[CNBCfix Fast Money Review Archive, October 2010]
[Friday, October 29, 2010]

Dan Nathan on Steve Jobs:
‘I think the guy’s lost it’

Given the money, growth, performance, adoration and prestige it has, Apple is usually not dissed by too many people on CNBC.

But don't count Dan Nathan among those people.

Nathan was heard to utter on Friday's Options Action: "After listening to Steve Jobs on their conference call a couple weeks ago, I think the guy's lost it. I mean, I, he must've woken up on the wrong side of the bed that day."

Nathan slammed the iPhone and the perception the company never has a failure, actually making the sort of argument Guy Adami always does about gold for some reason, claiming when the stock finally crumbles, it'll crumble big.

If Jobs responds, we'll be sure to post an update.

Packages from Yemen bound for Chicago synagogues. Who would ever be suspicious?

Friday's Fast Money was overshadowed by developing news on the Yemen package scare story, so the real highlight of the program was the new hair-pulled-back 'do of Mary Thompson, who has the prettiest hair on cable television.

Or maybe, it was Trish Regan leaning over to shut off a ringing cell phone on Closing Bell just before introducing Fast Money.

Whatever. Guy Adami actually suggested the terror case "just might add fuel to the fire" of his still-yet-to-unfold bearish selloff that he thought might've been coming next week, largely because of, incredibly, Apple's recent sluggishness.

Analyst Arthur Hatfield praised the package delivery companies, calling it "remarkable ... that these packages were flagged" and companies could get them out of the system. (We'll withhold judgment on how "remarkable" it was until we hear the details of how they actually were detected.)

Brian Kelly asked a question about FedEx and UPS supposedly using commercial airlines to carry some of their packages and whether there's a loophole there, a query that Hatfield seemed to find completely irrelevant. "That's a very very low risk," Hatfield said. "That is such a small number."

Mary Thompson, who couldn't make it to UAE but did get to the Newark airport, summed up the news as follows: "A very harsh reminder today that the terror threat here in the U.S. is very real."

Karen Finerman’s commentary is
disappointingly uninspiring

Steve Grasso, reiterating on Friday's 5 p.m. Fast Money a theme he brought up on the Halftime Report, identified the health-care stocks he'd sell (AGP, HS, MRK, PFE) and buy (UNH, WLP, CI, AET) heading into the elections.

Stephen Weiss didn't get much airtime on Friday's Fast Money Prop Desk and unfortunately used up the small amount he had by basically seconding Steve Grasso's basket of stock picks, though he did single out MDRX.

Karen Finerman, in what can charitably be described as a low-key performance Friday, grumbled about how the recent market run-up just seems like the same QE2 rally over and over again.

She made the explosive remark that Kraft seems "relatively less attractive" than previously because of higher input costs.

She said she still has a healthy position in CVS; "I think the bar's pretty low there."

She recommended CareFusion for the final trade.

Brian Kelly recommended Tidewater and Cliffs. Pete Najarian used to talk about CLF all the time. Now he doesn't because he mostly talks about Akamai and FFIV and Salesforce.com.

Many viewers were undoubtedly waiting for the last installment of Gary Kaminsky's book-themed myths of Wall Street series. Not only was Kaminsky not on the set Friday, Lee said, but "because of the breaking news we couldn't get to that." Dubious call.

Tilson explains why
he’s short Netflix

Agree or disagree with him, Whitney Tilson is one of the best on CNBC at articulating an investment position.

On Friday's Halftime Report, Tilson explained his case against Netflix.

First he cited "sequentially declining earnings for something trading at 67 times, uh, earnings, uh, just doesn't make any sense to us."

But he added something maybe many people haven't thought about, or emphasized just yet. "Their best streaming content is being provided by Starz," Tilson said. "We think they're gonna have to pay 8 to 10 times as much money as they're currently paying when that contract gets renewed."

Tilson also said he's shorting Open Table, which he acknowledged is actually an excellent, well-run company.

His rationale is the "truly extreme" valuation of "164 times trailing earnings ... there's just no possible way that this company can grow into this valuation," he said.

He said that because of the QE2 froth in the market, "We're finding a lot of great shorts."

Melissa reffed basketball

Steve Grasso pretty much owned Friday's Fast Money Halftime Report, his most provocative comment being to buy financials and energy going into the election. "You should be selling pretty much the whole health-care space, because that's where you're gonna see the cost-cutting," he said, singling out anything that's Medicare or Medicaid dependent for selling.

Grasso said Guy Adami was onto something in his MSFT commentary on Thursday night. "My clients are not excited about it," Grasso said, and it might take a management change to get them interested.

Grasso said despite the terror alert stories, "There was never a moment of panic" on the floor, and "it really is a dull Friday."

Grasso also asked Steve Cortes an attire question: "Steve are you short buttons at this point? Are you going as James Bond for Halloween?" (If you saw the show, you know what he meant.)

JJ Kinahan said somebody was detected selling November VIX puts and buying December VIX puts.

Pete Najarian said recent stock-buying indicates "maybe it's not all over for RIMM."

Nasdaq CFO Adena Friedman, likely meeting the unofficial Fast Money quota of occasionally having Nasdaq brass on the show in exchange for hosting it there, said the company is looking at acquisitions only as part of a cash-allocation story that also includes buybacks. The more interesting comment was when Melissa Lee revealed, "Adena by the way has a mean foul shot ... I was a referee of this contest..."

Natural gas: Capitalism
at its finest

Nat gas expert Kenneth Hersh put together the type of free-market commentary on Friday's Strategy Session that not only was interesting, but should be Kudlow-approved.

Hersh said there's a "big divergence here in the last week or so" between the Henry Hub price and the Nymex futures price.

(Keep in mind that in writing that sentence, we're plunging into the deep end of the natural-gas knowledge pool in which we've never really swum before. So we'll leave it at that.)

Hersh went on to point out that the natural gas market is a free-market success.

"The best natural gas policy is the market," Hersh said. He said high prices correct high prices, and low prices correct low prices. At some point the price can't be too low to keep everyone in business. And when there were higher prices, hydraulic fracturing and horizontal drilling emerged, and "it reversed the decline rate in North America. Which is an amazing feat," he said.

"If there's no better (sic), um, you know, testimonial for market capitalism other than natural gas, I don't know," Hersh said, which was a bit clumsy but you know what he meant.

Hersh told Gary Kaminsky he doubts there will be a spree of bankruptcies in the nat gas space, because "there's not as much leverage in the system."

Not the caliber of conversation
you hear on ‘Access Hollywood’

Kevin Lockhart said on Friday's Strategy Session, "We're continuing to expect the maturity calendar to be attacked by high-yield issuers."

Lockhart said debt investors will settle for a "flat and stable environment."

Herb talks about GAGA
without a poker face

Herb Greenberg told Strategy Session viewers Friday "there is no stopping these Chinese IPOs."

But why does that matter? "You should care because you may own them," Greenberg said. "It's like a who's-who of big investors ... even CALPERS."

Greenberg said the recent hot IPO, Le Gaga, consists of "vegetable greenhouses across China."

Herb complained that the "accounting" with these companies is dicey at best, and what analyst is possibly going to zip around the mainland and interview local Chinese about the strengths and weaknesses of this product?

He said he thinks this level of interest could be a "tipping point," or top in the market. "Could I be a year early? Absolutely," he admitted.

Kate Kelly reported that Goldman Sachs — perhaps in a sneaky effort to spur Congress to act — is mulling the idea of paying bonuses early to avoid a tax increase if the present rates are not renewed by a lame-duck Congress.

Gary Kaminsky pointed out "there's a lot of different reasons why" bonuses are often paid in February after being accrued by November, one of them being that firms don't want to hand someone a pile of money and suddenly watch them leave.

[Thursday, October 28, 2010]

If you’re Microsoft,
is life really so bad?

Fast Money opened Thursday with an interesting claim by Jon Fortt that the Fast Money gang might be a little overly negative on MSFT.

"There's a lot to like here I think," Fortt said. "Hate to pour water on the 'Bash Microsoft' party."

Guy Adami bristled at that suggestion, even though it was basically 100% true. "Jon, I don't think we're down on the results at all," Adami said. "We all said uniformly the quarter was very good; I think what we're saying is, over the last 5 years..."

Tim Seymour broke in, "The valuation is the reason that we need to talk about something more than just great numbers."

We were all set to agree with the panel, and not Fortt, but for whatever reason began to change our tune after thinking about it for a little bit.

Why do so many people (including basically this page) seem to hate Microsoft?

The products aren't junky and in many cases are pretty good. It prints cash. It employs tons of people with good jobs. It's influential. It doesn't (to our knowledge) run roughshod over Silicon Valley like it might've in the '80s and '90s. It's not a target of privacy investigations as far as we know.

The beef is that the stock sucks. We get that. Been there, done that, mostly around 8-10 years ago. So just sell the stock. There are 499 other names in the S&P 500 you can choose from. There are about 5,000 more everywhere else on global exchanges that you can pick from. There are ETFs. Why any money manager, or retail investor, feels like they have to analyze this thing is beyond ridiculous. We all know what it is and what it does and where it's going. Why does Fast Money need to spend 10 minutes on a stock everyone sort of agrees isn't really worth buying? Buy some other stock and analyze that instead and find other things to complain about.

Gary Kaminsky acknowledged this distinction on Thursday's Fast Money. "You may wanna talk about the business. The business is not the stock," Kaminsky said.

Seymour: Talking about Xbox
is just filling time

Joe Terranova said Thursday on Fast Money he's not the only one skeptical of Microsoft's long-term plan. "I think it's basically everyone," Terranova said, despite conceding that he'd be interested in the stock if it spends a couple days above $26.95.

"I don't even think anybody cares about the Xbox," grumbled Tim Seymour, who complained about the allocation of time during the earnings call.

Gary Kaminsky first said something about being at 30 Rock with a lot of people in Halloween costumes auditioning for a Jimmy Fallon skit of some kind that didn't quite register. Kaminsky went on to say, "Microsoft is a utility," and "the stock is in no-man's land."

"It's purgatory in the land of stocks," said Melissa Lee, and that's not really true or even close to true (the correct answer would be Citigroup or Dryships), but as we noted above, that's the way it goes.

Guy Adami made a joke after Jon Fortt answered Joe Terranova's question about how Microsoft would describe itself, as a company with growth opportunities. "I had an opportunity for growth when I was 18; now that I'm in my 40s..." Adami said.

If Gasparino takes up your cause, you’ve got a shot

We gotta say, with virtually no other information available, the general belief here is that a company shutting out an analyst is basically indefensible.

If the analyst is demonstrably incompetent, or Machiavellian, then say so.

So even though we'd be tempted to try, just to sharpen those debate-team skills, we see no way of defending Forest Labs for evidently shutting out CLSA's David Maris and Oppenheimer's John Newman.

There's a good article on this subject at WSJ.com (we're never sure exactly which articles are free and which require subscription under Murdoch's pay wall, so if you only get the top 2 grafs, just cut and paste the text into a Google search and that link will give you the whole thing) that indicates the company is maybe not so irritated about the ratings but perhaps the research notes that preceded them.

Maris complained Thursday on Fast Money that the company "just left us high and dry." And then, in a comment that suggested he might've been attempting to orchestrate a Mike Mayo-like PR offensive that was greatly enhanced by the reporting of a certain Fox Business bigwig, Maris said you'd think when a company sees a story about this in the paper they'd respond to the analyst right away, but "as of 2:30, 3 o'clock today, I still haven't gotten a phone call."

"That's interesting and shocking," Melissa Lee said. "We should note that we also called Forest Labs for comment. We did not receive any word back. So you're not the only one who's getting the cold shoulder today."

Melissa defends interview tactics
in wake of CEO’s reversal

Melissa Lee pointed out, on both the Halftime Report and 5 p.m. Fast Money on Thursday while wearing a sizzling charcoal-gray dress with generous collar and lizard belt, that Molycorp CEO Mark Smith said one thing on her program, then said quite another thing — "a 180" — on Bloomberg barely a week later. A week ago (see below), Smith said this about rare earths prices on Fast Money: "They are really spiked right now and we think there may be a form of a bubble occurring because of all of the news and the frenzy that's occurring."

Thursday, according to Lee during the Halftime Report, Smith said this on Bloomberg TV: "I don't believe that there is a bubble. ... These prices are absolutely sustainable and that's really based upon the very simple facts of supply and demand."

"It seems like a complete reversal," Lee complained, before launching into a defense of her interview. "It's a complete reversal ... the question did not contain the word 'bubble' in it ... he brought up the word 'bubble' himself ... I did do a follow-up question ... I gave him the chance to respond to his comments ... and he stuck by them ..."

Guy Adami suggested, "It appeared that might've been his first interview in that capacity, maybe he, he sort of said something that he, he regretted at the time, not realizing it."

Jon Najarian agreed with that. "I think Guy nailed it. I think he perhaps said what he truly thought."

Kaminsky: ‘Buy’ rating might
just mean an outperform call

Gary Kaminsky's weeklong Fast Money segments about investing myths have been pretty good.

Good enough to make us wonder: Maybe retail investors actually deserve to lose money.

Here's our point: Maybe retail investors — including, um, the people who put words on this page — are just too lazy with their money. They hear the pitch about index funds, or mutual funds, or ETFs, or dividend-payers, and most importantly they hear how stocks are the only way to beat inflation and that over any (insert number here, nowadays around 20 or so)-year period, stocks always outperform ... something else. And they're convinced.

In other words, the message is, you don't really have to do anything and you can win.

Kaminsky's segments this week have demonstrated that's not really true, or at least unlikely.

The truth is that many people, even wealthy, successful people, are lousy at math, a necessary skill for understanding stocks. People actually have even far less knowledge of basic investment strategies of pro money managers — we're talking people in the general public, many of them with great jobs and salaries and generally bright people — who have no clue what a put option is, couldn't define a P.E. ratio, are unaware of arbitrage and certainly have never heard of a double-top.

For these people, shipping cash off to a broker or mutual fund is basically the same as a person who's never driven a car choosing between a Ford Explorer, Jaguar XJ6 and a Toyota Corolla.

Honestly, these people should have most or all of their money in a CD or U.S. Treasurys. You really can't lose. Yes, there's inflation risk. That's a lot more endurable than, say, DRYS risk, the kind that goes from $140 to $3.

Anyway, the thrust of Kaminsky's arguments this week against the "closet indexers" is that they're merely trying to edge an index and, if they do so, will be rewarded even for losing money, and that brokers have an incentive to push stocks specifically recommended by their firm's sell-side analysts.

Thursday he discussed compensation. "In the hedge fund world, managers get paid based on performance. In the mutual fund world, managers get paid 2 ways: they get a compensation related to a base compensation. And they get a bonus in many cases — many cases — related to relative performance."

He also tackled analyst ratings — which happen to be judgments distributed (indirectly perhaps) for free over the Internet, which provides a hint as to how valuable they really are — and what they actually might mean. "In many cases a 'buy'-rated stock means that the analyst expects that stock to outperform its peer group. Not if it's gonna make you money or if the stock's gonna go up," Kaminsky said.

He also said that price targets — obviously tracked by a lot of retail investors — are little more than "dumb, stupid data points" that twist with every earnings estimate.

A review of Smarter Than the Street is going up on this site soon.

Christine O’Donnell,
it’s riding on you

Analyst Benjamin Salisbury delivered a spirited case on Thursday's Fast Money for the prospects of energy stocks if Republicans outperform on Election Day.

It seemed like his most significant contention was that the key battleground is control of the Senate, where various Democrats can be spoilsports, even though Salisbury admitted Harry Reid is a proponent of liquefied natural gas.

"The one area that the Republicans and the Obama administration have in common is nuclear," Salisbury said.

Joe Terranova said the bottom line to him is that the trade is still oil. "We have no solution right now to the energy crisis that we potentially face here," Terranova said.

Cortes concedes no penny

Steve Cortes on Thursday's Fast Money sounded like his entire weekend might've been ruined — merely because he hasn't re-shorted BAC yet and might've missed the peak by 20 cents.

"I didn't but I should've," Cortes lamented.

Guy Adami had this insight on Goldman Sachs: "I'm not sure."

Joe Terranova's take is that Goldman's recent bank outperformance "has to do with the putback mortgage exposure," which Goldman doesn't have. Gary Kaminsky offered a tease to Goldman compensation on Friday's Strategy Session.

Terranova revealed that the rare earths ETF described by Jan Van Eck previously on Fast Money "just scares the heck out of me."

Gotta admit, Steve Cortes
knows his geography

Kinross Gold CEO Tye Burt was quite the assertive chief executive during an in-studio interview with Melissa Lee and Guy Adami on Thursday's Fast Money Halftime Report.

There are "2 fundamental drivers under the gold price," Burt said. "One is demand from investors, which of course, gold as a barometer for investor sentiment is uh, strongly positive today. And jewelry."

Hmmm. "Demand from investors" is considered a "fundamental driver." That almost sounds like something you would've heard about mortgage-backed securities in 2006.

Afterwards, Melissa Lee asked Steve Cortes for a stock call on Kinross. Cortes said the company has exposure to some of the not-so-friendly places in the world, "particularly Mauritania," and "I see all kinds of risk in this name."

But Cortes also rolled out a horribly weak Mark Twain joke, "News of the dollar's death is very premature and exaggerated."

Then again, even that was probably better than what Walter Pritchard of Citi offered earlier in the program: "I think it's a tale of 2 cities in the PC market."

Guy Adami said at Halftime that Apple has done some curious things recently, and "I think they're trying to tell the Street something." Steve Cortes said there are signs the "stock is incredibly crowded."

Of the broader market, Steve Grasso said he thought a general rally would persist through the election, but now thinks it's maybe time to get short.

Crandall unwilling to wing it
on airline industry prospects

The Strategy Session introduced an ongoing interesting subject and one of Gary Kaminsky's favorites, the airlines.

Unfortunately Bob Crandall, who's just about the perfect guy to talk about this, could barely do any better than "no comment."

Kaminsky, echoing a point he's made over the past year often ahead of the curve (we just checked out the UAL chart), said in general whenever things tend to get good, "The industry kind of blows it." But nowadays it seems like they're making smart decisions about capacity, consolidation, etc., and they might actually "act rational" about industry challenges and opportunities.

Crandall was asked if there is indeed a new normal. "Nobody knows. The answer is, it is different," Crandall said.

"Nobody knows." Got it.

Kaminsky later said there's a "tug of war" between CFOs seeking to tap the equity markets, and other execs. But Ed Barnes, JetBlue CFO, said there's no big rush to raise capital, but airlines in fact see an "opportunity to maybe reduce leverage a little bit."

Elsewhere, in deal-of-the-day news, Kaminsky said he once had BMP Sunstone shares via a parent company and revealed: "I sold the stock substantially — substantially — below what Sanofi's paying."

It's always impressive when a CNBC program lands a Goldman Sachs guest. Sharmin Mossavar-Rahmani visited The Strategy Session on Thursday and said "We like emerging market local currency debt."

Unfortunately, Mossavar-Rahmani also had the cliche machine going, referring to "unusual uncertainty" in the financial markets. She said pessimism about the dollar and U.S. equities is unwarranted, which must be a jab at Steve Cortes and Guy Adami.

David Faber grumbled that Gary Kaminsky is thinking too far ahead about the bond market and other factors while Faber prefers to live every day to the fullest. Kaminsky cracked, "If I were sitting in my old seat we'd be thinking about February and March next year right now. That's how you be smarter than the Street."

"That's also how you get a stroke," Faber joked.

[Wednesday, October 27, 2010]

Screaming ‘day trade’!

Jan Van Eck showed up at the Fast Money set Wednesday to discuss — quite frankly as candidly as possible — the rare earth ETF he's got going.

We're not quite sure Van Eck adequately assuaged Karen Finerman's provocative question about the market cap of the ETF. But he did stress the ETF would consist of "all pure play stocks" and the performance was bound to be "volatile."

Nevertheless, Van Eck said there is "crazy" demand for this product, "a lot of interest." He said the thread is companies with "more than 50% of their revenue associated with the metals."

Flash: Kaminsky suspicious
of broker-analyst incentives

Gary Kaminsky's weeklong segments on Wall Street myths apparently are a hit, as Wednesday's installment on Fast Money occurred barely 12 minutes into the program instead of being saved for the latter half hour.

Kaminsky, who either wasn't paying attention when his number was called or merely pulled a fast one on the Fast gang, snapped to attention with Melissa Lee and proceeded to question (the word is probably stronger than that) the merits of research from sell-side analysts.

Kaminsky said sell-side analysts are evaluating sectors in a vaccuum, and they're pleased with themselves not if their picks actually make money, but just as long as they merely outperform the rest of the sector.

Kaminsky said investors have to know whether a recommendation is a "relative strong buy or absolute strong buy."

Mel Lee endorsed Kaminsky's presence, saying, after Kaminsky asked how she's doing, "I'm always great when you're on Gary."

Great advice — if it was
actually below $300

We had mixed feelings over Fast Money devoting about the first 10 minutes of Wednesday's program to the afterhours AAPL update on gross margins.

On the one hand, given how many stock buyers are interested in AAPL, the show should probably discuss the stock every day.

On the other hand, Wednesday's commentary was basically useless, because the stock barely moved in afterhours.

Yet the Fast gang just kept saying any selloff is a buying opportunity. "Operating margins are very fat," said Karen Finerman. "If Apple breaks 300 I would be a buyer."

Brian Marshall even said "I think this is an overreaction in the marketplace afterhours," when all the stock did was drop $1. And according to Google finance, the lowest level the shares reached afterhours was $304.70.

Anthony Scaramucci admitted being wrong about market cap impeding AAPL share prospects. "I've been wrong on Apple," he said, saying the company is presently in a "divot" in terms of its product cycle, but once that changes, "you watch those gross margins go back up."

He also said, "Hedge funds are wading into this stock now."

Did we miss a tight-money
policy somewhere?

Anthony Scaramucci made a rather eye-opening comment on Wednesday's Fast Money that sort of makes one wonder if Wall Street really "gets" it.

Scaramucci said the market was swayed by Bill Gross' commentary that "the Fed is basically telling people not to worry about our fiscal deficits."

Is Gross actually just now realizing that the Fed (and nearly the entire government except of course Paul Ryan) is basically telling us this?

Whatever. For every opinion on this page, Gross has about $10 million, so we're gonna stay out of this one. Scaramucci said this apparent position of the Fed is a problem in causing "de-risking."

Terranova: Gangbusters
jobs report on the way

Joe Terranova decided to pull a Joe LaVorgna on Wednesday's Fast Money, predicting that in about 9 days, "We're gonna have one of the better unemployment reports we've had in months."

So plan ahead.

Terranova also spoke about the TBT; "I'm looking for the exit door on that one TBT."

Analyst Brent Thill said that Mobile 7 is a "base hit," but not a double or triple. But what inning are we in of the Microsoft slower-growth era?

Pete Najarian, whose role with brother Jon these days on Fast Money seems to be to remind everyone to buy AKAM and FFIV or when AKAM and FFIV have just skyrocketed to remind everyone they should've bought AKAM and FFIV, admitted he jumped into BAC and MS "probably too early."

Flowserve, unlike AAPL, actually was a stock that moved seriously afterhours. Karen Finerman said "I would absolutely be a buyer here" as the shares plunged near the $100 level.

Finerman also made a Gary Kaminsky joke regarding the graphic for the "Short It!" segment that others (including, yep, Pete Najarian) got a chuckle over. Melissa Lee apparently knows baseball, or sure sounds like she does, in her description of Bengie Molina as being on "both sides of the trade" in the World Series. (But doesn't Melissa know it's kinda cute to say things like "how many touchdowns did he hit this year?")

Melissa Lee was positively bubbly throughout Wednesday's Fast Money and looked sharp in black. Mary Thompson lived up to her (CNBCfix-bestowed) reputation of Prettiest Hair on Cable Television in her breaking news report on AIG's Robert Benmosche on Wednesday.

Patty Edwards: Netflix
getting ahead of itself

For whatever reason, we just couldn't get "into" Wednesday's Fast Money Halftime Report.

Yeah, Patty Edwards was there talking about something greater than a 3-month time horizon, but for some reason, nothing really registered.

Kimberly Greenberger said Coach is sizzling partly because people such as Kimberly and Patty need several trips to accomplish all their holiday shopping, and Coach is showcasing something new all the time for repeat visitors.

Steve Cortes said (Zzzzzzz) "Consumer staples I think are getting attractive here." He also said he wouldn't short RIMM right now.

Patty Edwards said "I get nosebleeds at this level" of pricing in Netflix. "It's just too high."

Expert: Chicago Cubs
are actually trying to win

Sports-franchise expert Salvatore Galatioto is probably the type of guy who would rain on the sports talk radio parade, where basically every caller thinks every owner whose team didn't win the championship is too cheap.

Galatioto had an interesting little chat on The Strategy Session Wednesday about the value of owning a pro sports team.

Gary Kaminsky asked about owners' motivations. "Are they in it to basically make money, or are they in it to win a championship?" Kaminsky asked.

"Most of them are there to win," said Galatioto, pointing to the Chicago Cubs, which is profitable with losers on the field. "The Ricketts (sic) bought that team because they want to win."

Galatioto said if the Texas Rangers, for example, win the World Series, the biggest economic benefits won't come right now, but next year, when suites and tickets and merchandise are going to be sold. (Though we wonder, how hot will those suites be if Cliff Lee and another star or 2 departs and people doubt they can win again.)

Gary Kaminsky asked if the Dallas Cowboys remain super-valuable during bad seasons such as 2010. Galatioto said absolutely, "That new stadium is a money machine."

Kaminsky for whatever reason prefaced his question with "No disrespect to any Cowboys fans out there." Hey, disrespect those Cowboys all you want, and then some.

NFL TV map
oddity of the week

Mostly it's the Western half of the country that will see Sunday's Denver-San Francisco game. But note the tiny pocket in northwestern Indiana. Apparently, the Purdue university community still has a hankering for Kyle Orton.

The chart link, as always, is in the blue box at the upper right.

Kate Kelly: Hedge fund biggies
looking into mortgage liability

Kate Kelly reported on Wednesday's Strategy Session that it's not just a bunch of yo-yos, but rather a large number of bigwig hedge fund names are gathering to contemplate the case against the banks (ahem, cough, "Countrywide") over mortgage-backed securities that might've been a bit mislabeled.

Gary Kaminsky told David Faber his impression is that, "The idea that this is some small, you know, sort of, uh, mini-institutions, some small players, I think you and I can both agree, that the people that are at that meeting are very significant and they do extremely good work."

Superstar media analyst Rich Greenfield, who hasn't been on Fast Money for seemingly ages but made a great call a while back on DirecTV, said "The cable companies have largely won the broadband war."

He also said 101 million homes have ESPN now.

David Faber reported that Gary Kaminsky's Smarter Than the Street ranks No. 6 in investing books and No. 379 overall at Amazon.

Faber said Kaminsky should hopefully have the book on cassette tape so drivers can hear Gary's voice in the car. Kaminsky howled. Melissa Lee rushed to Kaminsky's defense: "I think his voice is melodious," Mel said.

[Tuesday, October 26, 2010]

Andy Busch: Don’t expect
tax-rate extension

Andy Busch told Fast Money viewers Tuesday he thinks an extension of the present tax rates, at least for middle-income earners, is already well priced into the stock market, but he actually doubts whether anything's going to happen in the lame-duck Congress.


On top of that, "Whatever the Fed does on Nov. 3, the day after the elections, the markets are gonna be disappointed," Busch said.

Tim Seymour (basically) calls buyers of GS 50-years knuckleheads

Gary Kaminsky told Fast Money viewers Tuesday that Goldman Sachs, issuing 50-year bonds, actually "could've done north of 2 billion" because demand was so strong.

The buyers, Kaminsky said, are "not interested in the duration risk." Rather they just want that 6% coupon they can get for 15-20 years.

Tim Seymour said that sounded loopy to him. "To me, this is a big risk," Seymour said. "Duration risk is a big deal right now." He said inflation is here, "and the long end of the curve is where it is stored."

Kaminsky said buyers don't care. Seymour asked if they should. Kaminsky said yes, but when you're getting 6% for 10 years, as opposed to 1-2%, you're going to be interested.

Colin Gillis: $36 on RIMM,
$95 on AMZN

The Fast Money gang on Tuesday wasn't really sold on the spike in Research in Motion.

But Guy Adami pointed out someone who's on the wrong end of that spike: Colin Gillis.

Adami wondered what Gillis would have to say about the RIMM move Wednesday, and maybe what he'd say about AMZN, another name in which he's a little low.

Tim Seymour said he thinks RIMM is around the area where "it runs out of gas."

"I have missed the trade so far," said Patty Edwards, who said RIMM is trading at 9 times this year's earnings, and referring to the Playbook demo, said "this is the area that is selling hot."

Joe Terranova modestly spoke about the RIMM bounce after Guy Adami correctly hailed Terranova making a good call on this one recently.

Kaminsky: Ask what commission
your broker is getting

In Day 2 of myths of retail investors, Gary Kaminsky urged viewers to always ask about commissions received by financial brokers who are selling you a security.

"People are fearful, they are concerned to ask," Kaminsky said. "Any time you buy any financial services product, you should ask, is the broker being compensated."

If you're doing your own research, "a broker is a complement. It's not the end-all," Kaminsky said.

A viewer e-mailed in a hard-luck story about a broker recommending he ditch F at $4, and what did the broker do wrong. "It's very probable that his broker was giving him the advice of the sell-side analyst at that firm," Kaminsky said.

Melissa Lee went out of her way to point out registered investment advisors have different obligations than brokers.

Kaminsky made a joke about Andy Busch's demand for kid gloves and said Melissa Lee should go easy on him because it's also his first time on the show, but Lee didn't bite. Tim Seymour got a takedown for questioning Kaminsky's glasses.

Should government allow
free offshore cash repatriating?

Melissa Lee, hot in sleeveless red-black dress ensemble, pointed out at the beginning of Tuesday's Fast Money that U.S. companies have gobs of cash offshore that our government will tax at 35% repatriated whereas countries like Britain and Japan would tax 0-2%.

"Bringing that offshore cash back would be a great strong-dollar policy," said Brian Kelly. Guy Adami said the government could give 'em a 1-time window to bring it back and then all bets are off.

"I think the coal names come under a little pressure," said Tim Seymour.

Guy Adami once again referred to IBM claiming to know what it's gonna earn in 2015.

Janet Brashear told Guy Adami that Starwood Hotels is having a big ride right now because it's the perfect time of year for that name. Adami said that despite the valuation it seems like the stock is determined to go a lot higher.

Mel Lee, in hot red, repeated Alan Mulally's midday comment, "laser-focused," in sultry fashion.

Analyst: Apple could actually use something Netflix has got

Brian Marshall told Fast Money Halftime Report viewers Tuesday, to our surprise, that if Apple was interested in acquiring Netflix, it would be a "pretty interesting marriage right there."

Marshall said the price, around $10 billion, would be doable for Apple, and "net-net it would be a positive."

As for Apple-Sony, "I don't think that makes much sense," Marshall said.

Cortes: Bipartisan agreement
on lower defense spending

Out of nowhere, Brian Kelly tossed a major dis in the direction of Warren Buffett in a discussion about Todd Combs on Tuesday's Halftime Report.

"I also think there are some other candidates for the position that may have backed out here," said Kelly, who didn't appear to have quite the same George Hamilton-esque tan that he showed off Monday, but close.

On unrelated subjects, Joe Terranova said "I think IBM gets north of 150."

Amin Khoury, CEO of BE Aerospace, dismissed Melissa Lee's suggestions about airline consolidation possibly removing capacity, because he says his business is about the total number of people flying and not under which brand.

"Airplanes are chock-full," Khoury said, adding "they are all looking to upgrade their interiors," which of course if true is a great thing for his business.

Steve Cortes said the stock's just an extension of BA. "If you buy it, you're effectively buying Boeing," he said.

But then Cortes really knocked our socks off with this claim: That there is sort of acknowledgment among Republicans and Democrats alike that "Defense spending is probably going to go lower."

We'll see if that happens.

Alan Mulally sounds as if he’s as
totally focused as Daniel Snyder

Phil LeBeau, who once bought a car for $400 and a case of beer, conducted a brief interview with Ford boss Alan Mulally during Tuesday's Fast Money.

Mulally spent much of the brief time warning against complacency and vowing that his company will not get complacent now that it's paying down debt in a hurry.

Steve Cortes said the play on F is actually "names like Magnum." Brian Kelly said to look at Toyota. Joe Terranova touted Johnson Controls.

Cortes shrugs off BAC rise

Steve Cortes said on Tuesday's Halftime that he wasn't too impressed with BAC's gains, saying he'd be "interested in shorting up around $12 or so."

He said the stock "5 weeks ago was at $14."

He said the real story of Tuesday is that "European stocks are really getting hammered."

Joe Terranova said, "I still think homebuilders could potentially be the winners."

Terranova said BAC's gains are an endorsement for another name. "If you like Bank of America, then you also have to looooove Citigroup."

Kaminsky: 1% of S&P 500
driving 27% of performance

Gary Kaminsky, citing stats from S&P, made an interesting point about the S&P 500 on Tuesday's Strategy Session.

Kaminsky listed 5 stocks — Apple, Berkshire, Citi, Philip Morris, McDonald's — which in number are 1% of the whole index, or 5 out of 500.

Kaminsky, though, said that those companies' "actual contribution to year-to-date performance through last night is: 27%" of the index.

He sees this as another reflection of the closet-index mentality. "If you don't have a position in those 5 stocks right now, we've said before, it's like being short those stocks," Kaminsky said.

Kaminsky: GS for 50 years,
or Mexico?

Gary Kaminsky reported on Goldman Sachs' remarkable 50-year bond issuance, saying it was still being worked on around 9:30, 9:40 a.m. "It's high-net-worth individuals and they can own a piece of paper like this in a tax-free account," Kaminsky said, saying it would be 6.25% over 50 years, which despite the duration risk is appealing because the "benchmark may be 5%."

Kaminsky and David Faber noted that Lehman Brothers was around for much longer than 50 years, and now isn't around. Faber though pointed to other firms no longer around that were merely taken over, and thus the investors still got their money. Kaminsky asked Faber if he would buy Goldman Sachs 50-year debt or Mexico 50-year debt. Faber admitted that's a great question, but he can't buy corporate debt, "thanks to CNBC restrictions."

In a bit of dead air near the end of the program, Faber agreed it's a "key, key time" for companies to access the debt markets in ways rarely if ever possible.

Scott Rechler, who's a pretty good TSS guest on REITs, said there's now a 16% premium in commercial REIT asset valuations, based partly on some accretive terminology. "The REITs are leading the market in terms of valuation going up right now," he said.

He also noted that REITS are only "15% of the U.S. commercial real estate market," and that massive deleveraging of the other 85% is going to take "2 or 3 years."

Rechler said what has to happen for nirvana are 3 things, 1) asset values appreciating, 2) liquidity, 3) economy improving.

David Faber said Gary Kaminsky's Smarter Than the Street is "No. 2 on Amazon business." Faber also made a good music call, revealing he used to listen to Blondie in his Walkman "back when Debbie Harry looked pretty darn good."

[Monday, October 25, 2010]

Sounds like our next bailout

Karen Finerman on Monday's Fast Money delivered an interesting little lecture on how the bottom is falling out of the oil tanker sector. Day rates, Finerman explained, have tumbled "dramatically," actually a "90% reduction," which seems unfathomable.

"Supply/demand dynamic is so far out of whack," Finerman said.

Early Fast Money viewers will recall endless conversations about the dry bulk shippers, namely Dryships but also Diana, Eagle, etc.

Back then, the oil tanker specialists barely got mentioned because how can you beat a dry bulk name that's doubling every few months, ultimately providing in the case of Dryships undeniably one of the greatest shorts of all time.

Nowadays, other than Monday's Fast Money, when's the last time you heard a damn thing about any of them?

Karen Finerman on Monday appeared to be wearing the same orange scarf that a while back prompted a reader of this site to ask who the designer is. Karen hasn't mentioned on-air, and we still have not the slightest idea.

Gary Kaminsky makes a healthy case for his book

In a very disjointed and quite frankly uninteresting opening segment of Monday's Fast Money dealing with Texas Instruments' earnings that as usual are about as exciting as a solar calculator, Gary Kaminsky, sitting in the Guy Adami chair, was somehow ignored for about 5 minutes.

Kaminsky said he was just "absorbing all the great energy."

Kaminsky was actually taking a turn on the panel, in part, to discuss investing themes covered in his new book, Smarter Than the Street. Later in the program he got a chance to take a crack at index funds.

Kaminsky said people by the late '90s were bombarded with sales pitches for index funds, the idea being that 8 or 9 active managers out of 10 underperform.

Not to name names, because Kaminsky didn't, but obviously Jack Bogle is one of those people making the sales pitch, which is fine, until we realized years ago that Vanguard was offering or promoting actively managed funds, which would seem to discredit the reason for the rest of the company. You'd think, either active managing works, or it doesn't. Otherwise it's like Ford manufacturing Toyotas just in case.

Kaminsky though, echoing obviously a passage in the book, points out that relative outperformance is useless if the index is down 9% and it's beat the 80% of managers who are down 11%.

"If you're gonna index, you're gonna get index returns," Kaminsky sighed.

But he said what the industry doesn't tell you about are the 1 out of 10 or 2 out of 10 managers that do beat the indexes. Kaminsky said the goal should be to make money, not just outperform.

If you read the book, you'll notice one convincing point you might hear this week, that, if all other things were equal, it should actually be easier for the small investor to outperform mutual funds because the small investor can easily unload his/her biggest positions without the market even noticing.

This page would speculate that offsetting that notion is the fact most small investors are poorly hedged, if hedged at all, and thus tend to really get killed when, say, buying Dryships in the 3-digit range.

One thing we find fascinating is the general public's belief that the Dow and S&P 500 are something like Moses' tablets, a list of names handed down from on high when in fact it's just the flavor of the month selections by a media company. The Dow is a joke, a list of stuff that was great about 10 years ago. Intel a more relevant "indicator" than Google? You've gotta be joking. There's American Express, but incredibly, no Apple. Bank of America got added in 2008, which is like dumping a Countrywide stink bomb on index-watchers.

This page will have a review of Kaminsky's book out soon. So far, we haven't found a thing we disagree with. (We kinda wish we could say the same things about Michelle Caruso-Cabrera's You Know I'm Hot, but we just can't.)

Melissa Lee reveals she
doesn’t watch CNBC documentaries

You'd think given the amount of promotion CNBC gave to Scott Cohn's "Remington Under Fire" that premiered last week, everyone at the network would've had to have seen it 3 times by now.

Obviously, that hasn't happened.

Analyst David Sackler returned to Fast Money on Monday and touted a gunmaker.

"We are long shares of Sturm Ruger," Sackler said. He said the investing public has misunderstood the trend of gun permits since Barack Obama was elected president.

But things got interesting when Sackler said "We also believe that Ruger would make a very good acquisition candidate, uh, for the Freedom Group."

Melissa Lee said "Wow, I didn't even know that existed, The Freedom Group, that's fascinating."

"They actually own Remington," Sackler explained.

"Oh they do. OK. That makes sense," Lee said, not particularly convincingly.

Lee, of course, would know what The Freedom Group is if she had merely watched "Remington Under Fire," although she would've had to watch all the way to the final segment to hear it.

Embarrassing as it sounds, it's probably worth giving Mel a break. Paul Krugman likely doesn't see every big article in the New York Times. Gasparino surely doesn't watch every Fox Business program.

In an unrelated stock, Sackler said "We continue to be long shares of Regis ... we continue to think that the company will be acquired in the mid-20s." He said the company's cash flow provides a floor if it doesn't get bought, but then again, that's kinda what they always say when recommending possible takeover targets.

Gary Kaminsky suggested that the reason everyone, including Melissa Lee who was "fascinated" to learn about The Freedom Group, was smirking during a portion of Sackler's comments is that he "tried to make joke about Regis" involving Supercuts but apparently it didn't work. Nothing wrong with a humor gamble.

Peter Schiff: Still fighting
the last election

Tim Seymour said on Monday's Fast Money that QE expectations are frothy and "I think 500 billion would be a very big disappointment," but it was Joe Terranova who stumbled into the Peter Schiff trap.

Terranova said so far it's mission accomplished for Tim Geithner: "That's what we want right now: an orderly decline in the dollar."

The program next cut to Schiff, who had heard everything and said if he's about to get wiped out, he couldn't care less if it's orderly or not. "I'm gonna get out of Dodge, I'm not gonna stay here and get shot," Schiff said.

"I'm not sure how orderly this is by the way," Seymour said.

Then Terranova, regardless of whether he's right or wrong about orderliness, confounded things by requesting a couple times Schiff keep it "simple" for people as to how to trade this, when really, they talk about the UUP and FXI and FXB, FXC, etc., all the time and how complicated can that be?

That was essentially Schiff's answer, saying owning foreign-based stocks does the trick, as well as all those currency ETFs that weren't around in the '70s. (Neither was Gaga; see what everyone listening to Bowie back then was missing?)

"Getting out of the dollar today is a lot easier than it used to be," Schiff said.

Schiff mocked some of the U.S. statements at the G20. "It's like an F student giving advice to honor students about how to improve their grades."

That one brought a rebuke from Tim Seymour, who said other nations may be creditors but they still find reason to buy our bonds. "You can't say these people think we are F students," Seymour said.

Hopefully Schiff's rhetoric on the campaign trail was more diverse than his Fast Money commentary. Fast Money heavily promoted the fact Schiff can apparently be heard at www.schiffradio.com.

Seymour drums for charity

A few weeks ago, nighttime rock star Tim Seymour was featured with his band on a segment of Fast Money's "Trade Your Passion."

On Monday's Fast Money, Melissa Lee revealed that Seymour, who drums for JAM Partners LP, performed at the Hedge Fund Rocktoberfest, for A Leg To Stand On, a global charity that "offers disabled children a chance for a more normal life."

This year apparently is the 7th year of Rocktoberfest. Web clips indicate Seymour is an annual participant.

Karen used to trumpet TBT,
not so much anymore

Bill O'Donnell explained how you get negative yields in Treasury inflation-protected securities. "The world for TIPS changed on August 27th," he said, at the Fed's Jackson Hole gathering. He called the results of that meeting "basically a starting gun for the TIPS market."

"This market is completely focused on the Fed's efforts to reflate," O'Donnell said.

Karen Finerman admitted being perplexed by the enduring strength in Treasurys. "I have been confounded for quite some time," she said, and "wouldn't touch it, the long end."

Mike Mayo is losing
the PR battle

In what's becoming a daily ritual on Fast Money, Karen Finerman (again) said Bank of America sure seems like it might be cheap, but you can't buy it through all the noise.

"I think at some point though the rhetoric will turn," she said, but "I don't know how this story gets resolved."

Gary Kaminsky claimed closet indexers are unloading BAC and finding C as an alternative.

Joe Terranova explained, "I did buy some Citi today ... if Citi gets back above 4.30, that's when the momentum restarts," he said.

Amgen’s ongoing trial:
Putting investors to sleep

All you really needed to know about the Amgen results was Chris Raymond's response when Melissa Lee asked him what he found interesting.

"Not much," was Raymond's answer.

"A nice beat but they didn't raise guidance," he added. "Everybody is waiting for 1-4-7 trial." (Without question. We spent all Monday afternoon and evening waiting for it.)

Raymond said his top pick would be BioMarine, and also Dendreon.

Joe Terranova said there are a lot of frustrated AMGN holders out there, including himself, who have finally seen a little pop but wonder about the next catalyst. Terranova said the way to play it is to sell half of it and hope you were wrong to sell it.

Separately, Karen Finerman told Gary Kaminsky she thinks "there will be a deal" regarding Genzyme and that Sanofi is the likely suitor.

Some healthy advice
for this page

Monday afternoon, we were watching Street Signs with Erin Burnett and happened to stumble onto an interesting conversation about the blogs.

Tim Kane of The Kauffman Foundation slinged it a bit with David Callahan, a co-founder and senior fellow of Demos, which we learned is a research and public policy organization.

Callahan notably said this:

"There are a lot of bloggers out there who don't have strong economic credentials who are in the debate. And they're not particularly accountable. Uh, a lot of them, you know, nobody is fact-checking them. There's no editor who's looking over their shoulder saying, 'Ooh, hey wait a minute, is that right.' And there's a real premium in this business for taking a more extremist view. You don't get page views in, in blogging by, kind of, uh, uh, being mild and fact-based. You get page views by taking a more assertive view, a more edgy view, and really trying to be 'out there'."

Hmmmm ... "a real premium in this business for taking a more extremist view."

The problem is that he actually refers to this endeavor as a "business."

Accountability? Mostly when describing clothes, hair, accessories, etc. We can't afford to be seen as moronic by those who also noticed Erin Burnett's show-stopping, knees-turning-to-Jell-O ensemble of turquoise blouse and new hairstyle Monday.

Or would that be considered a "more extremist view"?

Didn't think so.

Callahan went on to say: "There's a lot of bloggers out there who frankly are not that committed to the truth. I mean we saw, uh, with this Shirley Sherrod incident, a major distortion that flew into the mainstream media, led to the resignation of a, of a, of a, Obama administration official, and it turned out to be, you know, largely fabricated and distorted." As opposed to the hundreds of campaign commercials airing on mainstream media television every 5 minutes these days that absolutely never take a thing out of context.

Tim Kane said even the chairman of the Federal Reserve probably reads some of the blogs.

Kelly: Rare earths a play
on sovereignty

Brian Kelly said on Monday's Fast Money Halftime Report that there's no bubble in rare earths.

Bubbles, Kelly said, happen when supply is plentiful and/or growing but the price continues to rise. "This is a case where supply is not plentiful," Kelly said. "We're not in a bubble at all."

But Zachary Karabell warned that much of the gains in rare earths have come recently on suspicions of a China embargo that figures to unwind. "There's a lot of fast money in this particular trade," Karabell said.

But Kelly said rare earths are "also a security issue." And helpfully, he added, "You don't want China controlling your military."

Don't let China control your military. Good tip.

Kelly said of Molycorp, "I'd buy some more right here."

Karabell: Governments actually promote things they can’t really accomplish

In a Halftime Report Monday dominated by Pete Najarian guffawing at every other sentence, Zach Karabell said the G20 puffery is telling. "Governments can say what they want reality to be, but their ability to dictate global capital flows is somewhat less than their desire to dictate global capital flows," he said.

Steve Grasso made a Wall Street joke. "Schlumberger was actually added to the Morgan Stanley Best Idea- I guess that's like the Oprah Winfrey, Oprah Winfrey favorite things list," he said, to Pete Najarian's chuckles.

Grasso said Citigroup and other banks should be viewed as more of a long-term holding. "This stock can trade between 3.75 and $5.00 for the next 2 years," he said.

Grasso also downplayed Pete Najarian's claim that Bill Miller and Mike Holland are expressing bullishness including in the tech sector. "Last time I checked though Bill Miller only survives in upward markets, so he's never gonna come out and tell you he's short," Grasso said.

Steve Streit of Green Dot acknowledged Wal-Mart might be an impediment to new deals, but only one new potential deal: Target.

Melissa Lee wore smart fuchsia cotton button top.

Zach Karabell insisted "A lot of companies don't have pricing power." Jason Trennert said the Fed has put itself in a position now where really all it can do is disappoint.

CEO indicates business
worse than we thought

The Strategy Session on Monday didn't exactly get off to a gangbusters start to the week. ITG CEO Bob Gasser discussed his company's acquisition of Majestic Research, a deal that David Faber admitted normally wouldn't get much attention, but on a slow news day, it was the best they got. (NOTE: The end of that sentence was just a joke; Faber actually said they're talking about it because it's an example of maybe a company reinventing or reshaping its business model.

ITG, Faber said, is a liquidity provider that operates trading platforms allowing execution of trades away from exchanges. Gasser said the move is indeed a response to the low-volume, low-yield environemnt that is scary to businesses such as his. "If we got up every morning and, and, and looked at this as the future, ad infinitum we'd wanna jump out a window," Gasser said.

Elliot Weissbluth visited TSS Monday to make a recruiting pitch for his firm, HighTower Advisors. He said his firm is attractive to people who worked at the big banks because "You don't compromise any of those access to research."

More importantly, "Your W-2 compensation, the amount that you would take home as a 40% payout, doesn't change when you come to Hightower," Weissbluth said. "You become an owner."

Herb Greenberg was up in arms over the ITT Educational Services stock buyback. "As I continue to dig into this industry, I sometimes just feel like throwing up my hands," Greenberg said. "How can you commit new money when you don't know what's gonna happen???"

Gary Kaminsky balked when David Faber said Kaminsky would be "promoting" his book Smarter Than the Street later on Fast Money.

Melissa Lee said Kaminsky won't get a "free lunch" to tout the book. "He's not coming on to promote, he's gonna come on to work. For us," Lee said.

In what maybe should've been the top discussion topic of the day, David Faber and Gary Kaminsky discussed whether Apple could potentially be interested in buying Disney. "I don't think so," Faber said, citing "the distraction alone." The pair agreed that Apple's stock isn't underperforming unlike other companies loaded with cash. According to Faber, money managers long AAPL say "right now it's like owning Thomas Edison."

[Friday, October 22, 2010]

The stuff you learn
on Wikipedia

It's basically been Steve Cortes Week on Fast Money. Quite frankly he has more than held his own, but like anything, you get the bad with the good, such as like watching Alfonso Soriano segue from homer to 3-pitch strikeout...

On Friday's 5 p.m. Fast Money, Cortes issued 2 analogies, one of them referring to a very negative call on XOM.

"That XTO takeover I think is gonna go down as one of the worst mergers in history," Cortes said. "The only one I can think of that maybe is worse was Liz Taylor marrying Larry Fortensky."

Melissa Lee said Cortes "pulled deep for that one."

Guy Adami said he must've been "sitting on it" for a while.

We wondered whatever happened to Fortensky. Still alive. Most intriguingly, we were surprised to read, " 'Larry Fortensky' is also the nickname of a poker hand with four 10s."

Steve Cortes said one good way to play his negative views on Exxon would be to do a pairs trade of short XOM/long COP.

Whoa! Melissa gives CEO
a forearm shiver

One of the neat little conundrums of business execs on CNBC is that they always have to reassure the investors watching TV that they can charge a healthy price for their product while not conveying to the customers that they're being gouged.

Notice how Polycom CEO Andy Miller dealt with that challenge on Friday's Fast Money.

Miller, in a lengthy chat with the Fast gang, was eventually asked why his company could consider itself a better option than Cisco.

Miller's answers: "We build a better product ... we offer a much higher level of customer service ... and the most important, better partnerships."

Then Melissa Lee broke in with a startling interruption: "I thought the last 'p' was gonna be 'price.' How do you stand on price?"

Miller's response: "Our price, listen, last quarter, from a discount perspective, the discounts held very firm, our ASPs held firm, and from a price competition, we don't see, and in fact we grew a point on gross margin, so the pricing piece is fairly stable right now, it's really about innovation and differentiation in terms of the total cost of ownership..."

Got it.


If we had to guess, we'd speculate that Miller was more concerned about investors thinking he can't charge enough, rather than customers thinking they're being charged too much.

Guy Adami said he wouldn't rush in to Polycom after such a big gain Friday, but he and Joe Terranova said Polycom is a name to keep on the "radar screen."

Michael Block called Polycom a "very attractive business," adding, "they could be a target themselves."

Terranova puts
MSFT on the clock

Steve Cortes' 1st analogy of Friday's Fast Money proved he watched the shellacking of UCLA Thursday on ESPN.

"Amazon is hitting on all cylinders," Cortes said. "Watching this stock right now is like watching the Oregon Ducks play football. They are going down the field and they are scoring."

He said he's eager to buy Amazon, but "unfortunately it won't pull back to let me get in."

Guy Adami admitted "I was wrong yesterday" on AMZN, saying he thought it would test the low $150s.

Joe Terranova actually said of MSFT, "I mean, the story has to get ignited relatively soon."

Michael Block said eBay's a great company doing a lot of things right, but then made a pretty good joke: "I'm not ready to click-buy it now."

Lawrence Eagles, Nic Sarkozy
might want to pay a
visit to the Nasdaq

Just as they had on Friday's earlier Halftime Report, the 5 p.m. Fast Money gang tackled the ridiculous JPMorgan $100 oil call.

"It's interesting on the JPMorgan, you gotta point this out," said Joe Terranova. "I think it was the end of the summer, JPMorgan made a call in oil where they said it was gonna hit 65 bucks by the middle of October. Now we're gettting a JPMorgan call completely in the opposite direction."

Steve Cortes mocked the JPMorgan report's reliance on France unrest as part of a $100 oil thesis.

The French riots are "such a temporary blip in the oil market," Cortes laughed, saying the factor worth taking seriously is the possible dollar destruction, which he presently does not think will happen.

Guy Adami said, "France is relevant, where? I don't need the hate mail but you know I'm right on this one."

The 4-year-long Fast Fire

Fast Money viewers know how much Guy Adami loves to talk about how horrible it's going to be when gold corrects, even though the bottom has not fallen out of gold since the debut of Fast Money in 2006 and hasn't really fallen out in the last decade, or maybe not even really since 1980...

"I've been in that seat I know how scary it is when it's down 50 bucks," Adami said Friday on Fast Money. "You better prepare yourself," because the day where it's down $150 might actually be coming.

Brian Kelly though said gold "is starting to look attractive to me again." Kelly cited a "12-month rolling correlation" for 10-15 years as evidence that gold only trades with the dollar 50% of the time.

Guy Adami said the price action of FCX represents a "glimmer of hope" for the dollar.

Michael Block talked about commodity input price increases and said a name like Kraft has managed that well but now the expectations are baked-in, whereas Kellogg and Dean Foods maybe haven't been as successful and thus will get a "little more leeway" to improve. Guy Adami said of K, "I don't think they have pricing power."

MySpace: The next YHOO

This site posts all kinds of business/media stories every day. One series of such stories we actually happily ignore are all the (stoopid) cable TV showdowns that occur about twice a year where the distributor vows to keep a channel off the air, then it's always resolved just before some really important show is scheduled to air.

Analyst David Bank weighed in on that very subject on Friday's Halftime Report, in the most extreme terms. "It's a battle for the hearts and minds of the Long Island consumer," Bank said. "It really is a big battle."

But if you're expecting drama, forget it, Bank said, because these disputes "have always played out in favor of the content provider."

He said the only hope of the distributor is to generate "enough PR spin on this to get the government involved."

As for this weekend, "probably see a black screen on Sunday." Bank added, "I don't think the government is gonna get involved this time," or probably the next time either.

Then Bank seemed to start talking nonsense. "Any weakness from this is clearly like an opportunity to buy News Corp," Bank said, of the company that paid $60 for Dow Jones. "They're gonna do something with MySpace ultimately which could turn a big impact on earnings."

Joe Terranova:
$100 oil no big deal

Melissa Lee said Friday on the Halftime Report that the Call of the Day is JPMorgan's oil forecast, "the commodity could reach $100 a barrel in the near future."

"I clearly do not agree," said Steve Cortes. "If it does break $80 I will add to shorts."

Pete Najarian said the idea of $100 oil "seems to me like that could really slow down the economy."

Joe Terranova said yeah, but ... "Logically Pete I would agree with you," although, "companies are able to pass along and retain pricing power ... companies will be able to pass along to the consumer again."

We'll take the other side of this one. Oil got broke in summer of 2008, and 3 digits are a pipe dream.

Government meeting unlikely to solve anything

Michael Woolfolk said the G7 and the BRIC nations might have some talks over current account deficits, but he doubts the likelihood of major agreements. "Expect ubiquitous dollar-selling to resume next week," he said.

And that kind of sentiment is exactly where Steve Cortes wants it.

"I think the dollar bearishness is far too crowded," said Cortes, saying he's long because the widespread pessimism is a contra-indicator.

"I absolutely would not be long the dollar," said Joe Terranova.

Melissa plays the comedian

Steve Grasso said on Friday's Halftime that a big reason for Amazon's reversal/resilience that "it is a 4th-quarter story."

Joe Terranova quite bluntly said, "They have no competition."

Steve Cortes said he thinks BIDU is "extremely extended," and "I do think the competitors are emerging," including Alibaba. But Pete Najarian said there's a lot of growth ahead of the company.

Melissa Lee, who wore attractive charcoal heather/white top combination Friday, isn't really known for wisecracks, but managed to elicit guffaws from Pete Najarian with her characterization of Joe Terranova's closing comments on "I think we learned 3 things about the financials this week."

"Sounds like you're in an AA meeting or something," Lee said. "My name is Joe and I have a problem: I like the financials."

Semantics get under the skin
of Bob Olstein

David Faber introduced Bob Olstein on Friday's Strategy Session as "maybe he's a little bit pissed off," then asked rhetorically whether he could say that on cable.

What is it that's aggravating Olstein?

The word "target."

Olstein launched into a tirade about changes to Intel stock forecasts. "How can a company's value change by $45 billion because you miss earnings by a nickel?" he bellowed.

David Faber said gripes about sell-side finickiness are nothing new. "We could've had this conversation 12 years ago," Faber said.

"You've gotta take the word 'target' out of research reports," Olstein insisted.

In Macau, no one cares
about free cash flow

When he wasn't complaining about price targets, Bob Olstein was saying Friday that at least 2 stocks to him seem overvalued.

"Las Vegas Sands, and if you look at the chart, has not produced any free cash flow in the last 4 or 5 years. So how do you value a company at $25 billion that's producing no cash?" he demanded.

David Faber offered the obvious answer to that one. "They obviously don't think cash flow is as important as you do," Faber said.

"Do you value the air in this room?" Olstein responded. "Well a company that does not generate cash eventually is gonna get in trouble one way or another."

Olstein also pointed to Carnival Cruise Lines, "They have produced no free cash flow in 5 years."

On the plus said, Olstein said Charles Schwab is a stumbling company in part because "the spreads on their interest are way down," and with just a little improvement in those spreads, the company could see some nice revenue gains.

Kate Kelly’s report bound
to make many observers cry

Kate Kelly told Strategy Session viewers Friday something that, um, well, let's just say probably won't find a lot of sympathetic ears in the general public.

"Wall Street pay is likely to be down this year," Kelly said. "Flat is the new up."

Gary Kaminsky said Credit Suisse's pay percentage disclosures make him think "activist investors would be looking at a company like this and saying, 'Why, why do we accept that type of return on equity?' "

On an unrelated subject, Gary Kaminsky pointed out that Genzyme has been through this value-maximization thing before.

"I can vividly recall being at a meeting, probably 10 years ago, up in Boston, I think it was the Copley Plaza Hotel, where Genzyme laid out the next decade," Kaminsky said, saying the plan then was to have different publicly traded subsidiaries. "They've tried in the past to unlock value."

Soldier Field, 1 p.m. Sunday

Daniel Snyder is believed to be "completely focused" on the 3-3 Redskins' matchup vs. the Bears this weekend.

[Thursday, October 21, 2010]

CEO takes down
his own shares

Mark Smith, CEO of Molycorp, might as well have been speaking Mandarin on Thursday's Fast Money as far as this page is concerned.

We even had to look up the Fast Money Rapid Recap afterwards to figure out how "rare earths" is some kind of singular noun (or maybe not).

Anyway Smith seemed to disagree with one of Melissa Lee's premises, that the company currently maybe isn't mining anything, when in fact he says it's producing "3,000 tons of rare earths a year."

But Smith really made news when, about, 50 minutes into Fast Money, he used the "b" word to describe the short-term pricing in his own product.

"They are really spiked right now and we think there may be a form of a bubble occurring because of all of the news and the frenzy that's occurring," Smith said.

He added that people seem to be basing business plans on present prices, and "I strongly suggest that they do not."

According to Google finance, that's pretty much exactly the moment the stock plunged a dollar in afterhours trading, and continued to trade at relatively high volume through the rest of extended hours.

Brian Kelly said the funny thing about the rare earth term is that it's a product that's not really rare.

Colin Gillis admits AMZN
price target is $95

Colin Gillis managed to make Amazon sound not all that bad during his enthusiastic earnings report on Thursday's Fast Money while at the same time admitting he's been projecting the stock will blow to smithereens.

Gillis said that among other things, "Expenses are growing faster than revenues," and that "marketing expenses are up 62% on a year-over-year basis" for Amazon.

Joe Terranova asked what his price target had been. Gillis answered, "95 bucks." He asserted, "Even at $95 it still looks expensive."

The panel did one of those collective gasps, or maybe it was a collective "hmmmph," and Steve Cortes said, "$95 ... that's double-dog sell rating."

So, it's no surprise that Gillis a couple times begged off whether he's sticking by that number and claimed his target is actually "under review right now."

Guy Adami credited Gillis for taking his work seriously. "He brings the A game every single time," Adami said, but he meant "A" is in good, not "A" as in "Amazon."

Flight attendants down the chute, not hedged for that

Recently we've been contemplating putting together a list of the questions on Fast Money/CNBC we most dislike.

Thursday on Fast Money, it was Steve Cortes' turn to remind us of one we'd forgotten: Asking the airline CEO how hedged he is on fuel costs.

"43%" was Dave Barger's answer for JetBlue. (And of course, as always, the hedging strategy is working very well.)

Barger also said there's strong demand basically everywhere for air travel, through the summer, and "We're seeing the same theme going into the Thanksgiving time frame." He said the consolidation isn't a threat right now, but "is a good thing in our space."

Brian Kelly revealed, "I love flying JetBlue."

Scaramucci: Writing to Congress
really does create change

Anthony Scaramucci offered some currency-trade-war commentary on Thursday's Fast Money that had to make even the least skeptical viewer wonder if The Moochmeister has been spending too much time watching programs such as "Mr. Smith Goes to Washington."

Scaramucci said the Fed's QE could be a "2.0" version of Smoot-Hawley and lead to "sort of a reverse trade war" if the U.S. and China play a game of currency/tariff one-up.

So, what's the remedy?

"I guess what I'm suggesting to viewers is that we really need to implore both governments here to try to cooperate with each other," he said, and he expressed that recommendation more than once.

If not, he warned of "possibly a depression."

So, start directing your e-mails to ... Hmmm, let's see, who would make a nice contingent here ... Senator Charles Schumer (D-N.Y.), where else could we start; Senator John Kerry (D-Mass.), to rein in those Benedict Arnold CEOs; Senator Charles Grassley (R-Iowa), who thought some of the AIG folks should've considered suicide; Rep. Michelle Bachmann (R-Minn.), just because; Madame Secretary The Honorable Hillary Rodham Clinton, because she's bored with reading prepared statements in Jerusalem; Rep. Paul Ryan (R-Wis.), because he knows where to cut; Rep. Ron Paul (R-Texas), he's bound to have an opinion; and perhaps for good measure, The Honorable Timothy Geithner ... or prepare to face the consequences.

Scaramucci said it's possible the Republicans might take both houses of Congress and that some think the market has priced that in, but he doesn't; "markets probably will rally on that," he said.

"I think the way is to buy the dollar," said Steve Cortes.

So there’s an opening for
a Brazilian junk-food story

Normally Dan Niles' appearances on Fast Money are greeted with high expectations, but Thursday's chat might lower the bar a bit.

Niles said "Intel's the most interesting out of all the semiconductors," and then, one of the most lukewarm endorsements you'll hear, said he owns NTAP and Brocade in the cloud space, not the "sexier" names, but the "safer" ones, because everyone wants video on phones and that's what contains all the video.

Steve Cortes said McDonald's is a Europe story, whereas Yum is an Asian story.

Cortes also revealed he went to the CNBC commissary during Hispanic celebration month, told them his name is Cortes and demanded a free meal, but was denied.

Steve Cortes is doing his part
to support the AMZN multiple

Steve Cortes, ever the contrarian, might've raised some eyebrows with his comments on high-flying AMZN Thursday on Fast Money.

"If it continues to pull back, I'm gonna get involved here," said Cortes, who reports that just about every day, an Amazon package arrives at his home.

He said the king e-tailer is "becoming a significant cloud player."

Brian Kelly basically agreed. "I think it probably is a buying opportunity," he said.

Guy Adami though said a margin decline is trouble and predicted the stock will overshoot to the downside, and thus, "I would be scared to bottom-pick tomorrow."

Stephen Weiss said he's skeptical of the stock because "margins are getting pressured."

Sticking it to Superfusion

Joe Terranova accepted a Fast Fire on the UNG not on television Thursday, but on the Fast Money Web Extra, which is hardly really "extra," but more like about 2 additional sentences you didn't hear on the TV show.

Terranova, though, acknowledged his Oct. 5 blunder with a dig. "I'm gonna man up, not pull a Zach Karabell, not gonna pull a Zeke, no way, I was wrong, natural gas looks like it's going lower," Terranova said.

Doesn’t Melissa realize she’s cute when discussing shopping?

Guy Adami expressed wonderment on Thursday's Fast Money about a subject that quite frankly has made us wonder also.

"Online shoes?" Adami said. "I know like a Jimmy Choo in a 7 is much different than like a Manolo Blahnik in a 7," he added, drawing a very appealing smile from Mel Lee, but he said he doesn't understand how people could buy shoes without trying them on.

Lee offered this rationale: "Guys usually wear the same kind of shoe, they know what size ... so you can order the same old pairs..."

But then Lee brought an end to the chatter and moved on to the next topic, even though she later led a discussion about the Victoria's Secret million-dollar bra.

Jon Fortt had a tremendous pinstriped jacket during an Amazon update from Silicon Valley.

Not the type of charge
it prefers to get

Steve Cortes said on Thursday's Fast Money that, unlike Brian Kelly, he doesn't see American Express as an appealing stock right now.

"You can't fight city hall and you can't fight the government," Cortes said.

Stephen Weiss agreed with Cortes that the government case, unlike the one-off deal with Goldman Sachs, is more of a permanent type of threat and is bound to keep a "lid" on the stock.

Guy Adami said of CAT, "Pull the ripcord, take some profits."

Steve Cortes said dollar bearishness has reached a "crescendo," and as a result, "I'm short oil, I'm short gold and I'm long the U.S. dollar," which he conceded is all basically the same trade.

Lawyer: RMBS situation puts
teacher pensions at risk

David Faber and Gary Kaminsky spoke Thursday with Talcott Franklin, who established a clearinghouse for residential mortgage-backed securities and thus, not surprisingly, is highly interested in banks' potential liability for possibly misrepresented mortgages.

"The phone really at my firm has not stopped ringing," Franklin said.

Franklin said he couldn't reveal the users of his clearinghouse, but "it's anyone who wants a fixed-income investment," basically insurance companies, etc.

David Faber said he was asking this question with all due respect, but doesn't it seem like a lot of ambulance-chasing piling on now that people believe the banks have some liability. Franklin said his investors basically have a fiduciary duty to make sure they weren't defrauded, then he went on to rattle off a series of percentages about how much investor rights he has for various tiers of securities that can only be described as more inside baseball than George Will's Men at Work.

The banks, Franklin said, "were more concerned about second mortgages that they held on their books, they were more concerned about their own certificates than those of certificate holders. And I've gotta tell you, some day, some teacher is gonna wake up and find out she has no pension through no fault of her own."

Gary Kaminsky asked Franklin, "What's the end game here." Franklin said that if the banks end up buying these securities back, as long as the securities don't default, the banks won't lose money, so the banks should be allocating resources not to fighting every single case but to loan servicing, which could presumably improve the odds of individual mortgages being winners.

Gary Kaminsky said that as for stocks, there remains "continued concern about what the potential liabilities are."

David Faber revealed a conviction in his jury duty case. He said he wasn't the foreman, but "I was one of the leaders in the room."

[Wednesday, October 20, 2010]

Cortes: Bank of America faces
‘asbestos’ type of situation

In a wide-ranging Wednesday episode of Fast Money, the most interesting statement involved someone not even on the program.

"Dougie Kass said he's basically buying Bank of America with both hands," Guy Adami reported.

Karen Finerman said the problem with BAC is that the valuation says strong buy, but the "contagion from this issue" of mortgage-security liability has spilled over the stock, and who knows when it will ebb, even though it all seems overdone in the fear department.

That's when Steve Cortes got downright loopy.

"Karen I think you might be underestimating the wrath of trial lawyers," Cortes said, before unfurling this whopper: "I really think it could be an asbestos situation ... society wants a boogeyman."

Without breaking stride, Cortes took a crack at the homebuilders, adding, "If it breaks the ocho, I think there's a lot of trouble below for Pulte."

So basically, Cortes is describing BAC right now with terminology that's stronger than what many people used to describe BP back in June.

Finerman acknowledged Cortes has been right on his recent BAC short.

This/close to a Karen Finerman swimsuit conversation ...

Karen Finerman, who on Wednesday wore brand new smart gray plaid ensemble, started comparing eBay favorably to Netflix, saying, "It's just in the part of the pool that I feel a lot more comfortable in."

And for a moment, you were thinking K-Fine was going to launch into some swimwear dialogue, followed up by Melissa Lee...


Guy Adami even stole a page out of this site's playbook, saying later in the show to Melissa Lee, "You know what's not rare though on this desk? The beauty that you and K-Fine share. I mean, it's tremendous."

"What does he want? What does he want?" said Finerman, skeptically.

"It's just unbelievable. We get to be around it every day," Adami said.

Sounds like Catherine Keener’s
job in ‘40 Year Old Virgin’

Back to eBay, Patty Edwards said on Wednesday's Fast Money that it's trading at "16 times this year's earnings, which isn't that bad."

But more notably, Patty said it sounds to her like the entrepreneurial spirit is alive and well in America (apparently in spite of Anthony Scaramucci's sentiments about Barack Obama's purported War on Business).

"I can tell you anecdotal story after anecdotal story where people are starting up their own small businesses, using eBay as their forum to get things sold," Edwards said. "This has got some legs behind it still."

Hopefully, the movie was not
‘Wall Street: Money Never Sleeps’

Patty Edwards also revealed on Wednesday's Fast Money that she recently tried Coinstar's Redbox for the first time.

"I don't own the stock. I do like the stock," she said. "I just actually for the first time used it over the weekend. Went to Redbox. Best experience I've had in a long time, because I could pick it up in one area, drop 'em off in another. A dollar. It works."

Guy Adami said those aiming to short Netflix better stay out of the way for now. "It's not about valuation; Netflix goes higher," he said.

Brian Kelly said of Seagate, "The takeover story is the only reason why you own this stock." Steve Cortes chimed in that you should only own a possible takeover candidate if you're comfortable with it not being taken over.

Peter Misek visited the set and said the cards keep turning up straight flushes for Apple, that the competitors are losing the battle and that Palm will prove to be too late to help HPQ.

But Misek conceded that at this level of market cap for Apple, it will be "really tough to move this needle."

Cortes: You’re too late
for the China story

Steve Cortes said Wednesday that when retail investors start getting long, it's usually after the good performance is over, which is something he thinks is happening with China names now. "I think that is the Joe Kennedy, shoe-shine clerk, telling-you-to-buy-stocks type of phenomenon," Cortes said.

Karen Finerman is basically fed up with QE 2 talk. "I feel like we've rallied 5 times on the same QE story," she sighed.

Eric Jackson predicted the "dollar will rally."

Patty Edwards talked about the promising results of Tractor Supply, saying they also have "apparel sales." Guy Adami interjected, "Pete buys that stuff ... by the gross," which cracked up the panel and prompted a Brian Kelly dig at Steve Cortes.

In a segment on people's worst investments (oh man, where would we start ... owning Exodus Communications at $125 ... owning that repulsive SKF thing in the $200s in early 2009 ... selling Dow Jones in the $30s just before Murdoch bid (snicker) $60 for it ...), Stephen Weiss curiously talked about not his own, but that of David Bonderman, who wasn't around to defend himself. Weiss said that Bonderman coughed up a lot of cash for WaMu, and others did the same, but Bonderman kept his risk low and didn't really lose much at all, making us wonder why it was such a bad investment in the first place.

Melissa Lee seemed to think she was cool talking about a breaking Boston Globe report of a group of investors trying to buy "it."

Guy Adami called out Mel Lee for talking about Peter Tosh without knowing who Peter Tosh is.

Patty: Out of BAC, into GS

It was just a day ago we were rehashing another Steve Cortes wind-up joke with a baseball pitcher cliche ... so for Wednesday's, guess we should pick another pitcher ... Dizzy Dean? Luis Tiant? Stu Miller, maybe?

"If the market were a radio station right now, it would be all-QE, all the time," was Cortes' punch line.

Mel Lee, in Baltimore Ravens purple-and-black, said it's a "potpourri" of stuff lifting the Dow.

The most interesting trade(s) was probably supplied by Patty Edwards. "I sold Bank of America yesterday," Edwards said, but she also noted, "I bought a little bit of Goldman Sachs" on Wednesday. (She predicted a $160 breakthrough, not really a bold guess just a buck and change away.)

"I have a 190 target for Goldman, I think it gets there," said Jon Najarian.

Cortes might’ve gone
to the well too often

This page was heaping praise on Steve Cortes a day ago.

Maybe it went to his head.

Cortes spent much of Wednesday's Halftime trumpeting the same calls as a day earlier, that China's gonna get blunted by "official" interest rate hikes, yada yada yada.

Then he made his case that oil is the big indicator of where everything's going, something Joe Terranova wasn't buying.

"The correlation between the S&P and oil broke down with the BP spill," Terranova insisted, then rolled his eyes while Cortes claimed he was referring to August pricing.

Terranova said of AAPL, "291, that's the area that you put your stop if you're long."

Cortes said AAPL seems temporarily in a $300-$314 range, and "I think a breakout in either direction has legs."

Cortes told Red Hat CEO Jim Whitehurst that competitors say the knock on Red Hat is that much of its revenue doesn't come from its core business. Whitehurst's response wasn't terribly convincing. "With interest rates falling, that's certainly not the case anymore," he said.

Patty Edwards said, "We own Alaska Airlines, probably because it's the hometown favorite."

Fund manager is bullish

Carl Quintanilla, guesting for jury-duty-stricken David Faber and actually quieter than Joe Kernen, played a Squawk Box tape of legendary money manager Bill Miller during Wednesday's Strategy Session.

What we heard made our eyes roll.

Miller said that over the next 10 years, he expects a "real rate of return" of 6-10%, probably closer to the higher end. Quintanilla also said Miller claims the S&P 500 could be up 20% in the next 12 months.

Maybe Miller's right. And maybe, he's a long fund manager who needs people to believe in the stock market in order to make good coin.

Gary Kaminsky observed, "If you had played a tape of exactly 10 years ago, I suspect Bill would've said the same thing."

There’s a good reason
WMT coupon so low

Gary Kaminsky said Wednesday on The Strategy Session that the recent Wal-Mart bond offering that marked a new 3-year corporate low is "sort of reminding me of what was happening with the technology companies in 1999, early 2000."

He said tech companies whose stock soared were playing a "bragging rights" game to see who could get the lowest coupon in a convertible offering.

Guest Joe Balestrino, however, said this Wal-Mart return is no joke, "there's a demand for this paper."

Companies, Balestrino said, are "playing a financial arbitrage game" successfully because rates are low, and the decisive factor is, "Wal-mart is still paying spreads to Treasurys higher than historical norms."

"I think we have not hit the lows in yields," Balestrino said.

Kaminsky asked a seemingly off-the-wall question that's actually kind of provocative: Is Wal-Mart less likely to default than the U.S. government? The consensus was no, international risk and other reasons.

Herb: The next for-profit
domino to fall

Howard Lutnick of Cantor Fitzgerald made an enthusiastic visit to Wednesday's Strategy Session and trumpeted all the great additions he's made. "We hired the real estate team from Credit Suisse," he said.

Gary Kaminsky asked for the "general reason" why talented people originally at big Wall Street banks are moving to smaller shops.

"Guys start to get afraid that 'Hey, maybe the safety net's gonna be dropping a couple levels and I'm not gonna make the money I used to make,'" was Lutnick's answer.

Herb Greenberg made another demonstrative point against for-profit education, this time eyeing a big Apollo supplier, Quinstreet. "If enrollment drops, and schools cut costs, marketing is one of those costs that is likely to get hit," Greenberg said. "To think Quinstreet won't be affected, I believe, is ridiculous."

Kate Kelly looked good in her appearance Wednesday. Oddly enough, during her intro she said something that really sounded like "sex." After rewinding a couple times, we realize she actually said "specs."

It always pays to verify.

Kaminsky reveals selling
AAPL for under $7 in 1996

Gary Kaminsky writes on the K-Call blog of one that didn't really go over very well: Selling 2 million shares of AAPL in the 1990s.

"I was then quoted in the New York Times, questioning whether the company was going to survive at all," Kaminsky writes. "We felt fortunate to sell and break even."

Kaminsky even says that if you feel like calculating all that money left off the table, feel free to ship it to The Strategy Session's inbox at strategysession@cnbc.com.

[Tuesday, October 19, 2010]

Brian Moynihan faces
his first serious test

The Fast Money gang conducted a rather unusual, but interesting, debate largely over a single stock for almost the first 15 opening minutes of Tuesday's 5 p.m. effort.

The subject was BAC, and whether the bad headlines represent a buying opportunity for the stock.

"I think it's overblown," said Karen Finerman, who wore smart canary yellow jacket, of the latest New York Fed news. "If you believe Bank of America, then there really- this is way overdone. Way overdone."

Analyst Paul Miller, a pretty good Fast Money guest, explained that he still likes BAC, but "headlines themselves are causing all the problems" and that investors get freaked when they can't quantify things, even if the estimates seem way out of line as Miller asserts.

Karen Finerman said the mortgages in question apparently stem from 2004-08 issuances, and isn't there some kind of statute-of-limitations equivalent for pursuing action against them. Miller said no, and that we're basically in "uncharted territory here."

Miller acknowleged "People can't take the headline risk" and said the stock is not for "wimps," but said, "We like this stock up to 15, 16 dollars."

Steve Cortes, previously short BAC until very recently, admitted he got out "maybe a bit prematurely."

Steve Grasso joked, "I'm long Citi, JPMorgan and Bank America (sic), I must be as tough as the day is long."

This page will suggest 2 reasons why BAC might not be a buy, no matter how overblown the mortgage liability actually is. 1) Its CEO choice feels like an afterthought, and 2) There is still the possibility of harsh election rhetoric into early November.

Bravo, Cortes

In our analysis on Tuesday's Halftime, we singled out a comment by Zachary Karabell on AAPL (see below).

In the regular 5 p.m. show Tuesday, Steve Cortes actually made a similar argument that we can't help but agree with.

"The way people talk about emerging markets," Cortes said, "it really reminds me of the way people talked about technology in 2000. I mean, emerging markets are not destined to go up forever, and I think China tightening is going to be what kills it."

Cortes also said on the program, "The fact that China is officially tightening ... this is massive ... it's almost like the parents placing their earnings hopes on the children."

Here's the deal ... this page certainly agrees with the notion that China is a legit economic power, is going to continue to grow and wield influence, as Karabell and many others contend.

But observers/players of the financial markets can't possibly keep counting on, for example, FCX rising 5-fold in about 18 months ... can they?

Cortes is so accurate here, it's scary. Today's China talk is like when people said in 1999 that the Internet was going to revolutionize everything, usage was going parabolic monthly, that names such as Cisco, eBay, Dell were going to be some of the most important companies in the new economy. All of that was true and worked magnificently for investors for a long time ... but what has it gotten anyone since about mid-2000?

Gold, Rich. Gold.

We've kinda thought that Rich Ilczyszyn has been doing a good job in his occasional Fast Money commodities commentary.

Hopefully, he'll actually listen to the questions he's being asked by the Fast Money gang before launching into speeches.

Tuesday, Steve Grasso asked Ilczyszyn an excellent question: Has he factored the possibility of a Republican congressional takeover into his prediction for gold (slight pullback, then bullish)?

Ilczyszyn then responded by addressing "Melissa" and nodding as though he understood the question about the "wild card," but saying nothing about gold, only saying he's been predicting a dollar rally into and beyond the election.

"We're due for a retracement, the dollar's been getting hammered," he said.

‘Yesterday’s News Just Hit Home Today’

A couple weeks after this page saluted Johnny Paycheck, Melissa Lee, wearing appealing plum blouse and oversized hoop earrings, nicely played "Take This Job and Shove It" on Tuesday's Fast Money.

Unfortunately we're going to be among the folks climbing Barstool Mountain for the Steelers game this Sunday, even though our NFL map (see link, upper right) indicates a large portion of the country will get it in their living rooms.

If you take a look at the Week 7 NFL map, check out the CBS late-game oddity.

Virtually the whole country east of Colorado gets New England vs. San Diego.

Except for one little pocket: Most of the state of Arkansas, which gets the other option: Oakland vs. Denver.

Now, we wondered, why in the world would that be? Why would the state of Arkansas care about the Oakland-Denver game?

The only answer we've got is that Darren McFadden, basically a disappointment for the Raiders, is still in demand in his home state.

If that sounds crazy, consider that, according to this remarkably interesting September article about how NFL games are chosen, CBS stations in Oregon actually demanded they get Steelers-Titans in Week 2 because former Oregon college star Dennis Dixon, a 3rd-stringer who sucks, was starting the game for the arbitrary-NFL-punishment-rules-impaired Steelers.

Any reason anyone should
care about Carol Bartz?

Anthony Scaramucci offered up Dr Pepper/Snapple as The Hedge Fund Trade of the Week on Tuesday, citing "great balance sheet, 2.9% dividend yield."

We noticed Scaramucci said "this is a niche play," pronouncing "niche" as "neesh." He also added, "This could be a potential takeover candidate."

We also noticed that even though "Dr Pepper" has no period after "Dr," the Fast Money graphics gremlins put one in there.

Jordan Rohan spoke on the Fast Line about how Yahoo's quarter is kind of a "sideshow" to all the issues going on, and that the results are a "mixed bag at best."

How exciting. Mel Lee wondered why Rohan doesn't have a sell rating on the stock rather than a hold.

Karen Finerman said of AAPL, "I wouldn't buy it right here," but would buy it in the low 300s.

Melissa Lee began a segment with something about "that smartphone in your pocket" and then smiled and joked that her colleagues, including Karen Finerman, who was heard chuckling, probably thought she was going to talk about something other than what she actually talked about.

We also get a chuckle about how fascinated women get over the Cialis bathtub commercials, for what it's worth, on a probably unrelated note.

Hu Jintao, pilot

Steve Cortes and Zachary Karabell conducted a spirited go-round on China Tuesday during a crisp, solid Fast Money Halftime Report that left Brian Kelly and Patty Edwards in the equivalent of a television squeeze.

Cortes turned to one of his favorite staples — the Marichal-esque windup for a punch-line analogy — and offered, "I think if Captain Sullenberger from the Miracle on the Hudson were in charge, he could not engineer a soft landing in China."

Karabell was entertained, but not sold. "I like the Captain Sullenberg (sic) analogy but China's a much-bigger airplane with a lot more passengers," Karabell said. "Look at the tightening of the iron ore market" for a real indicator of the Chinese economy, not an interest-rate decision that is more political than economic.

"I don't think the commodity trade is over," said Brian Kelly.

"I don't think the China trade is over," said Patty Edwards.

Cortes, though, reiterated, "I am bearish on the China trade," and he cited, as he sometimes does, the fact that crude isn't moving enough to justify the gains in commodities.

But Karabell argued, "China is not a major oil consumer, all of its electricity is coal and hydro."

"It is a marginal one though," Cortes insisted.

At some point, every square inch of Macau will boast a slot machine. Or maybe not.

Zachary Karabell was asked by Melissa Lee on Tuesday's Halftime to comment on AAPL.

We found one remark intriguing.

"I'm just concerned about what the expectations are for a stock that's had this kind of run," he said. "I mean it's a very similar conversation to what we would have about Google a few years ago." We find that intriguing because AAPL chatter seems analogous to how many people, including Karabell, tend to speak of China. That the country's growth is continually underestimated by skeptics, that they're doing 1 big thing after another, that there's seemingly no end in sight for this massive resource demand.

But surely, just as with AAPL, the market is capable of reaching a point where all of that growth and then some is priced in to FCX, BHP, etc., and the China trade will begin to unwind ... couldn't it?

Perhaps not.

Unintentionally humorous, Melissa Lee made sure to clarify that Karabell was referring to AAPL's expectations running into a slowing growth rate and not bankruptcy.

Spoke too soon

Steve Cortes explained his BAC position — he's out — on the Fast Money Halftime Report Tuesday. The position sounded fine then, but, um, a little bit like the proverbial money left on the table within an hour or so of the show's end.

"I have a lot of friends at Bank America (sic) who are about to become my ex-friends if I didn't say something nice about Bank America (sic)," Cortes said. "I'm not bullish, but I have covered my shorts."

Goldman Sachs might ‘de-partner’ folks despite record ‘rainy day fund’

Kate Kelly, serving up a little inside baseball on Tuesday's Strategy Session, said 2 things that caught our attention.

"Goldman is, uh, hoarding cash," Kelly said. "They have something unique, it's called Global Core Excess; this is their ultimate rainy day fund."

Kelly showed a chart indicating the fund is at an "all-time high $173 billion."

Interestingly, in Q3 2007, the fund was only at $64 billion.

So basically, when the greats at Goldman really needed the money, they were light.

And now that they most certainly don't need much in that fund, they've overloaded it to the gills.

What's that slogan military critics often use, "still fighting the last war, not the next one"?

Kelly also revealed that, like the Ryder Cup, every 2 years is a partner year at Goldman Sachs, this year being a partner year. "Apparently they might even de-partner some people," Kelly said, which doesn't sound nice.

Tough questions for
Amanda Haynes-Dale

Amanda Haynes-Dale visited The Strategy Session on Tuesday to discuss/promote the hedge-fund-of-funds industry and, by the end of a fairly brief segment, found herself sort of in Bobby Orr-land, or trying to play offense while on defense.

Haynes repeatedly claimed the fund-of-funds sector was outperforming the S&P 500.

But guest host Joe Kernen (more on him later) nevertheless asked, "Why do I get the impression that the emperor has been shown to have no clothes with a lot of these managers?"

Gary Kaminsky said the reputation of the industry is that it's sort of fees after fees, and he followed up with, "Where is the value added in the fund of funds business?"

This was Haynes-Dale's response: "You have to pay an extra layer of fees for that. But you're getting a lot for the extra layer of fees. You're getting the instant diversification with multiple managers. You're getting access to managers who have 1 million to $25 million minimums. You're getting ongoing monitoring. And you're getting the administrative relief of tracking multiple managers on a monthly basis."


Everything seems to be going right for Teekay shipping.

The chart for the last year is a series of higher lows and higher highs. And as its top execs Peter Evensen (first time we've heard of a "CEO-elect") and Bjorn Moller, pointed out on Tuesday's Strategy Session, as did Gary Kaminsky, there's a reliability to the earnings that makes the company's 3-pronged structure of high yields valuable.

Yet Joe Kernen, who brought his A game as a Strategy Session sub host, found a cloud in the silver lining when discussing the company's valuation vs. share price.

"It's only at 40% of the value that you see, so obviously the corporate structure isn't allowing people to see the value of the company because it's 60% below what it's valued at. Why the convoluted structure?" he said.

Moller's answer was generic. "We are a play on the buildout of the global energy infrastructure," he said, explaining the company tracks its customers and has been "following our customers to floating production business offshore," which he said is "capital intensive" and requires investment. He said the end result is the company "delivering value in the sum of the parts."

Not a double-eagle,
but a solid birdie

Golf great Joe Kernen, who sometimes owns the Squawk Box floor the same way Tony Manero owned the lighted dance floor at 2001 (remember when that year seemed so far away?), guest-hosted on Tuesday's Strategy Session and was every bit as effective as Cliff Lee.

Kernen and Gary Kaminsky noted they've been working together in some capacity for 17 years, then Kaminsky credited Kernen's March 2009 interview in Golf Digest with turning the stock market around. "It was really the same month your interview with Golf Digest that basically created the bottom, globally, for equities if I'm not mistaken," Kaminsky said.

Kernen is described in the article as an "A-lister" who calls Baltusrol his own course. (He also says, "The Fed and the Treasury are doing the best they can at this point." And we remain amazed that, 18 months after the posting of this article, Joe's last name remains misspelled in the caption.)

On business, Gary Kaminsky said "Maybe CMBS is back," and Scott Rechler said the market could benefit from pent-up demand which would be a positive for banks. "There's plenty of buyers on the sidelines right now," Rechler said. "Every bank out there is trying to create CMBS products."

Howard’s ‘Halftime Highlights’
from ‘Monday Night Football’

Daniel Snyder is believed to have been "extremely focused" on the Washington Redskins' nail-biter loss to the Colts Sunday night.

[Monday, October 18, 2010]

Guy Adami on fire

CNBCfix-land was pumping the proverbial fist Monday when hearing Guy Adami ask Mark Fisher about the Flash Crash on Fast Money.

Adami is the only one on Fast Money who has pursued a line of questioning — first mentioned on this page in May actually before it came up on the show — that the real problem with the Flash Crash is not that it moved 1,000 points, but that it moved down.

There's a strange sense of entitlement among people that disasters should never happen and when they do, it's obviously the fault of the authorities who should've prevented it.

9/11 either happened because Rice and the Bush administration ignored reports about it from Richard Clarke, or it happened because Bill Clinton was too soft on the USS Cole bombers.

Katrina happened because the government poorly planned an evacuation and neglected the floodwalls for too long. A guy starts shooting people at Virginia Tech and the problem is a weak campus security alert system. Lehman Brothers went under because A) Barney Frank encouraged subprime, B) Glass-Steagall got lifted, C) the ratings agencies blew it, D) mortgage-backed securities were not traded on an exchange, E) the Fed didn't open the discount window early enough, F) government allowed it, G) art dealers wanted a liquidation sale, etc.

Anyway, Guy Adami asked Mark Fisher whether we'd still be talking about the Flash Crash if it wasn't a crash actually but a 1,000-point bounce. "Of course not," Fisher acknowledged.

Flash: Black Tuesday 1929
retro-blamed on HFT

One subject this page avoids is high-frequency trading.

We understand it's a hot topic with exchange insiders and is evidently dubious. We don't really get it, and don't care.

Mark Fisher on Monday's Fast Money a couple of times went out of his way to lobby against HFT, calling for a "timeout" in situations such as May 6 and saying, "I don't really think there's a long-term benefit to the market from high-frequency trading."

"In times of crisis, you need to slow everything down," Fisher said.

But Manoj Narang visited the Nasdaq to defend the liquidity HFT provides, and make a couple points we found even better. "May 6 would've happened irrespective of what actual market structure you had in place," he said, and he went on to say that the floor people of NYSE weren't exactly glorified in the press in October 1987.

Of course, no one demanded investigations in 1999 of how Amazon and Yahoo could rise $50 a day on seemingly no news, or how Exodus Communications could actually be worth anything.

The lesson is, whenever you have the stock market falling an unusually large amount, there's automatically a problem with the "system," and in fact trading must always be completely pure, that no stock should ever move on anything other than fundamentals by "investors" who "believe" in the company and not "traders" out to game the system and make a quick buck.

Fisher didn't actually make a great argument for the old ways, saying high-frequency trading has merely replaced the 95% of the Street that were "bookies" beforehand.

Interesting: Not a word
about Steve Jobs’ health

Fast Money traders spent Monday's episode talking circles around Apple but not, to our knowledge, ever discussing what used to be Topic 1 on these earnings calls:

Steve's liver.

Rather, the panel forged a very clumsy consensus that AAPL is probably a buy around its afterhours level of $300 even though it may have some more downside.

"I think this pullback's an opportunity," Pete Najarian said.

Guy Adami said as long as your time horizon is longer than a few minutes, you can probably safely get long.

Colin Gillis like the others was kind of forced to take a wait-and-see approach because the show aired during the conference call, but Gillis said the iPad effect is not well known because we've had "only 2 quarters" of it. Guy Adami asked some good questions about Gillis' call on RIMM based on Apple's results and Gillis said he's "even more steadfast than before" because of what Steve Jobs was saying.

The conversation got titillating when Karen Finerman called Tim Seymour a "pretty boy" several times, and what male wouldn't want Karen Finerman calling them a "pretty boy"?

The subject was IBM, and Seymour's agreement with Mel Lee that it was priced for perfection. "I've gotta disagree with Pretty Boy a little bit," Finerman said. She still likes the valuation, and "it was not priced for perfection."

This page likes to have fun with the subjects on Fast Money, and the health of Apple's CEO is in fact newsworthy and relevant to the show. But jokes aside, we hope Steve Jobs is doing well, and we're glad he was on the conference call and feisty, which must be a great sign.

Steve Cortes’ recent
BAC short was a great call

Traders curiously were piling over themselves Monday to back up what they thought was Karen Finerman's defense of Bank of America, only to have K-Fine have to clumsily extricate herself.

Guy Adami said that based on Citi's results, he'd prefer a stronger company such as Bank of America. Then Pete Najarian added, "I like Bank of America here, I agree with Karen, I think, as a franchise, I choose Bank of America over Citi."

"But I choose JPMorgan over both," Finerman said.

Adami sounded a negative tone for Goldman Sachs. "The word I'm hearing, the quarter will not be good," he said.

Tim Seymour said, "If you like Bank of America, you have to love Wells Fargo here."

Analyst: AIG is a buy

Andrew Kligerman of UBS made an interesting "short-term" bull call on AIG on Monday's Fast Money Halftime Report. "Once the government issues the warrants, I think the stock will rally," he said. He also said, "I don't think the investment community has really figured it out yet."

But he cautioned that on the other side, there is a "government overhang" that can provide a headwind, though he said Citigroup hasn't dramatically underperformed with the same situation.

We remember the summer of 2009, when this stock enjoyed some spikes and Pete Najarian would just turn his head on Fast Money and say "Nooooooooooo."

Munster: Long AAPL

Gene Munster in the last few years has rarely not been bullish on Apple (if ever). Monday on the Halftime Report he reaffirmed that to Melissa Lee, saying "We'd be long going into the quarter."

Munster said it's not short-term guidance but the long-term story. "I'm in China," he said, and is seeing an instant shift in the "raw number" of Apple products on the street.

Steve Grasso said the banks aren't needed to lead the market, just not to kill it. "We need them to level off" to get to S&P 1,200, he said.

Zachary Karabell, to no one's surprise, agreed. "I'm gonna sound like a broken record, but this is not the sector that we ought to be looking at for the juice in the market," Karabell said.

Melissa Lee tried to ask CME boss Craig Donohue about interest rate instrument market share or something like that, but Donohue wouldn't bite, calling the process a "marathon, not a sprint."

At the end of the program, Melissa Lee spoke of Huntsman, a stock she said "may not be on your radar." The abrupt segment seemed like it might not've been on Zachary Karabell's radar either, but he responded neatly that Huntsman and Lyondell have had a good year but could be "much much stronger" going into next year.

MLPs: The AAPL of
the next decade?

Robert Raymond visited The Strategy Session desk on Monday and mentioned these numbers, about master limited partnerships, that got our attention: "Low to mid-teens return profile conversation at sort of a base level."

As David Faber pointed out, who's going to object to a mid-teens return?

Faber pointed to the Alerian MLP Index, which he said has "been beating the S&P 500 by the way since it was established in 2006."

Gary Kaminsky, who has trumpeted MLPs before on Fast Money, said MLPs are "bond equivalents" that shouldn't be compared with the S&P 500, but should be likened to the Midtown Tunnel as entities predicated on long-term contracts and low long-term commodity risk that return capital to shareholders.

Kaminsky also said that people often refer to equities having a 10% long-term return, but people don't realize that "half of that return is dividends and distributions reinvested," which is Job 1 for the MLPs.

Stephen Maresca of Morgan Stanley was asked if Congress might target the taxation. "I don't think they're gonna go after MLPs," he said.

Raymond said nat gas is struggling because it's in a "chronically oversupplied market ... supply is overwhelming demand."

He said producers are acting "relatively irrationally" because they keep drilling and producing more at a lower price, a trend he said can't continue, so he expects consolidation eventually, but "not yet."

Rare Joe Kernen sighting
outside Squawk Box

David Faber announced at the end of Monday's Strategy Session that he's got jury duty Tuesday. In his place will be Joe Kernen, whom CNBC viewers rarely see beyond, oh, about 10 a.m. Eastern.

Perhaps part of the conversation will be about golf.

[Friday, October 15, 2010]

Terranova: Buy a home,
or refinance one

Joe Terranova on Friday offered one of the more intriguing out-of-the-box trades you'll hear on Fast Money.

"To me the best trade right now you can make in the bond market is go out and take a 30-year mortgage," Terranova said.

Brian Kelly basically seconded that. "This is probably one of the better times in the last 50 years to buy a home," he said.

Karen Finerman said she agrees about long-term bonds. "It seems like it's quite possible the Fed doesn't have a handle on inflation and in fact it ends up being something far greater than that," she said.

We totally get all of that — and at present, rates seem unfathomably low — but at the same time, the gut feeling is that housing is so damaged, the government simply is not going to allow mortgage rates to get much higher for many years. It might be that a few years now, rates could double. More likely, it seems they won't be allowed to. (Keep in mind we're amateurs and have no idea what tools the government would use to keep mortgage rates low if bond rates rise.)

Guy Adami pointed out that a lot of people can't get a 30-year mortgage. If you can, it's likely going to be a good deal, though probably not like buying AAPL at $30.

K-Fine: Told ya so on GOOG

Karen Finerman explained on Friday's Fast Money that Apple is speeding a little too fast for her.

"One more day like today, I would be out of Apple before earnings even," Finerman said.

Finerman also mocked the endless GOOG analysis on the Street. "Google went from being a slow-growth, mature company to being a growth company. Overnight. Which is, you know, very exciting and ridiculous at the same time," Finerman said.

If you see Neville Chamberlain waving a scrap of paper, get worried

Scott O'Neil of MarketSmith made a very revealing comment on Friday's Fast Money.

"We're not in the predicting business, we're in the interpretation business," O'Neil said.

In other words, great at telling you what's already happened, not necessarily so great at telling you what's going to happen.

O'Neil said the market this decade is eerily similar to the 1930s, and that there's a "similar comparison with the '70s."

So there's a sample size of 2. No word about all the other decades this market really doesn't look like.

O'Neil said the MarketSmith evaluation system has identified ARM holdings, Priceline and NetApp as stocks to watch. Particularly ARM. "There is the remote chance that it could be a young Cisco," he said.

Karen not impressed
with Florida real estate

Karen Finerman indicated Friday she's siding with David Einhorn instead of Bruce Berkowitz in the mighty St. Joe battle.

"I would not bet against David," Finerman said.

Brian Kelly said he did a simple back of the envelope calculation on St. Joe market value divided by acreage and came up with "$3,000 an acre," which he thinks is pretty cheap.

"What envelope, did it come from Berkowitz" Finerman said.

Adami: Market might go lower

Guy Adami, saying Friday as always that he thinks the market might be headed lower, said, "I fear that, at some point the air's gonna come out of this balloon because you need the financials."

Nevertheless, his colleagues all seemed to think the banking beating is overdone.

"I do think it's ridiculously overblown," said Karen Finerman, speaking mostly about Bank of America. "This just seems ridiculous to me; it's trading well below tangible book value."

"After everything the Fed and the government has done there's absolutely no way that they're gonna allow these banks to take a massive hit, based on this," said Brian Kelly, who said he finds JPMorgan "somewhat attractive" here.

Melissa Lee said that sounds like there's a "government put" in the sector.

Stephen Weiss said JPMorgan has already "quantified" its liabilities, and at worst, these mortgage cases are a "one-time write-off."

Grasso: AAPL is not
a valuation play

The hottest thing going on Friday's Fast Money Halftime Report was Melissa Lee's USC Cardinal red dress.

(Lee's outfits always look more dazzling on the Halftime Report than the 5 p.m. show; must be something about the studio backdrop.)

Aside from that, it was kinda downhill.

Lee asked Fast Line caller Erik Oja of S&P about the banking/mortgage situation and said the ongoing reports of further liabilities represent sort of "bottomless pits" for the big banks. But in fact the phone connection was so bad, it was Oja who sounded like he was calling from a bottomless pit.

Oja actually said the liabilities can't be quantified right now. Joe Terranova said the one to avoid is Bank of America, strictly because of Countrywide.

Terranova also said, "I think it's OK to own Citi here, and I think it's OK to own JPMorgan."

Patty Edwards, on the other hand, offered, "The only bank that I really like at this point in time is Bank of Montreal because well, they're not in the American mortgage space."

Steve Grasso made the type of comment that someone such as Karen Finerman might later object to, regarding Apple. "My clients think that the whole space is overvalued at this point," Grasso said. "But you can't look at it based on the valuation anymore. Yes, you have to be there."

Grasso also pointed to a June Supreme Court ruling as driving the tobacco stocks.

Analyst Richard Kugele spoke about Seagate and Western Digital and said "both of these companies have room to run from here."

New addition: NFL TV map

One of the neat things about operating a Web site is that you can kinda do whatever you want, even if some of your ideas don't seem to be in "synergy" with the script.

So, through the end of the year, this page, in the top of that blue bar to the upper right, will post the link to one of the greatest Web sites in existence: the506.com, which produces the NFL TV map of each week's games.

This week viewers will note a scattered CBS configuration and might wonder how so little of the country is getting the Ravens-Patriots tilt.

And they'll get the expected but regrettable information that the Philadelphia Eagles, who apparently despite being a mediocre, uninteresting squad have been designated the nation's hometown team and will appear in most markets (including the whole state of California) for about the 6th week in a row.

They'll also get facts such as old reliable Don Criqui handling the San Diego at St. Louis game with Steve Beuerlein.

As we understand it, the maps go up every Tuesday. We'll try to remember to change the link each week.

Obviously, that page is an absolute must.

Time for Round 2
of TARP?

You'd think that all the lawsuits and legal claims over mortgage-backed securities would've surfaced a couple years ago.

Evidently, you'd be wrong.

Strategy Session guest David Grais said Friday that the folks who bought them got snookered. "In about half of the loans, we find that there are material inaccuracies in the disclosure," Grais said.

For example, Grais said, many of the mortgages were purportedly for people's principal residences, but running credit score data later, he has determined many of those buyers were getting their mail sent other places.

Liability might run really high for certain banks, such as BAC with its Countrywide purchase, Grais said. But Gary Kaminsky saw a silver lining in this — for the investors who bought the "assets."

"A lot of the institutions that bought these, bought these toxic assets, they've written 'em down," Kaminsky said. "So if anything, that they can do at this point to try to collect additional capital against those, that's found money. Found money."

Guest Darek Wojnar was supposed to talk about hot ETF topics in the semiconductor space, but all he really said was that his crew really is diligent about the indexes.

This cup o’ joe
needed some microwaving

The normally tightly disciplined Strategy Session got a little sloppy near the end of Friday's broadcast.

Make that a lot sloppy.

On the plus side, it proved Herb Greenberg is quite skillful at digging himself out of TelePrompter hell.

Greenberg came on the show to deliver what actually should've been a 30-second soundbite: A company called Treehouse Foods is launching a private label coffee, Grove Square, to compete with GMCR, and has already landed shelf space in Wal-Mart at a 20% lower price to Green Mountain.

To get to that point, however, Greenberg somehow required a clumsy introduction from David Faber, and then the beginnings of a 20-questions game with Gary Kaminsky.

Greenberg asked Kaminsky what happens, "Whenever private label enters the scene, especially on someone who has, say, a monopoly."

Kaminsky said the first thing such a private label would do is go to Arkansas and persuade Wal-Mart to put it on the shelves, at a cheaper price, which apparently is exactly what happened in this case.

Greenberg then tried to set up an even lengthier speech, but stumbled over the wording and had to be helped out by David Faber despite neatly righting the ship.

The most important angle is how this might be hurting Green Mountain. Gary Kaminsky asked Herb Greenberg if the GMCR analysts know about this, an excellent question and one you'd think Herb would prepare for.

"I have no idea," Greenberg said, adding, "There has not been any chatter" on this subject until now.

[Thursday, October 14, 2010]

Is YHOO the world’s
toughest company to take over?

Dan Niles gave the Fast Money gang a tremendous little go-round on hot tech issues Thursday, perhaps key being his take on the latest M&A chatter.

Joe Terranova asked him which rumored deal seems most bogus. "The Yahoo one makes the least sense to me," Niles said, saying Microsoft couldn't pull it off with a $31 price, so what would AOL be thinking with a $3 billion market cap?

What's more, he said Yahoo doesn't want to be bought, unlike Seagate for example.

Niles said he does take the Seagate possible private deal reports seriously, because CEO Steve Luczo has "shown that he's willing to pull the trigger on something like that if he doesn't feel the company is fairly valued."

But he said there's an "extra variable" in the stock in that he expects the company to "guide down." He said it might be an attractive buy, but "I don't try to buy in front of an estimate cut and I do believe Seagate and WD both have them coming."

Terranova: Google at $630
by end of the year

The Fast Money chatter on GOOG's big report Thursday was similar to what we heard the day BHP made a bid for Potash. (This writer is long POT.)

Tim Seymour, Guy Adami and Anthony Scaramucci said the company's results justify the stock's gain, but that this isn't a point to chase. Joe Terranova meanwhile said it's just gonna go higher. (And we know how accurate that proved with his Potash north-of-$150 forecast.)

"This is probably getting ahead of itself now in terms of the spike up," Scaramucci said.

"I think it's underowned," said Terranova. "I think a push above 600 bucks is in the cards."

Karen Finerman, who wore spirited black dress over light green turtleneck and has been holding the stock, concedes it's been on a big run but still gushed, "This is really an extraordinary business ... over $100 a share now of cash."

Tim Seymour, discussing Baidu, wanted to let people know he's not a reckless beta-chaser. "I think they have some inroads in India that Google cannot claim," he said, but, "It's 101 times earnings right now, I mean that's an extraordinary amount of growth to have to pay for, and that's not what I do for a living."

Guy Adami said you could try Intel for an investment, but AMD, with high short interest, for a trade.

Scott Davis said GE will have a run-of-the-mill earnings report.

Miller: Banks are a buy

Bank analyst Paul Miller told Fast Money on Thursday that "sloppy analysis," perhaps by bears, in some recently surfacing bank research reports are providing a great entry point for financials.

Miller said he's tacking on a few billion in extra industry expenses from the foreclosure delays/investigations, but "There wasn't as many big problems as the media is really hyping it up."

He said some people will stay away from banks for emotional headline reasons, but "I think it's a complete buying opportunity."

Karen Finerman said she liked JPMorgan at $40, so she likes it even better now.

Joe Terranova said the play on Treasurys is TBT, which he sees as having made a recent double-bottom. "I think that's what you get long right here."

Mahaney: Yahoo makes sense
for private equity

Mark Mahaney told Fast Money Halftime Report viewers Thursday that he thinks Yahoo is indeed an attractive target for private equity.

He also said Yahoo doesn't want any part of private equity.

Mahaney called any interest by AOL likely a "sideshow," but said, "I think private equity may be taking a serious look at Yahoo," because it generates cash, it's unlikely that a strategic buyer would muscle in, and it has Asia assets that could be unloaded. "So it sets up well from a private equity perspective," Mahaney said.

Even so, he thinks the Jerry Yang precedent continues. "I don't think Yahoo is gonna want to sell to private equity," he said.

Melissa Lee, who wore a delightfully flattering snug purple top, said an AOL-Yahoo deal strikes her as being "like tying 2 stones together and hoping they're gonna float."

Mahaney absolutely nailed it with GOOG (as per late-Thursday-afternoon results), saying going into the earnings report he very much likes the stock and that the revenue story is "well intact."

He said the odds of a special dividend or buyback are "pretty low."

Negative bias, 25% upside

Analyst Bob Wetenhall on Thursday's Halftime explained his $45 price target on Apollo as "neutral with a negative bias."

Wetenhall told Melissa Lee, "We actually have a negative bias ... the company's actually a turnaround story. They're currently experiencing negative enrollment growth that will be pretty material."

Guy Adami pointed out that "When names like this get broken, they're very hard to fix."

Steve Cortes referred to University of Phoenix in decrying the "stadium curse." Cortes said, "The second a company has a stadium named after it, you have to sell it."

Just for kicks, we wondered if that was true Heinz. According to the chart since 2001, that's a no-decision. Company hasn't tanked, but there have been better buys.

Cortes got really ramped up talking about banks and his BAC short. "I think it is the worst of breed among these banks," he said.

Guy Adami said "Don't fade Mr. Einhorn" in regards to the St. Joe situation, even if Bruce Berkowitz is a prominent long in the stock.

Herb scoops analyst community

An initially quiet Thursday Strategy Sesssion, featuring adequate commentary from Scott Sperling but a way overly long intro from David Faber that kept a lid on Gary Kaminsky for nearly 5 minutes, suddenly ignited late in the half hour when Herb Greenberg went ballistic on for-profit education analysts.

"Think about the number of analysts who now were caught flat-footed, had to downgrade it, and not just that, there were at least 3 analysts out today WHO REITERATED THEIR BUYS ON APOLLO GROUP! WHAT THE HECK IS GOIN' ON HERE??!!?" Greenberg said.

"We've discussed this kind of thing close to 60 years, probably more than 60 years combined, this garbage-in, garbage-out mentality," agreed Kaminsky.

Kaminsky added, "I'd like to know if there's any sell-side analysts who actually went out on the road, went to the classes, went to the schools, met with potential students, and did the ground, ground zero research, because it was right there, you laid it out."

[Wednesday, October 13, 2010]

Did GOOG go public years too soon, and is that why Facebook waits?

The more we thought about the Google story after the mostly uninspiring Fast Money commentary on the subject Wednesday, the more we realized that there is a tremendous angle to Google's stock that nobody ever talks about on CNBC but probably should.

Google went public in August 2004. It feels like it was earlier than that. Remember the hubbub about how they used an unorthodox "Dutch tender" IPO method to stick it to the big banks and purportedly make it easier for the little guy to get in on the IPO?

OK. Anyway, here are some astounding sentences from a New York Times editorial the day after the shares went public:

"This Internet icon that raised $1.67 billion yesterday."

"Google is a profitable enterprise. But one worth more than $27 billion? Only time will tell if the company can fend off efforts by Yahoo and Microsoft to build superior search engines."

"Just days ago, the company's executives, bankers and venture capitalists were playing the blame game over a last-minute repricing from 25.7 million shares at up to $135 a share — which would have made Google worth more than General Motors — to 19.6 million shares at $85 apiece, which made it roughly equivalent to GM."

"The company had to lower its offering price to $85 in the face of a deteriorating stock market and the skepticism of institutional investors."

"As for Google shareholders, they can be satisfied that the IPO, in the end, went smoothly. Now all they have to worry about is whether the scrappy Internet search engine is really worth $27 billion."

As of Wednesday's close, that initially $27 billion company actually was worth $173 billion.

So the IPO priced at $85, and the shares traded at $100 on the first day.

But less than a year later, those shares were trading for $300.

What's more, barely 3 years after the IPO, those $100 shares were north of $600.

We found via Wikipedia that 1 year after the IPO, the company actually issued another 14 million shares, presumably around $300, which doubled the company's cash on hand to $7 billion.

We couldn't find a reliable figure for Google's actual cash on hand before the IPO, but based on the above tally, it was presumably under $2 billion.

So here's the obvious business school question: What did Google gain by its IPO?

Speaking of business school, Eric Schmidt wrote a piece for Harvard explaining exactly why the company went public. His main concern? "In early 2004 we found ourselves in the position of having to release our financial results to comply with U.S. securities laws." Specifically, the company had handed out enough private shares to employees, according to Schmidt, that it exceeded the 500-investor reporting threshold. So the company was required to release financial results despite not being public. Also, Schmidt said there was motivation to establish a public price for employees so they could know the value of their holdings and trade them.

As far as we know, the primary idea for going public is to raise capital. Shares aren't issued as a public service, but for raising capital and to create a "currency" of stock that can be used for M&A. Google of course is famously unorthodox in its financial motives.

Schmidt's stated reasons are fine, but the real question is whether Google sold itself alarmingly short in August 2004.

It may be that the initial $1.67 billion raised was the key to the company's staggering growth, funding research and fueling the more lucrative offering a year later.

Or, it may be that the company was already on a glorious trajectory, did not especially need an extra $1.67 billion in August 2004, and might've gotten 3 or 4 or 5 times that much — and seriously rewarded its early employees — had it just waited a couple years.

Which leads us to ... whether the company ever needed to go public at all, given that it doesn't have any idea what to do with the cash it produces. And, whether most successful Silicon Valley startups issue IPOs too early, at prices far below what they would soon be valued at.

See, if you're a 20something and someone tells you that you could be worth hundreds of millions if your IPO achieves a valuation of $27 billion, that sounds really enticing. Until the company actually proves to be worth $173 billion, and you could actually have a real (bleep)load of money.

We all know it works both ways. Many .com guys smartly took the money (while it lasted) and ran in the late 1990s before their endeavors proved laughable.

From this Andrew Ross Sorkin article of August 2004, we learned "Google is issuing two classes of stock, so that the founders can retain far more voting control — giving the public shareholders a very limited say in the way the company is run." We also learned that incredibly, the company got calls from the SEC about the founders' interview with Playboy.

On the plus side, we also learned in the NYT that "Google managed to go public at a very attractive valuation — many times higher, for example, than the price Microsoft fetched when it went public in 1986."

And another zinger from the August 2004 NYT: "Many analysts and investors have decided that Google deserves a valuation below that of Yahoo because it is less diversified."

Maybe they could
still bid for 3PAR?

Sometimes even the seasoned pros say things about stocks that we just don't quite understand.

Melissa Lee asked Karen Finerman on Wednesday's Fast Money what she was doing with her Google holdings going into earnings.

K-Fine seemed utterly flummoxed, shrugging and grimacing and explaining that the stock's had a great run recently, which makes her a bit nervous given that it moves so wildly on earnings reports, but in any case, "I'm hangin' on to it."

Joe Terranova actually said with a straight face that the key issue in the report is going to be "the expense-control issue," as though Google has any interest in that.

That's when Karen Finerman declared with sudden zeal it would be "fantastic" to see the company announce something in the area of capital allocation, whether a 1-time dividend, massive buyback or something else.

See, here's what we don't get ... How does a 1-time dividend give the stock any life? Some short-term players will jump in and then jump out. How does that improve the business' prospects of taking in more cash quarter after quarter? If the 1-time dividend is merely a sign that more such dividends will follow, then why not just declare a regular dividend.

As for buybacks, how does buying a limited number of shares improve the company's ability to generate cash? If the company's better off with fewer shares, why not just take it all private?

"I'm definitely long Google," said Simon Baker, a fan of the stock, taking an inaugural turn on the Fast Money Prop Desk Wednesday.

Baker also joked, "I'm excited that I can go down to Wal-Mart and buy some socks and get an iPad right now."

K-Fine ‘gets’ the flack thing

Commenting on the David Einhorn-St. Joe Company battle, Karen Finerman took a stab at predicting corporate press releases on Wednesday's Fast Money.

"I've gotta think that Einhorn's gonna have way more credibility than the company," Finerman said. "They're gonna have to refute it, you think, right, talk about 'Numerous inaccuracies.' I bet we'll see something like that. I don't know."

"I mean, a 139-page slide show at that luncheon is pretty thorough," chimed in Melissa Lee.

Brian Kelly had an interesting counterpoint, however, saying that he doesn't think JOE is at this level right now, but if the stock continues to slide, "it becomes a bit of a distressed real estate play."

Scaramucci: Ralph Lauren
like Nike, circa 1990s

Joe Terranova sort of damned the Hedge Fund Trade of the Week with faint praise on Wednesday's Fast Money.

Anthony Scaramucci announced, "The Hedge Fund Trade of the Week is Ralph Lauren," though he pronounced "Lauren" like "Loren," which we think is a bit off. Most eye-opening, Scaramucci said it has "growth reminiscent to what Nike had in the 1990s."

Terranova said, "I like it. I like the fact that finally, the Hedge Fund Trade of the Week is getting a little bit more aggressive in terms of growth."

Terranova said hedge fund managers have simply been "too risk adverse" in 2010.

Steve Eisman again has
momentum on his side

Herb Greenberg on Wednesday's Fast was all too happy to talk about some negative for-profit education disclosures by Apollo.

"What they're telling you here Melissa is, THE BUSINESS MODEL HAS CHANGED. And that's what we've been talking about from Day 1 on this, is these business models are gonna go through a hard reset," Greenberg said.

"Yeah, investors don't like hard resets," said Melissa Lee, who also in the program promoted the CNBC documentary premiere of Hugh Hefner.

Darren Rovell said the Chilean miners' sunglasses situation was an "incredible branding coup for Oakley."

How did that Flash Crash
happen again?

On Wednesday's Halftime, Melissa Lee challenged Joe Saluzzi, a recent "60 Minutes" subject, on his contention about the role of high-frequency trading in the Flash Crash.

"You make a lot of great points. But when it comes to the Flash Crash, none of the things that you dislike about high-frequency trading actually caused the Flash Crash," Lee said.

Saluzzi went out of his way to say, "We're not anti-high-frequency trading," but then he zeroed in on the government's contention that 1 algorithm was to blame.

"The algorithm itself was taken advantage of by other players in the system. That's the way it works," he said.

Saluzzi said underlying that problem is that exchanges, which are now very numerous, once relied on listings but now a series of other revenue streams that lead to the dark pools. "Their incentives are now twisted," he said.

We knew the exchanges comment would elicit a response from Steve Grasso, who said, "There's 40 different market participants now calling themselves exchanges, so it's not the guys that were here first, it's the guys that were here at the latter part of the day," Grasso said. He asked Saluzzi, "How do you get the genie back in the bottle?"

Saluzzi acknowledged they can't really put the genie back in the bottle, but that, as the number of exchanges grew, instead of getting a handle on it, they just created more exchanges. Like breaking the glass, and then instead of fixing it, breaking the glass into more pieces.

High-frequency trading is a little bit above our pay grade around here (but then again, so is complimenting the gals on The Call, and that hasn't stopped us). Nothing was settled here, or even close to settled. We'll only reiterate that for most people, there's nothing they can or should do and best to ignore it. But Saluzzi was an articulate guest with an interesting point, and this would be a valid subject to take up again.

Steve Grasso spoke about the drop in JOE. "When David Einhorn speaks, the (sic) Wall Street listens," he said. "The pressure is probably not going away in this name."

Soon it may feel like
we’re all in public housing

The Strategy Session spoke with Jimmy Grosfeld on Wednesday about the foreclosure inquiry/halt/moratorium that's now going on at a lot of banks. Grosfeld said he doubts it will freeze up the writing of new mortgages, but that any delay to the foreclosure process is bad. And any sort of moratorium, he said, "possibly incentivizes other homeowners to stop paying on their mortgage, because nothing's gonna happen to them if they do."

Gary Kaminsky said undoubtedly, people who are struggling with mortgages are going to look at the current foreclosure reviews and wonder to themselves if they should even keep paying. David Faber said we'll see if that happens. Kaminsky insisted, "You can be certain it's gonna happen."

Housing talk got very interesting later in the day. Ken Rosen, of Berkeley, guested on Street Signs With Erin Burnett and told Burnett and Steve Liesman that principal write-downs are the only way to adequately reset the housing market.

"It does create moral hazard if we get principal write-down but I think, uh, that's the only solution for a number of people who've got, uh, situation in states where there's a housing bubble that burst," Rosen said. "Prices are down 25 to 35%. The only way to keep that person in the house is to do some principal write-down, with a caveat: Create a second mortgage which would cover the principal write-down as a share-appreciation mortgage so that when prices recover, and they will recover, the bank, uh, the lender, will share with the homeowner in the recovery."

This sounds a lot like the type of stuff that set off Rick Santelli a while back. Actually — and we have no opinion on Rosen's argument — it's an interesting thing to think about.

The reality seems to be that everyone has a mortgage at different stages, and there's no way for the government to sponsor a principal-reduction program that everyone would find fair (specifically, people who are mortgage-free, or have nearly paid it off).

Steve Liesman affirmed at least part of what Rosen said, about the modifications that have been tried. "You can modify mortgages till the cows come home, and then you still have to evict the cows, because the cows ain't gonna be able to pay. Nobody's gonna be able to pay. It's a matter of the principal right here," Liesman said. Liesman, though, argued that he thinks the government can help in clearing the market by better keeping all the pieces of these mortgages together instead of people having to deal with CDOs all over the place. Rosen agreed that because Fannie and Freddie are into 70-80%, that's feasible.

But Liesman acknowledged, "The problem is your e-mail basket right now Erin, and I'll give it on-air if you want Erin, is filling up right now with people who are outraged by this very concept. And the concept is, that your neighbor gets a break and you don't." Even so, Liesman said, "Everybody is sinking because of this."

Mall stores are shopping

David Henry visited the Strategy Session to mostly make an advertisement for REITS. He said things have changed for tenants in the mall space. "Last year they were looking for ways to get out of leases. Today, they are looking for ways to sign leases," he said.

Henry said REITs are great because they're an inflation hedge and because it's "hard assets."

Gary Kaminsky then got away with a good punch line, "Everybody wants to have hard assets now, right?"

David Faber mentioned Kaminsky's new glasses at the beginning of the show, calling it an "intellectual look."

Faber later asked Kate Kelly what she thought about the glasses. Every guy would like Kate Kelly to compliment his appearance. Kelly said "I love the glasses," but then rushed into a final point about banks. Kelly said trading profits and VAR are shrinking some shops, but in the long run, it will reduce the competition in the sector and lead to bigger paydays for the survivors.

"The human capital story is gonna be the next chapter if VAR is coming down," Kaminsky said.

[Tuesday, October 12, 2010]

At that age, let it all
ride on Netflix

Tim Seymour certainly clarified the Intel situation on Tuesday's Fast Money when he suggested, "I think Intel's guilty only of poor guidance of their poor guidance."

Patty Edwards, who spoke earlier in the day about not liking INTC so much, revealed on the 5 p.m. show, "I've only got 1 client in it; she's 90 years old" and owns it for the dividend, Edwards said. "If you want something exciting, you need to go elsewhere," one of the show's greatest understatements.

Melissa Lee said the notion of a 90-year-old holding INTC for a dividend when there are many other stocks that pay a higher dividend is "kind of a sad statement."

Seymour shrugged. "I'm not sure what to recommend for a 90-year-old person; that's why I'm not in that business," he said.

One to remember,
from Tim & Karen

Tim Seymour and Karen Finerman quietly had one of those little exchanges on Tuesday's Fast Money that will give us an interesting chance to keep score for a few months.

Finerman eagerly explained why she's shifting allegiances from Bank of America to JPMorgan.

It's not just book valuation, Finerman said. "I just think they are going to be better able to manage the new normal."

CNBCfix translation: Brian Moynihan seems like a dud, and the housing market stinks.

Seymour, on the other hand, said he thinks BAC has been more beaten down than JPM and thus is the better buy at this point. He also said that WFC is being treated as a pure play on something or other and thus is getting a banking premium.

AMZN didn’t make the list,
despite selling the book

Zachary Karabell, who must put out at least 1 book a year, dropped by the Nasdaq on Tuesday to discuss Sustainable Excellence, now for sale.

We haven't read it, but hope to soon. Karabell explained on Fast Money that it's an analysis of how input costs are pressuring companies to find more sustainable-type models, and not really as a way of giving a nod to the NGOs. "It's not being driven by a desire to reduce the environmental impact, it's being driven by the relentless incentives of maintaining margins in a price-constrained world," Karabell said.

OK, we admit it. We're not totally certain what he was saying, but look forward to reading it. That's the best we can do for now. (And how about that quirky hyphenated cover?)

Karabell mentioned Nike, IBM, Cisco and Expedia as companies that exemplify this trend.

Karen Finerman on Tuesday singled out 4 possible takeover targets in the retail space: Children's Place, Aeropostale, DSW and American Eagle Outfitters.

Guest Derik de Bruin, a life sciences expert, hailed Thermo Fisher Scientific, "we like this name a lot, it's a good steady-Eddie grower."

Patty: Doubtful AAPL
needs Wal-Mart

Patty Edwards, who said a day earlier without much enthusiasm that she owns Intel, had even less enthusiasm for it on Tuesday's Halftime Report.

"Thank God it pays a dividend," Edwards said. "I'm not sure that if we check back at the end of the day that I will still be owning Intel."

Edwards also took up the subject of iPods in Wal-Marts, saying, "This is a big deal for Wal-Mart; I'm not so certain that Apple really needs Wal-Mart that much though."

We kinda doubt that too, given that it's got about, oh, $40 billion in cash and is in the top 5 in market value without any previous help from Uncle Sam (that would be Walton, not the U.S. government).

Brian Kelly said the Chinese interest in building out their Strategic Petroleum Reserve (we didn't know they had one either) "could put a bid into the oil market."

Joe Terranova said he thinks you can "nibble" in Salesforce.com and Akamai.

Chart great Jeff DeGraaf said we're "generally setting up for a market that wants to bide some time and I think that's exactly what we're gonna do here."

A race to watch:
for 2016

Tuesday's Strategy Session featured an appearance by Alexandra Lebenthal, who tackled the scorching topic of underfunded municipal obligations. Notably, Lebenthal revealed, "It is not a new concern."

Kate Kelly did an on-location report of the Kirk-Giannoulias Senate barnburner in Illinois. Like about 2 dozen other Senate races nationwide, you will hear this one described as "one of the nation's most closely watched races." And when it's done, no matter who wins, there will be zero change to quantitative easing, zero change to Afghanistan, zero change to health care, zero change to entitlements, zero change to immigration, zero change in Charles Gasparino's usual mood, etc.

But know this. And we're being serious here. It is entirely possible — not saying probable, just possible — that the next president is in this race. Alexi Giannoulias has some serious banking baggage on his hands. It's also a bad year for Democrats. For those reasons he could lose, maybe by as much as 5 percentage points. But no more than that. If he wins, it's entirely possible this guy's next stop in 2016 is not re-election ... but, shall we say, an invitation to a big white house courtesy of the Electoral College.

Bad stuff in politics gets 1 election of relevance. Either it sinks a candidate (um, Gary Hart or Gary Condit), or it never matters again. Mark Kirk might be the last chance for Republicans to defeat Alexi Giannoulias for a long time.

This site has no opinion on Giannoulias, officially or unofficially.

Melissa Francis, Trish Regan
have to report to someone

Some of the best CNBC comments occur in that tiny little window of time between the end of The Call, with Larry Kudlow's gang, and the beginning of The Strategy Session.

Tuesday, sexy Melissa Francis and Trish Regan paused from buckling viewers' knees to discuss a boss survey (which another knee-buckler, Jane Wells, writes about in the Funny Business blog).

After a couple innocuous jokes, Regan wondered, "Are our bosses listening?" And then Francis explained, "I am not smarter than my boss."

We always figure premium TV talent, i.e., people with contracts of more than 5 digits, don't really have to answer to anyone except viewers. Now we know better. We thought Larry Kudlow had the best job on CNBC, but maybe not.

[Monday, October 11, 2010]

A. Gary Shilling:
We’re all screwed

You'd think that a longtime economic guru who regularly touts his credentials, such as A. Gary Shilling, would have plenty of ideas for fixing the economy, instead of just hollering "No sale" at everything the government tries.


Tim Seymour interrupted another typical Shilling spiel on Monday's Fast Money to put Gary on the spot, asking for his "No. 1 idea" for reducing unemployment.

Well, um, uh, "I don't think there's much they can do," Shilling said with a chuckle. "There's no magic bullet."

But he obviously knows what not to do, so we're good to go.

"The Fed has already tried QE1, and QE2 may be a, a slow boat to nowhere," Shilling said, before launching into one of the weakest and more tiresome of cliches, "a trillion here, a trillion there" and pretty soon you're talking about yada yada yada ...

Tim Seymour reminded, "This is supposed to be a bridge; I've said this a lot of times." He has.

Maybe not the 1 deal
out of 10 that works

Guy Adami on Monday's Fast Money questioned Intel on the basis of its McAfee deal. "Did they need to buy growth?" Adami asked, sounding not terribly convinced.

Steve Grasso offered, "Intel runs into major resistance at 20 and a half." But Tim Seymour said "The valuation is unbelievable cheap."

Pete Najarian made a statement that probably could be made about 11 of the 12 months every year. "Right now Microsoft feels like dead money," Najarian said.

Tim Seymour said he thinks the whole Akamai-esque tech sphere is getting a "little rich in the tooth."

The unforgettable
‘Business of Pleasure’

As always, we had high hopes for Barry Ritholtz, pinned to the edge of our seats when he appeared on Fast Money Monday, but then he brought up "demi-stagflation," and so we mentally wandered off to Demi-Moore and once again speculated as to why Tom Cruise's character isn't really that enamored with her in "A Few Good Men"...

Guy Adami said even though it's on a tear, "I think LVS still has room on the upside."

Pete Najarian howled ridiculously Monday when Tim Seymour mentioned counterfeit vodka in Russia, but Pete's howl wasn't as loud as his guffaw after Steve Grasso zinged Melissa Lee's explanation of her own personal coverage of natural gas with "Was that the porn special?"

"Can we stop talking about that one? Please..." said Mel, who looked good Monday in red top.

CEO suggests Stephen Weiss
needs to hit refresh

Stephen Weiss, the epitome of gentlemanly conversation on Fast Money, got stiff-armed by Advent Software CEO Stephanie DiMarco on Monday's Halftime Report.

Weiss had the audacity to compliment Advent with a question, saying it's a "very high-quality product; I've used the product in the past. And I've always been surprised actually that there aren't more products, in other words you haven't expanded your reach into asset management. Any plans for some additional products, in that vein?"

"Well, time for you to take another look," DiMarco responded. "We, uh, actually have expanded our, our product set quite a bit recently," pointing to Tamale RMS (first time we've ever heard of that one).

Instead of countering with a snappy but accurate "Well then how come a pro like myself isn't aware of it," Weiss, persisted, as polite as before, asking a vague follow-up about the "general acceptance" of the Tamale system. DiMarco said it's gotten a great reception.

Patty Edwards was actually heard to say on Monday's Halftime, "Frankly you almost have to own a little Intel just for fun." Seriously? You could probably have more fun owning a bank account.

Kaminsky: 3 good reasons
Facebook may not want IPO

Gary Kaminsky said Monday on The Strategy Session that there actually are 3 reasons Facebook may not pull a Steve Schwarzman.

Kaminsky said IPOs generally happen "to create some liquidity, to monetize for those early investors that want to be able to capture that value."

But he said with Facebook, employees can already cash out on the secondary market, and private placements have established a value for the company. Kaminsky said if he's an investor, "I'm extremely happy" over the multiples and valuations assigned to the stock.

Lastly, Kaminsky said the company likely doesn't have to use stock as a currency for deals, it could probably easily raise money without it.

Aryeh Bourkoff phoned in to agree with that, but he said the real money really does come from the public markets, which may prove enticing.

People watching "The Social Network" might wonder what we did — how exactly does this company make money anyway?

It's a story to watch, for sure.

[Friday, October 8, 2010]

Flash: Adami apparently
wrong on market direction

Guy Adami has spent not all but most of the last 12 months saying things like "I think the market heads lower from here" or "I think the next big leg is down."

Or to be perfectly specific, as recently as Sept. 23, he said this: "It's either gonna explode higher, which I don't think will happen, or we're gonna trade a lot lower, which I do think will happen."

Friday, he capitulated at least in the short term: "It's basically green, green pastures and full-speed ahead in the equity market."

But he said ultimately he doesn't think it will end well.

Bold analyst call:
Price target = yesterday’s close

Jim Suva, who hasn't been heard from on Fast Money for a while, showed just how bold analysts can be with his Research in Motion price target.

"Our target price on RIMM is $47," Suva said. "We don't like RIMM at these levels."

He also said, "We're stepping to the sidelines right now on Motorola."

Karen Finerman said she's still got the POT trade going, "long December, short October" because she thinks it'll be a slow process. (This writer is long POT.)

Rich Ilczyszyn like Michael Block is getting reliable minutes of Fast Money commentary these days, and is doing a fine job, but unlike Block isn't trying hard enough to spice it up with a joke or 2.

Yakkity yak

You might've thought Tim Seymour had expressed every thought he needed to express this week on Thursday's Trading the Globe.

But the motormouth was in high gear on Friday's Fast Money. Seymour said, in rambling discourse, he thinks we're in the "middle innings" of whatever it is the central bank(s) are doing.

He said GE is now "getting back to the story," and it's not going to be about GE Capital anymore. Good to hear they've straightened that out after 10-plus years.

Seymour also saluted Peter Brady for his voice "changing" during one forgotten comment. Karen Finerman got that one but we're not sure Melissa Lee did.

One thing Karen didn't get was the surge in the market and commodity plays, saying "I don't get it" several times.

Karen said "The bar is really low" for JPMorgan.

Karen also said Bill Ackman apparently bought some shares of JCP around $20. "It would make me very, very nervous to follow him in."

Joe Terranova asked the panel rhetorically, "How could you be long Treasurys?"

Grasso: Shorts afraid
to try Caterpillar

While everyone is bound to be bullish on Melissa Lee in sleeveless black dress she wore on Friday's Halftime Report (she also joked about Maker's Mark), Steve Grasso said the mood at the NYSE is basically bullish on the whole stock market.

Grasso said "I am shocked" that he didn't see people rushing to get short CAT or DE like they typically do when those shares jump like they did Friday.

Then Grasso said, "Every time you try to step in front of this market, you get run over ... this market's going higher ... the squeeze and the pain is going to be to the upside going into the election cycle."

Joe Terranova said "commodities — that is gonna be the theme in the 4th quarter." Refreshingly, he also admitted of corn and ag futures, "In the last couple weeks I've actually gotten this wrong."

Patty Edwards, perhaps in a tribute to Butch & Sundance, wore Miami Dolphins colors on Friday, talked about Fortune Brands being the "Saturday" trade of buying a toilet, playing golf and drinking Maker's Mark, but said that's basically all the synergies the company's products have with each other.

(Butch & Sundance of course refers to Csonka — presumably Butch — and Kiick.)

Edwards spoke about Fortune as one of the Ackman plays. As to the other, JCP, Edwards said, "I'd love to know what he's seeing in there."

Actually Kate Kelly pointed out earlier on The Strategy Session that Ackman has good picks and bad. So, enjoy throwing darts at these 2.

Rovi CEO Alfred Amoroso talked about how great Apple products are for his company. Patty Edwards asked a question not as good as most other questions she asks, what's the "next biggest thing" in entertainment. Amoroso said in an apparent shout-out to future CNBC owner Comcast and others that he doesn't "subscribe" (pun apparently intended) to the notion the cable-company model is dead.

Jon Najarian congratulated Nasdaq's Brian Hyndman for bringing transparency to trading as opposed to those mysterious "dark pools." Chris Whalen said "The banks can't handle any more foreclosures," which cost $5,200/$5,300/$5,700 per house (usually at Home Depot) to rehab into usable living units.

Would’ve been a good day to
ask Dan Snyder how focused
he is on the Packers

Another Kaminsky-less Strategy Session on Friday was a quiet production, despite economy/bond talk from the likes of Greg Melich, Jeff Kronthal and John Thiel.

Paul Bard said NetSpend is the upcoming IPO to really watch, something offering financial services in place of a traditional bank account.

Kate Kelly revealed, "My sources tell me that QE2 is a virtual certainty at this point."

[Thursday, September 7, 2010]

Steve Jobs probably laughs

Jon Najarian for the 2nd time in a week saluted a New York newspaper.

"Kudos to the New York Times," Najarian said on Thursday's Fast Money, for its scoop on the secret Microsoft-Adobe meeting.

"People were actually somewhat giddy that maybe something would be going on, and it could be something that saves Steve Ballmer's career at Microsoft," Najarian opined.

Najarian then got a bit carried away in the analysis, asking "how funny or how bizarre is it" that the 2 tech chairmen supposedly most "hated" by Steve Jobs, or "at least hated in terms of business," would be having their companies involved in discussions of some kind.

We're not even close to experts on this one, but we don't think Jobs hates Gates anymore; hasn't he basically won?

Joe Terranova said Apple is a key name here, "That's what this might just be about," he suggested.

Karen Finerman revealed, "We bought some Microsoft on the Goldman Sachs downgrade ... just because the valuation is so ridiculously compelling." But Finerman said any interest in Adobe is not a reason for buying MSFT.

"They don't have a fabulous track record of creating value with acquisitions. Or creating value in the last 10 years I suppose," Finerman said, adding, "I think Ballmer's there till Gates wants him out."

Guest Michael Olson lumped deal talk into 3 categories, saying this is one that "could make sense; we wouldn't rule it out."

Pete Najarian made a point about how it likely would cost MSFT $20 billion, and he doubts it would boost MSFT's bottom line enough to justify that. Joe Terranova basically agreed, calling it a "Hail Mary pass."

Léo, you’ve got your
work cut out for you

Even though almost nobody agreed with this thesis back at the time (early August) and stock results didn't back it up, Joe Terranova said the game-changer for IBM was when Mark Hurd got the boot.

Money managers "got out of Hewlett-Packard on the loss of the Mark Hurd premium, they went directly into IBM," Terranova said.


If memory serves, Hurd got the boot Aug. 6.

IBM that day closed around $130.

3 weeks later, it was at $122.

But evidently, money managers went "directly" to IBM.

Karen Finerman said even though IBM hit an all-time high, "This valuation is not stretched at all."

Jon Najarian said, "I think Hewlett-Packard's dead money for a while."


Does Forbes exist simply to produce several ridiculous lists every year?

Steve Cortes said on Thursday's Fast Money that the "whole resource trade has gotten incredibly carried away."

In case you wondered if Jon Najarian wasn't trading well, he spoke about Alcoa and said "I like the trade I have on ... long the November 12 calls, short those 13s." But he said he's already "out of most of that trade."

Debbie Weinswig on the Fast Line didn't say anything particularly actionable, only that she and her team "continue to be very aggressive on Macy's ... continue to like Target as well."

Guest Simon Baker visited the Nasdaq and, aside from referring to the "chaps" on the Halftime Report earlier, made an articulate point about how the 2010 market feels like the 2004 market, which might've been a cool-off time but brought good things in succeeding years. It's a fine point, but we have to tip the cap to Carter Worth, who was comparing 2010 to 2004 basically about a year ago.

Melissa Lee said Suze Orman ranked No. 61 on the Forbes' most powerful women list.

Karen Finerman looked chic in new snug white top with blue dress, but it was her oversized watch that caught the camera's attention briefly.

Melissa Lee, however, was the epitome of professional, looking like she'd just wrapped up a big board meeting in dazzling business jacket, en route to a big celebration at Elaine's.

Dr. J is spending
too much time at the Gap

Jon Najarian said on Thursday's Halftime Report to skip channel checks and Dana Telsey and Britt Beemer and all that stuff: He's doing his own mall walks.

"I see traffic in these stores picking up substantially," Najarian said, better than any time in the previous 6 months.

That actually might put him on a philosophical collision course with this page, which strongly believes that no individual can be knowledgeable about the national economy based on firsthand evidence.

We should note that we actually are in agreement with Dr. J's months-long (if not longer) argument that the consumer's really not dead and people really are buying things (basically, in our view, because they always do.)

If you were concerned, however, that Dr. J might not've profited from the bump Thursday in select retailers, be assured, "I was long a lot of retail going into the move," he said.

As for Akamai, Najarian revealed, "I was not in until yesterday."

Steve Grasso predicted possible greatness for ANF. "If it trades above 42 and a half, the stock is off to the races," Grasso said.

Steve Cortes, skeptical, said "the XRT really isn't moving." But Grasso insisted that technicals are very important and that "1,172 is the next stutter-step" in the S&P.

Cortes: Natural gas stuck
below $4 basically forever

Steve Cortes revealed on Thursday's Fast Money that his mother, a 75-year-old retired Catholic schoolteacher, called him up suggesting they buy gold — which Cortes says is a sign of the top.

Cortes complained that we've got the "biggest gold range in 3 months" right now.

But Cortes saved his most stunning prediction for natural gas, after Steve Grasso said the drop Thursday was "probably a short-term event."

"Natural gas is the most vicious and protracted bear market that I've seen in my trading career," Cortes said. "It has been basically 2 years of lower lows ... I don't think it will ever be appreciably above $4 to stay again."

Joe Terranova said the natural gas supply story is based on horizontal drilling, which we think is the tactic used by bad guy Daniel Plainview in "There Will Be Blood."

If 3PAR had hired Mark Hurd, would HPQ have to take him?

Steve Grasso joked Thursday on the Halftime Report about why the Street won't let HPQ get out of its own way. "They wanted an outsider, but they didn't want this outsider. I mean, Joe and I probably could've had a better reaction on the stock than he's had at this point," Grasso said.

Sounds like a message
to Nancy Pelosi

Marc Sumerlin made the type of conditional prediction on Thursday's Strategy Session that will never come back to haunt him.

Sumerlin told a Kaminsky-less David Faber in Texas that if present tax rates are raised, there will be a recession.

But of course, since everyone and his brother has been strongly hinting that the fix (if that's the best term) is already in and all the present rates will be extended, really no chance of Sumerlin's forecast being put to the test.

David Faber questioned not the possibility of the extension failing but the propensity for such an event to lead to recession, telling Sumerlin it "seems to be on the margin more than overall."

"We're growing too slowly," Sumerlin insisted.

Maybe Citi, JPMorgan
should try cloud computing?

Raoul Pal, an investing guru from Spain opened a Pandora's box of semantical minutiae on Thursday's Strategy Session when he told David Faber in Texas that there's sort of a misconception among people who think monetarism is some sort of truth.

It's "fact vs. art," Pal said. "Monetarism is a theory and not fact."

If it were up to us, we wouldn't put it quite as delicately as Pal but rather just say, "We're making it up as we go along."

Bruce Zimmerman, CIO, University of Texas, also spoke for a bit, but he might as well have taken up some of the time for Kate Kelly, who may have looked good in a pleasant green sweater but had virtually nothing to say beyond the teaser to her segment about banks' interest in hiring currency trading.

Kelly pointed out that 2010 has been a tough year and that currency trading is a "bright spot" on Wall Street. "This is one area where people are actually hiring."

David Faber didn't seem too impressed, saying banks are "following as opposed to anticipating where the next trend's gonna be."

At the end of the program, David Faber wore a black cowboy hat and rode away on a horse, destined to be one of those CNBC moments replayed on the 25th-year anniversary specials and any salutes to Faber.

Brian Kelly Fast-Fired
for a Brag Trade

On a day where the most exciting thing was (perhaps Karen Finerman's sleeveless blue dress, but if not, then...) the selloff in various cloud-computing-linked stocks, Brian Marshall told Fast Money viewers Wednesday that FFIV buyers might soon get a great opportunity.

"I don't think it's likely that they get acquired," Marshall said, but he thinks "below $90" would be an excellent entry point for a stock he believes is worth $115.

Melissa Lee, continuing a theme from the Halftime Report, used air quotes to indicate her skepticism of Rackspace as a "cloud company."

Everyone on Fast Money is prone to a Brag Trade from time to time, but Brian Kelly on Wednesday seemed notably proud of his recent stake in Rackspace.

"I actually owned that stock, was fortunate enough to sell it last week on the spike," Kelly said. "I try to sell into the madness of crowds."

"The madness of the crowds..." Much more poetic than, say, Jon Najarian's, "Buy the rips, sell the dips. Dougie Kass preaches it, I practice it."

Ironically (yes, this one seems to meet the definition of irony) enough, Kelly also on Wednesday was hit with a Fast Fire on this Rackspace trade — not on TV, but on the Fast Money Web Extra, where he repeated the "madness" refrain. Guy Adami was less impressed with that than Kelly's description of the iPhone putting Rackspace in a new "paradigm," which Adami called a "Harvard word."

Patty Edwards, in a somewhat modest-ized version of the Brag Trade, said she unloaded some FFIV, but not completely. "I actually did take some profits today," Edwards said, "um, I've held it so long that it had gone up quite a bit. That being said, I did not sell all of it."

Still a lot of ‘House of Cards’
left in David Faber

Gene Munster put in a call to the Fast Line on Wednesday to somehow make the case that everybody who's been talking about an Apple-Verizon deal for years is now underestimating the potential.

Karen Finerman tried to call him out on that seemingly unlikely possibility.

"I think some of it's in the stock, but I think there's a lot more to go when you see the impact," Munster said.

Guy Adami spoke about the currency battles, you know, the global "race to debase" or whatever it's called which is actually a very boring Fast Money topic, noting that "Wars have started for less than this."

That prompted Tim Seymour to ask, "War games, again? Ally Sheedy?"

"Ya ever play Risk in college?" Adami asked in response. The answer's yes, and pretty much it's always whoever gets North America who wins.

Colin Granahan disappointed with his bastardization of Dickens for a retail analysis, saying its' a "tale of, kinda, 2 halves of the month."

David Faber interviewed Congressman Jeb Hensarling deep in the heart of Texas on Fast Money. At one point, Faber essentially said "Get that (bleep) outta here" when Hensarling suggested Congress was at fault for all the subprime loans. Faber claimed the banks were willingly entering the market. Hensarling to his credit handled the aggressive rebuttal like a pro and didn't get defensive or argumentative.

This weekend we'll try to do an exhaustive (maybe literally) summary of Faber's Goldman Sachs special that aired Wednesday. Because if we tried it right now, through no fault of the program, we'd fall asleep.

Herb to cloud-computing
sector: Facial

The sting in the cloud computing sector on Wednesday gave Herb Greenberg something of a chance to crow on Wednesday's Fast Money Halftime Report, although not nearly as much as a for-profit-education implosion might.

The sector is basically a commodity business and is "overhyped," Greenberg said, questioning why, if orders and business were so great, Rackspace on a day like this wouldn't have preannounced great earnings.

Melissa Lee referred to an earlier interview with Lanham Napier and practically shouted that the company is in "HOSTING and cloud computing" and maybe not a pure cloud-computing play.

Gary Kaminsky, digging in beyond the call of Strategy Session duty while on location in front of a Texas pond, said the same "chase for performance" is going on right now that happened last year.

If you’re gonna play in Texas,
gotta have a fiddle in the band

Sexy Melissa Francis spoke about how "rugged" the hosts of The Strategy Session looked on location in LaRue, Texas, and with that to start them off, how could Wednesday's episode from the Barefoot Economic Summit be anything but a raging success?

Most notable was an early offhand comment that Marc Sumerlin apparently said something about the Fed not needing to stop at $1 trillion, but $7 trillion (whatever that means).

Kyle Bass exhibited the difference between guesting and hosting, seriously toning the gloom factor in his economic assessment.

It wasn't that what he said was different, but how he said it. The assessment might've been the same as during his visit to New Jersey in August, but the end-of-the-world angle was notable absent.

Bass even admitted this time, "I actually own some stocks."

Gary Kaminsky unfortunately said conferences like these allow you to "formulate your top-down thinking." He said that watching Texas TV, the "lede story is about foreclosures."

Alan Fournier told Kaminsky, "I'm concerned that the debt markets are a little bit overly exuberant."

Urban cowboys Gary Kaminsky and David Faber referred to the "Dallas" theme as being the "Dynasty" song.

[Tuesday, October 5, 2010]

Karen seems to scoff
at HPQ skeptics

Karen Finerman, a bigwig at a D.C. women's conference, beamed in to Fast Money Tuesday from Washington and indicated a certain exasperation with the Hewlett-Packard headwinds.

"I don't think, that this guy, after being in there a week, has blown up a bunch of value," Finerman said. "I just- that doesn't make any sense to me."

She defended owning the shares. "I don't think it's broken, and yet it's trading like it's broken," she said.

Brian Kelly, who's been saying most of this year that MSFT has a dubious business model because software is getting free, actually said Tuesday, "I'm starting to look at Microsoft."

A rare Brag Trade
from Karen Finerman

We just pointed out — gee whiz, was that only yesterday? — that Karen Finerman is basically the most candid Fast Money panelist in terms of admitting crummy trades.

On Tuesday, depending on whether you put a comma after the "%" symbol, it's entirely possible Karen made a Brag Trade.

Speaking of Becton Dickinson and medical devicemakers, K-Fine said, "This whole sector got so beat up early in the year ... so now they're up 30%, for us, we've gotta take a little bit of money off the table."

Becton Dickinson came up because it was Anthony Scaramucci's Hedge Fund Trade of the Week. He said it's "historically trading right now at about 2/3 of its P.E."

More entertaining, Scaramucci joked that if anyone's planning to send him a pinata, "I need them to have Godiva chocolate because I'm a Wall Street elitist."

Another guy rich enough
to have his own jet

Brian Kelly said he just read Goodbye Gordon Gekko in the last week and called it a "phenomenal book."

We've been wondering ... if "The Social Network" proves to be a mega-hit among the Google/Apple/Salesforce.com wannabe crowd who collect big signing bonuses, will Anthony Scaramucci 23 years from now write a book titled Goodbye Mark Zuckerberg?

Space program less convincing
than Léo Apotheker

Only in the cockamamie world of Wall Street is a company as profitable as Google chastised for spending too much money.

Colin Gillis told Fast Money on Tuesday that moving into TV is a good idea, but as far as moving the needle, "not gonna happen overnight."

More importantly, Gillis said the company has given itself a headwind by making so many hires. "Expenses grow faster than revenue," Gillis complained.

Either it’s ‘out of catalysts,’
or it’s ‘for diversification’

John Stephenson visited the Fast Money set Tuesday to predict a looming top in gold. "The fundamentals in gold are bar none the worst of any commodity," Stephenson said.

The problem is, while gold is an interesting subject, until someone puts a date and price level on the next huge gold move (up or down), these debates are just a tiresome refrain. Eric Jackson argued in favor of the dollar (the pessimism "reminds me of late 2009," he said) and said the typically expected dollar/commodities divergence "doesn't have to be the case," and he thinks both could rally.

Guy Adami said to look at Eastman Chemical. Karen Finerman conceded "Bank of America's been a painful one this year," but she still sees value in it, and as for financials in general, "the bar has been lowered for all of these names."

Melissa Lee announced an upcoming "Trading the Globe" with Tim Seymour this week and told Seymour he had a "very handsome picture."

What’s a few hundred
among friends?

"I am long anyone who is bringing dollars back into the United States," said Patty Edwards on Tuesday's Fast Money Halftime Report.

But then Edwards really got our attention with one of her favorite calls, Home Depot as a foreclosure trade. "I don't think that I would be going short it anytime soon," she said. "You're dealing with all of those foreclosures people are buying, $5,300 per house to make them habitable. It's going to Home Depot."

The key there is the amount. We (sigh) actually record this kind of stuff (it's in the archives to the right). On April 26, Edwards said the foreclosure rehab cost was $5,200, and on Dec. 29, she said it was $5,700.

Maybe it changes by the month. We'll concede, whatever it is, she's close enough.

Cortes: Japan in ‘death spiral’

Melissa Lee's bright red frock stole the show on the Fast Money Halftime Report Tuesday, but Saša Zorović sought to pour a little fuel on whatever smoldering Microsoft fires exist.

Zorović said Microsoft could use a cloud-computing acquisition, perhaps Salesforce.com or Netsuite. But Jon Najarian said Salesforce.com has shot up so high it's probably not doable.

Joe Terranova said action in Treasurys Tuesday is a sign "people don't really trust this move in equities."

Steve Cortes first declared "Japan is quite literally in a death spiral" and that he'd look to go short Toyota and Sony, then he pointed to $15 as the "magic number" for also going short the XLF. "I think the banks are dead money," Cortes said.

To think, Sirius & XM
were once competitors

Rob Cox said on Tuesday's Strategy Session that Sirius XM might want to keep Pandora in its rear- view mirror. Cox said Pandora has 65 million registered users, and "you can actually access these guys in your car which is where half of all radio listening takes place."

Cox said for now, Sirius XM has advantages in the amount of content it offers, particularly the non-musical content, but that Pandora is a potential future threat.

Lucky for them

Paul Parker of Barclays suggested Microsoft wasn't "experienced" enough at M&A to seal the Yahoo deal.

Parker also told The Strategy Session that investors are actually thinking positive about doing deals.

Steve Liesman said countries did a great job of coordination during 2008-09, but nowadays, "It is an absolute free-for-all."

Gary Kaminsky said stocks are all trading together these days in the "closest correlation that we've seen in decades." He also recalled something we hadn't thought about for a while — remember all the "euro-parity" talk in the spring?

[Monday, October 4, 2010]

Did Toyota ever fix
all those cars?

Zach Karabell, who did double-duty Monday, took a crack on the 5 p.m. show about something he heard on the Fast Money Halftime Report from Ford watcher Adam Jonas.

"The idea that auto sales would go up 20% next year in the United States with the climate we have" is an "incredibly aggressive call," Karabell said, and if it were to happen, he said it would be a lousy use of capital, although it probably wouldn't be if you don't have a car right now and need one.

Melissa Lee asked Jon Najarian if he thinks Jonas' call is as loopy as Karabell does. "Nope," Dr. J said, saying the consumer tends to overachieve.

Stephen Weiss tried to say something on the subject but apparently didn't have the mike in place.

Weiss later spoke about 3G maestro NIHD and said of Latin America, "They're still in the PC stage."

‘Commando’ OK,
‘CYA’ not

Auto sales weren't the only sector where Jon Najarian and Zachary Karabell diverged in the category of enthusiasm Monday.

Najarian said if you're trying to play the next terror threat, consider OSIS, ICXT, or ASEI. "I think all of these securities plays are short-term plays," Najarian said.

Karabell said to skip that. "I can't say this. This is the back-end covering on the part of governments," Karabell said.

Guy Adami said LLL is priced very attractively now.

The Hangover, continued

"Today it felt like, you know, the most boring down day you could imagine," said Zachary Karabell on Monday's Fast Money.

Karabell said we've had a "schizophrenic month."

The panel balked at Sara Lee's revelations of suitors. Jon Najarian was incredulous that people had to read about it a little late in the New York Post, which is not the "financial reporting authority" he would prefer.

Guy Adami, for about the 25th time, mentioned his August 2009 visit to Vegas with Jon Najarian.

You’d think he could just
ship her an e-mail

Guy Adami started analyzing the Microsoft downgrade by Goldman Sachs Monday and said he'd "love to know what Heather Bellini has to say."

Zachary Karabell said the notion that the catalyst going forward for MSFT is dividend hikes and buybacks is to him the "worst sign in the world" for a company's growth prospects.

During a brief chat about Oracle's integration, which Guy Adami called maybe the best ever, Karabell brought up the "Delphic oracle," which we know about but only barely.

Panelists credited Karabell for the "cerebral" approach to stock-picking. "I'm not used to cerebral," admitted Harvard grad Melissa Lee.

Joe Terranova, who had a quiet day, said of gold, "There's no reason not to have it in there right now" in your portfolio.

It was not (at least overtly) a promotion for Carl Quintanilla's "Trash Inc.," which already premiered last week anyway, but analyst Vance Edelson did speak mostly positively about Republic Services Monday on Fast Money. Most interesting to us is he said Republic has "46 years' worth" of landfill space.

After that, we evidently try Yucca Mountain.

Melissa Lee had a hot necklace Monday.


Commodities/futures ace Rich Ilczyszyn made perfectly fine (as far as we could tell) comments on Monday's Fast Money. "Grains are done on the downside for a little bit, we've got a nice band of support," was one of them, while he suggested gold is inevitably due for a pullback.

But that wasn't enough for Jon Najarian, who delivered an outright essay on corn activity.

"Absolutely. I totally agree with that," Ilczyszyn said.

We figured he’s got a book
coming out — but he doesn’t

Former CBS boss Andrew Heyward visited the Fast Money set Monday.

For what purpose, we can't fathom.

He talked briefly about iPads and the media industry. Zachary Karabell asked the most relevant if predictably unanswerable question, "How do you monetize this?"

Heyward said that's a great, tough question, and purveyors are moving toward a "combination of subscription, and, what they call paid content, or branded content."

"You're gonna see experimentation," he added, helpfully.

Category: Most ironic CEOs?

Coming back from the first commercial break of Monday's Fast Money, someone — think Jon Najarian's voice — was heard off-camera saying "guy drives the Segway off the-" before Melissa Lee took over.

Google Instant sucks

For a while, because we were too tired/clueless to even realize we could change it, we were struggling along in our Google searches with the "Instant" feature activated.

If this function isn't a pile of crapola, nothing is.

If you're something of a fast typist, which we have to be around here, Google Instant mostly specializes in causing misspellings, and often leaving you with a search box with your typed words in it and no solutions until you actually hit the gray "Search" box. The culprit — we think — is that it doesn't always register your characters as you type them because it is searching during the keystroke.

Then it has the audacity to ask, "Did you mean ...?"

And the search results are no more "accurate" than the original way.

If this is the plan for gaining a toehold in China, or boosting U.S. market share from 70% to 75%, we'd say, um, back to the drawing board.

Scorecard update

Every now and then we take a look at some of the search queries and other inquiries we get around here and feel like we're not exactly serving our readers' needs.

A lot of folks are inspired to search the Web for subjects like "which fast money panelist was most accurate in 2009" and "is (so-and-so) on CNBC any good." (Actually, most people seem interested in stuff like "commando" and "spin class," but that's too depressing, so whatever.)

From time to time, this page points out, we can't grade panelists' collective picks because it's either unfair or impossible. Picks are made with widely varying degrees of specificity and conviction. A CEO comes on and after the interview Melissa Lee asks a panelist, "Do you buy the stock," the panelist says "It's getting a little rich but I think you can still buy it here, just give yourself a tight stop," and how in the world does anyone evaluate that?

So, we'll stick to the pure-television assessments, and as time permits this week take a crack at the Fast Money sphere's strengths and weaknesses. Just remember that in general, beauty is in the eye of the beholder, and for everyone out there who can't stand, for example, Joe Kernen, there's someone else who TiVos Squawk Box every day....

Melissa Lee — Melissa's style is obviously different than previous host Dylan Ratigan, who was quite effective in this format, and thus we initially found lots to nitpick. She has found something of a groove, is well-prepared, well-versed in data, and generally asks good questions of the guest CEOs and analysts. She is not Ms. Excitement when it comes to pushing her colleagues' buttons, but too eager to avoid debates or fireworks at any cost. Whatever the opinion, show has undeniably expanded under her watch. Now, does Mel look good? Yes, Mel looks good.

Simon Hobbs — Well-suited to this type of hosting and brings a spark to every program he's on. Admirable underdog type who doesn't look like he should be this successful on TV but is. The only drawback is that much of TV boils down to style; he simply doesn't have a great radio voice, isn't going to draw female viewers on appearance, and perhaps is more combative than some want to hear. Still one of our favorite hosts.

Gary Kaminsky — By our calculations, appears to be, other than Cramer, the most in-demand CNBC pundit at this time. If you sort through the biographies of CNBC personalities, you'll notice some arrived strictly from the media world, and others crossed over from big business. There's no perfect formula. Being good at both helps. Kaminsky's natural TV skills thrive on his impressive money management background. We know what some of you are thinking: "Yeah, but this is just like Brent Musburger in the '80s ... he's everywhere." Not yet. But look out.

Karen Finerman — Takes risk-on/risk-off to a new level for television, sometimes aggressively challenging colleagues all episode and other times quiet as a mouse. Looks great, beautiful smile, honesty regarding trading setbacks leads the pack. Still seems to take off more days than her colleagues, though we can't confirm that because we don't do attendance counts anymore.

Pete Najarian — Gentle giant, unassuming brainiac, resoundingly polite, and of course a great sense of humor — but only at guffawing at others' jokes while completely unable/unwilling to deliver a line of his own. Nothing wrong with his volatility or (increasingly rare) biotech reports. Too many saccharine opinions. Too uncomfortable at saying "I think."

Brian Kelly — Like an NBA 6th man, best value seems to be from the Prop Desk. Too often fails to get more than a couple sentences in when joining the 5 p.m. gang at the Nasdaq. Brings an impressive amount of trades and enthusiasm to match.

Todd Gordon — They could probably use him, but he hasn't been on the show for months.

We'll tackle as many others as possible the rest of this week.

Buy jewelry,
empower yourself

Zachary Karabell performed on Monday's Fast Money Halftime Report almost like he thought someone was putting him on.

He seemed to view the (what we think is the Charles Gasparino-fueled) Citi-Mike Mayo story as borderline laughable, "the ultimate in inside baseball," and said other than Goldman Sachs, this is not an exciting sector. "There's not a whole lot going on here," he said.

Karabell slammed the Pete Najarian-JJ Kinahan volatility talk about MSFT, saying, "Microsoft is cheap. These things can stay cheap for years."

"But we're talking about the options Zach," chided Melissa Lee.

Karabell responded to Lee's strike-a-pose question about a Win 7 phone being a catalyst with "No."

Steve Grasso, by the way, said, "The guys that I cover that are in the technology space are always disappointed with Microsoft," and JJ Kinahan offered that it's rather dubious the company admitted missing an entire "cycle."

Karabell chuckled his way through a question about currencies, saying he thinks they're in tight ranges and doesn't care much about them anyway.

Blue Nile CEO Diane Irvine is obviously adept at marketing, telling Fast Money that the reason her company is pushing an iPhone app is because "our business has been all about empowerment of the consumer." Karabell said he couldn't make a Final Call because he was too busy buying diamonds on his iPhone.

Flash: Wall Street sensitive
about bonus publicity

The most provocative comment of Monday's Strategy Session went unchallenged.

Not that it should've been challenged. We basically agree, although it's a very nuanced agreement.

David Faber said of TARP, "It has worked out fairly well. There's no way around that."

Financially it has worked out well. The government bought low and is selling higher. It has also set dubious precedents, in what government chooses to bail out and whether Congress has any control over the money the administration spends.

That will be a developing story, no doubt.

Kate Kelly reported that it's not a great year for Wall Street bonuses, that there could be a 20-25% decline and that the percentage of revenues devoted to bonuses is historically low, in the case of Goldman Sachs, the lowest since going public. (As if that will inspire admiration on Main Street.)

Gary Kaminsky asked guest Amy Butte what's really going on at the New York Stock Exchange in terms of what specialists are doing. Butte's best answer was that they're matching buyers and sellers — or put another way, perhaps there aren't a whole lot of new product lines rolling out there. Kaminsky indicated the bigger picture issue is what will happen to the exchanges amid declining volume. Butte's (hopeful) answer was that the Street will begin to evaluate them more on the listings business than the trading business.

Gary Kaminsky also laid out a chart to back up his contention, "I actually believe that lower interest rates has a negative impact on employment." Kaminsky explained that older workers have every incentive to remain in the work force because fixed-income investments do not offer them enough to live on.

This page was wrong,
but Cortes basically was too

Well, we were due for a bad one. How in the world were the Chicago Bears a 3-0 team?

So, we missed an NFL call. Perhaps we were swayed by Steve Cortes, who declared last week, "Lovie Smith is a terrible coach, but we have amazing players." If those players are amazing, we're George Soros.

Take the Bears to cover

We weren't going to do any football commentary this week, until we got a load of the NFL point spreads this weekend and found the Chicago Bears 3.5-point underdogs against the woeful New York Giants.

Lovie Smith is perhaps the most colorless figure in the NFL, but he's a much better coach than Fast Money's Steve Cortes thinks (see below). The Bears will make things happen on defense and special teams and give the Giants fits all night.

Vegas has handed Chicago a motivational gift. Take Chicago and the 3.5, certainly to cover, likely to win.

Pick ’em: Water or trash

CNBCfix.com takes a crack at a couple new CNBC documentaries from last week.

One is Carl Quintanilla's "Trash Inc.," which explores something we've got too much of.

The other is Michelle Caruso-Cabrera's "Liquid Assets," which explores something we don't really have enough of.

Not surprisingly from Caruso-Cabrera, "Liquid Assets" suggests the possibilities of a market-based water distribution system. The rest of the program seems to cast doubt on that notion.

[Friday, October 1, 2010]

Karabell: Big-oil CEO predicts
nat gas below $4.50 forever

The Fast Money stunner of the day Friday was delivered by Zachary Karabell:

"I had a lunch with a CEO of one of the largest oil companies in the world which I- and he was saying, look, he doesn't think that natural gas will go above 4 and a half dollars in the United States ever," Karabell said.

Karabell said the reason nat gas executives are talking up projected prices of $5 or $6 in 2011 or 2012 is because "all of their capital spending plans assumed that that would be the price," which Karabell described as "absolutely wishful thinking."

Joe Terranova said if it's true that natural gas stays permanently below $4.50, you might want to think about shorting a certain ETF. "The UNG will be worth less than a dollar," Terranova said.

Edwards hearing rumors
of trading layoffs

Patty Edwards said Friday she's not terribly interested in Goldman Sachs. Quite the contrary, in fact.

"I'm hearing rumors that, uh, Knight Trading is actually lowering their head count because of light trading volume at this point in time," Edwards revealed.

Zach Karabell, who once again made his case that maybe people shouldn't expect the banks to be market leaders for a long time, said "I'm short the financials but I'm long Goldman Sachs ... because I think that that stock is so completely washed out."

Karen Finerman said she likes some of the biggest banks such as Bank of America because "they are not priced for growth to the moon," they remain "premier" names, and "the risk/reward is very compelling to me."

Fortt: HPQ letting others
define its new CEO

Jon Fortt reported at the end of Friday's Fast Money that Larry Ellison told the Wall Street Journal that HPQ blew it. Then Fortt made an interesting observation about HPQ's lack of introduction of its new CEO.

"They've allowed other folks to sort of define him," Fortt said. "You wonder why they did that."

The obvious answer would be that the HPQ board doesn't really know what it's doing. If the published revelations about the Mark Hurd inquiry represent the extent of what he did, he shouldn't have been fired, provided he apologized for embarrassing the company.

Goodness only knows who's running HPQ these days, or who will really be running it by November.

Zach Karabell's Final Trade Friday was "Don't buy HP."

Terranova: Play POT at $140
with options

Joe Terranova and Karen Finerman took up the ag/M&A scene Friday with Potash. (This writer is long POT.)

"I think the interesting play in the ag space is Potash," Terranova said. "Look at where Potash is now trading. It traded today at 142 and a half. Think about that. There's a 130 bid out there. At a certain point, if Potash continues to lag here around 140, I do think you have to own it through options."

Finerman agreed with that general assessment and said there's essentially a $130 put in the shares. "I do own it through options, I own calls and I also own call spreads," Finerman said. "We are long December, short October because I don't think it's gonna play out so quickly, but I do think ultimately we will see a higher bid."

Terranova pounds
the table for oil

Joe Terranova said the oil market is "absolutely 100%" on fire, and he predicts "you will see a $90 print in oil before the end of the year," citing Asian demands for Oman-Dubai blends that exceeds demand for West Texas Intermediate.

The Zekemeister, Zach Karabell, making a welcome appearance on the Fast Money set in a half-hour Friday show that packed more punch than some hourlong versions, unfortunately stumbled in his first joke attempt, telling Terranova, "First of all Joe that is the perfect geography lesson via oil for the kids of America, so I think that's helpful."

Huh? Yeah, sure.

Karabell said people should look at solar, which he called a "beta version of the oil trade." Terranova agreed that solar "regains some of the momentum." Karen Finerman in the past has opined that oil bulls should simply go long oil, why take extra risk in solar, but she did not comment in this discussion.

Brian Kelly pounded the table for ethanol, saying it "outperformed the corn market today." Patty Edwards mentioned NAT and said "I own some Ormat."

Ed Mills predicts extension
of all the tax cuts

Ed Mills — the guy who a while back predicted that not enough House Democrats would flip-flop on health care to pass a bill — told Fast Money Friday that Congress' "most likely scenario is a short-term extension of all the tax cuts just to get out of town."

Karen Finerman, in eye-catching purple sweater, said she'd only look at Amazon if it were "substantially lower," but "nowhere near here."

"The value is no different today than it was yesterday," Finerman complained.

Zach Karabell said Netflix and Amazon have been operating magnificently, but the "stocks have simply transcended that model." So you can be skeptical of the stock activity without being skeptical of the companies.

Pablo Perez-Fernandez for a 2nd day tried calling in the Fast Line to talk about Research in Motion positives but his phone connection quickly faded to static, which Melissa Lee blamed on storms.

Melissa Lee, for reasons we don't understand, continues to plug the lousy "Wall Street: Money Never Sleeps" that nobody will be talking about after this weekend, mentioning an interview Michael Douglas gave to a blog about losing money in the credit crisis, which sounds like it could be some kind of strategic dig by Mr. Gekko against the recent claim on his estate made by his ex-wife.

Lee even uttered the verbatim version of Gekko's "money itself isn't lost or created it's simply transferred..."

Watching "The Social Network" this week we got a chuckle noticing a female character who resembles Lee, and the realization that, given that the film is based at Harvard, which Lee attended, and is about the awkwardness of certain guys finding dates, certainly, undoubtedly, there have been a lot of guys at Harvard as well as CNBC who have been interested in asking Lee out but just didn't have the guts to ask.

Analyst: Give the new guy
a break

Cowen analyst Peter Goldmacher defended Léo Apotheker on Friday's Fast Money Halftime Report.

"This is a guy who knows how to sell. And it's a little unfair to blame him for what happened to SAP and SAP, certainly SAP stock when he was CEO.

Melissa Lee asked Goldmacher if HPQ will buy SAP. Goldmacher said he doubted that would happen anytime soon but said it would make sense.

Joe Terranova wasn't impressed. "He clearly does not have any IT-making experience in terms of equipment there," Terranova said. "IBM remains the trade off of all of this."

Boston Film Critics voted it
best American film of 1981

IMAX chief Richard Gelfond, rapidly joining Clay Jones territory as one of our favorite Fast Money CEO guests, cracked up the room — or should've — with this observation/dig at a movie that, like "Lost in Translation," is best-known as a monumental miss by the critics who actually claimed it was good.

"I don't think 'My Dinner with Andre' lends itself to being a 3-D film exactly," Gelfond said.

"I think the world went a little 3-D crazy," he said.

Gelfond also noted huge opportunities for expansion in China. "I think in China we're really only at first base," he said.

That's fine, but how are Carl Quintanilla and the gang going to be able to pick up all the extra trash?

Edwards: Bank estimate cuts
might have overshot

As we often like to say on these subjects to our "retail-investor" readers, if you're spending a decent amount of time and energy ("decent amount" referring to anything over 30 seconds) being outraged by events such as the Flash Crash, you simply need to reallocate your free time to something more productive.

Melissa Lee opened Friday's Fast Money Halftime Report with Bob Pisani's description of the report, followed by a panel go-round that frankly went over our heads even more than the dinner-table discussion in "My Dinner with Andre."

Joe Terranova kept saying something about unloading 75,000 e-Mini contracts. Patty Edwards referenced 1987 and concluded, "We have fixed nothing, frankly."

Edwards did say it's possible banks might be headed up simply because the estimates have taken the bar down so low. Dr. J, Jon Najarian, said the trading houses such as Goldman Sachs might've had a huge September because he had a great month, and "I think the trading in the month of September was phenomenal."

Brazil: Lookin’ good

Michelle Caruso-Cabrera's hot pink reading glasses stole the highlights from a fairly quiet Friday Strategy Session, but Brazil guru Will Landers did indicate things are looking good down south.

Landers said the election is expected to be a rarity — no runoff — in crowning Dilma Rousseff as Lula's successor.

Landers said he met with former president Fernando Cardoso, who is very optimistic on the country's economy. "There's no way going back to the old Brazil of hyperinflation and very high interest rates," Landers said.

Landers said the giant Petrobras offering for cash was a bit "strange." He told Gary Kaminsky he doesn't hedge currency directly, but does do it indirectly through stock-picking.

Gary Kaminsky said he doubted the Flash Crash report would give retail investors more confidence in the stock market.

Movie of the week:
‘The Social Network’

Aaron Sorkin has done it again.

He recognizes "The Social Network" is a movie, not a biography, and puts together a fascinating depiction of the messiness of genius, illustrating how even the littlest tips from associates can be immensely successful in the right hands and that defining who's responsible for what can be trickier than hacking into Harvard's databases.

Unlike the even-more-forgettable-now "Money Never Sleeps," Melissa Lee is not in this movie, but a very beautiful actress who happens to resemble Lee has a prominent role.

Those who like to think in stock market terms may find themselves wondering: With 500 million users, and now a popular movie, has Facebook peaked? Fortunately/unfortunately, the stock market doesn't have an answer for that.

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Movie of the week

♦ Bonnie and Clyde
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♦ She's Out of My League
♦ Con Air

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Gordon Gekko:
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star bios

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CNBC guest bios

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