CNBCfix - Fast Money Review

[CNBCfix.com Fast Money Review, November 2010]
[Tuesday, November 30, 2010]

Analyst: RIMM to $80

RIMM analyst Peter Misek, of Jefferies, told the Fast Money gang Tuesday that RIMM's QNX is basically the greatest thing since sliced bread.

"It's not only gonna sell these Playbooks, it's a game-changer," Misek said. "Really in a way co-opts Google."

Melissa Lee, skeptical, asked why QNX is suddenly a game-changer now. "We had to see how quickly developers could port apps onto the new platform," Misek said.

Misek told Guy Adami the laptop and PC makers are the ones who are going to take a big margin hit and that the superior tablet makers aren't cannibalizing each other yet but providing value to consumers.

Guest seems to misunderstand the focus of his appearance

Melissa Lee introduced Alan Zafran on the Fast Line Tuesday in a segment purportedly about playing the government's tax-rate talks.

"You go for the jugular Melissa, you buy American here," Zafran said. "The U.S. is the best place to invest right now." After a lengthy table-pounding thesis, Zafran was interrupted by a frustrated Lee, who said "It's not a question of U.S. or not U.S., it's within the U.S., do you go dividend-paying or do you go non-dividend?"

"I think you still wanna go dividend," Zafran said, suggesting VIG and YAFFX.

Steve Grasso said he's been seeing people unload tobacco shares, which gives him a bad feeling about the high-dividend payers. But Tim Seymour interjected before Zafran responded, saying "I would be buying these stocks here" presuming they've been selling off for the wrong reasons, over U.S. tax uncertainty concerns.

Brian Kelly finds contradiction in his colleagues’ commentary

"You guys were talking the first 8 minutes of the show talking about how the market's gonna go down and then in the next 2 minutes, everybody spent their time talking about how great copper was, how great the PMIs are, how great Germany is," Brian Kelly told his Fast Money colleagues on Tuesday.

"I did buy TBT today ahead of the PMI numbers," Kelly explained.

Steve Grasso said Kelly's contention that maybe the market could drop 2-3% but otherwise is in bull mode seems a little long in the tooth. Kelly said he got bullish on the Jackson Hole speech.

Fast Money gang sounds
skeptical of GOOG

Joe Terranova took a swipe on Tuesday's Fast Money at Wedbush analyst Lou Kerner's curious price target for Google.

"If you're long the stock at 600 and someone comes out with a 575 price target on some bullish analyst news, you don't feel too good about that. Let's face it," Terranova said.

Terranova also said, "I think there could be further downside, just knowing that there are so many people out there right now worried about their long positions."

Tim Seymour said the real problem with GOOG Tuesday was concerns about a looming Groupon acquisition, "are they overspending yet again," and not reports of EU inquiries. "I'm sure Google's not real worried about this," he said.

"Technicals don't stack up very well right now for Google," said Guy Adami. "I think a lot of people are trapped in this."

Ritholtz: BAC has little
to fear from WikiLeaks

Barry Ritholtz visited the Fast Money set Tuesday to downplay the WikiLeaks bank effect.

"What on earth could they possibly release that's embarrassing to Bank of America?" Ritholtz said, saying the company is already well-known for "horrific acquisitions" and FASB's generosity.

Ritholtz said "We wouldn't be short Bank of America here."

Guy Adami asked Ritholtz if WikiLeaks has an obligation not to wait until 2011 to release its purported banking documents given the stir it's caused in the markets. Ritholtz said not to attach sense of obligation to WikiLeaks. "These are guys that are looking to cause excitement and buzz," Ritholtz said, saying the goal is "shaking the tree, disturbing the status quo."

Ritholtz said he likes C, but "we don't have a crazy upside target," maybe something in the mid-$5s.

COCO CEO drops out

Herb Greenberg loves it whenever there's dubious news about the for-profit education sector.

Tuesday Greenberg reported on Fast Money that Corinthian Colleges CEO Peter Waller is out, and that the company on a conference call refused to explain why until the "5th time" analysts asked, and eventually it was described as a "personality issue" that had been festering for weeks.

"The question is what's really going on there," Greenberg said, grumbling that Waller "gets $25,000 in outplacement fees."

Melissa Lee later told her panelists, "There's nothing wrong with an online degree guys."

Adami: S&P looks like it might be headed below 1,150

Tim Seymour said Tuesday that suddenly now, the market looks like it technically wants to sell, and he predicts the S&P might have to test 1,155.

"Totally agreed," said Steve Grasso. "I think we do touch down to 1,150."

Not surprisingly, Guy Adami, who has been fighting the Fed and governments for more than a year, said, "Timmy's on the negative side; I'm right there with him," except Adami suggested a downward move that could be "more extreme than 1,150."

Brian Kelly gushed about MON, saying "I bought Monsanto; I think we got a 77.25 price target on it."

"I own Monsanto here too," said Tim Seymour.

Seymour said to look at Telefonica as being thrown out with the bathwater in Spain.

Guy Adami said he still likes Netflix but won't like it once it trades 15 million shares.

Melissa Lee donned smart jacket and hoop earrings Tuesday, but let the hair down this time.

Analyst apparently doesn’t
believe his own price target

Wedbush analyst Lou Kerner spoke on Wednesday's Fast Money Halftime Report and offered a curious, to say the least, explanation for his 12-month $575 price target on GOOG.

"We don't have any value today for Android, and we think that that will create significant value for them over time," Kerner said.

So ... Kerner expects the company to create more "significant value" ... even though he refuses to assign any of that value to his price target.

Which to us amateurs sounds a bit like saying the Steelers are going to have a much better season than last year, but we're predicting 9 wins again.

Hmmm ... sounds like the type of rationale Gary Kaminsky loves to mock in Smarter Than the Street.

Despite his basically flat target, Kerner basically praised Google's prospects up and down. "We're entering into kind of a Golden Age of the Internet here," he said.

He said Google's apparently likely deal to buy Groupon "is really about local ... this can be accretive to Google."

He said "I don't think it'll be a catalyst near-term," but he said GOOG has a history of wise long-term decisions; "YouTube is now seen as a great purchase."

Patty Edwards said not to get terribly excited about GOOG just yet. "If you buy it, you're buying it for 5 years from now," Edwards said. "You're not buying it for a trade."

Biggest Black Friday lines
at Victoria’s Secret

Patty Edwards on Tuesday's Fast Money Halftime Report said that, based on her Black Friday mall walks, the place to go for retail action is Victoria's Secret.

"The biggest lines I saw anywhere were actually in The Limited stores," Edwards said. "People were spending for themselves."

Edwards said of Black Friday overall, "I don't think it was as busy as everyone thought," but actually "very, very surgical" buying by the upper-middle shopper.

"I'm playing Tiffany's, I'm playing Coach," Edwards said.

Edwards also revealed that in tech names AKAM and FFIV, "I've taken a little bit off the top on some of my positions." But she also said "I actually bought more gold over the past few days."

Terranova: $200 could be
Netflix floor

Steve Cortes found himself debating just about everything with Joe Terranova on Tuesday's Halftime Report.

"I think we are seeing risk come down," Cortes said.

"I don't think this is de-risking at all," Terranova said.

"But Joe copper's well off of its November highs," Cortes insisted.

"It is not well-off the November highs at all. It's had a shallow correction," Terranova countered.

Terranova said the $200 level for Netflix is "potentially becoming a floor."

But, "If I buy it, it'll be the high," he joked.

"I got out of IBM today," Terranova said. In terms of taxes, he said, "I think the market is pricing in an extension for all."

Brian Kelly said "I like RIMM here." Steve Cortes said he's playing contrarian on the banks. "I'm buying GS and MS," Cortes said.

CEO could be having
a boffo Sunday night

During a fairly quiet Strategy Session on Tuesday, the most interesting subject was Ventas CEO Debra Cafaro revealing she's quite familiar with the yinz.

"I'm just a working-class girl from Pittsburgh," Cafaro said.

"Steelers fan?" asked David Faber.

"Absolutely," Cafaro said.

Now, that would've been a helluva subject ... asking Cafaro what she thinks about this Sunday's donnybrook in Baltimore for basically all the marbles in the AFC North (it's the Faith Hill "waitin' all day for Sunday night" game on NBC), a game in which people are correct to question Joe Flacco's credentials for beating the Steelers.

But no. Instead they talked about the long-term wealth-producing opportunity of 85-year-olds.

Cafaro, whose company is a health-care REIT that specializes in assisted living centers, called the over-85 population the country's "fastest-growing population" and said "our demand is growing. There's very limited new supply."

She said the best way to grow cash and minimize risk is to make an acquisition here and there, "creating this diversified pool of uncorrelated cash flows from health care and senior housing assets."

A quick check of Yahoo finance shows Cafaro owns a healthy 633,589 shares of VTR.

Guess Barack Obama won’t be able to say he’s ‘outraged’ this time

David Faber opened Tuesday's Strategy Session saying Wall Street bonuses for this year are going to be down "perhaps as much as over 20% across the board."

Kate Kelly predicted a 22-28% drop and said she spoke to someone in prop trading who said "people will be shocked how bad bonuses are in that area."

Kelly, though, pointed to Goldman Sachs tightening the purse strings last year for PR reasons and said in that case, "this year will feel much better on a relative basis."

But she admitted, "a lot of this is very anecdotally driven."

Gary Kaminsky said the derivative losers in this are the "high-end retailers, travel-leisure industries," as well as New York real estate.

David Faber didn't seem too empathetic. "I'm gonna get out my violin, I'm feeling really bad right now," Faber said.

Stocks mentioned by Herb Greenberg seem to tend to go higher

David Faber and Gary Kaminsky mentioned on Tuesday's Strategy Session the plunge by recent Chinese IPOs Mecox and Le Gaga (which is a handy name for a company issuing an IPO).

"That is a wake-up call if you've ever gotten a wake-up call," Kaminsky said.

Though it passed without discussion, David Faber did mention Tesla, perhaps the first time we've heard Tesla mentioned since its IPO back in June.

Back then, most people were dismissing TSLA as a whimsical green play that would quickly stumble, though Gary Kaminsky did suggest that at least initially, it could draw closet indexers who at the time didn't have GM available to buy, as well as those seeking alternative energy plays.

Herb Greenberg even came on The Strategy Session on June 21 and warned that Tesla had a lot of supposed buyers who could still cancel their contracts, and "this is right now still currently pie in the sky for broad rollout."

The odd thing is that the stock actually traded flat all the way through October, then suddenly went parabolic in November ... coincidentally the same time GM came to market.

Quite frankly, if you bought this controversial stock anytime before November and held on, you had a monster year.

[Monday, November 29, 2010]

Oil watcher ‘frustrated’ that
speculators haven’t run price
up to $147

Author John Stephenson told Fast Money viewers on Monday, "I'm tremendously frustrated. The whole Street has just completely missed the oil trade. ... I think the oil price is gonna hit 147-150 in the next 2 years and probably go to 200 in the next 3."

Why he would be so "frustrated" about purportedly identifying a boffo trade that everyone else is undervaluing is a mystery.

Tim Seymour questioned Stephenson's premise. "John, have they missed it?"

Stephenson basically said yes, because he apparently doesn't think people realize how much driving is happening in America's favorite industrial park. "There's an awful lot of cars on the road in China," he said, explaining his own driver there had to take him all the way to the city on the shoulder.

Stephen Weiss gently chided Stephenson as well for his premise. "You've gotta watch Fast Money more because we've been all over the oil trade," Weiss said.

Stephenson closed with one of those sky's-the-limit forecasts that should always make people suspicious, saying he sees Chinese oil consumption increasing to "10, 15 million barrels a day. I don't see any stopping it."

Hours after Monday’s Fast Money, and Tim Seymour is probably still talking

If you watched the opening of Monday's Fast Money wondering if Tim Seymour would ever take a break, you were likely disappointed.

Europe, data, oil, consumers, you name it, Tim was all over it.

So much so that he was even heard off-camera answering Stephen Weiss' question for Doug Kass, who had made a lengthy point himself (see below) about food inflation and shorting food companies.

"Why don't you think they'll be able to pass the cost on, at least for the next year or so," Weiss asked Kass. "Tiffany passed on a gold price that went through the roof. And I know it's a higher-end buyer."

At that point Seymour was heard to mutter, "It's a different price point. Different buyer," while Kass explained the "violence" of the food price move is what matters.

AAPL could’ve been had
in autumn 2001 for $7

Stephen Weiss made a nifty little chart presentation on Monday's Fast Money, and happened to utter this provocative sentence:

"Over the last 10 years actually, FedEx has significantly outperformed Amazon. That broke down over the past year," Weiss said.

Hmmmm ... is that true?

According to our own chart eyeballing, yes.

The real question is whether that's even relevant.

Because consider the 9-year charts.

There you'll find AMZN ($179 now) trading for $6 (that's correct, $6) in autumn 2001.

Whereas FDX ($91 now) was in the upper $30s at the same time.

Actually we don't disagree with Weiss' trade, which is that FDX and UPS are due to outperform. Amazon's chart suggests it goes years where people just don't believe in it, then suddenly goes parabolic.

Jordan Rohan of Stifel Nicolaus spoke on the Fast Line about downgrading eBay to hold, saying it's at the "losing end" of the Amazon story.

Speaking of FedEx, isn't it about time for "Cast Away II"?

Melissa’s hairstyle
change was noticed

This page got inquiries Monday night concerning Melissa Lee's "hair back" decision for the 5 p.m. Fast Money.

So much for change

John Harwood reported on Monday's Fast Money that his latest analysis suggests Congress "will end up extending all the Bush tax cuts for 2 or 3 years."

Finerman, Seymour like BP

John Stephenson, despite claiming the Street doesn't get it, wasn't the only one advocating the oil trade on Monday's Fast Money.

"I think oil stays higher here," said Tim Seymour, before Stephenson's appearance. "BP I like, they sold another 7 billion in asset today."

Karen Finerman also revealed, "We did buy some BP today."

Finerman, in a fairly quiet performance, said "I like the U.S. right now" and also said she's intrigued by M&A rumors about Comverse. "I actually believe it, and we bought some stock," she said.

But Finerman admitted she was puzzled by the day's bank gains. "I don't know why," she said, suggesting maybe they were "overdone to the downside."

Stephen Weiss said that given the news, the "market should've been up all day long."

Joe Terranova said he bought AXP based on the affluent consumer. He also said "the euro respects a 200-day better than any other currency."

Tim Seymour, in one of his many comments, said the stcok market "looks a lot to me like the move in August, when again, that was the prelude to a melt-up."

Doug Kass: Global warming
will create water shortage,
balloon food prices

Doug Kass on Monday's Fast Money became about the 1.25 billionth person on CNBC to predict a someday global water crisis.

"We're gonna have the continued effect of global warming," Kass said, as well as the demands of accelerated global growth which is "gonna lead to more droughts, scarcity of water." He said the corresponding rise in food prices is going to be a "destabilizing factor."

He then pointed to the Brahmaputra River as a flashpoint in how China aims to smooth out its own internal inequities in water distribution, at the expense of peace with India.

Stephen Weiss questioned Kass' position of being short food companies when some have passed on the extra costs. Kass said now they're going to be dealing with "geometric increases."

Apparently not everyone else on Fast Money was convinced. "I overheard, uh, Timmy questioning my sanity off-camera before we went on air," Kass revealed.

Melissa Lee, who had a tremendous look going with perfect hair and sizzling dark gray dress on Monday's Halftime Report, threw viewers a curveball by switching to very businesslike hair-pulled-back for Monday's 5 p.m. Fast Money, and that looked pretty good too.

CEO dismisses short-term
stock owners on TV show
called ‘Fast Money’

Michael Rubin, CEO of GSI Commerce, dismissed Melissa Lee's suggestion on Monday's Halftime Report that Cyber Monday is overrated. "Cyber Monday absolutely is very important," Rubin insisted.

Rubin extended a backhanded dis about short-term stock holders maybe not being impressed but that he's creating long-term value. Melissa Lee noted some observers are concerned with the company's spending, which prompted a denunciation from Zach Karabell.

"Being upset with a company for spending money to expand as a general statement seems to me an absurdity," Karabell said. "I'd be much more more upset if they were radically buying back their shares. I mean, they're a new company, they should be spending money to expand, and if you're flummoxed by that, I, I don't quite get that."

"You've got the best vocabulary Zach," said Lee. "Flummoxed."

Gartman: People in different countries have less in common than people in the same country

Dennis Gartman on Monday's Fast Money Halftime Report predicted a biforcated outcome of European currency.

"I think eventually the euro breaks apart into a northern euro and a southern euro," Gartman said.

"I think that the euro has almost terminal problems ahead of it. It's just a rolling contagion from one country to the next," he added.

But Gartman's most colorful observation was drawing this distinction: "The difference between, uh, a Frenchman and an Italian is demonstrably different, demonstrably divergent, than between a Californian and a Virginian."

Californians and Virginians. Generic. Who woulda thunk?

Zachary Karabell tried to put the brakes on the burgeoning hysteria. "I think we're a little premature on the demise of the euro," said Karabell. "It's one thing to say there are issues. It's another thing to say the eurozone is about to disintegrate. Those are 2, in my mind, radically different statements." Or as others would put it, "demonstrably divergent."

Grasso: Some see ANF $60

Steve Grasso on Monday's Halftime once again drew the 1,172 S&P line in the sand. "If we break that, we go straight to 1,150," Grasso said.

Zachary Karabell said he sees the selloff of the last couple weeks "as a very minor replay of May of this year; I take as a good opportunity to get in to equities."

The Zekemeister also reported that Brazil is finding more offshore oil fields, which will help drive oil services. "Some of that may be in the stocks, I think a lot of it probably isn't," he said.

He also said "I'm long a few of the individual solar names ... but as a hedge I'm also short the TAN."

Pete Najarian gushed about the traffic at The Mall of America in Minnesota; "you can't get a parking spot." Specifically at The Buckle, he counted 5 registers regularly ringing, and "I didn't see any deals."

Grasso said people think ANF could hit $60 if given the same type of premium as J. Crew. He revealed he's investing in a fund that owns it.

Melissa Lee got a little racy near the end of the program, discussing alcoholic whipped cream and saying "There's nothing wrong with a little party time in your mouth."

That nearly doubled over Pete Najarian with laughter — rightly so this time — and prompted Lee to insist, "It's whipped cream guys!"

‘Super Rich’ guy has
advice for Jerry Brown

Real estate bigwig Glenn Stearns, star guest Monday on The Strategy Session, is perhaps best known in CNBC-land as being one of the subjects (along with CNBC star Anthony Scaramucci) of David Faber's 2008 "Untold Wealth: The Rise of the Super Rich," which explained that Stearns failed fourth grade.

And any classmate who laughed has been getting a facial.

Unfortunately, David Faber opted to launch Monday's interview with Stearns with the dreaded "on the ground economy" question, "What are you seeing on the ground in California ... the economy overall." This was Stearns' clumsy answer:

"California's not doing very well as you know. And the fact that we have basically gone without any type of ability to finance people anymore. What's happened is it's gotten so tough with regulations and restrictions on loans that it's really hard to, kinda help make the economy, uh, bring it, uh, bring it up on its feet right now ... we've overcorrected I think."

Apparently, what Stearns is driving at is that people who want to lend money are not being allowed to, citing a person who has $100,000 in the bank and a $3,000 credit account.

"Going all the way to the other extreme of checking for, you know, inquiries on Sears cards, we've gone too far," Stearns said.

Stearns predicted the California economy will be "flat for a long time," which is probably good news for the new gov.

Gary Kaminsky asked Stearns, "Can there be recovery without securitization?"

"Absolutely not," said Stearns, who said he's "selling everything to Fannie and Freddie right now."

Obama speech throws Strategy Session off its normal rhythm

Monday's Strategy Session, interrupted by a presidential speech, began with Gary Kaminsky openly questioning why European troubles known about since March seem to be lingering over the U.S. stock market, "and why it's deciding to have an impact on today's trading in the U.S., I have no idea."

"Great insight," said David Faber.

Kaminsky said probably what's happening is people are wondering "maybe Lehman is going to be Spain," or the one issue that's not going to be handled in the same way.

Guest Jeff Saut went into definition mode, drawing distinctions between banking crisis and sovereign debt crisis, saying with banks, there's a "bunch more moving parts," but right now in Europe it's kinda both.

Gary Kaminsky commented on the lofty price-seeking for the First Republic IPO and its dubious recent sale history. "If you're Merrill Lynch, right, this goes right in that category of 9 out of 10 deals not adding value," Kaminsky said.

Michelle Caruso-Cabrera,
and the Defense Department

A couple months ago, we read Michelle Caruso-Cabrera's oft-mentioned You Know I'm Right, and even though it's political stuff that's better handled by the likes of Drudge, HuffPost, DailyKos, Sean Hannity, etc., we put together a little review (handy link here).

Over the weekend, leafing through a few pages, we stumbled across one passage about the defense budget that suggests MCC might've been watching "Gone With the Wind" one too many times.

Or perhaps "Red Dawn."

Caruso-Cabrera writes in the 2nd paragraph of Chapter 12: "U.S. defense spending should be about the United States defending its sovereign borders. Invasion and civil war should be our primary concerns."

"Invasion."

And "civil war."

The impressive coming-of-age cast in "Red Dawn" includes Jennifer Grey, who recently came up big in "Dancing With the Stars."

Apparently things are hopping
at Victoria’s Secret

On Black Friday, there's no more capable person of firing off mall observations than Patty Edwards.

Here are some of Edwards' top observations on the Fast Money Twitter:

"People in front of line here at KSS have been here 4 hours"

"I've seen a number of cars with professional drivers at $KSS & $WMT - unusual for the Pacific NW."

"One person waiting as $GPS kids opened... Seemed a little lonely."

"Seeing some small Victoria's Secret bags joining the line. No more on that or @GuyAdami will blush. $LTD -PE"

"Prize for first substantial checkout line in a specialty store (and not because they're understaffed): Victoria's Secret. $LTD"

"Loads of big bags leaving $JCP. Looks like home goods selling better for them than $M today."

"Plenty of stock on hand for Justin Bieber's new album, just in case you couldn't find it anywhere. $TGT - PE"

Don’t tell David Faber, but it looks like Asher Edelman needs to spring for spellcheck

As of early Friday a.m., Asher Edelman's official blog was still headlining with the article that he went on The Strategy Session with "hosts David Farber and Gary Kaminsky."

Bad dis. We'd gladly ship 'em a correction, but there's no e-mail address listed on the blog, and let's face it, we doubt seriously that Asher Edelman reads CNBCfix.com (but of course, he should).

L.A. Times: John Kinnucan says he’ll be his own lawyer if hauled to court

Some who saw Tuesday's Strategy Session might've wondered if the elevator goes all the way to the top in regards to John Kinnucan's public comments about his "role" in the FBI insider-trading investigation.

David Faber even asked Kinnucan if it's really a good idea to be yukking up the encounter on television.

According to the L.A. Times, Kinnucan "says he hasn't hired an attorney and expects to defend himself in court 'if it comes to that'."

We wondered the reaction of Tiernan Ray, who runs the Barron's Tech Trader Daily blog, after Kinnucan mentioned the blog during his CNBC interview.

Ray actually had an item up Tuesday. He doesn't really take a position, but note the lack of authority he confers upon Kinnucan's firm with this description: "an analyst with something called Broadband Research." But later there's a reference to "Kinnucan's got guts."

[Wednesday, November 24, 2010]

Gak — 4 days of nothing
but Ireland, Portugal, etc.

It suddenly occurred to us Wednesday that we really should make an effort to figure out the Fast Money schedule, if any, for Friday.

Based on what Simon Hobbs said at the conclusion of Wednesday's episode, we were left with the notion there won't be any Fast Money again until Monday, though we won't be surprised if some panelists turn up on Friday's Closing Bell, or if producers slam David Faber and/or Gary Kaminsky between the tackles for some short-yardage Strategy Session commentary.

Around here, as always, we're thankful for every click we get. Especially those days we get just a little bit wiped out (not from the stock market) and wonder, wouldn't it be a great day to be on the sidelines, only to realize this could be the 1 day when Mel Lee and Mandy Drury gather all their friends around the computer to check out this page, and decide otherwise.

We're also glad to be reporting on a good-natured TV production gang that, generally speaking, doesn't try to go Sean Penn on us, at least that we know of.

It may be a long holiday weekend, but this page knows no holidays and vows to keep hitting the figurative F5 whenever the inspirations strike.

A Happy Thanksgiving to everyone.

Fast Money gang predicts
AAPL at Thanksgiving 2011

Guest host Simon Hobbs, always good for a provocative question, asked Wednesday's Fast Money gang what the price of AAPL will be 12 months from now.

Here's the tally (keep in mind Tim Seymour didn't seem totally serious):

Guy Adami — $285
Joe Terranova — $413
Karen Finerman — $360
Tim Seymour — $361
Patty Edwards — $375

$95 AMZN, $36 RIMM

Colin Gillis, who brings a hale earnestness to every Fast Money appearance, was assigned to do walking-chart duty on Wednesday's Fast Money, and quite frankly didn't really seem to be in synch.

Mostly Gillis just rattled off a series of Apple sales projections and prompted Joe Terranova to wonder if Apple is starting to cannibalize itself, a point voiced many times in 2008 and 2009 but not so much anymore.

Everyone's entitled to be wrong once in a while. Let's hope Gillis' price target on AAPL — whatever it is — is maybe a little more realistic than some of his other recent announced tech forecasts.

Jesse Eisinger says he’s ‘not really vilifying’ Goldman Sachs, but...

ProPublica reporter Jesse Eisinger told a unanimously opposed panel of Fast Money stars Wednesday (that for some strange reason) he's trying to figure out the difference between prop trading and market-making, specifically accusing Goldman Sachs of being on the other end of a client's losing trade and able to avoid chalking it up as prop trading.

He didn't exactly make the sale.

"There's a tone in your voice that I'm not sort of digging," said Guy Adami. "Goldman didn't ram this down the client's mouth, I mean I'm sure the client came and said, 'Can you make a market in this' ... you can't really vilify Goldman Sachs on that right?"

"That's exactly what Goldman says, and I'm not really vilifying them; what I want to do is identify whether this is really prop trading or not," Eisinger responded, while Tim Seymour was caught shaking his head the whole time. "They end up taking control of this CLO," Eisinger explained.

Eisinger, after a couple similar references to Goldman's response, even managed to get Karen Finerman to snap at him.

"Just because Goldman says something, doesn't mean necessarily it's false. I know it seems like that to you," K-Fine sneered.

Half of this conversation was in the deep end of the institutional trading pool, where we don't go unless we spy bikinis.

Eisinger said banks like Goldman keep all the gains for themselves, and "when they lose, they socialize the losses." Which also sounds a little bit like the latest IPO everyone's cheering.

Funny, the impact of 1 word

Patty Edwards made an "appearance" on Wednesday's Fast Money, but only on the Fast Line (we learned via the Twittersphere that the roads in the Great Northwest were slicked out and Patty apparently doesn't have a TV studio in her basement).

"I still like those high-end retailers. I like Tiffany's here, I like Coach, I like Nordstrom," Edwards gushed.

Fine, fair enough.

It was after those run-of-the-mill remarks that Edwards got our attention, explaining that candles and one other item are selling like hotcakes at Victoria's Secret.

We won't mention it here, because putting it in print on a page like this just doesn't do it justice.

Seen nowadays, ‘Happy Days’
doesn’t really hold up

Because he so enjoys pop-culture analogies of the '70s, we're confident Steve Cortes will appreciate this page's contention that inviting Cortes into a bullish conversation is like when the characters on that famous commercial talked about their great butter only to get a visit from Mr. Cholesterol.

"I really couldn't be more bearish on Europe," Cortes said. "The U.S. is like Pinky Tuscadero right now and we are enduring the Malachi Crunch."

"I think Steve's making a good point," said Tim Seymour, but that's kinda odd, given that Cortes wants to stuff the whole continent in the trash compactor while Seymour thinks the German and Spanish banks are overdone to the downside.

Steve Cortes finds the opposite end of seemingly every trade

Joe Terranova recommended Fast Money viewers on Wednesday take a look at the refiners, and Guy Adami said "I think gasoline is driving crude oil."

(That kind of talk reminds us of the early days of Fast Money, when Eric Bolling, during a parabolic Tesoro climb, stared into the camera and said "IF YOU LIKE MONEY. IF YOU ACTUALLY LIKE MONEY. BUY TESORO." And basically he was right; it didn't crater until well after he stopped saying that.)

Anyway, Steve Cortes countered, "I used today's rise on the XLE to get short," for reasons that had something to do with China that neither Terranova, nor us really, understood.

Terranova, sorta like Tim Seymour, said Cortes "does a great job and nails a lot of trades." Yeah, but he also comes up with the occasional "Delta House" too.

K-Fine isn’t yet too embarrassed
to mention that MSFT long

Debbie Weinswig told the Fast Money gang Wednesday she sees "30% upside" on Macy's shares, and "for Target we also have about a 30% upside."

Weinswig said "localization" is the key for the two retailers.

"I do like Macy's, I like Target," said Karen Finerman.

Guy Adami said "I think the shorts in Tiffany may have gotten squeezed."

Karen Finerman reiterated near the end of the show during somewhat of a loopy video-game discussion, "I'm long Microsoft."

We got a kick out of Mandy helping herself to a bite of turkey at the end of Closing Bell.

Welcome to the jungle

Just like Steve Cortes, we try to exploit any opening in the coverage to make a celebrity reference.

Just a day ago, we saw the story about Axl Rose suing Activision over featuring Slash's likeness on one of its Guitar Hero games, and put a link on the home page.

That article brings to mind a conversation not too long ago with a very fringe member of the CNBCfix community — OK, maybe not a member, but a trusty associate — who said he attended high school with Slash, which is true, and that Slash was actually known as "Saul Gottlieb" back in the day.

That sent us scrambling to Wikipedia, which indicates he actually went by "Saul Hudson."

But our source, impeccable really but perhaps mistaken here, insisted, "I remember it was Gottlieb, something like that."

The Wiki description sounds convincing. But there you go.

This page previously reported that another friend of the site attended school with "Fast Times at Ridgemont High" star Robert Romanus and insisted Romanus was known in college as "Romanos," which we're also slightly skeptical of.

Tom Cruise was known as Tom Mapother ("May-bother") when discovered in his first Glen Ridge (N.J.) high school play, leading to instant auditions and a movie career with virtually zero training.

Forbes blogger: John Kinnucan’s
description of FBI visit sounds
like ‘another Balloon Boy story’

A day after John Kinnucan's notable appearance on The Strategy Session (see below), we happened to notice that a Forbes blogger is harboring some skepticism.

Walter Pavlo questions Kinnucan's account of the FBI visit and doubts the agents would 1) ask Kinnucan to wear a wire, and 2) reveal the name of the target.

"While the mainstream media has picked this guy up as some sort of insider, I think there are a number of holes in this story," Pavlo writes.

Dennis Gartman elevated to
‘official Fast Money contributor’

Dennis Gartman, who hasn't been on Fast Money for a while, returned Wednesday with a new CNBC contributor designation and repeated one of his favorite long-term trades: "I own gold, but I own gold in euro terms."

Simon Hobbs questioned if Gartman hasn't been dinged by that trade recently. Gartman said yes but it happens with all good trades, and "On balance these trades have worked very, very well."

Gartman described interest in gold this way: "It is psychology pure and simple."

Dr. J: Why bail out banks
100 cents on the dollar?

Jon Najarian on Wednesday's Lee-less Fast Money Halftime Report unloaded on bailout policy.

"I still don't know why it's sacrosanct that the banks have to get 100 cents on the dollar," Najarian said. "It makes no sense at all to me that we bailed out our banks on 100 cents on the dollar. I have no idea why Europe is gonna make a similar mistake and do that ... and that's gonna hurt the euro big-time for more than just a couple weeks."

Brian Kelly said "I think you can be short the euro," to Simon Hobbs' skepticism given the Fed's printing of money.

Stephen Weiss is jumping on a trade many others have tried before, with little success — playing FedEx as a derivative on the Amazon trade.

Weiss said "they've gotta ship the goods somehow." He also likes Nordstrom, and he cited one fact purportedly in the consumer's favor — "personal bankruptcies on a rolling basis are at a 3-year low" — except that Patty Edwards pointed out a little while ago that when people declare bankruptcy, it actually improves their free cash flow.

Jon Najarian said he likes American Airlines; "people are still flying like crazy." Brian Kelly recommended JetBlue, which he said by valuation metrics would be a takeover target.

Retail investor finds Sears
‘not exactly exciting’

Retail watcher David Berman said on Wednesday's Strategy Session he's finding "quite a lot of strength in the consumer," and he downplayed a rise in inventories by explaining "this number's inflated by Wal-Mart."

Berman showed a fascinating little chart — unfortunately the quick-trigger cameraman kept cutting away from it while we were trying to read it — that Q2 overall retail sales increased 6%.

But if you take Apple's increase — 67% — out of the equation, the total retail increase was only 4%.

Put another way, Apple was responsible for 55% of the gains, according to Berman.

But Berman wasn't exactly breaking new ground when he said of Sears, "When you walk into the store, it's not exactly the most exciting store."

Interestingly, moments later, discussing the insider-trading probe, Berman remarked that his firm doesn't really do that much of its research visiting stores because "It's really hard to tell from visiting stores if they're doing well or not."

Business good for AAPL,
insider trading attorneys

Kate Kelly on Wednesday's Strategy Session spoke of a Wall Street Journal report about "the conduct of Goldman employees" around the MedImmune and Advance Medical Optics deals being scrutinized by investigators.

Kelly then added, "I'm told that the phone lines of defense lawyers in New York are ringing off the hook with clients and potential clients." She said one lawyer told her he's already canceled his Thanksgiving because he's going to be busy on Thursday and Friday.

Some research firm has a sense of humor. Gary Kaminsky reported that TSS receives gobs of e-mailed research reports every day, and he read one from Wednesday explaining absolutely no channel checks were done and the report was basically guesswork.

Rodge Cohen said "Spain is not Ireland." He said Spain has 3 large banks that are actually "quite solid," and he told Gary Kaminsky that if a capital raise is needed strictly for reassurance, there's an appetite for it.

[Tuesday, November 23, 2010]

Shouldn’t Steven Ballmer be doing what Mickey Drexler is doing?

Karen Finerman got feisty Tuesday over — of all things — MSFT.

"Microsoft has not traded this cheap on a P/E basis except for the depths of the '08 crisis at 10 and change times earnings, I am happy to own Microsoft," Finerman said on Fast Money. "The risk/reward equation here is so attractive to me."

Tim Seymour challenged Finerman to explain why the stock will rise.

"They'll earn their way into it," Finerman insisted.

Joe Terranova told Finerman the only risk with that is "you could potentially be early."

That's when K-Fine got snappy. "You don't need to have the timing right, when they're paying you 2½ percent dividend, you are getting paid to wait," Finerman said.

That didn't satisfy the critics. "Then why not Oracle," Terranova countered, "Or why wouldn't you rather be in chips," piled on Pete Najarian.

The funny thing about Finerman's argument is that she's regularly on the program complaining about how tech companies aren't doing the right thing with their cash stockpiles and not rewarding shareholders enough.

But she apparently thinks the 2½ percent from MSFT is just peachy.

Finerman: J. Crew brass had been ‘talking down this stock for a while’

Karen Finerman on Tuesday's Fast Money made a notable comment about Mickey Drexler's handling of recent J. Crew earnings calls.

"They have been talking down this stock for a while," Finerman said.

"Their last quarter they guided lower," she said, but "he's on the buy side of it now."

Finerman blessed the deal. "I think this will be a home run deal for this private equity group. If I could buy in on this, I absolutely would," she said.

All of which leads us to the conclusion: If it's such a great deal for this group, why is anybody going to sell their shares at $43.50?

Finerman said the company, under Delaware law, is now in "Revlon mode," where "they have to accept a better offer if it comes along." But she said the glitch with that is "will Mickey Drexler go along with it."

"I am still long the stock because I think it's not impossible that somebody else comes out," Finerman said.

Analyst Jeffrey Klinefelter said maybe the industry is ripe; "at least 8 out of 11 retailers that we cover are trading below this takeout range."

Longtime JCG bull Patty Edwards did note the JCG deal on her Twitter feed, but with far fewer tweets than we would've expected.

We found it interesting that earlier Tuesday, Asher Edelman said on The Strategy Session that taking companies public and private back and forth basically didn't accomplish much.

Maybe the most beautiful chart you’ve ever seen: 10-year gold

Tuesday was basically Karen Finerman Day on Fast Money.

Tim Seymour goaded Finerman into a gold conversation.

"Deflation is good for gold. Inflation is good for gold. War. Peace. Anything. Good for gold," Finerman sighed.

We don't put nearly as much thought into the gold trade as Guy Adami (then again, he doesn't really put much thought into it either other than he's seen those days when it takes the elevator down $100), but one of these days it seems like a long-term gold chart analysis is in order.

Gold's chart of the last decade is practically too good to be true.

It's close to parabolic, but not quite parabolic.

Finding a stock or index that matches it seems difficult if not impossible.

Likely targets would be oil, FXI or inverse of the dollar. Gold split with the former 2 in 2008, and the big dollar slide was early in the decade.

There are some weak parallels to AMZN — they've gradually arrived at the same place, but AMZN experienced much rockier times in between.

Gold's rise has simply occurred through strong markets and weak markets, low inflation and elevated inflation, low rates and high rates, pre-terror and post-terror, Greenspan & Bernanke.

Finerman's right, but her point is irrelevant. Just because people don't know why it's going up doesn't mean it should stop going up.

The gut feeling here is that there's been a perception that the world is simply getting wealthier at an accelerated rate; thus, limited commodities are going to be worth more and more. That's what spurred the oil market for much of the same time. One difference is that oil is everywhere and has to be stored, whereas nobody has too much gold for their kitchen sink to handle, let alone a strategic reserve.

Gold's peceived worth to humankind doesn't seem to be much, except for one important factor, that every generation of humankind has prized it.

With that kind of psychological track record behind it, it's hard to bet against it.

It also doesn't have any earnings estimates to beat or CEOs who might get tangled up with Jodie Fisher.

Like everything, it can't go straight up forever. But because no one can adequately explain why it's been going up, it seems foolish to keep suggesting a demise.

Rich Ilczyszyn predicted gold $1,600 next year and said "I think this still has a long way to go." He also said he'd be happy to buy copper in the "3.50, 3.60" area.

Joe Terranova said we learned in 2008 that what would be bad for gold is a "global margin call."

But wouldn't that basically be bad for everything?

Were Nuance buyers turkeys?

Joe Terranova on Tuesday's Fast Money gushed about Salesforce.com.

"I'm long the stock," Terranova said, saying the puts are "ridiculously cheap."

Anthony Scaramucci rang up Macy's as the (always exciting) Hedge Fund Trade of the Week. "Macy's is not a turkey on Thanksgiving Day," Scaramucci said, adding the company has the "highest cash flow in its peer group."

Joe Terranova asked Karen Finerman to name a retail management as good as Mickey Drexler. Finerman first said the Children's Place gang, but then she singled out Macy's.

Melissa Lee, who looked sharp in chic light gray dress, reported on the Steve Wozniak video where he wrongly claims Apple bought Nuance.

"That just seems insane. And terribly irresponsible," Lee said.

Riedel: Buy Korean companies
on the saber-rattling

David Riedel headlined a quiet Fast Money Halftime Report Tuesday by declaring South Korea a buy on the obvious dip.

Riedel said the latest fiasco is merely "saber-rattling" and represents a "buying opportunity." He said North Korea's belligerence only extends as far as China allows, and with China condemning recent events, "that puts the lid on this escalating into anything else."

Simon Baker said things are looking good in specialty retail. "I think Chico's, American Eagle could be in play," he said. Baker also said he's buying gold anytime on a pullback.

Steve Cortes countered, "I still believe the gold trade is very crowded."

Joe Terranova suggested (Zzzz) that "this is a market that goes sideways for the remainder of the year." But Brian Kelly asserted, "if we get to Spain, that's gonna be the big problem."

Asher Edelman:
‘I found Warren Buffett’s
thank-you shocking’

Any other day, Asher Edelman would've been the top story on The Strategy Session.

Tuesday he had to play second fiddle to, of all people, John Kinnucan.

Edelman told David Faber and Gary Kaminsky that "If I were running a fund I'd be completely hedged today," and "in terms of the bond market I'd be short."

The country is "heading into a very inflationary period," Edelman said.

Edelman wasn't terribly enthusiastic about banks. "I found Warren Buffett's thank-you shocking," he said, saying the government has made banks profitable only by committing $12 trillion, and in the case of many and not necessarily the big ones, "they're virtually bankrupt if you mark 'em to market."

Gary Kaminsky asked Edelman what he thinks of the U.S. in terms of "global leadership."

That brought a very noticeable pause and prompted David Faber to ask if it's really that bad.

It's not, apparently.

"Uh ... um ... uh," Edelman finally said, "leadership follows economics."

He said the U.S. may get stronger but less influential; "we don't necessarily have to rule the world."

It's probably not well-known that Edelman is one of several Wall Street figures cited by screenwriter Stanley Weiser as the inspiration for Gordon Gekko, at least in the first (good) movie, not the ludicrous "bookend" sequel.

Researcher questioned by FBI:
‘It was a little bit like a flying saucer landing in the ’hood’

The Strategy Session on Tuesday scored likely its biggest news-making interview yet when John Kinnucan told David Faber and Gary Kaminsky about his experience with the FBI in the apparent sweeping insider-trading probe.

David Faber began by asking Kinnucan, who runs a boutique firm called Broadband Research, what's going on.

"That's not all entirely clear to me," Kinnucan said.

He explained he was on his porch at 4 p.m. "having a glass of wine ... it may seem a little early to you but I get up at 3 in the morning ... I figure after 12 hours I'm entitled."

Kinnucan continued: "A couple suits jumped out of a sedan in front of my house, and they weren't Portland suits, they were definitely New York suits, and so it was a little bit like a, a flying saucer landing in the 'hood."

All right. Immediately we've got a reaction.

Kinnucan sounds very much like a patsy, for lack of a better term, meaning in this case someone who doesn't know what's going on and is bewildered by the whole thing.

Quite frankly, he also sounds like someone not taking this terribly seriously, which is at odds with his later comment that "My business has been destroyed."

Anyway, Kinnucan continued. He said he took the agents into his kitchen, where they mentioned his research and started "insinuating that it was improper ... and it was a little bit surreal because uh, they were rattling off stuff that crosses, uh, say briefing.com all day long, and is no different than the stuff that's published by the major banks and you can find on Barron's Tech Trader daily or numerous places."

Kinnucan says he was told the probe is about a "very large insider-trading ring investigation," and that "one of my clients was a focus of the probe."

David Faber asked who the client is.

"I was warned not to disclose that, or I would be guilty of obstruction of justice," Kinnucan said.

Kinnucan, who compared his situation to Arthur Andersen despite not being indicted, said he has to disclose to clients that federal agents have visited him, and "It's impossible to have a business on Wall Street if you're under investigation by the FBI."

Gary Kaminsky asked Kinnucan a couple times to explain exactly what kind of research he does. "What we do is what's generally known in the business as channel checks," Kinnucan said, and for better or for worse, the conversation at that point plunged into the deep end of the research pool, a few concepts involving, for example, various Apple sales that go beyond the scope of our amateur knowledge (which is kind of embarrassing, because Kinnucan said something about even his 7th-grade daughter knows various things about Apple sales). "It's impossible to be an analyst on Wall Street unless you have an expert network," Kinnucan said.

David Faber asked Kinnucan why he is going on television, which seems a dicey maneuver after an FBI visit. "I have done nothing wrong. My clients have done nothing wrong. And uh I just felt it was the right thing to do," Kinnucan said.

But back to our initial assessment. You know, when Kinnucan is going out of his way to mention wine, flying saucers and "New York suits" (how does he know a "suit" is from New York? Accent?), and it seems like he's more perplexed by all this than actually angry.

Here's the melodrama he closed with: "You know I've been dragged along the pavement a few hundred feet underneath a bus and, and lost alone at 40 below on the Brooks Range and to me this is just another chapter and I'm just trying to do the right thing."

Hmmm. He's been "dragged along the pavement a few hundred feet," but the first thing he can say about his experience is he was drinking wine at 4 p.m.

Different people have differing ways of responding to stress.

Dunno.

Wall Street vs. the cops

One concept this page has become well familiar with is the sentiment Wall Street folks have toward policing authorities.

Quite frankly, it's equivalent to what you'll hear from a lot of people in minority or rural communities.

They don't feel protected. They feel harassed.

This parallel is quite fascinating.

At this point nobody really knows a whole lot about the insider-trading probe.

Note from the entry above, however, that John Kinnucan is convinced "My clients have done nothing wrong."

Can any person actually be 100% certain that their clients have broken no laws?

And what if someone actually has been doing something wrong? Leaking privileged information, screwing other investors, rigging the system.

Isn't it helpful to have the authorities in place, to make sure material information is available to everyone, that the accounting conforms to standards, that no one's intentionally causing flash crashes or wrongly backdating options?

Maybe it isn't. Maybe people who distrust the authorities simply find them incompetent. Madoff got through; Enron was allowed to mushroom.

This page won't take a position on this subject right now because we haven't thought much about it. And this whole insider trading probe stuff is sensitive enough right now, we're even ginchy about reporting on it lest the FBI knock on the door asking to see our ... CNBC recorded-program history, or something like that.

At this point there don't seem to be any specific reports of someone ripping people off in a massive insider-trading scheme.

But until we hear more, this will be yet another "show-me" investigation for the skeptics on Wall Street.

[Monday, November 22, 2010]

Pat-downs for everyone

Monday's Fast Money was more than halfway over when Doug Kass dropped this bombshell:

"I suspect that we are vulnerable to a terrorist attack."

If at first
you don’t succeed ...

Doug Kass, delivering some stock market/economic/general-global-geopolitical-stuff forecasts on Monday's Fast Money, made one prediction that really caught our ear.

"T. Rowe Price, Franklin Resources, Waddell Reed, will be some of the worst-performing stocks in 2011. I am short all 3," Kass said.

What's interesting about that is that Kass said basically the same thing almost exactly a year ago on Fast Money, on Nov. 18.

The explanation in 2009 was this: "I have started to accumulate a short position in the asset managers, T. Rowe Price and Franklin Resources, which are simply leveraged plays on the capital markets. I expect corporations to cut back their, uh, 401 (sic) matching contributions, which is going to hurt, uh, the asset managers 'cause it's the lifeblood of their business."

Just for kicks, we did some then-and-now comparisons of these names:

TROW — 49.12 then, 58.54 Monday
BEN — 114.66 then, 115.85 Monday
WDR — 29.50 then, 31.33 Monday

Well, he's bound to be right one of these years.

Sounds like the Flash Crash

It's not that we're trying to pick on Doug Kass. After all, he's got fascinating opinions, and nothing wrong with sharing.

But we had trouble getting too excited about this one:

"I believe that cybercrime is going to explode exponentially next year," Kass said. "And my surprise is that we're gonna see a specific attack on the New York Stock Exchange, which has a profound impact, causes a weeklong hiatus in trading."

See, that's just the type of stuff that we're liable to come back with a year from now and say, "Didn't happen."

On a more conventional note, Kass reiterated that he said recently "I think the market has topped for the year, and I continue to see that."

Tim Seymour wonders where the CSCO analysts are

One thing ya gotta admit about HPQ — its CEOs tend to do splashy things.

The last one got tangled up with an actress whose productions might be considered soft-core. The one before that actually ran for statewide office in California as a Republican.

The current one is apparently maybe supposed to testify about something but isn't planning to show up.

Nevertheless, Karen Finerman said on Monday's Fast Money that HPQ's "valuation is very attractive."

"I own the stock too; I think the valuation is fantastic," said Tim Seymour.

"I think this is the first of many good quarters ahead for these guys," added Guy Adami.

Seymour and Finerman went even further on the Final Trade, pitching HPQ.

Seymour, though, might've gotten a slight bit of comeuppance when making a lukewarm defense of Cisco's government-spending problems (we thought all that mattered was John Chambers' "tone," but apparently this quarter we're going to hear about government spending for weeks) by suggesting that the analysts haven't come out and nailed CSCO alone. "That's not a Cisco-specific statement to me," Seymour said, one of about 3 times he used the term "Cisco-specific."

Guy Adami though pointed to the Juniper scoreboard since the Cisco earnings report and said there's your Cisco-specific.

Our warning lights started going off a bit Monday when we apparently heard Seymour debate the Fed's position on inflation with Steve Liesman — taking the side there's no inflation.

Because on Nov. 10, he and Karen Finerman teamed up against Zachary Karabell on the other side of that no-inflation trade.

It's possible Seymour is saying there's no inflation in the U.S. but there is in emerging markets. But the Nov. 10 chatter didn't include that kind of breakdown. Unfortunately, Tamron Hall didn't ask Gary Kaminsky about that angle on the "Today" show either.

The fast money could be in muni bonds, but not right at this moment

Acer CEO Gianfranco Lanci brought a spirited tablet defense and a thick accent to the Fast Money studio on Monday.

Lanci corrected Melissa Lee's opening question about rolling out a 7-inch tablet, saying they're actually rolling out a "wide range of tablets, not only 7 inches."

Tim Seymour, citing his own purchasing habits as quality evidence, said he doesn't think most people want both a netbook and a tablet. Lanci insisted, "We see tablet as a complementary device."

Stephen Weiss said he just got long MEE, which we found interesting because not too long ago Zeke Karabell said he was shorting it. "Where there's smoke there's fire," Weiss, about M&A interest in this sector.

Muni expert Alan Zafran predicted a great buying opportunity ahead, saying a "massive amount of supply" is going to hit the market because of the Build America expiration, and people will take profits ahead of time, causing a "supply-demand imbalance."

Grasso: Amazon should rise

Steve Grasso thinks one tech high-flier isn't quite lofty enough yet. Grasso said on Monday's Fast Money Halftime Report, "I still think there's some upside" in Amazon, which he called a "Christmas story." He also said he likes Tiffany's.

Zach Karabell said an improving consumer is good for a name he likes, GSIC, for at least 30 days or so.

Karabell said the insider-trading probe is "icing on the cake" for bank shorts who have done well, though he's long GS as a best-in-breed against some shorts in the sector.

Karabell also revealed he's short Tyson; "I'm not in love with the management of this company."

Aaron Rakers spoke about HPQ and said, "We see upside drivers to the company ... we would be buyers here." Steve Grasso complained about that obnoxious mugshot of Leo Apotheker they keep showing on Fast Money; "that's the only thing that makes it go lower."

We didn't detect a whole lot of excitement from Brian Kelly, but he was kinda wingin' it in hipster fashion Monday with blue shirt/orange tie/gray jacket.

So many thought-provoking insider-trading scenarios, not enough time for all of them

Lawyer Ben Brafman helped kick off Monday's Strategy Session with what figured to be some intriguing examples of the gray areas of insider trading.

"It's not black and white, and then uh, when you really analyze it, it should be black and white to the people who are using this information if they are using it unlawfully," Brafman pointed out.

He tried outlining an example of an expert in the health care industry who has information about a medical ruling.

David Faber sort of hijacked the example to suggest if the info is just a good, educated guess, it has to be legal, right?

Brafman agreed but then continued with his example, saying if it was leaked to a hedge fund by an FDA person, that would be "black and white," and he apparently was going to make a comparison, but Faber interrupted him again.

Maybe Brafman just didn't get to his point quickly enough, or maybe he used up too much time on the no-brainer FDA leaker example.

In any case, it's a fascinating subject. Gary Kaminsky asked Brafman about a researcher who goes to a trade show and sort of a puts 2 and 2 together via body language that a big contract is coming down. Brafman said that's legal because anyone attending the show could infer that.

It actually doesn't seem like such a gray concept. If you're in possession of information that the public doesn't have, and you trade on it, that's a problem.

But Brafman noted these cases are very defensible. And we're of course reminded of Bud Fox hearing about the FDA ruling from his dad. Is a union leader considered an executive? What about during labor standoffs ... remarks that union negotiators might make during cocktail parties could seemingly be very useful.

Like we said, fascinating topic.

Gary Kaminsky said large insider-trading probes are sort of like presidential elections or Olympic Games. "We see this every 3 or 4 years," he said.

Buying time, with Jerry Brown

Dagny Maidman returned to The Strategy Session on Monday and said, among other things, California RANs have been a good 7-month investment.

"States in terms of their ability to pay what's coming due, the state general obligation bonds, they're fine," Maidman said. "But I think the long-term problems are a big deal."

Someone's phone went off while Maidman spoke.

Yesterday’s raider
is today’s activist

The Strategy Session guest Augustus Oliver spoke about a topic we unfortunately don't get too excited about — activist investors — and predicted a bigger year in 2011.

Oliver said activist investing basically follows the perceived "value gap" in stocks.

He also said that when an activist investor comes in and boosts a stock short-term, some people will consider it a risk as to whether they want to buy it at the higher price.

Tap the debt spigot first,
deflect questions later

Monday morning on CNBC, George Bush told Lawrence Kudlow in an interview clip that he didn't really sweat the precedent-setting ramifications of TARP, because given the situation we had, "There's not a lot of time for theoretical debate."

Does that mean he had a theoretical debate about anything?

Bear Stearns disappeared in March. Lehman didn't sink until September.

Apparently over 6 months, there was no time for debate.

We haven't seen Mandy yet, but Trish did to the fashion competition Monday what the Steelers did to the Oakland Raiders on Sunday.

Gary Kaminsky explains why answers on ‘The Price is Right’ are higher than in the Bob Barker years

Fast Money viewers might have noticed Melissa Lee last week playing a clip of Gary Kaminsky's Thursday appearance on the "Today" show.

We figured Gary would be unleashing some stock advice from Smarter Than the Street.

Instead, Gary was asked by Tamron Hall 8 or 9 consecutive questions (we lost track once or twice) about ... inflation.

The impact of the line of questioning gradually faded with each query. Suffice it to say Kaminsky was obligated to deliver an "Economics for beginners" session.

Steve Cortes, Peter Boockvar and Joe LaVorgna were probably sitting around somewhere watching it and going "WTF man."

But we've gotta give Hall credit — she tackled the subject with an eagerness not seen since Jerry Ford's "WIN" buttons.

Kaminsky handled each question as smoothly as Tom Brady scanning a blitz package on 3rd and 4, though the off-kilter tie was a bit noticeable.

Kaminsky at one point said "Some inflation is necessary ... too much inflation, those who remember the 1970s for example, is terrible." We always blame it on Carter, because even though it sort of ignited before his time, he still seems like the appropriate guy to pin it on.

[Friday, November 19, 2010]

Mark Schoenebaum prescribes
HGSI for your account’s health

Dr. Mark Schoenebaum visited the Fast Money set Friday and spokesoquicklyasusualit'salmostlikeheleftnospacebetweenthewords.

Schoenebaum said HGSI's lupus medicine (Benlysta) just got a 13-2 vote by an FDA panel. "Despite that, the stock is down. That makes absolutely no sense. I've never seen that happen in my 10-year career," he said.

But then Schoenebaum sort of explained why it does make sense, saying some people have fears about Benlysta's safety, which he thinks are overdone because there has been "no drug approved in 50 years for this disease."

"I think you can see that stock return 30% over the next, over the next, 1 to 6 months," he said, calling it "top of the heap in the whole biotech sector."

Movie of the week:
‘Marathon Man,’ overdone to the upside

Every week that goes by without another "movie of the week" reference on this page sticks mightily in the craw.

The truth is we've been trying to piece together an actual Fast Money can't-miss movie script, and until that gets done, filmdom thoughts feel far more like business than pleasure.

But on Friday's Fast Money, Mark Schoenebaum spoke about an experimental drug trial. And in the category of "Is it safe," Guy Adami referenced a movie right in his formidable-youth-years wheelhouse, "Marathon Man."

"I didn't go to the dentist for years afterwards," Adami revealed.

"Marathon Man" has mostly faded from consciousness. Nobody under 35 has seen it. What's significant is that it's in that strange category of being one of the worst movies that people actually think are good.

Runaway Nazis were a popular Hollywood topic in the late '40s and resurfaced in the '70s, when it occurred to people it might be fascinating if some were still secretly operating as senior citizens.

But lest you think the Tea Party is feisty now, no '70s film cliché was worse than suspicion of government. Good grief, if you started to rattle off the list, you'd never stop. "Capricorn One" ... "The Gauntlet" ... "The Parallax View" ... "The China Syndrome" ... "The Conversation" ... "The Eiger Sanction" ... "All the President's Men" ... "Magnum Force" ...

"Marathon Man" is famous for the line Adami quoted, plus the unique torture he referenced, plus the historic pairing of Olivier and Hoffman, whose efforts to stay awake all night in preparation for a scene of great fatigue famously prompted Sir Laurence to ask him if he'd ever heard of acting.

Aside from that, it's a ghastly mess of a film that almost feels like parody ... people pointing guns at each other "Pulp Fiction" style, an agitated woman running into the street and being hit by a car, an internationally wanted Nazi getting diamonds appraised in a Jewish neighborhood, a slugfest on a water pump stairwell ...

Adami probably moved on from "Marathon Man" to "Orca," and rightly considered it an upgrade.

Apparently no buyer’s remorse
for Steve Grasso

On a quiet Friday afternoon episode of Fast Money mostly characterized by the smokin'-hot Melissa Lee hair-dress encore, Steve Grasso revealed he's walkin' the walk as well as talkin' the talk.

Grasso announced on the 5 p.m. show that after touting HPQ at Halftime, he jumped in. "I bought it today, I bought 20% of what I want to buy," Grasso said. "I recommended it, so I have to have some skin in the game."

Stephen Weiss though isn't a fan. "If the stock popped, I'd be a seller going into earnings," Weiss said. "I'm staying away from Hewlett-Packard," he added, calling it a "show-me stock."

Analyst Bill Fearnley Jr. said he's actually confident in HPQ but not necessarily because of the ridiculous hiring of Léo Apotheker. "They do have a really good bench," Fearnley said.

Fearnley also explained why Dell's margins got so suddenly hot: "They are walking away from some business."

We've been trying to figure out what super-hot date Melissa must've been dressed to kill for, but quite honestly, have no clue.

If we get any details, we'll pass them on.

1,230 (or 1,270) is your key

Steve Grasso said on Friday's Fast Money that the next range breakout is the key to market direction, suggesting boundaries of 1,230 to 1,170. Except in closing, he said 1,270 and 1,130.

Guy Adami agreed that the next breakout is significant — he figures it'll be down but isn't sure — and doubts the market will stay flat for long.

Adami also trumpeted longtime favorite Walter Energy. "I'm telling you right now, the 6% of short interest out there is not happening, they haven't been happening for the last $40," he said.

Adami also said "You know, this QE2, I think it could be potentially disastrous," but given the way he said it, as an afterthought, it doesn't sound like he's particularly scared right now.

Smarter Than the Street reviewed

CNBCfix.com finally posts its review of Gary Kaminsky's Smarter Than the Street, and it's about time (we just learned Friday on The Strategy Session that Kaminsky has already done the "Today" show).

Readers of this page are likely aware of the book's themes through Kaminsky's comments on Fast Money and The Strategy Session. Smarter is a lively, quick read with relevant advice and relevant anecdotes. We give it the full 360 degrees right here.

Melissa Lee has hottest
hair day of 2010

The highlight of Friday's quiet Fast Money Halftime Report was undoubtedly the hair-dress ensemble Melissa Lee put together, even though Steve Grasso ended up in another little HPQ dispute, this time with Joe Terranova.

Grasso — who joked about "strong hands" — said he would buy HPQ at this point even as Terranova said there's too much noise about courthouse locations, etc., that would cause him to step back.

UBS analyst Henry Kirn said "Chinese demand for corn" is a potentially strong driver for John Deere.

UEC CEO Amir Adnani fairly predictably said the U.S. just isn't mining enough uranium. He said the commodity is about one-third its all-time high.

Jon Najarian said he'll have to wait for a pullback, maybe the low $120s, to get back into Salesforce.com. Melissa Lee congratulated Jim Cramer on his Salesforce interview. Najarian said Oregon football is helping Nike and he sees the stock in the triple digits in early 2011.

Liesman: ‘Low odds’ of Bernanke
stepping down

Gary Kaminsky posed a provocative question on Friday's Strategy Session: Would Ben Bernanke conclude all the Fed controversy isn't worth it, and just retire?

Steve Liesman told Kaminsky, "I learned long ago not to take any outlandish comment you make and rule it out completely. So I'm not gonna rule it out completely. I'd say the odds are very low."

Liesman said "some Fed observers" are wondering if the arrival of some new faces at the Fed suggests that, were a QE vote taken in January, would it actually be 7-4.

Gary Kaminsky noted GM peaked early Thursday, as he had suggested, and that by Monday he expects the company will start trading just on the fundamentals.

Tech M&A expert Michael Price told Strategy Session viewers "there's really a slowing of the growth in technology sales overall." He predicted tech multiples around 28 will gradually fall to 20 and those at 6 might jump to 8. He said Apple's acquisitions are likely to be "small." Herb Greenberg said people in the tech world are going to be desperate to push Q1 sales up into Q4.

[Thursday, Nov. 18, 2010]

Karen Finerman apparently received GM IPO shares

It wasn't a big surprise here, after Kate Kelly revealed this week on The Strategy Session that the government was making an effort to extend the GM IPO to women-run investment firms such as (of course) Mickie Siebert, to hear on Thursday's Fast Money that Karen Finerman's Metropolitan Capital apparently was also on the receiving end of the hottest IPO of 2010.

Finerman, who said "If you could buy it below 34, I think GM is a buy," later explained, "I do own some."

That could mean she merely bought it on the open market Thursday, but Melissa Lee was heard to say "allocation" after Finerman's comment, which strongly implies Metropolitan got the IPO deal of $33.

Ritholtz: Avoid market orders during IPO days

Barry Ritholtz visited the Fast Money set Thursday and delivered a provocative bailout comment.

"I wish we would've done to the banks what we did with GM," Ritholtz said.

We thought about that one for a while and decided the government basically did do to the banks what it did to GM.

Several CEOs were told to quit, some salaries were slashed, some divisions were ordered gone.

Without any more context, it's impossible to gauge the extent of Ritholtz's statement. Does he mean all TARP recipients, or just Lehman/Bear/Merrill/Citi ... would Goldman Sachs need the GM treatment ... regional banks?

Ritholtz said the GM IPO was a learning experience, "it absolutely is a lesson to tell you, don't do market orders in an IPO. If you look in the beginning of the day, it looked like people were just plowing in, blindly, that's not an intelligent way to buy anything."

And GM's future? "It really is gonna depend on what the Volt does," Ritholtz said.

Terranova to GM:
You’re in good hands

Joe Terranova, fresh off a bruising battle with Steve Grasso a day earlier on Fast Money, apparently wanted to continue his "strong hands" GM IPO thesis on Thursday.

"A lot of the weaker hands left today," Terranova asserted, prompting a shrug from Guy Adami, who cited Michael Steinhardt's earlier flip recommendation on The Strategy Session and said, "I don't know what strong and weak hands are today."

So Terranova later asked Anthony Scaramucci for his opinion of the "strong hands" issue. Scaramucci said he's pretty certain that in the hedge fund world, once they saw GM trading up $2.50 or even up $2.95 from the IPO, "a lot of guys sold that stock up there."

Karen Finerman owns it, and we'd have to consider K-Fine as "strong hands."

Scaramucci said he prefers Ford over GM. "Ford I just think has a much better management team," he said. As for General Motors, "There's gonna be a lot of froth and spinning in this stock in the near-term, it's just my personal opinion."

Dr. J quits while he’s
ahead on Harrah’s

After revealing on Thursday's Fast Money Halftime Report that he was trying to get in on the Harrah's/Caesars IPO, Jon Najarian further revealed on the 5 p.m. Fast Money that he canceled, because "quite frankly I got cold feet."

Najarian said Burlington Coat Factory had backed off its own pricing, and that GM has sucked the life out of the IPO market and he now thinks he wouldn't be able to flip Harrah's at the presumed price.

Karen Finerman and Melissa Lee openly questioned how Burlington Coat Factory could be caught off-guard by the GM IPO, knowing it's been coming for months.

Anthony Scaramucci said he doesn't like the Harrah's IPO, predicting funds will short the stock and go long the debt in a form of capital-structure arbitrage.

Didn’t happen with Harrah’s,
but Dr. J got a Brag Trade

Jon Najarian revealed a quick score on Thursday's Fast Money, in the name of First Solar. "Bought it today around 122, it got up over 126," Najarian reported.

Joe Terranova predicted a "sideways market for the remainder of the year."

David Riedel said he likes Argentina's Banco Macro (BMA).

Barry Ritholtz said rising rates are often good for stocks if demand for capital is going up. But he said that's not necessarily the case with QE2.

Najarian wants in
on Harrah’s IPO

Viewers who had heard mixed reviews this week on The Strategy Session about the presumed Harrah's IPO might've been surprised to hear Jon Najarian say "I'm trying to get into it" on Thursday's Fast Money Halftime Report.

Dr. J also said, unlike Steve Grasso and Guy Adami, that he thinks the market experienced a "sentiment change" on Thursday and is now poised to resume an upward march.

Patty Edwards explained at Halftime why she (unlike Ron Kruszewski) isn't unhappy about being GM-less in her portfolio.. "I will buy GM the first time that someone on the street stops me and tells me how much they're looking forward to buying a GM car," Edwards said.

Guest Tom Villalta said he prefers F to GM and would have to see a "little more momentum" and more of a "track record" before jupming into GM. Also, "We're not as keen on the parts makers," Villalta said.

2 ‘Strong buy,’
4 ‘Buy,’ per Yahoo finance

On a quiet Strategy Session Thursday, Gary Kaminsky and David Faber reflected on the ratings for KKR.

"It's not surprising that there's so many buy recommendations. I would find it interesting if a sell-side analyst actually came out with a sell," said Kaminsky, who said he'd like to "meet with that analyst if that happened."

"Probably be a firm with no capital markets business and no M&A," said Faber.

Kaminsky said that in the aftermath of the GM deal, "you would hope that this could open the doors to maybe other potential IPOs." However, it seems like a "single-stock situation."

Guest Fred Lane said the government and underwriters pulled off a "textbook case" of IPO pricing with General Motors. Another guest, Daniel Simkowitz, couldn't give Kate Kelly the number she thought she'd hear (that would be 5 or 6) but said, "at the end of the day it was multiple times oversubscribed."

David Faber reported that there's a "50/50 chance" the Harrah's offering would be pulled, because "simply not that much demand."

Muni expert Peter Hayes of BlackRock said of present markets, "we view this as a buying opportunity."

David Faber curiously began the program rattling off the expected new chain of command in the Comcast-owned NBC Universal. Faber said there's no change at the top of CNBC, that "Mark Hoffman will report to Steve Burke."

[Wednesday, Nov. 17, 2010]

Tom Marsico, next time Kate Kelly calls, answer the phone

Kate Kelly, who Melissa Lee said at the beginning of Wednesday's Fast Money "has owned this story from the beginning," spoke early on the program about an apparent big-name money manager backing out of GM.

"Tom Marsico owns a number of big names," Kelly said, but "apparently Marsico had no stomach for this at $33 per share either. And he was looking to get about a $500 million stock allocation, but essentially dropped out of it when the price hovered close to where it ended up today. ... I also put in a call to Marsico. No comment ... it tells us how institutions got to feeling that this was too dear at a certain level."

Fast-forward to the last 10 minutes of the program, when Kelly issued a correction about her report of Marsico backing out. "Tom Marsico denies that that is the case, and he and other sources now tell me that he is involved in the final price of $33 per share involved in the deal," Kelly said.

"Here is his statement: We are involved in the GM deal. We have a large order in. I regret the error."

(Small editing gag there on our part — we wrote the above sentence as Kelly spoke it, which almost sounded like Marsico is blaming himself for the error, which he presumably isn't.)

Steve Grasso, pointed out, not particularly helpfully for the show's authority, "That's a huge thing that Kate Kelly just corrected with an institutional buyer such as Marsico, 'cause that's what we started off the show saying, that maybe these value guys think that the stock is overpriced at that level. That's a huge deal in making up to (sic) the retail investor's mind."

Jon Najarian does an end-around on his own GM analysis

The General Motors IPO was the talk of Wednesday's Fast Money, and danged if Jon Najarian didn't slickly end up taking both sides of the trade — in the span of 1 paragraph.

"Anybody who gets into it should flip it pretty darn quickly, obviously," Najarian said, explaining that Gary Kaminsky thinks it will peak on the open. But "I think actually it hovers there for a considerable period of time," Najarian continued, and will get squeeze support. "So I think it goes higher in the next week."

So people who get in on the IPO should flip it "obviously," but on the other hand, it's going higher in the next week.

Later he said he told car dealers to put "as much money as you've got" into the IPO because it's a "guaranteed pop" and anybody capable of putting "all their assets under management" in the IPO would do so.

Steve Grasso conducts debates
with anyone supporting GM

The Fast Money star we found ourselves most agreeing with Wednesday was Steve Grasso, who spent much of the program trying to pound the bullishness out of anyone who thinks GM is a revitalized company.

Grasso's first target was Phil LeBeau, who gushed that "we are at the beginning of an auto cycle" featuring huge "pent-up demand" in North America.

LeBeau said that based on what GM execs are saying, the company was posting -$1,191 profit (that's correct, negative number) per car in North America in 2007 vs. $3,005 profit in 2010. What got Grasso's attention though was LeBeau describing GM as having a "finite" handle on labor peace and health care and pension costs.

Grasso scoffed, "The show is called Fast Money, but we don't want finite returns as well."

Steve Grasso tries to take
Joe Terranova to Trade School

Halfway through Wednesday's Fast Money it was Joe Terranova who got under Steve Grasso's skin, claiming "the simple fact, the honest answer" is that the underwriters don't want so many retail investors involved in the GM IPO because the goal is to "put it in the strongest hands possible."

"But that's insulting to say to the retail investor," Grasso said.

"Absolutely it's insulting, but at the end of the day they care about the appreciation of the stock price," Terranova said, rather heatedly.

"You ever see the way hedge funds flip around these new issues? I mean, how can you say that a hedge fund is gonna be putting it into more solid hands than a retail investor," Grasso said.

Continuing before Terranova could enunciate a good comeback, Grasso said, "You're talking about institutions. Straight vanilla institutions. There's a big difference between a hedge fund and the way a mutual fund- a hedge fund is paid to lock in those quick, that's why people want their money with a hedge fund, because they can be nimble, they can be quick, vs. being a pension fund, or a mutual fund."

"OK," Terranova said.

Actually, it's not clear exactly what "strong hands" Terranova was talking about and whether that amounts to "straight vanilla institutions." All he said was organizers want the shares in "less retail" hands.

Terranova went on to claim retail investors would flip the shares faster than whatever "institutions" he's talking about, dubiously citing as evidence Jon Najarian's earlier theory that actually suggested people will/should and won't/shouldn't flip.

That prompted a question from Karen Finerman, who said it'd be great to know whether it's possible to tell whether a typical TD Ameritrade account holder is a likely or unlikely share flipper, which got Jon Najarian coining or introducing a bizarre term, "pyramid of speed."

Sigh ... we'd like to agree with Terranova on this one, because it's a provocative point.

But thinking about it from a few angles, it just doesn't make any sense.

The obvious truth is that underwriters are going to funnel the shares to people who can help them, not angry taxpayers with $9,000 Schwab accounts who think the government owes them one.

The notion that it's really going to institutions because of fears flippers will sink the price is just silly.

But let's say for a moment that it is true — the government would have far more to be concerned about when a hedge fund unloads 500,000 shares, vs. a small investor selling 500.

So, Grasso is right. By the way, if you're connected to General Motors in any way, be assured Grasso is pulling for you.

"I truly hope they survive, but I'm skeptical," he said.

Terranova: No lower than $26

Skeptics and flippers aside, some people on Wednesday's Fast Money actually think GM is a promising growth story.

Karen Finerman, who turned heads with a sleeveless, summer-like purple dress, said that after the GM IPO hike to $33, "it's actually more expensive than Ford now on a price-to-earnings basis." But she said the global automotive industry looks like it might be "near the bottom of a pretty big cycle," which would be an immense opportunity for investors.

"I still think it's relatively cheap," Joe Terranova said of the IPO price.

And he doesn't see a crash. "I can't see the stock going below 26 bucks," Terranova said.

Tim Seymour called in on the Fast Line and reported an "absurd amount of interest" among hedge funds for this offering.

Kate Kelly said the congratulations have begun early for GM road show personnel, "apparently they got a standing ovation when they arrived at Morgan Stanley today."

Melissa Lee had us thinking we could suggest she wear Wednesday's charcoal heather long-sleeve dress while potentially serving as hostess for the CNBCfix.com Holiday Party (unless tiny/cute combo Nicole Lapin accepts the offer first, which is not considered likely). Lee told everyone at the top of Wednesday's broadcast, "Tonight you are witnessing history in the making."

CEO demands GM shares for $33 but can’t say if his firm recommends stock

You have to wonder who in the PR Dept. at Stifel Nicolaus told CEO Ron Kruszewski it would be a good idea Wednesday to whine on national TV.

Kruszewski visited the Fast Money set to purportedly take up the subject of taxpayers possibly getting "hosed" in the GM IPO allocation.

Except he doesn't really think it's the taxpayers getting hosed, but his firm.

"What this is about is fairness to the investors," Kruszewski said, a "fundamental issue of fairness about who had access to this ... this is a great success. Congratulations. I'm talking about the fundamental fairness."

Then he revealed that when Stifel sought to order some IPO shares — not through the Treasury Department but some other murky entity — he was told no. And so were Raymond James, Janney Montgomery, Davidson.

"I don't wanna stand and sound sour grapes, it wasn't like a huge financial situation for us," Kruszewski said. "I am talking about protecting our investors who had a right to have access."

So it's about "protecting" people ... who are facing the risk of not getting stock shares below expected free market price.

Gary Kaminsky, on the Fast Line, said the "spin" Thursday will be that 20% of the IPO went to "retail."

But even Kaminsky conceded it's unclear exactly what "retail" means, and whether extending shares to Fidelity mutual funds constitutes a "retail" allocation.

"The fact of the matter is Ron's got a right to be upset," Kaminsky said. "How they define retail is really what's gonna be the buzz point," he added. He doesn't think the intent of the organizers was to define Fidelity as "retail" for example. "I don't believe that's what they meant."

Kruszewski hung around in the studio for about 8 minutes, and unfortunately the longer he stayed, the worse it got.

Brian Kelly asked Kruszewski a great question: Is his firm recommending that people buy shares on Thursday's opening?

"I think you're missing the point," Kruszewski said, even though the question was exactly on-point. Kruszewski repeated that it doesn't matter whether his firm is recommending the stock, only that it was shut out of the offer, which shouldn't happen because GM is owned by "taxpayers," even though he made no argument whatsoever as to how his company would better help taxpayers than those such as Marsico.

The taxpayer should really only care about how much the government gets for these shares, not who's buying them, shouldn't he?

But then Kruszewski actually said "Any individual can go to the Treasury and put a bid on U.S. Treasurys." Sure ... because there's a fresh new batch offered every week.

Finally he retuned again to that sticky recommendation question, saying his firm doesn't need to recommend GM because people will want such an "icon" of American business. (An icon so awesome, it crumbled into embarrassing bankruptcy just a couple years ago even after several lifelines.)

Here's a question for Kruszewski ... the U.S. Army is run by the taxpayers too. Does that mean the Army is obligated to purchase weaponry, uniforms, supplies, vehicles, aircraft and technology from absolutely every company that wants to sell it something?

Of course not. Governments are created to make those kinds of decisions.

As far as we know, Stifel probably did get screwed. Kruszewski's beef is an internecine financial contracting dispute. He should call his congressman and/or vote the bums out. How Marsico got it and Stifel didn't, we have no clue; maybe Marsico owned a bunch of the old stock down to $0 (if true — and we have no idea if that criteria even matters — that might partly explain why there were buyers for GM stock below $1 in the crisis of 2008) or had a bunch of GM bonds. What's disingenuous is suggesting it's the "taxpayers" who are getting screwed without taking the necessary position for making that point that the IPO is priced too low ... and his implication, backed up with zero evidence, that "taxpayer" investors are being denied shares through other firms that they wouldn't be denied through his firm.

In fact, Kruszewski praised the deal for taxpayers, saying "congratulations" and "success" several times in describing the offering.

Gary Kaminsky said the bottom line is, where will these shares open Thursday. He said according to an eWallStreeter survey, 12% predict under $33, 9% say flat, 15% say $34, 12% say $35 and 51% say $36 and up. (In case you're proofreading, that does add up to 99%, the residue presumably rounding.)

Oh yeah ... some huge
observations about CSCO

Basically an afterthought on Wednesday's Fast Money, Jon Fortt mentioned a couple potentially alarming things about Cisco's outlook.

Fortt showed clips of an interview with VMWare CEO Paul Maritz and said Maritz is "not seeing that public sector weakness" that John Chambers claims. Fortt said the president of Microsoft's business division also isn't seeing that weakness.

Brian Kelly handled the smart Twitterer question of the day, which was how best to trade oil without using the USO.

Kelly said he'd opt for the OIH and XLE, which aren't perfectly pure plays but close. Joe Terranova called the USO a "wasted tool" and said Hess is closely correlated with spot oil price.

Kelly said despite the QE2 selloff (after the spike), "nothing has changed at all since last week." Pointing to heightened soybean shipments to Europe and China, Kelly recommends DSX and BALT, a new tool on the Baltic Dry Index.

Kelly also called LTD "Grasso's favorite stock."

Steve Cortes thinks seemingly everything is going down

Todd Gordon, who had accurately predicted on Twitter he'd be returning to Fast Money on Nov. 17, said on Wednesday's Halftime Report that right now "the focus is on China."

Steve Cortes readily agreed, seeing parallels with spring Chinese activity and saying "The market trades miserably there."

Cortes called the recent commodities surge a "speculative bubble to the upside" that is stalling and said it's got all indication of a "lasting top" in commodities.

Rich Ilczyszyn basically said Cortes is nuts, that the notion this is the end of the emerging markets trade is ridiculous and that the uptrends continue to hold despite the last week and a half.

Cortes said "I am short the Nasdaq" and would add to it if AAPL breaks $300. He also said he's skeptical of UNP and not short yet, but could be.

Patty Edwards said GM is "not my cup of tea" and said she's not excited about GM being added to indexes within 6 months. "That's not a reason to buy a company in my opinion," Edwards said.

PG&E CEO Peter Darby was inadvertently cut off by a broken network feed, but to be honest, his interview over San Bruno pipeline liability and defense of accounting for the reserve wasn't terribly interesting anyway. Patty Edwards said there are better companies for getting dividend yield.

Melissa Lee had a glam look going with appealing charcoal heather dress.

Kaminsky’s best guess: $36.50

Wednesday's Strategy Session was refreshingly light on GM, though Kate Kelly did deliver a necessary pricing update and Gary Kaminsky delivered a few predictions as well as a scoop about allocation.

"There is an attempt to try to distribute the retail shares to cash accounts as opposed to margin accounts," Kaminsky said, based on the theory that cash accounts will hold the shares longer.

That's a fine idea actually but makes us really want to go off on the government's odd fascination with stock holding periods, as though there's somehow something noble about owning shares of something for 1 year as opposed to 9 months ... but we just don't have time for that right now.

Thursday's opening GM price estimate? "My guess is $36.50," Kaminsky said.

Kate Kelly said $33 appears to be the likely IPO price, though it was still subject to change. Kelly also said, "We hear that GM is seriously considering a debt offering to take place after this IPO is sewn up." Kaminsky said GM can't be blamed for tapping the debt market while there's a lot of excitement about the company, though it's curious that they'll be trying to sell bonds to a lot of the same people who held the old bonds, some of whom ended up in a snit with the government over how much they should've been paid on those bonds heading into bankruptcy.

Kaminsky said investors shouldn't expect to learn at 4:05 p.m. about their share allotments, and in fact, "You may not even find out until tomorrow if you actually were allocated shares in the transaction."

Gary Kaminsky and David Faber revealed what numbers are on those background screens in The Strategy Session decor. "For those that wanted to know, what's been running behind us, time and sales, since June 7th: Ford Motor Company. We've seen every single tick of Ford Motor Company since June 7th," Kaminsky said.

Elsewhere on CNBC Wednesday, Phil LeBeau delivered a brief segment on the subject this page floated yesterday: Why should anyone think today's GM is different than the sorry enterprise that crumbled into bankruptcy. LeBeau's chief (and basically only) argument was that the hourly cost per worker is down from the $70s to the $50s. Maybe the Google guys should take notice, instead of 10% up across the board, start slashing.

U.S. sticks it to California

California state Treasurer Bill Lockyer said on Wednesday's TSS he doubts Congress will renew the Build America Bonds program.

"My best prediction is that it's not gonna be extended," Lockyer told Gary Kaminsky. "I think that it could and should be."

The reason he believes that, Lockyer said, is "Views expressed by Republican leaders have been critical of the BABs program, largely because of potential impact on federal deficit."

But, Lockyer grumbled, "We are a net donor, we send more money to Washington, D.C., in taxes than we get back." He said if BABs isn't renewed, his state will "go back to reliance on tax-exempts."

The Harrah's re-emergence (as "Caesars") got a brief mention on TSS Wednesday — and it doesn't sound like that enticing of an investment.

Analyst Joe Stauff said "The book looks weak," but it's in the interest of the company and private equity holders "for them to get this out, really at any price."

Gary Kaminsky said it's not a scientific thing, but he warned viewers to "Be wary, always, when a company comes public and they change their name."

We'll call the Melissa Francis (red)/Trish Regan (blue) sexy-outfit battle Wednesday a tie.

[Tuesday, November 16, 2010]

Bankruptcy can be invigorating

CNBC's Phil LeBeau on Tuesday's Fast Money basically told the small investor to forget about getting a government discount on GM.

"They're not completely shut out, there are some retail investors who are getting some of this," LeBeau said. But, "Is it the mom and pop, is it the guy who has $10,000 in the TD Ameritrade account? Probably not."

LeBeau said the GM IPO is attracting "huge demand from the institutional investors," and will potentially raise $22.4 billion, the largest IPO ever.

Kate Kelly reported during the program that there's still a possibility the price could edge past $33, and "spirits seem to be good right now."

Karen Finerman said the creeping price shows that the company and underwriters "must be very, very confident."

Pete Najarian though, citing Mike Steinhardt on The Strategy Session, predicted "this is gonna be a flipper's dream," and "I think you will see some heavy heavy pressure if this stock is up over 20%," he said.

Tim Seymour countered that the stock will have resiliency, because people aren't able to get enough of the allocation and thus will support the stock.

Something that's amusing is that people are calling this GM share offering an "IPO." This is as much of an "initial" offering as "Pirates of the Caribbean 4" is an original movie.

This "IPO" is little more than recycled ownership of a tired, fading battleground-state HMO whose hopes basically hinge on excessive government bailout kindness and exploiting the Chinese market before all the other biggies get there (which they might actually do, because, um, Japanese things aren't exactly a big hit there).

Where are the new products, the "wow" factor that might get regular joes talking enthusiastically about the company? According to the latest big J.D. Power survey we could find, from June, there's absolutely nothing special here, they're not building better cars than Ford, Honda or Hyundai. We do wish GM and the good people who work there good luck. GM should enjoy the same prestige as Caterpillar or John Deere or Boeing. It doesn't. Not even close. It's been a colossal embarrassment of American industry. It really should be a "show-me" stock. Whatever they've been serving on that road show, we need to get some.

Guy Adami has chance to gloat, graciously declines

One notion that must be true is that if so many people are apparently hell-bent on purchasing shares of General Motors, this market can't be all bad.

Guy Adami, who predicted double-tops everywhere on Friday, could've taken the opportunity to gloat a little bit on Tuesday's Fast Money, at least for a day.

Instead, Adami pointed to the interest in GM and the market bouncing off the "Steve Grasso" level of 1,172 and suggested "maybe, maybe we've put in a short-term bottom."

Adami also said "I like Ford; I think it's ahead of itself."

What’s worse: QE2,
or European sovereign debt?

Marc Chandler, a currency expert at Brown Brothers Harriman, told the Fast Money gang Tuesday "I think that the crisis in Europe is still beginning" and predicted Portugal will next face a debt assault.

Tim Seymour questioned why anyone would have faith in the euro right now, but Chandler batted that down by suggesting people see the euro as a hedge against QE2.

Then Chandler pulled out a rather obscure element of the tax conversation, "the end of the make-work-pay tax ... what's gonna feel like a tax hike in early January."

He said as far as Europe goes, "it's not a liquidty crisis anymore, it's solvency."

Seymour was a bit more specific. "It's the European banks that I think have the big problem," Seymour said.

Guy Adami said gold might not be highly correlated with the dollar, but "it can become a dollar story very quickly," in case you're thinking about going long.

Scaramucci: Rich will get richer,
or at least act like it

Anthony Scaramucci said on Tuesday's Fast Money that hedge fund folks "are very fearful about the $600 billion injection."

He also said contrary to what some people think, most hedgies don't just lock in profits and go away, they're too confident in their abilities to make money.

Scaramucci said the Hedge Fund Trade of the Week is Coach, and he didn't mean the guy who was Sam's bartender. "QE2 plus a tax-cut extension is going to equal we think a lot of demand for luxury goods," Scaramucci said, saying it boasts "very high margins" and is a "Fed thesis" play.

Adami: AAPL could see $285

The Fast Money traders had a little go-round Tuesday on AAPL, though hardly any new ground was broken.

Guy Adami said the stock seems to have encountered pressure since Steve Jobs' comments on the last earnings report, and Adami "can easily see it down to 285" and that aggressive shorts might want to give it a shot to that level. Tim Seymour cautioned that "they do need to grow internationally" in order to sustain the years-long growth of the stock.

Pete Najarian though said "this is a pretty cheap stock," and that people might best play it around the averages, the "100-day is right around 275."

Simon Baker said "For us, Apple's a core position" and he'd be interested in buying on any pullback.

Tim Seymour struggles to convince himself owning CSCO was a good idea

Karen Finerman wore pretty carolina blue sweater on Tuesday's Fast Money, but otherwise did little more than express wonderment at the various machinations of the stock market.

Finerman singled out copper, which has moved "32 cents in 5 sessions," which she said used to be a year's worth of a move.

"We are long some volatility," she said.

Guy Adami said commodities have made a notable reversal since the Silver Wheaton day of last week, and "I think you're in sort of the first couple innings of this selloff," suggesting FCX in particular has more room on the downside.

Tim Seymour said the overnight worries about China involved concerns the government might use "blunt instruments" to manage its economy. What, they can't just order everyone to Macau?

Seymour gave a too-long explanation about holding CSCO. "As a long-term investor this is a company that I actually buy," is how he finally wrapped it up.

Pete’s impressed by caliber of
Fast Money Twitter followers

Simon Baker, who brings some enthusiasm (with an accent) to Fast Money, spent some time in front of the giant new charts Tuesday and recommended 2 stocks, ANN and PETM.

"We've got a price target of 30" on ANN, he said, "or 30% higher from here." He called PetSmart a "pure play" for animal lovers and gives it a price target of $45.

Pete Najarian talked about potential takeover targets in the cloud computing and other tech spaces and whether the options market seems to believe in them. Najarian said "I scratch my head" at perceived takeover premiums in FFIV, because the stock has run up to such valuation he can't see anyone paying that much just to slither into the cloud space.

It was also Pete's turn Tuesday to promote twitter.com/cnbcfastmoney, which is probably a fine idea, but does the world really need any more Twittering? Pete hailed one tweeter who asked a question about waiting to get into a stock, "that's what really caught my eye, when he talked about discipline."

Great. Knock yourself out.

Guy Adami told viwers to check it out, while Karen Finerman shouted to Adami, "You don't know what it is."

Scott Wapner’s brushback pitch to a Fast Money trader

Zachary Karabell wasn't on Tuesday's Fast Money Halftime Report but he did make an appearance on Scott Wapner's Fast Money Final Call, and while the Zekemeister probably figured he'd be getting some TV punditry batting practice, Wapner actually came at him like Sandy Koufax in the '63 Series.

Wapner laid into Karabell's notes, which basically suggested investors are getting used to sovereign debt credit issues (they are) in the developed world. Wapner pointed to the scoreboard like Deion Sanders in Super Bowl XXIX and asked Karabell how that squares with Dow down 200.

Karabell said the Ireland-tainted selloff seems like a "small replay of what went on in May ... I think this really is a debt market event."

But on the plus side, "There's no real indication of China meaningfully slowing."

Karabell said all the money to be made Tuesday was being short in the morning but that bulls haven't gotten the all-clear just yet. "While I wouldn't plunge in 100% today, I'm looking to get more long," he said.

We've gotta agree. Tuesday's drop is basically over nothing. Long-term shorts are fighting a voracious Fed that's basically been engineering a bull market for 18 months. As always, you can and should do any trade you want; just make sure you've got an exit strategy.

We think he’s referring
to Newmont’s Richard O’Brien

Jon Najarian on Tuesday's Halftime Report pointed to volatility in the junior gold miner sector.

"Makes me think a lot of those cocky mining CEOs that have been on the program talking about how they don't have any hedges are wishing they had some today," Najarian said.

Emily French starts commenting before she is even asked a question

Melissa Lee had barely told Consiliagra commodity expert Emily French it was great to have her on Tuesday's Fast Money Halftime Report before French launched into a thesis on the reasons for the "absolute guttural move in the commodity space."

"3 primary threats that we're looking at is first and foremost China ... pointing again to inflationary concerns," French said. "Secondly ... the U.S. dollar ... we're watching that 79.56 level ... the third threat is the technical makeup of the market."

Lee even had to fight through French's closing remarks to get her to pause long enough to hear a question from Brian Kelly about China. French said Chinese inflation is something to keep an eye on.

Troubled debtor nations might somehow get the notion a rescue package will always be available

Brian Kelly made a comment in total seriousness on Tuesday's Fast Money Halftime Report that might've made some viewers chuckle out loud.

Kelly was speaking about Austria's obstacle to Greece aid and noted it's a problem if they don't get the money, then he actually said, "If they do get the money, then of course you run the risk of some kind of a moral hazard."

"Moral hazard" ... wasn't that conquered a couple years ago?

And now we're talking about European governments standing up for moral hazard?

Patty Edwards revealed, "I would be scared to be long the euro at this point." Jon Najarian couldn't resist bringing up all the names from spring that stock markets already dealt with and eventually waded through, "Portugal, Spain ... all that witches brew mixed up," Najarian said.

Terranova bails on year-end

Joe Terranova turned on the stock market Tuesday about as quickly as Yankee fans flipped on the Bronx Bombers in Game 4 of the ALCS.

"I think the best of this year's gains may be behind us," Terranova said on the Fast Money Halftime Report.

Brian Kelly though was a voice of reason, questioning Melissa Lee's goofy premise that the market somehow appears that it will trade flat or down for the rest of the year. "I'm not sure it stays down that long, this far for that long," Kelly said.

Analyst Harsh Kumar explained why he likes a certain company based on a curious Chinese broken-stoplight play. "Cree has now started to see a pickup in activity, pickup in market share," Kumar said.

Patty Edwards refreshingly admitted not pulling the trigger quickly enough on Cisco as soon as the bad news broke last week. "The first sale is always the best sale," Edwards said. "So I decided not to sell my Cisco into the panic last week. Bad move on my part."

Melissa Lee wore her cute pinstriped vest Tuesday and always wears oversized hoop earrings with it. But Tuesday, instead of traditional white blouse, she complimented it with iceberg blue.

Your move, Steve Eisman

The for-profit education sector is a very polarizing subject in investing and government circles recently; Herb Greenberg is basically making a second career out of it on CNBC.

One of the risks of shorting this sector, which includes a lot of crummy businesses, is the emotional appeals you know these companies are going to make to soft-hearted legislators about how struggling people are going to be denied an education if tighter (i.e., reasonable) standards for academic grants are adopted.

Sure enough, on Tuesday we started noticing some kind of for-profit education lobbying commercial in which a guy speaks of learning a new computer trade and landing a job but bemoans how regulators are clamping down on the type of education he received. The result, the man says in the ad, is "letting government decide who can go to college."

Steinhardt thinks government is actually out of bullets

Investing legend Michael Steinhardt spent quality time on Tuesday's Strategy Session, and, as with Jason Ader's compelling gambling discussion last week, we should probably just post a complete transcript.

But then that wouldn't allow us to highlight the fact Steinhardt said Barack Obama has "shot his wad."

Steinhardt carped about the Fed and said if everybody else wasn't doing the same thing on CNBC for a week, "I wouldve been ranting and raving" about Ben Bernanke.

"Where we really have a problem is not commodity prices, it's employment. And it's wages, and what he's doing is not gonna help that at all," Steinhardt said.

"What about governments? They haven't slashed anything, they are bloated," he continued, apparently surprised that this is how it works and basically governments solve problems in this half-century by producing debt.

"The president shot his wad as it were with the stimulus, so what are they gonna do, where's the money gonna come from. It's not gonna come from Congress. I think you can just raise taxes so much," he said.

"I would certainly be short the debt markets," he said.

Steinhardt seems astounded
by 2-year yields

Michael Steinhardt wasted little time Tuesday in launching into his favorite trade of the moment.

"I've been short the 2-year Treasury because even with this heroic increase in interest rates," Steinhardt said, "inflation is 2%. The economy next year consensus is going to grow, consensus, 2 and a half percent. So when's the last time you remember a 2-year Treasury yielding half of 1% when the economy grows-"

"I don't know, you tell me," David Faber said.

"I don't remember a 2-year Treasury yielding half of 1% in my lifetime," Steinhardt said.

Fair enough. We'll just say we've been hearing that same argument on CNBC throughout 2010, and so far it hasn't really paid jack.

Rare on-air guest criticism of TV programming decisions

Michael Steinhardt on Tuesday refreshingly swatted down any talk about Ireland, even though a few moments of his appearance had to be interrupted by an entirely useless European news report from Simon Hobbs.

"What's happening in Ireland I think is more interest to the broadcasters than it is to investors," Steinhardt told David Faber.

"I'd say that 90-plus percent of your viewers don't care what's happening in the Irish parliament. But they do care what's happening in all sorts of domestic markets," Steinhardt said.

Steinhardt described Tuesday's selloff as, "What's happened here is you've bought the rumor and now you're selling the news."

Mandatory convertible:
GM’s next hot vehicle?

Strategy Session host David Faber apparently was thrown a curveball by a producer's glitch when he saw guest Larry McDonald show up at the table Tuesday.

"Larry, I had no idea you were actually gonna be here in the studio with us," Faber said.

"He just snuck in," joked Gary Kaminsky.

McDonald said pricing for a GM mandatory convertible has jumped from $3 billion to $4 billion, a "sign of very strong demand" in GM securities.

McDonald said the healthy interest in GM "could accelerate the Delphi IPO."

David Faber asked Michael Steinhardt, if he were to receive GM IPO shares, when he'd unload them. "As quickly as I can. I don't think one should be a long-term holder in government securities," Steinhardt said.

Kaminsky: Stocks might not like this particular rise in rates

David Faber and Gary Kaminsky briefly tackled on Tuesday's Strategy Session why stocks would be plunging with a widening yield curve.

A rising rate environment is "not bad for stocks. Usually good for stocks," Faber pointed out.

Gary Kaminsky agreed. "60some-odd percent of the time, equities do better when bond- when interest rates are going up," Kaminsky said. "But the difference here is that interest rates aren't going up because the underlying economy is improving dramatically."

Later in the program, Philippe Dauman, Viacom CEO, said advertising is on the rebound, and a nice healthy buyback is in the works.

[Monday, November 15, 2010]

Guy Adami’s bull-market
rationalization of the day

The first thing we wanted to hear on Monday's Fast Money was not the increasingly tiresome GM IPO story, but Guy Adami's reaction to the virtually flat market after he warned Friday of double-tops everywhere and made the startling prediction that "Monday could be extraordinarily interesting."

It actually took about 12 minutes before Melissa Lee, in hot black top, cut to the chase with The Negotiator.

"If you're bullish today, you have to be a little disappointed," Adami claimed. "You had every reason for it to go higher ... HUGE headline this morning ... you had your merger Monday, you had ... Mutual Fund Monday, and all those things lining up, after a big selloff last week, and we closed basically around the lows. So to me, not all that encouraging going forward."

Really. You don't say.

Adami is basically caught in a logic chase-for-performance, reasoning for a very long time that the market should not be rising as much as it has, and therefore it must actually rise basically every day or else the major reversal is at hand.

It's kind of like predicting the Chicago Bears would go 1-15, but seeing them now with 6 wins and declaring them a disaster if they don't go 13-3.

During a later discussion, Adami managed to backhandedly squeeze a point by Joe Terranova on bond selling into his dubious stocks premise (note the stressing of the words "I guess").

"The unwind of the Treasurys is great — I guess — if it finds its way to the equity market. If it doesn't though- it didn't find its way to the equity market today apparently and if it doesn't then you have to wonder, what is the next bullish catalyst for the equity market?" Adami said.

InBev likely doesn’t
want to touch fertilizer

Guy Adami, bearish as he may be, offered a hot tip to those interested in a potential M&A play on the banks.

"I think Regions Financial ... lot of people are talking about them as a possible acquisition target, and US Bancorp might be the acquirer," Adami said, saying execs of both companies will be a conference together.

In something of an understatement, Tim Seymour said not to expect outside bidders for POT, predicting eventually, "actually this is gonna be a Canadian-only deal, I think this is gonna be Agrium and Potash."

Dan Niles wants more than just CSCO’s head on a platter

Dan Niles, who hasn't exactly been a big cheerleader for tech in recent months, apparently thinks Cisco's problems are more than just Cisco's problems despite people labeling the latest quarterly outlook as company-specific.

"I think it's really hard to ignore the 800-pound gorilla in the room," Niles said.

Guy Adami — no surprise whatsoever — agreed with that, but impressively took the other side for the sake of discussion and asked Niles how he reconciles that view with Juniper's resiliency.

Niles mumbled that Juniper also missed but managed to convince people it's a cloud play so it hasn't been punished.

Shares bought and sold!

The GM IPO is turning into the most overhyped event on business television since about, oh, the elections of 2 weeks ago.

The most exciting analysis heard on Monday's Fast Money was Melissa Lee's vocabularly choice when referring to the earlier projected $26-$29 price range, "If I were a taxpayer, I'd be pissed."

Ugh.

Lee opened the program saying "Kate Kelly is on the story" and the camera caught Kate apparently unaware it was 5 p.m. in that little newsroom where radiant Mary Thompson generally breaks reports about whale-watching and bad guys.

"Kate are you there?" Lee asked in vain as Kelly muttered something along the lines of "I know" to someone in her studio who was apparently talking her ear off. "Well she's obviously there," joked Guy Adami, one of his better lines recently actually.

The GM story got more interesting when Gary Kaminsky, on the Fast Line, expanded his recent point about GM not making the indexes for 6 months by predicting some instant flipping.

"It will not be in the S&P 500 for probably 6 months," he said, and "ironically many of the funds that get it may flip it and short it the same day."

Kaminsky said Ford is the trade to watch and indicated it could provide a pairs trade in such a scenario.

Won't the taxpayers be happy to know the government intentionally underpriced the GM IPO to the point Wall Streeters could quickly flip it for a fast buck.

Hold on, hold on ... if word of this gets out, the SEC might enact an autumn-2008-esque short-selling ban — on just 1 stock, GM.

Kaminsky said even though the IPO price is climbing, subscribers will still get a nice pop because it hasn't yet been raised too high. He said retail allocations will be "extremely limited."

"I would be scared to be shorting GM on the first day," said Tim Seymour, who said he thinks "retail should be getting this deal." Guy Adami said that given the volume in F, "it feels like the buyers finally capitulated."

Kate Kelly said despite the IPO price hike, traders are "relatively upbeat" about GM shares.

Joe Terranova said, "obviously that road show was a phenomenal success."

Who was better:
Lennon or McCartney?

A little breaking news about Apple and The Beatles (that would be Apple Inc., not the Beatles' old record label) on Monday's Fast Money gives this page a chance to present a great question making the rounds of the CNBCfix community recently.

Were John & Paul equals, or was one of them superior?

A lot of folks won't like this answer, but the truth is, Paul was a better musician.

Lennon was cooler, no question.

Lennon had a better voice.

Lennon had an edge, an interest in rebellion.

What they had together was the equivalent of Shakespeare in a pair — likely the world's greatest example of a healthy competition.

Each respected the other and wanted him to succeed ... and also wanted to outdo him.

History offers discouragingly few examples of extraordinary long-long pairs trades. The Kennedy brothers perhaps, Jack and Joseph Jr., except that one went too far. The prospect of wartime bragging rights at Hyannis Port might very well have pushed Joe to accept his tragically risky assignment in Europe and put Jack, who was not healthy enough for the military, on PT-109, where he nearly died, though without his older brother, one can wonder whether Jack ever would've been competitive enough to run for president. (Whether George and Jeb meet this strict criteria depends on how seriously you take Oliver Stone's "W.") Ruth and Gehrig perhaps, but the Babe had been a megastar for years before Gehrig arrived. Maris and Mantle yes, but only for 1 or 2 seasons.

If for some unfortunate reason Lennon-McCartney had gone their separate ways in the 1950s, you'd turn to John for your peace activism, but when it came time to actually play some records, you'd pick Paul, who not coincidentally owns the No. 1 title on the official CNBCfix 10 Greatest Songs of All Time List, but we don't reveal those things in posts like this because we'd rather keep people in suspense for a time we really need the page views.

The breaking news report on Monday's Fast Money was a WSJ scoop that Apple may be set to announce the inclusion of the Beatles catalog. Tim Seymour explained that he was recently trying to download a Beatles song for his band to cover, and "I got Dear Prudence. And it was one of those bands that sounds like Dear Prudence."

Notwithstanding the fact you'd think a hedge fund manager would be capable of scooping up the whole authentic Beatles catalog at Best Buy with the equivalent of pocket change, surely there's nothing more frustrating than downloading the wrong version of "Dear Prudence."

Onus apparently is on government to get people to buy iPads, shop at Amazon, search Google, consume energy

Ya gotta wonder what prompted Greg Hess, a signer of that quirky letter to Ben Bernanke, to defend it on Monday's Fast Money.

Because money supply might be in Hess' repertoire, but "glib" certainly isn't.

Hess told Melissa Lee the purpose of the letter was to embolden critics of the Fed's policy who might have some standing or clout in government circles.

Joe Terranova demanded to know if not QE2, "What would the alternative be."

"Ultimately the United States cannot continue to paper over the problems that hold us back. The greatest problems that we face right now are uncertainty ... and the fact we do not have a strong growth strategy in place," Hess said.

That part about it somehow being a government requirement to have a "strong growth strategy" to hand down to us minions sounds a little dubious, but then again a lot of smart people often find themselves tallying up exactly how many jobs each president has "created" and actually present those numbers on TV.

QE2 "continues to raise the uncertainty ... banks unwilling to make loans," Hess added.

Brian Kelly asked Hess if the size is what bothers him, would the letter have been written if it was $25 billion a month.

Hess didn't even bother to try to answer that one, just saying it's an "enormously accommodative" policy, and all it's doing is merely "adding to the problem and taking the heat off fiscal policy."

Joe Terranova said not to worry, "I think we're overreacting to it."

Worth: Buy MSFT up to $30

The highlight of Carter Worth's Fast Money appearance on Monday wasn't his pick of MSFT.

Rather, it was his actual laughing that was detected, while talking about his Facebook chart of Kraft.

That's not to say by any means that Worth doesn't have a sense of humor. He'll crack a smile. But the man is the ultimate gentleman on television, impeccably dressed, astoundingly courteous, ridiculously thorough and credentialed.

Every time he's on the air, you're figuring, after the regatta on Martha's Vineyard, he'll probably sit down with a brandy and cigar while discussing the next ambassador to Luxembourg with some chums from BU.

We actually couldn't grasp what the heck the Facebook stuff amounted to, but Worth did say that MSFT "holds here at 26, bounces towards 30, so it's a thumbs-up."

He said to "stay the course" in gold. "Financials are heavy; we're not excited about that group," he said.

Pete used to regularly
pronounce it ‘Buka-ris’

One of our favorite stock market pundits, Dick Bove, explained on Monday's Fast Money Halftime Report just how he came around to co-signing a letter to Ben Bernanke complaining about QE2.

Unfortunately, Bove's argument was about as groundbreaking as a Monkees reunion.

Brian Kelly asked Bove why he's so agitated about the Fed doing basically what it's been doing for decades. "Well, I think it's the magnitude of the program," Bove said. "To increase money supply at an extremely rapid rate ... obviates all of the benefits of a slow-money supply growth," he said.

OK. So, a troubling acceleration, but probably not reason enough to think we're in Lawrence, Kan., in the first 15 minutes of "The Day After."

Bove also said any historian can tell you "rapid increases in money supply do not improve the economy ... in the longer run, you've now created inflation in the economy."

Sure, whatever, we get it.

Melissa Lee asked Bove, "Let's connect the dots then," and define exactly how Bove is differentiating between short (in which he thinks stocks can perform) and long term.

"Short term I would say is the next 6 to 9 months; longer term is anything longer than that," he said.

So there's a big difference between something next April and next September, but no distinction between next September and September 2017.

Or something like that.

Pete Najarian praised the Caterpillar-Bucyrus transaction. "Great part about this deal is, the lack of any overlap right now," Najarian said.

Our bad

CNBCfix.com might be a shoestring operation (ya think?), but even a shoestring operation is aware of search engine optimization, news cycles and people's attention spans.

Thus it was disheartening to realize late Monday evening that the brief account of Kate Kelly's Strategy Session appearance we'd crafted during a furiously busy Monday afternoon, and publicized on the home page, actually never made it into cyberspace ... because we forgot to post it.

A lot of the goofs here are funny, but this one in particular sucked, because, on the heels of a weekend, we like to get Monday stuff up on this page as soon as possible so that people who actually click here more than once aren't forced to read the same Friday top headline for 3-4 days in a row (we hear ya) and (gasp) start to look elsewhere for Fast Money commentary.

Better late than never — and now completely overhyped for no good reason — is our take on Kelly's appearance below.

Kelly: GM stock engineers
gunning for ‘10% pop’

David Faber and Kate Kelly reported on Monday's Strategy Session that GM is going to move up the price on its IPO, though the exact number is still a mystery.

Kelly said the government and underwriters are trying to toe the line between delivering a success but not screwing the taxpayers. The government doesn't want the shares to jump 20-30% from the IPO because the taxpayers will feel taken, Kelly said.

So, "What they really want is about a 10% pop," Kelly said.

All well and good, and maybe it will be a big success. But maybe people also should wonder whether it's helpful to have the government going out of its way to guarantee a 10% quick-buck profit for firms such as Mickey Siebert instead of just pricing it as close to fair market value as possible for the benefit of all taxpayers.

Gary Kaminsky wasn't on Monday's program unfortunately but called in to say the 11th-hour government jockeying "shows you the pressure that they've obviously had to succumb to."

Sharmin Mossavar-Rahmani, who was just on The Strategy Session a mere 2-3 weeks ago, returned to say U.S. stocks look great, apparently because corporate balance sheets look "pristine." Mossavar-Rahmani is obviously a quality guest, but this conversation went on too long.

[Friday, November 12, 2010]

Guy Adami says now’s (really) the time for a double-top

Probably the most confounding trader on Fast Money is Guy Adami.

Given his credentials, reputation (including positive things we've read on trader message boards) and demeanor, The Negotiator should be the go-to Voice of Reason during any notable stock market activity.

Instead he's more like the Voice of Gilligan's Island, hinting during each day's episode of Fast Money that today's the day we finally get off the island of bullishness.

Friday, Adami took a turn on both the Halftime Report and the 5 p.m. Fast Money, warning of fright as often as possible. This comment was typical: "There's a very good chance we've seen a double-top" in so many indicators and the broad market, and "Monday could be extraordinarily interesting."

And of course Fast Money viewers will note that Adami suggested a double-top in Caterpillar a couple times in September, latest being Sept. 13, when CAT traded at $71 (it was at $81 Friday after our day of massively important reversals).

We've seen this movie before. We'll take the other side of that "extraordinarily interesting" Monday trade and predict the Dow falls no less than 50 points, which certainly would defy the claim of "extraordinarily interesting."

He's the pro, we're not. But we don't get it. Maybe we're not supposed to get it. The stock market has been face-ripped-off land for any dedicated shorts since about March 2009. Governments are indirectly bankrolling stocks and as far as we know, governments really can't be beat. If you just bought (wish we had) the most obvious names that everyone has followed in the latter half of this decade — AAPL, MCD, AMZN, FCX, CRM, CAT, SPG, PCLN, etc. — you'd be doing spectacularly well. No overthinking it. Just spectacularly well.

Adami might say, "1- or 2-year performance is fine, but the show's about the trade, which is short-term market movements." The bottom line is that on a day-to-day basis, for more than a year, his commentary definitely leans bearish, and net-net, the market's trended higher.

56 new highs on Nasdaq,
41 new lows

Tim Seymour on Friday's Fast Money seemed to take a page out of the Guy Adami playbook, complaining there were all sorts of troubling data, namely questions about Chinese tightening of some sort, and "people really don't know what to make of it."

"I think the market wants to go lower," Seymour said.

Seymour also said "I would not be shorting indices against long stocks, because it's not working."

Apparently just as suspicious about the Adami-Seymour gloom machine on a forgettable 90-point down day as we were, Steve Grasso made perhaps the stock market understatement of the last 2 years, pointing out how the market has been remarkably strong this fall, and so "you've gotta give it a little bit of respect too."

Karen Finerman conceded, "The magnitude of this move was actually not so big considering how gigantic the run has been up in, across the board, all the commodities, all the markets. So to me this pullback is healthy, and I think there probably should be more to go."

That could potentially draw us into one of those logically silly debates with ourselves about how the stock market is never described as "healthy" when it rises sharply, but only the "corrections" are deemed healthy.

Like dunking a basketball or benching 500 pounds is "toppy" or "overextended," but getting the flu is "healthy."

Karen Finerman, who boldly wore short-sleeved dress in mid-November complemented by another appealing scarf on a day when quiet Melissa Lee stole the show in soft red, said it's "Hard to see how you really get hurt in Cisco." We agree with that, but we would also change 1 word, "Hard to see how you really get rich in Cisco."

And basically, isn't that the goal? Or is what's happening to Cisco a "healthy" event for the shares?

Peter Boockvar said QE2 is a failure before it even began because it scared the market into an inflation frenzy. Boockvar actually made a joke about Ben Bernanke, or tried to make a joke, wondering if there were trees growing money in Europe for Ben to print, or something like that.

Patty: Don’t try to be a hero

On Friday's Fast Money Halftime Report, JJ Kinahan actually had the audacity to suggest Friday's selloff maybe wasn't that big of a deal, something Guy Adami basically would have none of.

"A lot of people have taken a long weekend because of the holiday yesterday so I do think we have to keep our cool a little bit," Kinahan said.

"It's fine to be calm, I'm all with calm, I'm all with 4-day weekends, that's great, but you know, sometimes, the market's attempting to tell you something," Adami said.

Melissa Lee botched the stairs-up/elevator-down cliche. Adami said "Maybe we're in that sort of elevator silo right now." Or maybe it's a grain silo, like Harrison Ford in "Witness."

Patty Edwards wasn't as bearish as Guy Adami thankfully but did manage to utter probably our favorite Fast Money cliche, "No reason to be a hero at this point." Edwards, trying out a new 'do late this week, said she bought BlackRock Kelso and Bank of Montreal on Friday.

Steve Grasso inadvertently demonstrated how great it is to work on the floor of the NYSE, as several hot chicks were seen mugging for the cameras over his shoulder during the Fast Money Halftime Report.

Toward the end of The Strategy Session, Martin Franklin said he senses some "frugality fatigue" on the part of consumers, and also, "the reality is that costs are gonna continue to go up in China." David Faber hailed Franklin's triathlon athletic greatness and called Franklin a "man who has no body fat."

The ticket analogy
to GM’s IPO

The Strategy Session gang on Friday put together an interesting go-round on small investors being shut out of the GM IPO — all the more interesting given that Kate Kelly just reported on Monday that "anyone with a brokerage account can get into GM." (Sure they can — after it climbs $5 from the IPO price.)

On Friday, Kelly said "Schwab, E-Trade, Ameritrade and at least for a moment in there, Fidelity, it appeared as though customers were not going to have any access to any shares because those companies did not expect to receive any allocations from the underwriters."

Kelly said she's been getting e-mails, including from someone who said they opened a Fidelity account specifically to get in the GM IPO.

Then Kelly said you might want to fatten up your account if you are a retail investor and want to get in, because there's a "relatively high barrier to entry here," which she described as $500,000, $1 million, $10 million, something like that.

Gary Kaminsky used a pie chart to show that in general, 90% of an IPO goes to institutional investors. But as everyone at the table agreed, this IPO is different in that it's owned by the taxpayers, and so why are the little guys being frozen out?

This brings to mind one of our favorite examples of supply-demand economics — the face value ticket price for a hot event.

Take an event like the Super Bowl, and you'll hear people say "I'm hoping to get tickets," etc.

What they really mean is tickets at face value price, which for elite events, for a variety of social (and sometimes economic) reasons, are generally well below the expected fair market value.

Anyone can buy a ticket from someone else at fair market value (assuming there aren't harsh anti-scalping laws in place). But people for whatever reason don't consider that a fair price and most won't do it. They've just gotta see the Stones, but only if it's the $95 face value ticket and not paying $395 via eBay/broker, etc.

The problem is accelerated when hot events offer tickets well below probable market value. The bigger the gap between face value and perceived fair market value, the more incentive there is for the quick-buck artists to jump in.

The Strategy Session broke interesting new ground by bringing in, via video, Anand Marphatia, a retail investor who apparently e-mailed the show unhappy about being shut out of the IPO.

"Clearly it's a good IPO; like you I expect this to pop in the afterhours," Marphatia told David Faber. "I see GM as a very good investment going forward."

But after contacting his broker, "I just received an e-mail from Schwab recently saying I cannot participate in this IPO," Marphatia said.

So here's the deal ... the goal of the taxpayer should not be to own GM shares. The taxpayers' goal should be for the government to get the most possible money from this offering.

Likewise, a producer of the Stones concert should be less concerned about being able to attend himself at $95 and more concerned about whether the tickets weren't underpriced to begin with.

What Marphatia may not realize is that, given the oversubscribed nature of this deal at $26-$29 or whatever it is now, for every share he (in an ideal world) gets, someone else is not getting a share. It might be a fat-cat banker, or it might be another retail investor.

There are apparently 365 million shares being offered. If there are 36 million investors who would like some, should they all get 10 shares? People with Fidelity accounts built up to $200,000 over 30 years getting the same number as some guy who opened one last week with $10,000?

What should really be called into question is the price. If there is this much demand, is the government selling too low? It sounds like it, but that's a subjective issue. The government would probably argue it doesn't want to price the shares near expected first-day value because if they were to tumble below the IPO price, that could badly affect confidence on several levels. The government won't admit it, but hot IPOs are also seen as a perk for the institutions, which may agree to lower fees in certain cases (we have no idea if that's what happened) in exchange for a "reasonably" priced IPO.

If Marphatia truly believes in the company's long-term prospects, as he says, he should have no qualms about buying shares on the open market on the first day.

If he believes taxpayers are being screwed, that's an issue to keep in mind on Election Day (oops, it seems like we just had one), or something to write one's congressman about.

(This writer is getting zero shares of the GM IPO and won't be buying any on the open market.)

Gary Kaminsky said the Treasury Department people are "the only ones who can change the transaction between now and next Wednesday."

[Thursday, November 11, 2010]

At a minimum,
it’s a clumsy acronym

Anthony Scaramucci made a point on Thursday's Fast Money that seems like it should've prompted much more controversy than it actually did.

Scaramucci said we've not only got QE2, but QET — which he called "Quantitative Easing, The Money Goes Into Tech Stocks. The last time the Federal Reserve pumped money like this was during the Y2K crisis. What happened? It touched off a huge Internet bubble."

Conclusion? "We're set up for a potential another bubble in tech," Scaramucci said.

We know just about as much about the Fed's money-pumping policies of the late '90s as Melissa Lee does about (see below) power-to-weight ratios in golf (OK, maybe that's a small exaggeration), but something doesn't feel quite right here; as in, 1) what was the Y2K crisis anyway, and 2) how did it prompt the Fed to prop up Internet stocks?

Nevertheless, "I think you're absolutely right," agreed Brian Kelly.

But maybe the most significant verdict on Scaramucci's point came from the elevated level of giggling throughout the program by the Fast Money gang, whether the subject was QET, Cisco, or David Rosenberg's always-gloomy call, suggesting no one really expects a 2011-long Flash Crash.

John Chambers needs to take the weekend off and watch football

It's hard to believe the Cisco earnings report could dominate a couple days' worth of Fast Money, but unfortunately that's what came to fruition on Thursday.

Tim Seymour and Brian Kelly seemed to sense a little bit of overdoing it to the downside.

"This stock's not broken, this company's not broken," Seymour said. "This is not terrible. This is temporary too."

"I actually think it's probably not a bad buy here," Kelly said.

Newfound quick-buck artist Karen Finerman though said she wanted nothing more to do with the stock, admitting she tried a little of it on valuation. "It was up like 12 cents and I'm out. Wish I'd never done it," Finerman said. "It was a waste of time."

David Rosenberg seems
to grasp for an analogy

Melissa Lee spoke with perennial bear David Rosenberg of Gluskin Sheff. Rosenberg suggested maybe the price of oil is about to reignite something bad.

"If I remember correctly, last time we were testing $90 in oil, uh, was in October of 2007," Rosenberg claimed.

And does he actually think the rest of the market is in the same place?

Citigroup was in the $30s. Bank of America was in the $40s. Dryships was over $100. Houses probably cost about 20% more than they do now.

Nevertheless, it's an interesting implication — that maybe the stock market peaks when oil hits $90.

If Rosenberg is right, we'll give him credit.

Exactly why are we devoting
air time to this product?

Colin Gillis on Thursday tested out the upcoming Samsung Galaxy tablet and noted "definitely the Android tablet onslaught is coming."

Gillis said many questions persist about the 7-inch screen size, saying that proportionally, it all amounts to just 45% of the size of the iPad.

Furthermore, he said most people put their phone in their pocket and would prefer to carry a tablet. "If you're walking around with a 7-inch screen in your pocket, you're gonna look a little dorky," Gillis said.

Karen Finerman said Samsung must be aware of all the doubts about this product and so what is their end game, are they trying to be first on the market and get their foot in the door for a later product. "Absolutely," Gillis said, saying Samsung is "only expecting to sell maybe a million units."

Tim Seymour joked that "some people walk around like they have a 7-inch screen in their pocket, and some people walk around like they have a 10-inch screen in their pocket."

Karen Finerman and Melissa Lee practically in unison said they knew Seymour would make that kind of a joke.

Jon Fortt called in to discuss the breaking report, apparently from TechCrunch, that Yahoo is supposedly planning 20% across-the-board staff reductions. Fortt said the company says " '20% reduction across the board is misleading and inaccurate,' so that's not happening. They're not denying layoffs in general."

Tim Seymour and Brian Kelly said it sounded like a weak denial. "It doesn't sound like great news to me," Kelly said.

Jane Wells looks better
than Disney’s results

Always easy on the eyes, Jane Wells made a welcome appearance in sexy orange on Thursday's Fast Money to discuss Disney's (leaked) results.

The only problem was that Wells took forever to answer a question from the Fast gang about why the stock would be trading down, alternating between the Street already was expecting a miss, and the miss was more than the Street expected.

Carter Worth made a strong recommendation for Toyota, saying it has lagged the whole automotive index for obvious reasons, an "epic disconnect," but the stock has shown enough strength and might have yen tailwinds that "we think it's goin' to 85." Tim Seymour said Toyota still has a pretty good reputation for quality around the world.

Tim Seymour tried to enlist David Rosenberg in making it sound like he's really scared about Europe debt refinancing, and in fact Seymour revealed he's "short Eastern European banks — I've seen this movie play out before," but when on the other hand he's talking about 7-inch screens in pockets, it's safe to presume the feeling isn't exactly armageddon.

Claim: White House may
be employing spin

Anthony Scaramucci, who evidently has some more advice for President Obama should they ever meet again at a town hall, complained on a Fast Money "soapbox" Thursday about Tim Geithner's rationale for the dollar reversal.

"When you're promulgating policy like this, uh, these guys are often apologists for their own policy," Scaramucci said. He said Geithner is basically crediting relaxation in the flight to safety, but in fact, "He's ignoring the rules of supply and demand," which QE2 is bound to distort.

"The QE2 is basically adrenaline into a sluggish patient, result of which we're now gonna have some side effects that are probably not positive," Scaramucci said.

A year after 1 market’s
Thanksgiving crash

Melissa Lee on Thursday's Fast Money actually had the audacity to refer to golf clubs as "the ultimate discretionary purchase."

Discretionary for some, not others.

Lee then spoke on the Fast Line with Callaway Golf CEO George Fellows — who basically didn't really seem to have much data on anything.

Fellows said holiday season looks to be as normal as any other holiday season, but it's too early to know for sure if people are rushing out to buy things.

Lee said some analyst claims that a big factor for Callaway sales is actually the extension of present tax rates. Fellows didn't seem completely sold on that but said "I would expect that it would have an effect on discretionaries."

Fellows said 95% of clubs now are titanium, and he's excited about his new Diablo.

Tim Seymour asked Anthony Scaramucci, "How is your power-to-weight ratio?" Scaramucci claimed he's the worst golfer in the world. Melissa Lee said she's never heard of power-to-weight ratio either, and it sounds like anyone wishing to ask Melissa out for a round of golf should probably stick to the pee-wee variety, which quite frankly can be a blast.

"I think Tiger's hurt the industry," Scaramucci said, on a serious note.

‘You fight great.
But I’m a great fighter.’

The most bizarre thing Thursday about Options Action guy Dan Nathan's debut (we think) appearance on Fast Money wasn't the fact Melissa Lee actually called him "Nathans," but that his nose looked like it had just gone 15 rounds with Apollo Creed.

Coincidentally, "Nathans" has been owning Cisco, and even cracked, "If you're long the stock like I am, you feel like you got hit with one of those Diablo, octane Calloway things there, you know what I mean."

Perhaps that literally happened. Hopefully Nathan is OK; sometimes that pesky TV camera can just distort how people actually look.

Nathan flew through a 1x2 call strategy for protecting a CSCO long position. "Consider it a leveraged overwrite," he said.

If Cisco’s taking a government hit, another tech giant likely is too

Patty Edwards had an interesting Cisco derivative play on Thursday's Fast Money Halftime Report.

Edwards said she holds CSCO, and "I'm not gonna be selling it today into any panic," but at the same time, "it's probably not gonna remain a long-term hold."

Instead, Edwards said, "Look at those tech plays that have a lot of government exposures." Specifically she said Dell gets a "boatload" of revenue from state governments.

Pete Najarian said he likes Juniper's reaction to the Cisco news. Steve Cortes said he's thinking about Nvidia as a short, perhaps against long Intel, always an exciting play.

Steve Grasso said "Everyone listens to Mr. Chambers, but no one really buys the stock." In the same dull-stock category, he noted, "Intel at this point is not gaining any traction from the clientele that I cover."

Pete Najarian said he's studying Disney in part because "my son and I, I'm working together win him on investing." That harkens back to the wonderful '80s, when seemingly every teenager from families of mild means or more had 1 share of either DIS, MCD or AAPL.

Perhaps that's still the case.

Najarian said he might like the stock around $34.50.

Emulex CEO Jim McCluney shrugged off Cisco's troubles and said "we're seeing new server refreshes, new equipment coming out" in his tech-supply, cloud-computing-space business. Pete Najarian said Emulex could be a consolidation-type play.

Oliver Gilvarry told Fast Money Halftime viewers that the dollar will remain the world's reserve currency.

Japan’s salvation: Casinos?

Gaming expert Jason Ader, a board member for Las Vegas Sands, visited The Strategy Session Thursday and put together quite simply one of the best little business discussions you're going to hear.

We'd post the whole transcript, if we had one.

Maybe most provocatively, Ader talked about how gambling is going to factor into the equation for strapped states' finances.

"This may very well be the economic time, the pressures exist such, that something like Internet gaming on a state-by-state basis could happen, and it may happen," Ader said.

We initially figured that just meant lottery tickets, etc., but then Gary Kaminsky said, "Just think about it in terms of sports, professional sports," and David Faber agreed, "No doubt. There's a real revenue opportunity there."

The gut feeling here is that would take a long time to happen, because Vegas establishments would probably fight it. On the other hand, if those establishments are the ones collecting most of the online bets, and the respective states figure out ways to get their cut, who knows.

Interesting.

Ader also spoke briefly, too briefly, about Japan, an untapped gaming market. But is it too late? One wonders what kind of tourist dollars Japan could attract with a Macau-like island entertainment complex full of glistening casinos and card games.

As we understand it, casinos are banned in Japan, though lotteries are common. We're 100% pro-values here, and if it doesn't feel right, they shouldn't do it.

However, the long-term trends globally have shown gambling emerging as a seedy no-no into a semi-acceptable piece of life's candy relied on by governments, with the caveat you're not supposed to get carried away with it.

How to boost Vegas:
Direct flights from Shanghai

Jason Ader also explained Thursday how Macau remains much more than a fad. "Asia in general is a very underserved market," he said, saying the Chinese government has done a good job "promoting" it (which shouldn't be hard for that type of government to do) and in easing visa issues.

"Macau's a whole different ballgame," he said. "You have 3 or 4 people standing behind the person at the table, betting over shoulders."

Then this, which makes you wonder what's going to happen to that Chinese middle class if they ever discover mortgage-backed securities: "Chinese propensity to wager is much higher than what we see in the U.S."

David Faber asked if there wasn't a clause that eventually allows the Chinese government to absorb companies' gambling assets. "It's a long way out," Ader smiled, so we doubt that's a near-term concern.

Ader said nobody in the investing world always gets it right. "There's always investors in the hedge fund industry who add capital right at the wrong time and pull out the wrong time as well," he said. Gary Kaminsky praised Ader's credentials with EF Hutton comparisons, saying, "When Jason spoke on the gaming stocks, I mean, you basically, it moved stocks."

Maybe Cisco doesn’t make enough products states truly need

Speaking of strapped states, we have the Cisco conference call, and John Chambers' tone.

David Faber said on Thursday's Strategy Session that a big cause of Cisco's downbeat outlook is reduced state spending, saying the company reported "We're starting to see the impact of states having to cut back."

Here's the interesting thing about that ... everybody who watches CNBC has seen the Cisco commercials with Ellen Page. But does everybody pay attention to the products Cisco is advertising in these commercials? Cisco suggests 4th-graders in Canada should videoconference with 4th-graders in China (despite the fact they're something like 11 hours apart).

Is that really a useful expenditure for a school board to make?

Another commercial shows Ellen speaking to her doctor in Europe on a video screen. Is that what Obamacare is all about, docs in other countries not making diagnoses in person but just talking to people on TV?

Finally there was a commercial about police departments using camera technology to survey the city. While it has understandably alarmed some privacy advocates (as long as it's public places only, we don't think it's much of a problem), that product actually seems useful and something municipalities should consider.

So, basically 1 for 3.

Some might say Cisco doesn't sell to the general public and these ads are kind of like a fashion show, where designers unveil over-the-top creations just to hook interest in the regular product lines that people actually will buy. But does anyone think state governments are like fashion buyers?

Elsewhere, Gary Kaminsky again stressed the Fed can do all it wants with short-term rates, but "they can't control the long end of the curve." David Faber said it sounds like that means the 30-year is edging out the 10-year for importance now. Yes, Kaminsky said, "Control room, let's not bring up the 10-year chart anymore."

Kaminsky said if tech continues to underperform the S&P, "that will create quantitative selling in equities."

Super Bowl of IPO season
coming up

Kate Kelly said the reports Thursday that GM may close its IPO early probably aren't accurate, "apparently that's not the case," though "I cannot wait till next week," said Gary Kaminsky, who added that GM is being pitched to investors as a China play.

Gary Kaminsky sported a sharp V-neck sweater. "He's long a lot of vests," joked David Faber. Melissa Lee chimed in, "He's long vests, David, and short sleeves," which was pretty good. Trish Regan won the day's Mandy-Melissa-Trish fashion showdown with pink spandex top, but Mandy put on a show with matching watch/belt on Street Signs.

[Wednesday, November 10, 2010]

Karabell gets less than 4 minutes to silence the skeptics

Zachary Karabell's appearance on Wednesday's Fast Money ignited a whale of an economics donnybrook we haven't seen for a long time.

Karabell made a 3-pronged argument that inflation is benign if not nonexistent.

He started with "Commodity inflation doesn't equal goods inflation," suggesting even though iron ore is up, products aren't.

"In what country Zach?" demanded Tim Seymour, who looked just horrified at this comment.

Karabell responded, "Our cell phones aren't going up here and they're certainly going up modestly from a really low base in India and China."

Karabell's 2nd point was "the emergence of a global middle class is inherently deflationary."

He said of inflation, "I don't think it's purely a monetary phenomenon, I think it's a demand phenomenon."

Last, he cited productivity.

"I'll give you productivity, because I think that argument makes sense," said Karen Finerman. "The commodity one doesn't." Finerman asked how there couldn't be "crowding out" from China's growth and said that there's wage pressure in China with commodity price hikes. "To say that those 2 things are deflationary, that doesn't make any sense to me."

Karabell said a middle class emergence isn't inflationary because it's from such a low base, and higher commodity costs are something "companies are having to absorb. They're not really able to pass those on in any meaningful fashion ... it doesn't lead to goods inflation."

Brian Kelly came at Karabell with a clever rebuttal, that Karabell's argument sounds like what some bigwigs in the '70s used to say about inflation in the U.S., which, um, was probably just before Jerry Ford rolled out those "WIN" (that would be "Whip Inflation Now") buttons, and Jimmy Carter put on a sweater for a fireside national chat about how our problem really is a crisis of confidence.

"We're dealing with old models in new systems," Karabell said with barely a shrug. "Food on the whole is cheaper than it was 20 years ago."

Karabell looked glum as Melissa Lee suddenly cut him off, leaving the last word in the 4-minute, 10-second segment for Tim Seymour and Karen Finerman.

"Zach's a smart guy," Seymour concluded, which is a statement we agree with, but sounds oddly placed given this argument; really isn't Seymour trying to say just the opposite, that on this subject, he doesn't get it?

"If I'm in emerging markets, the biggest percentage of my costs are food and energy," Seymour explained. "If I am spending more on food and energy, I'm not buying cell phones, I'm not buying anything. Separating core from inflation I think globally is lunacy, and emerging markets, you absolutely cannot do."

"Just for example, gasoline," chimed in Karen Finerman. "It's up. That's a good. It's up. It's more expensive."

We should probably weigh in on this one, but can't, because this type of subject matter is a little above our pay grade, which has gradually risen recently maybe more than some would like to admit.

Bank of America chairman
only owns 54,650 shares

Melissa Lee said on Wednesday's Fast Money that Bank of America Chairman Charles O. "Chad" Holliday Jr. reported buying 30,000 shares of BAC on Tuesday.

At about $12.60 a share, that comes out to ... well, you do the math, as Michael Burns would say (see below).

According to Yahoo finance, former Chairman Kenneth Lewis, on his last reporting date of Feb. 15, 2009, owned 1.8 million shares.

Current CEO Brian Moynihan, who reports owning 452,451 shares, has made one purchase in the last 18 months, for 30,000 shares in August 2010.

Karen Finerman said news of the purchases by Holliday and Robert Scully are worth a look. "To me buying is much more relevant than selling," Finerman said.

"I think we're making a bigger deal out of this, I'm sorry," said Tim Seymour.

Been a long time since we’ve seen Ellen Page watching those Canadian kids teleconference with Beijing in daytime both places

The Cisco afterhours earnings report brought predictable reaction on Wednesday's Fast Money. Guy Adami said "Maybe the tech trade that everybody says is full-raging going forward is not as healthy as people think," Brian Kelly said "I might wanna be a buyer of Cisco here," and Karen Finerman said, "I really wanna hear the commentary."

Finerman also said the commentary "sets the tone," but doesn't she know it's the tone from John Chambers that's supposed to set everything else?

Stephen Weiss even got in on the act from the Prop Desk, saying Cisco's cold water from the previous quarter "was a great buying opportunity," and that he likes buying the dips.

That prompted Guy Adami to rebut that Cisco presently is no better than 3 months ago, so if you bought the dip, not much gain. Weiss rebutted that he doesn't care about Cisco, but likes other names such as QualComm, especially if the market has a 5% correction in store.

Tim Seymour said of CSCO, "this is maybe a margin problem."

Some of the best work on CSCO was delivered by Jon Fortt, who offered a good explanation as to how he arrived at Cisco's apparent revenue forecast based on previous numbers but that his projection hasn't yet been confirmed by the company.

"That is a tremendous miss," Melissa Lee said.

Karen Finerman noted the afterhours plunge. "That's an enormous move for Cisco," she said.

Guy Adami agreed Brian Kelly might have it right on the buy side. "My sense is, it's gonna overshoot to the downside," Adami said.

But then The Negotiator made a bold prediction. "Tomorrow, do we sort of re-ignite the selloff that we saw yesterday? Chances are the answer is yes," Adami said.

Meanwhile, Tesla continues
on its curious path

Tim Seymour and Guy Adami put together a little front-end collision on the automakers on Wednesday's Fast Money.

Citing a possible $30 price by Morgan Stanley, Adami said, "Benign, lousy or good tape, Ford seems to be working independently."

"Guess what folks: GM is the most profitable auto company in the world," Seymour said. "I would not be buying Ford here ... I think you're a little late to the party."

Put on the spot, Karen struggles to quickly identify extended sectors

While Tim Seymour and Guy Adami were disagreeing on cars, Karen Finerman and Brian Kelly were disagreeing on market expectations.

"Since he made that speech in Jackson Hole, the equity markets are up 15%. That is ... gigantic," Finerman said. "To stay in the trade full-bore ... it's already happened."

"The market hasn't priced in green shoots," Finerman continued, but "beyond, you know."

"Full blossoms," said Melissa Lee.

Brian Kelly was practically taken aback, saying if multiples were 25 he'd agree, but demanding to know where the irrational exuberance is.

That left Finerman struggling for what proved to be a clumsy, unconvincing response: "I think it's a big mix of different things," such as P.E. ratios on China plays.

Just what the world needs:
‘Pirates of the Caribbean 4’

Roger Neshem, a North Dakota farmer who's basically a Fast Money original, basically said times are great, he bought fertilizer early a lot cheaper than it is now, and "the windfalls are gonna come in this year because we had input prices last year a lot cheaper."

Stephen Weiss made the case for Foster Wheeler, citing a present 29% Asia component that he said will grow.

David Bank said with Disney, "the park is something of a black box." He said a Lionsgate-MGM deal makes sense for both sides.

Michael Burns presents
Melissa Lee with an unexpected interview challenge

Melissa Lee interviewed Lionsgate Vice Chairman Michael Burns, sort of a Fast Money Friend, on Wednesday's Halftime Report.

Lee started by asking what's the "next chapter" for Lionsgate with MGM.

Here's how the conversation went:

Burns: "It's not on my schedule going forward, but you can sort of derive what you want from that ... a team of our executives is in New York."

Lee: "It's not on your schedule per se but your team of executives are planning to meet with MGM sometime in the near future?"

Burns: "I think it's fair to say that it might've been actually have taken place, Melissa."

Lee: "Oh it has taken place."

Burns: "That would be the rumor."

Lee: "No, but I'm asking you, as the person who employs these top executives Michael, if you can move it from rumor to fact, or maybe dispel the rumor..."

Burns: "We're very interested in the MGM transaction ... (rattles off purported who's who of media investing giants as being in town) ... in other words you do the math."

Interesting ... rarely does a business interview subject attempt to be so coy. We decided to put together a scoreboard for Melissa's handling, on a scale of 1 to 10:

Persistence: 9. Asked him enough times and let it go at the right time.

Swagger: 9. Never got flustered despite the couching going on and didn't give Burns the upper hand.

Speed in recognizing a hoodwinking in progress: 4. Would've been a great catch, but Lee didn't realize Burns' key phrase was "going forward," meaning Burns himself has probably already had the meeting, and Lee instead thought he was merely hinting that the other execs were the ones still about to have the meeting.

Appearance on camera: 8.5. Pretty good, looked like a new black leather outfit.

Variety wrote about the interview and said Burns "hinted that the meeting had taken place already."

Wow. Sounds like some meeting. Wish we were there. Oh, joy.

Maybe Burns was giddy or something because he also took a bit of a detour when he explained how thrilled his wife was to be at "The Next Three Days" premiere because "her Jon Hamm is actually Mark Sanchez," and Sanchez was actually there.

Instead of attending movie premieres, shouldn't Sanchez be studying the playbook, given that he's got a tough road game this week with the resurgent Cleveland Browns?

Burns also set a rather high bar for "The Next Three Days," Lionsgate's next big release. "I think it's the best movie that Lionsgate has released in 10 years."

Grasso: Ford over GM

Jon Najarian on Wednesday's Halftime Report touted the RIMM Playback in part because it's out earlier than the next version of the iPad, and people who want the "full monty" flash will like it.

Steve Grasso said Apple still has all those loyal buyers that RIMM doesn't quite enjoy.

Grasso also said "I still think Ford has room to run to about $18" and tried to make the reverse point of conventional GM IPO wisdom but briefly couldn't because Melissa Lee interrupted him thinking he was going to make the same old point, "We've heard that for a long time."

In fact, Grasso said people were expecting F holders to drop it for GM, but now that's looking like not the case, that GM doesn't seem like it's a revamped company but "still has the worries it once had before."

Lionsgate's Michael Burns, once married to Lori Loughlin, either spoke of a rumor or confirmation of an MGM meeting. "We're very interested in the MGM transaction," Burns said. This page will have more on Burns' Fast Money interview overnight Wednesday.

Was BHP’s bid ridiculously low?

A couple of months ago, it wouldn't have seemed like it.

But in hindsight, BHP Billiton's bid for Potash seems a lot like the Dallas Cowboys' attempt to beat the Green Bay Packers last Sunday night.

Gary Kaminsky and David Faber were talking about the Genzyme saga on Wednesday's Strategy Session and what a failed bid can do to the stocks.

"BHP-Potash for example," said Gary Kaminsky, "if you did not have such strong fundamentals at the time that the news came out last week, just imagine what would've happened with the Potash shares in the hands of some of the risk-arbs."

The inescapable fact is that BHP blew it, ridiculously, wasting everyone's time with a bid that was obviously way too low.

This isn't like buying Yahoo or SunTrust Banks. This is a natural resource treasure certain to have some government influence.

According to Yahoo finance, this $130 bid surfaced Aug. 17, just after the stock was trading at $112. In fact, the fertilizer stocks had begun rallying in late June or the first week of July.

Without the BHP bid, it's entirely possible Potash would be north of $130 anyway.

BHP not only stepped in front of an accelerating train with way too low of a cushion, it did it without the requisite extra show of respect (think InBev-Anheuser-Busch $5 sweetener) for a company/country that wants to be sure no one's trying to pick off its natural assets on the cheap.

On the one hand, it's kind of impressive for a company to be aggressively frugal in the M&A business (unlike, say, those bidders for 3PAR).

On the other, BHP's pursuit of Potash looks downright incompetent.

Seems like ‘Mission: Impossible’
has somehow paid off

Donald Putnam, founder of Grail Partners, actually gave a nod to Goldman Sachs during Wednesday's Strategy Session discussion about the asset-management business.

"This is a very highly fragmented industry," Putnam said. "I actually subscribe to the Goldman thesis — that it is possible to be very successful very small, meaning between 1 and 10 billion under management, and it's possible to be successful in a larger scale, call it 100 billion and up, and that that middle zone is extremely dangerous."

Gary Kaminsky asked how many companies match that $5 billion-$100 billion description. "Probably in the neighborhood of 2(00) or 300 hundred companies," Putnam said.

Putnam, using a strange pop culture analogy, explained those in the middle can be very profitable, but then the risks grow. "It's like, you buy a share of Tom Cruise? I don't know, not unless you're a couch manufacturer," he said.

If world leaders are trying to solve Too Big To Fail, the meeting will never end

Steve Liesman, reporting on The Strategy Session Wednesday from Seoul, first experienced about a 10-second time delay from David Faber's question, then said the G20 nations are in agreement "all big banks must have higher capital levels."

But then Liesman said something utterly shocking. "I think you guys can take a step back and say, 'Hey it's no surprise that world leaders can't figure out the too-big-to-fail problem'," Liesman said.

Really. Chris Dodd just told Fast Money a couple days ago that fin reg has conquered Too Big to Fail.

Rob Cox told TSS viewers that John Kanas was going to score big in the BankUnited IPO, which will probably look like an embarrassment for the FDIC.

Gary Kaminsky noted the "Nasdaq underperforming the S&P the last couple days ... always seems to get more leverage on the upside or downside, not a trend now but something we should keep our eye on."

David Faber said there's a "little softness in high-yield" given HCA pricing at the higher end, 7.75%.

[Tuesday, November 9, 2010]

S&P falls 9 points,
clear sign of capitulation

The stock market took a breather Tuesday from a torrid pace, and sure enough, Guy Adami on Fast Money was talking as if we'd just seen Flash Crash II.

"Everything reversed today on huge volume," Adami said. Pointing to the "ridiculous move in silver," he said, "You don't see moves in silver like you saw today. It does not happen. And gold, same thing."

Adami said Tuesday was the first day in a while that was encouraging to market naysayers. And he said instead of just sitting on the sidelines, bears could actually "maybe get short."

Steve Cortes had no trouble piling on, calling Tuesday a "reversal of fortune day."

We checked Yahoo finance and discovered that despite the "ridiculous" moves in precious metals, gold closed Tuesday comfortably above its price of just a week ago. So did FCX, so did AAPL, and even POT is only a couple dollars below last week's levels despite the fact it basically lost the BHP bid.

Joe Terranova wasn't quite as bad but admitted, "I am clearly not as long as I was this morning."

The beauty of the markets and trading is that you can do absolutely any trade you want. Just make sure you've got an exit strategy. We'll take the other side of the Tuesday-midday-reversal-as-harbinger-of-bad-bear-market apocalypse; we've been to face-ripped-off land too many times since about 2007.

Sounds like he plans to go
Dublin-down on a short

In October, Steve Cortes, whose thesis is basically that whenever the U.S. stock market rises it's because we're sweeping all of Europe's massive problems under the rug, talked about shorting BAC and did so remarkably well.

But just a week ago, Cortes said the banks had been beaten down so badly that, coupled with the steepening yield curve, he could see BAC and WFC as maybe worth a buy.

On Tuesday, he was back in the "sell" camp on BAC, saying "I'm very tempted to short ... I think this is a natural, technical place to look to short again."

Then this jaw-dropper on banks: "I think they are dead money for years."

Hey, whatever works. To us, BAC seems like a lousy short, already thoroughly beaten and a lot of effort to get a 50-cent drop. Wouldn't it just be easier to short Open Table or something like that?

Cortes sparred with Brian Kelly, who said "there's absolutely loan demand."

"Not on the housing level there's not," and it sounded like Kelly agreed with that, though it wasn't completely clear.

"I think banks are still a little scared," said Tim Seymour.

"I continue to believe that Europe is smoldering beneath the surface," said Cortes, who has now identified Ireland as his next purported European apocalypse and which he identified as not the Celtic tiger some call it, but "more of a Gaelic kitten."

"I think there's more dollar-buying to come," he said.

Terranova agrees with Fisher,
but doesn’t sound scared

We gave a healthy amount of space to Mark Fisher's predictions Tuesday on The Strategy Session about how QE2 is leading us toward a bubble worse than the Y2K tech stocks.

Joe Terranova on the 5 p.m. Fast Money agreed with Fisher — except the fact it took nearly a half hour into the program for him to say it suggests Terranova probably sees better odds in Dallas winning this Sunday.

"The potential is there for a massive bubble to, basically in essence, burst," Terranova said. "I agree with Mark, I do believe the Treasury market is a huge bubble."

Richard Volpe said the market is concerned about the 30-year. (Note: Rick Santelli's been on that beat for about 2 years.)

But for every great call,
there was PFE in April

Anthony Scaramucci was so modest on Tuesday's Fast Money, he basically took no credit for a great Hedge Fund Trade of the Week from March, APL (that's correct, only 1 "A," not the symbol you're thinking of).

That stock is up over 100% since the recommendation, which Scaramucci credited to Leon Cooperman, adding "macro forces for natural gas are quite positive."

We all live in the present though. "The new hedge fund trade of the week this week is ADP," Scaramucci said, citing a "fortress balance sheet ... triple-A rating ... Bill Ackman owns it at Pershing Square ... this is one of the best outsourcers ... akin to cloud computing."

Joe Terranova made a joke about food inflation, saying "you're gonna have some talk about natural gas afterwards."

Take the Steelers

Brian Kelly went to the charts at Englewood Cliffs Tuesday to suggest a market indicator that we basically don't believe, to the point we're burying this item, provocative as it is.

Kelly drew comparisons from all the way back to 1871 of P.E. ratio vs. inflation, saying "Every time, or on average, when inflation has been 2-3%, the S&P 500 P.E. ratio has been about 18."

That led Kelly to predict a 2-3% inflation rate and attach an 18 multiple to earnings estimates and arrive at 1,675 for the next 6 to 12 months.

If it happens, great. Just feels like wishful thinking, at least in that short of a time frame ... or put another way, the same type of rationalization used by the Boston Globe to suggest this could be a 2001-esque year for the Patriots.

‘Die Hard: With a Vengeance,’
an astoundingly bad film

Tim Seymour, who hasn't been on Fast Money a whole lot lately, returned Tuesday to say "Gold is the most ridiculous overcrowded trade," and "Golden Star Resources, I'll leave that one alone."

Melissa Lee raised the issue of buying puts if volatility's low because you don't want to try to be buying insurance while the house is burning.

"But the house isn't burning down," Seymour said. "Volatility is so compressed here ... buying volatility and protection at these levels, after this rally, not, not a fool's game."

Colin Sebastian spoke about the Najarians' favorite stock, AKAM, and its troubles with NFLX. "No doubt this is a potential black eye for Akamai," Sebastian said. "We think the stock could get locked in a holding pattern here."

Guy Adami said Jeremy Irons "was in one of the 'Die Hard' flicks."

Ask BHP Billiton
how well that went over

RIMM analyst Shaw Wu made a comment on Tuesday's Fast Money Halftime Report that sounded like he hasn't read the business pages in about 2 weeks.

Wu rates RIMM a hold and not sell because it has low valuation, has "strong assets in the company, namely its Push network" ... and also could be an attractive takeover target.

Wu, who also took his price target from $72 to $60, told Fast Money that "Cisco we think still makes the most sense" as a possible acquirer of Research in Motion. But he noted there are concerns about foreign investment in Canada.

Ya think?

How bankruptcies
boost the economy

Patty Edwards made one of those observations on Tuesday's Fast Money Halftime Report that you probably hadn't thought about.

"Bankruptcies (are) up 12% year over year," Edwards said, during a discussion of Priceline and consumer travel. "Well, if you declare bankruptcy, you suddenly have more cash flow, believe it or not."

Stephen Weiss then made what sounds like a contradictory point about airlines and rising oil. "You could be bordering on disaster in terms of their cost structure," Weiss said, before adding, "They will pass it on though."

A disaster ... but they'll pass it on.

Silver Wheaton CEO Peter Barnes explained what sounds like a pretty good corporate deal. "Our costs are locked in at $4 an ounce," he said. "Today we're selling it for $28."

Pete Najarian said of silver, "first time in weeks, more puts being bought on the offer than calls."

"I'd look at platinum or palladium first" with new money, said Patty Edwards.

"I bought some Diana Shipping today," said Brian Kelly, because DSX is shipping stuff to China. Pete Najarian said if AKAM drops into the mid-$40s on Netflix or any other concerns, "I would be a buyer."

Mark Fisher sort of sounds like he’s urging corporate socialism

In about 15 minutes of commentary, Mark Fisher on Tuesday provided Strategy Session reviewers with about 2 weeks worth of material.

Fisher denounced QE2 on several levels, but where he really got interesting was in his Keynesian-style suggestion of a corporate-government tradeoff.

"What's good for the equity markets is not necessarily good for the economy," Fisher said of QE2. "You're not gonna create jobs. We need to create jobs by incentivizing the people that actually create jobs."

Hmmm ... does the government need to "incentivize" people to create jobs? Let's continue, with Fisher's idea for what government could tell corporations.

"You go ahead, and you say the trillion dollars that's offshore, we'll let you bring it back, OK," he said. "If you go ahead and hire X number of workers, new workers, OK ... allow them to bring it back without a tax in return for going ahead and hiring thousands of workers."

Later he said that if QE2 is really working, you'd have to look at Cisco and IBM and ask, "You hiring another 20,000, 30,000 workers? That's where the real answer is."

So, if we understand this plan correctly ... corporate giants are supposed to add workers they presumably don't need, to lower the unemployment rate, in exchange for being able to use even more of their already large cash piles on dividends, buybacks and 3PAR offers.

What about the notion that Cisco and IBM aren't hiring that number of workers ... because there simply isn't enough work for those people to do?

And if they're going to be hired to not do much work, couldn't IBM and Cisco just repatriate the money as is, pay the tax to the government, and let the government pad the payrolls?

Fisher also seemed to complain that it's too easy to get unemployment, that it used to be people would spend 5 hours in a line, whereas nowadays they "direct deposit your account in 6 seconds."

"You're not making this argument that people are on unemployment because they want to be," asked David Faber. "I mean, come on, It's $400 a week in New York."

How about Google-backed money?

On Monday, a lot of people chuckled at what seemed like a strange idea from World Bank chief Robert Zoellick about creating a gold-based global reserve currency.

What we heard from Mark Fisher on Tuesday's Strategy Session also left us scratching the noggin.

"Hydrocarbons are going to be part of this currency solution," Fisher said.

"What does that mean exactly?" asked David Faber.

"You're gonna have currencies based, backed up with some type of hydrocarbon," Fisher explained.

We're probably missing something, but we're guessing that means some kind of oil-based currencies (notice he said it in plural).

Fisher also told Pete Najarian, "I think almost we're close to the bottom in nat gas to some degree."

Fisher on QE2:
‘Bubble of all bubbles’

If you weren't scared about what QE2 might lead to — and maybe want to be scared — you definitely should've checked out Mark Fisher's Strategy Session visit Tuesday.

"Whether you agree with it or disagree with it," Fisher said of QE2, "this can't end right. Worthless paper after worthless paper."

Faber said, "Parabolic moves end in parabolic corrections. This is gonna end bad, it's just a matter of not if, it's just a matter of when."

He continued, "This is gonna be the ultimate bubble. The ultimate bubble. This is gonna make 2000 look like a cakewalk in the end. ... This is gonna be the bubble of all bubbles."

David Faber at one point asked Faber about China's view of QE2. "Who cares?" Faber said. "We're subsidizing all of these developing and emerging nations by allowing them to peg their currency to us."

Expert: No bubble
in high-yield

When Mark Fisher was not holding court on Tuesday's Strategy Session, Mark Bamford was touting the strength of the high-yield market.

"The default premium, which is the spread over Treasurys that you see right now for investment-grade borrowers and high-yield borrowers, while it's narrower than it was at the height of the crisis 2 years ago, it is still very very wide as a percentage of the total return that investors are getting," Bamford said.

He said the high-yield surge has staying power; "we're forecasting that it will ... We think 2011 is gonna look like 2010 from a volume standpoint." Asked about HCA choosing high-yield issuance over an IPO, he said, "I think the market can handle it."

David Faber said companies have simply found high-yield debt to be a "better way to raise capital" than testing the uncertain IPO market. Gary Kaminsky said HCA's move, including the massive dividend it will pay, is good news for names like KKR, Blackstone, "even to some extent, Fortress."

Kaminsky also pointed out that many people have come on CNBC calling a bond bubble but that they may not have the most "credibility" on the subject, because "they're not actually talking to the buyers."

[Monday, November 8, 2010]

Chris Dodd doesn’t get it

Melissa Lee on Monday's Fast Money asked departing U.S. Senator Chris Dodd what is the "centerpiece" of Dodd's fin reg, the "most important thing to keep intact."

Dodd's response: "One is the too big to fail notion. It's critically important. The American taxpayers have spoken very strongly on this. They don't ever wanna be confronted again of (sic) a kind of a bailout institution where some institution can so disregard the rules of the road, that they can become so big they can count on the taxpayer for pulling their chestnuts out of the fire. Those days are over with."

So "too big to fail" no longer exists.

Got it.

So nothing involved in the finance business will ever get too big that the government won't be compelled to prop it up if something bad should happen.

Coincidentally, every CNBC program on Monday devoted time to the General Motors "road show," a company that can no longer be considered "too big to fail" because Chris Dodd says the concept has been eliminated.

Melissa Lee asked Dodd why he wasn't trumpeting the Volcker Rule. Dodd's response hinted the bill's prop trading provision doesn't really work and that it's best left to the chummy gang that is supposed to oversee the banks. "I do see the regulators coming up with a more nuanced approach than might otherwise have been the case had you legislated in this area," Dodd said.

Brian Kelly said all of this is "relatively bullish for the banks," and Pete Najarian concurred.

Dodd at one point said, "I'd be the last person to tell you that we've written something here that oughta be etched in marble or granite."

Obviously.

Why not? TWX did it

Analyst Tim Boyd said any kind of tie-up between Yahoo and AOL would be viewed as sort of a lifeline for AOL, whereas Yahoo would view AOL's display as a bit of an "albatross," such a complicated deal would be the equivalent of a 5-team pro sports trade, and "I think they've got other things to focus on."

Did Robert Zoellick
call the top?

The Fast Money gang spent about 10 minutes at the top of Monday's show kicking around gold, but no one had quite as funny of a quip about Robert Zoellick's reserve currency as Zeke Karabell on the Halftime Report.

In fact, Stephen Weiss even put Melissa Lee in clarification/full disclosure mode.

Weiss said on the 5 p.m. show, "To me it seems like the risk/reward is becoming close to intolerable ... there's just not enough gold out there as you pointed out on the midday report, it's virtually impossible for it to happen."

"By the way," Lee said, "the, the information that Stephen was pointing out on the Halftime Report, in terms of not being enough gold out there for a gold standard, that's according to UBS, so I just wanted to give that attribution out there."

"I think energy is a much better commodity play at this point," Weiss said.

Brian Kelly said he did a "quick little calculation," and said if you "took the M2 and divided it by how much gold the U.S. has, it would imply a gold price of $33,000 an ounce."

Flash: Trader suddenly likes
commodity that’s going up

Rich Ilczyszyn spoke about gold in effusive terms on Monday, which had Melissa Lee sensing a reversal.

Ilczyszyn said "I think gold right now is running on its own internals" and who knows, maybe it can go up to $1,500.

Lee said that sounded a little different than what Ilczyszyn said a week ago when he suggested people should maybe start moving out of gold into energy, and wondered if it was an "extension" of his previous point, or a flip.

"Absolutely not. I would call this an extension," Ilczyszyn said. And what would you expect him to say?

Brian Kelly, who gushed about gold along with Pete Najarian, reported that "China has eased investment restrictions for individuals in China owning gold."

That prompted Melissa Lee to ask about smuggling gold in underwear. (Seriously. She did ask about that.)

Guy Adami commented on the strength in FCX. "I'll see your copper and I'll raise your silver," Adami said. "Silver Wheaton still works here."

Over the shoulder
of Stephen Weiss

Gary Kaminsky called in to the Fast Line on Monday and reported that based on what he sees at his local deli, he finds "eggs up 87%," which prompted a strange laugh from Pete Najarian, plus projections of "meat prices, take it or leave it, up 20% later this week, plastic containers up 15%. These are the real impacts of what's happening," Kaminsky said, during a lengthy commentary that allowed Melissa Lee ample time to pose for the camera.

Lee then turned to Stephen Weiss, who looked confounded by the configuration of the Prop Desk camera and uncertain as to whether he should fully turn around or not. Weiss said Conagra's got a host of great brands, and those kinds of brands always have pricing power.

Kaminsky pointed to Hebrew National Hot Dogs and said to Weiss that this is just a factor for people to keep in mind, that food inflation is occurring.

Melissa Lee then made such a good joke, her best in months probably if not all of 2010, that had us wondering what Mel was driving at, 'cause she doesn't often unleash the deadpan humor. "Do you think that is an affluent consumer's, uh, hot dog, or..." Lee said, to laughs from the gang that reverberated through the broadcast.

Lee told Kaminsky, "I'm very proud of you, you did boots-on-the-ground research for this segment." Kaminsky said Mark Fisher is going to be on the Strategy Session Tuesday.

Kate’s post-work
destination: salon

Kate Kelly, reporting on GM's road show Monday outside Guastavino's, courageously faced the wind and looked good in an all-day-long hair battle. Kelly said on Fast Money that some people she talks to think "GM might be impossibly cheap" from $26-$29, and that the IPO will be open to small investors, "anyone with a brokerage account can get into GM."

Stephen Weiss praised DIS as a buy, saying "it's one of the cheapest entertainment stocks out there."

Melissa Lee introduced Ron Shah, business partner of Stephen Weiss and a veteran of Tim Seymour's Trading the Globe. "Congratulations on joining CNBC's contributor team," Lee said.

Shah recommended 5 India stocks, 4 of them (not Infosys) at 52-week highs, he said: Tata Motors, ICICI Bank, Dr. Reddy's, HDFC Bank and Infosys. Shah said Indian markets can be too volatile short-term, so they must be played on a "long-term basis."

Doug Kass sort of sounds like he’s blaming the government for sinking his market call

Zachary Karabell evidently wasn't too impressed with Robert Zoellick's controversial call Monday for a global gold-based reserve currency.

"It was one of the weirder, uh, solutions proposed by an official in a real position of authority that I've heard in, well at least since last Tuesday's election," Karabell said on the Fast Money Halftime Report.

Jon Najarian said he likes ANR and not MEE because on Monday, you'd rather be long the one that was sold off on Friday. Melissa Lee, who looked sharp in red, asked Karabell if he still believes in his short of MEE.

"I've been short this name for 5 days, or 6 days, so obviously Friday was not the best, uh, the best day for that," Karabell said. "Fundamentally I think it's an odd deal ... I still don't like the name."

Karabell also wasn't too keen on HPQ. "I find the way they've managed that company to date, and particularly the board, so disturbing that I'm not a buyer of the company," he said.

Steve Grasso said the feeling on the floor is that RIG is undervalued up to $70, and at that point, it's a question of how much future drilling you believe in.

We were all excited about Doug Kass placing a call on the Fast Line Monday, but the results were about as impressive as a YHOO quarter.

"I remain unconvinced that QE2 is gonna deliver, um, the anticipated virtuous and smooth cycle of growth that the Fed desires," Kass said. "I thought that the market was toppy for some time now."

He admitted he called the top too early and can't really get on board at this level and bemoaned the infusion of Fed money. "We had Cash for Clunkers, now we have Cash for Stock Market Gains," Kass said.

Kaminsky: Maybe 6-12 months
before GM gets in S&P 500

Gary Kaminsky on Monday's Strategy Session said a lot of index buyers may be on the GM sidelines for a while, because S&P "will not likely look at GM for inclusion in the S&P 500 index for 6 to 12 months."

Kate Kelly, reporting live outside a restaurant, said the GM road show is pitching the company to a varied group of potential investors, and there is interest in the IPO price. But "can they raise the price range?" Kaminsky asked rhetorically. "They've got a number of different masters that they have to fulfill and please here."

David Faber pointed old GM bonds and said, "those bonds Gary are pricing in a much higher deal ... 20% above where the IPO is currently priced."

Guest Charles Kantor stressed caution on buying GM because "this is a very complicated company."

If there’s a parabolic move,
Herb’s on the case

Initially on Monday's Strategy Session, Sam Hocking of BNP Paribas spoke about how hedge funds are underlevered on the long side during the autumn rally and that some think the gains are just a "head fake." He said hedge fund redemption notices are generally due 45 days before year-end, so we're just a week away from a better grasp on leverage.

Gary Kaminsky said hedge fund greats like Stan Druckenmiller got out in part because closet indexers have taken over the market, and not to expect bigger hedge fund inflows into traditional equity funds but rather convertible arbitrage and high-yield funds.

But moments later Charles Kantor declared the rosy scenario legit, saying, "We think there's tremendous value in owning equities." Kantor recommended Brookfield Asset Management, Cummins, and "United Postal Services."

Despite that glitch, he made a decent analogy, "I wanna play golf with the wind, not into the wind."

The latest high-flying stock targeted by Herb Greenberg is Netflix, which he said revealed a "significant change" in the margin outlook for digitial media in its last earnings report. "What will happen if this becomes an all-out price war?" Greenberg asked.

We goofed.
Oh man, did we goof.

We occasionally try to point out on this page (more as a personal reminder than anything) that we don't want to make predictions, because we suck at them.

But then again if we're going to chronicle when people on Fast Money are right or wrong, such as Steve Cortes' recently brilliant BAC short calls that in the last couple days have morphed into a rather confusing "Chinatown"-esque she's-my-long/she's-my-short, we've gotta sorta hold the predictions on this page to similar accountability. (Actually we don't, but it's the right thing to do.)

So it was that somehow, incredibly, on September 15, we posted this headline:

CNBCfix prediction:
Christine O’Donnell all the way

Unfathomably, the first line of this prediction was: "We always enjoy being ahead of the pack whenever possible."

Since this page is getting hung out to dry, it gets an opportunity to defend itself. We had barely heard of O'Donnell before her primary win. That night, we saw what she looked like. We saw what her upcoming Democratic opponent looked like. We put 2 and 2 together.

And got 3.

Quite frankly, this prediction was betrayed by mathematics. She ran in the primary against a respected candidate who was widely regarded as a shoo-in.

The fact O'Donnell could defeat this caliber of candidate by a convincing 6 percentage points, and do so poorly on Nov. 2, is the electoral equivalent to the Kansas City Chiefs knocking off the Patriots 34-20 in the playoffs, then losing the Super Bowl to the Atlanta Falcons 49-13.

Obviously, we should've thought this one through.

The gut feeling here is that the witchcraft tape — which surfaced after this prediction — did it. No witchcraft, and it's at least competitive.

Unfortunately this horrid call obscures some of the (far) better election ones that were made in the CNBCfix community but generally didn't creep onto this site.

O'Donnell remains a doll who didn't belong in the Senate. She should get married, she'll have no trouble finding takers, and consider a career as a pundit, though we're skeptical that'll have staying power.

One subject related to O'Donnell that only Dylan Ratigan (to our knowledge) has harped on is the relative underperformance of female candidates. O'Donnell and Sharron Angle sought 2 seats that should've easily ended up in the Republican column, and perhaps Election Day's biggest embarrassment was Meg Whitman's utter annihilation in California, despite a massive financial edge, against a dinosaur who should've retired a decade ago or more. Maybe there's an unfortunate bias among traditional Republican voters against female candidates. Whatever. We're done with election calls.

Conscience clear; back to Fast Money.

[Friday, November 5, 2010]

Whew! John Chambers’ ‘tone’
resurfaces on Fast Money

We were afraid after seeing Friday's Fast Money Halftime Report that no one was going to speculate about John Chambers' "tone," but Mark McKechnie of Gleacher bailed everyone out on the 5 p.m. Fast Money Friday.

McKechnie said he expects a "standard Cisco print," but "I think more important though is gonna be John Chambers' tone."

It always is.

Evidently.

Melissa Lee seemed to cheerlead for a repatriation tax break. Lee said in 2004 the repatriation rate was slashed to 5% and change, and "that year more than $300 billion in overseas profits came back to the United States."

And all of it went into subprime mortgage-"backed" securities.

Guy Adami said Cisco should probably be trading over $27, and if the quarter is "halfway decent, I think it will."

So impressive, no one’s doing it

Guy Adami on Friday's Fast Money saluted the "nice job by CW" on Thursday, when Carter Worth pointed to an "epic" divergence between the S&P 500 and financials and said something's gotta give.

That made us wonder: If Worth is correct, isn't there an obvious trade in this scenario?

Which would be, go long XLF, short the S&P 500?

If the banks and the S&P are to reconverge, at any level, then banks must outperform the broader market.

Yet, nobody actually suggested that trade.

4 Horsemen, 3 Musketeers, etc.

Maybe the hottest stock picks on Friday's Fast Money came from Simon Baker, who actually claimed he's from Brooklyn.

Baker said "outsourcing continues to be very very strong," and some names should be bought on the pullback.

He called Cognizant, Infosys and IGate the "3 Musketeers" of India outsourcing names.

Guy Adami pointed to LVS' 52-week high before it pulled back Friday and suggests people "gobble it up" if it falls back to the high $40s.

But Steve Grasso said in the $50s, LVS shares "are overextended at this point." Brian Kelly said the stock is "too high-flying for me."

Cue sonar sound

About the only time Guy Adami got serious on Friday's Fast Money was during his sour take on the unemployment numbers. "At best, they were tepid," Adami said.

Joe Terranova though reiterated a Halftime point, "the insurance is too cheap," and thus he expects the market to continue climbing.

Adami also managed to say "I think you buy PCP" if there's any spillover selloff from the Boeing problem.

But after Stephen Weiss spoke about a whale being in Titanium Metals who will have to cash out someday, Adami cracked, "Pete's got a titanium plate in his head."

"And at some point, he's gotta cash out," said Steve Grasso.

Weiss also spoke about Foster Wheeler as an "Under the Radar" trade. Guy Adami said they shouldn't make the sonar bad-joke sound when discussing an "Under the Radar" stock.

Schiff: My silver stocks
are awesome

Peter Schiff barely waited for his introduction from Melissa Lee on Friday's Fast Money Halftime Report before laying in to QE2.

"We can never have a recovery while the Fed is doing QEs," Schiff rambled. "We're gonna be in worse shape than we were before they began."

After Schiff stopped talking, Lee said, as Pete Najarian chuckled, "I like a man who, who's got a lot to talk about and starts right out of the gate with what he wants to say, so I commend you for that."

Schiff gushed that "I've never seen rises like this" in the silver stocks he owns.

They talked about John Chambers’ comments, but not his ‘tone’

Pete Najarian's guffawing was so out of control on Friday's Halftime Report, it stopped Joe Terranova in his tracks.

Melissa Lee had asked Terranova if he was interested in RIMM at these levels.

"No I don't think so," Terranova said, as Najarian cracked up.

"What's so funny Pete?" Terranova asked, not really getting much of an answer.

Steve Grasso said that "If you're looking for the real high-beta, you're not looking for Cisco." Referring to John Chambers' commentary, Grasso said, "I find it ironic that everyone trades the whole tech space off of what he says and doesn't buy his stock."

Unemployment 9.6%;
truck driver shortage ahead

Derek Leathers, COO of trucker Werner Enterprises, introduced a new word for Fast Money Halftime Report viewers Friday.

Leathers responded to a question about rails hurting the trucking business by pointing out his company is involved in the whole intermodal scene, and it's really "more coopetition" than anything else.

Leathers said current trends and future projections still point to 70% of hauling by truck because trains simply don't go enough places. But he said "at some point there will be a driver shortage."

Steve Grasso wasn't sold on the market rally. "I still think we're due for a pullback." But Joe Terranova said the options protection is so cheap, it's a sign to him that the market's going higher.

Grasso conceded that banks may be an outperform after really only leading the market for a few months back in that furious 2009 rally. "Now you're gonna see people start to dip back into financials again that avoided 'em like the plague," Grasso said.

ETFs are ‘crazy stuff that
no one understands’

Micro-cap expert Robert Ladd, despite being an agreeable fellow, may not be that well cut out for television.

But he sure had some interesting things to say about ETFs on Friday's Strategy Session.

"I don't think anyone understands ETFs," Ladd said, crediting Herb Greenberg for suggesting the possibility recently on TSS that an ETF could possibly implode. It's "crazy stuff like that that no one understands," Ladd said.

"An ETF is not made for the long-term investor, it's made for the day-trader," Ladd added. "The bottom line is nobody knows what they're doing with these."

Ladd really didn't make a strong argument for micro caps and obviously not the micro-cap ETF that Gary Kaminsky recommended. "I can mark a top of a market pretty well," Ladd joked, suggesting his appearance on CNBC could do just that.

General Motors plays ‘Survivor’

Jeff Kronthal, already a regular on The Strategy Session, made a case Friday that 30-year Treasurys are now offering value. "I think the market's beginning to take some of the risk out of it," Kronthal said.

Kate Kelly spoke briefly about GM's IPO road show. We got a bit lost when Kelly started breaking down the execs into Team G and Team M.

Gary Kaminsky said the real thing to keep an eye on here is that the closet indexers can't buy GM until it gets into the indexes, so people are thinking about it riding it into index inclusion and then unloading.

Anthony DiClemente said investors might've been "partially expecting the buybacks" announced by CBS on Friday.

[Thursday, November 4, 2010]

If you’re ‘distraught’ about your job, why did you run for office?

Paul Ashworth, a Fast Money guest caller on Thursday, said basically the Fed's QE2 amount isn't high enough, so 1 of 2 things will happen: admitting defeat, or doing more of it. "The Fed's got to scale up its purchases," Ashworth concluded.

Guy Adami explained that he missed a lot of morning classes in college, including economics, but he wondered about the Fed's perceived obligation to spur job growth, "When did that become one of their mandates?"

Ashworth said there's a dual mandate, "it's maximum employment and price stability."

Patty Edwards, whom you might expect to hold conservative views about taxation and government spending, suggested that government may have bought time, but little else, with QE2 as municipalities are having a difficult time raising money. "It's not today, but who knows what's gonna happen," Edwards said, explaining that her own governor is "absolutely distraught" about cuts she'll have to make.

According to this article, Christine Gregoire actually blames her budget situation on election defeats of tax hikes. "I wish the voters had helped us out," Gregoire complained.

If Karen had known her loss would be this small, she would’ve lost more

Karen Finerman made a comment on Thursday's Fast Money about Potash that frankly echoes something we were wondering.

"If I had known that Potash would only be down 4 or 5 dollars on the rejection from Canada, I would've been gigantic in it," Finerman said.

The day the offer was announced, the stock jumped about $30. Staying there without a deal though seems a reach. Mosaic and Agrium, though, are also up big since that day, so maybe all BHP did was re-price the sector.

Finerman doubts a deal can happen. "They've gotta look elsewhere if they wanna be in this space," Finerman said.

Finerman, who wore cute white/blue combo, said it doesn't make a whole lot of sense to her that stocks can be at September 2008 levels while unemployment is way higher than its September 2008 level and won't massively correct in a short period. "There is a disconnect there somewhere," Finerman said.

Steve Cortes seems to overrate
a 200-point rally

Steve Cortes incredibly said on Fast Money that Thursday's rally wasn't just a nice recovery of a market still down about 20% from its all-time high ... but in fact the same thing as the legendary Nasdaq of Y2K.

"I do remain skeptical," Cortes said. "Watching CNBC today, talking to traders, reading the press ... for me it's very reminiscent of the kind of talk I heard in the tech crisis, or pre-crisis days in early 2000, there was no circumstance by which tech could go lower."

Wow. What does that kind of forecast project to, S&P 400?

Guy Adami, who likes to say that stocks as opposed to people tell the truth except when stocks say something he doesn't believe, nevertheless concurred on some level with Cortes, saying Thursday's rally "had all the feeling of sort of those blowoff tops. ... I think it ends extraordinarily badly."

Adami also delivered an anti-drug message.

Mike Ryan also mistakenly
interprets effect as cause

Mike Ryan of UBS briefly spoke with Fast Money on Thursday about the effects of a divided government. And then he made this comment:

"Gridlock isn't good when it morphs into dysfunction."

What Ryan is actually saying is that the government hasn't done enough about some favorite political subject of his, likely for good reason, and now there is even less chance of that happening.

Steve Cortes tried to convince Ryan that maintaining tax rates is effectively a fiscal stimulus. Ryan said forget it, it's just removing the potential shock of a tax hike off the table.

Steve Cortes’ daily roundup
of pop-culture paraphrasings

"To paraphrase Fletch, I was talking to my broker, and I said, 'Are you using the whole fist there broker?' "

"I'm all out of love, to quote Air Supply."

Worth: ‘Epic moment’ ahead
for S&P/banks divergence

Carter Worth, a staple of Options Action, handled a chart segment on Fast Money Thursday and pointed to the divergence between the S&P 500 and financials.

"1 of 2 things has to happen," Worth said. "The financials have to come to life," or if not, the broader market will have to "succumb."

"It's an epic moment," Worth claimed.

Joe LaVorgna, in a completely humdrum, strictly for-the-record-only type of commentary on the always-uber-dull jobs report, predicted "Consensus. 80 on the headline. 90 private. Unemployment rate down to 9-5."

Bill Brodsky of the CBOE got a couple minutes to lobby the government about what he'd like to see from Washington and praise regulators he likes/has to deal with.

Whitney Tilson redefended his short of Open Table, but quite frankly said nothing new except that he continues to short it. "The valuation has just gotten more extreme," he said. "Eventually the laws of gravity will catch up to this stock."

Tilson said it takes "nerves of steel" to short stocks like this one. Karen Finerman noted he said "nerves."

Even though people like being nice to Melissa Lee, Melissa tends to be shy about being the center of attention. So, Guy Adami's nice little tribute to Melissa's birthday Thursday, with a 20-something theme song to boot, fell flat as a pancake as Melissa abruptly changed the subject.

Grasso: Obama was
‘wasting the market’s time’

Steve Grasso, asked on Thursday's Fast Money Halftime Report to comment on the White House's acknowledgment that it might support an extension of all income tax rates, delivered something of a roundabout facial to the president.

"The feeling on the floor was maybe he would've held on to a couple more seats if he would've said this a couple months ago instead of wasting the market's time," Grasso said. "But I guess I'm a little, I'm slightly biased."

Grasso said the market doesn't need every big sector to gain in order to rally. "I'm actually seeing some flow in selling the pops on financials," he said.

Guy Adami said that while he doesn't really believe in the rally, he respects it. "1,219.80 in the S&P" is the key level, he said. "Truth is price, price is truth."

Buckle up

Patty Edwards cited the old Jeff Macke complaint against retailers on Thursday's Halftime after praising the higher end. "I was very shocked however that JCPenney and Kohl's both put up pretty dismal numbers frankly and blamed it on the weather," Edwards said.

Edwards said KSS still has good management, and if the selloff continues it's a buy.

Edwards said the only teen retailers that looked particularly good this time were the Buckle and Zumiez. Melissa Lee offered up someone's dubious-sounding theory that 18% of Buckle stores are in the highest grain-producing states and thus those teens are likely to have more money than other teens in other places who would be forced to go to Abercrombie & Fitch.

Edwards said all the denim and cotton that's being sold now was purchased long ago before the commodity surge; she expects margin crunching not to happen till the 1st quarter of 2011.

Grasso fears MOT reverse split

Guy Adami said he likes the QualComm story, but "maybe we're making a double-top here."

Steve Grasso was much more crestfallen over Motorola and said it would be great if Carl Icahn could work some magic. "The price action is very disheartening ... I'm still long it personally," Grasso said. He said confounding matters is talk of a reverse stock split; "those never end right."

Rich Ilczyszyn said "I'm not saying oil's the new gold," but people might want to think about a commodities shift.

Patty Edwards unfortunately couldn't resist not only a dreaded cliche, but even announcing beforehand it's a cliche.

"It's a cliche, but don't fight the Fed," Edwards said.

Happy 3(X)th, Melissa

The highlight of Thursday's Halftime Report, which figures to be a highlight all day Thursday, was the extended birthday cheers for Melissa Lee, including that little stuffed camel Guy Adami and Erin Burnett got Melissa that hopefully she'll keep around on the show.

"Darn right, I do not have one," Lee said.

Steve Grasso said, "I got you a Tiffany's gift certificate."

Jon Najarian said what's really doing well Thursday after the "gold contracts" he bought for Melissa.

Terremark chief Manny Medina even wished Melissa a happy birthday twice during his interview.

Canada taking a page from
Hugo Chavez’s playbook?

David Faber said on Thursday's Strategy Session that it's time to basically forget about the Potash takeover.

"I'm told the bar to doing so is too high for BHP to realistically consider this deal anything but dead," Faber said.

Guest Kevin Arquit said the Canadian government managed to "send a very strong message to others" about its willingness to accept foreign investment.

It's kind of hard to knock the Canadians for this — after all, the U.S. blocked the CNOOC-Unocal thing — but there are many bigger-pictures about interfering with capitalism, such as — perhaps — the notion that BHP will just look elsewhere, and so will other big companies, and then Potash will be at a competitive disadvantage, unlike, say, Anheuser-Busch, which seems probably as strong as ever with the added muscle it's got.

Or whatever. Something like that, but that's for another time.

Gary Kaminsky said the Fed "might as well have just gone out and bought S&P futures," because QE2 accomplishes the same thing. He said he can't see a "significant correction" through year-end.

"The Federal Reserve is telling you to buy S&P stocks," Kaminsky said.

Glenn Britt of Time Warner Cable said the biggest headwind for his business is that "household vacancy rates are at an all-time high."

Kate Kelly reported concerns about Chesapeake's hedging program but said Aubrey McClendon thinks it's all OK, and is shifting away from a nat-gas-focused company.

"This company is, in a sense, a hedge fund," said Gary Kaminsky.

[Wednesday, November 3, 2010]

The greatest struggle of our time (revisited): Shaving 5 percentage points from the unemployment rate

As soon as it was announced that Peter Boockvar would be delivering Fed commentary on Wednesday's Fast Money, it wouldn't have taken a rocket scientist to guess what Boockvar's opinion of QE2 would be.

"The Fed has it backwards," Boockvar said. "They're trying to goose asset prices to make us feel like we're wealthier so we'll go out and spend and thus help the economic activity as opposed to asset prices reflecting the underlying fundamentals of economic activity."

But that actually makes Boockvar reluctantly bullish on stocks even though in his opinion it's bound to end horribly, perhaps leading to a situation of rising rates while not being delevered. "You can't be short this market when the Fed is printing money as they are," Boockvar said.

The good stuff came later, when Joe Terranova and Steve Cortes started to scrap over the subject.

Terranova questioned what Boockvar's alternate idea would be and approved of Ben Bernanke's plan, saying "he's gotta do something ... it's proper, it's warranted."

Cortes jumped in and said, "Joe I would say, he doesn't have to do anything. The Congress and the president should be cutting taxes."

Cortes said "all stimuli are not created equal," and it's better to let the private sector do it.

Interesting. But the knee-jerk reaction here is that we've gotta agree with Terranova. While smart people question both approaches, there's way too much skepticism about tax cuts — skepticism from some that they're needed, and skepticism from others that they'll last long enough to do any good.

Remember that George Bush a couple times tried sending people $800 or $600 checks, and Barack Obama did something like add 8 bucks a week to people's paychecks, and most people said none of that did a damn thing.

On the other hand, the belief here is that government tends to get into problems because it probably collects more money in general than it should, and anytime that amount is reduced (in taxation or borrowing), it's a positive.

We would've liked to hear more about this on Fast Money, but birthday girl (on Thursday) Melissa Lee, as she's likely to do whenever a quasi-political subject is introduced, jumped in and said "Something tells me this is a debate we could be having all night long," which means cut to the next topic.

Check please, says Herb

Herb Greenberg is on the warpath about another high-flying stock, Open Table.

Greenberg questioned the quality of the earnings but said most importantly, "This is all about a company that's changing its business model." He said it's using a new method that "in effect is free to restaurants unless customers use it," and "that suggests the company is reaching for growth."

Joe Terranova, who was an impressive voice of reason Thursday, countered that "Whether it's shorts covering or not, you have to respect the price action. Stock made a 52-week high. So keep that in mind if you want to step in here," Terranova said.

Guy Adami joked that he had no clue how Open Table worked, and he always thought the best way to get a table was to "grease the maitre d'" and hand him a $20 bill.

Don’t go around,
breakin’ young girls’ hearts...

Brian Kelly, handling Fast Money's new "Chart Center" Wednesday, proved to be Mr. Unflappable and was so good at it, his giggling colleagues probably didn't even notice.

Kelly showed off the new screens — which honestly aren't really that interesting but fit the new evolving decor at Englewood Cliffs — with panache and even neatly did a casting gesture to show how the charts come up; "It's like I'm fishing," Kelly said, causing Pete Najarian to howl.

Kelly pointed to a couple homebuilding/home improvement names he likes as an offshoot of the Fed's action, specifically Plum Creek and Home Depot, where he's seeing a "nice uptrend" but unfortunately referred to as being the destination of the "weekend warrior."

"I actually bought a little bit today," Kelly said.

"Next time I expect you to do a Billie Jean sort of move," said Melissa Lee, snickering.

Debbie Weinswig got about 90 seconds (if that) to talk on Wednesday's Fast Money and unfortunately used it to say (incorrectly) "Nordstroms."

Weinswig said clothing sales for October will be soft because the weather was warm, but November should be strong. She likes the names that are "more aspirational, more fashion-forward," which is an approach this site will try to emulate. Pete Najarian said TJX fits the bill for him.

At the end of the program, Melissa Lee reported that Canada is balking at the Potash takeover, and POT was down $7 in afterhours. Joe Terranova, who owns POT, said "obviously this is concerning ... I need more information."

2-pick race for Fast Money
stock call of the year:
BP (Tilson) vs. HLF (Edwards)

Anthony Scaramucci told Fast Money viewers on Wednesday that the Fed's approach "augurs very well for stocks."

"The Fed since the Alan Greenspan days definitely believes in the wealth effect," Scaramucci said in what was some of the better explanatory commentary (at least to amateur mopes like us) about what the Fed is doing that we've heard on CNBC recently. "The Fed is making a guess here, at least according to hedge fund people that I've talked to, about a 3X multiplier effect, or some kind of creation of $1.8 trillion dollars in liquidity," he said.

Scaramucci said as a result, BP is the Hedge Fund Trade of the Week. "It's basically BP, it's Whitney Tilson's stock," he said. Scaramucci said it's "still attractively priced ... a lot of the headwinds are away."

We don't conduct an official Fast Money stock-picking contest — no way to evaluate every single call — but we will declare a winner at year-end of what seems like it was the best trade of 2010.

In 2009, we saluted Jon Najarian for telling Dylan Ratigan either late February or early March that bank stocks could double very shortly if mark-to-market got eased.

In 2010, the 2 front-runners appear to be Whitney's Tilson plunge into BP in the low $30s in early June, and Patty Edwards' early March (and ongoing) recommendation of Herbalife, a pair of undeniably downright sensational calls.

Candidates elected!

Steve Cortes on Wednesday's 5 p.m. Fast Money grasped as much as possible at finding reasons to be negative on the market.

"I haven't seen something this built-up with this little reaction since Geraldo Rivera tried to open Al Capone's vault," Cortes said.

Cortes complained the market "yawned" on a "very boring day" in spite of all the exciting election results, and he would "look to possibly go short."

Cortes, though, sounded like he was in some sort of denial in acknowledging his short-oil position isn't working.

"I'm still short," he said, and "feeling some pain on this trade." But, "We only had a couple hours of trading post-Fed, so let's not make too much of today, let's see what happens in the next couple of days."

Joe Terranova takes
a swipe at the Ivy League

Joe Terranova advised market players to ignore the "social consequences" of what the Fed is doing. "Let them debate that in the classrooms at Princeton," Terranova said. What matters about the Fed, he said, is that "they wanna force people out of Treasurys."

"I bought some more TLT today," said Brian Kelly. "There's absolutely no way they're gonna let 10s and 30s go too high."

Richard Volpe said thanks to QE, "there's a lot of buy power here" for Treasurys.

Steve Cortes, in something of a reversal, said BAC and WFC may have upside because of the steepening yield curve. Guy Adami countered that the yield curve was steep a year ago and banks didn't do anything. "I still think the banks are a sale," Adami said.

CNBCfix, ahead of the news

Anthony Scaramucci on Wednesday's Fast Money pointed out that Thursday is Melissa Lee's birthday, something flagged on this page Wednesday morning (see below).

"Aw, thanks Anthony, I appreciate that," Lee said, smiling.

Dr. J: Gold activity shows
real assessment of Fed’s plan

Jon Najarian made an interesting observation about gold on Wednesday's Fast Money Halftime Report that required a couple viewings to sort through.

As we understand it, Najarian was saying that estimates by some of $100 billion a month by the Fed are much larger than what he's been able to measure recently, and that the gold price activity Wednesday seems to confirm his findings.

"I look for it to be more moderate QE, rather than very aggressive," i.e. the $100 billion level, Najarian said. "If it was that big, you would consider buying some gold here."

That brought disagreement from a couple colleagues.

"These markets are not very big," Steve Cortes said of gold and silver. "And when they go down, they can go down very violently. ... I think the gold trade is incredibly crowded and dangerous. I'm short gold."

"I think the gold trade is still on," said Brian Kelly. "One thing the market has not priced in is monetary retaliation."

Marco Rubio, VP in waiting

Steve Cortes on Wednesday's Halftime praised voters in a way that sounded like he just ran for office.

"The American people I think sent a very clear message that we reject the European model of more government intervention, higher taxes, lower growth, higher unemployment. Is that all good news? Absolutely," Cortes said.

Cortes said he thinks that the Tea Party is "very critical of dollar devaluation," so there could be some battles brewing there.

Analyst Ed Mills said, "I think the clear result from last night is increased pressure to extend all the tax cuts." Melissa Lee tried to make a joke about "metaphor indigestion down the road" that didn't really work.

GM’s Don Johnson seems to take IPO secrecy to the extreme

Melissa Lee on Wednesday's Fast Money Halftime Report tried to ask GM's Don Johnson a simple question about the IPO, only to run into a brick wall.

Lee asked Johnson whether the IPO, whenever it happens and at whatever price, would cause people to buy more cars, knowing that the company is trading again on the stock market and presumably healthy.

Johnson first said he couldn't comment on IPO matters. Pressed, he delivered the corporate line about how GM is executing on so many levels and that's why people will want to buy the cars.

Brian Kelly said the IPO notion works for him. "I'd probably sell out of Ford if I had it, and I would buy the GM," Kelly said, but he was a little more enthusiastic about a platinum ETF as a derivative trade.

"I'm using PGM," concurred Patty Edwards, who revealed, "personally, not looking to get into the GM IPO; maybe I'll miss something big. I'm willing to take that risk."

Edwards in a mostly quiet performance did mention Herbalife, but also spoke of the chances of bringing back all that offshore cash held by U.S. companies without paying such a hefty tax that would help control our runaway deficits which is another common gripe on CNBC that apparently is on the short end of this particular philosophical divide. "We do have the possibility now that we could get some sort of a tax break on the repatriation of all those dollars overseas," Edwards said.

Jon Najarian said he likes DO and RIG to benefit in the upcoming months after "ludicrous" offshore drilling ban is gone. Steve Cortes pointed to Petrobras and said "I am skeptical that Brazil can keep rallying."

Now, if BAC could only
unload Countrywide

Gary Kaminsky and David Faber took up the subject of the Bank of America and PNC stakes in BlackRock on Wednesday's Strategy Session, with Kaminsky saying it's actually "good news" for BlackRock that the banks are unloading some of their holdings.

"This overhang has really been out there for institutional owners of BlackRock for the last couple of years," Kaminsky said, but he said the real question is, "Why is Bank of America doing this now?"

Bloomberg reports that BAC "agreed with federal regulators to achieve at least $3 billion in net gains from asset sales by the end of this year, and had accrued about $1.9 billion as of June 30." Bloomberg says BAC can post another $275 million with this sale.

Kate Kelly said Build America bonds, a popular program set to expire at year-end, are sort of caught in limbo from the election.

"Muni traders are telling me that there's a good chance that it will expire in late December but actually be taken back up in the new Congress early in the year and perhaps be renewed as part of an omnibus spending bill maybe in February, that's kind of the betting," Kelly said.

Guest Ben Thompson said the bonds have "expanded the demand base for the sector," and "it's not a partisan issue either."

Thompson said the best guess is a "32%, 1-year extension."

Kelly said gridlock is actually a statement. "By not deciding, Congress is deciding," Kelly said.

After today, we hopefully won’t hear ‘uncertainty’ on CNBC for a while

The Strategy Session brought in Rick Santelli on Wednesday for a roundtable (er, literally, we think it's a trapezoidal table, or something like that) discussion on the Fed and quantitative easing.

Gary Kaminsky said what's important is the exit strategy. "If there's no direction in terms of when this program will end, the next question is, will the bond vigilantes ... decide to take control away from the Fed ... and make a determination that rates have to go higher," Kaminsky said.

Rick Santelli said — and isn't this basically always the case with every securities instrument in any market at any given time — "The real question we need to ask is how much distortion is in the markets based on the Kool-aid."

Santelli said a debt-conscious Congress would be a plus and a minus. "Being fiscally conservative could be bearish for equities" right now because it would remove some of the safety net, he said, but be bullish long-term for a more "sustainable" fiscal policy.

David Faber cracked that Gary Kaminsky, in Rex Ryan/Jim Tressel V-neck sweater, was "disguised today as a college dean."

Newmont CEO: $850 floor
under gold, basically forever

Melissa Lee didn't waste much time in unleashing the obvious at Newmont Mining CEO Richard O'Brien on Tuesday's Fast Money.

"Gotta ask you the question, what is your outlook on gold?" Lee said.

Asking the CEO of a gold miner what his outlook is on gold. Yep, definitely gotta ask.

Part of O'Brien's response included, "What we've seen in this, uh, this sort of asset bubble is interesting because, gold prices, while it's gone up, it's only gone up 5% in the quarter, and I think that sort of steady increase is good for gold."

"You used the phrase 'asset bubble,' so whenever I hear that from a CEO I sort of zero in on that," Lee said. "Does that imply that gold is trading on something other than fundamentals at this point?"

O'Brien said, "Since probably the end of 2008 we've seen gold really trade more as a currency than just on its supply-and-demand characteristics."

Karen Finerman, perhaps recalling when Guy Adami spent literally months claiming that ABX buying back its hedges was the sign of a top in gold, asked O'Brien at what point NEM would consider hedging again.

O'Brien said fuggetaboutit ... "There is no place where I'd hedge into this ... I continue to believe that we're gonna see gold over the next several years trade up into the $1,500 range."

Lee followed, "So you're basically saying we're never gonna see 800 or $900 an ounce again?"

"I think that's exactly right," O'Brien said. "I think we are going to see a, a floor under gold, 850 or $900 for the foreseeable future."

Lee then played editor as well as interviewer. "The headline that I got out of this here is, uh, "Bye-bye hedges for good, $850 an ounce is the floor for gold at least for the foreseeable future'."

Um, not bad, but that's kinda long for a headline.

"Actually what I got out of it," said Brian Kelly, "was that he talked about gold and new gold finds being few and far between. To me that goes to the junior gold miners who have some of these," and might be takeover targets for a company such as Newmont that has cash.

Put KOL on the backburner

Daniel Clifton spent an afternoon Tuesday on the Fast Money Prop Desk, and quite frankly we wondered what purpose was served by having him on the program Election Day.

Especially when he made the coal ETF KOL his Final Trade if — stressing "if" — the Republicans took the Senate.

If his trades are conditional on the election outcomes, then 1) it seems like he's not particularly confident about the outcomes he is predicting, and 2) what's the point of having him on before the election?

Clifton reiterated his Halftime Report prediction of GOP Senate control, citing the "macrodata wave moving to the Republicans over the weekend." He said the consensus is that Republicans will pick up about 8 Senate seats, so if it turns out to be 9 or 10, it's a positive.

Overnight we learn
Daniel Clifton was wrong

Ed Groshans visited the Fast Money setup to, like Daniel Clifton, explain how certain stocks should perform in the wake of elections, in this case financials.

There were so many hypotheticals and if-thens in this clumsy segment, we could hardly figure out most of what Groshans was saying, particularly in regards to Visa and Mastercard, even though we rewound the tape and actually watched twice.

Groshans did say of banks, "I don't wanna be in the Regions, I don't wanna be in the SunTrusts too much ... but I do wanna be in USB, MTB ... PNC."

Daniel Clifton used the segment as a chance to reveal a Brag Trade. "We kept financials out of our Republican sweep portfolio, and everything in there has gone up since Labor Day, so I think that was the right decision going into this election."

Except, obviously, we now know Clifton's decision to predict a GOP takeover of the Senate obviously was not the right one.

Dan Greenhaus mistakenly
interprets effect as cause

Dan Greenhaus of Miller Tabak visited the Fast Money set Tuesday to talk about, like everyone else, politics.

Unfortunately, Greenhaus was putting the horse behind the cart.

Greenhaus claims "Gridlock is bad, because we're at a point in our country where we really need to have some fundamental changes, adjustments, progress, whatever words you want to use, something really should be done to address some of our problems."

In fact, gridlock exists for the exact opposite reason, that most people don't see any fundamental changes, adjustments or progress needed in the government.

"Gridlock" is merely an excuse used by people who have come up short in the category of political causes, frustrated that the government doesn't give them enough of their own agenda. Generally these are people 1) decrying the amount of debt, 2) decrying the lack of an energy "policy," 3) decrying lack of immigration "reform," 4) decrying existence of don't-ask/don't-tell, etc.

Presumably, had he elaborated on his point, Greenhaus would've said something about getting the deficit and entitlements under control and somehow eliminating "too big to fail."

It seems like every other day this page is pointing this out, but the truth is that the smart people in and around government (note: that doesn't mean everyone in and around government is smart, only that there are smart people in and around government) don't care about the debt and so other people probably shouldn't either.

There are gobs of things in the world that are too big to fail and always will be; best to just accept it and move on.

The funny thing is, while Greenhaus spoke, the text at the bottom of the screen said "Greenhaus: Government is good when gov't action is not needed." So he's halfway there. They're sending him hints; he just hasn't quite nailed it yet.

Melissa’s birthday is Thursday;
age speculation centers on 38

Last year, Fast Money tried to conduct a birthday celebration for Melissa Lee on Nov. 4, only to have Melissa basically snuff out any evidence of cheering.

Guy Adami said at the time that people could look up Melissa's age on the Internet. In fact, as far as we know, they can't.

We're always keeping the ears tuned for clues. Best guess at this point is that Mel is still on the good side of 40.

Karen trips up Dan Niles

Ed Groshans might've had the most confounding segment on Tuesday's Fast Money, but normally stellar Dan Niles gave it the old college try himself.

Niles tried to advance/explain his thesis that the world's macro rally is about to come screeching to a halt, while throwing in some lukewarm views on various tech sectors.

But Karen Finerman said a lot of factors beyond just the U.S. elections have been driving the macro environment, and she demanded Niles explain exactly when the music stops, either with QE2 made official, or election night.

"Maybe I should put it differently," Niles conceded. "I think the U.S. elections and the U.S. Quantitative Easing 2 have been driving the market." But then he said the markets will start noticing things such as Germany is trying to make it so bondholders can get hit if they buy sovereign debt, that the EU Club Med nations have a lot of borrowing to do ... Niles also spoke of "put-back mortgages, those things are gonna start to come to the forefront."

Allscripts chief Glen Tullman used the term "nonpartisan" a couple times on Fast Money Tuesday and actually said with a straight face, "We're indifferent as to the election results."

The Volt better be good

Phil LeBeau reported breaking news on Tuesday's Fast Money, that GM apparently is going to be able to carry forward $50 billion in losses to reduce tax liability under a TARP provision, which isn't supposed to happen in bankruptcy. "You would have to wonder if that brings the appeal up slightly, GM vs. Ford," said Joe Terranova.

Brian Kelly wondered how Toyota would react to that. (Slightly different electorate factor going on there.)

Karen Finerman made a case for trucking as a rebounding sector. "Chicks love trucks, right?" Finerman asked, then added in a pun, "We're really starting to see a pickup in trucks, right?"

"This is a space that I actually like," Finerman concluded.

Finerman also said "I still like the financials," she still sees inflation and plays bonds that way ("very out of the money, we are short the long end of the curve"), and likes the idea of BP's earnings and business getting back to normal.

Steve Cortes insisted it's "problematic" that financials haven't been rallying with the S&P.

Karen Finerman wore neat black top with another exquisite scarf. We were really hoping this site would get another inquiry about who the designer is, which is what happened with a previous scarf Karen wore with an orange outfit, so that we could legitimately suggest Karen reveal the designer on TV. But then again, we can make that suggestion anyway even if no one asked.

NFL TV map
oddity of the week

For some reason, a tiny little pocket of western Arkansas will see Sunday's Patriots-Browns early game on CBS while most of the country gets San Diego-Houston or Miami-Baltimore.

Best guess is that newfound star Cleveland running back Peyton Hillis, who really isn't that great but is one of the team's bright spots, is responsible for the local interest, given that he attended Arkansas.

The map, as always, is available in the upper right corner of this page.

Dan Clifton: Republicans
will take both Houses

Dan Clifton said on Tuesday's Fast Money Halftime Report that independent voters are surging Republican and he predicts the key Senate races will tip that way.

Melissa Lee asked Clifton if he's predicting a takeover of both houses despite the consensus of experts. "That's absolutely correct," Clifton said.

Jon Najarian, for his part, said "I look for a Republican victory, including a sweeping Republican victory, 60-plus seats I'll call that in the House."

Steve Cortes claimed everything election- and QE2-related is "fully priced" into the market. But "I bought Clorox" on the selloff because he likes the company.

Patty Edwards revealed, "I did a little bit of buying this morning; I picked up a little bit of Whole Foods ... Herbalife."

Melissa Lee explained that Stephen Weiss said a day ago that QE2 is good for the high-end consumer. Patty Edwards let viewers know that any call like that requires more analysis of the mall-walking variety.

"To just buy the high-end, or just buy retail in general, I think is a fool's move," Edwards said. "It's about individual stocks."

Interpublic CEO Michael Roth said "we're coming off such a crappy year, that the growth is, is, is exceptionally high. I think it has to moderate."

David Stockman disheartened that Congress will be ‘partisan’

David Stockman painted a very bleak picture of the U.S. debt situation on Tuesday's Strategy Session.

But first, he credited the program for raising the general TV bar.

"I'm delighted to be here," Stockman said. "This is a great show; you get some real serious thinking."

Stockman complained that "the debt is growing at twice the rate of GDP, and we're going into a new Congress that'll be totally stalemated. I mean, it'll be rancorous, it'll be partisan, and it'll be all, I'm afraid, oriented to the 2012 elections."

Despite that rhetoric, Stockman actually said this is really a bipartisan combine, that Republicans, just like their rivals, oppose any restructuring or cutbacks to Social Security and Medicare payments. "There's only a tiny portion of the budget that they even want to cut," he said.

Stockman said the Bush tax cuts were a mistake, "We shouldn't have done it."

He called the demand for bonds at such low interest rates merely a central bank-run "casino" and a "manipulated, medicated market."

Gary Kaminsky, pointing to deficits as a percentage of GDP, asked Stockman the relevant question, really the only one that matters: "Is there a level" that we reach with debt at which we "cannot reverse" the cycle and ever hope to see surpluses.

"I think we're already there," Stockman said.

OK, (deep breath), the last thing we want to do here is argue with a presidential budget director over national debt trends.

But you know what they say in poker; don't play the cards, play the people playing the cards.

And if you look around the table, you see few people of significance in government objecting to the debt levels that exist.

Kaminsky's question hinted at what's really going on. The truth is that the really smart people who run the vast government enterprise, and all the people who advise them, agree on a bipartisan basis that whatever the most dangerous level for debt issuance is, we haven't reached it yet.

And so if they're not being kept awake at night by this, why should anyone else ... particularly when people were making the same comments Stockman made Tuesday back in the 1980s.

Stockman told Kaminsky, "we're already there" past the point of no return on debt. But if we were really already there, wouldn't that have been the first thing Stockman said on the program, warning people to head for the hills and grab a Remington (the ones that don't fire without the trigger being pulled) and a couple years' supply of food and hunker down?

As for raising taxes, here's the problem: Just because you'd like to see taxes raised for some endeavor doesn't mean the money will indeed go to that endeavor if taxes are raised. In fact it's likely the opposite, you'll instead hear politicians claiming "We've got people hurting right NOW, we can't afford to be tackling a Standard & Poor's rating at this time." Tack on a few more percentage points to middle- and upper-income taxpayers supposedly for the "debt," and watch it go to Medicare, while the deficit grows just as before.

So, we'll take a pass.

Bruce Grossman:
‘They just want income’

Bruce Grossman also joined David Stockman at the table on Tuesday's Strategy Session, one of the most provocative in a long time. (Actually, Grossman got to the table before Stockman, but we prioritized Stockman's remarks higher on this page because he's more of a bigwig.)

Grossman complained the market is supposed to be looking ahead and evaluating earnings as a "discount mechanism," but "it's not really functioning that way right now."

"I think you still have a fair amount of spread tightening in the junk market," he added, saying investors "just want income .. there's a massive shift going on in the markets."

"I couldn't agree more," said Gary Kaminsky.

Grossman went on to explain that economic situations are helping some and not others; "there's a real have/have-not situation," which is kind of like saying the rules of the NFL are being exploited by the Patriots to go 6-1 while the 49ers can only go 2-6, but whatever.

Herb Greenberg said investors have been bidding Open Table sky-high despite its use of a discounting model for 2 quarters. "The only thing that really should matter is the quality of new deals with restaurants," Greenberg said.

[Monday, November 1, 2010]

Steve Cortes believes his vote might boost the Dow

Steve Cortes, who, let's be honest, sort of owned Fast Money in the last couple weeks with his collection of bold contrarian calls, seems to have bought into a media perception regarding politics during an episode of Fast Money on Monday that seemed so dependent on waiting for Tuesday's election outcome, we can't imagine what Tuesday's show will be like.

Cortes pointed out that he voted early in Chicago, and (no surprise here) made the joke about voting twice, but saying he really means it, because the Senate seat from Illinois requires a vote on serving the remainder of the current term and another vote on the next term.

(Joe Terranova asked Cortes who he voted for and Cortes said, "Whaddayou think?")

Here's where Cortes got really dubious: "My guess is that Obama is not going to lose his, his home seat," Cortes said, but as far as the markets are concerned, it would be "very constructive" if a Republican won.

The media likes to talk reverentially about "the Ted Kennedy seat" or "the Obama Senate seat."

One difference is that someone else has been holding the "Obama" seat since 2009. The big difference is that Kennedy spent 46 years in his, whereas Barack Obama spent "4" in his, using it basically as an "Advance to Boardwalk" card, accomplishing virtually nothing, spending most of the abbreviated term taking the advice of Harry Reid (per Game Change) that he'd never go anywhere in the Senate and might as well try something else, like defeating Hillary Clinton, and in which the latter 2 years consisted of jetting the Iowa-Hollywood-New Hampshire circuit.

Now he's trying to run the country just like a center-right, big-government Republican, or in other words, his predecessor.

Presumably, V and MA are plunging resources into Nevada

Political expert Ed Mills (the guy who insisted for the longest time that not enough Democrats could be persuaded to switch to Barack Obama's health plan that apparently isn't lowering anyone's costs but is a huge bill nonetheless) returned to Fast Money on Monday to say he's particularly focused on 3 Senate races: West Virginia, Illinois and Nevada.

Mills said if Senator Harry Reid is defeated, it looks like a battle between Chuck Schumer and Dick Durbin for majority leader, and if Durbin wins, "that increases the chances for more interchange legislation, which could be an overhang for Visa and Mastercard."

Panel to Jesse Eisinger:
Thanks for nothing

The Fast Money gang on Monday conducted an extensive go-round (could've been called a 360, if Anderson Cooper hadn't already stolen the term) with Jesse Eisinger over the latest ProPublica scoop by Eisinger and Jake Bernstein on the CDO market, this time an SEC investigation of a deal between JPMorgan's "Squared" and the Magnetar hedge fund.

The panel regarded this as basically a "show-me" interview. In other words, show me why I should care, because I don't.

That was the gist of a pointed question by Joe Terranova about what's really changed here, after Eisinger revealed to Melissa Lee that the SEC likely isn't emboldened by the Goldman Sachs Abacus blueprint because unlike Paulson not investing, "Magnetar invested in the bottom tranche" of Squared.

Eisinger ultimately said this is what matters: "The SEC's very interested in the CDO business ... these cases are extremely difficult for a variety of reasons ... it's hard to rip off sophisticated investors."

Karen Finerman, who it was revealed reloaded on JPMorgan last week, damned the report with (very) faint praise. "Apparently there is headline risk. I wasn't looking for this to come out this week. ... I don't think it's that dramatic," Finerman said.

Steve Cortes, noting that Goldman Sachs and JPMorgan weren't the big CDO players but are the most polarizing/attention-getting names, said the SEC is basically just a political arm of somebody's army that times cases for various purposes. "I think that they are reading the politics very correctly here," Cortes said. "They will not, in my view, go after Citi and BAC."

Cortes: Poor are suffering
under dollar destruction

Steve Cortes appeared to hint on Monday's Fast Money that there's an unspoken class-warfare game playing out.

"Trashing the dollar is not cost-free," Cortes said. "Who gets hurt the most? The lower end of the spectrum."

Cortes said the natural gas market to him is like how people view the Chicago Cubs; apparently they think/hope it's going to be a winner, but it won't be because he's never seen such a "protracted" destruction of a commodity in his career.

Cortes also said the same thing he said a bunch of times last week: "I think the oil trade is very crowded." Steve Grasso disagreed.

Steve Grasso said people might be underestimating the rise in high-end commodities for a name like Tiffany. "Those input costs went up drastically," Grasso said.

Karen Finerman might've been wearing a new gray outfit.

XOM tried to buy YHOO?

Steve Grasso on Monday's Halftime Report served up an interesting new analogy that quickly caught on with his colleagues.

"ExxonMobil has been the Microsoft of the integrated names," Grasso said.

He said he thinks the market could go higher but that it would be a "short-lived pop in the S&P."

"You know what they say about Microsoft — it's the Exxon of the tech space," Zach Karabell joked later, one of 2 or 3 references to this theme.

George Gobel was usually bluffing

This page hasn't done a comedy critique for a while (much to our chagrin), but Zachary Karabell reaffirmed on the Fast Money Halftime Report Monday that he's well-familiar with the Paul Lynde shtick from the old "Hollywood Squares."

See, the general routine is for Melissa Lee to ask Karabell a somewhat lengthy question, and then before answering, Karabell responds with a wisecrack about something previously said by another panelist.

And no matter how good the joke, Pete Najarian guffaws all the way to high heaven, as though he found a corner blitz by the Sacramento Surge unblocked.

Consider Monday's entry: Brian Kelly initially said he's not into the oil-services plays but more of a "3rd derivative" type of thing. "For me the trade is to go much more into something like an RSX, which is the Russian ETF," Kelly said.

Karabell responded to Melissa Lee's question as to whether he's in the weak-dollar oil trade by saying "First of all I'm still stunned at the notion of Russia suddenly being less risky than Halliburton."

Lee said that's a "statement in and of itself."

"I'm shocked and awed," Karabell continued, as Pete Najarian howled.

Now, let's face it ... this one was pretty much a dud. But is Karabell capable of delivering in this role? Absolutely. There's a serious vacuum of intellectual humor on TV and the Web, and on Fast Money in particular, it's a battle of extremists, such as, for example, if you rated Pete Najarian's ability to laugh at a joke and his ability to tell a joke on a scale of 1 to 10 you'd get 10 and 1, respectively.

"I'm much more interested in something like Schlumberger," Karabell finally got around to saying. "I get a little nervous when people sort of plunge into oil simply as a derivative, a currency play. I'm much more interested in one of the fundamental drivers."

Guest Charles Boorady said he thinks the GOP is not likely to extend the stimulus.

Huge year for M&A:
if you’re 3PAR

Every business TV viewer knows if you watch long enough, you're bound to hear one of those dreaded stock-market clichés.

On Monday's Strategy Session, Richard Zinman actually put together a twist on an old favorite that we've rarely heard. "We're actually advising clients right now, buy the rumor, buy the news," Zinman.

He said he thinks "the equity market will grind higher."

Mark Shafir of Citigroup spoke about M&A but in fact couldn't resist one of those aforementioned clichés about why M&A hasn't gone ballistic just yet. "Bottom line is, you've got a lot of uncertainty," Shafir said.

Gary Kaminsky said the September-October market surge is not M&A-driven, but rather all QE2.

Kaminsky said even if an EXCO going-private transaction happens, "The impact of what's happening in the commodity ... has not changed at all."

Kaminsky and David Faber at the top of Monday's program discussed Wilmington selling to M&T and taking a share-price hit. "This is a company-specific situation," said Kaminsky, who said it's an example of the lingering effects of the 2008 crisis.

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