsky concluded that high-yield, much like preseason offenses, basically gets a 2-week pass with Labor Day on the horizon.

"This should be the time for the high-yield market to be in the absolute sweet spot," Kaminsky said, but Lockhart said investors are wary of "potential economic volatility," and that right now it's "pause time."

"We at least need some stability," Lockhart said.

Gary Kaminsky said someone just told him there's an "80% chance of recession." Lockhart said it's a matter of "technical issues," and "I think the bond guys are responding to those," even though those "technical issues" he cited including economic outlook and credit difficulties sounded a lot more to us like fundamental issues, but whatever.

"August is traditionally a slow time," Lockhart conceded.

Kate Kelly reported that 64% of IPOs this year are under water from the offer price, and Gary Kaminsky pointed to the infamous Skullcandy chart as one example; "where was the due diligence," Kaminsky complained.

David Faber pointed to activity in patent player Interdigital and complained he's getting too much attention, presumably from his many sources. "By the way I've gotten literally about 150 e-mails about this company; please stop with the e-mails," Faber said.

Gary Kaminsky saluted Faber's early focus on the IP scene. "You were totally in front of this," Kaminsky said.

[Tuesday, August 16, 2011]

Mike Khouw doesn’t get it

The folks on Options Action are constantly telling viewers that options are great for measuring exact risk and for taking risk with smaller amounts of cash.

So of all things, Mike Khouw on Tuesday's Fast Money suggested selling NFLX upside calls.

Khouw explained that holders of the stock who don't want to get out should try to "enhance the yield" by selling the December $250 call for $24, not for any believable reason Khouw could cite, but because "now it's looking like there are some headwinds" of unexplained specifics.

Aside from the absurdity of NFLX holders wanting to cap any gains through December at a level beneath what it traded less than a month ago, Khouw didn't bother to recommend a put collar, as Dan Nathan suggested, because Khouw says even though he would love that option, the people who own this stock think there's no downside, and right then and there, our Fast Money Spider Sense starts tingling, like when Karen Finerman says "I wouldn't be short, I wouldn't be long." (This writer is long NFLX.)

"Personally, these valuations make zero sense," said Khouw, evidently ignoring that whole "price is truth" thing.

David Greenberg still never really answered Brian Kelly’s question

This page has been harping for a week now on the HFT-is-artificially-running-the-markets theory only because it only surfaces on Fast Money during big market swings (apparently between early August and the 2010 Flash Crash, HFT took 15 months off), and no one who complains about it has adequately explained why it matters to Fast Money viewers.

(Note: We don't endorse HFT and really have no clue exactly what it is.)

So David Greenberg visited the Nasdaq Tuesday to make just such a claim, and as soon as Brian Kelly asked the relevant question, how the little guy is hurt, Greenberg followed with the typical non-answer, which was just to state the huge amounts of trades being regarded as HFT.

"The high-frequency traders do a lot of quote-stuffing," Greenberg said. "It gives a false sense of where the market is," adding that in the NYSE, "you can do a million quotes in a second," as though home viewers can grasp the significance of that if there even is one anyway.

But Kelly wasn't giving up so easily and demanded an answer.

Greenberg said it involves putting in stops: "You're going to get hit, and probably before you get the fill, your stock is probably back up if not higher than it was."

So, if we understand that correctly, the HFT guys are ensuring that everyone is going to sell their shares below where the shares will trade the rest of that given day.

Because during high volatility, the stocks weren't actually moving down 80 S&P points, it was just the "machines" holding them "hostage" and making you feel that way.

And these fraudulent market prices are occurring while the government, which is blamed every 5 seconds on CNBC for trampling on financials with burdensome regulations and implementing dubious short-selling bans and creating general "uncertainty," apparently doesn't see this as a subject worth addressing.

And perhaps the CIA had someone on the grassy knoll ...

Greenberg warned it's only going to get worse. "The moves that you've been seeing now, believe it or not, are gonna look incredibly small and slow compared to what's gonna happen in the future," he said.

Rich Repetto does his best under challenging circumstances

Speaking of financial transactions, Richard Repetto was brought on much earlier on Tuesday's Fast Money than David Greenberg (that should tell you something) to tackle the "financial transaction tax" supposedly in the works in Europe.

"The NYSE has the most sensitivity of volumes over in Europe," Repetto said, while explaining the whole thing is very iffy right now and who knows whether it will happen.

"It seems like there are a lot of 'ifs' in this," concluded Melissa Lee, asking for a trade based on the little we do know now. Repetto reiterated that the NYSE has the biggest exposure but also took the biggest hit, while ICE took the 2nd-biggest hit.

If there was a way to short the prospect of AAPL buying NOK, we’d try it

Peter Misek actually claimed on Tuesday's Fast Money that Apple will be prompted to respond to Google's MMI purchase with a deal of its own for wireless patents, which are the new cloud computing apparently.

Misek claimed that HTC, QCOM and NOK would be in AAPL's orbit, but that only Nokia is a "digestable" one.

Such a takeover over a few years could pay for itself, Misek said, saying, "Could be a very good ROI if they were to spend 10 to $15 billion to do that."

Karen Finerman later spoke about the deal, saying this type of deal troubles her because it's sort of a business model change with the vertical integration, but in this case "It's really not that big of a deal," and thus GOOG has been "excessively penalized" by the market in her opinion.

Misek said RIMM got an "overreaction to the upside" based on the news and is really worth $20.

Léo advisory

Brian Kelly said on Tuesday's Fast Money there was something historic in the Merkel-Sarkozy conference Tuesday; "that was the moment that France and Germany took over the euro."

Kelly said it would be strong for the euro, which prompted another great question from Karen Finerman in sizzling sleeveless orange, asking if that means Kelly is saying Europe will stay together and that is bullish.

Kelly, unfortunately experiencing a bad hair day in the Tim Seymour seat of all places, answered that what matters is that Germany and France are together and issuing essentially ultimatums to other members to shape up or ship out, and that, "Either way the euro becomes a stronger currency."

Dennis Gartman recycled his Halftime commentary on the European situation and explained, "it really is bullish for the gold market."

Karen Finerman noted that Wal-Mart has "flat-lined" practically since she's been alive (which of course isn't true), but that the company has 25% international sales that is significant but trading at the U.S. multiple.

"I think Costco has the right strategy," said Joe Terranova, another recycled line from Halftime. Stephen Weiss, in one of his few lines, said of WMT, "I still think it's a value trap."

Finerman suggested WMT consider buying FDO as a way to get into "urban centers" rather than fighting all these city councils, though if she thinks MMI was an insignificant deal for GOOG...

Finerman said Dell's report is "probably not a good read for HP," so we'll be sure to keep tabs on that one.

Joe Terranova said, "EMC would be a trade off of this."

Dan Nathan stomped on LULU. "That thing is broken; that was ill today," Nathan said, but Terranova bristled, "Go easy, I'm still long," and if that thing is indeed broken, then we're starting at quarterback for the Steelers on Thursday.

Wonder if the Nordstrom customer ever goes to Dollar General

Patty Edwards, shut out the entire first segment by a Europe-trigger-happy Judge Wapner, gradually gained momentum and seized control of a sleep-inducing episode of the Fast Money Halftime Report on Tuesday.

"Home Depot is eating Lowe's lunch," Edwards said, focusing on the customer experience, and "Frank Blake is absolutely the man."

Edwards also got 2 cracks at the SKS story, first explaining (as she's done before) where 25% of the revenue comes from (NYC flagship store, much from European visitors), then reiterating the importance of where that money comes from and explaining she likes Nordstrom.

Brian Kelly scoffed at WMT and DG while conceding Warren Buffett, while older than Kelly is, has a longer time horizon, but "Neither of these stocks do I want to own."

That prompted Joe Terranova to declare, "You wanna own Costco" for when rich folks trade down, which prompted Patty Edwards to clarify, "That's not a trade down for them because the Nordstrom customer is the Costco customer."

Edwards, dubbed "the queen of PE" by Judge Wapner and featuring a sprightly new hairstyle and borderline Jackie Brown "badass" suit look but not quite the original Jackie Brown look, also touted Philip Morris International and Herbalife in Call the Close.

Gartman: ‘It’s disastrous’

Judge Scott Wapner on Tuesday's Halftime turned to Simon Hobbs on Europe and Eamon Javers on the Rick Perry fiasco, and then to Joe Terranova to tie a ribbon on the whole thing.

"This is all about a world of debt," Terranova said.

Brian Kelly complained about a lack of urgency; "the European leaders just don't understand how bad it is," but it was Dennis Gartman who was most disgusted by developments across the Atlantic.

"It was the meeting that wasn't," Gartman carped.

Zachary Karabell convincingly outlined why the Merkel-Sarkozy show was more about internal politics and less of a global-market-calming event and that expectations of foreign investors shouldn't have been great, but Gartman was unswayed.

"I am so utterly skeptical of what this meeting was," Gartman said. "I think it's disastrous to be honest."

Brian Kelly said in Call the Close he's a seller "until we get a globally coordinated solution to the imbalances." Judge Wapner cracked, "Maybe you're gonna be a seller for a while then."

Maynard Um said a lot of fast money traders are playing Dell. "It's a rent not own type of market," Um said, but "I do think there is a long-term story here."

Zachary Karabell deadpanned that Renren's drop is an indication that the lack of a Eurobond and fears of a U.S. double-dip signal "fewer Internet users in China." (Yes, he was joking, evidence by his leaning posture.)

‘Huge disconnect’ between
market, state of economy

Morgan Stanley Vice Chairman Rob Kindler mildly complained he had to share Tuesday's Strategy Session with the Merkel-Sarkozy news conference, then proceeded to make every minute count in summarizing August's stock swoon.

Kindler said "There's a huge disconnect between the market and what's actually really happening out there," and that "actually business is relatively good across the board."

"I think this is really a financial crisis, not an economic crisis," he said.

He added that "CEOs just don't understand" what's happened with their stocks given the conditions they're seeing.

He predicted amid skepticism from David Faber about Q2's results that the M&A scene will be "very active" as long the stock market sees a "narrow range," but "if there are wide swings in the market, then M&A will dry up."

Kindler finally suggested that dividends are going to become popular. "There's gonna be high-growth companies, I predict, putting yields on their stock," he said.

‘China is years away’
from reserve currency

Before Rob Kindler took a crack at economics on Tuesday, Marc Chandler spoke on the Strategy Session about Chinese currency irritation.

"The Chinese are frustrated with what is going on," Chandler said, but he added that Americans shouldn't be worried about the whole "reserve currency" thing. "China is years away, if not decades away, from being a reserve- a real reserve asset of any kind of gravitas," he said.

Simon Hobbs, reporting a couple times during Tuesday's Strategy Session about the Merkel-Sarkozy conference, said Europe is "upping the ante" on greater fiscal coordination. The crew mentioned "euro bond" several times before Hobbs clarified late in the program, "there are not gonna be euro bonds any time soon."

Gary Kaminsky decried WMT's buybacks as "terrible capital allocation ... I think they should just spend the entire free cash that they're distributing there on dividends."

[Monday, August 16, 2011]

Month of August deals blow
to James Altucher’s 20,000 Dow

James Altucher returned to Fast Money on Monday undaunted by the August market selloff on his Dow 20,000 in 2012 prediction.

"Stocks are obviously cheaper now," Altucher said, and he "absolutely" stands by the prediction.

Pete Najarian, who said "I wish I had your hair," questioned if that could happen with unemployment and housing still facing headwinds. Altucher said "housing's doing the best it's done in 5 years" and that unemployment hasn't stopped companies from excelling in the last couple years.

Altucher said all it would take is for XOM and MSFT to double, and you'd see the averages skyrocket.

Altucher got something of a dis from Scott Nations, who said in his Final Trade he was selling Dow 20,000 by year-end, but the prediction has always been sometime in 2012, and Nations was reacting to someone (probably Melissa Lee but we can't recall) saying during Monday's program that it was "by 2012."

Steve Cortes challenges
Carter Worth with
a Brag Trade

Carter Worth revisited the Fast Money set Monday and also revisited this dubious notion that whenever stocks fall, they'll never climb past the most recent plateau level because all of those people who bought then are not the ones who sold to make the shares go down but will be the new sellers as soon as the shares go up (you know, the Yogi Berra crowded restaurant thing).

Worth argued that the sharp reverberations this month have established the year's high and low for the market.

"There are so many dead bodies up above, unhappy shares, that even as we recover, come out of the woodwork to be made whole, to recoup losses," Worth said, for an upside ceiling, but then he assured that the bottom's probably in because early August looked "capitulatory."

Steve Cortes was not impressed at calling tops and bottoms 100 and 200 points apart saying it "is somewhat like telling me the Yankees are good and the Cubs stink ... what are we supposed to do with this?"

Cortes followed with a Brag Trade: "Last week I was pounding the table when we were near those lows, saying that this was the lows of the year," and suggested what people need to know now is where it goes from here.

Worth claimed his opinion is an "important judgment" because he's been hearing from a lot of people who say we'll be retesting the lows in October and breaking through them, which apparently would make Worth sort of a contrarian himself.

How come nobody calls early August a ‘healthy correction’?

We figured with the market going up, we were done hearing about high-frequency trading for a while, but Tim Seymour on Monday's Fast Money still seemed pained by the activity of last week.

"These markets aren't free anymore," Seymour claimed, saying 65-70% of the volumes were HFT last week, and the 3x ETFs were causing trouble. "There's a problem here. The infrastructure of the market can't handle this, and, and the regulatory folks are not able to handle what the high-frequency traders are doing, and manipulating this market ... it's noticeable, the lack of participation by those same guys that when you combine with algos, really exaggerate the moves down."

So if the moves down were "exaggerated" simply by computer programs, shouldn't people have been buying woefully undervalued shares?

At least Seymour didn't quite go as far as last week's argument that stocks were being held "hostage" by program trading.

Notice that when the markets sell off a little bit, Carter Worth calls it a "healthy correction," but when the market sells off a lot, he never says anything about healthy or unhealthy.

Carl Icahn delivers facial
to (absent) Karen Finerman

Carl Icahn was crowing I told you so to the Fast Money gang on Monday in the wake of the Motorola Mobility deal.

"We had a pretty good weekend," Icahn allowed. "I remember I used to take a bit of guff from all you guys ... I think it was Karen or somebody was saying that I need intervention on Motorola, so I'm just laughing about who needs the intervention now."

He called purchases of MOT pre-breakup a "no-brainer" because it was "undervalued mathematically."

"He who laughs last, laughs best," Icahn chortled at one point.

Melissa Lee asked about a higher bid for Clorox. Icahn said he was "certainly not gonna get into that at this point."

Guy Adami was asked about Warren Buffett and Dollar General and indicated he's as high on these useless filings as we are. "I hate following these guys into these things," Adami said.

Joe Terranova: Everyone
wins in GOOG-MMI deal

Joe Terranova offered the most eyebrow-raising comment on the MMI takeover on Monday's Fast Money, asserting, "I think this is good for everyone," then rattling off HTC, Nokia, Microsoft and RIMM.

Guy Adami later said, "Win-win? Don't believe it." He thinks it will give RIMM a boost to $28-$29, where it would be prime for shorting.

Tim Seymour said of GOOG, "I think they overpaid for it."

Todd Gordon predicted a climb in the euro up to 1.51 or so but "longer-term, I think the euro's a sell."

Mark Wiltamuth for some reason was brought onto the Fast Money set to express an equalweight rating on WMT, which he said has "got some company-specific issues" but needs to energize U.S. same-store sales. Then, everyone made fun of Guy Adami and the 6-inch protractor, stressing the "6-inch" part.

Guy Adami predicted the S&P would approach the resistance level of 1,246.

Rich Ilczyszyn will buy gold if it goes up, or goes down, but evidently not as long as it stays where it is

Rich Ilczyszyn sounded like he was basically in no-man's land on gold on Monday's Fast Money Halftime Report.

The Ilchynmeister first rambled through a 4-point analysis like Kahlil Bell rambled through the Bills' defense, apparently rattling off reasons why gold might be toppy: open interest drop, GLD/SPYder, CME margins and technicals such as RSI, and probably only 2% of viewers knew exactly what he was talking about in all 4 of those situations.

Anyway, "the market's still a little bit overextended," Ilczyszyn concluded.

But then guest host Simon Hobbs pointed out that Ilczyszyn reported off-air he would buy if it topped $1,870. Hey, "I'm a momentum guy," Ilczyszyn acknowledged, saying the investors are on the sidelines.

Mostly, though, he was pegging $1,650 as a "good basis of support" and indicating he would like to buy between $1,650 and $1,680. Steve Grasso asked if it might get to $1,500. "I don't think it's gonna get that low," Ilczyszyn said, though he mentioned the FSG and said if the S&P surges we could "maybe see some of that unwind."

Steve Cortes said he dislikes the "immensely crowded" gold trade and that if the S&P gets over 1,200, "then I think gold is really in trouble."

Ilczyszyn didn't answer a question about the refiners as a play on the Brent spread, calling it a "good question" and leaving it at that, but he did say that if there's clarity soon in the Libya situation, "if that's the case, that narrows," so be careful.

Cortes ‘commends’ GOOG

Steve Cortes, who made a tremendous call a week ago on the "Jeffersons" stock market "movin' on up," shied away from nothing on Monday's Fast Money Halftime Report while recent rival Steve Grasso continued to stay quietly in S&P wait-and-see mode.

But Cortes ran into a buzz saw in Pete Najarian after Cortes re-touted WMT. "I would buy more above 50," Cortes said, citing "massive decline in energy prices."

Najarian asserted, "I like the dollar names far better," even though you're not getting the dividend, but the price appreciation is there.

"I might be missing the boat here," Cortes conceded, and Najarian said they'd talk after the show.

Cortes took a contrarian approach to GOOG. "I bought Google this morning," he said, and in what sounded like a bit of wishful thinking, added, "I really commend the company for putting its cash to work."

But Colin Gillis indicated that Google is in a pickle regarding this deal. "If they, you know, are true to keeping Android open, then, you know, it doesn't mean anything," Gillis said, unless, on the other hand, Google opts to be "disingenuous" to the other Android ecosystem names it backs.

Gillis dodged a question on where RIMM is going but said "we like Microsoft as a derivative play."

Pete Najarian in calling a winner said it looks like it was Motorola Mobility and that the GOOG price response "speaks for itself."

Najarian said something about MMI was "up every single session last week," although stock price and volume were not, so maybe he meant option interest.

Steve Grasso said "It seems like they paid too much for the patents." Najarian said of RIMM, "they become very very interesting," perhaps attracting a buyer such as MSFT. Steve Cortes revisited his bad RIMM trade but said it's worth a look in the 23-24 range with risk to 22.

Cortes said he thinks "there's serious value" in JNJ and threw in a Brag Trade, that he bought around $60 last week, but Najarian said he prefers PFE and MRK.

Brian Kelly was quiet as a mouse, perhaps fearing Simon Hobbs would reveal further e-mails he sent. But at one point Steve Grasso pointed to 1,200 in the S&P and said that's a "better analytical approach" than what Kelly offered about the euro.

1 of world’s richest people thinks taxes are too low

Brian Sullivan and Gary Kaminsky chided Warren Buffett on Monday's Strategy Session for his soak-the-rich NYT op-ed, and while the hosts' commentary was particularly inflammatory, it does beg a bigger question.

Kaminsky said that rich people who are troubled about taxes can write a check and that the IRS has no problem with people paying more than they owe. Sullivan suggested Buffett can change his income stream, which we're not totally sure about, saying, "if you do pay yourself in capital gains and dividend income, and then moan that the tax rate is lower than your secretary, you can pay yourself in ordinary income."

Quite frankly, Kaminsky is right, and that if Buffett thinks he should pay more, he should simply write a check.

It comes down to whether one thinks the money is better off in his own hands, or the government's hands.

George Bush may not have been that clever, but his 2001 tax cut tripped up many a liberal critic who opposed it. That was the year the government shipped $600 advance refund checks to people. Basically everyone who opposed the cut cashed the check anyway. If they were against it, why did they accept the cash.

The only argument of sound logic would be, "my peers are also getting these checks, and if I don't cash it, they'll get ahead and I won't." But we're talking about $600. It's a TV set, not a business enterprise.

Meanwhile, if they tore the check up, it would have exactly the effect they purport to believe in — more money for the government, and rare control over a government decision.

If the government is debating where to build a new bridge, and your view does not prevail, it is pointless for you to avoid the new bridge once it's built. The same cannot be said for accepting a tax cut/refund, in which rejecting the government decision would help your ideological position that the government, and not you, should be appropriating that $600.

Doubtlessly, what Buffett's 8-figure pals will quietly argue is that they're giving gobs to charities and other causes, and while they may not balk at a tax hike, it'll just siphon the money from the hospital, museum, university and orchestra pool.

Motorola Mobility
price ‘reasonable’

Monday's Strategy Session picked up right where Friday's daylong CNBC letdown coverage left off.

Guest host Brian Sullivan, chipper as always, struggled in vain to seize on a polarizing subject that would ignite some video clicks around the Web or get picked up by Dow Jones Newswires. Quite frankly, for 2 straight days of huge S&P gains, everyone seems a bit emotionally tapped out, more in a state of relief that we avoided 3-digit S&P rather than euphoria over the money made in the last week.

Sullivan noted he went to Wisconsin over the weekend to "calm myself down."

The clunker of the day was when high-yield expert James Keenan couldn't or didn't answer Gary Kaminsky's question about the percentage of failures in a typical well-managed high-yield portfolio, instead calling it a sector with "cyclical" rates of failure.

Keenan mostly had generic thoughts; "there's still too much leverage in the system," but high-yield represents "good value on a standalone basis … the Fed is committed to creating nominal growth."

Keenan also touted the "relative value" of high-yield, which he said recently fell 4% as equities fell 20%, as Gary Kaminsky borderline scoffed at "relative" and mentioned closet indexers for the 1st of 2 occasions on the program.

Michael J. Price commented favorably on the Google-Motorola Mobility deal. "This deal's really all about patents," Price said, and was "quite a reasonable deal" for GOOG. "I really think what drove this transaction was the Nortel process," he said.

Gary Kaminsky pointed to some legalese-sounding language in an Estee Lauder forecast reflecting on recent Europe and market trouble. "This is a CYA," Kaminsky said, suggesting it's possible we might see these kinds of statements from others. Kaminsky also pointed to Steven Cohen's market-neutral forecast at SALT.

[Friday, August 12, 2011]

Patty: Play offense with WLT

Friday evening, CNBC opted for an hour of (mostly live) business programming to recap the volatile week in stocks, featuring Bill Griffeth and Amanda Drury, and while it's always great to see Mandy & Bill Griffeth, one might wonder if this particular broadcast was a make-up call for skipping live coverage of the downgrade a week earlier.

Anyway, Mandy and Bill put together a little Fast Money featuring Patty Edwards and Stephen Weiss, in which Edwards recommended one notable Fast Money name not in the banks that's undergone a stunning pounding.

"I'm gonna play a little offense, and a little defense," Edwards said, before rattling off WLT as her offense pick.

After such a big fall, Edwards says she could "see a lot of upside there."

She also likes Bank of Montreal, plus JWN, COP (though it wasn't clear if all those were supposed to be defense; JWN strikes as maybe an offense-type name).

Edwards said she sees a "little bit of an overhang" for stocks from Tuesday's Germany-France meeting, but "I think we're close to the bottom."

Weiss likes COP, QCOM, JPM and NS, in particular NS.

Jane Wells in L.A.

This page is always aware of whenever Jane Wells makes a bigger splash than usual, and Friday afternoon, in a segment that got clipped throughout the day, Jane sizzled up the streets of L.A. in ruffled top while conducting a slight parody of the "do you know where your money is" slogan that featured at least one very attractive young investor.

Wells said "The Hubbanator" was told "Stay the course" by his financial advisor.

Sounds like Brian Kelly during commercial break demanded Simon Hobbs issue retraction

You know that according to "Road House," Rule No. 2 of bouncing is "take it outside ... never start anything inside the bar."

Yet, Friday on the Fast Money Halftime Report, Simon Hobbs announced to the world that Brian Kelly had been "swirling" inboxes with e-mail of SocGen "stories" a day before French regulators announced an investigation into SocGen rumor-mongering.

So Hobbs evidently found Kelly the perfect guy to ask about that probe.

"Well, I mean, you know, they should," said Kelly.

Then Hobbs brought the issue home. "You were swirling around yesterday with negative stories on, on gold from Alphaville, or I mean, you, you, you in a sense, you, you were part of this, this general belief, this general communication, BK, that there are questions, big questions to answer, on SocGen."

"What I was sending to you was just simply, this is the information that's out there," Kelly said. "As I said in that e-mail, you know, that's not my area of expertise when it gets to the gold forward rates and all of that. So, you know, this is what's out there; I, it, you know, it's just public information."

They went to commercial break. And when they came back, Hobbs made this announcement:

"And BK, let me be very clear. Before the break I was not suggesting that you were in any way spreading false or scurrilous rumors, I was just suggesting that it was part of a swirl that was going on yesterday. In your case of course, it was more about well-documented trades, uh, through the Financial Times."

Those 2 would've benefitted from being aware of Dalton's 2 other "Road House" rules, which for Kelly would be (1) "Expect the unexpected," and for Hobbs (3), "Be nice."

Steve Grasso doesn’t respond to Pete Najarian’s indirect dig

Simon Hobbs asked Pete Najarian about the big banks on Friday's Halftime, and while Najarian said you might get some short-term bang for the buck in a name like BAC, be careful.

"These are only trades. These are not investments. Unless you're looking 5 years out and you're actually trading on hope. I don't like to trade on hope," Najarian said, and we're only aware of 1 Fast Money regular recently who has spoken of a 5-year plan, for holding bank stocks.

Kate Kelly looked good in bright red (might've been orange on some TVs), but we can't figure out why her distinctions between JPM and BAC were drawn out for so long in mystery fashion.

Pete Najarian actually claimed of Jamie Dimon, "Basically he's the Steven Jobs of the financial world."

Patty has pizza Friday

Simon Hobbs unleashed some quality air time Friday for Patty Edwards, who doesn't often get more than a couple soundbites from Judge Wapner.

And since someone had to do the Fast Money ag trade, Edwards was the perfect choice. "Yes actually I have bought a little bit of Potash, I picked up a little bit more Syngenta this week, trimmed some of my losers," Edwards said, but cautioned against jumping into the market on Friday. "You don't wanna go in there long."

Edwards claimed she researched the 2008 ban on short-selling and found, "Things sold off horrendously after the ban was lifted," so she doubts it'll be good for Europe and thinks the prospects are very dicey for American banks. "Contagion fear is still very real, and I would not go anywhere near the U.S. financials," Edwards said.

Edwards also revealed, "I am still holding my gold position. I think the uncertainty out there will get gold, as Grasso said, up to $2,000," but she didn't mention this time that it's on the "house's money" now.

Once again viewers got the Fast Money "you have to be really selective in retail" lecture, with Patty noting JCPenney has ditched guidance, while at JWN, "I absolutely adore the management team there."

Edwards celebrated Call the Close with "Going out as flat as the pizza I'm having for dinner," which suggests she's not having Chicago deep dish, but let's hope it's something more exciting than Domino's.

Grasso: Watch 1,172

Steve Grasso has been on his heels for a couple days as the stock market has indeed successfully tested his magic 1,172 level, but he remained fixated on the number on Friday's Halftime.

"Watch the 1,172 mark; I would trim some profits if anyone has them out there," Grasso said.

Brian Kelly seemed to think industrials are artificially high. "I would be a seller; I think this is a gift here," Kelly said, questioning the merits of extra-extra-low interest rates and also saying, "I'm short silver at this point."

Rebecca Patterson didn't talk about gold gone wild and bikini, but she did say, "I feel like the global economy but especially Europe has turned into a big game of Whack-a-Mole. ... So anytime you get the euro rallying on relief cause the mallet's been brought out, I wanna keep selling it. I don't think we're done."

Kaminsky: Trump made ‘single best stock call’ on CNBC all week

After a monstrous week in the stock market that brought hyper-ratings to business television, it only seemed fitting that CNBC Friday would experience something of a letdown.

A lot of recap, a lot of slogans, a lot of looking ahead, such as Steve Liesman talking on The Strategy Session about his vacation beginning in 3 hours.

Gary Kaminsky bashed the upstart strategists who were comparing this week to the Reagan era; "these guys were in diapers in 1987," Kaminsky said, insisting nobody knows and that such analysis is merely "garbage in, garbage out."

But Kaminsky hailed Donald Trump's Squawk Box announcement of buying assorted names including JNJ and PG, calling it the "single best stock call on the network all week."

Steve Liesman: Fed action like
‘those helping Africa commercials’

Many times Steve Liesman finds himself on CNBC defending his basic reporting about Fed activity against network hard-liners who can't stand the central bank and instead of writing a letter to Ben S. Bernanke for some reason feel compelled to take their gripes out on Liesman.

But when hosts or pundits engage Liesman in thoughtful conversation about policy, he usually has provocative opinions to share, such as when guest host Joe Kernen questioned on Friday's Strategy Session why more people shouldn't just want the Fed to do nothing.

"It's Chinese water torture … sooner or later it's self-defeating," Kernen complained of QE-and-beyond or whatever this basically-zero-rate-forever concept is known as.

Liesman sort of concurred, telling Kernen "I'm kind of in that camp" that says QE2 might've failed because it jacked up oil which then harmed the economy, then admitting with a bizarre parallel about endless Fed assistance to the economy/stocks, "It's like one of those helping Africa commercials. If you have the power to spend a dollar a day, right, to help famine and help hunger."

Liesman reported that according to the Fed survey, only 12% recommend doing nothing. Gary Kaminsky asked if there were some off-the-wall write-in suggestions, and Liesman said there were, such as recommendations for setting a 4% inflation target, or targeting 4-5% nominal GDP, or even (the most notorious) "buy stocks."

In contrast to Gary Kaminsky's praise of Donald Trump's call, Liesman claimed S&P had the worst call of the week given the demand for Treasurys, although that was actually last week. "I bet debt had a better week than the stock market did," Liesman said.

Gary Kaminsky jabbed Liesman about "your friends in D.C.," though Liesman insisted "I've been good friends with Republican administrations as well."

Kaminsky asked if the people in D.C. will summarize this week as wild stock market, but no recession, economy fine. Liesman slightly protested, saying, "I think we're gonna call this runs of August … the sound and fury," and hopefully none of those nicknames ever comes to pass.

Kaminsky: Banks must be ‘somewhat’ in leadership to make S&P highs

Gary Kaminsky spoke Friday of what is bound to be an ongoing debate, whether the stock market can really go anywhere if names such as GS, BAC and C are getting walloped.

"Banks have to be somewhat of a leadership group, I think, for the S&P, for the overall market to make highs," Kaminsky said. "That was not the case in the early part- mid part of the spring, early part of the summer, but certainly came true in the summertime."

Guest John Brynjolfsson noted the expanding caretaking of the central bank. "Essentially, the money markets have now been sucked into the Fed, uh, realm, by this action. the statement to hold Fed funds down through 2013, i think is essentially, um, a statement about the Fed's dual mandate, as well," he said.

Guest Bill Irving said, wasn't this a great time to be in the Treasury market, and as far as recession possibilities, "I think that it's definitely grown, it's somewhere between a quarter and a half."

[Thursday, August 11, 2011]

They have.
We haven’t.

Melissa Lee acknowledged on Thursday's Fast Money, "We've been making so much of the role of machines in all of these big moves in the markets."

Roubini Group claimed just 2 months ago that 1,300 would be a ‘big correction’

You'd think that if the stock market were going to crater into bear or near-bear territory, some guy who goes around with the nickname "Dr. Doom" would've been the one to predict it.

No. Actually, it was Dick Bove.

Meanwhile, Gina Sanchez of the Roubini organization was saying this on Fast Money back on May 31: "You could get a correction down to, you know, 1,300 ... that's already, you know, a big correction compared to what people are expecting on the markets."

Evidently, not nearly big enough.

Sanchez returned to Fast Money in June and issued a year-end forecast of S&P 1,350.

But nobody on Thursday's Fast Money asked Sanchez about those forecasts, which would be a serious bull call if she still believes them, instead listening to her say that now, we're either going to have a recession, or we aren't.

Sanchez, who remotely resembles Michelle Caruso-Cabrera but is not as pretty as Michelle Caruso-Cabrera, insisted, "Either way we're in a growth recession," and "we're neutral on commodities."

She did add, "We're overweight credit" and prefer "emerging market equity relative to developed market equity."

Later Ron Insana revealed that he and Roubini have been on the same speaking circuit, and with all due respect to the Insanameister, who's one of our favorite pundits, that's the type of circuit whose existence is sort of proof that a lot of people still have too much money on their hands.

Anyway, Insana asked Sanchez about a Roubini quote about capitalism and whether he's trying to be "purposely inflammatory" or whether he actually believes it.

Sanchez said Roubini's view is "we need to get people to work."

Or, maybe we need to leave people alone, and let them find out where the work and value is on their own.

Lon Juricic fares no better than Herb Greenberg a day earlier

This page just said that Melissa Lee is too conservative in her clothing choices (see below) and perhaps Melissa took the cue Thursday, turning up on Fast Money in a lovely scarf, although it doesn't seem like a game-changer.

Nor was the opinion of Lon Juricic a game-changer either, after it drew visible frowns from Karen Finerman and Melissa Lee.

Finerman asked, and Lee chimed in, whether the dollar amounts of insider stock buys recently reported actually constitute a lot of money on the part of these high-net-worth individuals.

Juricic first claimed someone at CTAS bought $70 million and that's a big deal, then stammered, "You see those big buys and you just see 'em as a whole, the whole group, the whole sector, you have to, to play that."

Ron Insana needs to crank it up a notch, start saying something decisive, take a stand

Guy Adami on Thursday's Fast Money drew hearty laughs — namely from female colleagues Karen Finerman and Melissa Lee — when he declared, "I don't think the bottom is in by any stretch, and I like bottoms as much as the next guy."

Yet, given the jocularity and joviality of the panel, we had a very strong sense that the Fast gang truly thinks, like Steve Cortes said, we're movin' on up for a while. (That's not a prediction, just an observation.)

Joe Terranova, adding a twist to the "All the President's Men" line, recommended investors "follow the money flow," when Terranova indicated is signaling don't short.

Karen Finerman, wearing an appealing white sleeveless dress with blue trim that cost an estimated fifty-six-hundred dollars but did not wear those glasses everyone thinks are so sexy, said, "I do think some of the volatility's behind us."

Ron Insana tried to parse it to the nth degree, saying, "The bottom is being put in place, but I don't think we're there yet."

Mike Khouw argued that we're "bound to start seeing some plain-vanilla rotation from the, from the fixed-income side into equities."

Pete Najarian wasn't fully convinced of anything. "We look like one of those BRIC nations, the way we're trading .. they've removed the stairs; it's elevator up, elevator down." Pete also disagreed with Terranova that money will come out of gold into equities; "I don't think enough money came out of gold," Najarian said.

Guy Adami should not have given up on this topic so soon but forced Mel to deal with it

It's always a treat when a sexy CNBC star such as Michelle Caruso-Cabrera interrupts Fast Money for breaking news, and MCC did just that Thursday, reporting that 4 countries (the screen text said "Belgium, France, Italy, Span (sic)") were banning short selling.

Karen Finerman, who could give Greg Zuckerman a run for his money had she entered journalism instead of risk arbitrage (money isn't everything btw), asked Caruso-Cabrera if this draconian-esque rule was merely a ban on naked shorting, and we just put "Caruso-Cabrera" and "naked" in the same sentence, oh my ...

Caruso-Cabrera said she had "no clarity on that."

Guy Adami slugged another extra-base hit on this topic, wondering aloud, "I wonder why the shorts need to be disadvantaged when you can buy things willy-nilly," then for some reason insisting he had to move on.

Ron Insana said he couldn't reveal the exact conversations because he signed a confidentiality agreement, but there are so many ways of getting around no-short-selling rules that they really don't matter.

And isn't it curious how no one complained about HFT on Thursday.

Najarian: buying BX

Pete Najarian did say on Thursday's Fast Money that the market see-saw is good for at least 1 name, BX. "I think there's a lot of upside still," Najarian said.

Joe Terranova tried to argue that the banks are a buy because this isn't 2008. Najarian countered, "But where's your yield?"

Dan Dicker was also saying it's not 2008, because "the oil price itself has not come down nearly as much as it did in '08," and also because the MLPs, rather than getting slammed, have become a "store of value."

Dicker said a lot of quality high-beta names he likes have been pummeled to levels he never would've believed, such as Apache.

Guy Adami said one of his colleagues likes luxury handbags; "Karen brings 'em in each and every day," he said.

Greg Zuckerman spoke briefly about hedge funds, and sometimes we've gotta wonder how much Greg Zuckerman must like writing about hedge funds. Yeah, it probably pays well, and it gets him on Fast Money. But think of the damage someone of Zuckerman's caliber could do with some night cop reporting. The home invasions, the bar fights ... these come from some of America's finest information-gatherers, and this site is proud to have gotten acquainted with some of them and will absolutely continue to post their best efforts.

Zuckerman basically said Thursday that hedge funds that did well this summer found gold and Treasurys (as opposed to the ones that found BAC).

19.95 A YEAR!!!! Judge
is tired of Magic Jack too

From time to time, we're tempted to just ditch the whole CNBC-watching thing when we decide we simply can't stomach one more Magic Jack commercial.

Fortunately, we're not alone, and stars at CNBC get it too.

Steve Cortes on Thursday's Fast Money Halftime Report was calling gold "the most crowded trade I have ever seen" before making this comparison: "There's more gold commercials now than there are Viagra commercials."

Judge Scott Wapner concurred. "Seriously man. It's like every other commercial. Aside from the Magic Jack, that's on like every 3 seconds."

Steve Cortes says he talks to people on the street about stock market panic

If we print a 10-handle on the S&P 500 next week, Steve Cortes is going to look like a yo-yo.

Until then, the Cortmeister is feelin' it.

"This is a Jefferson market, and I don't mean Thomas Jefferson," Cortes said on Thursday's Halftime Report. "I mean, I mean, George and Wheezie Jefferson. We are movin' on up. This market is gonna go higher. There is far too much fear. The bottom is in. ... We didn't break Tuesday's low. That's incredibly significant."

Steve Grasso wasn't nearly so effusive, wondering aloud if the S&P can even close above 1,172.

"We will soon Stevie. We will soon," taunted Cortes.

Cortes claimed the panic is not just a psychological notion, but actually detectable on the pavement. "I even sensed it after I left the office yesterday out in the streets, talking to people," Cortes claimed.

JJ Kinahan crushes one

Guy Adami allowed on Thursday's Halftime Report that the market may continue higher, but he doubted the bottom is in. "I don't believe so, not by any stretch," he told Scott Judge Wapner.

Steve Grasso was basically in that camp. "I think we have to test those lows," Grasso said.

Jon Najarian though seemed to be leaning Cortes' direction though he didn't explicitly go that far and didn't this time suggest it's a "fake" movement because of high-frequency trading. "As far as the U.S. markets, we may have seen that bottom," Najarian conceded.

Cortes claimed the world's economic situation is already "more than priced into stocks," and so it's onward and upward. "I'm now short Treasurys," he also said.

That was a good reminder of JJ Kinahan's awesome revelation Wednesday of buying TBT.

Grasso buying BAC
lower and lower

Maybe our favorite ongoing Guy Adami theme (no, not the Barrick buying back gold hedges or Freeport McMoRan "stole" Phelps Dodge) is the one about the ridiculous emergency stock market outrage and conspiracy theory and regulation that happens only when stocks go markedly down, not up.

"Why should shorts be- why should they be at a disadvantage?" Adami rhetorically asked Judge Scott Wapner on Thursday's Halftime. "Why would you ban short-selling? Have we ever banned buying on plus ticks? ... I didn't understand it a couple years ago ... 'cause it's ridiculous."

However, the premise of that point was Wapner's report on bank stocks cratering Wednesday, and no one really explained who's talking about banning shorts.

Adami sounded skeptical of CSCO but conceded it may have hit a double bottom; in any case, it's "becoming more interesting."

He also said, "Sara Lee might be actually a buy at current levels."

Rich Ilczyszyn briefly got an encore for his Wednesday night gold reservations, saying, "This is a currency trade, not a safe haven trade."

Steve Grasso said he's doing what Dennis Gartman has called "trading's carcinogen" with BAC. "I'm long higher, and I've been averaging down as the stock craters," Grasso said.

Guest Tad Rivelle said "a case can be made that the dividends in stocks look quite attractive relative to Treasurys."

Another guest, Romit Shah, said he wasn't too optimistic about Nvidia. "The problem will be the guidance for ... the October quarter." Guy Adami called Nvidia a "potentially takeover target at current levels."

Harvey Golub says ‘bull----’ twice on The Strategy Session, yet another comment was more important

Presumably one of these days, the FCC is gonna start ordering a 7-second delay for CNBC.

It was former AmEx chief Harvey Golub who went ballistic on Thursday's Strategy Session, but he actually said something just before that — without swearing — that really rang the CNBCfix.com meter.

Golub pointed to the administration's announcement a couple Mondays ago that birth control will now be covered by health plans without copay.

What Golub did NOT say is that this plan, first quietly floated from the advisory-panel angle about 10 days prior during the debt-ceiling noise, was notably officially declared by the White House on the same Monday in which Barack Obama and John Boehner and Harry Reid and Nancy Pelosi all announced they had a deal, and thus made few front pages.

What's amazing about this move is that here Washington is talking about reining in costs, and the Associated Press reports that the move will be funded through the cost of health plans — in other words, a blow against ObamaCare lowering people's health-care prices (as if anyone believed that was going to happen by eliminating the "inefficiencies" in the system).

This site was the only one to our knowledge that led its home page with a reference to this cost (in AP's 11th paragraph).

(Note we have no position on the merits of the policy, only the economics and notable timing in which the administration released the edict at a time it would get the least amount of coverage possible.)

Anyway, Golub was one of the very few people we've heard bring it up, and he said Thursday that while it's touted as "free" because of no copay, "it can't be free" because it's funded through health plans.

Right on. Though it's worth noting, the comment came after David Faber asked Golub to identify a specific policy that "discourages business investment," and that's probably taking it too far in this case.

"I don't think we ever get to contraceptives on The Strategy Session," said Faber, who thanked Golub for taking them there.

First ‘Peter’ Faber,
then ‘bull----’

Harvey Golub complained Thursday that the birth-control order will "raise the cost in the health care system," and then gave David Faber his 2nd example of anti-investment policy, the NLRB fight against the Boeing plant.

"But Peter that's bullshit," Golub said.

"David, David," corrected Faber.

"David I'm sorry, David," Golub said. "I don't know why I said Peter. I know a Peter Faber."

But Golub wasn't apologizing for his terminology, only piling it on. "It's bullshit. I mean I know I'm not supposed to say it on the show, but you know that," he said.

Harvey Golub virtually turns
The Strategy Session into
Fox News

Another target of Harvey Golub on Thursday was the "massive and dysfunctional Dodd-Frank bill," saying, "I think Dodd-Frank's a freaking disaster," arguing that the 2 people most culpable for the financial crisis are writing the new policy.

That wasn't in "House of Cards," and the comment brought serious resistance from David Faber, who insisted Wall Street was a major cause.

Golub says Congress is merely authoring policy that will encourage banks to get bigger and leave fewer banks in the country.

He said the administration will "pursue policies that, that will be different from the rhetoric … the policies that will be put in place by the administration will do the opposite," and that "nothing's going to change for the next, for the next 2 years."

Golub actually did speak a little bit outside of politics, saying that while some banks may face tough choices about selling assets at depressed prices, if their long-term goal is to downsize as a "strategic matter," then they should probably just unload "for whatever the price."

While he said there "might" be a recession, he also claimed, "it's the certainty that's the problem."

Golub also said the financial supermarket concept has "never worked" because it's merely based on financial synergies and not strategic synergies, or in other words, it's not like the Apple ecosystem.

Are we looking at
‘Too Big to Fail Part II’?

Larry McDonald, who with Gary Kaminsky was in the Lehman umbrella before the collapse ("Gary got out before me," McDonald said), joined Thursday's Strategy Session to make an interesting observation about how Lehman's PR department handled spring-summer 2008.

"The more you talk, the worse off you are," McDonald said, although Bear Stearns did not come up in this conversation, and Bear was criticized for not talking at all, and Bear basically went under first, so we're not sure that assessment is accurate.

It's more like, the way people talk is what matters.

The real secret to surviving 2008 was to be the 1st or 3rd domino to fall, but not the 2nd (that is, if you consider Bear "saved," and if not, then just say the secret was to not be 1 or 2).

McDonald was asserting that today's European situation is "nothing like Lehman Brothers." So David Faber asked if the shorts pressuring the banks have a case.

"At the end of the day," Faber said of Lehman, with his patented cliche, "rumor and innuendo may have accelerated that process," but he's talked to enough people from those mid-September 2008 meetings to know "they were right … the hole was massive."

"The shorts were right but they accelerated the decline," McDonald said, predicting that recent history will prompt more immediate reassurances this time, and that once seen as an October-November issue, Europe's banks will be dealt with much sooner, perhaps in a "potentially blockbuster deal" with a "potential big backstop" of $1 trillion.

He noted that Panama and Indonesia CDSes were trading "inside" France's.

Gary Kaminsky referred to his all-about-Germany point and said, "We see today … some sort of anticipation that there will be some sort of backstop that Germany will support."

Scott Judge Wapner opened the show with a chart showing "lots of big insider buying going on" and got largely the same reax from his colleagues that Herb Greenberg did on last night's Fast Money, as Gary Kaminsky said "insiders aren't great buyers all the time," but nevertheless, "it's not a negative."

Kaminsky outlined 3 factors for financials, being 1) True book value, 2) Return on capital, and 3) Revenue growth.

[Wednesday, August 10, 2011]

Pop Culture great moments:
Al Czervik on the 1st tee

This page has complained before that "Caddyshack" quotes are so commonplace, we basically don't want to hear them anymore.

But long before Steve Grasso and Carter Worth began dissecting S&P levels, Al Czervik had a far more entertaining way of picking stock market direction.

Czervik, see, according to the script, is supposed to be hugely successful in street smarts, and hugely lacking in social graces. So any scene depicting Al making stock calls was written with the notion of conveying to viewers, here's how Al gets ahead.

And in the filmmakers' eyes, it's the Steve Cortes approach: "They're all selling?? Then buy! Buy!"

If only it was that easy.

Even 500-point down day can’t stop the Fast Money ag trade

This page has been saying for a while that basically the ag trade (as well as the Brag Trade, which rhymes by the way) is as old as Fast Money itself, and that rarely a day goes by without someone recommending it.

Further evidence of that theory occurred actually Wednesday night, when Patty Edwards and Rich Ilczyszyn took part in a prime time Fast Money (gee whiz, how can Jane Wells not be on prime-time?) with Brian Sullivan and recommended buying agriculture.

"I think you buy, uh, ags across the board. This could be a short-term trade; this could be a trade that lasts 1 to 2 years," Ilczyszyn said.

Patty, in sparking red and pearls, wasn't quite so aggressive, telling Brian Sullivan that " 'safe' is a definition that I'm not gonna get into," but that buyers can start taking a "partial position" in any of 3 names, ANDE, SYT or (the old reliable) POT (and one way we'll know for sure this market has bottomed is when POT fetches less than BHP's 2010 bid).

Edwards stressed a 2nd time in a short segment that she doesn't want to parse the meaning of "safe" but said there's an "opportunity to start picking them up, in small doses."

Sullivan said he doesn't know how Mel Lee or Judge Wapner run their ship, but in his world, "it is ladies first," so Patty finally got to bat leadoff for a change.

S&P 500 lows:
Friday: 1,168.09
Monday: 1,119.28
Tuesday: 1,101.54
Wednesday: 1,118.01

This page has long noted (gosh, we've hinted at Brag Blogging several times in the last day or 2, that's gotta stop) that there's something ironic, or just downright lame, about people on a TV show called "Fast Money" always telling people to sit tight during the rarest of days when the biggest gobs of money are made in one direction or another.

Generally the prescriptions on the show called "Fast Money" are to wait until Slow Money scenarios unfold and chase those and forget about trying to "be a hero" chasing the fast bucks in "the deep end of the trading pool."

And so on Wednesday, viewers heard Dennis Gartman — just days ago telling gold owners to run from what proved to be the best short-term rally in a long time — instructing viewers, "Hide. Hide. Get to the sidelines."

No one bothered this time with HFT conspiracy theories, though Tim Seymour flirted with the "machines," saying, "We're probably in line with the '87 crash in absolute terms in the number of days ... what's discouraging is this market feels very futures-driven. It feels as if, you know, the market's not really trading on fundamentals" and is held "hostage" to a technical market driven by levered ETFs and futures.

And our question to that would be, if that's truly the case, then why isn't Seymour rattling off some "hostage" names that must be woefully undervalued right now that should be bought for the value they'll unleash once they're freed?

What Seymour said is like saying Tim Lincecum has seen his ERA double because he's been pitching in Coors Field for 2 months, and because of that you can sign him for 2/3 of his current salary, but Seymour's not recommending that, because ...

Karen Finerman said nothing was going to stop her picking up DIS. "I put out a bid at 30, ended up chasing it to 30.28 ... of course it could go lower," but she's happy with her purchase.

Dick Bove: Secretariat-esque
lead for Fast Money
Trade of the year

It'll take a gargantuan call to catch the Dickster.

This page has concluded that no matter what happens through the end of the year, Dick Bove's get-totally-out-of-the-market call is a cinch for our own CNBCfix.com Fast Money Trade of the Year.

First, qualifications. We decided Bove's call counts, even though he's not a Fast Money contributor and it was some kind of note to clients, because he did in fact discuss it with Melissa Lee on Fast Money that day.

Second, we know, as Fast Money people have pointed out including Steve Cortes, who found it "ridiculous," that Bove was arguing his theory on U.S. debt concerns and not on a European implosion.

But the truth is that we don't really know why any given seller in this market is selling. You put a buy order in with Charles Schwab, the seller doesn't have to give you a reason in writing why they're unloading. And so the gut here too is that this a Europe story, but who knows, maybe it's not.

The bottom line is that the Bovemeister told people to get totally out at staggeringly near-perfect timing, and no matter when those people finally get back in, they're bound to be better off than those who rode out the storm, and at this point that seems about as iron-clad as Whitney Tilson's June 2010 buy of BP seemed a year ago at this time.

But with 4½ months ago, there's still time for someone to play spoiler.

What is a non-core asset to
Bank of America/Merrill Lynch?

Melissa Lee said on Wednesday's Fast Money that she's reading the Web, noting that rumors of Bank of America unloading some stake in a Chinese bank have been "at least considered among the blogosphere."

Bank analyst Paul Miller said the real problem with BAC is the Countrywide portfolio. "Until people get comfortable with that liability, um, this stock's gonna, you know, probably trade around these areas," Miller said.

Kate Kelly reported on the Berkowitz/Moynihan conference call and used curious first-name terminology for Moynihan, explaining, "Brian did succeed in sort of paring some of the losses BofA had sustained in, in morning trading," but adding, "there were some real gaping holes in his explanations," including the apparent BAC assessment that housing prices rise 1% in 2012."

Miller said, "I think Wells Fargo at these levels are (sic) a steal."

The too-quick camera caught Melissa doing a hair flip after the first commercial break, but later on during the Brian Marshall CSCO chat, the cameraman pulled a Daily Double, catching Karen Finerman doing the same thing.

Herb Greenberg’s report fails to impress Dennis Gartman

Carter Worth failed to impress Wednesday with a "who knows" outlook on stocks and reiteration of this dubious notion that all those people who bought during months of S&P 500 stagnation are just dying to break even, assuming of course that none of them are contributing to the overall S&P 500 selling that we're now observing.

It's basically like the Yogi Berra crowded-restaurant line, that none of those people have sold their shares because the selling's too crowded.

"Any recovery simply will return the market to a level where all these unhappy shares, all this supply, wants their money back," Worth asserted, but he did add, "We think yesterday was capitulatory."

Herb Greenberg burst onto Wednesday's Fast Money to proclaim a trend of "very large insider buying" in certain stocks, including United Continental, GM (Greenberg said "GE" but he likely meant "GM") and even the Emerson guys despite the CEO's lack of visibility.

Dennis Gartman scoffed that "10,000 shares of United Airlines," even he could do that.

"Maybe they're just nibbling a little bit," Greenberg admitted.

Rich Ilczyszyn, in a tune-up to his prime-time showing with Patty Edwards later, questioned gold's position. "We've gone a hundred dollars in 3 days," he said. "If you think this is a safe-haven play, I think you're dead-wrong this time," and suggested "taking a profit and maybe even going short."

Jeremy Wien talked options and suggested a call spread to take advantage of some volatility (when do you ever not hear that phrase on Fast Money?)

JJ Kinahan revealed, "Today in the TBT, I actually went out and bought it."

Karen Finerman said "I'm long Macy's," and even in this market, would "be closer to being a buyer" than a seller.

Steve Cortes makes one of the greatest Fast Money comments ever

On a day in which we're somehow hailing a great call to buy CSCO, it was Steve Cortes who was flooding the airwaves with the most wisdom.

It happened after Jon Najarian, apparently the designated spokesman for the anti-HFT movement, once again implied that the market hasn't really gone down as much as we think nor gone up as much as we thought on Tuesday.

With the "machines," Najarian said, "it works both ways," causing "inversions across the market."

Judge Wapner asked if HFT is really "exacerbating" the Dow/S&P moves. "That's understating it, 'exacerbating'," Dr. J insisted.

Then the Cortmeister barreled in with a monster rebuttal. "Scott, I have to disagree with this," Cortes said. "I think this is about the economics of Europe. There was no high-frequency trading in European bonds and European credit. The reason we walked in today down 4% is because of what's going on in Europe, and I think high-frequency is being set up a lot on this network as almost this boogeyman to blame this volatility on. It's about Europe, and it's about bonds."

Of course, he's right; whenever the market goes down sharply, for some reason, even the most seasoned pros such as Jon Najarian and most of this week's 5 p.m. Fast Money gang refuse to believe that regular human beings are actually capable of selling 500 points in the Dow Jones Industrial Average in a day, that there must be some conspiracy behind it, and while this maybe gains a minimal amount of traction on CNBC, the same reaction actually works against the network when people like Jon Stewart start claiming to gullible observers that the reason the stock market is in the tank is because people on CNBC "missed it" when the signs were so obvious.

(And of course our now-daily disclaimer; we barely know what HFT is, and don't defend it, only doubt its purported status as bear-market scapegoat.)

Dr. J wouldn't fold, of course, either. "I have to disagree, respectfully with Mr. Cortes," Najarian claimed. "When investors can't see what the real bid is in the market ... then they are selling at prices that are horrific or they're buying at prices that are horrifically bad for them," and if you actually know what it means to have both parties in a trade achieving a "horrifically bad" price, you need to be reading far more advanced material than this page.

Zachary Karabell made a point that was very provable and accurate, that while there was "programmatic selling" (that part we don't know about) on Wednesday, "you do not have this massive, 2 to 3x downside on a lot of beta names."

Steve Cortes admits ‘there is a Lululemon party afoot’

Stocks might've been down sharply Wednesday, but most of the Fast Money Halftime panel was willing to buy.

"Yesterday I bought some S&P calls," said Brian Kelly, and he was thinking about buying more. "All it would take is 1 firm statement that says, 'the French banks are absolutely fine,' and this market will rip."

"I bought the market this morning," gushed Steve Cortes, because "we got clearance from the tower" n the Fed statement Tuesday.

He added, "Europe is our Billy Carter."

That prompted Zachary Karabell to joke, "He ain't heavy..."

Karabell added not to expect definitive statements from France "until at least Labor Day because the entire country's on vacation in August," and he said the markets are probably wrongly ignoring "the nationalization option," which is more tolerable to people in Europe, and thus "there is an inherent floor underneath this," and armageddon "simply not going to come to pass."

Steve Cortes, who trumpeted how he was mulling shorting LULU in late May around $91, admitted at one point, "There is a Lululemon party afoot there."

Jon Najarian said he'd love to pick up COST at $65. "The stores are packed whenever I go there," Najarian said.

Must be time for
another 1-for-10

The Fast Money Halftime Report on Wednesday brought out its big guns in the form of Fred Cannon, but the interview was only notable for what Judge Wapner claimed in the intro.

"Citigroup is flirting with 2.50 a share!" said Wapner.

Moments later, Judge clarified. "In the lede we said that Citi was at 2.50 a share. Clearly not," he said, blaming Teleprompter madness. "That's what it said, but clearly it's not trading at, at 2.50 a share."

Cannon spoke as though the market is overreacting, saying, "Investors are just worried about contagion," which nobody can really adequately define, and that the banking system is "in far better shape than it was going into the crisis."

Brian Kelly asked Cannon about Kelly's theory that banks nowadays are merely "giant vaults" that store valuables.

"I think you're wrong," Cannon said.

Colin Gillis makes
the call of the afternoon

Little did we think that of all names, CSCO would prove a big winner on Wednesday.

Yet by the afterhours, Colin Gillis' Halftime enthusiasm for the stock, when he said "the investors that we're talking to are nibbling away at Cisco right here, right now," was paying off in a big way.

Gillis faced a double team of Steve Cortes and Judge Scott Wapner, with Cortes saying the only catalyst for the stock is if John Chambers says "I resign."

Gillis then claimed, "He's going to retire relatively soon."

Which brought sighing from Wapner: "Ho! So now you're telling me to buy the stock because you think the guy's gonna leave!"

But then Judge made nice, and Gillis insisted, "The demand for Cisco's products is not going away."

Not quite so accurate was Zachary Karabell's Call the Close offering of "I think we're heading higher today at the end of the day."

Gary Kaminsky:
1% 10-year is possible

Soon, we might have to start paying the government to own its bonds.

Gary Kaminsky said on Wednesday's Strategy Session, "I wouldn't be surprised if we could actually print a 1% 10-year."

Ron Insana doesn’t come close to giving DrudgeReport a possible headline

You can tell we're in crisis-land.

Ron Insana, who quite frankly is a CNBC legend and one of this site's favorite pundits (he's actually better at punditing than anchoring, where he did a fine job, which brings to mind someone on TV years ago, we can't remember who, urging Dan Rather to start issuing his opinions during newscasts because anyone is capable of reading the news but not everyone has seen the world like Dan Rather), made a special appearance on Wednesday's Strategy Session.

And if anyone (besides this page) was keeping score, they'd have to conclude that Insana spent the session basically getting lapped by Gary Kaminsky.

Insana's generic assessment of the market free fall faulted "the lack of policy coordination around the world," and that "global deflation" is the boogeyman here.

Kaminsky, on the other hand, suggested a 1% 10-year, asserted "it's about Germany now," and had this critique of the Fed:

"I heard from the Fed yesterday that we're in a recession right now. I heard from the Fed yesterday that QE2 failed. In fact — in fact — if you go back and play the Bernanke interview from last year post-QE2 on '60 Minutes,' think about how wrong he was. He actually made the Meredith Whitney call on '60 Minutes' look OK compared to what he said about what QE2 would do," Kaminsky said, adding that because of the results of QE1&2, QE3 doesn't matter and wouldn't/won't have the same market impact.

Hoover left office in 1933

Ron Insana, in his not-particularly-cutting-edge remarks Wednesday, unfortunately invoked the "policy" route with everyone's favorite Kate Moss dress sample size, saying there's "potential for a Hooverian-style or 1937-style policy mistake when we decided to run towards austerity."

Kelly: Paulson ‘apologetic’
to investors after 31% down

John Paulson's name has surfaced on CNBC from time to time in 2011, and mostly for gold or BAC reasons.

According to Kate Kelly on Wednesday's Strategy Session, Paulson's Advantage Plus fund is down an embarrassing 31% for the year.

Kelly said there are no excuses; "it sounds like Paulson himself has been very open about the returns and apologetic even about the month of July for example."

David Faber and others agreed these are patient clients who believe in the long term. Gary Kaminsky said that for now, "the moves in the currency market that are directional bets are unprecedented. Unprecedented."

Just what Facebook users are dying to get: a 15-page PDF on Internet safety

Facebook security chief Joe Sullivan spoke in too much of a press-release style Wednesday and had to be prodded by David Faber to finally announce the new Facebook initiatives for Web security.

Sullivan first said there are thousands of people at Facebook working behind the scenes on "password reset" and "account recovery mechanisms," which should make us feel safe, but then unloaded this whopper, saying next week, and this is "the first time we've mentioned this," Facebook will issue a 15-page PDF document, a "manual on how you can keep yourself safe online. What are the steps that you should take?"

Which ought to be a big hit for all those users who enjoy reading the terms and conditions and clicking "I Agree" whenever getting a software upgrade.

Twitter critics question
Doug Kass’ ‘bottom’ call

Melissa does not take enough chances in her apparel choices

Dr. J, Jon Najarian, on Tuesday's Fast Money picked up where he left off a day earlier on high-frequency trading.

But on Tuesday, he said the concept even has fans.

"I get both lovers and haters," Najarian said, but it's the lovers he thinks are mistaken; "I'd love to have that debate sometime with one of 'em."

Melissa Lee asked what HFT signifies in the wake of a huge rally Tuesday after a huge selloff Monday.

"It means it was no more fake to the upside than it was to the downside," Najarian said.

Then he offered the goofiest of analogies, saying, "If I can blindfold you Melissa and spin you in circles for a while ... on top of just having a great Friday night," it would be the same feeling, not knowing where she's really at.

Now that makes a person think. The thought of Melissa blindfolded definitely gets engines running. But to really make that Friday night work, Mel needs to start throwing some bombs down the field. The traditional conservative look works great with Kate Middleton. Middleton's royalty. Melissa's a TV star. Notice how Mandy gets people's attention. Even Maria Bartiromo will don the 1970s male prom jacket for a twist. The stained-glass-like dress is fine, but not enough of an end-around to keep viewers on their toes.

Meanwhile, Najarian's advice for dealing with HFT was, "you don't ever go to a market order," and we can't fathom why people would be putting in market orders on days such as these, but apparently some need the advice.

"The machines are hovering in, and honing in on these levels," agreed Tim Seymour.

"A lot of it seemed like robotics," said Steve Grasso at one point.

Because it would be impossible for actual human beings to move the markets this much with their own decisions; it's the machines' fault, and without algorithms, the market would be like MSFT shares every day, all the time, safe for all who handle, and then there's the absurdity of people who talk about technical levels all day purportedly aghast that stock owners actually do plan trades based on technicals.

Gee whiz, has this crew watched "War Games" a few too many times, or what?

Jane Wells: Hotter
than Vegas itself

While Melissa Lee's wardrobe could use an occasional change-up, we have no such concerns — none — about knee-buckling Jane Wells.

Fast Money gave viewers a treat Tuesday, featuring Wells on location at Caesars Palace in a smoldering fuchsia top that was hotter than any HFT program.

Wells said the markets weren't hotter than Vegas, but "it's a dry heat." She showed comments from Gary Loveman and Phil Ruffin, but the best was saved for last when the camera let Wells strike a pose heading into commercial, although it also wouldn't have hurt to have a roaming cameraman do the 360 as the guy at the Nasdaq did for Melissa and Karen at the end of the show.

Dan Greenhaus indicates he gets it, and then sort of doesn’t

Dan Greenhaus, in a pretty good appearance actually at the Nasdaq on Tuesday, said the dissent within the Fed "says that Ben Bernanke is hanging on by a thread, so to speak; that's an overstatement."

Yeah, seems like it.

Tim Seymour questioned if the critics are right that the Fed statement just doesn't do enough.

Greenhaus said basically to look at the scoreboard. "I know that you were recently in a little bit of a tiff with Peter Schiff on the show ... these individuals are in retrospect starting to look a little incorrect," he said, clarifying that he doesn't want to say "silly."

Bernanke, according to Greenhaus, "to the extent that we accept that 12 guys in a room should be deciding where interest rates are, has been proven correct."

Except no one who gives this subject thoughtful consideration actually believes that "12 guys in a room" are determining U.S. monetary policy.

Think of it as the Supreme Court, in which 9 tokens are not the cause of our society's rules, but the effects of massively widespread political dynamics at the time the seats became empty.

Melissa totally bungles Joe’s AAPL thesis, yet Joe bails her out

Melissa Lee was rewriting history Tuesday when she asked Joe Terranova about his much-debated oil-AAPL linkage on Fast Money.

"Didn't you before pull up a chart a while ago we were having an Apple discussion about higher oil prices and higher gas prices and how it really doesn't impact Apple in the end?" Lee asked.

"Well, in the end, I don't believe that it does," Terranova said Tuesday.

But on June 23, he was saying anything but.

Namely, that AAPL is "the ultimate consumer discretionary play ... Go back to February. Think about where Apple was when it was making those highs around 360, where was the price of oil. Once the price of oil shot from 85 to 100 in a matter of 3 days, that was the top for Apple."

In fact, there might've been more validity to that theory than many including Karen Finerman were willing to credit him for. On Tuesday, instead of trying to parse and massage Lee's statement for some element of accuracy, he should've just corrected her and hung tight.

Doug Kass: Bottom
in for the year

Doug Kass claimed on Tuesday's Fast Money, "We're now as oversold as we were when Germany invaded France in 1940, or after the October '87 crash."

That came after the most cotton-pickin' opening statement we've ever heard, something about some mumbo jumbo technical indicators meaning something about what Dan Greenhaus said or didn't say.

Kass claims the bottoms for stocks are in for the year. He called the S&P downgrade the "Ah-ha moment" but assured, "I don't mean to sound like a cheerleader or like Jim Altucher."

He initially referred to "my idol Dennis Gartman" but noted, "I don't think as he does that we're going to retest."

Pressed by Melissa Lee to disclose whether he's actually loading up on his thesis, Kass also said "I'm never fully invested but I'm at my highest gross and net long positions," of course "never fully invested" being a logical fallacy because either he's saying 1) he is at the point where he will put the most money he will ever put into the market, which is essentially "fully invested," or 2) there's never a time when every dime he owns is in the stock market, which is true for every human being and would mean the concept of "fully invested" simply does not exist and should not be acknowledged.

Tim Seymour asked Kass over what time frame did he reach this "highest gross and net" position. Kass said, "in the last 2 days."

Dan Niles indicates companies get angry when he suggests shorting them

One of the reasons this page is skeptical of the stock plunge of the last 2 weeks is that the primary — though certainly not the only — catalyst cited on CNBC is debt concerns of years or decades down the road.

The notion the Dow would drop 600 points in a day because people suddenly worried about Social Security in 2021 is bogus.

The bigger concern would be that stocks are cratering for an actually believable reason, that shopping might've started hitting a brick wall in July, that banks and real estate might be running on fumes or that Europe is about to embark on the French Revolution Part II.

That latter graf is scary. But what Dan Niles said on Tuesday's Fast Money indicates that the savviest of pros doesn't believe it and thus is clinging to the tired debt cliche for lack of any other rationale.

"It's an interesting rally. I think we're gonna get more, I'm expecting a bounce of 10% at least from the bottom," said Niles, saying we're halfway there, but that we've still got all these long-term problems, the first thing he said to that being, "gotta figure out how to cut the deficit."

"2 days doesn't make a trend," Niles added, but those 2 days would make a trend if the apocalyptic scenario noted above were true.

So maybe Niles is overly optimistic, or hopefully he's right.

Joe Terranova asked Niles if Amazon and Google are the type of big-cap-tech names to buy for an August-December spree.

"I'll have to send you a check in the mail. That's what we said back on July 21st," Niles said, adding, "the names you mentioned, Amazon, eBay, Google, those are names we all own already," even though Terranova didn't mention eBay.

Niles said you don't have to go 100% long but can pair those names up against short opportunities. But he wouldn't identify which shorts to Melissa Lee, saying, "I think I'll avoid that, given how upset the companies get."

Was just about a year ago that everyone claimed ‘gridlock’ was great for the stock market

Just like Dan Niles, Adam Parker suggested Tuesday on Fast Money that the markets aren't being driven by legitimate apocalyptic concerns.

"The bear case probably has a higher probability than the bull case," Parker said, but his most telling remark came when Steve Grasso asked about what's worse now than in 2008, and, in a blatant sign of how fickle this analysis business works, the first thing Parker offered was not Europe collapsing or Bank of America bankrupt (hopefully neither is the case), but "the polarization down in Washington."

Parker claimed that unlike in 2009, when a lot of shaky names were pounded on bankruptcy fears only to experience enormous gains, the next bounce will be "maybe higher-quality, higher-yielding multinational type of companies."

Tim Seymour revealed his meal timing Tuesday, saying the market mayhem "started for me last night around 10:30 when I was finishing up dinner."

Joe Terranova said that on Tuesday, he bought Amazon, "I got back into Caterpillar, got back into JPMorgan," then, feeling the need to echo the day's theme, said, "at the end of the day, the machines pointed higher."

Judge Wapner asks if the Fed might start buying stocks

Steve Liesman didn't have any tips for Ben S. Bernanke on Tuesday's Fast Money Halftime Report.

"It's not entirely clear what he should do," Liesman said.

And we remember back in 2008 when Liesman was saying virtually every other day, "When there's a fire on the block, you have to put the fire out first, and THEN you can go back in and assess the blame," etc.

Liesman said it's in the Fed's interest to signal things to traders that then cause buying the markets, which sort of becomes a self-fulfilling prophecy.

Scott Wapner posed what Judge called a "radical idea, I know," which was whether the Fed would start to "buy risk assets like equities."

Liesman said, "I think it would have to be pretty bad" for that to happen.

He said what motivates Ben Bernanke is a "clear and present deflationary threat."

Pete buys BX, BAC

Pete Najarian, noting Dick Bove's The-world's-coming-to-an-end-but-I'd-buy-some-BAC recent forecast, revealed on Tuesday's Halftime Report, "That's a name that I dipped into today."

Najarian also mentioned BX. "I jumped in there as well," he said, actually just minutes before the show began, at 12:27 p.m. Eastern, but he cautioned, "this isn't the time to jump all the way in."

Brian Kelly said he sold a "good portion" of his gold position and as for stocks, "it wouldn't surprise me to see another 7 to 8% here" and thus it makes sense to "dip your toe in."

But Kelly was skeptical of BAC, asking Najarian "Where's the earnings catalyst here?"

"I think the catalyst is Mr. Bernanke," Najarian said.

Judge Wapner said mutual fund redemptions were the most since the Flash Crash.

Dan Dicker said the problem with oil is the "flatness, losing of the steepness of the curve." He said people who want a beta play in oil stocks should know that "Some of these E&P companies just got murdered," and he mentioned Total and Chevron for the dividends.

Dennis Gartman is starting
to hear from cab drivers

Dennis Gartman, whose lighten-up-your-gold call of the last several days was quite bust-y, tackled equities Tuesday and asserted on the Fast Money Halftime Report that "the panic for now is done," that he's not sure if the "ultimate lows" are in, but "the V-bottoms are in."

His rationale was a cabbie who recognized Gartman from CNBC (see, he wouldn't have recognized him as just a letter-writer) and "asked me what he should be doing" while explaining he was "selling everything that he had" and buying gold, which Gartman compared to Joe Kennedy saying the market top is when shoeshine clerks are talking about it.

"When the cabdrivers start telling you that they're out of stocks, it's probably time to get in," Gartman said, citing as Steve Cortes did the huge overnight turnaround in S&P futures. "It's been an enormous run," Gartman said. "The panic is done."

Judge Wapner again seemed blown away that Gartman has a cell phone, telling Dennis he's "grateful that you called in to talk."

Steve Cortes ‘pretty sure’
he saw Merc pros in tears

While Dennis Gartman was hailing a short-term bottom, it was nothing compared with the gushing of Steve Cortes.

"I have been buying," Cortes said. "I'm pretty sure outside the Chicago Merc I saw some grown men crying, and when they are crying, I am buying."

Cortes rattled off consumer staples and WMT, PG, JNJ, citing the "$40 backup in oil."

"The S&P was down 30 last night," said Cortes, calling Tuesday's midday recovery the "best comeback story that I've seen since Johnny Fontaine got that movie in 'The Godfather'," which it wasn't, especially if he had hung around about an hour later for the Fed comments.

Cortes said he ditched Treasurys; "I took profits on that entire position yesterday."

Cortes backed Gartman's call on gold. "I think retail money was sold a false premise," Cortes said. "I am long dollar and short both gold and silver."

Cortes, who likely either takes the Red Line or Brown Line, said he also agrees with Gartman on overheard public conversations. "I ride public transportation," Cortes said, unlike Judge Wapner he said who gets a CNBC Maybach (Cortes said that, not this page), and he heard 2 people on the L say they were "talking about the only safe place to be is gold," and at least they were doing that instead of 1) listening to their iPod or 2) recruiting folks for their dice game.

Chartist not quite as effusive as Dennis Gartman

Chris Verrone told Fast Money Halftime viewers that Tuesday's recovery is merely a "classic oversold bounce" and that he doesn't believe in a rally yet.

"Bulls still outnumber the bears by about 2 to 1," he said, and chartists need that number under 1 for a bull scenario. He also pointed to the S&P facing a "1,200 to 1,220 resistance neighborhood."

Verrone said the market's had some 90% down days and for a bull case, we need some 90% up days.

If that's not enough, he added that the "put/call ratio did not move above 1," a sign the options market isn't signaling a bull run either.

Patty, like her call, is mostly on the Halftime sidelines

Patty Edwards on Tuesday donned that outfit so similar to Pam Grier's sizzling "badass" suit at the end of "Jackie Brown."

But Scott Judge Wapner inexplicably barely afforded Edwards a chance to speak, and when she did, Patty indicated she's not tapping this market for nearly as much cash as Jackie walked away with at the end of the movie.

Edwards did get to say, well into the program, "Today I'm playing the part of Steve Cortes," namely contrarian as the market soared. "I am still on the sidelines … I've seen these bounces."

Like everyone, Edwards had a small Brag Trade (not the "house money" in gold this time), saying she's comfortably hedged, and thus, "I didn't lose yesterday."

Edwards also got a brief comment on DIS. "Half the time the stock goes down afterwards" even with an upside surprise, Edwards said. "I like the stock longer-term," she said, but isn't sure she would buy today into earnings.

Despite limited time, Edwards also mentioned "sidelines" in a Call the Close that wasn't long on fireworks.

Bert Dohmen: U.S. is actually
in a recession right now

Bert Dohmen guested on Tuesday's Strategy Session with a suggestion to enjoy the rallies while they last.

Dohmen first went out of his way to thank Gary Kaminsky and David Faber for having him on, then said he evaluates economic growth through a "top-down approach and then I use technical analysis extensively."

He complained that for "nominal GDP, they deduct the rate of inflation" of around 2 and change and use "gimmicks." He said we're actually in a "contraction already … we are right now in a recession if you deduct the true rate of inflation."

Dohmen also argued that the "200-day moving average on a major index" is a major indicator, particularly with the transports, which he says is overlooked. "If that index is plummeting, you know that goods are not being moved," he said.

Like everyone else on CNBC this week, Dohmen couldn't resist a Brag Trade. "We were short going into the crash … I think eventually we'll go much lower."

Look at your 401(k), then be glad your salary is not paid in BAC shares

Tuesday's Strategy Session opened with a roundtable on BAC, which brought back some memories for Gary Kaminsky.

"I lived through this in some respect," said Kaminsky, formerly of Neuberger Berman under the Lehman umbrella. "I believe the credit markets will determine what happens with the equity."

Kate Kelly explained, with a report that might've been a bit too wordy, how Brian Moynihan was "taking the rally as an opportunity to engage in a bit of a communications offensive" with a letter to company "teammates" defending the banks aggressive moves, at short term costs, to clear up legacy issues.

But David Faber pointed out a big "slug of stock" that just became vested for a bunch of employees, who would ordinarily consider cashing in right away, but at this time, "that just is awful," Faber said.

Gary Kaminsky said that's what's really in crisis mode here, "I'm talking about human capital," or the BAC elites who get paid based on company stock and whether they're going to believe in this story.

Kate Kelly recalled the "famous moment" between Erin Callan and David Einhorn, but nobody really thinks it's quite the same thing this time.

If the housing market doesn’t sink BofA, the lawyers will

Daniel Alpert, in a straightforward, pretty good nuts-and-bolts appearance, explained to Strategy Session viewers Tuesday why there can be sharply divergent views on Bank of America's capital needs.

Alpert said the markets are telling banks that "future top-line revenues" are a concern. Alpert said that while the banks may have plenty more capital than 2008 or even a year ago, the question is, "where is bank capital relative to the mass of potentially troubled assets and future liabilities," and "where the banks are going to be 1 quarter from now."

We've started to feel a bit sorry for Brian Moynihan, as the job he took looks about as manageable as Casey Stengel's with the '62 Mets, but Kate Kelly asked Alpert about one thing that could be hung on Moynihan's management: whether the mortgage settlement backfired.

Alpert said it's going to get worse, with Fannie and Freddie and all, that the volume of liability is "almost limitless" and that "there's going to be a different number put on the table shortly."

High-yield expert:
Start gunning for BBs

High-yield expert Brad Rogoff said on Tuesday's Strategy Session that "once you get sort of below 1.5% GDP level," that's when high-yield tends to struggle and turn negative.

But, Rogoff said, a slow-growth environment "should be good for higher-quality high-yield" (try saying that a bunch of times fast).

Rogoff said, "We're in a lower-growth environment," and "we think the double-B part of the market is the cheapest part of the market and we're cautious around certain triple-C's."

Gary Kaminsky said maybe the "most relevant comment" on the show recently was Steve Walsh suggesting that a downgrade would mean selling the junkiest stuff to maintain the overall portfolio grade. Kaminsky also re-stressed how junk bonds are "almost a perfect indicator" of equities.

David Faber questioned the Fed's tools. "Rates that low, what in the world more could they do?" Faber asked, to which we'll say, again, they could start mailing people cash so that people can buy some more iPads.

[Monday, August 8, 2011]

Late June, S&P 500 surges 70 points in 4 days, not a word about high-frequency trading

In the first half of Monday's Fast Money, viewers were handed a boatload of seemingly convincing reasons as to why the stock market is hemorrhaging.

The S&P downgrade, lack of confidence in government, Europe's contagion, deteriorating assessments of Bank of America's capital situation, global slowdown, global "policy failure," diminishing wealth effect that will hurt the economy, hedge funds doing "rash selling."

And viewers in the 2nd half learned apparently the real reason stocks are selling:

High-frequency trading.

Melissa Lee asked HFT critic Jon Najarian if HFT bears blame in Monday's 634-point Dow plunge.

"Yes. Because there were times again when the latency kicked in and people had no idea, were we really down 380 points, or was it worse than that," Najarian said.

Tim Seymour basically agreed with that, explaining Friday's up-and-down-but-ultimately-fairly flat market as apparently not a reasonable outcome on a day with a significant ECB report and rumors of a pending S&P downgrade and said it "reeks to me of manipulation."

We don't know the first thing about high-frequency trading and wouldn't begin to defend it. But how come it only gets talked about when the market goes down?

Furthermore, there's a logic problem with Najarian's murky point. The inference (again, we're just the laymen watching TV) would be that HFT is duping market players with bidding chicanery.

So if one is complaining that HFT affected the market on a day the Dow fell 634 points, surely the implication is that the prices were made artificially low; if the opposite then the complainer would be praising HFT for keeping the losses small.

Yet Najarian told Melissa Lee at the top of the show — not a half-hour later — that he had "27 trades" on Monday, and "every single one of 'em was a sale. I didn't buy a thing."

But if HFT is causing stocks to artificially sell for lower than they should, then shouldn't experts be in there buying them?

Evidently not.

We know from his previous comments on the Flash Crash that Guy Adami agrees with our sentiments on this, though he wasn't on the show Monday and probably won't challenge the HFT thesis on-air. We also heard on the program Monday that the Senate banking committee is going to investigate the S&P downgrade. The truth is that the stock market is a gigantic pool of risk, people won't accept that, and thus we'll always be looking for scapegoats.

Dennis Gartman’s short-term call on gold looks like a bust

Karen Finerman on Monday's Fast Money found reports of Senate hearings over the downgrade, in her favorite word, "ridiculous."

"I think it's a little bit ridiculous. Isn't one of the reasons for the downgrade was the way the Congress functioned, and now the Senate is looking into the downgrade," Finerman said.

Moments later, Peter Schiff maybe had "Silence of the Lambs" on the mind, claiming there's some kind of "quid pro quo" between Congress and S&P.

"Why wasn't Congress prosecuting anybody at S&P or Moody's for the fraud involved in subprime. I thought it was because they weren't downgrading the U.S. Treasury. And now that S&P did it, maybe there's gonna be retaliation," Schiff said.

Schiff said "the only thing they did wrong is they waited too long to downgrade, and they didn't downgrade low enough."

Then he ran into a buzzsaw from nemesis Tim Seymour, who claimed that the emerging markets that Schiff likes to cite are taking a worse beating than the U.S. "This is a policy failure around the world. This is not a U.S. problem, Peter," said Seymour, who momentarily left Schiff speechless.

Here’s what you get
for 2 and 20

Wall Street Journal hedge fund expert Greg Zuckerman said on Monday's Fast Money that hedge fund operators might not be the cool, smooth market players you might think they are.

"The irony here is that experts tell investors not to panic, not to do any kind of rash selling, and that's in fact what hedge funds are doing," Zuckerman said, although none of the hedge fund chieftains on Fast Money admitted that.

Zuckerman said there is "some comfort" now vs. 2008 because hedge funds aren't as levered as they were back then. But he said there gets to be a perception that other funds may have to sell, and you'd want to sell before they do, a selling cascade that feeds on itself.

Anthony Scaramucci dialed in to argue, "I actually think it's gonna be a little bit worse," even though they're not as levered, because the market selloff will "crimp consumption for the consumer" and thus sting the economy.

Stephen Weiss said in his view, the market bottom "doesn't kick in until you see massive revisions to S&P forecasted earnings."

Amelia Bourdeau suggesting a short Aussie/U.S. dollar trade. "I like to short it at the current level, which is around 101.90," Bourdeau said.

Alexandra Lebenthal said of munis, "The market's sort of taking a wait-and-see attitude," then offered a David Faber cliche, "and at the end of the day, we still have the credits that are strong in and of themselves."

Tim Seymour characterized the market selling — when he wasn't blaming it later on "manipulation" — as a vote against Washington. "The confidence, and policy, is gone," Seymour said, but maybe that's not the real story and maybe it's about being manipulated.

At the end of the program, Seymour recommended, "Continuing to get your portfolio that much more liquid," which sure sounds like "sell" to us, but maybe there's something more profound about it that we don't grasp.

Judge Wapner, Zach Karabell
deliver some of CNBC’s finest questions of the market meltdown

Vincent Truglia guested on Monday's Fast Money Halftime Report, defended S&P ratings with reasonable vigor. And, let's face it, defending the guys who rated mortgage-backed securities is a tall order. But Truglia still ended up with more than he bargained for thanks to some excellent, savvy questions from Judge Scott Wapner and Zachary Karabell.

Wapner cited this curious rationale of a credit rating being based on the "Bush tax cuts," which strikes some observers more as a "political" critique and less of an objective financial review.

Truglia defended such considerations as "perfectly legitimate," without really explaining why, but perhaps betrayed a bit of his own sensitivities in describing the debt-ceiling debate, which he said "makes Washington look like Buenos Aires on the Potomac."

Karabell then piled on with, "Isn't there a vast difference though between rating the sovereign debt of Bulgaria and rating the sovereign debt of the United States," an absolutely fabulous question that points at one of this page's favorite themes, people building economic models from sample sizes (in this case) as low as 1.

Truglia responded without hesitation, "Well actually if you take a look at the IMF, it's examined sovereign ratings of the 3 agencies, over the last 3 or 4 decades, and they've been among the most accurate ratings of any."

"That's not answering my question though," Karabell said.

"Quite frankly, the ratings speak for themselves," Truglia insisted.

They sure do, especially in subprime and alt-A.

Judge closed by asking Truglia if France could be in line for a downgrade and would that have even bigger ramifications. Truglia seemed to dismiss that notion. "France has much better fiscal metrics, and debt metrics, than the U.S.," he said.

Andy Busch takes a Brag Trade
just a little too far

Quite frankly, Andy Busch might be the funniest guy on Fast Money.

Now, whether Busch realizes his sense of timing is unclear. It could be jaw-dropping deadpan ability, or it could be plain luck.

Invited on Monday's Halftime Report by Judge Wapner — while the Dow was down 300-plus — Busch cheerily greeted the gang with, "Hey, what's goin' on?"

Busch then tried to take credit for a market call, explaining he wrote clients in the morning, "I thought this was gonna happen, this early sell-off. I think from here it's gonna stabilize."

That was with the S&P 500 down 41 points.

So much for that stabilization.

Rich Ilczyszyn now refers to shop as MF Global, not Lind-Waldock

Rich Ilczyszyn may or may not be as funny as Andy Busch, but unlike Busch Monday, he indicated he knew what's goin' on when he asked himself the question, "What's up? Gold's up!"

Ilczyszyn conceded gold has multiple interests; "it's an anti-dollar, it's an anti-euro, it's an anti-stock trade, so obviously people like this trade," he said. "It's the only thing I think people seem to be somewhat safe with."

Yet, he argued, "it might be a little bit overbought short-term."

The Ilchmeister's Twitter handle no longer has the Lind-Waldock initials, and Judge Wapner referred to him as representing MF Global on Monday. We noticed the wire services disagreeing with each other last week over which shop name to use, though as far as we could tell, it's the same company.

Judge Wapner tosses Zach Karabell an easy one

Judge Scott Wapner handed Zachary Karabell an easy judgment on Monday's Fast Money Halftime Report.

Regarding BAC, Wapner asked, "Worst-case scenario Zach Karabell is what?"

Karabell snickered, then said, "I guess the worst-case scenario is the stock goes to zero."

Karabell added, "I don't think financials are where people should've been in at any point, I've been saying that for months. It's one of the few things that on a day like today I feel like I can say I've been right about."

He is indeed correct about that, although there's an extended angle to that which seems somewhat unclear, whether an ongoing decline in the financials can be indefinitely concurrent with a bullish call on themes such as global growth, fertilizer, oil, etc.

Steve Grasso said "I'm still long Bank, JPMorgan, Citi" and got slightly defensive about those holdings, insisting that in 5 years from now or more, nobody thinks they'll be at zero but are bound to be higher than now. Judge Wapner impressively challenged whether anyone 2 weeks ago would've thought BAC would trade for $7. That brought something of a Brag Trade defense from Grasso, who said with S&P 1,284 he was predicting a hundred-point decline.

More from Halftime and 5 p.m. Fast Money later.

Gundlach: Government ‘put’
under BAC at $3 or $1

Bank of America got a healthy amount of discussion on Monday's Strategy Session.

Gary Kaminsky, who stressed the need to be "very careful" about this conversation, said it's "a traditional debt holders vs. equity holders warfare." David Faber speculated that BAC wouldn't issue stock at $7 for a capital raise, unless it's "absolutely, positively" against the wall, which it doesn't appear to be.

Jeff Gundlach later scoffed at the company, saying "it's a freight train" and to get off the rails. He said people tell him there's a government "put" under it, but Gundlach asserts, "it's gonna be a put at $3 a share, or a dollar a share."

Bass: When push comes to shove, don’t count on Germany

Strategy Session guest star and SALT king Kyle Bass reiterated his ongoing skepticism of global debt-handling capacity.

Bass said, "A bailout out of the size required for Italy and Spain will cost France and maybe even Germany their AAA ratings," which he said would be "supposedly the 6th save for the Eurozone."

Bass said "I think the French have to be all in," but Germany is another story, and that when the Eurozone puts a paper in front of Deutschland that says it's joint and severally liable for the obligations and asks Germany to sign it, "No way."

Gary Kaminsky rattled off 3 straight questions for Bass, and as often happens in those circumstances, the respondent answered No. 1 and then "forgot Question 2."

After Kaminsky re-asked, whether we're in a global recession, Bass said, "I guess that means if growth is sub-2% for a couple of quarters, then yes, I think we are in a recession again."

Bass devoted time to Japan's concerns, saying, "if their rates move at all, they can't pay their bills," but he didn't bring up that diaper thing again, thankfully.

Bass said investing on his thesis "has been really tough," adding, "we're invested mostly in the United States," specifically fixed income and credit.

Bass advice to the world? "We just need to delever," he said, which will happen one way or another.

Even Billy Mays couldn’t
sell anyone on this market

Jeff Gundlach on Monday's Strategy Session said the S&P downgrade is somewhat bogus because it really reflects a "risk of print and pay," and not the wherewithal to pay.

"It's a downgrade of the U.S. dollar," citing his previous Strategy Session comment of June 30 being trouble like Rory McIlroy at Amen Corner (and indeed he did warn of that April 14, though he didn't make a hard and fast prediction).

Of the high-yield market, Gundlach said, "I hate it."

The funniest thing on Monday's Strategy Session didn't even get a mention.

Gary Kaminsky had outlined a chart about how viewers can stomach this financial disaster. He first said people need to get a level of liquid capital they're comfortable with so they can sleep at night, and he reminded that "bond markets are smarter than stock markets."

Point 2 on the graphic said "Strategists, analysts and Billy Mays," and we were dying to hear the Billy Mays part, but Kaminsky only said it was a reminder that no one, not himself or Wall Street strategists, knows for sure what's going to happen.

Peter Hayes got minimal time but said munis will mostly be impacted not so much by the downgrade but "really from deficit reduction, fiscal austerity." He said he'd be looking at water and sewer, essential services revenues, and airport bonds.

Fast Money great moments:
The August 2007 bottom

If longs are lucky, it'll be deja vu.

Early/longtime viewers of CNBC's Fast Money will recall that during the mostly wonderful stock-market year of 2007 (in which show stars such as Dylan Ratigan and Jeff Macke actually complained occasionally that the stock market went up every day), there was a big problem in August.

The S&P 500, which had been floating around 1,550 in mid-July, suddenly began a 4-week race to the bottom.

The first 3 weeks, which included a couple 30-pointers to the upper 1,400s, were only mildly scary, but the 4th week was a disaster. A 44-point plunge Aug. 9 (per Yahoo finance), a 26-point plunge 3 days later, a 20-point drop the day after.

And then came Aug. 16.

Opening at 1,404.64, the S&P plunged 34 points midday to 1,370. It closed at 1,411.

This site didn't exist then, so there's no record, but we distinctly recall The Admiral of Fast Money, Eric Bolling, practically gushing on that day, in the most reassuring way, "I think we've bottomed!" His fellow panelists generally agreed, and it was basically buy-buy-buy for the next 2 months, right back up to that 1,550s mark.

(Bolling, incidentally, would be gone about a month later in what might be a great warning of a market top; whenever a business network outbids another network for Eric Bolling, watch your stocks.)

Just 2 weeks ago, we were at 1,345 in the S&P 500. As of Monday's intraday activity, the percentage decline this time has been worse.

Back in August 2007, the economy was barreling from a position of "strength" (when Bear Stearns was only famous for the Jimmy Cayne bridge games that C. Gasparino used to write about and when Lehman Brothers was a fine place to put your money and when Sarah Palin and Gaga and Barack Obama had barely even been heard from), in which general confidence was a lot more pervasive than nowadays. But if we get a whoosh-out, we'll know we've seen this movie before.

CNBC stars wear Pelle Moda;
Courtney Reagan, Mandy turn up in same outfit at cafeteria

CNBC spokesman Brian Steel delivered a treat to his Twitter followers Friday: A 1½-minute video of a chipper Amanda Drury and Courtney Reagan at the CNBC cafeteria explaining their nearly identical red outfits.

Mandy (who's on the right in the photos for those who somehow aren't sure) tells Steel, and Reagan agrees, it was "completely coincidental," though Reagan wonders how their "stylists" will feel about it. (And if the stylists don't like this little happenstance, then the stylists are clueless.)

Courtney actually has a nice layered collar, but Mandy's got her sexy white watch.

Now, Steel asked about the shoes, and the ladies agreed they were wearing the same style, but Mandy claimed "I have no idea" who the shoemaker is, which we find a bit hard to believe.

Reagan professed the same, but then they looked at them and agreed both pairs coincidentally are Pelle Moda, which we've never heard of and have to admit that knowledge of such things is far beyond this page's (very low) fashion pay grade.

Notice in the bottom picture the dude in jeans who's walking into this production and undoubtedly thinking, "Hmmmm, I like this."

There was no hint of fur-ruffling in this episode. "I just think of Courtney as my little sister anyway," Mandy said, to a nice little hug.

Many thanks to the "spotter" who flagged this one.

[Friday, August 5, 2011]

Brian Kelly refers to
himself in 3rd person

The day couldn't have been more chock-full of European news and stuff to talk about, and yet Brian Kelly on Friday's Halftime uttered the most dreadful Fast Money line in probably months.

"I still have my doubts whether or not this actually can take place," Kelly said. "It's kinda like me saying, uh, 'BK would like to buy a Ferrari.' But, BK doesn't have a printing press."

Gartman: Sounds like QE-Infinity

Dennis Gartman seemed really eager to dial into Friday's Fast Money Halftime Report to voice concerns about gold, even getting bumped ahead of Patty Edwards by a "grateful" Judge Wapner who thanked Gartman profusely for taking the time to speak.

Gartman explained he halved his gold position. "Too many people were involved in the trade," he said. "Gold is not a safe investment."

Gartman conceded, however, said that if the early news Friday is all true, "this is QE-Infinity ... when the facts change, I'll change."

When Edwards finally got a chance, she said, "I'm not touching my gold position, I'm leaving it intact. But I did take half of my silver position off yesterday."

Edwards said that in the wake of the European developments, she didn't think she could trade this particular market fast enough for clients, citing Simon Hobbs' use of "the words 'may' and 'if'."

Edwards said in Call the Close that she's staying long gold. But Brian Kelly said he's "with Patty, buy gold," even though Patty didn't say "buy," only remaining long.

Do we hear 1,236?

We're not pro chartists, just the amateur bums.

But as further evidence that technical levels, while fine and relevant during "normal" plodding markets, are basically useless during earth-shaking weeks, Steve Grasso offered this on Friday's Halftime.

"We're still stuck at a critical point," Grasso citing, then citing "1,191 ... 1,182" as key support levels, then saying "we can actually pop well above 1,200 if this is indeed a game-changer," then citing "1,204, 1,216, 1,228" to the upside.

The question was how to play it now, not how great did he already play it

Here we have the Roman Empire either collapsing or rising again, and Dr. J, Jon Najarian, was still able to unleash a dilly of a Brag Trade on Friday's Fast Money Halftime Report.

"How do you trade it from here?" was what Judge Scott Wapner asked Najarian.

"Believe it or not, it played out exactly to plan," Najarian responded. "We put out this morning that we thought we would see a big open on that positive jobs report ... we thought it would get hit very quickly ... we told our subscribers, watch for 11 o'clock Central time, noon East Coast, when the European bourses are closing, because the announcement will most likely come just after that ... that's exactly what has happened."

For those actually interested in what to do now, Najarian said that if the news reports are accurate, "then I think we could see a pretty significant short squeeze into the close."

Later, Najarian and Judge decided to carve out a moment in the program for an anti-HFT examination, with Dr. J singling out $2 drop activity in QCOM but curiously also crediting 2 other guys for seeing it too, which means they probably arguably saw it just before Dr. J did. Dr. J then rattled off how the system works, followed by an even more inside-baseball explanation by Steve Grasso about how a better system works. Dr. J summarized as, "That's how you get Flash Crashes, my friend."

Obviously pre-scheduled LNKD chat imposes briefly on breaking-news discussions

Rebecca Patterson said on Friday's Halftime "the market has ADD right now" and that it's too soon to make a currency trade.

Patterson said if there's clarity over the weekend, she'd short the dollar and go long Norway, but if no clarity, would sell the euro and go long Swiss franc.

Evercore's Ken Sena wasn't that impressed by LinkedIn's quarter. "The results were good. But the results didn't blow us away," Sena said, explaining his $70 valuation.

However, "we like the story overall," he said.

Anyone got $100 billion
lying around?

Brian Kelly demanded Simon Hobbs provide some immediate answers to Hobbs' breaking-news report on the Italian situation.

"With what cash is the ECB gonna buy this with? They don't have any," Kelly said.

Hobbs downplayed the immediate need to answer that, saying there's "$100 billion that still sits within the national central banks .... that's for them to sort out further down the line."

Steve Grasso later said, "QE3 is gonna be a tough, tough sell to the American people, and in D.C.," although we kind of doubt that it would be, if bad stuff continues to happen.

Brian Kelly incredibly had even more ideas for the Fed. "What I do think they could do is cut the interest on excess reserves." He said he'd still stay short the euro.

Steve Liesman sees further vindication in debt-ceiling brouhaha being much ado about nothing

Steve Liesman and Gary Kaminsky sparred briefly on Friday's breaking-news Strategy Session over where the real indications of this week's stock bloodbath were coming from.

"Does this not tell you that Europe is what bothers the American market, not America!!" Liesman bellowed.

"Steve! I've been saying this, David and I have been sitting here for weeks — weeks — trying to basically make that point," Kaminsky responded.

Given the magnitude of this plunge, this page this weekend might take an extended look back at CNBC commentary for a couple months back to better identify some heroes and zeroes.

But note that on July 11 (see far below on this page), Judge Scott Wapner asked Jim O'Neill on the Halftime Report about a rumor that Italian banks were no longer buying Italian bonds, and O'Neill, amid giving an optimistic outlook for the 2nd half, said, "I'm too busy to hear all the tittle talk going on in the markets."

Also July 11, on the Strategy Session, guest Jacques Cailloux said Italy is feeling some pinch despite a better situation than Greece, and "It's likely to go on until we get a pretty serious policy response here."

On that episode, Gary Kaminsky pointed to Spain's cost of borrowing and said that credit markets usually tend to be ahead of the equities, and that he would've been more conservative during that time and missed some of the late June/early July rally.

Back to Friday: Guest Tim Backshall said "the high-yield specifically has been sending us a message for a couple of months now that something's going on from a macro perspective," and Gary Kaminsky did indeed say June 24 after Jefferies' Kevin Lockhart spoke of high-yield redemptions that high-yield "typically leads" equities, and "if this is a sustainable outflow of funds out of the high-yield market, you gotta expect the same's gonna happen with the equity markets."

Much of that has been recorded on this page, but honestly, we didn't take it seriously enough, perhaps because it was accelerating during the second straight year of May-June fears of Greece and how all the PIIGS are affected, which for a short time appeared to be nothing more than the same great buying opportunity as in 2010.

At least we're certainly not alone. Consider the stoicism of the Fast Money gang during that ridiculous commercial-free broadcast the day of the Greek prime minister no-confidence vote in June, vs. the chuckles-galore 512-point market dissection Thursday night highlighted by Guy Adami's "hot list."

Even Friday, after the ECB-related bounce-back, there's still a panic-free sense from CNBC pundits of a mere passing storm.

But now, everyone's brokerage account is taking it seriously.

Sometimes, it’s capitulation

Gary Kaminsky showed a chart early on Friday's Strategy Session that took a moment to absorb but was actually quite interesting.

The chart referred to S&P declines of 9.5% or greater over a 10-day span, since World War II.

As Kaminsky explained, "there's only been 3 times where that type of equity market action has not indicated that we're in a recession."

Those 10-day spans, marked by the date of worst % off high, were these:

8/31/1998 — 13.1% down, but forward 6-month return of 28.0%
10/27/1997 — 9.8% down, but forward return of 23.7%
11/20/1974 — 9.7% down, but forward return of 31.2%

In other words, generally a swoon such as this one is a sign of trouble, not a bottom.

But not always, and the only thing lacking was how many total such 10-day spans have occurred.

See, that’s what I meant

Dick Bove, who made the now-famous call last week to get completely out of the stock market, found a neat little way to reconcile the uneven specifics of that call — "I think we're dealing finally with some of the core problems that the United States financial system faces, I mean the government, faces" — with the apparent facts on the ground from Italy that Steve Liesman says are really moving the markets.

Bove asserted Friday, "This whole system is based upon a country which is bankrupt. I mean, we cannot pay our debt."

To his credit, or not, one of his comments a week ago to Melissa Lee was, "I think the problem is that we're restructuring the global financial system away from the United States," although that sounds like a lengthy process that isn't really the cause of immediate Italian bond woes.

It's maybe dubious rationale. But broadly telling everyone to get completely out of the stock market a week before this monstrosity was a brilliant stroke, so however he got there, the Dickster jacked one out of the park.

Bove disagreed slightly with Tim Backshall on Friday, saying in the U.S., "actually the banks are not in bad condition at all" and argued the market is undervaluing Citigroup's cash position because "it believes that cash is no good." Bove also told Gary Kaminsky that banks won't have significant prop-trading losses for this quarter because "they're more agency traders at the present time."

Why the banks maybe
aren’t so cheap

Tim Backshall said on Friday's jam-packed Strategy Session a bunch of things we were nodding to, such as, in evaluating the U.S. CDS market, "there's a lot of technical mumbo jumbo that goes on in there."

He said the stock plunge this week is "a recognition that we never really got out of this balance-sheet recession."

Maybe most significantly, he threw some water on the constant refrain we've been hearing for literally years on Fast Money about how cheap the bank stocks are based on book. "Everybody talks about book value with banks; nobody knows what the book value really is," Backshall said.

Maybe the Fed could
mail cash to people?

Brian Sullivan seemed more adamant about getting guest Richard Portes on The Strategy Session than even David Faber was about the Bruce Berkowitz flight-delayed appearance a couple months ago.

Portes, wearing what some would call "Miami Vice" attire but really more resembling Dalton during his early trips into town in "Road House," said, "It's quite possible that the U.S. will go in a recession."

Steve Liesman proceeded to ask Portes a couple of great questions, first to identify the specific policy mistakes that have exacerbated this situation.

Portes said that in the U.K., "the government has been, uh, cutting too far, too fast, too soon."

Liesman followed up by asking what that meant for the U.S. and whether it too (snicker) could somehow cut "too fast," and Portes capably answered that the risk here isn't so great for that because there's very little serious cutting in the debt-ceiling deal (just as there's very little health care in the health-care deal unless you're 23 and want to stay on your parents' plan for 3 more years, but he didn't say that).

Portes said something we'll always be skeptical of, that the Fed has "not much left in its arsenal," a regular argument heard in February-March 2009.

Portes was given extensive time through a shaky connection, to the point Gary Kaminsky had to fight his way through the music heading into the first commercial break to deliver a huge update on why the Dow ticker on people's screens was suddenly gaining. "Hold the music for 1 quick second," Kaminsky said. "The ECB says they're ready to buy Italian, Spanish bonds if Berlusconi commits to bring forward specific reforms."

Mark Fisher: ‘I don’t think I’m qualified’ to declare a recession or not

One of the casualties of Friday's Strategy Session was not the Dow, which rallied, but Mark Fisher's airtime, which was discombobulated and limited at best.

Fisher first said oil is falling not as a real economic signal but because traders will "hit the most liquid markets you can first."

Fisher used the term "circus" about 3 times to refer to Washington and Europe. He also singled out warnings that people wouldn't get Social Security checks, which sort of indicates what side he might've been on in that debate.

Brian Sullivan, asking many good, direct questions this week, asked Fisher if he thinks we're getting a recession. "I don't think I'm qualified to say whether or not we're going into a recession or not," Fisher said, but in fact, if only a select few economists deem themselves qualified to define the term, then really nobody's qualified.

Gary Kaminsky asked Fisher to elaborate on his advice to buy "producing assets." Fisher, adding a David Faber cliche, said investors will want the building blocks of society. "I still think at the end of the day ... they're gonna invest in necessities," he said.

Liesman: Take a step back
from that ‘recession’ thing

Brian Sullivan also asked Steve Liesman Friday if we've got a recession on our hands.

"I don't believe we're in a recession; I think today's jobs report told us that we're not necessarily on the cusp of one," Liesman said.

Gary Kaminsky and Liesman actually debated slightly what Liesman thinks about while playing Dead on the guitar. Liesman eventually admitted, "I don't think we need easier money." (Note: Coming from Liesman, that is a significant statement, although if the government hasn't figured that out from a couple years at 0%, they need more help than just watching The Strategy Session.)

Brian Sullivan, highly quotable, threw a new wrinkle into the conversation or at least a wrinkle that's only gotten token attention this week amid the fall of the Roman Empire, saying, "This Brazilian chart right now worries me more than anything else globally that I'm seeing."

At one point Liesman made an interesting remark that he's just tired of talking about economic crises, we've been doing this for 3 years, and maybe we can just ignore it because we're sick of it. Sullivan made a hilarious crack, suggesting that "CNBC takes a month off," which gets to one of our favorite poker-style analogies of watching not the data but the reactions of the people watching the data to gauge its significance, for example, will Americans really not go see "Indiana Jones 5" because Berlusconi doesn't deliver all of the necessary cuts, etc., but not enough time today to fully explore the CNBC sentiment indicator.

Sam Hocking told Gary Kaminsky that hedge fund margin calls weren't the trigger of giant selling Thursday, because it's standard practice and generally involves 3 days to cover.

Simon Hobbs a couple times said of the ECB news, "This is an absolute game-changer."

Michelle Meyer appears
on Squawk Box, says ‘elevated’
risk of recession

Michelle Meyer, The World's Cutest Economist who hasn't been on Fast Money for more than a year since being asked about an "after-school job" but now seems to have slightly darker hair, surfaced on Friday's Squawk Box with Joe Kernen.

Meyer said BofA/Merrill finds a 35% chance of recession, "that's about double in a normal expansion ... but by no means is that our baseline forecast."

[Thursday, August 4, 2011]

Fast Money gang: In denial?

Inferring a real and not just the nominal trades from the Fast Money gang Thursday, one conclusion seems clear:

They're not taking this seriously.

It was barely a minute or 2 into Thursday's program before panelists were chortling over a "hot list" joke, which makes you think they're not really scared of losing their wealth in a 2008-style crisis.

Consider the traders' reaction to a 500-point drop:

Guy Adami said market participants "need to take the emotion out of this."

Joe Terranova insisted there wasn't as much panic as might be believed, because, "You cannot count high-frequency-trading volume."

Karen Finerman, making the newfound "hot list" in part because of a dress costing sixty-seven hundred dollars, said, "I think the bar is so low on that unemployment number for tomorrow," and also said, "It's a great Alan Greenspan quote, 'Liquidity is not a financial term, it's a psychological term,' and that to me says it all."

Finerman argued that a name such as MOS is not truly 8% less good than it was a day or 2 ago, that she's also looking at MTW, and maybe even Ingersoll-Rand though the latter is "not there yet."

This'll probably come back to haunt, but this page has to agree. At worst this is the '97 Asian financial crisis; at best, just some typical sell-in-May-and-go-away doldrums while kicking the can down the road for a blockbuster September.

But it's still a 500-point drop, after a lousy couple weeks.

Adami had this prediction for Friday: "An early flush down to maybe this 1,180 level and then sort of rip the rest of the day."

CNBC expert admits
Fed not really ‘apolitical’

Lo and behold, did Steve Liesman say something interesting on Thursday's Fast Money.

He said that some kind of measure such as QE3 would need "some support from the political establishment before Bernanke moves. I know the Fed's supposed to be apolitical, but the fact is, I think in the face of, of the trend of things right now, that's not gonna happen."

So a respected CNBC reporter agrees with a long-running theme on this page, that mopes who come on CNBC and chastise Ben Bernanke's "policy" (remember how Ben was the culprit for the Egypt-Libya-Syria upheavals for inflating food prices?) are too clueless to realize it's actually a massive consensus that decides these things.

(Liesman didn't use the term "massive consensus," but "political establishment" is the same thing, trust us.)

Mel Lee, finally back from a break in a sizzling blue top that even out-cuted Karen Finerman Thursday, introduced Liesman in a slightly cavalier manner that network execs may frown on: "Our senior economics reporter, I think our only one actually, which makes you senior."

Karen Finerman then chided Tim Seymour over presentation expectations and/or the lack of excitement thereof. "That's what we need, Megan Fox talking about the employment number," Finerman cracked.

Liesman tried to close with a kicker of a soundbite — "the new interest rate on money is essentially zero" — but nobody on the panel seemed especially impressed.

Scaramucci: 50-60%
likelihood of QE3

Anthony Scaramucci said that according to research by his firm, there's a "50-60% likelihood of QE3."

Scaramucci cited "the Taylor Rule," and no, he doesn't mean Steelers cornerback Ike Taylor in some kind of a throwback to Mel Blount getting the bump-and-run minimized, but rather it's some kind of inflation/GDP formula dictating Fed policy. "So it is likely that the Fed will have to intervene in these markets again with a QE3," which Scaramucci called "another positive development for the markets, and it would potentially be bad for the dollar."

Guest Adam Parker said, "No I don't agree with that at all," at least the part about QE3 being a positive, because the Street will be skeptical this time.

Karen Finerman earlier said she thinks QE3 would be "less effective than QE2."

Slightly unrelated, Scaramucci said, "Most of the hedge funds de-risked coming into June," but one issue is that they've dabbled in gold as a hedge. "When things get bad, everything starts to converge on each other," Scaramucci said. "Right now, I will tell you that the gold story is the trickiest thing for the hedge fund community."

According to Dennis Gartman, a steep yield curve makes every banker a genius

Bank expert Chris Verrone gave a detailed chart explanation on Thursday's Fast Money to show "support is no longer being respected" in the financials.

As for the S&P, he predicted "1,170, 1,120" as the next key support levels to watch.

Chris Whalen didn't say "s---" this time, but he did draw a distinction between the quality of various U.S. banking franchises, specifically the strength of UBS and PNC vs. dogs like BAC and C.

Jens Nordvig said the Fed and Japan and others aren't quite in a race to the bottom for currencies, because the Fed has merely been using "indirect" measures so far.

Tim Seymour changes hair part

Guy Adami, who actually at one point credited a Barton Biggs interview for calming the markets, was most certainly not scared of the stock market Thursday, especially when it came to one of his favorites, WLT, which quite frankly suffered a worse bloodbath than Frankie Pentangeli at the end of "The Godfather, Part II."

Adami noted the shares were sub-$80, but argued that in a takeout, it "could easily go for 7½ billion dollars, which puts it right back to 120."

JJ Kinahan was given scant minutes upstairs at the Nasdaq but said, "the VIX just for a point of reference is up 58% in the last 3 weeks. It's really been an incredible move."

Brian Kelly hailed Treasurys, "that's the safe haven here."

Kate Kelly, surfacing on Thursday's Fast Money after a Strategy Session interview with Jes Staley that her host dubbed predictable, said a couple things to watch from Thursday were the moves in Temple Inland and Ralcorp, because those have had acquisition offers and the market slam could reflect a lack of confidence in deals happening, as well as the PMI earnings results, which brings solvency issues to the forefront.

Karen Finerman asked Kelly if she had insight on Kinetic Concepts. Kelly consulted some paper notes and said she didn't, but that was a stock worth watching because someone she spoke with mentioned the "financing committed from Morgan Stanley."

Tim Seymour did talk at length as usual about the world's various data points, but he let his hair make his biggest statement of the day, moving the part from right side to left side. (We tried to put up picture proof but haven't yet found dueling screen grabs that adequately show the distinction against the fairly dark Fast Money background.

Grasso didn’t go
quite far enough

Steve Grasso and Guy Adami differed slightly on the S&P at the end of Thursday's Halftime Report.

"Ultimately I think we head below 1,200, not today but ultimately," Grasso said, a prophecy that actually came true just a few hours later.

"I don't know if it's gonna get there," said Adami. "1,204's my level; above 1,235, I think it gets very interesting to the upside again."

Steve Cortes, when not doing a mini-Brag Trade on Kraft, which he called an "inverse-wheat trade," said, "I will tell you, I'm getting very interested in Bank of America," which is a curious observation, because that one looks like falling-dagger land.

Scott Mushkin said of Kraft's move, "I think it's a great deal all around."

Steve Grasso said, "Around $70 looks like a pretty good entry point for Abercrombie."

Rebecca Patterson gave a brief assessment of currencies, saying, "There's sources of growth out there for commodities and commodity currencies. It's just a matter of when do you get back in to buy. Not yet, but hopefully soon."

Dick Bove suddenly
looks like a genius, if
for the wrong reason

Dennis Gartman warned Fast Money Halftime Report viewers on Thursday about gold.

"If you haven't reduced the size of your gold position, you better go do it right now," Gartman said, stressing the rumor of margin increases and that gold doesn't go up on days like this.

Steve Cortes, who just a day ago proclaimed "Ding dong, get long," agreed and stressed that gold is no safe haven, saying, "I am shorting silver ... we're back into a credit crisis."

Cortes also added to our continuing log of Fast Money musical picks, citing Orleans this time. "You remember that great song from the '70s, 'Still the One'? Well the U.S. dollar, we're still the one," Cortes said.

Brian Kelly wasn't negative on gold Thursday, explaining, "I am still long gold ... if we stay down here, I'll be lightening up my position for sure."

Steve Grasso said, "Yesterday we defended that 1,233 level ... but today we broke it." He said it matters for fundamental investors, because "70% of all stocks trade with the overall trend."

"1,204 is the level I'm gonna continue to look at," said Guy Adami.

A bunch of people have made fairly bullish/semi bullish/lukewarm/negative market calls in the last week or so, and we don't have the wherewithal to evaluate all (particularly this page's own suggestion that down 25 S&P whatever, it'll bounce), but Steve Cortes obviously didn't make anyone any money with yesterday's go-long call, Doug Kass' creeping Twitter suggestions for several days about being on the verge of big buying opportunities haven't really materialized except for maybe unfathomably nimble traders, but Patty Edwards has wisely recommended sidelines, and Dick Bove of all people, despite citing the debt-ceiling debate rather than Europe, is King of August for telling people to get totally out of the market.

We'll have more from Thursday's Halftime and 5 p.m. Fast Money later.

Not quite past Andy Busch’s
Point of Know Return

The Strategy Session, much more than Fast Money and probably other CNBC shows, has been out front on the Europe story, and perhaps our favorite line recently came from Andy Busch, rapidly emerging as one of our favorite voices, for various reasons.

Busch said on Monday's Strategy Session, "If we break 7% on the yield, and CDS gets above 400, it's the point of no return."

By Thursday, as far as the CDSes go, they just surged to a record 384, according to Bloomberg.

Yet the Italian 10-year just dropped below 6%, according to Reuters.

Brian Sullivan admits interview wasn’t going to provide spontaneous answers

Andy Busch claimed on Thursday's Strategy Session that, without naming names, he wasn't really on board with the commentary of Jes Staley.

"This is heavy-duty counterparty risk that's going on right now," Busch asserted.

"Jes Staley just said it wasn't!" said Brian Sullivan.

Steve Liesman then tried playing moderator, saying, "If he had said otherwise, could you imagine the run on the banks at that point."

Sullivan then backpedaled, admitting the less-than-insightful journalistic moment: "It was one of those questions where you know the answer going in, but you need to get it on the record," Sullivan mumbled.

Gary Kaminsky’s question
too much for Andy Busch

Any momentum Andy Busch had Thursday got derailed when Gary Kaminsky asked him a good question about whether the euro could go to parity and to give him a reason why that wouldn't happen.

Busch first restated the question, then told the backstory of how we got here, then offered a totally hedged non-answer, "I would be really surprised if the new ECB doesn't cut rates when the new Italian guy comes in on November 6th. That's what I think." (But what, again, does he think about euro parity?)

"We've got Franz Kafka stuff going on here!" bellowed Brian Sullivan, but at least he didn't say it's "kafka-esque," the term elitist writers use while trying to sound clever.

Santelli: ‘Financial enema’
will do us good

These non-commercial programs are turning into commentary killers.

The most interesting and/or useful calls on Thursday's Strategy Session came at the end.

Rick Santelli said the 10-year bottom was a blinking-instant 2% at the end of 2008, and "I think we're gonna have a double-bottom in yields."

Jim Iuorio said of gold, "We could have some serious downside just based on the magnitude of the upside."

Gary Kaminsky said that in Europe, there's a "monumental shift, where you've now gotta rethink your portfolio, and you gotta say, 'Europe is going to be easing.' In fact, I think we may even see an emergency rate cut out of Europe, if this continues for several days."

Santelli concluded, "The giant financial enema's forced on the system, and we will all ultimately be better off for it," although the more we think about it, the more we're not totally sure it makes a lot of sense.

‘Clearly Europe has the
economic wherewithal’

If the Jes Staley interview on The Strategy Session had been the only CNBC viewers had seen all day, they would've had no clue the Dow was plunging 300, 400, 500 points.

Scheduling is not always perfect, and Staley might not've been the most dynamic guest for a stock market day like Thursday, with interviewer Kate Kelly perhaps conceding as much by her terminology when telling Staley, "Thanks for doing this."

Staley insisted from the start, "Clearly Europe has got the economic wherewithal to deal with the crisis that it is currently facing."

"We're an extender of credit to Europe," Staley assured at one point.

Steve Liesman asked Staley to give the '07 financial activity a score of 100 and from that, explain where we're at now. Surprisingly, Staley asserted, "I think we're in a significantly better position today."

At one point too many mikes were left open and Brian Sullivan's echoing question could be heard on the time delay. At another point, Staley used the word "uncertainty" about 3 times in 1 soundbite. At another point, Staley was heard to say "whilst."

Gary Kaminsky asked Staley why clients should pick JPMorgan as opposed to its rivals and what makes JPM special. Staley curiously first went out of his way to praise Goldman Sachs and Morgan Stanley, then said JPMorgan is "very committed to our clients."

Staley at least didn't express typical mainstream disgust at Congress as Ward McCarthy did yesterday on Fast Money, explaining, "I think on 1 level, we saw democracy at work."

Flash: Bernanke has
probably called Trichet

Gary Kaminsky said in the beginning of Thursday's Strategy Session, rather emphatically, "The charts. Say. Global. Slowdown."

Steve Liesman got nuanced, saying the "interconnectedness" is really not so much about macro-economic fundamentals but "more about systemic risk."

But Liesman said "As I cast about for reasons today," which makes us wonder too if this selloff is really real.

Sullivan said, "If I was Ben Bernanke, I'd be on the phone with Trichet right now."

"My guess is that call has happened," Liesman said.

"Very good," Sullivan said.

[Wednesday, August 3, 2011]

Karen Finerman says the
magic words for long investors

Scott Judge Wapner asked Karen Finerman about gold on Wednesday's Fast Money.

"I'm just, I'm astounded. It's an inflation hedge, a deflation hedge, I mean it'll hedge anything," Finerman said.

She added, "wouldn't be long, wouldn't be short" — which immediately got our Spider Sense tingling, because in the CNBCfix.com interpretation of real as opposed to nominal Fast Money calls, hearing Karen Finerman say "wouldn't be long, wouldn't be short" is equivalent to "buy! buy! buy!"

Karen on Wednesday also gave a rare hint at her personal views of America's financial management, saying the deal does not mean we are "getting our fiscal house in order, not that we just did that, I don't think we did, we just avoided disaster."


The Fast Money males should leave certain things to the experts, and we're not talking about stock picks.

Rather, it's the subject of complimenting the women on CNBC, which quite frankly is possibly this site's favorite task, and there's simply not enough time in the day to adequately account for it all.

When male on-air colleagues try it, they often sound like mopes.

So while her colleagues rightfully gushed Wednesday about those sexy glasses of Karen Finerman that she inexplicably rarely wears, they missed the more important half of the equation, which would be that stunning dress that cost forty-four hundred dollars.

Tim Seymour was the first to salute the specs, followed by Joe Terranova with probably the clunker of the day: "I thought I was sitting next to Catwoman for a second with those glasses."

"Well thank you. I guess. I don't know," said Finerman, mildly uncomfortable with the attention.

Judge Wapner moments later was stammering about pinning down K-Fine on a global macro/Caterpillar call, saying, "you still are, uh..."

"Hot, is what she is," broke in Guy Adami. "Sorry, sometimes I blurt."

Another big-time analyst is disappointed that not everyone in Congress agrees with him and thinks everyone else is too

Ward McCarthy of Jefferies told Scott Judge Wapner on Wednesday's Fast Money that a double-dip isn't likely.

"I don't think so," said McCarthy, who said there are still options for the Fed. "The one that intrigues me the most, uh, is that they can keep the existing size of the balance sheet but change the structure, specifically by increasing the maturity, with the idea being that they could help the yield curve to flatten," he said.

Fair enough. But then McCarthy unfortunately revealed that he too got caught up in the media's ridiculous non-story of the last 3 weeks: "Watching our government be in such a dysfunctional state for a long period of time, uh, I think really was disheartening for all of us," McCarthy said.

Which is equivalent to scoffing at the outcome of Super Bowl XIV because the Steelers didn't wake up until the 4th quarter.

Joe Terranova latest to back the GM story without naming a single product it’s making that people clamor for

A top GM exec just said on The Strategy Session a couple days ago that it would be "silly" to attempt a 3% market share gain.

Joe Terranova on Wednesday's Fast Money apparently felt that market share is just fine, saying the stock is at "a level that it is attractive," and at some point the stakeholders will unload, "that overhang will be lifted," and the stock will run to "clearly 30-35 bucks."

Judge Wapner seemed intrigued by the news Goldman Sachs has taken F off its conviction buy list, but Terranova asserted, "Goldman doesn't run everything."

Terranova: Support at 1,227

Steve Grasso said on Wednesday's Fast Money that stocks had a nice bounce, but "I would be selling the market on any rally, even up to 1,300."

Joe Terranova went all the way back to the "1st week of November" to find a former-resistance-now-support level of 1,227.05.

Guy Adami said traders can use 1,256 as a reference point to go long some high-beta stocks, or could play it more cautiously and use Wednesday's intraday low instead.

Tim Seymour said, "Today felt like a capitulation day at least on a couple of levels." He later questioned himself: "Capitulation today in Brazil? We may have seen some of that."

Flash: Grasso made
a profit in AKS

Guy Adami on Wednesday's Fast Money offered perhaps the most intriguing single-stock trade, which was JNPR. "You have an outside day," Adami said. "That's a tradeable bottom."

Steve Grasso, meanwhile, was telling viewers for the umpteenth time this week about his Brag Trade in AKS and the specific reason he bought it for. "I sold it up, I made a decent profit," Grasso said.

Then he said, "For me I'm just looking for a technical bounce," which prompted Judge Wapner to helpfully get him to clarify that he actually did buy back the shares, but it was a couple days ago and with only 20% of the previous float, or probably as Patty Edwards would say, the "house's money."

Joe Terranova said Oracle and Aruba Networks are looking good here.

Dan Dicker said of oil, "the short-term fundamentals have to change," and that there's a flattening of the curve in process. He said he liked the integrateds, but "I wouldn't touch the refiner trade."

Jon Fortt said that basically no one cares much about RIMM's OS7. Brian Stutland said a sophisticated options trader is buying 17s in RIMM a few months away.

Tim Freeman, in yet another mind-numbing Fast Money redefinition of the VIX and why it is or isn't moving like uninformed people would think (except if you don't really know what it is, you're not going to care where it's moving anyway), said that things aren't so volatile because people are waiting on QE3, they're hedged, and that they know equities are looking cheap to fundamental investors.

In less than a minute,
Patty Edwards talks herself
into a gold thesis

Judge Wapner plunged right into precious metals on Wednesday's Fast Money Halftime Report and elicited a curious roundabout recommendation on gold from Patty Edwards.

"At this point in time I'm not sure if I would actually go in there and buy more or not," Edwards said.

A moment later, she said, "That being said, I don't think I would be in there buying at this point."

Evidently Edwards was swayed by her own commentary in-between, in which she unfortunately dabbled in something rare for her, a bona fide Brag Trade, heaping it on with one we rarely even get from Jon Najarian, the "house money."

"I've got it from $800 an ounce for my clients," Edwards said, adding "I really don't care" if it drops $100, which is kind of a curious approach. "Frankly I'll hold onto it because I'm basically playing with house money at this point."

We should probably note the redundancy in one of Patty's favorite lines, "at this point in time," because we did that for David Farr (see below), but enough already.

Pete Najarian gushed about gold, saying $1,800 is "not a crazy call," and "in the GLD they went out to the October options."

Steve Cortes cautioned "the trade is incredibly crowded" and "retail-dominated," but admitted it's massively strong and impressively held its own even as oil has sold off.

Dennis Gartman insisted he's not a gold bug. "Most gold bugs are the folks that think that the world's coming to an end, that we need distilled water, ammunition, dried food," Gartman said.

"I am long of Dennis Gartman and short of Marc Faber," said Zachary Karabell, though he pronounced the latter "Fay-ber," while we thought it was "Fah-ber."

Traders find various ways to rationalize the big MA move they obviously missed

Apparently taking a cue from Patty Edwards' $800 gold basis, Wednesday's Fast Money Halftime Report was a bizarre mix of Brag Trades and My Bads.

"I was burned on RIMM," conceded Zachary Karabell, who added, "I don't think RIMM is going away. Nokia might be going away."

But Karabell said of Mastercard, "I made money on it in the 200s."

Patty Edwards said she wouldn't get into MA here because it has "run so far so fast," but she said she's been holding V and is "pretty happy" with that.

Steve Cortes said he got burned trying to short silver recently but made sure to note that of his S&P bull call, he got long, but it was "about a percent lower from here."

CBS watcher Larry Haverty said "They're gonna mint money on political advertising next year" and have begun to figure out how run the company like a cable operation with syndication, etc.

Notably, Haverty said, "I'm very very bullish on- on- on the economy, Scott," citing first "price of oil is going down," then in a very dubious call, added, "auto business is terrific."

"I don't know that I'd say the auto business is terrific," said Scott Judge Wapner, an understatement.

Haverty, who would barely stop talking and forced Judge to cut him off, also likes Comcast. "It's basically absurdly cheap," and if they can't find acquisitions, "they'll buy their own stock."

Patty Edwards recommended Philip Morris International as a Slow Money trade.

Ding dong, get long

Zachary Karabell offered a very concise explanation about U.S. stock market activity recently that many others on CNBC were taking hours to discuss.

"Every time there's a massive hiccup in European credit markets, there has been a significant selloff in European eq- in American and European equity markets," Karabell said.

Steve Cortes even revealed, "I am net long the market as of this morning," and for his Call the Close, even said, "Ding dong, get long."

"For a rare moment, I am totally with Cortes," said Zachary Karabell.

Patty Edwards, despite being carefree about $100 gold drops, wasn't so enthusiastic. "I don't think that I personally wanna get long with other people's money going into these jobs numbers that we've got in the next couple of days," Edwards said.

Which makes us wonder: How bad can it actually be? 11% unemployment?

‘This’ world is one thing,
‘that’ world might be one of high-yielding Treasurys, solvent Medicare ...

You've been hearing for days from Guy Adami about this notorious earnings report from Emerson Electric.

On Wednesday's Strategy Session, Gary Kaminsky spoke about comments from Emerson CEO David Farr, whom Kaminsky said is a significant voice because of his "transparent" observations as a leader who "likes to sort of say it like it is."

Kaminsky even showed a select paragraph of Farr's remarks in graphic form and read it aloud, saying, "I have no visibility into 2012 at this point in time, given what's going on around this world, both in Japan, in the U.S., and in Western Europe."

We can easily excuse the "in time" redundancy, but "this world" is a bit of a head-scratcher even though Kaminsky bailed him out by reading it as "the" world, and "both" referring to U.S., Japan and Western Europe, suggests this wasn't the most eloquent statement from a CEO we've heard recently.

Kaminsky said there's a lack of credibility or confidence with European banks that's affecting the ability to get credit, and as for where to put money now, he likes "selective" REITs, growth MLPs and municipal bonds.

What if someone tries
to buy out KKR?

It was KK on KKR Kate Kelly visited on Wednesday's Strategy Session to try to explain the big KKR plunge.

Kelly said even though the numbers were generally good, the company "missed expectations," but she pointed to exec Scott Nuttall's boast that the company is great at turning "lemons into lemonade," which makes us think CNBCfix.com should ask Nuttall about taking over this site (provided that, at the end of the day, we don't have to pay that 2 and 20 thing that David Faber despises).

Brian Sullivan asked Gary Kaminsky a couple great questions about private equity, as to whether these shops can be declared failures as public companies. Kaminsky said "I'm gonna take the other side of that" and made an argument on behalf of the KKR types, that they would say their model delivers success over 10-15 years, not in the short run, but he acknowledged up till now, it's basically been a failure. Sullivan though suggested it's a different skill set between analyzing and taking over other companies and running their own publicly traded company.

Kate Kelly was either wincing or rolling her eyes when she explained why they've gone public because of the "graying" of the founders: "They had to develop some permanent capital, figure out their leadership and succession plan."

Trying to be funny often doesn't work, as Brian Sullivan likely discovered when he asked Kelly to ask tomorrow's guest Jes Staley, who according to Kelly "I don't think has done a television interview in quite some time," if JPMorgan is going to buy Portugal.

Chance to flirt
with Carolin Schober

CNBC Europe fox Carolin Schober reported Wednesday from Italy on The Strategy Session, unfortunately having to listen to Silvio Berlusconi's speech and saying the country probably needs "at least a raising of the retirement age to 70 years."

Brian Sullivan savvily (is that a word?) sneaked in a compliment for Schober, asking if there's anyone in Italy under 50 besides herself.

"Thank you for noticing I'm not 50 yet," Schober said.

Hey, we noticed that too, a long time ago.

Anyway, Schober said, too seriously for the joke that it was, "there are masses of tourists here, um, and they're all below 50 I would say," which seems dubious because we figured most would be over 50, before adding, "there are many young people here."

Sullivan said his point was "sort of meant sarcastically" but that Italy has one of the "worst demographic profiles of any country in the world ... almost a negative birthrate," and isn't it curious how people on CNBC will talk about birthrates hampering other countries (you know, the Kyle Bass Japan diapers thing from SALT), but nobody brought it up during the U.S. debt debate.

George Goncalves claims Europeans ‘kick the can down the road’ because they’re good at soccer

George Goncalves was the latest Wednesday on The Strategy Session to explain what Europe is doing; "they're trying to kick the can down the road" because they like soccer, Goncalves tried to joke, and he should probably leave the comedy to the professionals.

Goncalves did little but chide what governments are doing, saying, "You can't shrink your way into growth."

He said it matters here because "everything is somehow tied to each other."

Yield Hunter Darren Horowitz touted 3 MLPs, saying, "I think that uh you are gonna see higher prices across the MLP asset class." He likes PAA (6.3% yield according to graphic), MMP (5.4%) and EPD (5.8%).

Gary Kaminsky asked Horowitz if MLPs have gotten too popular. No, said Horowitz, who said "I think that's a good thing."

Brian Stutland, in yet another endless CNBC definition of the VIX, said hedges are coming off the table, which can be an indicator that in stocks, "usually a big rally is coming on its way."

Bertha Coombs delivered breaking news on Playboy of all things, saying, "the SEC is charging former Playboy CEO Christie Hefner's husband with insider trading," and we'd sort of question the order there, probably should've said "charging the husband of former Playboy CEO..." for those who don't get the whole thing.

Coombs said the allegation is that Christie warned him not to do it, and Coombs also identified the hubby as "William Moravitz," though it's actually "Marovitz."

"Moral of the story Brian," said Coombs: "Listen to your wife."

[Tuesday, August 2, 2011]

We’re not done
with the automaker bailouts

The subject of the automakers came up on Tuesday's Fast Money.

And the panelists blamed the stock performances on uninspiring products the economy.

But at what point does the dog actually start wagging the tail?

Maybe the reason people aren't flooding Ford and GM showrooms is not because of the ADP number or "wealth effect" of 401(k) accounts or uncertainty over the alternative minimum tax ... but because those showrooms are full of the same generic products all their rivals are making and that they themselves have been making for 5, 10, even 20 years in some cases.

Expectations in Detroit are so sadly low, a top GM exec incredibly told Phil LeBeau (see below) it actually would be "silly" to try for a 3-percentage-point market share gain.

How about, instead of blaming the economy, actually building something that makes people go, "You know what, we weren't going to buy a car this year, but we saw this new (insert favorite brand) and couldn't resist ..."

Anthony Scaramucci claimed that if you buy F or GM now you'll have a nice return in 18 months, but "the show's called 'Fast Money' for a reason .. . these stocks are not going anywhere in the short term."

Guy Adami seconded the excuse theory, saying Ford's chart mirrors U.S. Steel, and that you wanna buy the automakers when you see steel bounce, or in other words, the cars Detroit is building with bailout help are just as generic as a sheet of rolled steel.

Terranova: Wealth is created through ‘rising values of homes’

It barely took seconds of Tuesday's Fast Money for Joe Terranova to issue the most curious proclamation of the day.

"You create wealth domestically in America through rising values of homes and rising value of asset prices," Terranova said.

Gotta disagree mightily with that one.

Housing prices and asset speculation do not represent "wealth."

"Wealth" — and yes, there's a risk of semantics-land here but this is an important and widely defined term — is not arbitrary financial multipliers on a computer or piece of paper to be cited by Jared Bernstein or Robert Reich on the Larry Kudlow show ... but the world people have accumulated for themselves (with the help of others), which is why virtually every American today lives a far wealthier life than John D. Rockefeller did.

In fact much of our wealth in the U.S., unlike housing prices, goes incredibly overlooked. It's the ability to go virtually anywhere in the world in a short period of time, communicate instantly, be successfully treated for a heart attack on a moment's notice, get a root canal, be entertained almost on-demand, and maybe most important, examples of limited government at its finest, knowing that you're probably not going to die of something in the air from the people/wastewater/landfills/mosquitoes around you.

The type of "wealth" Terranova is talking about is paper gains that don't really "create" jack, as we saw from about 2003 to 2007.

No one else on the panel really endorsed Terranova's theory, with Brian Kelly saying he sees "some kind of a QE3 coming down the line" and basically admitting that it's phony. "That was the whole point of QE1 and QE2," he said. "The point was to increase people's feeling of how wealthy they were."

Mike Khouw outright dismissed Terranova's point. "If everybody's going to sit there and say, OK, we should re-inflate home prices, No. 1, it's not going to happen," Khouw said, "and I don't see any reason why we should only hang our hopes to that."

Now Scaramucci’s doing it

We figured that with Anthony Scaramucci making a rare appearance on the Fast Money set Tuesday, panelists would be gushing about the last SALT and the next SALT and who was playing blackjack and Melissa Lee at the Bellagio pool and who got a tan, etc.


Instead, the Moochmeister mostly spoke grimly about the state of the economy, echoing his recent series of economic pronouncements on Twitter that coincidentally also deal with national leadership.

Unfortunately, he also uncorked the worst of today's cliches, saying, "Kick the can down the road, that's an easy route, that's for federal governments," while praising the state and local governments who don't have to 1) ship cash to old people and 2) pay for most of old people's meds and 3) build nuclear weapons, for making the "hard choices."

We get the feeling that far more than talking stocks, Scaramucci would've just loved to weigh in on White House performance during the last couple months, but Judge Wapner didn't ask, and as Mel Lee likes to say, it's not a political show.

Richard Bernstein believes there’s a ‘textbook’ for markets like this

Apparently whoever scheduled Richard Bernstein for Tuesday's Fast Money forgot to tell Judge Scott Wapner about the ground rules.

Bernstein said, like many others on CNBC Tuesday, that the stock market is momentarily rough, but think about buying in a "a week, 2 weeks."

So Judge asked where to look if someone's going to dabble.

"Well obviously I can't, uh, can't quite share that with you; that would, uh, that would be kind of, uh, interesting. I don't think my, my investors would really like that," Bernstein stammered. "It's just very traditional defensive stuff," or what he twice called a "textbook" reaction to tough markets.

Brian Kelly tried the carrot approach, saying, "Let's do it this way," and asking what country would Bernstein pick. Bernstein said he sees the biggest risk in the emerging markets right now.

Asked about preferreds, which suddenly are a hot topic on Fast Money this week, Bernstein said they're basically tools of the financials, so buy them if you like the financials.

Anthony Scaramucci said he's happy to be more specific about his picks, primarily chemical stocks and cyclical/industrials as well as drug stocks.

Dana Telsey: Unprecedented customer base for high-end retail

Dana Telsey, perpetually chipper and cute, made a rare Fast Money appearance Tuesday and defined today's luxury market this way.

"It's tourists and locals, and we haven't had that before," Telsey said.

Which made us wonder: If it wasn't tourists and locals, who would it be?


(Presumably Telsey meant "locals" as in local people, not unions.)

Telsey told Guy Adami that $70 for ANF makes sense, because she was just in Britain and saw the lines. "People over 30 years old are buying Abercrombie merchandise," Telsey said.

Telsey said you'd have to look at "watches and jewelry" as signs of where the first "cracks" in high-end retail could be, a reminder of the early days of Fast Money when Dylan Ratigan couldn't tell you about Blue Nile often enough.

Guy Adami, rock on

Guy Adami spoke on Tuesday's Fast Money better than we could've written it.

"If we hold these 1,249/1,250 level, don't get in the way if this market starts to rally again," Adami said. "It's very painful to get in the way of this locomotive."

While we don't understand Adami's long-term the-market's-always-going-down predisposition, which he reiterated Tuesday, we agree 100% that this is a train you don't want to short; who knows, maybe it'll go down another 25 S&P points, but in this page's view, the governments have been locked into the stock market since late 2008 and while you can find pockets of short success, you're basically asking for face-ripped-off land if trying to short nowadays.

Whether it's underwater for the year or not, soon enough, the S&P will get a boost, maybe QE3 or whatever or some European game-changer, and AAPL will be at $450 before you can shake a stick.

Mike Khouw agreed with Adami on the basis of volatility, which Khouw said "indicates that there's quite a bit of panic in the market here ... that does sort of set you up potentially for a little bit of a bounce."

Anthony Scaramucci was dealing in gloom, however. "You've got the trifecta of things going on right now ... lack of confidence in the government ... economic data has been disastrous ... (and companies) are sitting on $2 trillion cash."

That was seconded by Stephen Weiss, who in an otherwise quiet show said, "We're at '09 levels" of data, but going the wrong direction.

Adami, Kelly: Watch CBS

Muni bond investor Alexandra Lebenthal was shaking her head before Judge Scott Wapner finished asking her about the ramifications of the bankruptcy of Central Falls, R.I.

"Tiny example ... yesterday's news ... expected for a long time," were among Lebenthal's descriptions.

Lebenthal, though, did say a downgrade of U.S. debt would be "so ironic" in that it would be perpetrated by the federal government and really sting the municipalities who actually do have their act together. "If there is a downgrade, there will be an effect," Lebenthal said.

Guy Adami said "I think CBS is a name you can own" with a $26 level stop. Brian Kelly agreed with the call but said he'd prefer to get in around $25.50. Anthony Scaramucci made a new media observation that was easily understood but still should've been given more time, "All of these sports contracts are real-time, and that's where the advertisers are going."

Guy Adami said there's "opportunity" in WMT if the economy is going to struggle. Joe Terranova declared, "The trade in this space, Costco."

David Greenberg downplayed the notion of a rush into gold. "Open interest is actually lower today than it was a week ago," he said, adding, "basically it was just, you know, a melt-up today."

Like Dennis Gartman, he wanted nothing to do with silver, which Guy Adami likes. "The moves in silver are insane," Greenberg said.

Patty Edwards clarifies
‘balance sheet’ comment

After Tuesday's Fast Money Halftime Report, Patty Edwards explained via Twitter that she was referring to actual shoppers when saying, "most of those higher-end shoppers trade more off of their balance sheet and less off of their cash flow."

That comment kind of threw us, because we hadn't normally thought of individuals having their own cash flows.

Or, evidently, it's kind of like the wealth-creation thing Joe Terranova spoke about later, that high-end folks go to Coach when the stock market is up, not when they get a raise. (And maybe that applies to lower-end too, given that Tony Manero made a down payment for "layaway" on his new shirt before having any clue he was about to get a raise.)

Edwards also bailed out Judge Wapner's incomplete assessment of credit card debt, saying people paying off cards is good long term but "tough sledding" short term.

Solution: Have more kids

In a remarkable contrast, The Strategy Session/Fast Money Halftime gang in Tuesday's non-bifurcated programming massively overtalked about one thing the government is doing this week — voting on a debt ceiling — and said absolutely nothing about something equally symbolic the government is doing this week — mandating birth control as preventive health care with no copays. (And this, by the way, according to the Associated Press, is how the money works with that: "The cost will be spread among other people with health insurance, resulting in slightly higher premiums.")

So we're charging the American health-plan consumer more money to help ensure there are fewer of us around 25 years from now to support today's 40- and 50somethings, as today's 40somethings are supporting the 70/80somethings who supported the would-be 120-somethings, etc.

Hail ObamaCare.

Brian Sullivan, who showed some impressive raw abilities at winging it Tuesday but maybe waited around a bit for things to happen too much and was a bit choppy (this is one of those times someone has to take charge and run the show), was floating several thought-provoking personal thoughts on America's financial matters, including, "I'm not saying cut Medicare, because you say that, and you're gonna get a billion angry e-mails."

He continued, "The boomers, maybe the luckiest generation, right, because they're gonna get everything that was promised to them. The reality is that, I'm- sadly, I turned 40 last week, and, you know, when I do my financial planning, I don't expect to get- I'll get something, but I'm not gonna get everything."

Steve Liesman tried to clarify that point this way: "This will get a lot of angry e-mails, but it's statistically true. The debate is about how long Grandpa will work and that Grandma will live. And it's only because the, the men work longer and the, the women live longer."

He's not right about "statistically true," because he didn't say "the debate is simply about how many new people we're going to bring along in the future," because everyone is afraid to take up that subject; however, he is right that the actual "debate" is about the things he mentioned.

Sullivan unfortunately veered into pseudo-philosophy cliche, saying, "And I tweeted out something last night and I got, you know, some people agreed, some people said I was an idiot ... the battle to come is not Republican-Democrat. The battle to come is old-young."

As Capt. Willard asked,
Who’s in charge here?

Tuesday's Strategy Session/Halftime Report was so unprepared for a long, drawn-out Washington news affair, that about halfway through, it was practically impossible to tell which show was going on or who was supposed to speak about what.

Hosts (there were about 4 at one point) were so grasping for soundbites, they were recalling people off-air who probably figured their airtime was up and didn't have anything more to add about the empty podium in front of the White House either (one time when that window of 8 mug shots would've been a big plus actually).

Anyway, Steve Liesman turned up near the end of the first half-hour, telling Brian Sullivan, "They called me back and said you guys were floundering and needed some help."

"It's not untrue," Sullivan humorously admitted.

"Wapner's sitting over there steaming," Liesman cracked, and by the time Judge finally got some semblance of control, he was playing it unusually close to the vest, perhaps after Monday's minor disorganization.

David Faber:
Lucky to be on vacation

Brian Sullivan claimed Tuesday on The Strategy Session/Halftime Report that "the only thing in the debt deal that they're cutting are the things that the government might actually do well and promote growth like, funding major projects that the private sector won't take on. And they're leaving the entitlement programs intact for their base, which is a good thing for those folks, but it doesn't bode well for this or U.S. GDP growth, does it."

Call this page skeptical, but if the private sector "won't take" something on, it's usually a lousy idea, and sounds like Sullivan is referring to natural gas running everything or some T. Boone Pickens alternative energy idea that only GE takes seriously with a lot of government largesse.

The idea that the government might "actually do well" at things besides what it's really good at — sending checks to old people — is also a stretch.

Anyway, Gary Kaminsky made several references to a chart showing U.S. surplus/deficit as a percent of GDP, which actually showed a massive tumble in the '30s that proved V-shape. Kaminsky said, "From a credit rating standpoint, this is an unsustainable path that we are now on."

Kaminsky called the chart "government gone wild," which reminded us of Rebecca Patterson's gold comment a couple weeks ago, and coincidentally Rebecca Patterson did turn up on Tuesday's show, but she didn't talk about the gold-bikini thing.

Brian Sullivan told Kaminsky, "You keep calling for this, and it's clearly frozen."

"I know you bought those videos, Girls Gone Wild," Kaminsky told Sullivan.

Kaminsky also pointed to Barclays shares as a sign of trouble in the European and perhaps broader financial sector. "The employees of these banks are compensated in stock," he said, and with banks trading this way, "you start to have to worry about the longer-term viability of the human capital aspects of the business."

Another Detroit auto exec fails to give viewers a reason to buy his cars, even prefers to gain less than 3 points of market share

In one of the most bizarrely packaged Strategy Session-Fast Money Halftime Report combos ever, Phil LeBeau briefly interrupted the first half-hour for an out-of-the-blue interview with GM's Don Johnson over July car sales.

Johnson told LeBeau, who bought his first car for "$400 and a case of beer," that the numbers suggest a full-year sales pace that "looks like we're gonna be 12.1 to 12.2" million.

Gary Kaminsky asked Johnson what people who paid $33 or $34 for GM stock on the IPO day should be thinking.

"Well at the end of day, you know, I can't control the daily stock price," Johnson said, except the company actually can control its stock price by simply making products people want. "We put together a very simple, straightforward plan," he said, that included these 4 elements he named: "new products ... focusing on our 4 brands ... got our balance sheet in order ... got our dealers profitable."

That sounds like 1 generic sales pitch and 3 levels of cost-cutting or "streamlining."

Johnson added that it's about "making sure that we match demand with our production plan, not doing anything silly, uh, not trying to gain, you know, 3-4 percentage points of share but, slowly, but surely, increasing our sales ... and I think that's a, a formula for success in this business."


There's actually a "formula for success" in Detroit?

When did that happen?

1,258 intraday bottom June 16;
1,265 close June 15

We were nodding with Jeff Saut and Steve Cortes during the Strategy/Halftime Tuesday, only to see the S&P spoiling a nice theory as the trading day progressed.

Saut said investors have to "sit on your hands right here," but added, "I do however think we're approaching a very deeply oversold condition."

Cortes told Judge Scott Wapner, as the contrarian, "I'm actually doing a little bit of buying today," adding, "I bought Wal-Mart today on the downgrade."

Joe Terranova said "the line in the sand is 1257."

That's basically what we figure is the bounce, given that lousy May-June activity before the massive 70-point S&P gain in 5 days.

Except the S&P broke through even on the year by the end of the day, in which case the bears will say the trend is broken and bulls will say it doesn't matter "unless it stays there for a significant level of time."

Brian Kelly said he thinks there could be "some sort of QE3."

Terranova said "unfortunately you have a technical breakdown ... you have to pull back because of the technicals," but then he pointed to a corporate bond vehicle, LQD, "trading at its highest level that it's traded at since October-November."

Patty Edwards, who only got about 2 soundbites but that was about 1 more than Kelly and Cortes, said, "I think that Target still will continue to work, but what we're seeing here is the consumer is paying off their credit cards, and as long as they keep doing that, it's the right thing to do for them, it's the wrong thing to do for the market, and that's gonna be a tough trade."

Judge Wapner curiously said "it may not be a good thing though for the economy," which has laymen like us confused ... apparently it would be better for the economy if we had more debt; did anyone bring that up in Congress recently?

Edwards also said, in a reference to Wal-Mart, "most of those higher-end shoppers trade more off of their balance sheet and less off of their cash flow," and we sort of assumed she meant the high-end retail stocks, unless she meant the actual shoppers themselves and how much they're spending.

Another sign that a cigarette tax hike can’t be far away in Europe, U.S.

Brian Sullivan said Tuesday, "The only Dow stock that's up right now is Philip Morris."

That got us wondering — is "Philip Morris" actually in the Dow?

No. It was knocked out Feb. 19, 2008.

That would be the "Altria" version of Philip Morris, by the way.

Sullivan, implying he was talking about MO even though he said "Philip Morris" rather than "Altria," also asked Jeff Saut, "Are people gonna start smoking heavily again in the United States?" Saut just said it's had a great return over time.

MO was indeed up during the program(s). PM, which viewers might've thought Sullivan was referring to, is clearly not a Dow component, and was both up and down during the program.

If you were confused, know that so were we.

At least nobody said
‘kicking the can down the road’

Brian Sullivan elicited a potential new cliche out of Strategy Session guest Scott Minerd Tuesday but in the process unleashed one of the most dreadful himself.

"Plainly, the U.S. is the least dirty shirt in the bag," Minerd said.

Then, for a point about Europe, tapping into pop psychology that seems to be a common topic these days on CNBC, he added, "It's what I referred to recently as cognitive dissonance, right. They basically keep doing the same thing thinking they're going to get a different outcome."

"Well isn't that insanity, the definition of insanity, doing the same thing over and over again and expecting a different outcome?" Sullivan (ugh) asked.

Minerd actually told Gary Kaminsky that for 3-6 months, "over that horizon, I think that we have a very good chance of seeing equities up maybe another 10% from where we are," despite some "turbulence" in the interim, a point made later by Jeff Saut.

Minerd also said the euro long-term is trouble, "unless something is done to bifurcate the euro," the second time we've heard a variation of "bifurcate" this week.

Exciting stuff while watching endless footage of an empty podium

Brian Sullivan and his Strategy Session crew mulled the seeming contradictions between the race to the 10-year Treasury and America's debt/economic situation.

"If you listen to the radio, you can't go a commercial break without hearing how America's doomed and they should buy some program to help 'em figure things out," Sullivan said.

Scott Minerd claimed, "I think we're going to 2."

"So we actually rally on the downgrade news," Gary Kaminsky asked.

"Yes," Minerd said.

"I don't think we're gonna get 2%," said Steve Liesman.

Either a Brag Trade,
or an embarrassing miss

Scott Minerd asserted on Tuesday's Strategy/Halftime that "the high levels of growth in China are unsustainable."

"We could've said that 6 months or a year ago, or 2 years ago," challenged Brian Sullivan.

"That's true, and look, hey, I turned negative on Internet stocks in 1998, I mean, you know, I'm early," Minerd said, and we doubt he would've brought that up if he considered that a bad call.

These CNBC Washington reporters always have to be careful to play the straight man with their colleagues

The longer the nearly commercial-free (that's correct, 1 break in an hour, almost like watching C-SPAN) programming of Strategy Session/Fast Money Halftime lingered Tuesday, the closer Scott Minerd kept getting to something really entertaining, or at least something that would get the producers to make the slash motion.

Gary Kaminsky started some of the pouncing on Congress, asking Eamon Javers how closely members are watching Europe. "Some of them are paying attention to what goes on in Europe, I think a lot of them are not paying a whole lot of attention to be honest with you," Javers admitted.

"Make sure that none of the 535 members return to where they are from on a private jet," chortled Brian Sullivan, before seizing a moment of political correctness. "Except of course for Representative Giffords, obviously a super, super example there."

Sullivan also complained to Javers that raising tax rates to Clinton levels wouldn't bring nearly enough to help the deficit and demanded, "Has anybody asked Harry Reid where the other 95% is going to come from?" Javers diplomatically said Reid wants a different "balance."

Scott Minerd volunteered, "It's nice to have a whipping boy so that, that you can essentially divide the electorate ... we're living in a world where the- a lot of people have taken advantage of dividing the electorate into good and bad, or rich and poor," and Gary Kaminsky must've sensed that one was heading into Charles Gasparino-eque "borderline socialist" land, so he jumped in to redirect the conversation.

Baseball-card market
heating up

Rebecca Patterson didn't talk about the gold gone wild/bikini think Tuesday, but she did sport hair pulled back for a change and declared, "on a broader basis, a trade-weighted basis, I don't think we've seen the bottom for the dollar yet."

But Patterson stressed, "It depends what you're betting on the dollar for," drawing comparisons with the euro and yen and Swiss franc and citing Scott Minerd's dirtier shirts.

Patterson said ECB rate hike projections are being ramped down; "I think that game is changing."

Patterson also made up for David Faber's absence, saying at one point, "at the end of the day."

Scott Minerd declared, "I hate the emerging markets."

Minerd said "a 5 to 20% allocation toward gold is a good thing," and also recommended "art and collectibles" for high-end investors. "I call it the anti-currency trend."

Jeff Saut said of gold, "I think it trades substantially higher."

[Monday, August 1, 2011]

Forgotten in a week, or something President Tebow has to deal with in 2025?

The Fast Money gang, not quite as bad as the Halftime gang earlier when the Dow was down even worse, basically bailed on making stock calls Monday, albeit with a few exceptions.

Karen Finerman, in her curious orange/fuchsia combo (each looked great individually), lamented, "I think that as the day wore on there was more and more uncertainty about a debt deal, not less," though, "I do think it gets passed."

Guy Adami hailed his question for Ron Insana on Thursday's wretched Fast Money about whether the debt debate was just a smokescreen for really bad market fundamentals, then pointed to his flavor of the month (for July & August apparently), Emerson Electric and its shaky outlook.

We thought it was significant that, for the first time in a while, Fast Money didn't bother with some expert talking about the ratings agencies and U.S. debt, or even entitlements, a sign that this was all much ado about nothing.

Actually what's happening feels like the typical, not guaranteed, but typical sell-in-May-and-go-away pattern, where various bits of data are (what's that Ron Insana term again? "False-cause fallacy") hailed as determining seasonal trading patterns, and in fact the most significant move isn't the recent slump on debt/Europe, but that absolutely relentless week and a half surge in late June after the S&P floated just a bit too low.

Carter Worth was the lone panelist making any kind of gutsy call Monday (although to be honest, Guy Adami made recommendations too, if a bit lukewarmly). Worth showed 3 charts of the S&P 500 (he said the first was a 5-year or 6-year chart, but it was clearly an 8-year chart) that cumulatively suggested people were taking the pullbacks too seriously.

Honestly, one part of Worth's analysis we don't get. He points out the S&P is around 2008 levels before the big plunge, and the fact it has returned to those levels means those holders will be inclined to cash out, having finally reached break-even.

But if all of those 2008 holders continued holding for 3 years waiting for break-even, then who was doing the selling that sent it plunging?

That's something we just don't get.

Worth suggest Bobby McFerrinizing it. "Take advantage of the weakness and do some buying," he recommended.

Even Guy Adami is unimpressed by Doug Kass’ Brag Trade

Doug Kass' trading lesson on Monday's Fast Money was so achingly dull, even Guy Adami was caught by the camera thinking about other things.

The purported hook for Kass' chat sounded promising enough; it was about making quick money against the crowd based on the quality of an earnings report that might've looked better on first glance than it actually was.

Kass explained, "I shorted GE and Danaher last week," but then delivered little more than an utterly useless Brag Trade, explaining he shorted GE from $19.50 because he noticed the earnings reflected an "effective tax rate drop" and a big change in "other income" from discontinued operations. (The fact the broader market has tanked for a week apparently had nothing to do with the stock selling off.)

Kass spent so much time with filler theory and comments that a relatively timid Judge Wapner finally had to cut him off before a commercial.

And we thought it was a lockout

It's either an indication of the type of bias a Fast Money panelist might have, or just a signal that no one really cared.

Guy Adami on Monday's Fast Money recommended people "stay away" from BWLD, although it caught a break from "this NFL strike ending."

More proof of that
bifurcated economy

Tim Seymour said on Monday's Fast Money regarding the AT&T-America Movil-Telmex deal, "The rich get richer ... Carlos Slim wins again."

So, according to the left-leaning op-ed writers, the debt deal is just the tip of the iceberg.

"I'd probably stay away" from this one as an arbitrage, said Karen Finerman.

Guy Adami offers more trades than his colleagues combined

Guy Adami, unlike his colleagues, is credited here with seeing opportunity on Monday's Fast Money.

Adami said not to bet against CERN, even though "the short interest in this name is astronomical."

He also singled out Raytheon and fellow defense names LMT and LLL (which was his Final Trade) because now "they're interesting on valuation."

Of course someone had to mention that the ag trade is a great place to go, and Monday it was Tim Seymour, specifying the "ferts." Joe Terranova, rather quiet Monday, recommended Bunge as a play on sugar.

Jon Najarian, introduced again as Dr. Evil but without the music, said to look at SYK as a "derivative" play on health-care cutbacks if there's restrictions on "elective surgeries," although one kind of gets the impression that angle has been factored into the stock.

Karen Finerman, like most on the 5 p.m. show and Halftime Monday, was being defensive, saying of health care specifically, "You've got to be kind of a hero to step in," which sounds similar to what they said before the post-ObamaCare rally.

A show so bereft of trades, they started talking about preferred stocks

Judge Scott Wapner, who was discombobulated at Halftime and continued with an utterly subpar performance guesting for Melissa Lee on Monday's Fast Money, at one point in another occasional example of us remembering more things about the show than its hosts sometimes do, told Karen Finerman "you're a buyer" of RadioShack.

"No. Not a buyer. I, I don't know, I just, I still don't get it, maybe it's cheap on valuation, I just, I don't know why you'd be, you would go to the Shack," Finerman clarified.

Tim Seymour asked Finerman when was the last time she was in a RadioShack. "I can't tell ya," Finerman said, meaning, she doesn't know.

Dr. J, in one of his rare moments of commentary Monday, disagreed with the stock. "I like Radio Shack, and I like it on this big dip after the runup last week, and the subsequent selloff," he said.

Guy Adami at one point referenced a "safety trade" of Ford or GE preferreds, and maybe the ETF that deals with those, explaining "I'm swimming in Karen's pool now," but it was a half-hearted recommendation that required more emphasis if the viewer was truly supposed to get excited about delving into that one.

Finerman told Judge Wapner, in his lone good question of the afternoon (What would derail the AAPL story), "I think the No. 1 risk to Apple is Steve Jobs." (We disagree with that answer, but it was a good question.) Dr. J also got a quip in about AAPL, and Tim Seymour mentioned Samsung, but nothing was heard about NFLX, AMZN, CSCO or CLX for a change.

Guy Adami somehow got Fast Fired for touting MMM last month, a trade we'd long forgotten, and it really makes us wonder, if that merits a Fast Fire, when do they start auditing Steve Cortes' call to consider shorting LULU at $91?

Terranova: No sign
of ‘euphoria’ in gold

Dennis Gartman spoke with Judge Wapner Monday to offer absolutely nothing new, saying "Gold probably still wants to go higher ... you've heard me tell the story many times before."

Yes. Many times.

And then he proceeded to hail the gold-in-non-dollar-terms thesis, and we've heard that one many, many, many times, but Fast Money insists on airing it a couple times a week regardless.

Joe Terranova said "you have not seen any evidence of euphoria in the gold market."

Karen Finerman offered, after Judge Wapner somehow asked her with a straight face what the gold trade is, "I'm actually perplexed why the dollar was up ... I would do nothing."

Andy Busch, who actually warned on Monday's Strategy Session that if Italy's 10-year goes over 7% then we're at the Point of Know Return, one of those Kansas tunes we're certain Karen Finerman and Patty Edwards must've heard numerous times even though both lived far away from Kansas, got a chance for a second helping on Monday's Fast Money, and, as with Doug Kass, viewers needed a snooze alarm.

"The Eurozone is a disaster," Busch said. "I kind of like selling Europe and I like buying, you know, Australia and other currencies," which means, he wants to sell the sterling and buy the Aussie dollar to avoid U.S. dollar moves, and he said it's a trade floated previously on Money in Motion, which you weren't watching until you learned that Rebecca Patterson talks about showering in gold in a bikini.

Weiss: Steel companies
‘are close to insolvent’

After a weekend in which John Boehner got Barack Obama and Harry Reid together for a deal, Stephen Weiss somehow could basically find no one in agreement with him on Monday's Fast Money Halftime Report.

Weiss sparred with Steve Grasso in a feisty steel showdown, with Weiss pointing to AKS and saying, "Bottom line is, these companies are close to insolvent."

Judge Wapner said he was brining Grasso in on the hopes it wouldn't be "Leonard-Hearns 3," and the result was the 2nd (not so) rare Brag Trade of the day from No. 386.

"I sold it on the pop up 10%," Grasso said, "so it did trade up 14%. So this is not a dig at Stephen Weiss; I don't know how you'd tolerate that risk-reward, if you're short, to watch it trade that high ... I actually bought it back last week, because I think at, at, when you see people getting most negative on the steel space, is usually when the prices bottom out, so I bought it on a technical bounce."

"Actually that's not entirely true," Weiss countered. "We've seen a number of upgrades on the Street, on AK Steel, and USX, in the last few weeks."

"Right. And that's when I sold it up 10%," Grasso interrupted.

"The fundamentals are worsening," Weiss insisted, before being cut off again.

"This is the first time you agree wholeheartedly with Moody's. Got it," Grasso smirked.

Weiss: ‘Charmed life’ of high-end consumer bound to end

Debbie Weinswig spoke on the Fast Line on Monday's Halftime and evidently is bullish on "retailers" because of the weather.

"We did see very strong mall-traffic trends and the warm weather," Weinswig said, adding that merchandise flew off the racks in June and new stuff was selling well in July, so margins aren't a concern.

Weinswig touted M, because it's "had a lot of fashion newness," and TGT, because "Target has got their 5% discount card."

Stephen Weiss grumbled, in a disastrous echo of Steve Cortes, "I think at some point, the charmed life of the high-end consumer runs out," and that's after we've just read a bunch of op-eds from disgruntled folks complaining that the rich are getting richer too fast in the wake of the debt deal, so we'll take the other side of that trade.

Weiss went on to say that he knows a casual-dining franchisee just getting killed by high gasoline costs.

Patty Edwards took something of a middle ground, saying, "I absolutely agree with the call on Target," but added a cautionary tale: "My store walks are showing a lot more discounting this year than I've seen this early in the back-to-school season."

Zachary Karabell brought reality to the Weinswig-Weiss thread, saying, "I would just caution ... retail, broad brush, there's a lot of different retailers ... Apple ... Coach." He steered well clear of the Cortes-Weiss theory, saying of high-end consumers, "I don't think they crack, I think you've got a bifurcated economy."

Having an agency rate U.S. government debt is like paying sportswriters to tell you which quarterbacks are good

It seemed like Judge Scott Wapner was reaching in vain forever to get Sean Egan on the Fast Line, and when he finally did, the results were hardly worth waiting for.

Judge asked directly, "Would you downgrade today, to AA?"

Egan didn't answer the question, saying, "Actually you know, we we, downgraded one notch to AA+, and we did that as of July 16th."

Zachary Karabell, putting together his finest show in recent memory, jumped on Egan's criteria. "Why is debt to GDP, as this abstract ratio, more important than pure servicing costs, based on the interest payments, which are historically low and more than maintainable?" Karabell asked.

"Because the servicing costs, the funding costs, can rise fairly dramatically, fairly quickly," Egan said, citing Europe.

Weiss: ‘We are gonna double-dip’

Zachary Karabell notably praised the recent discussion in Washington, D.C., while notably not taking sides on the outcome.

"It was real noise and it's noise we should've had," Karabell said.

We could try to infer something from that, but won't.

Karabell said the debt debate overshadowed other recent market problems, such as, "We had this absolutely horrifically bad GDP reading." But he said the debate also indicated that the Tea Party is not just a flavor of the month from 2011, and as far as government spending goes, "this story is not done."

Stephen Weiss said last week's debt talks were actually good for stocks, because "that obfuscated all the negative news we had globally."

He asserted, "We are gonna double-dip, there's no question in my mind."

Patty Edwards revealed that the Chinese PMI is "certainly not something that makes me happy," and thank goodness, because if that's the type of thing that makes people happy, well ... "I certainly don't think that you can be a raging bull at this point in time," Edwards added. "Look toward dividend-paying stocks."

Zachary Karabell shrugged off some of Weiss' doom, saying, "I don't think we are in this, kinda meltdown slowdown," and was the only panelist on Call the Close to recommend getting "a little bit long" this week.

Steve Grasso said "I sold my UAL" and that 1,283, 1,284 remain key levels on the S&P, but "it sure does feel like we're heading to flat on year, which is 1,257."

Patty Edwards said she is "absolutely not" using weakness to get in defense names, saying she sold some Raytheon a month ago.

Steve Grasso said "You've gotta stay away from all health care at this point," and then Stephen Weiss revealed "I still like Allscripts," not the only time the 2 disagreed Monday.

Zachary Karabell said he owns some Becton Dicksinson, but for health care overall, "We are early innings of a bad story."

Judge Wapner found himself in a dead-air trap before his 2nd commercial break, saying, "and when we come back on Fast," then just staring into the camera waiting for a cue and waving his hand before the screen quietly cut to commercial.

Looks good on you, though

Based on what we were hearing on Monday's Fast Money Halftime Report, we had to wonder if panelists were actually ordered not to recommend anything.

The highlight came when Steve Grasso revealed a rare (for him) Brag Trade, with LVS, explaining, "I actually got squeezed out the right way of getting squeezed out of a stock ... I'm not looking back at this point."

But he's apparently not past The Point of Know Return, saying he still likes the sector, even though he's out.

Patty Edwards' rationale was even more curious, saying of LVS, "I really like the way the chart's setting up for them."

So Judge Scott Wapner rightly asked, "What would make you put your money to work then," and whether Edwards is buying the stock, which she said she isn't.

"If you like the way the chart looks why don't you just buy the stocks," Wapner asked.

"Because I don't want to get any longer this market at this point," Edwards said.

"Understood," was Judge's reaction.

So in other words, looks like a great stock moving in the right direction, but don't go near it.

We'll have more from Monday's Halftime and 5 p.m. Fast Money later.

Sounds like Dow Jones Newswires and everyone else dropped the ball/buried the lede, but Kate Kelly won’t concede a scoop

Kate Kelly took an interesting turn Monday at playing news critic on The Strategy Session, after a London Daily Telegraph article about Lansdowne exiting its $850 million stake in Goldman Sachs that was picked up by major U.S. business outlets.

"It's old news, and also somewhat inaccurate the way it's being portrayed by some people," Kelly insisted. She said it happened in Q1, was reported in May, and was not so much a disdain for Goldman and regulation, but part of Lansdowne's new thesis of trying "universal banks" instead.

We couldn't immediately find any reports from May.

But we did find a post by Kelly on Monday at CNBC.com that explains the news "was reported in public filings in May (and reiterated by Reuters on Monday). At least one outlet, the Dow Jones Newswires, picked up on the sale at that time."

Indeed, we found the Dow Jones Newswires story from May, and the Lansdowne reference is in there, though it doesn't do the math for readers as to the whole amount, and certainly wasn't the headline, which was all the people buying GS instead.

What's notable is that this "old news" was more like "no news," considering it was never reported at CNBC.com until this weekend.

"Right now I think the story's being dramatically overplayed," Kelly said.

But if that's the case, why even bother to mention it?

Kelly wasn't done chiding the Telegraph — which coincidentally or not, apparently scooped both the Seattle Times and Portland Oregonian on D.B. Cooper, given that AP picked up its story over the weekend — saying, "By the way, speaking of 16 billion in AUM, another inaccurate piece of reporting, a couple of these stories call Lansdowne the largest hedge fund in Europe. I feel like Brevan Howard might take issue with that since they have 30 or more."

Guest: ‘Too big to fail’
actually works in Canada

Mary Thompson, prettiest hair on cable television, more than lived up to that moniker on Monday's Strategy Session (why doesn't she do shampoo ads?), explained that First Niagara is expanding by buying the HSBC branches that HSBC doesn't really care about.

Thompson said this purchase might have limited impact and that First Niagara might seek more assets to put together a "very attractive funding profile."

Brian Sullivan said "HSBC waved the white flag."

Guest John Taft of RBC said, "I see this really more as HSBC divesting themselves of a subscale business. And I think we're gonna see a lot more of that as Dodd-Frank regulatory reform works its way through the rule-making process. I mean, there is tremendous uncertainty right now, still."

(Translation: There's no demand for their products.)

Taft said regional banks "have a good position right now."

Taft said 6 big banks in Canada account for 90% of deposits. "No Canadian banks failed, none even cut their dividends. ... Canada is all about too big to fail, and it didn't seem to affect the uh, the performance of the banking sector up there."

Brian Sullivan referenced Buffalo's banking prowess, asking, "are the Bills the new Panthers," but Mary Thompson took the sports talk further, crowing, "the Bruins still won the Stanley Cup," something that Patty Edwards probably doesn't want to hear.

Neither did Taft, saying his wife is from Montreal.

"It's like the DMZ," Sullivan said.

Sullivan, running out of time, unfortunately settled for the dreadful "What keeps you up at night right now" question for Don Drapkin.

Drapkin said in Europe, "it's scary ... prices are way high ... unemployment is rampant."

Then Drapkin condescendingly chided Congress, first mentioning a "17 billion" debt ceiling, then correctly "17 trillion," complaining "what happens if we go back to 7%?" in bonds, and that the whole thing needs "adult supervision."

(Translation: That's a "no" vote on the Obama-Boehner-Reid-Pelosi package.)

Drapkin did have a good 1-liner, "it's gonna be no day at the bleach for Carl."

Can’t Europe just add
a bunch of casinos?

Andy Busch, who would be our favorite Money in Motion personality if it weren't already for Rebecca (bikini-gold) Patterson and Amelia Bourdeau, forgot to pack an opinion for lunch Monday during his Strategy Session appearance.

Busch actually spent most of his interview simply agreeing that the questions and observations of Gary Kaminsky and guest host Brian Sullivan were good ones.

Sullivan asked Busch, will anyone buy Italian debt when they have to roll it over.

"Well that's the question," Busch said.

"Well what's the answer?" Sullivan demanded.

"If we break 7% on the yield, and CDS gets above 400, it's the point of no return," said Busch, plunging over the cliche waterfall in a barrel like at Niagara Falls (a reference to a later discussion on the show) because as soon as you hear someone on CNBC say "point of no return" in an economic situation, it's probably time to start buying.

(It also reminds us of the Kansas song, spelled "Point of Know Return," which we know Patty Edwards and the rest of the Fast Money gang has heard at some point. (Note: We're not saying that Patty has it on her iPod or plans it for the iCloud or even likes it, only that we're sure she's familiar with the Kansas greatest hits catalog.))

Anyway, Sullivan asked Busch how much the whole of Europe is in trouble over Italy regarding contagion, etc.

"How far this goes, I'm not sure," Busch said, helpfully.

He said the dollar's weakness is the resulting of having "the easiest central bank on the planet."

Gary Kaminsky pointed to Italy's 10-year bond yields and warned, "You're talking about bankruptcy in Italy if this cost of capital remains," adding, "the European banks buy a lot of this paper."

We wonder why it isn't past time for Europe to do what the U.S. does, start building out the gambling infrastructure and raising the cigarette tax.

Did Roger McNamee use The Strategy Session to front-run a negative article on Forbes?

Just near the end of his appearance on Wednesday's Strategy Session, Roger McNamee brought up a subject he wasn't even asked about.


Curiously enough, so did Fortune mag — the next morning.

And when one puts 2 and 2 together, one might infer McNamee was launching a preemptive strike about a key paragraph in the Fortune article.

On Wednesday's Strategy, McNamee said, "We're an investor in Forbes. HTML5 is gonna swing the pendulum from commoditization back towards differentiation and content."

David Faber asked, "You still happy with that investment? I know that was made a number of years ago; Forbes has had not an easy go of it."

"No they haven't," McNamee said, "and we've marked it way, way down. But from where we hold it, it's gonna make us I think a terrific return. Remember, the investment business isn't about the money you lost yesterday, it's what can you make tomorrow."

"And what gives you the confidence that that's a position that can turn around for you?" Faber asked.

"Because I look at what the technology's allowing. And I look at what my band, Moonalice, has done," McNamee said, not really answering the question.

"But at the end of the day, though, that's a content business and it really is all about how- what content you're delivering not necessarily how you're delivering it," Faber persisted.

"I actually think the 'how' is gonna matter enormously," McNamee asserted. "Because now that people just want things on their body; the reason Google is having a problem is that people do 1% as many index searches, Google searches, on a phone as they do on a computer."

We'll get back to that stuff in a moment.

The Fortune article, meanwhile, which according to Fortune was posted 5 a.m. Thursday, outlines how the Forbes Media empire, which sold a 45% stake to McNamee's Elevation Partners in 2006 for $237 million, required an "emergency" restructuring of loan terms with JPMorgan and 6 other lenders in August 2010. The article also revealed previously unreleased documents showing fairy tale-like projections of revenue and profitability through 2011 that apparently were accepted by both McNamee's team and the lenders.

But for The Strategy Session, this was most likely the most important passage in the article, curiously set off in parentheses: "(In a twist that could prove lucky for Forbes, it has a 'call' option to force Elevation to sell back its stake at fair market value anytime after Aug. 4, 2011. If the company's value does not rise above what Elevation paid in 2006, Forbes could buy back the stake and stick Elevation with a loss.)"

McNamee clearly has an endgame here.

And the question would be, based on his comments, does he want Forbes Media to buy out the Elevation stake, or does he not want it to buy out the stake?

Certainly, he argued that the brand will make a "terrific return" going forward, which would be an incentive for Forbes Media to buy out Elevation.

On the other hand, he claims it's HTML5 that will deliver this "terrific return," which would figure to be an incentive for old media types to maintain their partnership with a Silicon Valley firm.

In fact, either side, just a few days from now, can require Forbes Media to buy back the stake. The article notes, before the parentheses, that Elevation has its own "put" option of requiring Forbes Media to repurchase the stake at "fair market value." We're not expert financiers here by any means, but as far as we know, "fair market value" — as defined by Investopedia, formerly a Forbes Media property — means the price an asset "would fetch in the marketplace," or in other words in this case, the same price Elevation would figure to get from any other buyer.

The fact Elevation requires this "put" suggests, as the Fortune writer notes, it was "clearly worried about being able to exit the deal," and so we would add that "fair" really means "above" in this case.

The gut here is that "fair value" is a dog, this one's a loser, and Elevation doesn't want to get stuck with a hefty loss on Aug. 4 but prefers more time to either turn the business around or amortize it, so on Wednesday, McNamee tried to argue that Forbes Media is more valuable than it actually is, which would figure to dissuade the Forbes Media brass from deciding, "We might as well buy it back now; it's dirt cheap."

In any case, there's an agenda going on here. To think that the subject of Forbes came up on Wednesday's Strategy Session as some innocuous non-sequitur from McNamee, after David Faber had said, "I'm happy when our guest dictates where we're going," is to think that the guys and ladies in Washington, D.C., want to take a serious stab at entitlements and tax brackets this weekend.

The article doesn't quite get far enough to even imply why Forbes Media would want to buy the stake back. It can be inferred that after the restructuring of August 2010, the company is indeed on sounder footing, and if family members decided "this is the bottom" and/or like Hef simply wanted complete control again, now would be as good a time as any to buy out Elevation, probably with more borrowed money.

It's a classic have-their-cake-(what's-left-of-it)-and-eat-it-too story such as the New York Mets are trying where old money gives little more than a token nameplate to nouveau riche who are eager to help them out with borrowed money, knowing this might be as close as they get to a signature brand, and the result is largely banks handing out big sums so that founding family members get paid.

The Fortune article, by Katie Benner, is well-written, but includes no indication that Elevation was ever asked for comment.

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