CNBCfix - Fast Money Review

[CNBCfix.com Fast Money Review Archive, September 2010]
[Thursday, September 30, 2010]

Jon Fortt: Valley bigwigs
call HPQ hire ‘nutty’

In a blockbuster episode of Fast Money on Thursday, it was Jon Fortt, on the HPQ decision, who knocked the reporting out of the park.

"The universal thing that I'm hearing is, 'This is nutty'," Fortt said. "This choice of this guy is a little puzzling to them. One person said, 'This board is dysfunctional', which is a little harsh."

Fortt went on to give this description of Léo Apotheker:

"Doesn't know hardware."
"Doesn't know acquisitions."
"Doesn't really know change management."

Brian Kelly said Apotheker must be skilled at something. Fortt said, "This guy is very good at software sales. This is a sales guy ... he is not known as an operational guy."

Too big to go parabolic

The thought that keeps coming to mind amid all of CNBC's fine coverage of the HPQ CEO decision is this stat:

300,000 employees.

Can a 71-year-old company with 300,000 employees be considered an attractive growth stock?

It's almost like Léo Apotheker has been tapped to run Pittsburgh.

We looked up the Fortune list of biggest companies by employees. It looks like this:

1. Wal-Mart, 2,100,000
2. UPS, 408,000
3. IBM, 399,409
4. McDonald's, 385,000
5. Target, 351,000
6. Kroger, 334,000
7. Sears Holdings, 322,000
8. (tie) Hewlett-Packard, 304,000
8. (tie) General Electric, 304,000
10. Bank of America, 287,000

The bottom line, after viewing 5-year and 10-year stock charts for each of these names, is that none of these stocks, save for MCD, has really done anything.

IBM's had some pockets of strength; so has Kroger. HPQ had a wonderful 3-year span from 2005-08, but even that didn't really offset the disaster from 2001-03.

It's important to note these companies pay dividends, so you get paid to wait. But the gut feeling here — we're not pros — is that these names are way too big to be a pure play on anything, it's virtually impossible to move the needle, and they are essentially GDP plays.

But there is a silver lining: It seems like you do want to buy them after severe punishment, such as what McDonald's experienced in 2003 after it lost a couple of CEOs in a short time, or what HPQ was dealing with during the Fiorina reign, or what Boeing faced with CEO and investigative turmoil in early 2003.

It would seem as though steep selloffs in these companies are generally overdone, because the revenues are so massive that resiliency is almost automatic. Whitney Tilson has made a similar argument in regards to BP (apparently between 90,000-100,000 employees, from what we could find); there is just too much revenue for this not to work.

And so, Karen Finerman and Steve Cortes' contention Thursday that so much bad stuff is baked into HPQ that the stock is maybe a buy is probably correct. Eventually someone, if not the newly named CEO, will figure it out. The only problem is, as MCD showed in 2002, you might have to wait a year or more.

Finerman ‘underwhelmed’
by HPQ hire

The Fast Money gang was taking the show-me approach to HPQ's new hire Thursday.

"It's clearly underwhelming," said Karen Finerman, who looked so good in gray outfit that all you wanted to do was watch Karen talk for the whole show. "He's gonna have a tough road to really get everyone on board."

"I'm actually very surprised by this," said Anthony Scaramucci. "I would've thought that they would've done a more broad-based search."

Guy Adami pointed out that he thinks ORCL likely easily outperformed SAP over the time Apotheker was in charge.

"There is doubt in the stock, no doubt," Finerman said.

Market says this is a ‘miss’

Anthony Scaramucci likely isn't casting a vote in the California primary. But he didn't seem particularly enamored with one Senate candidate when talking about HPQ CEOs' history of running the company this decade.

"Carly Fiorina did not do it successfully. So they did have 1 hit and they had 1 miss," Scaramucci said.

Brian Marshall diplomatically told the Fast Money gang on Thursday that "I think it's a mixed choice" by HPQ.

He conceded, "Leo kind of did have a mixed review running SAP ... his contract was not renewed earlier this year."

Guy Adami asked about Apotheker's record of integrating companies. "That remains to be seen," Marshall said.

Lovie Smith = not that bad;
players not so amazing

Gary Kaminsky didn't seem overwhelmed by the HPQ choice.

Melissa Lee told Kaminsky, "It strikes me that this is a little bit sloppy," then asked Kaminsky for his opinion.

"Let this be a lesson to all boards of directors and let this be a lesson to all shareholders especially if you own stock in a company where the celebrity CEO is running it," Kaminsky said. "You better have a succession plan in place. You better spend some time off the golf course when you have these board meetings and thinking about 'What if'."

In other words, that sort of sounds to us like, "Looks like the HPQ board blew it."

Steve Cortes said this might be good for HPQ buyers. "I'm a contrarian and I'm looking to buy here; I disagree with my friend Gary," Cortes said. "You know, look, I think the Mark Hurd premium has been extremely exaggerated ... this guy is not Steve Jobs, this is not Bill Gates."

Then Cortes unloaded a whopper of an HPQ comparison to football.

"I think they're a lot like the Chicago Bears. Lovie Smith is a terrible coach, but we have amazing players, and we're 3-0," Cortes said.

They don't really have amazing players, and it's likely 3-0 going on 7-9. But you have to hand it to them for what they've done so far.

Scaramucci: Fed, Krugman say
you just need to think you’re rich

The non-HPQ highlight of Thursday's Fast Money was Anthony Scaramucci's challenge of Peter Boockvar's 5% up, 5% down, we're-all-even thesis.

Boockvar had laid out an interesting theory that, offsetting the Dow against the gains in gold in recent year(s), stocks really aren't doing anything.

"It's just like giving somebody a 5% raise, but if their cost of living goes up 5%, they feel better, but in reality, they're no better off," Boockvar said.

"I actually think they are better off," Scaramucci countered. "Behavioral economics would dictate that the feeling of that prosperity does create some wealth effect and starts the economy. I know Bernanke believes that, it's in the Beige Book notes, they're talking about that. Paul Krugman wrote about it in his book. ... Even though you're right from a statistical measurement, it's really not the case."

Barry Ritholtz on AIG:
Don’t believe the hype

We were hoping Barry Ritholtz was going to set off some fireworks in his Fast Money appearance Thursday.

Instead, all he did was grumble that AIG owes too much money, specifically $182.3 billion.

"I don't see how a $27 billion-cap company, um, that essentially is insolvent given how much more they owe than they have, is ever gonna be able to repay that," Ritholtz said.

Maybe HPQ can buy Gymboree?

Steve Cortes reiterated Thursday that he's down on the banks.

"I'm very short, and I'm looking to add," he said. "I think that the XLF goes much below 14."

Karen Finerman said "Trading volumes: That's the problem" with Goldman Sachs and Morgan Stanley. She then lamented the state of commercial banks. "We need to see loan growth in those banks," she said.

Guy Adami said he thinks the Gymboree news, thanks to massive short interest, means there's still "further room on the upside."

Brian Kelly was skeptical of that. "It doesn't worry anybody that the news is out now?"

Anthony Scaramucci called Netflix a "very dangerous stock for retail investors."

Hours left for Matthew Simmons’
prediction to come true

Whitney Tilson sounded just as enthusiastic about BP as ever on Thursday's Fast Money Halftime Report.

"We had a great gift just a few weeks ago," Tilson said, pointing to the stock's level around $34, in which he "got a chance to reload."

Tilson said if the company reinstates its dividend and pays the same rate it did previously which he said it can afford, "it would be yielding 8.6%."

"Our price target is well north of 50 bucks," Tilson said.

And just think, a few months ago someone came on Fast Money and said BP wouldn't even exist by October.

Maybe the most interesting part of Tilson's argument though was his observation that BP sold those assets to Apache at "43 times cash flow." Every time Joe Terranova talks about Apache, by contrast, he says APA "stole" the assets from BP.

Tilson made an extended case for ADP, pointing out present headwinds such as unemployment and low interest it earns on money it holds before transferring it but saying once those trends change, there's a lot of room to boost earnings.

Cortes: China chart diverges
from Cat, FCX gains

Steve Cortes sounded like he was back in full bunker mode on Thursday's Halftime Report.

Maybe not at the same level as a few months ago when he predicted consumers wouldn't be able to afford Wal-Mart, but still bunker mode.

"I'm looking to possibly short Caterpillar," Cortes said, because "China has not been confirming the rally."

He added, "I'm long Treasurys."

Steve Grasso said "I've definitely seen the shorts dissipate" in Research in Motion, but he always doesn't see a groundswell of buying.

Jon Najarian said he thinks people merely started taking some profits in AAPL and AMZN around 11 a.m.

Sirius XM investor:
‘Churn’s come down dramatically’

Greg Maffei, a bigwig at Liberty Media, seemed to indicate on Thursday's Strategy Session that Comcast and Brian Roberts might've bought NBC the same way Jack Welch did — on the cheap.

"I thought it was a great deal," Maffei said. "If you look, Brian and his team bought into the asset when GE needed to get out. They did it in a way that was very advantageous to them in terms of delaying the cash outlay. They did it when many of the businesses were at the bottom of the cycle."

Maffei said that for Comcast, owning such a massive content provider is "a great hedge," presumably against whatever happens in the distribution business.

Maffei also spoke positively about his firm's investment in Sirius XM. "We were very lucky in sort of catching the market bottom February-March of '09," he said. "We've got about 40%, we are very happy with the performance obviously, the stock has done very well. More importantly, the underlying business, Mel's done a great job."

David Faber asked Maffei if car sales was too volatile a metric to get really comfortable with the satellite radio business. "We've seen some growth in car sales," Maffei responded. "We've also seen, and as you know, car sales, OEM installs are about 85% of our growth in gross ads at Sirius but importantly we've also seen reduced churn. Churn's come down dramatically in the business, and increased conversion from the free period to self-pay."

Faber asked if Mel Karmazin and Howard Stern will reach a deal. "That's still between Mel and Howard," Maffei said.

Maffei told Faber that in regards to Live Nation, "We think that, uh, the management team is good, a response Faber questioned. Maffei also said of Faber's question about "any chance" of QVC buying HSN, " 'any chance' is an open issue."

Faber also asked Maffei about stocks such as Netflix and the content distribution model. Maffei essentially said he thinks Netflix will run into tough competition. Faber at the close asked Gary Kaminsky if Maffei, without putting the proverbial words in his mouth, was calling NFLX overvalued. "You saw his body language," Kaminsky agreed.

David Faber showed a pretty slick The Strategy Session coffee mug, apparently now available. "Last for 5 months at CNBC, you get a mug," Faber said.

[Wednesday, September 29, 2010]

What if telegraphing it
does make the stock run

Eamon Javers, who occasionally delivers some breaking D.C. news for Fast Money, reported on the almost-unthinkable Wednesday, saying the government's messy takeover of AIG "might actually end up being in the black for taxpayers."

Among the reasons Javers cited, attributing calculations to "back of the envelope" stuff in D.C., is a potential $9.8 billion gain on the Maiden Lane franchise.

Brian Kelly seemed poised to jump out of his chair, complaining about the government "telegraphing" its plans for both AIG and Citigroup. "Why tell anybody anything? Let the stock run up," Kelly insisted.

Guy Adami piled on but in a different direction, saying he understands the bailouts, but "the terms they did them under could've been significantly better. I mean, there was no other person to turn to. ... Yeah we made money, we should've made a lot more," Adami said, pointing to Warren Buffett's investment in Goldman Sachs, which of course was just an act of global charity and had nothing to do with greed.

Steve Grasso at one point said, "I hate to be the Kudlow on this show."

Fast Money plays
Name That Voice

Melissa Lee shockingly revealed something on Wednesday's Fast Money:

She doesn't recognize Doug Kass' voice.

Lee was expecting to have Doug Kass on the Fast Line, only to get silence.

Eventually, someone obviously not Kass (because, you know, he didn't start with a story in that deliberate near-drawl) was heard to say, "Hey guys, I thought you were talking to somebody else."

"No, we're talking to you Doug!" Lee exclaimed.

"This is Joe," the caller said.

"Joe LaVorgna!" said Guy Adami.

The highlight of the rest of the segment was basically Joe Terranova gloating that he didn't read LaVorgna's report and Guy Adami gloating that he did.

The Kingston Trio version
is more famous

Doug Kass, when he finally reached the Fast Line, sure enough came well-equipped with another 40-50-year-old pop music reference.

"I'm, uh, growing more fearful both on technical and fundamental grounds," Kass said, explaining it's the "old Joan Baez song: 'Where have all the mo players gone. Long time passing.'"

He took another dig at Steve Grasso's technicals. Grasso responded, "It's 1,131 and 1,150. Whichever breaks first, good for 20 handles."

Didn’t Mao’s Little Red Book
predict $1,450 in 2010?

In case you were afraid gold might be out of catalysts, Brian Kelly served up a fairly appealing one on Wednesday's Fast Money.

"China, in August or July, opened up the market for gold, And that is a huge market. If they start saving in gold, and they start having products in gold, that's gonna be massive demand," Kelly said.

Patty Edwards said, "We are long gold but we have been trimming back our positions."

Steve Grasso said, "I love the action that we've been seeing in Weyerhauser." He also spoke about RIG, "I'm seeing a lot of interest on the buy side."

Readin’, writin’, reboot

Blackboard CEO Michael Chasen sounds like he's in an interesting business and probably would've had some interesting things to say about it — were he given a healthy amount of time.

As it was, Chasen mostly told the Fast Money gang Wednesday that schools everywhere are looking at technology to cut costs, that his company has a renewal rate of more than 90% and thus high visibility, and also boasts "a number of patents."

We couldn't find it quickly on the Web site, but one of these days we'll figure out exactly what Blackboard does.

Kevin Pleines of Birinyi happily said he doubts that the September rally is mere short-covering. He called it a "trader's market going into the end of the year."

Maybe K-Fine secretly has
a pilot’s license?

JetBlue CEO Dave Barger is often described as a "Fast Money Friend of the Show."

Apparently, very friendly.

Guy Adami reported Wednesday, "Karen was on a JetBlue flight yesterday. She called me today. They actually invited her into the cockpit."

"Oh really?" asked Melissa Lee, in a way that sounded like she had already heard this story, which she probably had in the green room.

"They love her," Adami said.

"Wow!" Lee said.

"Obviously. They're only human," Adami said, before continuing on to whatever he was talking about.

We gotta wonder if that one's OK with the TSA. But then again, who wouldn't make an exception for Karen Finerman?

Patty Edwards said she (Patty) was flying all around the country a week ago, and "Those planes were packed."

Melissa Lee made a comment that prompted Guy Adami to draw an obvious, ahem, connotation, telling Lee, "My mind is all over the place there," but because we're modest around here and don't want to hang this one on Lee, we're not going to list what it was she said.

Cortes: Consider
shorting the banks

Patty Edwards and Melissa Lee decided to dump on the Heartland on Wednesday's Fast Money Halftime Report.

Steve Cortes chuckled that, because of the farm economy, they're driving Porsches in Peoria, prompting Mel Lee to ask Edwards if that was true, which drew a shake of the head from Edwards, who suggested probably "Buicks" instead.

Edwards counts San Diego, Seattle area and Alaska among her stops. Come to think of it, last time we were in L.A. and San Diego, we never saw a Porsche either, just a lot of Hyundai, Camry, Accord, Segway, many of them on their way to Barack Obama fund-raisers.

Steve Cortes said "I think we're very close" to a top in gold.

Cortes rolled his eyes at banks, suggesting they might be up on a rising-tide scenario. "This is a chance to add to shorts on financials on the whole," Cortes said.

Patty Edwards agreed, "It is a place that you wanna short."

Patty Edwards brought up "commando," quickly becoming Fast Money's favorite subject.

How to be a success
in spite of Lehman Brothers

The Strategy Session on Wednesday introduced viewers to one Dagny Maidman, a money manager at Credit Suisse who has crafted an interesting strategy for getting ginchy clients into potentially more rewarding investments — selling puts on top stocks.

"I was able to formulate a list of stocks which my clients were comfortable with, and then, we can get up to 10-11% premium just by selling the puts, and if the market really goes down a lot, or 1 stock exceptionally goes down, then they're gonna buy that stock and that's gonna begin building out a core portfolio of stocks," Maidman said.

We'll let "able to formulate" pass mostly without comment; it's television, where people sometimes tend to speak unnecessarily formally, including Fast Money, which is presently batting around a more "formal" term for not wearing any underwear.

Maidman said the stocks she picks are "very well-known names, core franchises, very sustainable businesses, impeccable balance sheets, very low debt, minimum of 2% dividend yield."

She told Gary Kaminsky that, in a scenario where the stocks don't crash and her fund can continue collecting put premium, she expects to make "7-8% returns."

"I happen to like the put strategy, I think it makes a lot of sense," said Gary Kaminsky.

With just a tiny amount of Web searching, we discovered Maidman is a Yale law grad who worked on a suit against an investment bank, then decided she wanted to be in the world of investment banking, which until recently put her at Lehman Brothers, another example of the thousands of successful employees there who got the shaft for various outrageous reasons.

More interestingly, we discovered Maidman attended Hebron Academy in Maine, then Williams College, then Yale.

That kind of background is hardly uncommon among people you see on CNBC. They're not all actually geniuses — witness the closet indexers and the mortgage-backed securities guys — but in general it's a higher rate of brainpower return.

So, despite knowing very little about Maidman, you have to figure she's likely a success no matter what she's doing, legal, investment banking, selling puts, Twittering, etc., and that mopes who try at home the sophisticated stuff she's suggesting might not fare so well.

That, however, didn't stop Maidman from beginning her interview talking about all the fearsome "uncertainty" gripping Wall Street.

Gary Kaminsky delivered a shout-out to another CNBC program he recommended to David Faber. "You watch Options Action on Friday night David, you learn about how you can do these straddle strangles, selling puts, it's a great program," Kaminsky said.

Sam Hocking told TSS that "investors are still choosing larger funds."

David Faber mentioned Barry Diller's Live Nation exit and said why not, he's already got plenty of other stuff going on that he's more invested in.

[Tuesday, September 28, 2010]

Apple execs generally don’t disclose career plans at coffee shops

Fast Money had a field day promoting Gleacher's Brian Marshall, who purportedly put the kibosh to the once-hot rumor that HPQ had hired Tim Cook simply because Marshall ran into Cook at a coffee shop and Cook evidently told him the whole truth of the entire situation.

Guy Adami stated the obvious at 5 p.m. "He's not gonna tell this cat today, over coffee, oh, you know what, guess what, I am going to Hewlett-Packard," Adami said. "He's certainly not gonna be honest with that dude, right?"

Right.

Joe Terranova continued to defend Research in Motion at 5 p.m. "The downside in RIMM, it doesn't get below 40," Terranova said. "This is not a stock that's gonna continue its precipitous decline."

Even Fast Money guests
do the Brag Trade

Rich Ilczyszyn of Lind Waldock spoke with the Fast Money gang on Tuesday and was asked about his prediction for gold.

"Earlier in the year, you know, I called for $1,325," Ilczyszyn said.

Herb suggests the Street should
wake up and smell the ...

Joe Terranova said of the review in progress at Green Mountain Coffee Roasters, "This is clearly something that you would call a game-changer."

Later, Herb Greenberg visited with Fast Money and sort of failed to "connect the dots" for Melissa Lee about how the revenue recognition inquiry squares away with the short cases that have been made for the stock, but did say, "Annybody who's questioned the company has looked foolish."

Until now, apparently.

Terranova said people have been using the stock as a "proxy" for coffee futures.

Fast Money gives
SumZero.com a boost

Carter Worth's Fast Money chart analysis involving transports and Russell 2000 and double tops in certain stocks might've been pretty good, but thanks to graphics trouble and clumsy camerawork, we didn't really know what he was talking about.

Worth did tell Pete Najarian that the struggles of banks are "hugely important" and a "major red flag" for the broader market.

Brian Kelly seemed to think, on the heels of Mighty Meredith Whitney's uninspiring commentary, that maybe banks have hit bottom and people don't realize it. "What else can go wrong? We know they're not gonna go out of business," Kelly said.

The Web site sumzero.com was proud of David Sackler's chat with the Fast Money gang Tuesday, offering a link to his Regis analysis on the site's home page. Sackler said the hair chain is a Warren Buffett type of play that has suffered from mismanagement, and is a candidate to get taken out, "probably (by) a private equity firm."

It's entirely possible he's right. The problem is that the hair business just isn't very chain-able, there's no stature in a hair chains. Elites go to whatever famous local guy(s) operates in their city. The problem with going to a chain such as Regis, which Tim Seymour has undoubtedly never visited, is that, should you happen to get an excellent cut, it's entirely possible the person who cut it won't be there the next time.

Melissa fascinated by underwear talk

Perhaps inspired by the Power Lunch bra discussion, Melissa Lee decided to say "commando" as much as possible on Tuesday.

It started on the Halftime Report, and then once Guy Adami and Joe Terranova started talking about cotton on Fast Money, she briefly spoke about it again.

She even said something at Halftime about how she hopes cotton's rise doesn't stop people from buying premium underwear or something like that.

Lee didn't say anything about shapewear, one of the topics on Power Lunch, when Michelle Caruso-Cabrera, to our amazement, revealed she's a big fan of shapewear.

Lee doesn't need any shapewear. In fact she knocked one out of the park Tuesday with an appealing V-neck black sweater over white T-shirt.

Lee defended Pete Najarian's hair; "It's longer than mine in fact."

Lee also revealed she took a cruise with her family recently.

HPQ crosses the Grasso line

Regular Fast Money viewers will recall that, on the afternoon of Mark Hurd's departure Aug. 6 as HPQ traded afterhours in $41-land, Steve Grasso made a cautious "buy" call that set off Gary Kaminsky in a way that made the Bears-Packers rivalry seem like a golf outing.

HPQ traded above $42 on the following Monday and Tuesday, then began a weekslong slide.

We've refereed this one already and hope to avoid a booth review, but it's worth noting that HPQ in Tuesday's afterhours had finally climbed back over $42, which means anyone who took Grasso's advice and had not yet sold was, as of Tuesday evening, no worse than break-even, despite nearly 2 months of rather ugly performance.

Kaminsky might say, just wait until the new CEO is named, see if it doesn't sell off. Certainly possible.

Nations 1-0-1 vs. Karabell

A week ago Wednesday, we noted that Scott Nations disagreed with 2 of Zach Karabell's calls during the Fast Money Halftime Report.

Karabell had trumpeted both Monsanto, which he noted was lagging the pure fertilizer names, and Adobe, stung by a steep selloff that day from $32 land to $26.

Nations countered that MON's Roundup was getting killed by Chinese generics, and there's "no growth on the horizon for many of these names" like Adobe.

MON indeed has gotten killed since then, from $54 to $48. ADBE though has held steady at $26 since Karabell's gutsy call to potentially risk a falling knife.

California here we come...

Gary Kaminsky continued his rampage into TV big-shot land Tuesday by donning the jacket and guest-hosting Closing Bell with Maria Bartiromo.

After a Meredith Whitney interview, Kaminsky openly questioned how the federal government could turn down states after all it did for banks. "I find it hard to imagine that the federal government's not gonna put that money out there," Kaminsky said.

Kaminsky also took a crack at Sal Arnuk's contention that the SEC's flash-crash report is relevant and that the flash crash had an impact on retail investors' psychology by pointing out that Arnuk's own analysis suggests the trend of equity outflows was established long before the crash. Arnuk responded that by reading the blogs, it's clear that people are concerned about the average guy getting screwed.

Maria Bartiromo's "Inside the Mind of Google" just won a news Emmy, by the way.

Patty: Cotton to hurt
specialty retail

On Tuesday's Fast Money Halftime Report, Steve Cortes finally had an opportunity to discuss what appeared to be a successful and gutsy foray into RIMM a couple weeks ago.

"I did get lucky with the earnings surprise, I made a little bit of money on it, but I'm no longer involved," Cortes revealed. "The price action is terrible."

Patty Edwards made an interesting point about cotton's climb, saying names like Nordstrom and Macy's are insulated because they buy a lot of their stuff from others, but specialty retailers like Abercrombie & Fitch and American Eagle Outfitters are "manufacturing their own goods" and will feel it in the margins.

Joe Terranova continued to swim against the grain in defending RIMM and its early 2011 tablet. "I think this limits the downside," Terranova said, suggesting it won't get to the $30s and that "$40-$45, "that's your buy zone."

Patty Edwards said she thinks HPQ has a deep bench and will come out OK in the CEO marketplace. "I'm on board, I'm continuing to hold," Edwards said.

Average female consumer
buys 5 to 6 bras a year

Maybe the most intriguing CNBC interview on Tuesday was Tyler Mathisen's Power Lunch chat with Maidenform CEO Maurice Reznik, who is also a Fast Money Friend.

Mathisen asked Reznik, "How many bras does the average American woman buy in a year?"

Reznik answered, with a bit of a stumble that raised eyebrows, "Most consumers wear between 5 — buy between 5 to 6 bras a year."

Reznik said consumers' goal is "a bra that makes you look 2 cups bigger."

Mathisen's sidekicks on Power Lunch, Michelle Caruso-Cabrera and Sue Herera, were eager to jump in.

"What is the most common cup size?" Caruso-Cabrera asked.

"The most common size is 36C," said Reznik. "It used to be 34B."

Reznik explained that difference with what we think is one of the most dubious marketing slogans these days. "Consumers are getting bigger, or maybe they're being measured better, but 80% of American consumers wear the wrong size bra," Reznik said.

"Yeah that I learned on Oprah," Caruso-Cabrera said.

We noticed — not that we look for these things — but you'll find that "80% wrong size bra" quote just about anywhere there's a bra ad or interview, which is nothing more than slick marketing, telling consumers that odds are overwhelming they need to go out and buy new clothes.

Now, is it actually true? Doubtful. There's some truth to it, because think about every pair of pants you own, they're not all the same size, so they can't all be technically the "right" size, even though they obviously all fit or you wouldn't still be wearing them.

Reznik said the most exciting angle to his business is "Shapewear. We love shapewear."

Caruso-Cabrera wasn't impressed with the term, telling Mathisen, "You realize he's talking about girdles, right? That's the new word for girdles."

Mathisen asked Reznik, "How did you get into women's underwear?"

"Just one of those lucky guys," Reznik said.

Mathisen was the consummate pro. Unfortunately Power Lunch wasn't able to bring Mandy & Melissa from The Call over to this one.

Nanny state invades
The Strategy Session

Extremely well-prepared corporate board expert Janice Ellig had a statistic for everything during her visit to The Strategy Session on Tuesday.

"There are 15% women in professional positions in corporate America," Ellig said. "What corporate America has to do is look at that 15%, grow them so that they can go on to other boards."

"Grow them" ... So it's the company's responsibility to "grow" a certain sector of its employees so that they can be usable/better employees for other companies.

As opposed to the antiquated notion of people getting ahead on their own and not expecting someone to hand life to them on a silver platter.

Gary Kaminsky suggested that HPQ maybe doesn't have its act together in this whole CEO thing. "This has been a very, very long process," Kaminsky said.

Then, speaking of internal candidates, he asked rhetorically, "What happens to those that don't get the job?" His answer was they won't stay, they never stay.

Ellig at one point said it's important for a company to take its time. "You should not replace the CEO so quickly," she said.

[Monday, September 27, 2010]

Terranova: 2011 tablet rollout
puts floor under RIMM

Joe Terranova put forth a curious investment thesis on Research in Motion early on Monday's Fast Money.

Terranova said the fact the new tablet won't roll out until 2011 provides "underlying support in the stock price."

Anthony Scaramucci immediately questioned that, asking Terranova if Apple wouldn't have the iPad "2.0" by then.

"To me this is not an Apple story," Terranova said.

But Brian Kelly and Guy Adami were both apparently leaning Scaramucci's direction. "There's gonna be tons of tablets out there by the time this tablet gets to the stores," Kelly said. "I think is maybe an opportunity to sell (RIMM) stock again," Adami said.

"To me, this is not about Apple," Terranova insisted.

Rudy Gekko’s death: How tragic

Gary Kaminsky explained Monday what exactly Eli Wallach was doing in "Money Never Sleeps."

"Fortunately Bob Pisani did have the answer for those that are curious," Kaminsky told Melissa Lee. "He forgot his line during the filming of the movie; he basically did that little whistle noise, which became part of the whole character in the film, because Oliver Stone, your good friend, thought it was an excellent, uh, improvisation."

Anthony Scaramucci decided he could 1-up that: "Little more color to that Gary," said Scaramucci. "There's actually a guy who was a financial adviser to Oliver that used to do that, uh, I don't remember his name, but he was doing that on the set and so he was joking with Eli Wallach, and then when they went to do the take, he forgot the line, and then he did the whistle."

The interesting thing about that is that the original "Wall Street" DVD comes with (or used to) a very impressive series of interviews and director's commentary, and Martin Sheen notes he tried to improvise his lines several times only to have Oliver Stone demand he stick to the script, and "he was right," according to Sheen.

Stone's not above impromptu blunders, however; he decided to have a bald guy signifying death follow Jim Morrison around after he began shooting "The Doors."

This page expressed astonishment over the weekend at the mildly positive reviews the new "Wall Street" has been getting. But Monday, in a brief discussion about it among some extended members of the CNBCfix community — admittedly, a couple people who don't really know Tim Seymour from Jane Seymour — we discovered some regular Joes are actually (mildly) digging it. We don't get it, but whatever.

Gary Kaminsky got in a zinger at Anthony Scaramucci before the Fast Money chat was done Monday. "Melissa playing a CNBC anchor was so much more realistic than you playing a hedge fund manager," Kaminsky told Scaramucci. "I'll leave it at that."

Scaramucci called that a "double takedown."

Guy Adami said the "Money Never Sleeps" credits aren't fair enough to his colleagues. "You guys should've been named as like, 'Anthony Scaramucci as himself,' 'Melissa Lee as herself,' what happened there?" In fact, according to the Internet Movie Database, kind of the bible of film crediting, Scaramucci is indeed credited as "Himself." Lee on the other hand, like Larry Kudlow, is credited as "newscaster."

"That was our Andy Warhol moment in Hollywood," said Scaramucci.

Gary Kaminsky, by the way, opted not to talk about HPQ's CEO. "That story's getting so boring," Kaminsky complained.

Fast Money crosses the
‘commando’ barrier

Fast Money opted for an extended underwear conversation on Monday, but please note it really didn't involve Melissa Lee.

Guy Adami used the "c" word while Joe Terranova talked about raw materials prices. "The upside is still there for cotton; it's basically blue skies ahead," Terranova said.

Later, Anthony Scaramucci introduced the Hedge Fund Trade of the Week as Carter's, "the jammies for the 0 to 7 crew, also the underwear product."

His first argument for the stock was "10.7 times earnings for 2010."

"I do wear boxer shorts from time to time," Guy Adami revealed.

At another point, Adami referred to Gary Kaminsky's upcoming book. "I'm gonna hump it," Adami said.

"You're gonna hump the book," Melissa Lee said in the form of a question.

"That's not a sexual reference," Adami clarified.

Melissa refuses to reveal how she gets her hair looking perfect

Guy Adami started to talk briefly Monday about the Unilever-Alberto Culver deal, mentioned his favorite shampoo, Nexxus, and told Melissa Lee, "I think you use similar products."

"I don't," Lee would only say.

Anthony Scaramucci was extrapolating big-time on Wal-Mart's venture into Africa. "The Fed is actually acting in a quantitative easing position for the entire world right now, and companies are responding."

"I think it's just about placing a footprint in the continent of Africa," countered Joe Terranova.

Guy Adami asked Doug Freedman about Nvidia. "We actually sort of want to stay away from Nvidia," Freedman said, because it's "boxed out of the chipset market."

Richard Volpe of RBS spoke about the Fed and said, "They've essentially told you QE is baked in the cake at this point." What we noticed during his segment is that the sideways CNBC graphic said Volpe was speaking from "Stanford," Connecticut.

Karabell: Apple expectations
are ‘extraordinarily high’

For a few years now, about the only warnings you'd hear about AAPL shares involve the beta, the notion that if the market plunges, people will specifically sell this name because they've made profits in it and it's liquid.

Zachary Karabell on Monday's Halftime Report suggested that expectations might be starting to get a little stratospheric.

"I would still be nervous about the fact that this stock just keeps running up and up and up and up, and we're getting to that point where the expectations for forward growth are so extraordinarily high, that even Apple executing brilliantly is going to have difficulty living up to those," Karabell said.

He called it an "unbelievable company" but "not necessarily an unbelievable stock."

Much of Pete Najarian's AAPL commentary was lost via technical glitch.

Colin Gillis wasn't too optimistic about the RIMM tablet as a game-changer. "There's gonna be so many tablets clogging the marketplace," Gillis said, adding that Apple will probably do an iPad revamp next year.

Melissa Lee managed to crack up her panel — and viewers — by pointing out she was calling on Zach Karabell to discuss a hair company's M&A.

The giggling panel, anticipating a helluva one-liner, was obviously disappointed by a rare Karabell bomb, and we're not talking about the pair that Mike Wallace caught Sunday. "I don't know that we should say 'accretive' when we're talking about hair," Karabell offered.

A satirical video of "Chariots of Fire" caused Pete Najarian to needlessly crack up.

"I don't wanna be in Treasurys at all," said Brian Kelly.

ETF industry tells Herb
to stuff it

Herb Greenberg reported on Monday's Strategy Session he got an earful from the ETF guys over last week's report.

"The message I got loud and clear from anybody associated with the ETF industry is this: ETFs cannot collapse," Greenberg said.

He said the argument is there is collateral put down by short sellers, and additional share creation is possible if the shorts want to cover.

Either to allow the other side to make its point or simply embarrass it, Greenberg ran a European video clip of Morningstar's Bradley Kay explaining that ETFs pose "very little net economic danger ... it's in the hidden plumbing of the financial system."

"Whenever I hear those words I get a little worried," said David Faber.

The TSS crew brought on Morningstar's Paul Justice to defend Kay's remarks. "There's been hidden plumbing in capital markets for decades before ETFs ever existed," Justice said, saying there is "layers" to the collateral issue. Gary Kaminsky said the ETF industry has been very successful selling their products to retail investors. Justice said in general those are very strong operations.

How to free WMT from mediocrity

On Monday's Strategy Session, Gary Kaminsky proposed an idea we hadn't heard for unlocking WMT shareholder value — splitting the company into a domestic U.S. company and a separate foreign unit.

David Faber said he hadn't heard that one either, and actually doubted it could happen because there's a lot of executive bouncing between Wal-Mart's domestic and international operations in which rising stars are sent overseas to be groomed for Bentonville positions (now doesn't that sound exotic).

Nevertheless, this is an interesting concept. Quite simply, America is saturated in Wal-Mart. Its U.S. future is (very limited) to a few untapped big cities, incremental market share gains and losses, occasional union/government controversy ... and reliable profitability and dividend.

That last element is not to be scoffed at. But it's not going to push the stock. A pure play on overseas retail growth — particularly in emerging markets, Asia, Brazil, etc., you know the tired drill — would be an intriguing stock.

It's something Mike Duke should take a look at.

Do as I say,
not as I just said

Gary Kaminsky on Monday repeated a successful thesis of the last year, that airlines have gotten smarter, "They're not looking to do stupid things with their capital."

Kaminsky asked Strategy Session guest analyst Helane Becker if that heralds an era of fruitful investment in the airline space.

First, Becker conceded, "Beware the analyst or management that says it's different this time." But then Becker went on to say just that. "The idea of non-organic growth and taking out each other's capacity really enables the airlines to be profitable through a cycle," she said.

On the capital markets, Strategy Session guest Tom Fox said Monday this is "gonna be the biggest year on record for investment-grade issuance."

Gary Kaminsky said, "Buybacks don't significantly work over many cycles."

Shout-out: Johnny Paycheck

Chances are, the games of your favorite NFL team might not regularly be offered in your area. (This phenomenon by the way results from a strange brew of dinosaur-caliber pro sports ownership, politically sensitive antitrust exemptions, and downright buffoonery.)

So to get what you want, you probably either install a dish and order the Sunday Ticket.

Or, you scale Barstool Mountain.

Johnny Paycheck's is the outlaw country that never quite gets lumped in with the slightly more famous outlaw country guys (you know, "Willie, Waylon & Me,"). That's unfortunate. He didn't write many of his hits, but the soul, the edge, the heart, the voice ... "Barstool Mountain," written by Donn Tankersley and Wayne Carson, has everything to do with getting over a rocky relationship and nothing to do with sports-bar football but seems apropos when planting one's butt for 3-plus hours surrounded by 15 screens and about 10 times as many pitchers of Colorado Cool-Aid.

Paycheck is most well-known for his version of the David Allan Coe-penned "Take This Job And Shove It," a song co-opted by losers such as Steven Slater who didn't do his job and ran away like a coward and still got the national media to fawn over him.

Paycheck, born Donald Eugene Lytle, died in 2003.

You can hear "Barstool Mountain" on YouTube right here. But know that once you start listening to Paycheck, you're hooked.

Why are critics giving
‘Money Never Sleeps’
above-average star reviews
while conceding much
of it is lousy?

Sadly, "Wall Street: Money Never Sleeps" is a poor movie.

Many prominent critics — not all, but many — more or less agree with that assessment. So why are they are all giving it the benefit of the doubt in their star ratings?

The suspicion here was that Michael Douglas' cancer is affecting reviews. But of the prominent critics this site looked up, only the Chicago Tribune's Michael Phillips mentions Douglas' health problems as possibly affecting his assessment: "Douglas has been in the news lately for his battle with cancer, and that off-camera fact has a way of informing Douglas' on-camera achievement," Phillips writes.

The most startling reviews are from the New York Post's Kyle Smith, who (correctly) bashed the film in his text but accorded it passable star ratings. The Los Angeles Times' Kenneth Turan and Philadelphia Inquirer's Carrie Rickey somehow praised much of the acting while writing off the film in general. The list:

Joe Neumaier, N.Y. Daily News (5 of 5 stars): "Everyone involved brings their A game"

Christopher Kelly, Dallas Morning News (4 of 5): "Urgency and rage that makes it feel alive"

A.O. Scott, New York Times: "Nowhere near good enough and something close to great"

Roger Ebert, Chicago Sun-Times (3 of 4): "Entertaining story ... isn't nearly as merciless as I expected"

Lisa Kennedy, Denver Post (3 of 4): "Entertaining if contradictory drama"

Kyle Smith, New York Post (2½ of 4): "Makes no sense on either the micro or macro level"

Michael Phillips, Chicago Tribune (2½ of 4): "Script goes dangerously soft on its most valuable commodity"

Rene Rodriguez, Miami Herald (2½ of 4): "Feels somewhat superfluous — a sequel born of a creative whim"

Kenneth Turan, L.A. Times: "Unfocused, erratic, downright messy sequel"

Carrie Rickey, Philadelphia Inquirer (2 of 4): "Looks like a PowerPoint in search of a thesis"

It is highly unlikely anyone will be talking about this borderline wretched film a month from now, and utterly inconceivable anyone will remember it in 23 years.

The original "Wall Street" was exciting. The sensational vibrancy of New York City, the garbage haulers and dock workers punching the clock at dawn, the bankers and secretaries taking crowded trains and elevators to high-rise offices, the union guys sharing a beer after work, the hookers, the homeless, the rich zipping out to the Hamptons, their mistresses, their butlers, their art, their guest houses, their parties, their rivalries. Everywhere you look, a meritocracy.

"Money Never Sleeps" feels like it's filmed in Scarsdale. Bright, sunny, comfy and modern apartments, with the latest in flat-screen TVs. Trading rooms with almost zero rapport. So many people changing firms you can't remember who works/worked for what. A purportedly underdog leftist Web site operating in an office fit for Vanity Fair. Unabsorbable flowcharts on alternative-energy companies that make no sense. Sudden head-scratching competition with a female colleague that disappears just as fast. Basically no street people (1 sidewalk bump to the contrary). Bailouts and 2nd or 3rd chances for everyone.

Movies basically come down to what you can show. Here we have a protagonist reading résumés and dispensing rumors and overseeing wire transfers. The original was exceptional at depicting how Bud Fox made money. He secretly follows a whale around Manhattan to learn what company is in play. He brilliantly figures out how to get into a law firm at night. He strategically leaks facts, not rumors, to the press.

The original Gordon Gekko, like Michael Corleone who wasn't tragic enough, was inadvertently too admirable for some people's liking. Ironically, the values in "Sleeps" are probably more dubious than in the original. If Jake's ultimate investment was in any field besides alternative energy, you'd find his activities deplorable. Susan Sarandon's ridiculous nurse-turned-Realtor credit junkie absolves Wall Streeters of blame by implying greed happens to everyone. Bretton should probably be considered a hero if he turned in Gekko in 1987; his realistic price assessments at the bailout meeting likely saved the taxpayers money. A couple that has zero fun together, zero in common and zero reason to be together apparently will unite after a baby.

This page said previously that it's unfair to evaluate "Money Never Sleeps" based on the first film. What matters is whether "Money" is any good. It's not. But in fact it's not unfair to compare it to the original — because "Money" would be downright incomprehensible without it. Seemingly half of Michael Douglas' lines are inside jokes about the first film. A quirky tribute of the first film — dividing the screen into quadrants showing brokers on the phone as an homage to late-'60s style — is maddeningly repeated several times. The plot calls for Gekko's daughter — far more Patti Davis than Ivanka Trump — to hate her father, so a painfully detailed backstory involving onetime spoiled baby Rudy Gekko must be retold stupefyingly. Characters are forced to read not only their own résumés but the (abbreviated) Cliffs Notes of the 2008 banking crisis. Characters constantly are explaining who they are to people who presumably know them.

Just like in the original, the female characters are pathetic.

"Money Never Sleeps" is a dog with fleas that, like just about every prominent 20-year sequel ("Two Jakes," "Godfather Part III," "Star Wars: The Phantom Menace"), should never have been made. The passable if not enthusiastic reviews are merely an honorary addition to the mediocre 1987 acclaim of the first film that the critic community realizes was sold short.

[Friday, September 24, 2010]

Karen suggests something
of a fix is in

Karen Finerman, who did just about all the talking Friday, explained on Fast Money what it was like getting into the Petrobras offering.

"We just bought on the deal, and got cut back rather severely, which tells you I'm a smallish customer, and, uh, it was oversubscribed," Finerman said.

But Finerman said it's a "very high-profile" offering, and because of that, "you'll price it in such a way that the likelihood of it trading down will hopefully be very small. I think there's probably somewhat of a floor under it."

Guy Adami: Capitulating?

While some tend to gloat about their successful trades, Steve Grasso on Friday's Fast Money was remarkably candid about his own recent assessment of the S&P 500.

"I missed this rally too," Grasso said. "So from 1,040? I don't think I was buying it until 1,110 or somewhere around there. But you have to be buying the market now. We're probably going through 1,150. ... It'll probably take a couple of days to get there. This market's going to 1,200."

Karen Finerman was much more skeptical, even comparing the huge September run to March 2009.

I think, Finerman said, "you gotta be selling somewhat into this. Or, you can buy puts."

Finerman also reported an "enormous move" in the XRT and said the bar is now very high.

Guy Adami has been spending pretty much the last 12 months predicting the market's gonna go lower. A few times he's been right. But not Thursday. "I thought yesterday, turns out to be a massive head-fake," Adami admitted.

David Trone fails to give
Karen Finerman a highly convincing answer

David Trone of JMP defended his bullish call on Goldman Sachs, Morgan Stanley and Jefferies on Fast Money Friday.

"I think going forward, the stocks are a good buy. Um, we are on a general path of capital markets recovery after the crisis," Trone said.

Karen Finerman questioned that, saying equity IPOs are weak and bond issues are "generally much thinner margins," and asked Trone why he sees a rosier Wall Street picture than she does (not a rosier Wall Street picture than "Money Never Sleeps," which isn't particularly rosy toward Wall Street, but a rosier financial forecast).

Trone said CEOs are saying "The valuations are OK so now I'm gonna come to market," and as for his firm, "We're starting to see clients become a little more engaged in the equity side."

Karen: Look at Google go

Karen Finerman reiterated Friday that she doesn't really get the gold thing, but said when she finally buys, that'll be the top.

Michael Block, on the Prop Desk, didn't get many opportunities Friday to make a point (basically 1). "When gold is up on a day when equities are up, it's a risky asset," Block said. "When it's up on a day when Spoos are down, it's a safe haven. Let's make up our minds people."

Finerman said risk/reward suggests FCX has run too far. She said she could consider making a "bearish bet."

Karen said the tech story of the week in her opinion is the "slow creep by Google." She said the "valuation just got way way way too cheap."

CEO: Markdowns have long
been a holiday staple

The funniest thing on Friday's Fast Money Halftime Report wasn't even said on the Halftime Report.

Melissa Lee played a clip from David Tepper's Squawk Box appearance in which he said, if the economy gets better, stocks are a buy, and if the economy doesn't get better, than it'll be QE2, and "everything" will be a buy.

Zachary Karabell took a crack at that at Halftime, saying as Pete Najarian did a LMAO off-camera, "It's kind of like if things are bad they'll be good, and if things are good they'll be good."

Karabell found himself actually defending Amazon.com's valuation. "This whole Internet commerce space, which sounds like a theme that's been repeated ad nauseum for the past years, is a theme that needs to continue to be repeated ad nauseum because it is clearly driving commerce," Karabell said.

Steve Grasso also expressed admiration for the stock and credited Pete Najarian for some reason with identifying its strengths. "It's a bigger company than just the Kindle," Grasso said.

Express CEO Mike Weiss, a bit of a character who had a lot of interesting things to say, said discounts are simply a reality for much of retail and it'd be absurd for people in his sector not to plan for that (and we would extrapolate, people who constantly warn on CNBC about slumping consumers because they've noticed some markdowns at the mall need to get a life). "Our part of the market has been promotional for years now," Weiss said. "I've not seen a regular priced Christmas in I don't know how long."

Chicken trader skips
‘Money Never Sleeps’ premiere

Kate Kelly delivered one of the more entertaining Strategy Session reports recently: The reaction of Wall Street to Oliver Stone's new movie.

Most Americans probably aren't terribly sensitive to traders' feelings.

But maybe they should be.

"People are very concerned about the sequel in the sense that they think it actually may end up being yet another Wall Street bashing vehicle," Kelly said.

More shockingly, "One trader I was e-mailing with was invited to the premiere but said he didn't want to go because he feared being in Page Six," Kelly said.

Gary Kaminsky referred to Eli Wallach's bird-calling scene in "Money Never Sleeps" and tried to replicate it. "I can't figure that one out," Kaminsky said.

CEO does a Brag Trade

Normally all the crowing on CNBC about stock/commodity calls is reserved for the traders.

On Friday's Strategy Session, Goldcorp CEO Chuck Jeannes decided he could play that game too — on the price of gold.

"Earlier this year I said that we'd hit $1,300 so I guess I have to come up with a new number," Jeannes said. Ah, such a burden.

"I was quoted the other day saying I see 1,500 in the next year or 2," he added.

Strayer closed at $150 Sept. 15.
Strayer closed at $174 Friday.

Herb Greenberg updated Strategy Session viewers Friday on what is indeed an interesting, developing subject of for-profit education regulation.

But how much regulation will we get, and when? "This is one of the great guessing games," Greenberg said.

It was just Sept. 15 that Steve Eisman made a lengthy appearance on TSS to explain in detail his rationale for shorting the for-profit sector.

Eisman in fact singled out Strayer as a name people consider to be elite but is really in his opinion just as junky as the rest. "I think what they are better at is manipulating their loan data," he said then.

This page opined then (see below) that while Eisman made a very strong case, "Stocks affected by the government always seem to take a pounding when the news is bad, then miraculously we end up with some kind of bailout."

In fact, as of this moment, Eisman on The Strategy Session seems very much a contra-indicator.

And if you bought his thesis that day, you're in face-ripped-off land right now.

Picasso: Trading above book value

Gary Kaminsky said Friday on The Strategy Session that the "domino effect" from the successful Petrobras offering is huge.

"I heard 15 are gonna be tried to be brought to the market next week," he said, meaning not filings, but pricings and transactions.

Martin Sass engaged in a neat little business chat with no blockbusters. "I don't think we're going into a double dip. I think the market is priced into a double-dip," Sass said, predicting a "sustained period of sluggish growth."

Gary Kaminsky said some of the best gains of the 2000s have been made in the galleries. "Fine art, even though there's been a lot of volatility, has just so outperformed the S&P 500 over the last decade as well," Kaminsky said.

[Thursday, September 23, 2010]

Movie of the week year:
‘Wall Street: Money Never Sleeps’

It's a dog, sport.

Maybe that's harsh. But that's how Gekko would put it.

(Note: Several details are noted below. We don't consider them bona fide "spoilers," but be warned if you prefer no advance details.)

"Money Never Sleeps" suffers from 2 problems. One is relentless backstory recitations, about what the characters have been doing since the first film and the 2008 banking crisis. Another is that the real drama — overlevered balance sheets, wire transfers and bailouts — can't be shown well on film if at all.

In a reach to show something visual, we get several flowcharts of alternative energy, and "Minority Report"-style trader computer screens that make the Strategy Session background seem like Norman Rockwell wallpaper.

Most will make comparisons of the film to the original "Wall Street." The new one falls short in several key ways (namely, it very much lacks the extremely vibrant depiction of New York City in the first film). Nevertheless it is unfair to judge a film that way. The issue is whether this is a good movie. Is it entertaining drama. Well, not particularly.

Michael Douglas approaches his role with an earnestness that will save the film from oblivion. Shia LaBeouf gives a yeoman effort. Carey Mulligan is profoundly dull and usually in tears.

Many CNBC faces are of course seen ... Maria Bartiromo, Melissa Lee, David Faber, Anthony Scaramucci, Becky Quick, Melissa Francis (we think), Jim Cramer making an unfortunately obnoxious statement. Sue Herera never looked better.

It just so happens "Money Never Sleeps" screenwriter Allan Loeb showed up on the Fast Money set Thursday. "I used CNBC a lot, actually, and CNBC is, is almost a character in the movie," he said.

Curiously, Loeb said his challenge was to "tell a real story with human emotions and relationships that had nothing to do with the world of finance." Actually, all the relationships seem to have everything to do with finance.

Anthony Scaramucci said, "I think this movie is gonna be so fantastically well-received."

We disagree. If people are talking about it a month from now, we'll be surprised.

Mark Fisher wants immigrants
to overpay for houses

Mark Fisher on Thursday delivered some of the most interesting Fast Money commentary you'll ever hear, to the point we'll never have enough time to address it all.

Now, whether any of it really makes much sense is a matter of debate.

But interesting? Yes indeed.

Fisher, who used the terms "simple" and "easy" several times ("it's simple how to fix the housing problem, you change psychology"), offered this idea for rebuilding the U.S. housing market: Let people from other nations willing to immigrate and pay $400,000 or $500,000 immediately move to this country and buy a home.

The knee-jerk reaction to that one unfortunately isn't very positive.

First, you'd have to allow prospective buyers to come to this country and look around first if they're going to make serious offers. So then the State Department would be churning out temporary visas — which would accomplish many of the immigrants' goal, not so much buying a $400,000 house but merely getting into the country.

But let's say we can do that and it's somehow feasible. In order to immigrate, they have to pay $400k or $500K for a home. So either 1) (most likely) they're going to bid on previously $800K homes in hopes of finding a deal just like anyone else, or 2) they're going to give someone who paid $300K an early Christmas present of $100K-$200K.

Fisher did not have enough time, or he just didn't make totally clear, whether the immigrant would merely have to spend the $400K level of cash on any home, or whether the immigrant would have to spend that amount of money on a home presently worth less than that.

If it's the former, then Fisher is simply arguing for higher immigration restricted to wealthier people and there's no need for a housing component; i.e., if more people are here, there's naturally more housing demand, although it's just going to be incremental, most of those people are not going to want to live in Florida or Vegas condos. If Fisher instead is suggesting some kind of artificial premium to spur the market of $200K-$400K homes, it seems like just a newfound bubble, and an impossible task for the government to referee via appraisals which homes are lucky enough to draw the foreign buyers.

Jon Najarian said he hasn't heard this idea before and if nothing else, people would respect candidates who suggest it. "American people would sit up and take notice of that politician; they wouldn't just slam in the polls," Dr. J said.

Like we said, it's interesting. Just not particularly convincing.

Sort of like a politician
trying to trade oil futures

Housing wasn't Mark Fisher's only topic Thursday.

Social Security actually took up most of his time and drew the sharpest reactions from the Fast Money gang.

Fisher said the problem with the world of finance right now is "You have, just outright fear," and the challenge is, "how we go ahead and change market psychology."

So Melissa Lee asked him how he would change that psychology. "The first thing that we should do, OK, is No. 1, we should just go ahead and just say, this is what we're gonna do, we're gonna go ahead, and instead of, we're gonna take the pain, we're gonna admit the fact that we're gonna have to do something about Social Security, we're gonna have to do something about the budget deficit," Fisher said.

Tim Seymour quickly jumped in. "Mark, what does taking the pain mean here?" Seymour asked. "Are you talking a political solution, or are you talking a market solution?"

"I'm talking about a comprehensive solution," Fisher said, pleading for more time. "Social Security, the budget deficits are out of control ... if you have a net worth over X, we're gonna cut your Social Security benefits in half, or 60%, or 50%."

He said the goal is to "right Social Security."

Anthony Scaramucci was shaking his head. "Mark, there's no political will to do that," Scaramucci said.

"And that's the problem," Fisher said.

Tim Seymour raised the robbing Peter to pay Paul effect of accepting cuts now and getting less later.

Guy Adami wonders
why Social Security exists

While Mark Fisher on Thursday was advocating 50-cents-on-the-dollar Social Security deals for people making "X," Guy Adami was even more aggressive.

"Why does Social Security exist right now?" Adami asked Fisher. "I understand why they implemented it, but that's back when people were living till 60 years old. Now people live to 85."

Adami said the government should just cut a deal of 40 cents on the dollar. "Any shot of that ever happening?" he asked Fisher.

"I think that's what should happen," Fisher said, explaining he thinks people would take that trade in exchange for avoiding tax hikes.

Numerous issues with this one. First of all why is Fisher so concerned about Social Security. The truth is that the government rakes in money every year from sources that amount to little more than paper differences. Income, FICA, payroll, etc., taxes. Then the government spends it.

The fact that the government sends it to old people isn't such a bad idea. It's a steady, reliable stream of income for the economy. These people don't have to move in with their kids. And as the old people always say, "I PAID INTO THIS MY WHOLE CAREER!" The idea that we should cut back on that while continuing to pay to train ragtag "alliances" in Afghanistan to make sure al-Qaida somehow doesn't regain a permanent "base" is jaw-dropping.

The notion that Social Security can't really be expected to pay for itself is probably true — we're not defending the creation and formula of new workers paying off the older ones — but falls under the all-important logic umbrella of future population. Everything we count on, not just Social Security, is dependent on more people (or significantly more productivity) being here tomorrow than exists today. Quite frankly, if for whatever reason there are only 100 million Americans around 10 years from now, life is going to suck in a large number of ways.

There's also the point this page has raised recently, that we don't know how much debt it would take to sink the government. That's what makes politics. People's natural inclination is to abhor debt so there is a bias against it. On so many levels it just feels wrong, to get something we haven't yet earned. In politics it is rarely issued for capital projects but more as a smoothing mechanism, so that economic shocks are not as painful as they should likely be; a politician's unstated view is basically that it's better to take cold medicine for 7 days and go about one's business than stay home miserably sick for 2 and come back completely refreshed on Day 3.

Fisher said the White House handling of the economy isn't equivalent to leading the Super Bowl by 20 points in the 4th quarter, because otherwise, why would Lawrence Summers be stepping down?

At least Obama didn’t ask him about the ‘$500 million’ he made for ‘sure’

3 days after his legendary "town hall" question(s) for President Obama, Anthony Scaramucci was obviously still buzzing about the experience Thursday.

"80,000 jobs go from Wall Street, you lose 3 (sic) service jobs in the economy," said Scaramucci, who presumably meant 3 service jobs for every 1 job on Wall Street.

"OK, so I know we like to hit Wall Street with the pinata," he continued, "but Wall Street jobs are very very important. They have a huge multiplier effect on the economy."

Melissa Lee complained about the White House's complaints about China. "The amount they want the yuan to appreciate is irresponsible," Lee said.

Munster: Netbooks getting
hammered

Melissa Lee challenged Tim Seymour on Thursday to reach a personal consensus on Apple. "It seems like you're having a real debate within yourself," Lee said.

Seymour acknowledged, "They've come to a place in the road where there's gonna be extraordinary competition."

Anthony Scaramucci said, "I'm still biased against Apple because of this gigantic market capitalization." But he said if people want to beat up on him, do it now, because after that "town hall" thing, "It's a week for me to get flacked."

Gene Munster said of AAPL, "We think that the all-in-one television is next." Munster added of the computer space in general, "Netbooks are really hurting ... that whole segment of the market is absolutely getting devastated by right now Apple and in the future Android and Apple tablets."

We thought according to Melissa Lee's buildup that Scott Raynovich on the Fast Line was going to say something profound about cloud computing. Instead, he just said "valuations are just getting really stretched here."

Carter Worth trumpeted Heinz and Kimberly Clark. "I would get long both of these," he said.

Cleveland to cover

Every time we get the urge to make a prediction on this page, we always try to stop, because quite frankly, this page sucks at predictions.

We (ahem) did go 3-0 on the NFL's opening weekend in terms of point spread, but our gut feeling about a Detroit victory in Chicago fell a ridiculous rule short of happening.

The one we're feeling good about this week is the Cleveland Browns (+10.5) in Baltimore. The little secret many don't seem to realize is that Baltimore quite frankly can't score points. Joe Flacco is the Dante Pastorini of the 2000s. Cleveland claws its way to an improbable victory, or no worse than a field goal loss.

Now, can the Yinz will a victory down in Tampa? Charlie Batch is the type of backup QB who might be capable of putting up 28 points, or might be capable of putting up 3. With the 'Burghers at -2.5, and a possible outcome of 7-6, this is one to avoid.

Meanwhile, a player who's never done jack in the NFL except waste first-round talent but happens to play in New York will not miss a game after a DUI arrest ... while a 2-time champion quarterback never charged with a crime continues to work out at a high school while his team performs with a 4th-stringer in his place...

Too bad

The Fast Money Halftime Report closed Thursday with Steve Grasso and Guy Adami trading underwear jokes ("I have to wear 'em to change 'em, baby," said Adami).

That segued into the beginning of Fox Day on Power Lunch featuring — this is key — Mandy and Michelle, on Sue Herera's show, in which Herera said, "This is the girls' hour, there will be no discussion of underwear as there was on the previous half-hour."

"Exactly!" said Michelle Caruso-Cabrera, drawing the "cut" sign across her neck.

Cortes re-shorting

In a quiet Fast Money Halftime Report Thursday marked mostly by smiling Melissa Lee's ravishing new dress — as well as some interesting background from Tim Seymour on the Petrobras issuance ("I think you're seeing a squeeze into the number") — Guy Adami once again volunteered to play the heavy.

Adami predicted a breakout on the S&P, one way or another. "It's either gonna explode higher, which I don't think will happen, or we're gonna trade a lot lower, which I do think will happen," Adami said.

Steve Grasso said to "watch 1,131," but if it crosses below 1,116, then "bail out."

Steve Cortes said the morphing yield curve represents "huge problems for financials," and, "as a matter of fact I added to shorts yesterday."

Jon Najarian was a little more optimistic, pointing to UBS and HSBC as stronger European banks and suggesting if they hold their 200-day, to get back in all the big banks on the dip.

Guy Adami and Steve Grasso wished Debby Kass luck on her art show Thursday evening.

Too big to get bigger

Gary Kaminsky, David Faber and Rodge Cohen conducted an interesting discussion on Thursday's Strategy Session (seems like we've used that terminology a few times this week, to the show's credit) as to whether, in fact, some huge Wall Street banks still need to merge.

"I believe, that we are in a period today David, that the industry's got massive overcapacity, the revenues aren't there, the growth opportunities are not there," Kaminsky said, "and I think we need a massive round of consolidation of the mega-firms."

Cohen said, "Unfortunately perhaps I think the odds are very long against further consolidation at least among the mega-firms, in view of what is a very clear direction from Dodd-Frank that there should be no more consolidation among the largest firms."

We hadn't thought much about this recently, but it's a tremendous question. Is the industry going to draw certain parallels or non-parallels to airlines, as Kaminsky spoke about, simply because the government is taking this "Too big to fail" stuff quite seriously?

Faber raised the issue of going the opposite direction, simply seeing dissolution of certain firms. Cohen said he doubted that too unless there are some "unduly restrictive" regulatory issues.

Gary Kaminsky made a comment that we've heard Jim Cramer more or less make several times. "I don't believe you ever need to be fully invested," Kaminsky said.

Kaminsky was referring to money managers. Cramer would tell callers (and this isn't an exact quote and maybe he's changed his opinions over time, whatever) that they should keep something like 5% in cash always to have available for whatever great or bad moment may happen.

We always found a logic problem with that. If you put $10,000 into your brokerage account and keep $500 in cash at all times ... then why not just put $9,500 in the account, invest it all, and then put the other $500 in higher-yielding CD/Treasury bonds/gold coin/NFL Sunday Ticket?

Whatever. Kaminsky joked about getting his last "360 review" on Wall Street, where everyone above, below and beside you gets a crack at you. "It was definitely colorful," Kaminsky said.

[Wednesday, September 22, 2010]

Guy who exhorts everyone to give money away still keeps enough to get by be comfortable be rich preserve a fortune remain the nation’s richest man

Analyst and Microsoft critic Eric Jackson said Wednesday on Fast Money that MSFT's dividend hike was like a "Kiss-your-sister announcement ... I wanted to see a doubling of the dividend."

Jackson said there isn't an ulterior motive for hoarding cash, telling Joe Terranova that an acquisition the scale of, say, RIMM, now seems "less likely" than before. "Microsoft's problem is that they're just inherently conservative," Jackson said.

Stephen Weiss said some people think of Steve Ballmer as the executor of the Gates estate. There are worse estates to be executors for.

Guy Adami ‘gets’ what makes
Internet hits go up

Guy Adami early in Wednesday's Fast Money saluted "Finnerman's (sic)" sexy glasses. "They look fantastic," he said.

See, we haven't done a scientific survey or anything, but from the looks of the data, we tend to think this page gets a lot more hits from those types of things than from the really serious stuff, you know, Steve Cortes' charts that used to be in lockstep until...

And quite frankly, we're on board with that; we like being nice to women and know that many viewers are often impressed by what they see on Fast Money.

Finerman later did a rant against a Barnes&Noble proxy statement projecting EBITDA through, we think, 2014. "These are ridiculous; this is just absurd," said Karen, who likened such a rosy scenario to seeing herself in supermodel form in bikini a couple years from now.

Finerman also went off on Blockbuster, exposing it as a BKS type of stock with great penetration but a lousy body of potential. "What do you think their market share is? Probably very high. Unless it's porn, which they don't sell," Finerman said.

"How do you know?" asked Guy Adami with a smirk.

Fleck nearly runs into
Melissa’s stop sign

Stephen Weiss on Wednesday's Fast said some financial plays are in trouble. "I'm short right now Piper, I'm short Stifel, and I'm short KBW," he said, explaining, "Here's the dirty secret ... when I can trade for a third of a penny, vs. 2, 3 or 4 cents a share, that's real performance that I'm picking up in a low-performance environment."

Brian Kelly said he "sold short some HYG."

Robert Breza of RBC wasn't too gung-ho about Adobe, unlike Zeke Karabell earlier, saying "I think you'll get an attractive entry point lower," and, in the only metric that really counts nowadays among tech stocks, "I don't see Adobe being a takeout candidate."

Guy Adami actually made an (extremely) rare call on gold Wednesday. "It works until it doesn't work," he shrugged, before saying, "right now, it feels like it's gonna be significantly higher than here."

Karen Finerman in sexy glasses asked Bill Fleckenstein what would present a bearish case for gold. "Prudence. Responsibility. Central bankers who didn't behave like Politburo members," Fleckenstein said.

Fleck at one point did make a quick reference to the Tea Party, and boy did Melissa Lee jump right in to make sure that didn't go any further.

Next semester: Bailout 101

We had high hopes for Barry Ritholtz's appearance Wednesday on Fast Money, but this one was a little high and dry.

Ritholtz said Larry Summers was part of a consensus that was a part of the 2008-etc. problems, and it's time for some fresh voices and good to let Summers go back to Harvard. "I think the White House is better for it," Ritholtz said, explaining it would allow Austan Goolsbee to restore his new position to the type of status it should have but that Summers' presence managed to diminish.

Too bad Barry didn't go to the CNBC town hall and personally mention that to Barack Obama ... or would he instead have just complained about the "war on quantitative research"?

Unfortunately Ritholtz didn't say anything as provocative as Summers might say himself, including that old yarn about explanations for female faculty members underrepresented in science programs which also went untouched when Karen Finerman interviewed Summers a while back. You'd think people in a college environment, supposedly interested in truths and knowledge, would welcome such stimulating discussion; after all if it's idiotic then everyone will realize it, right, and if it's not idiotic, then maybe there's something to be learned or developed. Or would we all just be better off with censorship when we (likely irrationally) presume our feelings are going to be hurt?

Usually it’s only guest CEOs who say ‘Michelle,’ then ‘Melissa’

Scott Nations on Wednesday acted as sort of a checks-and-balances — not on the government, but on Zachary Karabell.

Karabell touted Monsanto, saying it was lagging because it's not a pure fertilizer play, but it is "absolutely key to the same theme and has underperformed."

Nations countered, "Monsanto's gotten beaten up because their cash cow, Roundup, is getting killed by Japa- or by Chinese, uh, generics, so I'm not certain Monsanto's the place to go."

Karabell later said he was buying Adobe in the midst of a 20% whacking, because it had low P.E. relative to its sector before the day's selloff, and the earnings were still pretty good despite the selloff.

There's "no growth on the horizon for many of these names," Nations insisted.

Karabell did go unchallenged on another point. "I don't think you should be looking at financials now for the next 3 to 6 months for market leadership. Of course everyone who trades happens to be in the financial industry, so they look to financials for market leadership," he said.

Karabell might've gotten in a bit of Fast Money hot water when he tried joking about the lack of catchy names for tablet devices and suggested for Research in Motion, "We can call it The Michelle. Or The Melissa. Or The Something."

The Michelle? Tribute to Caruso-Cabrera?

Joe Terranova grumbled about Microsoft. "They should've raised that dividend a heckuva lot more than they did," he said.

The stock reaction
suggests Whitney’s right

Joe Terranova said something curious on Wednesday's Halftime.

"Take a look at a name like an Apache, which stole BP's assets," Terranova said.

Yet, on July 27, Whitney Tilson was saying just the opposite. "They got an incredible price for the $7 billion of assets they sold to Apache," Tilson said.

‘Debasement’ sounds like where Chicago fans watch da football game

Gold bull James DiGeorgia might've been a good guest on Wednesday's Halftime — had he ever stopped talking.

DiGeorgia spoke about ongoing currency debasing and (what else) China demand as evidence of continuing healthy appetite for gold, but he either didn't hear the questions posed to him or pretended he didn't hear and so mostly just rattled off past history about the metal that isn't really relevant for a trade.

Brian Kelly offered a "fun fact," that "all the gold ever mined would fit in 3 and a half Olympic-sized swimming pools. That's all the gold there is. Ever mined."

Actually, Bill Fleckenstein has publicly claimed that all the gold ever found would fit in only 2 swimming pools.

Zachary Karabell said to be careful with that "debasement" of currency argument. "We don't have an asset-backed currency. So that's a major argument that is by no means won."

Those triple shorts
remain a separate issue

Herb Greenberg engineered a rather interesting Strategy Session discussion on Wednesday.

Unfortunately, while his passion for making a point as always was top-notch, Herb once again over-acted along the lines of Tom Cruise making the "galactically stupid" point in "A Few Good Men."

Greenberg spoke about a 2-year ETF study by Bogan Associates.

"What is an ETF? It ain't what you think it is," Greenberg said. He pointed out they don't buy and sell shares, but "they own something called creation units."

Specifically Greenberg singled out the XRT. "It has 16 and a half million shares outstanding," Greenberg said, "but it also has 97 million shares short. In other words, it appears an unlimited number of shares can be created."

For more, TSS brought on Andrew Bogan. David Faber asked Bogan, "Can they create to cover?"

"So long as the market's working, uh, properly as it usually does, that works just fine," Bogan said. But as Gary Kaminsky noted, the market always works fine, until it doesn't.

Eventually the question was raised as to who would get stuck if there was a massive demand and not enough shares to satisfy it. "The short sellers are not gonna be on the hook for this," Kaminsky said. "If somebody's going to be caught ever holding the bag, so to speak, it will be the prime broker."

Greenberg wasn't so sure. "Will it be the prime broker?" he asked. "Will it be the Federal Reserve?"

The conclusion from this peanut gallery is that, given the lack of any mention of the report on Fast Money (this TSS review was stitched together after Fast Money aired for the day) and lack of serious traction on the Web (from what we could tell), this really isn't a major concern, despite the fact it sounds like it should be one.

But another element of the conversation was intriguing. Gary Kaminsky and Herb Greenberg wondered aloud if the SEC is aware of this ETF situation, noting there's a division of the SEC for issuance and another for regulation. "Are the 2 sides talking to one another? I don't know the answer to the question," Greenberg said.

Of course, just a couple days ago (see below) this page, evidently alone in the blogosphere, pointed out that among the questions not asked of Barack Obama at the CNBC "town hall" was the issue of 1) whether the SEC can catch the next Madoff and/or 2) is the SEC truly an effective, relevant agency at all?

But why should anybody bother asking the president questions like that when instead they can complain about how their emotionally invested 2008 vote hasn't paid off for them yet or how expensive it is to get married, and then afterwards Jim Cramer can point out WHAT A TREMENDOUS TOWN HALL THIS IS I THINK IT WAS A VICTORY FOR OBAMA BECAUSE THE STOCK MARKET DIDN'T GO DOWN WHILE HE TALKED AND FORTUNATELY HE DIDN'T ASK ANTHONY SCARAMUCCI HOW MUCH HE PULLED DOWN LAST YEAR BECAUSE I'M SURE IT WAS $500 MILLION OR SOME OUTRAGEOUS SUM...

Trade ya Derek Jeter
for Miroslav Klose

Michael Eisner is certainly an interesting person, but if anyone detected "actionable" information in his common-among-old-media-legends-interviewed-on-TV soliloquy about the transformation of content and media, please ship us an instant message.

"Kind of reminds me of Moss Hart's 'Act One' biography," Eisner said, and of course, with a beginning like that, we need not say any more.

Eisner did say about Topps, "It's fantastic. We make more money in Germany than in all of the United States."

Gary Kaminsky once again rained on those dividend kings Verizon and AT&T for perceived cutthroat competition to retain customers while trumpeting a pick he legitimately has been calling since the start of the year and possibly well before, American Tower. "The beneficiaries of what goes on here is gonna be the buildout, the tower companies," Kaminsky said. "This stock trading, not at a 52-week high, but at an all-time high."

David Faber twice used the term "adopt" in regards to Blockbuster Video, as in, "didn't adopt effectively," when we think he actually meant "adapt." We'd ship him an e-mail, but he revealed this week he doesn't read them.

[Tuesday, September 21, 2010]

Jim Cramer really did say
he’s ‘sure’ Scaramucci earned
‘$500 million’ last year

Anthony Scaramucci complained Tuesday on Fast Money that Jim Cramer misstated Scaramucci's income.

We found Cramer's comment. Cramer did say on national TV that Scaramucci, regarded by Oliver Stone as The New Gordon Gekko, made an "outrageous sum."

Cramer told Carl Quintanilla and the rest of the Power Lunch gang Monday: "The president did not personalize it. I was thinking maybe he says to Scaramucci, 'Hey, listen, how much did you take down?' The old president might've asked him that and it would've been hor- horribly embarrassing because I'm sure it was $500 million, some out- outrageous sum."

There’s no such thing as a free lunch — except at Skybridge Capital

For people wondering what the heck a rich hedge-fund manager was thinking in complaining to Barack Obama about life as a pinata, Anthony Scaramucci presented his side of the story on Tuesday's Fast Money.

"One thing about the president, and God bless him, he's got a, you know, he is the president of the United States, when he tells you to hold on a second, there's no way you can rebut him, but I just wanna correct a few things," Scaramucci said. "I don't have a 15% tax rate. Jim Cramer said I made $500 million last year, I did not, not even close. I mean, I think, if anything, I pay 100% of my employees' health-care expenses, and we have free meals at Skybridge, we serve lunch there everyday."

Scaramucci explained the rationale behind his question. "I was trying to explain to the president I think there's a nexus between Main Street and Wall Street and we need both of those things in our society," he said.

"I was just saying, 'Hey, let's stop hitting Wall Street with a pinata stick.' Somebody said over the Internet, 'You know, he should be taking out a baseball bat.' OK, I understand the anger, but the anger's not gonna get us anywhere."

(The "baseball bat" thing didn't come from this site, in case anyone was wondering. Apparently what he's referring to is the first reader comment at the thinkprogress.org Web site article, which was picked up by USA Today and a host of other search engines, another example of how, when you put free material out there on the Web, some people will gladly appropriate it.)

The Moochmeister lamented Tuesday that the president chose to only answer his first question, a topic we took up a day ago when we suggested it's really hard for anyone to hear a bunch of commentary from various people and have to answer every question in 2 or 3 parts. "He didn't get to the structural question Melissa which I think is an important one," Scaramucci said. "It costs $90,000 in New York City to hire a $50,000 employee who's gonna net $35,000."

"I think he gets it, I think he's gonna dial down the rhetoric," Scaramucci concluded Tuesday.

But then, horrifyingly, Scaramucci said, "I'm just suggesting that it's time to heal the society." That harkens back to the 2000 election, when people actually were heard to say in early 2001 that they needed "healing" because of the "wounds" of the close election. (Like we said yesterday, are we a nation of whiners, or what?)

Here's the deal ... it's true that much of what The New Gordon Gekko spoke about is highly fertile grounds for satire. Hedge fund managers profiled in David Faber's "Untold Wealth" complaining to the president about feeling like a pinata aren't exactly sympathetic figures.

But we're not gonna fully do that here, because it took guts to defend Wall Street in an environment such as that one. Now, should Scaramucci, instead of trying to tell basketball jokes on Monday and unload a 2-part question, have just said to the president what he said to viewers Tuesday? Yes, Scaramucci should've merely told the president what he told viewers Tuesday. Could he have offered much more relevant questions? Yes, he could've offered things such as "Would the world be better off without hedge funds?" or "Didn't you receive a lot of support from hedge funds in 2008?" and watched the president squirm a little bit. (He also could've brought up a host of great topics we identified Monday that went unmentioned, including whether Goldman Sachs was punished enough or too much, is Arizona's immigration law a good idea, is the Obama SEC capable of catching the next Madoff, etc.)

No way

Asked by Melissa Lee to suggest a candidate for the Larry Summers post, Guy Adami said, "Bill Gross would probably be perfect for the job frankly."

Adami also said investors may not like the uncertainty of Summers' departure. "If you're bullish on the market I don't think it's particularly good news," he said.

Karen Finerman not around to
challenge Amazon’s valuation

West Coaster Mark Mahaney visited the Fast Money set Tuesday (unlike fellow West Coaster Patty Edwards, he didn't get a seat at the table) to pound the table for Amazon.

"We still have a nice product cycle, you know, coming ahead," Mahaney said, referring to the $139 Kindle. But he also said international growth is good despite lagging in Brazil and India. "In China they're doing well," he assured.

Tim Seymour was hailing GOOG for no other reason than its share price went up. "To me this is the ultimate growth stock that turned into a value play," Seymour posited.

Patty questions the quality
of eBay’s sales

China watcher David Riedel suggested a couple lighly followed plays on the Chinese consumer. "JOBS, the U.S. ticker of the sort of Monster.com of China," he said, "and EDU, which is New Oriental Education, it's like the University of Phoenix in China."

Joe Terranova praised Apple, saying "I think it's breaking out above 300 bucks." Tim Seymour said "a lot of these things are short-squeezed" in the tech space.

Patty Edwards, unlike Karen Finerman and Brian Kelly at Halftime, disagreed that surging names like AAPL, AMZN and PCLN represent consumer plays — and managed to find a cloud for eBay's silver lining.

"I think it's more of a technology play," Edwards said. "eBay is people selling stuff so they can make their mortgage payments I think in a lot of cases."

Hmmm. We previously heard from Rick Santelli that mortgage payments were being subsidized by the feds for all those people who overspent and bought a 5-bathroom home, and so they won't have to sell things on eBay to pay the mortgage. But maybe we/they were mistaken.

Finerman: Fed is
‘an insider trader’

Not only was Karen Finerman beaming when introduced on the Fast Money Halftime Report, she got an impromptu kiss from the hubby while trying to make a point about the Fed.

"I can't help shake this feeling that the Fed is an insider trader, and that they have market data that the rest of us don't really have," K-Fine ultimately said.

Finerman and Brian Kelly agreed that Apple is more of a consumer stock than a tech stock. Karen, though, still isn't on board with Amazon. "If things go perfectly from now until forever, Amazon is fairly priced," Finerman said.

"I'm not constructive on the holidays," said Patty Edwards, describing Amazon as a little stock to play with and nothing more.

Steve Cortes tried to tell another pop culture joke. "Housing, it reminds me a bit of David Hasselhoff, once the uptrend broke, it broke," he said, making a "Dancing With the Stars" reference we didn't get, but then again, we don't watch the show.

Melissa Lee hailed Joe LaVorgna: "By the way his team was just ranked the top economics team for fixed income in Institutional Investor's survey," Lee said.

Stephen Roach on the yuan:
O-ver-ra-ted, o-ver-ra-ted...

Stephen Roach took part in a spirited chat with the Strategy Session guys over currency valuation.

"America doesn't need a stronger Chinese renminbi," Roach said. "America needs jobs."

The currency issue is a "bogus issue," Roach said. And if the yuan is raised, "It's not gonna do anything," he said, saying similar tactics occurred with the yen in the '80s and the trade deficits remained "huge."

"I think you guys are just making too much out of this currency issue," Roach concluded.

David Faber stuck by the notion that if it's causing tension, it's important. He and Kaminsky noted that a rising yuan would raise the price of goods at Wal-Mart. "It's a no-win situation," Kaminsky said. "This is one of those relationships you better keep happy."

Maybe NFL is a bubble?

The cameraman caught Kate Kelly at an especially good angle at the end of Tuesday's Strategy Session, during which Kelly talked about the return of NFL CFO Anthony Noto to Goldman Sachs.

Kelly said it used to be that when you left the firm you were gone for good, and now there's a slight change to the culture. Gary Kaminsky said one reason for the old way is that a person below you would get your old position, creating an incentive for them to move up knowing you'd be gone for good.

But the more friendly welcome-back policy "will impact the whole way the next level down gets treated in terms of promotions and the year-end reviews, etc.," Kaminsky said.

Kaminsky pointed out Goldman Sachs' business cards would say "GOLDMAN SACHS" in big letters and your name in smaller letters. Kelly said the firm's motto is "Client first, team second, you last," but she initially got it wrong in a way some bloggers could pounce on.

One of these days we'll take a crack if anything can stop the business of the NFL.

David Faber says he reads
no viewer e-mail

Lawrence Golub, who has a great job — not the private equity stuff, but married to Karen Finerman — towered over the Strategy Session crew Tuesday and noted tax considerations are spurring a lot of dealmaking.

"We've told our dealmakers, don't make Christmas vacation plans; you can go away in January," Golub said. "We've got a pipeline of 96 separate middle-market transactions that are trying to close by year-end."

Golub said some firms are just interested in growing as much as possible and issuing shares to bring in cash. "We have the best, most shareholder-friendly fee structure in the business. Our fees are about a third lower, and we're paid on cumulative profits forever. So we've got a cap on cumulative profits," Golub said.

He said coming out of the Wall Street disaster, this is "historically a wonderful time to be a credit investor, to be a lender."

The funniest part was trying to figure out how much taller Golub is than the Strategy Session hosts, topped off when Gary Kaminsky and David Faber cracked at the end that the grips should've provided them with a couple stools.

Gary Kaminsky wondered why Nomura is at a 52-week low. David Faber said you can e-mail the show with an answer. "He does in fact read all the viewer e-mail," Faber said. "I don't read any of them."

[Monday, September 20, 2010]

Barack Obama claims he
predicted 2008 Wall Street crash

President Barack Obama on Monday responded to a Wall Street question from CNBC's Anthony Scaramucci by putting himself somewhere in the vicinity of the Nouriel Roubini camp:

"I think it'd be useful to go back and look at the speeches that I've made, including a speech by the way I made back in 2007 on Wall Street, before Lehmans had gone under, in which I warned about a potential crisis, if we didn't start reforming practices on Wall Street," Obama said.

We found the transcript. It was a speech delivered at the Nasdaq on Sept. 17, 2007, a few weeks before the peak of the market. Judge for yourself. One curious thing he says: "It's bad for competition when you have an administration that's willing to approve merger after merger with barely any scrutiny."

Are we a nation
of whiners, or what?

First, know that this site congratulates John Harwood, CNBC and President Barack Obama for putting together a warm Q&A session Monday.

But this was no "town hall," at least not in the sense anyone cares about.

Questioners somehow were allowed if not encouraged to give speeches. The president responded with even longer speeches. Only a select few in the crowd were able to ask questions; the vast majority served as (ugh) designated clappers.

And the whining ...

Almost every question was poor me, about how tough things are for people, how they've lost hope, how they can't afford to get married.

Most of the topics were so uninteresting, by the halfway point attendees in the background, who probably had to show up for this thing 3 hours in advance, were regularly observed to be visibly bored.

Imagine being in Barack Obama's position trying to follow many of these people's train of thought through multiple paragraphs of information in order to answer all 2 or 3 of their questions in the correct order.

What he should've said to many of them was, "You know what, I'm doing the best I can, if you don't like it vote for someone else; this isn't helping anything but is only wasting time, stop turning to people like me for help."

Please know that if you're laid off, or struggling, thanks for reading this site and hang in there; we'll get through this collectively like we always do.

At some point people need to stand up for themselves and stop blaming invented political targets and recognize that this is the way it is and move forward without the help of the government. If you're truly outraged, run for office.

One of the most dubious exchanges was when the president and John Harwood were discussing Steve Schwarzman's recent comment comparing the purported War on Wall Street to the Nazi invasion of Poland. Obama first said "I don't know where that comes from," then later acknowledged it "had to do with a proposal to change a rule called carried interest," then admitted, "there are complicated economic arguments as to why this isn't really income, this is more like capital gains and so forth, which is a fair argument to have. I have no problem having that argument."

So, why didn't you have it? Isn't this a business channel program? (Maybe that'll be for the next "town hall.")

It's always important to identify subjects that do not surface in events like this.

Remarkably, on the leading business channel, we heard almost nothing about:

1. Oil drilling.
2. Goldman Sachs.
3. Climate change.
4. Health care.
5. Outsourcing.
6. Google-China.
7. The flash crash.
8. Illegal immigration.
9. Why the SEC didn't catch Madoff.
10. Justice Department approach to antitrust cases.
11. Net neutrality.

Lists like those can be endless. We could also throw in, for the sake of foreign policy, queries about whether Afghanistan is truly sitting on a Fort Knox of lithium, and how far along Iraq is coming in pumping oil.

Health care got a brief mention or 2, but its utter lack of prominence suggests the legislation that was passed is basically irrelevant, at least to the extent people really care about health care (the cost).

CNBC star and conscience of the hedge fund industry Anthony Scaramucci, one of the questioners, did indulge a bit too much in the Harvard basketball anecdotes, but the Moochmeister did put forth a nicely straightforward question about what hedge funds apparently see as a war on Wall Street that makes them feel like a "piñata." At one point the president referred to Lehman Brothers as "Lehmans," saying "before Lehmans had gone under," which made us wonder if Lehman Brothers is regularly shortened to "Lehmans" rather than "Lehman." We rarely hear it that way on CNBC couldn't find a Web answer quickly. (We're suspicious only because the president also calls the home of his purported favorite baseball team, known as either U.S. Cellular Field or Sox Park, as a bastardization of its old name, "Cominskey Park," which in fact, might just be a tribute to Gary Kaminsky, who also worked at "Lehmans.")

Obviously to get the president of the United States to agree to a forum like this requires ground rules. No argument there. So, you get what you pay for. Still, the content would've been better simply by speeding it up; people get 20 seconds for a question, he gets a minute or 2 to answer.

The Fast Money gang spent little time on it. "I didn't hear anything that was so compellingly new," said Karen Finerman.

Pete Najarian referred to the much-awaited "jargon" that, once heard, led to a pullback in the VIX.

Should hedge funds be
exempt — from griping?

Atlanta blogger Jay Bookman says Anthony Scaramucci got what he deserved by complaining about the White House's approach to hedge funds.

More potential tech deals that are already priced in

Tech watcher Brian Marshall said on Monday's Fast Money that the next potential deal that makes the most sense is EMC gobbling up Isilon. The only problem with that insight, according to Marshall, is that the takeover premium is "largely built in at this point."

Patty Edwards, whom Melissa Lee revealed was "actually in the Tri-State area" as opposed to the Great Northwest (Englewood Cliffs sure has a lot of nice neighborhoods), asked Marshall if he had any more combos in his mind that seemed like a good idea.

Marshall strangely said the "biggest, you know, sort of head-scratcher" he could think of would be Cisco and EMC. "I think that deal makes complete sense," he said, so we interpret "head-scratcher" to mean not "stupid" in this case, but "thought-provoking."

Marshall also said, "I think IBM for NetApp would make tremendous sense as well."

A. Gary Shilling is just as
out of tricks as the Fed

A. Gary Shilling put in another call on the Fast Line Monday to reiterate (sigh, once again) his view that the Fed is basically out of tricks and that there's not much pressure on them to do anything.

Daniel Clifton used to say
health care wouldn’t happen

Daniel Clifton, fresh off of constantly underestimating the amount of House members who were going to flip on health care, offered a new prediction Monday: "I do believe that we're gonna get an extension of all of the tax cuts at least into 2011."

Clifton said everything you're hearing to the contrary from certain politicians such as Barack Obama is merely election-season noise that will go away by December.

Clifton also predicted to Karen Finerman a 1-year extension at 15%, or extension of unstated time at 20%, of the dividend tax rate, "which is where capital gains is scheduled to go."

Just show the damn movie

Quite frankly, we're just about "Wall Street"-ed out.

We're sick of Oliver Stone interviews about how it wasn't about 2008 because that would have to be a documentary and he didn't really understand all of it, etc., how Gordon Gekko has changed, etc.

So we weren't getting very excited when Melissa Lee ran clips Monday of Shia LaBeouf telling her he watches Fast Money "all the time, it's part of my prep."

But then we did start to get excited when Mel revealed "I am going tonight" to the New York City premiere, and Pete Najarian said, "You should see the outfit."

Tim Seymour in fact was heard to call it "smokin'."

But then Melissa, as she always does, moved on, and we heard/saw no more. Maybe the New York Post will have a photo gallery.

Maybe POT wants in too

Joe Terranova on Monday seemed to think that Dell, fresh off a loss with 3PAR, should jump right back in against IBM for Netezza.

"This is an area that clearly, they should be involved in," Terranova said.

Tim Seymour dismissed that while at the same time suggesting an equally eye-opening competitor. "I think Dell is reaching way too far, I think HPQ will jump back in here," Seymour said.

Jon Fortt, in an otherwise smooth presentation about Mark Hurd's settlement with HPQ, somehow got tripped up over whether there was any "money exchanged," which led to a clumsy follow-up discussion.

Karen Finerman said this battle was "never truly an issue" with presently owning HPQ stock, a "complete sideshow" in her opinion.

Joe Terranova said the bottom line about these companies is "they need each other." Terranova also suggested the timing of the settlement is curious, "You have to wonder if H-P has selected the CEO. ... They want this cleaned up."

"I thought I was the conspiracy theorist," said Melissa Lee.

Karen and Melissa almost — almost — conduct an interesting conversation on marriage

Pete Najarian, for some reason grasping for an ally in his go-long-the-miners gold thesis, tried to get Dennis Gartman on board Monday.

"I don't trade the miners for the simple reason, I don't wanna walk in 1 day and find out that a mine that I own has been struck, or that a mine that I own has been watered in, or that a mine that I own has problems in the mine," Gartman said. "The beta on those things is so much more violent, so much higher than is gold itself."

Of the general stock market, Tim Seymour said, "The dollar weakness, to me, is what keeps this rally going." Patty Edwards suggested TAL International, not a particularly well-known stock, as her Final Trade. Pete Najarian said to keep looking at DuPont.

Melissa Lee during "Pops & Drops" played a clip from John Harwood's "town hall" meeting with Barack Obama featuring one complainer saying he can't afford anything; "Having a marriage, it's awfully expensive."

Joe Terranova then tried to snooker Karen Finerman into a discussion with a quip about something to do with making interest payments.

Karen and Melissa started to opine on the subject of marriage, and we thought about Erin Burnett appearing ringless during her stunning appearance after the Obama "town hall" and figured she must certainly have some provocative views on this subject as well ... but if we start clamoring for that sort of thing we're likely to elicit a few frowns from interested parties, so best to let it go...

Terranova was on lookout
for stock tips at town hall

CNBC and John Harwood put together a fine town hall meeting with President Obama on Monday.

It was a success, not just because of Anthony Scaramucci's "homie"-style handshake (that was the best description we could find on the Web) with the prez afterwards or how great Erin Burnett looked in her D.C. anchor perch, but from the general rapport and willingness of the commander in chief to take part in an event like this, something to his credit, as his predecessor tended to spurn these kinds of things.

Afterwards, there might've been a little too much paralysis by analysis, as the network seemed intent on polling everyone from Kalamazoo to Fresno about what they heard.

By the time the Fast Money gang got an abbreviated crack at it, the consensus had pretty much been set in stone.

"I don't think I heard anything different," said Steve Grasso.

Patty Edwards, with a new 'do, said last week she was hoping for the president to say he is not at war with capitalism, offered, "From what I heard today, Obama is basically saying that there is going to be some turnover in some of those seats, he is not giving us anything new to work off of otherwise."

We wondered if someone in the audience would ask the president what he thinks about the name change to Trutina Financial, but no one bit.

Joe Terranova was the only one who semi-floored us in his apparent anticipation that this could actually be a market-moving event. "I sat there thinking to myself, watching with Patty, determining whether I would make changes to the portfolio," Terranova said.

Obama event guts CNBC
afternoon programming

Monday's special CNBC noon Eastern time town hall with President Obama, hosted by John Harwood, will preempt a bunch of the usual CNBC shows, before, during and after the event.

Senior editor Mark Koba writes that he and Harwood will be the only reporters in the room.

Felix Rohatyn writes new book

Prone as we are to review just about anything we stumble upon, this site took a stab at Felix Rohatyn's upcoming Dealings, about his decades as a king rainmaker for Lazard and later ambassador to France.

Contrary to Rohatyn's work with New York City in 1975 (which also spurred another legend, that of James Cayne), we're not about to issue him a bailout. Actually, that was a joke. It's not a bad book, but not particularly juicy either.

Lehman’s board

Gary Kaminsky's commentary this week about the ineffectiveness of the Lehman Brothers board suddenly prompted us to wonder: Who the heck was on that board?

We easily found numerous credible sources on the Web. The members were:

Richard S. Fuld, Jr., Chairman and Chief Executive Officer
Michael L. Ainslie
John F. Akers
Roger S. Berlind
Thomas Cruikshank
Marsha Johnson Evans
Sir Christopher Gent
Roland A. Hernandez
Henry Kaufman
John D. Macomber

Any notion that this board was a reliable overseer of the company's direction would seem to be squashed by the fact Kaufman was once known as "Dr. Doom" for his economic suspicions, and that, according to the Wall Street Journal, the Lehman board up until 2006 boasted 80-something actress Dina Merrill, who appeared in "Caddyshack II" and made a couple visits to "The Love Boat."

[Friday, September 17, 2010]

Block: Expect in-house pick
for Hewlett-Packard CEO

Michael Block, returning to the Fast Money Prop Desk on Friday, said the word is that it's likely HPQ will tap an in-house candidate as CEO, which makes for a decisive call between value play and value trap.

"I still say it's a trap," Block said. "Right away 2 names popped into my head, Safra Catz at Oracle, and Tim Cook at Apple" as possible Hurd successors. "Now it seems like there's gonna be an internal successor. No offense to anybody, but the market will be disappointed by that," he said.

Catz, whom we had never heard of until now, evidently according to our cross-bio research happened to be at DLJ the same time Karen Finerman was there.

Tim Seymour argued at one point that all of these HPQ deals show the company is actually "well-run from within." Block wasn't impressed.

"What would you rather own, a stock like that, or something like Oracle which has had a great quarter, or some of these other software names that could have some deal juice in them like the Red Hat, like the NetSuite, or even a name like F5," Block said.

Joe Terranova said ORCL's ride isn't over. "There's further appreciation in the stock left," he said.

Guy Adami said based on the numbers, ORCL is cheap, but the chart is significant. "This is the highest Oracle's been since 2001, which is absolutely flabbergasting frankly. I think Joe's gonna have an opportunity to buy that other half back cheaper, given the volume we saw today," Adami said.

In rare moment, Melissa Lee
sticks it to Tim Seymour

Melissa Lee on Friday's Fast Money impressively accomplished something very few people can do: Stop Tim Seymour in his tracks.

Seymour said, "Can the U.S. really make fun of China when in fact Japan is arguably manipulating their currency right now?"

Lee cut in, "Is there a trade imbalance with, uh, with Japan? That's the reason why we're focusing on China."

Seymour hesitated, then said, in a non-answer, "I think ultimately it's, it's really about, uh, China not wanting to kowtow to any particular needs."

One trade you probably
can’t do at home

Victor Sperandeo, Trader Vic, revealed something we probably should've known about futures trading but didn't.

Sperandeo was asked the best way to trade gold, ETFs, stocks, futures, etc.

"I strictly trade in futures," he said. "One reason is taxes. Futures are taxed at a, at a 24 and a half percent maxi-tax. ... So why trade gold stocks when you pay 35 going to 40?"

"Keep that quiet, that tax rate," mumbled Joe Terranova.

"The president is not gonna listen to me," Sperandeo reassured.

"The president's watching right now," Melissa Lee said.

Trader Vic said he'd stop being bullish gold "when there's fundamental change." Melissa Lee asked, "Like what?" Trader Vic answered, "Well for example, stop bailing out a company."

Sounds like a Jim Chanos short

John Carney, appearing on Fast Money no doubt as a way to promote his new CNBC.com venture "NetNet," spoke about the curious massive gains in Soufun on Friday.

Carney revealed, "They're on their 3rd accounting firm right now." The first apparently quit, the second was fired, and according to Carney, Ernst at this point can't guarantee the company has all the resources to adequately do GAAP.

So, why did the stock catapult Friday?

"People want to play the Chinese real estate market," Carney said. "There's not a lot of ways foreigners can play that boom."

"I wouldn't touch that," said Tim Seymour.

Sure hope Steve Cortes unloaded in Thursday afterhours

Research in Motion, Thursday's darling, was back to getting kicked around by the Fast Money gang on Friday.

"There is no trade right now in RIMM," said Joe Terranova, but actually Guy Adami said he disagreed with that, that the stock is shortable.

Melissa Lee cited what to her is a "red flag," that "the company will stop giving ASP guidance."

Tim Seymour said those things are what investors need and faulted the open high, close low activity of the shares Friday. "Very weak performance," he said. "I don't think we're getting what we need from them."

Now even Guy Adami is
boasting about Dr. J’s trades

Surely if Jon Najarian had been on Fast Money Friday, he would've told you how he nailed Research in Motion.

Because he wasn't, Guy Adami spoke on his behalf.

"Doc traded this one great," Adami said.

Hopefully, Potash has no
designs on ArcSight

Joe Terranova and Tim Seymour conducted a small little debate Friday on Potash and the fertilizer space, with Terranova citing disappointment that POT couldn't get over $150 while Seymour said it's fundamentals and not takeovers that are reason to be long the sector. (This writer is long POT, because Karen Finerman was so convincing a day ago in predicting a new bid.)

Michael Block, who a week or 2 ago pointed out the predicted flood of bids on Potash hadn't materialized, warned about owning stocks in play or maybe thought to be in play.

"We have to remember who owns these stocks now; who owns POT, who owns Mosaic," Block said. "It's going to be guys who like to play deals. Frankly they may not be even looking at the corn price right here, all I know is they're playing the deal, and that's just a big caveat for anyone involved in these things."

Guy Adami said with Amazon, "I think you wanna be taking profits." Joe Terranova said, "Keep your eye on Qualcomm here."

Tim Seymour said there isn't a clear market direction. "I think there's a lot of cross currents." But he predicted things would settle down in a good way starting in October. "I think a lot of guys are gonna be chasing this."

Block was almost shut out of the Final Trade, but the cameraman gave him a chance. He said to "short FedEx, no reason to own it right now." Seymour said to buy Mobile Telesystems on weakness, Adami said to short FCX, Brian Kelly said buy RGR, and Terranova saluted Gary Kaminsky with a long Clorox call.

Brian Kelly likely wasn’t considered for Helen Thomas’ front-row seat

On Friday's Fast Money Halftime Report, Brian Kelly said he's got the perfect question if, like all of these Princeton folks apparently, CNBC were to invite him to Monday's town hall with Barack Obama.

"If one of his family members were out of work for 26 weeks or more, what would he tell them to do. That's it, that's the answer to our economy," Kelly said.

Steve Grasso sort of scoffed at that one. "It doesn't matter, he extended unemployment to 99 weeks, that's what he'd tell 'em, sit home and cash the check," Grasso said.

Patty Edwards said, "I'd love to hear that this president doesn't hate capitalism."

Grasso's response to that was, "Maybe the tooth fairy calls you too."

Grasso tells Doug Kass,
Get that (bleep) outta here

Steve Grasso on Friday pointed to the "mammoth level of 1,131" and predicted the market would go higher.

Which put him in an argument with Doug Kass.

"In technical analysis, it's not the level which is important, it's the manner in which the market moves to a level. And this advance has been a weak one technically," Kass said.

Grasso didn't care. "Until we break 1,110 to the down side, this market's going higher, whether you like it or not, I don't care what stool you're sitting on," Grasso said.

CEO compliments Fast Money

Patty Edwards said Friday that she would "take a little bit off the table" in Oracle, and not necessarily "buy it with both hands."

Steve Grasso said HPQ would benefit from some decision-making. "My partners are still long it, people are still constructive on Hewlett-Packard, but we definitely need some closure on the CEO," he said.

Patty Edwards said her trade off the RIMM news is MICC.

Brian Kelly said the prepaid story is the angle to note from the RIMM report. "I still think the way to play this is through Vodafone," Kelly said.

Medicis chief Jonah Shacknai expressed happiness at being on Friday's Fast Money Halftime Report. "It's my pleasure to be on your terrific show," he said.

Melissa Lee was impressed by Shacknai's product description: "Blasting butt cells out of existence; that sounds pretty attractive to me, Jonah," Lee said.

Kronthal: No bubble

A quiet Strategy Session on Friday was marked by Steve Liesman's report on a series of new data about the American household and consumer. Many mildly interesting numbers; "the takeaway from this report is the consumer remains under pressure," Liesman said.

Maybe the show's most interesting nugget though was this comment from Kate Kelly, something we either didn't know or had forgotten about: "John Mack, their former chairman, endorsed Hillary Clinton for president." (Presumably Kelly meant "former CEO," as he's evidently still chairman.)

Jeff Kronthal reassuringly said, "I don't think we're at any point near a risk for another bubble." Brad Miller said there are a lot of IPOs, currently 10, festering on the Street, and that there'll be more heading into year-end.

Gary Kaminsky reiterated an outrage about Lehman Brothers he made during his Wednesday Squawk Box appearance (you know, the one where Kaminsky started to say "I also know Dick, I knew Dick quite well, I still know Dick quite well," and Joe Kernen said, "I don't think you know Dick," and Kaminsky admitted, "That's a good one! You know, I set you up for that," and Becky Quick had to cover her face because of the giggling), saying a lot of people lost their jobs while some bigwigs are being kept around to sort things out. "The guys that helped blow up Lehman (are) now working for the estate, helping unwind the positions. There's a lot of crazy things that go on in the industry," Kaminsky said.

[Thursday, September 16, 2010]

There must be a Macau
trade in this somewhere

In an afternoon dominated by Oracle and Research in Motion conference calls which quite frankly weren't particularly interesting, the Fast Money gang seemed most interested in what Bruce Rockowitz of Li & Fung had to say about production in America's largest industrial park — China.

Rockowitz said that even as technical innovation improves the delivery to U.S. merchants, inflation is creeping into the equation. "You see it throughout all of Asia, prices going up," he said. That only adds to the incentives of companies such as Wal-Mart to improve the process and "buy later, buy smaller, buy quicker, buy right."

Karen Finerman asked if the efficiency improvements that allow retailers such as WMT to more quickly order and receive the stuff that's selling and not have to keep on their shelves as much stuff that isn't selling will outweight the negative of inflation.

Rockowitz said "Ultimately yes," but at this point, "retailers are just starting to gear up" to take advantage of the efficiencies.

Melissa Lee asked a great question, "Why can't a factory in Indonesia make what a factory in China makes?" Rockowitz had a convincing answer: "Because the scale of the labor force in China is so much dramatically bigger," he said, and that in China, you have access to all the "subtrades" in sort of a "1-stop" shopping environment.

Congrats to Cortes,
if only for a day

We've gotta hand it to Steve Cortes, who did nail Research in Motion on Thursday, even if his 4-catalyst plans seems a bigger reach than the Bills winning at Green Bay on Sunday.

"Kudos to Killer Cortes," said Joe Terranova.

But Terranova also said, "I think there's no trade on RIMM," and Guy Adami recommended people take profits on its afterhours spike.

Pete Najarian pointed out that Melissa Lee owns a BlackBerry Torch. "I have it," Lee said, showing it off for the camera.

Adami said he thinks "There's a very good chance" that AMZN gets to $150 again and fails.

Karen: POT will get done

Dennis Gartman described gold this way on Thursday. "It's become a currency. It's not gold any longer. It's a reservable asset," he said.

Karen Finerman, very intrigued these days by gold bull cases, asked if governments' fiscal responsibility is the only thing that can stop gold from rising.

Gartman said a big Republican win in November would perhaps be a headwind on gold, but people who think governments are going to start getting their fiscal discipline in order should know that's "been a bad bet" for 45 years.

Karen Finerman said she was "skeptical" of the reports of Potash trying to put together a Chinese consortium, but nevertheless, "I am long Potash."

Pete Najarian made "The Pitch" for Siemens, which he called the "German version of GE." If that's the case, could it actually be a great stock? No one on the panel bothered to question this pitch.

Gary Kaminsky shows a couple
governors how it’s done

In another indication of his rising big-shotness, Gary Kaminsky cracked the impressive lineup for John Harwood's Thursday night CNBC prime time special, "Prosperity and Power: Making Washington Work for You."

It was an extended panel discussion around excerpts of Harwood's earlier interview with Nancy Pelosi. Apparently the hook was for CNBC to capitalize on some of the Tuesday night election buzz percolating throughout cable TV this week.

Harwood's guests included Ed Rendell and John Engler, plus Neel Kashkari and Eamon Javers. The tone was very genteel, with only mild chiding between Rendell and Engler.

Unfortunately but not unexpectedly, there weren't any headline-making moments. Kaminsky said, with help of a Jamie Dimon graphic, that there's a fine line between regulation and the right hand not really knowing what the left is doing (presumably we're in the latter mode right now according to Kaminsky). Kaminsky also stressed, more than once, that people expecting a stock rally in the event of a big Republican win in November might well be disappointed.

2-0 vs. Texas?

Last we checked, Washington Redskins owner Daniel Snyder is likely "completely focused" on this Sunday's game with the Houston Texans.

Good luck, Dennis

Our home page notes the scoop from dailyfinance.com indicating that Dennis Kneale is likely to depart CNBC when his contract expires soon.

This would be a complete non-surprise. For the last few months if not more, Kneale in his CNBC assignments has sort of resembled the onetime starting pitcher relegated to bullpen duty.

The truth is, Dennis Kneale is an excellent television personality. He's a guy with ideas and optimism and ability to present them on-air. It's also true that he's a legit target for satire, maybe occasionally exasperates his colleagues, and something about the way he operates doesn't quite carry enough gravitas, though we'd be hard-pressed to define that. OK, 1 example, his blogger rant would've been great — if it wasn't overwhelmingly about "poor me." His onetime colleague/rival C. Gasparino, by contrast, made a more entertaining/provocative statement on the subject in about 1/100th of the time and energy.

It will be disappointing if a talented person such as Kneale can't stick with CNBC. Nevertheless, after several years, it's clear the network doesn't have an ideal role for him, and maybe it's best for the sides to part ways. After all, that's capitalism, isn't it?

Doug Kass is the foil
for Dr. J’s latest dunk

Jon Najarian explained on Thursday's Halftime he was hitting it big with TBT, which he expects to reflect a movement out of bonds into more risk-on trades, "I think as we accelerate towards the election."

Steve Grasso agreed with the November catalyst. "I've been saying it for about a month and a half now, I think the biggest catalyst for this market to the upside is going to be those midterm elections," Grasso said. "You can make the comparisons to '04. ... This market is in lock-step."

Grasso said Doug Kass, who wasn't on-air, happens to be someone who disagrees, but whatever. Najarian took that as an opportunity to crow.

"Dougie shot us a note right as I was coming on air, and he said, 'Take a look at the TBT,' and I said, 'Dougie, I already got it'," Najarian said.

Steve Cortes & Bob Seger:
Against the wind

The Fast Money Halftime gang addressed the subject of RIMM's midday climb.

"I think some of the shorts might be a little apprehensive," said Guy Adami, who said the small rise actually makes him "more bearish to see this" rather than if the stock were plunging pre-earnings.

Jon Najarian said suddenly there was call-buying, then employed one of the most dreadful of cliches, "What a difference a day can make."

Steve Grasso said indeed, people he deals with are still very bearish but are trying to protect themselves just for this moment, "one of the rare times I can agree with the whole panel."

Steve Cortes said he actually thinks the stock is a long, despite the fact, "I am fighting a ton of momentum here."

Tilson: Companies should use
debt on buybacks

Whitney Tilson made an appearance on Thursday's Halftime Report but basically said the same thing he said a week ago on Squawk Box with Gary Kaminsky, that he thinks certain blue-chip equities are far better deals than the bonds they're issuing.

"We're not shorting corporate bonds, but, uh, you know, we just don't understand what investors, any long-term oriented investors could possibly be thinking, when Johnson&Johnson a month ago issued all-time record low debt ... and the stock's trading at under 12 times earnings and yielding 3.8%," Tilson said.

He said companies like JNJ should be doing an "arb" thing where they issue debt and buy back the stock.

"Why do you think that's not taking place?" Guy Adami asked.

Tilson didn't give a specific answer but said the markets suggest a lot of people fear we're entering 10 years of Japan-style economics, which he considers "less than 5%" chance of happening.

No. 386 asked Rosetta Stone CEO Tom Adams a good question, if international travel picks up, would that be good for the company. "I haven't looked at that proxy, but I think it's a good idea," Adams said.

Steve Cortes pointed to Monster Worldwide's chart as his indicator of the economy. "I'm short the banks right now, as of yesterday, shorting retailers, XRT," he said.

He also said he disagrees with his colleagues, "I believe the bond pullback is a buy."

Guy Adami said he agreed with Cortes in that unemployment doesn't seem so much cyclical, as "structural."

Jon Najarian spoke about Akamai options activity, which gave him another chance to tout a great trade of his. "I think this is a hot stock, and another one of those gifts when it broke through 38 earlier this year," Najarian said.

They talk about the housing bubble, the Internet bubble, but never the oil bubble

Suncor CEO Rick George, whose stock, like CHK, once seemed like it wouldn't stop anywhere short of the moon, spent some extended time on Thursday's Strategy Session and took a question from David Faber about some critics who think SU is less a stock and "much more of a proxy for the commodity."

George, referring to his 2009 merger with Petro-Canada, seemed to think the market has not given his company enough credit. "We've been put in the penalty box for a while here," he said.

Gary Kaminsky pointed out that 9 out of 10 combinations fail and asked George why the Petro-Canada deal will be the 1 in 10 that doesn't.

George first said the deal was done in early 2009, "right at the low part of the market," so his chief argument apparently is that the cost was reasonable. Then he said, "The synergy values are huge ... $400 million of expense savings a year and a billion dollars on capital savings ... headquarters in the same town, reduce office space."

Based on this CBC article at the time of the March 2009 announcement, a major impetus for the deal appears to be size, that it presumably was a goal of Suncor and perhaps both companies to become so big as to prevent a foreign takeover. Which, as is noted in the article, might've been great for Canada, but perhaps not terribly appealing to shareholders.

We're not oil analysts in the slightest. The gut feeling though is that stock of a name like Suncor, with a slightly more unconventional (er, not as cheap) way of producing oil, is going to be permanently tethered to the price of crude.

What's more, we wonder why CNBC pundits never seem to take up the notion of maybe oil of the 2000s was a bubble. Once it crashed down to the $30s in late 2008, all you heard was "Oh, that can't last, it'll just go right up again, etc." And it has gone back up, but nowhere near $147.

And maybe in fact it's going to spend the next 5 years testing $40, rather than $100, and oil stocks right now might be like MSFT and CSCO and ORCL of the early 2000s, previously moonshots because of all this parabolic Internet (Chinese oil) usage that was going to happen indefinitely only to have markets eventually decide there's a top to everything. Interesting how XOM 2008-2010 and MSFT 2000-2002 seem to resemble each other.

Jon Fortt delivered some breaking news about Mark Hurd being present at the ORCL conference call. It is not yet known if Mark Hurd will consume a cup of coffee, a candy bar, or a cigarette during said conference call. But it was generally agreed on TSS Thursday that Mark Hurd will not answer Hewlett-Packard questions on said conference call.

"Why not put him on, you get more people to listen to the call that way," said Gary Kaminsky.

The Big 3 of stockbrokers

Matt Snowling, in very limited time on Thursday's Strategy Session, predicted the retail brokerage industry is destined to morph into "the Big 3 asset gatherers — the Schwabs, the Fidelitys, and the Ameritrades of the world."

The interesting thing about that is that anyone basically over 35 who has been interested in the stock market recalls the days (not too long ago actually) of horribly high commissions. Nowadays, depending on where your account is and maybe the amount in it, you're looking at $9.99, $8.99, maybe $4.99 or $3.99 or even a bunch of trades free.

It used to be, you'd have to call up a human being, or even visit him/her in an office, and hope they'd only charge you $49 to buy $1,000 worth of IBM.

But at least back then, stocks generally went up, and the people charging you $49 could keep saying with relative honesty, "anybody who holds stocks for 10 years or more always comes out ahead."

Gary Kaminsky said the real pain caused by diminishing trading volumes is not being felt by the sales people or the investment bankers, but the "back-office jobs in brokerages" that are being hurt.

However it turns out,
we’re sure Aubrey’s covered

Kate Kelly on Thursday delivered some interesting news on how Chesapeake plays the natural gas options market, all the way out into 2010.

David Faber asked, "They're kind of trading here a lot, aren't they?" But he did note that as a natural gas supplier, it can produce the commodity to meet the $8 call prices.

Faber, Kelly and Kaminsky noted the value of hedging and bringing in cash, but Kaminsky said, "I don't think companies are rewarded for having a long-term hedging program if it becomes speculating."

[Wednesday, September 15, 2010]

CNBCfix prediction:
Christine O’Donnell all the way

We always enjoy being ahead of the pack whenever possible.

Wednesday, we barely knew anything about Christine O'Donnell, and still don't really, except that a bunch of TV pundits (including 1 you're about to hear from on Fast Money) were immediately writing off her impressive Delaware primary victory as a disaster and certain loss for Republicans in November.

We figured they must be right. Until we heard someone mumble "better-looking than Sarah Palin," prompting us to look up some pictures.

Here is what Christine O'Donnell looks like.

This is what her opponent, Chris Coons, looks like.

Anybody who thinks that guy is going to defeat this woman is insane.

Confirming our instinct, incredibly, Chris Coons' own Web site, at least as of overnight Thursday, featured a large picture of his stunning opponent. Is this guy trying to lose, or what?

K-Fine: Tuesday stunk
for Republicans

On Wednesday's Fast Money, Richard Bernstein showed up to talk politics, and Karen Finerman tipped her hand.

"So, when I look at some of those Tea Party victories, I actually think, if you're a Republican, this is a worse day today than where you were yesterday, and your likelihood of massive shifts has changed somewhat for the worse," Finerman said.

Wow. Where to start on that one.

How about this: That maybe people were actually voting for what they believe in, and perhaps are tired of hearing how they just have to pull the lever for these uninteresting, mega-rich, self-financed moderate candidates who don't really stand for anything (in places such as, um, Connecticut, California, Nevada...)

Or maybe this: They didn't really see the need to hand yet another post to a 71-year-old who has already done state rep, state senator, lieutenant governor, governor and congressman and in fact moved from governor to congressman in a negotiated back-room swap.

But because that might (or might not) end up netting fewer Republican seats for Chris "POLITICS IS ABOUT POWER!!!!" Matthews to yak about while Barack Bush maintains the 10-year (or more) status quo and charges every problem to our national credit card just like the previous Republican administration would've done while feigning tax hikes against the rich, apparently, "if you're a Republican, this is a worse day today than where you were yesterday."

Richard Bernstein, to his credit, said "I don't know ... the whole game plan no matter who wins is gonna be the presidency in 2012."

That's a whole other topic we don't have the inclination or patience to address. Obama could be defeated if things get or remain rough, but it seems unlikely, especially when the Republican front-runner is Mitt Romney, who couldn't beat Mike Huckabee a couple years ago. If Republicans are really going to win the White House, who are they going to nominate in 2012 who will be a more interesting candidate than Barack Obama?

Bernstein recommended small-cap value, "the great cyclical play right now."

Seymour invades
the Red Bull cabinet

Tim Seymour, as he is prone to do, spoke on Wednesday's Fast Money as though he was getting paid by the word.

"We have melting-up here," he said at the beginning, and the commentary melted on for the next 60 minutes.

None of it, though, jolted Karen Finerman as much as Seymour's repeated contention that we've yet to see a real "market-turn" that anyone believes in.

Seymour said, "Gold will stop rallying when equities truly have a base behind them."

Finerman protested, "The S&P's up like 7%, maybe more-"

"But Karen, I don't think anybody believes this rally is for real," Seymour said.

Later, discussing Apple, K-Finerman interrupted some chuckling to ask Seymour again about this "market turns" stuff: "I don't get what you're talking about," Finerman said. "Markets are up gigantic for September."

Seymour said there's "no dispute" of that, but he's "dubious" on the 2nd half of the month.

"I'm talking about an S&P that really trades on a valuation that's reasonably attractive," Seymour added.

So, Finerman said, it's a "volume thing?"

"We haven't seen the volumes to validate it," Seymour acknowledged. "We haven't seen semiconductors..."

Gold (again) didn’t do what Karen figures it’s supposed to

If K-Fine was exasperated by Tim Seymour's analysis of a "market turn," she was just about equally exasperated with the latest (non-)gold move.

After Brian Kelly spoke about what he sees as the trend toward currency debasement featuring Japan, Finerman asked about Wednesday's reaction: "Why wouldn't we see that in gold?"

Kelly responded, "If you look at the inflation expectations, they're not there yet."

Seymour: AAPL out of catalysts

If Karen Finerman was annoyed by some of her colleagues' commentary, Joe Terranova was positively dumbfounded on the subject of Apple.

"I think Apple goes well north of 300 bucks," Terranova said.

Tim Seymour spoke of $350 price targets and asked, "What can they do for us in the 4th quarter?"

Terranova, in disbelief, held up his iPad and said "This is the gift."

"Everybody that wants 1 has got 1 on this desk," Seymour responded.

Melissa Lee followed with a good question, asking Terranova if the notion of the iPad being everyone's gift is already built into the stock, and if so, what would move the stock. Terranova responded that the overall market could move higher, and the rising tide would lift Apple more than other names.

"My iPod keeps breaking unfortunately," Seymour said.

Steve Cortes somehow finds
4 reasons to go long RIMM

Melissa Lee on Wednesday revealed an interesting call from Steve Cortes (not shown on camera), who said Research in Motion is actually a buy for reasons of sentiment, technicals, overseas strength and M&A potential. In the process of explaining, Lee's hand talk made Marcel Marceau seem like a minor leaguer.

Brian Kelly said he'd pick GOOG over RIMM.

MSFT-YHOO: Oozing synergy

Lou Kerner began his Fast Money appearance on Wednesday not sounding like he was going to say anything dramatic, but by the end, you were wondering why YHOO shares were even worth a dime.

Melissa Lee asked Kerner what's left if Yahoo! dumps Alibaba.

"A company that's really in transition," Kerner said, with a business that's going "sideways," with a "lot of work to do." And he said Carol Bartz is in an "incredibly tough position."

As for whether Yahoo! unloads Alibaba, "I think the odds are pretty low in the near term," Kerner said.

Patty Edwards, getting about 45 seconds of total airtime from the West Coast Prop Desk, first said she wouldn't do the kinds of deals Steve Ballmer tries to do, but then floated what could only be considered a nightmare scenario for MSFT shareholders (and probably YHOO ones too): "Maybe they wanna takeover Yahoo," Edwards said, pointing to the debt raise. "It's just a thought."

Heather Bellini said she expects an MSFT debt offering "sometime in the next 4 to 8 weeks," and a dividend moving from "13 cents to 17 cents per quarter."

Recently there's been a spate of weak jokes on Fast Money, and Wednesday was Joe Terranova's turn, saying Yahoo! should "Make 'em an offer they can't refuse. It worked in 'The Godfather'."

Heather Bellini says hopes of a Hurd blockbuster at Oracle are premature

Heather Bellini said Wednesday that "Oracle is potentially in a very sweet spot."

Patty Edwards, though, clamored for details. "What is the next big thing that you think is coming out of there?"

"Open world's next week," Bellini said, then she cited a "fusion app," and of course, "gotta be another acquisition that's coming down the line sooner or later."

CNBCfix.com: Free to read,
sometimes worth that much

Scott O'Neil visited the Fast Money set Wednesday to talk about his new endeavor, MarketSmith, a Web site that aims to deliver to regular Joes the same market news that the elite pros get.

"I appreciate being among fellow marketsmiths," O'Neil told the Fast Money panel.

Melissa Lee, who talked furiously with her hands, pointed out how "commoditized" information is these days and how anyone can find just about anything via the Web, and she asked O'Neil specifically about MarketSmith, "How is this different?"

"It screens and it brings it down, we have exclusive ratings and rankings on the tool," O'Neil said. He also mentioned a "single view and functionality ... so it greatly speeds up the process."

O'Neil said the site somehow calculates stocks into formulas used by greats like Warren Buffett or Martin Zweig or others, which, quite honestly, is a process that sounds fairly dubious and subjective.

O'Neil told Tim Seymour that the system has identified a comparison between today's Apple and Xerox of 1963, which to us seems an astoundingly fluky comparison with no relevance. Traders seemed to have more questions for O'Neil than he could supply decent answers for.

If that sounds like a harsh review of the site, it's not meant to be. In fact, O'Neil is a honcho in the business media industry, and we're rooting for him to succeed. What we heard didn't sound terribly inspiring. When visiting MarketSmith, we were greeted with a box that says, "Learn how Greed, Hope, Fear and Pride can keep you from making money in the stock market," which sounds like a highly semantical way of buying and selling stocks. MarketSmith will be a show-me type of operation.

Melissa Lee asked O'Neil for stock picks. He said Apple, Baidu, F5 Networks, Chipotle.

Maybe BUD would take YHOO?

Melissa Lee introduced on Wednesday the Fast Money version of "The Dating Game," and while many viewers were no doubt disappointed to learn Melissa herself wasn't the one playing it, the gimmick produced one of the more entertaining discussions recently. Joe Terranova was asked about IBM maybe buying Red Hat. "IBM stands out, absolutely," Terranova said. "But you gotta think about Microsoft," he added, and he's got a good point, but we think maybe there's antitrust stuff there, but who knows?

The entertainment came when Tim Seymour described the notion of Pepsi and Anheuser-Inbev teaming up like a "snake swallowing a horse." He did acknowledge though that there would be distribution savings and that InBev wants to rule the world. But he doesn't think it could happen because of too much debt.

Lee asked about Unilever maybe eyeing Hain Celestial. Karen Finerman said, "You gotta think somebody like Nestle ... even a Pepsi" would be interested in Hain, an appealing target, even though Finerman thinks Hain definitely isn't looking to be bought.

Brian Kelly, whose quiet turn on the Fast Money desk Wednesday essentially amounted to playing an entire basketball game and taking about 1 shot, said, "I went out and shorted the OIH."

Karen Finerman said RIG doesn't have the huge pockets of BP and it's too hard to know the extent of liabilities it faces. "I actually am long RIG," said Joe Terranova, who said he also bought Mastercard.

Pete Dawkins pulls out
the semantics playbook

There are few people we'd like to see on Fast Money more than Heisman Trophy winners, especially legends such as Army halfback Pete Dawkins.

Unfortunately, Dawkins opted to play safety on Wednesday.

Dawkins' subject was Lehman Brothers, and whether it could happen again. "Oh sure it can happen again," Dawkins said. "And, I think we learned a lot of lessons."

When Melissa Lee asked what lessons we haven't learned that would lead to another Lehman-type event, Dawkins explained we're "too focused on management" and not always able to "recognize how raw leadership is crucial."

That prompted Karen Finerman to ask how that applied to Lehman, "Who's the leader there, is it the board or is it Fuld, or both?"

"It's a number of different things," Dawkins said. "You have to manage a big company, and management is a bunch of functions, it's allocating resources, measuring results. But leadership is the qualities of the people at the top. It's vision, it's integrity, it's determination, it's trust."

Dawkins' bio is so loaded, it's almost absurd. Overcame polio at 11, picked West Point over Yale, Heisman winner, Rhodes Scholar. Curiously, he also lost the 1988 New Jersey Senate race to Frank Lautenberg by 8 points.

He might be right —
but does Congress care?

Watching a fascinating discussion with Steve Eisman about the for-profit education industry on The Strategy Session Wednesday, we had the feeling that being right sometimes doesn't necessarily amount to squat.

Eisman's trade — short the heck out of these suckers — basically just sounds like yet another regulatory play, putting it in the same category as health-care stocks, credit cards, CME/NYSE/Nasdaq, pretty much all of the big banks, automakers, tobacco, drilling, pawn shops, etc.

And while we're not making a call in the slightest on for-profit education (this writer has nowhere near a position long or short), the gut says stocks affected by the government always seem to take a pounding when the news is bad, then miraculously we end up with some kind of bailout.

Gary Kaminsky asked Eisman what the for-profit ed longs would say to defend their positions. Eisman acknowledged they crank out revenue. But, he said, "If you wake up some of these long-only guys in the middle of the night, and you said to them, these are bad companies aren't they? They'd say yeah, they are."

Herb Greenberg asked Eisman if he would still short the sector if all these proposed government rules went away. "Absolutely not," Eisman said.

"The catalyst is, the government has to act," Eisman added. "There's no reason to think they're not going through with them."

Kaminsky concluded: "Either something is gonna happen at the government level to change how the business works, or else these guys are continue to do what they're doing, and generate a lot of cash."

Degree of skepticism

Whatever the political reality, Steve Eisman made some remarkable observations about the state of for-profit education.

He said students are ultimately charged about 5 times more than they would be at nonprofit institutions, that much of that is funded by the taxpayer under Title IV, and "the default rates are excessively high in this industry."

"Most of the students who go to these schools can't afford to pay a dollar to go to them," Eisman said. "If the student defaults, the school bears no risk on that default."

He said the schools experience "massive churn" of students. "In the case of Apollo, they have to generate 6 to 7 news students per year just to grow by 1 student," he said.

He said really, they're just "marketing machines masquerading as universities."

Newspapers can’t seem
to catch a break

Steve Eisman said in the event of a "hard reset" in the sector, "Probably the ones that are most impacted would be ITT Education, and Washington Post, with ownership of Kaplan."

Eisman said names regarded as being elite, such as Strayer, really aren't. "I think what they are better at is manipulating their loan data," he said, saying Strayer uses interest-only loans and effectively is "consolidating them over and over again" to push losses further ahead.

He said Apollo simply pays off some of its students' bad loans so the loan-loss rate doesn't look so bad.

If the new rules do happen, he said "the shrinkage could be very very rapid" in the industry.

Stuck in the middle,
with Herb Greenberg

Herb Greenberg asked Steve Eisman about an interview he had last week with ITT CEO Kevin Modany. Greenberg said Modany claimed, "If these rules change, the underprivileged will be hurt."

"I watched that show," Eisman said. "If it wasn't so pathetic, it would be laughable."

Eisman then made a reference we didn't quite get. "If you had asked him about the Yankees, he'd have somehow slipped in that he educates the underprivileged and the Yankees agree with him."

Actually, Modany's interview was fairly short, and didn't seem notably laughable.

Modany did refer to "minorities, low-income, non-traditional" a couple times. "What happens to them, where do they go," he asked.

Eisman said Wednesday that those arguments about who was getting hurt were the same things said about subprime.

What likely irritated Eisman was this comment by Modany: "If you look at taxpayer costs, the taxpayer cost is actually higher when we look at public state schools vs. a proprietary school." That would've been an extended arguent worth hearing.

Eisman: Housing might have
lower to go

Steve Eisman's opinions Wednesday weren't limited to for-profit education.

Speaking of the economy, he said, "It's gonna be like this for years ... very little growth, declining margins in the banking industry, and I think people's expectations are just way too high."

He said the banking world and the government are more concerned about capital levels than shareholder rewards. "I don't think you're gonna see really much in the way of dividends for 2 years," he said.

Most notably, Eisman said, "There is a possibility that housing prices start going down again."

Gary Kaminsky said, "If we start to see a precipitous decline in home prices right now, I don't think many of the financial institutions have modeled their business right now to sort of absorb that again, this soon."

David Faber said Eisman was appearing "in his first televised interview in over a decade, I'm told." Unfortunately, Faber squandered a little bit of that time asking the same dull nonspecific question twice, where does Eisman think we stand 2 years after the Wall Street crash, etc.

When was the last time you saw Greg Troccoli, Dan Fitzpatrick, John Roque, Louise Yamada, Katie Stockton, Jeff DeGraaf ...

Carter Worth delivered one of the rare chart moments on Fast Money Wednesday.

"This time around, we will actually get above the June and August tops and we'll print, let's say 1,140, 1,145," Worth said.

To play that, Worth said, he'd "fade consumer discretionary, get long energy." He also pointed out Halliburton as a "real standout," a stock that's "being rotated into, if you will."

Joe Terranova said, "I am very long energy here." Jon Najarian said Chevron is a better performer than Exxon because Chevron fortunately didn't plunge whole hog into the nat gas space.

Patty Edwards talked a bit about the transports. "I actually own a company, TAL, which does containers. They're telling me that the business is booming," Edwards said. "That tells me FedEx probably has a good quarter coming up." Joe Terranova said the difference between FedEx and UPS favoring UPS involves international management and fewer pension issues.

Jon Najarian revealed he's got a Harley. "Love the stock, I got one of 'em," he said.

Terranova: Can still short TM

Peter Boockvar said not to get too excited about Japan's efforts to weaken the yen. "Every currency trader is gonna go back and look at their '03-'04 playbook with respect to the Bank of Japan, and that's why it's gonna lessen the impact of this being effective," Boockvar said.

"This is a global race to debase your currency," he added. "And the last man standing in that scenario remains gold ... on pullbacks you buy it."

"I bought some more TLT" on the news, said Brian Kelly.

Joe Terranova said Toyota should've done a lot better on the news, but "It's only up about 1% right now," so he thinks "you could still be comfortable" being short TM.

Jon Najarian talked about steel names and said it's kind of a boom-and-bust situation that people could avoid for now before buying. "I'd wait for a little more of a bust," Najarian said.

Patty: HPQ has room to rise

Melissa Lee made a rare stock call, of sorts, on Wednesday's Halftime, asking Patty Edwards if Edwards had sold into HPQ strength.

"Not yet. I'm still hanging on," Edwards said.

"What are you waiting for?" Lee asked.

"More, I want more," Edwards joked. "Bottom line, the stock is still cheap, it is still one of the big gorillas in technology, it's at low valuations."

"I think the software names are the place to be right now," said Joe Terranova.

Brian Kelly said a Yahoo!-Alibaba split wouldn't really be good for Yahoo!. "For me, Alibaba is the crown jewel of Yahoo!" he said.

[Tuesday, September 14, 2010]

Michelle Meyer sighting

Michelle Meyer made an all-too-rare CNBC appearance with Maria Bartiromo on Tuesday as the Money Honey made the rounds at Bank of America Merrill Lynch, where we learned Meyer's title is senior U.S. economist, global research.

Meyer, The World's Cutest Economist, burst into business-television consciousness a year ago at Barclays Capital. She said the consumer will remain cautious, but we "just need a little growth to get started."

Neither Bartiromo, nor anyone else, asked Meyer if this is an "after-school job."

In less than 2 years, it’s about a triple, but should be ‘well north’ of that

K-Fine said something about Apple on Tuesday's Fast Money that we found downright iJaw-dropping.

"If they were to have a much better capital allocation strategy, their stock would be well north of where it is now," Finerman said.

So, how should amateurs like us interpret that one?

Seems K-Fine means either the company has not made as much money as it could've, or it has somehow produced too low of a multiple.

Shame on them.

Cortes: Microsoft should
buy more things

Tuesday's discussion of the ability of companies like Microsoft to borrow cheap money prompted Steve Cortes to indulge in fantasy.

"They can think out of the box here and go buy something unrelated to their businesses. They could follow somewhat of a GE model from the Jack Welch days," Cortes said.

Steve Ballmer: The next Jack Welch.

Karen Finerman wasn't nearly so optimistic, saying people should just be thankful it's not any worse. "Microsoft shareholders should be delighted they didn't buy Yahoo! That was the last big idea they had," Finerman said.

One thing we were happy to hear was Tim Seymour talking about this emerging issue of overseas cash. "I don't think it's particularly virtuous that a lot of these tech companies have been, you know, keeping money offshore, and have effective tax rates of under 20%," Seymour said. "A lot of people are frustrated about this. ... That money should've been home."

First, we don't claim to be international tax experts by any means. Undoubtedly there is a good reason, somewhere, for why taxation of tech companies' overseas cash piles works the way it does.

The absurdity is that corporations with $40 billion in cash are actually borrowing money to avoid paying taxes, while the government strongly considers hiking taxes on individual people who don't have lobbyists and can't issue 3-year notes at 1%.

But what was John Chambers’
tone when he announced it?

Brian Kelly echoed what we were thinking in these parts as Melissa Lee was devoting most of her opening to the all-important landmark inaugural Cisco payout.

"I don't understand why people got so excited over a 1% dividend," Beeks said.

"I think the growth story for Cisco is over," said Joe Terranova.

That all sounds great —
except, what’s wrong with golf?

Gary Kaminsky, on Tuesday's Fast Money, delivered a teaser to his next "K-Call," which will address the lack of oversight at places such as Lehman Brothers, where Kaminsky once worked.

"Where was the board of directors?" Kaminsky asked. He said board members "show up for meetings, they play golf, they have a nice catered dinner."

Kaminsky said if boards don't become more responsible, more companies will go the way of Lehman. "People say, can this happen again? Not only can it happen again, it will happen again somewhere as long as we don't see board members responsible for the fiduciary actions of the companies," he said.

Karen Finerman, who was a bit chattier than usual Tuesday, asked, "How do you get a board to be much more accountable?"

Kaminsky's answer was harsher than we expected.

"Well you basically put some in jail, you basically fine them money, you make 'em have skin in the game," Kaminsky said.

Melissa Lee enjoys halting
interesting conversations

Tim Seymour once again gushed about gold Tuesday. And once again Karen Finerman tried to call him out on it.

"If gold breaks 1,275 tomorrow, it goes higher," Seymour said. "Look at the dollar, that's the trade ... the dollar is going lower."

"I just need someone to explain to me, I'm the idiot sitting on the sidelines while gold rallies, but how is it that gold is a deflation hedge, and the inflation hedge?" Finerman asked. "You're talking deflation and gold is great, you're talking about inflation and gold is great, how can that possibly be?"

Seymour, whose argument Tuesday was much more in the QE/deflation/risk-off sense, eventually got around to a response.

"We can talk all night about this," Seymour said before Melissa Lee cut him off.

"And we're not going to," Schoolmarm Mel said.

"When gold will stop rallying is when markets feel comfortable," Seymour said.

Gotta say, we think that in fact is the driver of gold. The problem is, it sort of contradicts the other reasons Seymour cites.

Probably not the last
you’ll hear of this

Over the last couple weeks/months we've begun to dread the notion that we're going to start hearing "coal supercycle" about 20 times a day on CNBC.

We're not there yet, thankfully, though darned if Fast Money didn't try its best Tuesday.

Steve Cortes made an interesting observation about coal the commodity, pointing to KOL the ETF, saying, "It's almost an exact replica of the Chinese trade; it's interchangeable with FXI. All of the marginal demand is coming from China."

Tim Seymour disagreed with Cortes that maybe the coal trade is overheated. "I think the supercycle's very much intact," Seymour said. "I think it's only 1 way up; you buy this weakness."

In other words, BAC is
economy-dependent

A couple Fast Money guests on Tuesday failed to light up the scoreboard. David Levy, playing "Bull Market or BS?", decided "BS" was the correct answer, saying earnings just won't come through because 6 sectors of the economy are struggling. Stephen Weiss, who said he's long UPS, talked transports and said, "I think you continue to see the rails move higher."

Steve Cortes revealed, "I am short crude," with 1 reason being the dollar got hit and oil still didn't do well, and also that "crude is badly lagging the EEM trade."

Karen Finerman identified the main catalyst-in-waiting for banks like BAC, aside from the fact they're probably not going to launch a tablet or start shipping coal to China. "At some point, we need to have loan growth," Finerman said.

Scott Nations recommended buying the October 24 put in MSFT for 30 cents, which Nations seemed to think is a bargain. "The interesting thing is, that 24 strike, that's a strike that would've been in the money as of, uh, oh just the end of last week," Nations said.

4 minutes for Wapner

Scott Wapner made a very rare appearance on Fast Money to talk about "quote-stuffing," which is apparently the latest insidery outrage on Wall Street (and also provides a good lead-in for still more Jim Simons interview excerpts).

"It's basically when high-frequency traders flood the market with bogus trades," Wapner said. "Their competitors have to sit there and process all these trades, uh, that they never really intend to do anything with."

We'll say what we always say when these types of subjects come up on Fast Money, that we have no doubt there is an outrage going on here, maybe a serious outrage, but if the retail investor at home is going to sit around and stew about it, that's a rather colossal waste of one's time.

Qliktech CEO Lars Bjork made an appearance on the set, and while we did find later on the Web that he's a proud holder of an MBA from the University of Lund (that's in Sverige for those who didn't know), we never got a clue during his interview as to what his company actually does, other than some kind of business intelligence software that apparently works on every application. "Corporate America is drowning in data," Bjork said.

CEO’s visit with Erin Burnett
pays off for Vringo

Early Tuesday afternoon, Erin Burnett welcomed Vringo CEO Jon Medved to her perch at the NYSE and, as the interview began, displayed a "real-time" stock chart showing Vringo trading at $1.97, up 7 cents.

About 4 minutes later, after Medved had discussed the potential of his company's ringtones and as Burnett had moved on to airline fuel prices, VRNG was seen in the CNBC ticker as trading at $2.65, up 75 cents.

Dr. J: I called Cisco
‘a screaming buy’

Jon Najarian on Tuesday's Halftime Report pounded the table — for his own purported call on CSCO.

"I remember 1 of the 2 of us on this desk pounding the table saying 'Cisco is a screaming buy down here folks.' Actually it was Melissa Lee that did that. Quite frankly though, it was me," Najarian said, pointing to the report of CSCO's dividend. "This makes the Cisco story that much bigger going forward."

First of all, we should note, we don't chronicle every single word uttered by people on Fast Money. So did we actually miss a "screaming buy" recommendation? Possibly. (Remotely possible.)

Here's really what we actually know to have happened.

On Thursday, Aug. 12, Halftime Report, Dr. J actually said, "I was able to buy it right around 21 today. I think that's a gift, like Akamai. But like Akamai I don't think it moves in, you know, just 1 day. I think this is a multiweek wait before it gets back on the rails, but then I think it goes, and that's why I'm long it."

Fair enough, he bought around $21 and was suggesting a hold for weeks.

Later that day on Fast Money, he said this:

"I was selling some puts in Cisco ... I was able to pick up stock just over 21, bought a bull-call spread as well and then just sat there selling stuff into it all day. Unfortunately, I think it's like Akamai, it's gonna take days or weeks to play out, it's not a bang, a V-shaped bottom story."

All well and good. But then on Thursday, Aug. 26, he was heard to say this about Cisco:

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

On Sept. 1, Najarian was on the Halftime Report. He said then, "I loved that Chambers came out and said he sees better things coming out of Europe than he expected, surprisingly good news out of Europe, even though the signals in the U.S. are mixed. That's a completely different message than just 2 weeks ago, and it's another reason to be a little long into the fall."

On Aug. 12, it closed at $21.36.

On Aug. 26, it closed at $20.70.

On Sept. 1, it closed at $20.26.

Tuesday, it closed at $21.45.

So we've gone from a "gift" around $21 and a "multiweek wait," to making a "couple nice scalps," to "a little long." Now we're told at some point it was actually a "screaming buy," despite the fact it's a grand 9 cents higher than the day it was called a "gift."

Of course we can't say with certainty that he never called CSCO a "screaming buy" on CNBC in the last month. We don't detect, and CNBC.com doesn't indicate, any significant Fast Money commentary on the stock since Sept. 1. Actually Guy Adami just last night made it his Final Trade, while Najarian picked Red Hat, which fell about 1% Tuesday.

What we can say is that in 3 extremely detailed trade presentations he made about the stock, he 1) merely called it a "gift" at the price it's basically at now, 2) referred to getting "scalps," which we interpret as very short-term buying and selling, and 3) said you can get "a little long into the fall," which doesn't exactly sound like a "screaming buy" definition.

If there's any CSCO call to be saluted on Fast Money (and we still think it's kind of early for that, but whatever), it would be "Zeke" Karabell, who was the most effusive panelist on CSCO on Aug. 26, saying, "I think this is an unbelievable entry point."

Patty Edwards said Tuesday of CSCO, "The dividend? It's just the icing on the cupcake."

Jon Fortt, who's getting better and better at this Silicon Valley reporting gig, told Melissa Lee there's no sign that the dividend is a step toward John Chambers' retirement. "He's committed to being there for the next 3 years at least," Fortt said.

Everyone likes HPQ

The Fast Money Halftime gang found a bit of a consensus Tuesday on HPQ.

"I'm in it for the longer term," said Patty Edwards. "The valuation is still incredibly cheap, and depending on who they name, there could be even more catalysts."

Joe Terranova said, "It's cheap down here."

Steve Cortes said, "The fact that they've done major acquisitions without a quarterback in charge tells me that the bench is very strong at H-P ... I think they will get a great CEO."

And the stock’s worth about 1% of its value 10 years ago

Gary Kaminsky, foreshadowing a later CNBC interview with Brian Moynihan, hauled out an interesting quote he found about banking supermarkets:

"The math can be pretty significant if you can increase cross-selling by a fraction. 1% would be a huge amount."

Kaminsky revealed the quote came from Robert Lipp, then the vice chairman of Citigroup.

In 2000.

"We've seen this movie before," Kaminsky said.

Keep in mind we're just amateurs here. But it seems undeniable that BAC is a behemoth in all the wrong spaces right now, mortgage lending, retail banking and financial management, and unless it's going to convert into a seller of copper & potash to China or a cloud computing engineer, its stock is going to be about as exciting as the Kevin Kolb-led Philadelphia offense.

Ouch

Gary Kaminsky asked Strategy Session guest Steve Barry, a honcho at Goldman Sachs, about the promotion of Jim O'Neill, saying, "An economist is now gonna be overseeing asset management."

Michelle Caruso-Cabrera chimed in, "An economist running a business? Come on."

"He's not running the business; we still have our senior leadership at the top," said Barry, and it's worth noting the way he said it was not a dis to O'Neill. "The influence of Jim as a strategic thinker ... I think we can leverage that, we have leveraged that as a client of Goldman Sachs."

Herb Greenberg returned to the Strategy Session set to slam the for-profit education sector again (maybe that's the reason why the rest of the world's going forward and we're going backward, see below).

"This in effect is an industry that is fighting for its life," Greenberg said.

Greenberg announced that Steve Eisman would be on the show tomorrow. "First televised interview in 10 years!" said Michelle Caruso-Cabrera, who unfortunately didn't bring back that pilot's hat that Gary Kaminsky gave her a couple weeks ago.

Weinswig: Discounts aplenty

Debbie Weinswig talked about Best Buy and said, "Retailers are discounting ... you're seeing more units, but at lower price points."

Gary Kaminsky said it will be worth watching if Wal-Mart can do some damage selling TV sets. "Typically not thought of, as a destination for electronics," Kaminsky said.

Michelle Caruso-Cabrera asked if Cisco's reported dividend plan is "a symbol of maturation?"

Jon Fortt told Strategy Session viewers, "No H-P CEO news today."

[Monday, September 13, 2010]

Jim Simons wants more students to master high-frequency trading

We were this/close to writing off Monday's Fast Money as a highly forgettable, humdrum effort, sort of an abridged episode of "Biography: Jim Simons."

And then Simons, in one of the endless series of interview clips with Melissa Lee, cranked open a Pandora's box of educational commentary, specifically his firm's reliance on hiring foreign math whizzes.

"American kids are not going into math and science when they leave high school in the numbers that they should," Simons said. "In part because they're not prepared, and in part because they're not inspired. And that's the job of teachers ... and so we have to import people."

Simons, in a roundabout way, said teacher pay shouldn't be so low that there's no reward to doing it. He acknowledged Wall Street pays more but said if you pick Wall Street over teaching, "You shouldn't necessarily get more respect."

Fast Money gang auditions
for Arne Duncan’s job

As soon as Jim Simons' education comments were out of his mouth, the Fast Money gang started raining the b.s.

Tim Seymour said, "The reason we're buying Indian stocks is for the technology advancements. China's way ahead, I think it's gonna stay that way."

Guy Adami was in disbelief over Simons' possible implication teacher salaries should be competitive with Wall Street. "Not in any of our lifetimes," he said. "The U.S. is going backwards while the rest of the world is going forwards (sic)."

Jon Najarian explained the distribution of math geniuses this way: "There'll be greater numbers of them overseas, because of competitive forces overseas ... We have 'em here, just not in the same numbers."

Karen Finerman did not speak on this subject, unfortunately.

Where to begin ...

1. Simons says U.S. kids aren't taking science in "numbers that they should." Who/what determined what "should" be the number? The Ten Commandments? What subject is benefitting from this underperformance, all these people who "should" be in math but are doing something else they shouldn't be? History? English? Law? Drama? Are those courses overbooked? Did it occur to Simons that basic math happens to be very difficult for a lot of people, many who would struggle to solve a simple equation?

2. Simons says students are "not inspired" by math teachers ... OK Barack Obama, thanks for the pep talk. Many teachers are great; some suck and should be in other professions. Either way, let's stop being a complete nanny-state and let people take responsibility for themselves and figure things out on their own instead of trying to convince ourselves that it's 3rd parties' fault for not baby-sitting grown human beings all the way through their Ph.D.

3. Simons implies Wall Street gets better people than the teaching profession ... who would you say had a better/smarter year in 2008, Wall Street or the teachers?

4. Tim Seymour says people buy India stocks for technology advancements. We actually thought it was those 700 million (roughly) people just swarming into the middle class on a daily basis, who are all going to start eating meat in their diets and of course once they start on meat they don't go back, and they will buy potash and they will use smartphones too, probably via Mobile Telesystems and China Mobile (or is that another episode?).

5. Jon Najarian says "competitive forces" produce more overseas math geniuses, rather than the inescapable logic India and China alone have 7 times the population of America, and the way his colleagues talked is equivalent to people watching an Angels-Mariners game and deciding the Japanese leagues are going to dominate Major League Baseball because American players simply aren't getting good enough hitting instruction and it must be because our hitting coaches are underpaid while this is something they really prioritize in Japan ...

6. Guy Adami says disparities between teaching and Wall Street are the reason the U.S. is going "backwards," and the "rest of the world" is going forward. That's obviously the case in the smartphone market, where Research in Motion (Canada) and Nokia (Finland) are just waiting for Apple (American) and Google (American) to hit $5 where they can maybe do a "take-under" ... and of course most prominent Americans (not just Jim Rogers) are moving to Hong Kong, Mumbai, Rio, and Americans are signing up in droves to learn Hindi and Mandarin while students in those countries spurn English entirely, right?

There are always going to be elite American math students. There are always going to be non-American academic elites who recognize and appreciate the opportunities America offers and will seek to be a part of it. It doesn't mean they've got better teachers, it doesn't mean they're going forward while we're all going backward.

We can't figure out why the Fast gang was so eager to agree with Simons. Apparently people won't be satisfied until American technology is so advanced that iPads, Intel chips, Caterpillar earth movers, Pixar, Viagra and Big Macs dominate the world and everyone from Bangkok to Oslo watches Stallone films.

Businessman insists his company’s chief line of business isn’t dead

Intel Chief Technology Officer Justin Rattner gave an on-location interview to Fast Money to trumpet Intel's new Sandy Bridge chips.

Rattner did fine, but really didn't seem totally comfortable, particularly when Jon Najarian strongly hinted he thinks the PC's best days are over, yielding to tablets.

"It's a little early to declare the death of the PC," Rattner said. "The jury's still out."

"28 million of these things sold? I mean, that's not a flash in the pan really is it?" Najarian questioned.

"No, but there are, you know, well over a billion PCs out there," Rattner said, insisting Intel has a significant role to play in tablets as well.

Politics by increment,
courtesy of Fast Money

Jeremy Zirin decided to let the Fast Money crowd in on a little secret Monday, saying the "base-case scenario is that we see a 1-year extension of the current Bush tax cuts."

In another hot-button topic we just can't get enough analysis of, Dennis Gartman complained about the time frame for BASEL capital-raising, specifically the 2019 part. "You have got to be kidding me," Gartman said, saying he would've recommended "nothing past 2015" because the possibility exists of new crises in the interim, and there will be different people in charge when this window of time ends.

If you’re an American and not an MSFT shareholder, not necessarily a great deal

Patty Edwards, in a very limited West Coast Prop Desk appearance Monday, praised Microsoft in part for its cash plans, saying, "We want to see these big tech companies, paying dividends, buying back stock."

But then Edwards questioned why they would actually need to raise money to do so.

Bloomberg says Microsoft is borrowing because even though it has $37 billion in cash, "Much of that is held overseas, requiring Microsoft to pay taxes on money brought home."

So the investing world is applauding a company with $37 billion in cash for borrowing money, which prevents some of that cash stockpile from going to the U.S. government, which will then borrow more money itself, which will ultimately be repaid by American taxpayers.

Karen Finerman said, in rather clumsy fashion, "I think it's wise," that this is a great time for companies to borrow with rates historically low.

Tim Seymour echoed that, saying, to the contrary of many people's opinion of Microsoft's management, "I think these guys are smart guys" who haven't been listening to investors' screams.

Colin Gillis had this to say about tech in a backhanded dis of Cisco — which evidently isn't hiring enough foreign students who are going forward while Americans go backward. "If you want growth, buy Apple; if you want yield, buy Microsoft," he said.

Maybe not an
Arc de Triomphe

Jon Najarian said Monday on Fast Money that options activity involving the HPQ-ArcSight deal suggest "There are people out there that believe we could be seeing another 3PAR."

Yikes.

"Is anybody running Hewlett-Packard," Guy Adami wondered aloud.

Karen Finerman decried the pace of HPQ deals, even if the dollar amounts aren't huge. "There's 1 a week!" Finerman said.

Gary Kaminsky always likes to say 9 out of 10 M&A deals don't work. It is almost unfathomable to think 3PAR, given the ultimate price paid, was a savvy buy.

Jim Simons: ‘The system worked
beautifully’ in flash crash

Tim Seymour cautioned Monday that CAT and DE are looking a bit "toppy" these days. Guy Adami suggested again that CAT may be in double-top land, and he warned not to get too cocky about September gains through the 13th of the month even though he's been almost constantly bearish since last September with little to show for it. "They don't pay you at halftime!" he said.

Carter Worth talked about S&P charts and resistance. "There's a lot of knots in the yo-yo," he said, adding the charts suggest "fade telco, fade utilities, and get long energy among other places in the market."

Jon Najarian said there's a lot of M&A people looking around, "squeezing melons" (doesn't that sound nice?).

One of the things Jim Simons told Melissa Lee is that portfolio insurance was "one of the dumbest products ever," and that regarding the flash crash, "in my opinion, the system worked beautifully ... compared to October of 1987."

Jon Najarian insisted, "I think there are some firms that are absolute thieves out there."

Karen Finerman saluted Cantor Fitzgerald for helping out the Michael J. Fox Foundation.

Tim Seymour joked about his stubble, saying, "Here I am, hiding behind makeup."

"That's not the first time that's happened," offered Karen Finerman.

Karabell sounds like
Monday is just a drag

Zachary Karabell, far from being galvanized about the Jets' upcoming Monday night tilt (or perhaps the big wins in D.C., Seattle, Pittsburgh), didn't exactly seem impressed by anything he was hearing on Monday's Fast Money Halftime Report.

Melissa Lee called on Karabell to discuss the better-than-expected numbers from China.

"I don't really think this data was unexpected except from a Wall Street community that doesn't necessarily know what's going on in China," Karabell said.

Lee cracked, "Not everybody can be a China expert as you are Zach Karabell."

But then Karabell defended the detected disdain. "Not exactly what I meant; a little dig at trading is worth it every now and then," he said.

Karabell also indicated he wasn't rushing to buy/sell stocks on BASEL developments, in a sentence of noninterest that took a long time to unfold. "It's ... a 5- to 10-year phase-in period, which is an eternity for any of us in market land," he said.

Grasso: 1,131 is level to watch

The hottest thing going on Monday's Fast Money Halftime Report was Melissa Lee's sizzling purple top perfectly complementing new straight hairstyle.

Steve Grasso said the market's gain "opens the door to 1,131, which is the June highs," and said we're now looking at a 1,110-1,131 range that would, with a breakout either direction, probably tack on another 20 points.

Grasso said this year is the first time he's really heard people talking about Exxon, but not because it's a great growth story. "People ... are looking for the dividend play vs. a sexy story about a capital apprecation move," he said.

Melissa Lee asked Steve Cortes if he had decided to start shorting select banks again. "I am tempted; I have not done anything yet," Cortes said. But his recent optimism for the market is sinking with the recent gains. "I'm actually really negative," he said.

Zach Karabell, in one subject he did speak about with a degree of enthusiasm, said "iron ore is interesting" and noted that Vale hasn't moved with the copper names.

Jim Simons not exactly pounding the table for anything

Melissa Lee on Monday's Halftime showed an excerpt of her interview with Jim Simons, in which 1) Simons seemed to be staring into the ground as he talked, and 2) nothing particularly explosive was revealed here.

Simons said when the flash crash happened, he canceled some trades.

He said in the old days the specialists could just take a break.

Steve Grasso responded to that. "They're not called specialists on the floor anymore; they're called designated market makers, DMMs. They don't have the luxury of being able to step away the way the old specialists do. We have required participation rates," he said. "The game has totally changed."

In other clip, Simons piled on the insight. Consumer spending a bit slow ... uncertainty about the government ...

Zach Karabell said it'll be interesting to see what Simons' returns are for the recent months after the flash crash, which is basically what could/should be said for everyone else too, right?

Dan Niles kicks butt

Gary Kaminsky, David Faber and Dan Niles on Monday put together one of the better Strategy Session conversations in a while regarding Hewlett-Packard.

In a very interesting revelation, Kaminsky pointed out certain HPQ board members are remarkably light in how many shares they own.

Namely, Marc Andreessen (that would be zero).

Then Kaminsky showed a graphic showing zero insider purchases of HPQ this year.

"You might've been expecting some insiders to come in here and take advantage of this decline," Kaminsky said. "Look how many shares were bought."

Dan Niles explained what his firm has done with HPQ and also gave a healthy endorsement of entrepreneurism and risk-taking.

"When, you know, they fired Hurd, um, about a week or so later the stock got interesting enough and they hadn't done anything at that time, we stepped up as a firm, we bought some shares," Niles said. "When they started going, uh, into a hostile bidding war with Dell, we ended up actually selling the shares."

Niles concurred with Kaminsky's analysis of insider buying. "All my personal liquid net worth, almost all of it, is in the firm. If I make the decision to buy or sell a company, investors know that I've got more to lose than they do," Niles said.

Shocking, not necessarily interesting, or interesting, not necessarily surprising

David Faber, asked by Kaminsky for a reaction to those HPQ insider numbers, said, "I would say, um, shocking, bordering on interesting. Or interesting, bordering on surprising," and we recalled that old Natural Light commercial, "You can call me Ray, or you can call me Jay..."

Kaminsky: I don’t get Gaga

Gary Kaminsky said the amount of deal-making by HPQ as it searches for a CEO is at a minimum "very unusual" and not completely confidence-inspiring.

"Shareholders still to this point have not felt comfortable that the long-term strategic direction of this company has been decided," Kaminsky said.

"It just does not make a lot of sense to me," Kaminsky added. But then at one point he clarified, "Call me, I guess, a little bit outdated; you know, I don't understand Lady Gaga."

David Faber described the Mark Hurd situation with a touch of elitism. "Let's call it imbroglio, I like using that word, you can look it up," Faber said.

Wikipedia actually thinks Gary Parr needs to post his own résumé

Monday's star Strategy Session guest, undeniable Wall Street great Gary Parr, might want to check out his Wikipedia page in his spare time.

We happened to take a glance in search of hometown, education, age, but mostly just found a massive editing controvery.

Apparently lots of citations are needed. Our favorite sentence, at the top, is this: "Please do not post your own résumé on Wikipedia. It is considered a conflict of interest and will be speedily deleted."

Parr did not have any blockbusters to add Monday on The Strategy Session but smoothly spoke about the world's banking and M&A situation, saying of BASEL-related capital requirements (we think that was the subject of the moment), "This is probably good news for the economy, notably in Europe."

He said there may not be any blockbuster deals right now, but "There's a flow of all kinds of assets being sold."

Based on a few articles we turned up, Parr is apparently about 53 years old.

Gary Kaminsky donned a Jets jersey for the big game tonight, and Kaminsky and David Faber both reported that Washington Redskins owner Daniel Snyder was really "focused" on Sunday night's game with the Dallas Cowboys.

Schiff: U.S. economy
doesn’t need car salesmen

Ever-quotable Peter Schiff gave an interview to British writer Neal Underwood posted Monday.

And in it, Schiff said the recent bubble proves Americans don't actually need a certain profession that many people kinda wish would go away.

"There are people who took jobs that shouldn’t have existed; we don’t need mortgage advisers or car salesmen," Schiff said.

Gary Kaminsky makes
international news

Gary Kaminsky evidently isn't just a hit in New York — but in España.

Catching up on our CNBC reading over the weekend, we found a pair of bloggers in Spain last month dissecting Kaminsky's opinion about the possibility of Microsoft buying Research in Motion.

When we fed the site into Google translator, we found it describes Kaminsky as a "specialist."

Not to be left out, the post also mentions Joe Terranova, but for some reason in very small font.

This just in

Daniel Snyder presumably is still only thinking about Sunday's game with the Dallas Cowboys; it's the only thing he's focused on ...

[Friday, September 10, 2010]

Karen Finerman watched
the Saints-Vikings game

We heard something on Friday's Fast Money we didn't expect to hear.

Karen Finerman watched the NFL opener Thursday night — and obviously saw the whole game, because she nailed the analysis.

"I watched the game. It did drag a little bit at the end," Karen revealed.

That came after Steve Cortes blamed the NFL on light trading. "First NFL game was last night; traders might've stayed out a little too late, watching the Vikings and the Saints, so quiet action on the Street today," Cortes said.

Patty Edwards said, "I'm going long the Seahawks."

Patty’s shop has new name

Until recently, Patty Edwards hailed from Storehouse Partners, which we think was a unit of Bellevue Financial.

As Fast Money indicated Friday, Patty now represents Trutina Financial.

If you're wondering, as we were, what exactly "Trutina" means, the Web site obliges: "'Trutina' means 'balance' in Latin."

Hmmm. The initial reaction around here is that it's not a neatly pronounceable or memorable term. In fact it's more along the lines of the erudite "insider" type of labeling that means a lot to the proprietor but nothing to the potential customer.

That actually could be part of the strategy. It might be that potential customers automatically tend to think a firm with a name they don't understand is highly sophisticated and knows things that they (the customers) don't.

On Fast Money, shop names are a mixed bag. On the one hand you've got "OptionMonster," no secrets there. On the other hand, you've got "Drakon" (huh?) and "Kanundum" (say what?).

Our favorite, we have to admit, is Metropolitan Capital Advisors. Smooth, elegant, big-city. Just like its co-founder.

On the plus side for Trutina, Coach Wooden was once heard in a TV interview to declare "balance" the 2nd-most important word in the English language. (We'll reveal No. 1 in a future post, to keep you in suspense.)

But then again, he said English language.

It likely doesn't matter. We figure the vast majority of accounts serviced by Trutina and others are generated not by the name of the business ("Hey Edna, did you see someone opened up an investment shop called Trutina?" "Yes dear, I've already plucked $1,500 out of the mattress to make a deposit") but by positive word of mouth from other clients. If the shop's good, the name will catch on. Once we understood what "RiverTwice" meant, we started saying it about 2-3 times a day and quite frankly haven't stopped.

If nothing else, the switch to Trutina replaces that wretched reverse-type black-background Storehouse Partners Web site. But maybe as some sort of tribute, Patty wore all black on Friday.

It was sharp black, however.

"Patty's on the, like, fancy Prop Desk," said Karen Finerman.

"The glamour desk tonight," agreed Melissa Lee.

Thill: Red Hat, Citrix
are takeover candidates

Brent Thill told Fast Money viewers on Friday that he's identified Red Hat and Citrix as potential takeover targets in cloud computing. "Both are critical pieces to the cloud," Thill said.

Steve Cortes said he agreed that eventually those names will get taken out, but they are fairly large cap, and so "these are not easy acquisitions."

Joe Terranova declared, "oil's found a bottom."

Brian Kelly, who just got a buzz, said "I actually bought a little TLT today."

Patty Edwards was asked about Philip Morris International and revealed, "I did pick some more up this week."

Karen Finerman said PG&E's little disaster is much more contained than the BP situation. Nevertheless, "You don't have to be a hero."

We said at Halftime that Melissa Lee looked as good as she did Tuesday. After seeing the 5 p.m. Fast Money, we realized we were wrong, that Mel was flat-out smokin' Friday, and if she doesn't have a big date in the works, we'll eat our "DOW 10,000" hats.

sheamcnally.org

Friday's segment titled Trading Your World featured Brian Kelly, who spoke about a young nephew who has battled cancer. Kelly said the situation has caused him to consider the effects of health-care overhaul in great detail. It's also clear he's doing a great deal to help his nephew.

Everyone deserves an uncle like BK. As the screen text noted, you can visit sheamcnally.org for details.

Grasso: Interest in banks
is a ‘bet on the elections’

Friday's Fast Money Halftime Report got squeezed indirectly by the presidential news conference, as Strategy Session was given a chunk of the time.

Jon Najarian said he disagrees with Credit Suisse, that a Republican takeover of Congress would be a "very positive thing for businesses going forward."

Steve Grasso said people tend to start nibbling on C and BAC when they drop to certain levels (this writer is long C). "I do see buy-side interest currently in the financial sector, and I think it's a bet on the elections vs. anything else," Grasso said.

Joe Terranova said, given the CEO switch, Nokia and Microsoft might "collabolate" on some level.

Prior to Friday's Halftime Report, we had never even heard of Acme Packet. But that is one helluva stock chart. Melissa Lee asked CEO Andy Ory the usual Melissa Lee question, whether there's M&A in the company's future and specifically whether Cisco would be interested. Ory said he's happy to remain an independent company.

Morgan Stanley analyst Adam Holt made a negative, "relative call" on Adobe.

Melissa Lee looked basically as good as she did on Tuesday.

Why do any taxes need to be raised, when we can just borrow the money?

The long-running Barack Obama press conference ate up the first 20 minutes of The Strategy Session on Friday.

But not a problem: TSS just took a healthy bite out of the Fast Money Halftime Report.

Unfortunately, Gary Kaminsky on Friday didn't seem particularly keen on unloading some broadsides at some of the dubious politics in play from the president's news conference.

"This is not a political show. We don't want it to be a political show," Kaminsky asserted.

He said all that matters is, "If you're managing money, if you're coming up with investing strategy, you know taxes are going up."

Eamon Javers reported that Obama's terminology "seemed to signal a little bit of willingness to compromise."

Yesterday we learned from Bernard Beal that the odds of states defaulting are "next to zero." So why does anyone need to raise taxes?

A day, sadly, to remember

Strategy Session guest Jeff Kaplan on Friday pointed to healthy dealmaking — "The M&A environment will continue to be good through year-end" — but indicated that taxes are a concern, for example in the speed of the Burger King transaction. "I think the capital gain implications were at work there," Kaplan said.

Kaplan, not surprisingly, also said "the integration has been successful" at Bank of America Merrill Lynch.

This page almost always tries to have as much fun talking about stocks as is humanly possible. Of course, this is one weekend where no American, nor our friends around the world, can or should escape memories of unspeakable horror 9 years ago.

On Friday, Gary Kaminsky and a screen graphic honored a pair of victims. "I always think about my former colleagues, Timmy Grazioso, Marni Pont, who were tragically killed on September 11th," Kaminsky said.

[Thursday, September 9, 2010]

Notably, the Fast Money panel’s Democrat was silent

Jon Najarian beamed into Fast Money on Thursday to predict a November GOP landslide the size of the state of Texas.

There's a "seismic shift in what's going on in the House and Senate," Najarian said, pointing basically to InTrade data.

He said this type of momentum is what spurs conservative Democrats to vote with Republicans. "I'll call it kind of 'blue dog fever'," Najarian said.

Tim Seymour asked the question that was on our minds the whole time. "Jon, haven't we known this was happening?" Seymour said. "The GOP's expectations for, for midterm elections I think have been very high for a very long time."

No, Dr. J insisted. "You and I might be looking at it through different glasses than a lot of other folks, in particular, our friends on the left, because I think they were in denial, and it's not just a river in Egypt," Najarian said. "They thought they were gonna hold on to the House. ... I don't think they believed it, but they were saying it."

Najarian said the House could be most explosive; "The turnover there could be in excess of 50 seats."

Joe Terranova suggested the FOMC might be "less accommodative" if Republicans take the House. Say what?

Guy Adami, in our view, seemed to hit the nail on the head.

"Trying to trade this though, in terms of playing stocks, I think you get burned more than you make money," Adami said.

McCain & Dukakis

One of the things we like to point out on this page is that it's basically a center-right country, presently being run by people of center-left persuasion.

This happened because of traditional appetite for change, and quite frankly because, while the previous Oval Office occupant did do some good things that were underrated, on a lot of the big-picture issues he did a lousy job.

There's an important question that rarely surfaces in the national (i.e., cable TV) media, which is: What was the true strength of the Democratic onslaught of 2006 and 2008?

For perspective, we turn to the 1988 presidential election. (You can easily follow along with the Wikipedia 2008 election page and the Wikipedia 1988 election page.)

Coincidentally, John McCain and Mike Dukakis received the same percentage of vote: 45.7%

A look at the maps, though, shows a staggering difference.

Dukakis won 10 states. McCain won 22.

Dukakis' victories were a smattering of Northern states. McCain's victories represented a massive claim to America's heartland and sizable political bloc.

What's more, McCain was running into the sizable headwind as the incumbent party after 8 tumultuous years. Dukakis had what is often believed to be a tailwind, the opposition party after 8 years, though admittedly the Reagan era was more popular than the W. era.

All of which suggests that the impressive Democratic gains of 2006-08 were heavily influenced by independents and swing voters who can twist in either direction, might be short-lived, and that 2010 might not be bringing a "seismic change" as Dr. J suggested, but a reversion to the mean.

Analyst: Airlines will
consolidate to Big 3

Airline analyst Jamie Baker predicts the airline industry will ultimately "emerge as the Big 3."

Baker said consolidation typically runs in 2-3-year cycles and that names people will focus on are AirTran, Alaska Airlines and US Airways. He predicts the Big 3 giants will be American, Delta and United.

He called it a win-win for everyone, though we're not sure if he meant passengers. "Future capital is going to be allocated much more efficiently in the industry," he said, which would improve the balance sheet, allow delevering, reduce the risk of bankruptcy, and cause multiples to expand.

"We have buy ratings right now on American, on Delta," he said, and "We have a buy rating on USAir." He said he expects the "next big deal" in 2013 or 2014.

Tim Seymour made some reference to stewardesses. Guy Adami asked "What era do you live in?"

"The '70s," Seymour said.

The resistance to that word has always been a mystery to us. Can't they just call male flight attendants "stewards"? What's wrong with "stewardess"? It works in restaurants; waitresses and waiters. Should we call them "table attendants?"

Compelling valuation is an
uncompelling tell

Melissa Lee on Thursday's Fast Money referenced Colin Gillis' Halftime takedown of Research in Motion. Karen Finerman, one of several times on the day, said it's "valuation compelling." But K-Fine said she got stopped out at $50 and is no longer interested.

Lee asked if Nokia might be interested in RIMM. Tim Seymour squelched that. "I think Nokia is a target for a takeout too," he said.

Karen Finerman questioned how much muscle Google can get out of its phones. "I still think the valuation's compelling, but ... it's hard to really think this is the big new growth story anymore," Finerman said.

Joe Terranova said the Adobe app news "fends off any potential antitrust regulation investigation for Apple. This is an Adobe-specific story," he said.

How about a ‘vanilla coke’?

Melissa Lee on Thursday spoke about McDonald's issues in Europe. "Apparently not selling as many Royale with cheeses as it used to," Lee said.

We think "Royale" is the word that should've gotten the plural, but whatever.

Guy Adami asked a few questions about "Pulp Fiction" lingo, then Lee admitted she doesn't know the movie's lines. "I never know these things," she said.

"I like french fries. I guess in France you just call 'em fries though," said Brian Kelly, before admitting, "That one bombed."

Terranova thinks Kevin Kolb
isn’t the answer

Joe Terranova said Goldman Sachs has issued a report calling Best Buy's upcoming earnings a market-mover. "I'm playing it through RadioShack," Terranova said.

Guy Adami referenced the previous terrible Best Buy quarter he likes to talk about and said the bloom might be off the rose. "The bloom is off the rose," Karen Finerman affirmed, but she said (you've heard this before) the valuation has a lot of bad things already priced in.

Joe Terranova said trading stocks in September is like watching the Philadelphia Eagles offense. "All you hope for is for them to maintain field position," he said.

Karen Finerman made the pitch for Airgas, and although she wasn't in soundbite mode and tried to deliver an essay, this was a decent one, kind of an under-the-radar situation, referring to Air Products' possible takeover. "It's high noon," Finerman said, suggesting players try it with options. "I specifically like the October 65s at about 2.60."

"Sounds to me like the options are relatively cheap," was Joe Terranova's conclusion.

Karen said the banks have excess capital and Europe could see the same bottoming U.S. banks did in 2009. Finerman also pointed out that with BP, "That debt has come all the way back." Guy Adami said CAT could be experiencing a double top.

Oleg Mukhamedshin, a "deputy CEO" of Rusal, said aluminum prices should get a boost going into year-end.

Guy Adami made a reference to Lincoln-Douglas debates. Melissa Lee said "I was the co-captain," of what we're not sure, possibly the Harvard debate team.

Right at the opening, Melissa Lee somehow allowed Tim Seymour to deliver a speech on Deutsche Bank and some other BASEL stuff we couldn't begin to follow; Seymour followed it up with more at the end of the show.

Melissa Lee and Becky Quick wore virtually the same dress Thursday. We'll announce the winner tomorrow.

Gillis: RIMM has a lot
lower to go

The highlight of Thursday's Fast Money Halftime Report was Colin Gillis' contention that RIMM has a lot of room to go lower.

"We're not the first ones to the party here," Gillis admitted, but he stressed, "There's plenty of room to the downside."

Melissa Lee questioned if there isn't a "takeover put" in the stock that will keep it above a certain level; i.e., at some point it'll be so low that someone will buy it. Gillis said Microsoft is always the rumored likely suitor but it would take "at least a year" before that type of put kicks in.

Steve Cortes rejected gold bullishness. "I am generally skeptical of seasonal approaches to the market," he explained, then said, "Gold is extremely overbought technically ... almost ubiquitous bullishness at this point."

"I have never understood gold; I think it's just a shiny metal," said Scott Nations.

Cortes said he thinks homebuilders and the banks most closely aligned with them might have bottomed recently. He's not bullish, but is no longer bearish. "I'm no longer short," he said.

Steve Grasso said it's a light day all around. "I'm not seeing any volume return," he said.

A potpourri of ... something

Gary Kaminsky and David Faber were off Thursday, but Becky Quick brought her A game — or certainly her A outfit — to The Strategy Session.

Giving her a boost was The New Gordon Gekko (that would be Anthony Scaramucci), who noted, "I would rather sell hot dogs than game somebody."

Despite those sentiments, Thursday, fortunately/unfortunately, was one of those days that renewed our vigor towards petitioning a pop culture element onto The Strategy Session that might spice things up a bit.

Quite frankly, we watched dumbfoundedly and stone-faced while Scaramucci, Quick and Kate Kelly talked about what we could only describe as hedge fund minutiae.

One of the hot topics had something to do with hedge fund redemption lockup periods.

TNGG, who happens to be good at television and is a very reliable pinch-hitter on these types of days, pointed out, "2006 we were in a 75-year holding pattern, right ... 2010, we're in the instant gratification society where the money has to come out like an ATM machine. Neither one of those things are right. The 1-year lockup seems like the right number."

He then said "Potpourri" and asked Becky Quick if that's the type of lingo she'd hear from Gary Kaminsky. Kate Kelly jumped in, "I don't think that's a K-Call."

That was Quick — literally

Becky Quick queued up a lengthy intro Thursday about the risk of Illinois or other states defaulting on debt before asking Strategy Session guest Bernard Beal exactly how worried he is about such a scenario.

"Not very," Beal said.

He also described the odds as "next to zero."

"There's been 1 state default in a hundred years, and that was Arkansas," he added.

Scaramucci: Double-dip
risk no higher than 25%

The New Gordon Gekko found himself at odds with the gloom of Peter Boockvar and Kate Kelly on Thursday.

Boockvar said not to expect a quick multiple reversion.

"We got to a 30 multiple in March 2000; it's hundred-year average is 15, which we're at now, and I'm afraid that we're gonna be undershooting that before we get to a bottom," Boockvar said.

"There's an increasingly negative conviction out there," Kelly said.

Anthony Scaramucci, though, said "There's only been one double-dip recession in the last 35 years ... The research team at Skybridge Capital thinks it's a low risk, we're putting it at 20 to 25%."

Guest Suni Harford kind of talked about what every Strategy Session guest (except Daniel "I JUST CAN'T WAIT UNTIL THE REDSKINS PLAY THE COWBOYS ON SUNDAY AND CAN'T THINK ABOUT ANYTHING ELSE" Snyder) talks about, that people are in bonds for good reason, etc., but there's pockets of strength out there, etc.

TNGG explained some metrics on the hedge fund of funds industry. "We have 7.4 billion in assets now," he said, and the entire industry has "540 billion in assets."

Bertha Coombs: Equities are
the ‘ugly, red-headed stepchild’

Bertha Coombs, a highly educated, reliably upbeat, calm, pleasant, thorough CNBC reporter, offered an astonishing choice of words while substituting for Nicole Lapin on Worldwide Exchange Thursday.

Coombs spoke with guest analyst-host Karen Olney of UBS about a bond bubble and said: "You wouldn't be buying government bonds, but what would you be buying. Would you be putting it in to equities? That seems to be kind of the uh, the ugly, red-headed stepchild these days."

"Definitely gone through a de-rating over the past decade, that's for sure," Olney chuckled.

[Wednesday, September 8, 2010]

Mahaney: GOOG to $600

Not satisfied with a completely simple product that happens to make it, according to some, "the most successful company in the history of the world," Google has further tinkered with basic search, issuing suggestions on every keystroke and quite frankly driving users batty.

Mark Mahaney, though, seems to think that's great.

"You're gonna see speedier search results that actually kicks out tonight," Mahaney said on Wednesday's Fast Money.

He also said the company offered 2 new data points Wednesday. "For the first time they crossed a billion simultaneous users. Secondly, they're now seeing mobile search queries grow 4x year-over-year," Mahaney said.

"We like the stock," he added, predicting $600.

Karen Finerman questioned what would have to happen for the stock not to reach those levels, which would make it just another value trap.

Mahaney said basically if economic growth in the 2nd half of the year flatlines and mobile doesn't meet expectations, the stock would be a dog.

"Core PC search is gonna be 90, maybe a little bit more than that, percent of total revenue," Mahaney said, with growing percentages (up to 10) for mobile and, curiously, for YouTube.

This page officially hates the stock. Some like it, and that's OK; that's what makes markets. Its prospects in China are meager at best, it would seem that its global domination can't possibly get any greater than it's been for the last couple years, and there seems to be decided government concern on the notion of a single company holding massive amounts of national and international Internet usage data.

The best question for Mahaney went totally unasked. Forget about how Google is going to do vs. $470. Instead, how is Google going to do against the market and other stocks? In other words, if everything Mahaney forecasts actually happens, then might AKAM be a better stock? What about MSFT? Or AAPL? If GOOG is indeed going to hit $600, would that put AMZN at $200 at the same time?

Back to the new Google search. If you're trying for Melissa Lee, note that 1) searches are affected by regional subjects, and 2) you have to get all the way to the last "e" because Google is going to assume you want the dope on Melissa Leo first. ("Frozen River," great film.)

Of these photo suggestions, we like the slinky awards-banquet dress at right, though clicking on that site brought up some crazy Web page that seemed to be selling something.

Somewhere, there’s a stock,
saying, take a chance on me

Melissa Lee referred to Karen Finerman on Wednesday as a "value queen," which drew guffaws from the Tim Seymour side of the panel.

"I resent being called a value queen," Finerman joked.

"Dancing queen," Seymour suggested.

In fact, later on, producers showed footage of Pete Najarian dancing, even once with Karen Finerman on the table in shake-your-booty mode.

The NFL: Trickle-down economics at its finest

Melissa Lee tried to put the New York Jets' blackout conundrum, reported by Darren Rovell, into simple business terms Wednesday.

"If this were a stock, they discount it enough in order to boost volumes, and so their margins are under pressure," Lee said, tossing the subject to Pete Najarian, who really didn't have anything to add.

Tim Seymour made the best point about the NFL's blackout rules and unfortunately was drowned out. "How idiotic is that policy?" Seymour asked Najarian, who merely pointed out the league does it to ensure people buy tickets.

Football is hardly alone in fearing television. Baseball used to have a lot of owners in the '60s and '70s who worried about the gate. The Chicago Blackhawks — who just picked up the Stanley Cup a couple months ago — actually still had a no-home-games-on-local-TV-period policy up until just a couple years ago under old-school (that's putting it kindly) owner Bill Wirtz. Augusta National used to refuse to show the first 7 holes (or something close to that) of the Masters because it feared an attendance drop if spectators knew the entire tourney was going to be on TV.

The truth is that it's 2 different things. On the one hand it's a TV show. On the other hand it's a semi-regular (depending on the sport) community festival.

Does the TV show hurt the community festival? We don't claim serious expertise on this subject. But we're going to agree with Seymour. Cultural evidence actually indicates TV presence boosts interest in attending games. The Atlanta Braves and Chicago Cubs were among the first sports teams with national "superstations." The Braves' attendance, both at Fulton County and Turner Field, mirrors the team's on-field success; matching or easily surpassing the league average since 1991. The Cubs have been matching or outperforming the league average since 1984 and have posted healthy outperformance in the last decade despite up and down teams.

Quite frankly it just seems dumb to keep the Tampa Bay Buccaneers off TV because a minimum amount of tickets weren't sold; it's penny wise and pound foolish. If the team turns out better than people think, the casual fan won't realize it. But then again this is NFL socialism (see below), where blackouts aren't a priority for the Yuccaneers because they'll still collect the same share of the massive premiums Fox, NBC, CBS and ESPN pay to broadcast games people actually want to see involving the Cowboys, the Patriots, the 'Skins, the Colts, the Steelers, the Vikings, any team that's a contender, etc.

The belief on this page is that attending an NFL game can be — can be — one of those emperor-has-no-clothes scenarios; in other words, you're paying hundreds of dollars to spend 8 hours of a Sunday with maybe a buddy or 2 shuffling between the overpriced elite concession stand and your seat, sometimes in bad weather, sometimes watching very poor play, when instead you can gather the same group of buddies and more, go to a sports bar, get a burger and a beer for under $10, (and this is key) be waited on by a waitress, (and this also key) watch every game on satellite at the same time, with a john nearby and no wait, for 3 hours, allowing yourself those other 5 hours to do something productive ... but the former is considered supposedly a great treat.

When in doubt,
take the Steelers

We always say, it's best for this page to avoid stock predictions because 1) they're usually wrong, and 2) we suck at it in general.

So we'll take a stab at football instead.

New Orleans (-4.5) vs. Minnesota — The Thursday night opener has morphed into an extension of the Super Bowl as a home game, more like the last game of the previous season than the first game of the new season. The Vikings are struggling with a wretched training camp and, while quite possibly being the better team, simply can't prevail under these circumstances. The Saints win by at least 2 scores.

Pittsburgh (+2) vs. Atlanta — If this were in Atlanta (it's not), the line makes sense. The Falcons are not capable of winning this type of game on the road. The Steelers, in contrast to the Vikings, have had the best possible training camp, a chip-on-the-shoulder mentality that will rally around a 5th-string quarterback — at home — if necessary. Take the Steelers.

Chicago (-6.5) vs. Detroit — Chicago has about 3 good players, all of whom are in the twilight of their careers. The rest of the roster is scrubs and journeymen. The Lions are hardly formidable, but at least they're going in the right direction. Detroit covers, and likely wins.

Brian Kelly accepts the tough assignment of convincing colleagues a stock at 52-week high is a buy

The Fast Money feature "The Pitch," in which a panelist lobbies for a particular stock, is probably most likable when someone is advocating a heavily shorted and/or polarizing stock that draws passioned arguments.

Brian Kelly instead offered Verisign, which Pete Najarian noted only happens to be trading at a 52-week high.

To his credit, Kelly did offer a reason that probably the Street hasn't priced in — foreign language domains. (We have no clue if that's a good argument or not — we barely know what the company does — but it's a decent conversation-starter.) Kelly acknowledged the company got out of the security business, which might be viewed as a negative. Pete Najarian said it's hard to believe a company with this kind of stock performance could have negatives, but he pointed to the exit from security and said he's not sure if there's really that much business in domains.

Will Ken Feinberg actually end up disbursing $20 billion?

Karen Finerman said of HPQ on Wednesday, "I think there are catalysts that will eventually make it move."

Finerman made an interesting suggestion regarding Valueclick, saying it's sort of the last biggie in its sector that wasn't bought out, and it might still be a takeover target. "The valuation seems attractive," Karen said. We sort of figured that train had come and gone years ago, but maybe not.

Finerman also said unraveling the Deepwater Horizon causes will take more than a single company report. "I don't think it's up to BP to assign blame," Finerman said.

Analyst Greg Badishkanian talked about Hain Celestial and said organic foods are nowadays seen more as a staple than a luxury.

Pete Najarian said the VIX is "sucking on that 200-day."

Roque: Silver to $36?

Melissa Lee on Wednesday's Halftime reported on a remarkable prediction by John Roque.

Roque, Lee said, "says $36 an ounce is the next stop, according to the charts, for silver."

Peter Schiff, who ignited some fireworks, said he doesn't know about the charts, but "I think silver prices are going a lot higher. ... I think silver's gonna go ultimately $50 an ounce, $100 an ounce."

Lee said that's all well and good, but when will something like this happen. "It could happen very soon," Schiff said.

Steve Cortes challenged Schiff as to why the euro, for example, would be so much better than the dollar. "I think we're making more mistakes" than Europe, Schiff said. "We're talking about pouring more gasoline on the fire."

Schiff: Goldman is good place to work, lousy place to invest

Steve Cortes pointed to a chart of FCX vs. MA as one that used to be correlated but now, because of MA, we're "starting to see that break down." (This writer is long V.)

"You definitely wanna stay away from Mastercard," chortled Peter Schiff. "One of the reasons so many Americans are using Mastercard is because they're, they're putting their food on it ... They know they're broke, and they might as well go out with a bang, I mean a lot of people have no intention of paying back the money that they're using," Schiff said, and of course he's got all kinds of scientific evidence backing that one up.

Brian Kelly said fair enough, but just remember that "China is as levered to the U.S. consumer as anybody else out there." Schiff said that's true, but only by choice.

Joe Terranova said he likes Goldman Sachs, "a bottom has been found."

Schiff couldn't resist that one either. "It's a great place to work, but I wouldn't want to own their stock. All the profits go to the employees, there's nothing left for the shareholders. Stay away from that stock," Schiff said.

Schiff admitted "I've owned BP shares in my own account for years," then claimed he was too busy to trade it successfully. "I was running for Senate at that time."

Terranova pounded the table for AAPL. "I expect it to make a new high before the end of the year and go to 300," he said. But then again, a few weeks ago he was expecting RIMM to go to $65.

Steve Cortes compares routine Intel downgrade to monumental sports mistake of 26 years ago

Analyst Uche Orji spoke about his downgrade of Intel on Wednesday — and Steve Cortes wasn't exactly impressed.

"I get a bit frustrated when sell-side analysts come out and downgrade a stock that has done this poorly," Cortes said. "This would've been very useful information in my view at 24, not quite as useful at 17 ... it's a little bit like as if I were to tell the Portland Trail Blazers back in the 1980s, you really should've drafted Michael Jordan instead of Sam Bowie."

"Well, hindsight's 20/20," said Mel Lee, who evidently didn't have much of a clue as to what Cortes was talking about, which is kind of cute actually.

Anyone can do the math, but...

Melissa Lee noted Wednesday that the Fast Money Halftime Report is actually a "22-minute show."

Not seen on TV

Fast Money executive producer John Melloy put together an interesting article Wednesday on rumor acceleration in the marketplace.

Melloy points to rumors about Potash, ZymoGenetics and New York Times.

“It’s been an easy environment for some traders to get rumors started due to the acceleration of activity,” Pete Najarian says. “It’s like chum in the water.”

“The speculation is out of control and this will end badly with all else held constant,” says Mike Block.

It’s the best of times,
and the worst of times

Herb Greenberg said on Wednesday's Strategy Session that he's skeptical of how well Best Buy can do given that, according to GS he said, 40% of its sales are from PCs and TVs.

"PC demand, if we've heard nothing, has fallen off a cliff," Greenberg said. He also said there's a "big glut of TVs, flat-panel screens, just, in Asia, big glut."

We just couldn't really get "in" to Wednesday's Strategy Session, which featured a lot of opening talk from Kate Kelly about the GSPS, or whatever, and then European investing expert Tom Lister who twice — twice — unfortunately referred to "What we see is a tale of 2 cities, for sure."

Lister cited pockets of strength and weakness, touting "very strong performance of industrial businesses."

Gary Kaminsky at one point said "The junk market has been el fuego." We knew that didn't sound right, and indeed, at the end of the show when that funky "Mr. Rogers" music plays (which is actually becoming one of our favorite parts of the show), Kaminsky admitted it's actually "en fuego" and noted that Darren Rovell's mother has taught his kids Spanish.

"Even I knew 'en fuego' and I took French, Gary," chirped Melissa Lee.

[Tuesday, September 7, 2010]

So, apparently, no

Guy Adami asked Oliver Stone a great, and refreshingly honest, question on Tuesday's Fast Money.

Adami said Gordon Gekko was written to be a villain, yet "he became a role model for many people, myself included, frankly." Thus, Adami asked Stone, was Gekko partly to blame for the crisis of 2008?

"I think it was in the air," was Stone's ambiguous answer, referring to "that Donald Trump era" of the time. Finally, he conceded, "It's a very difficult question. You've gotta answer it for yourself. If you idolize Gordon Gekko, that's your problem. But I always thought of him as a villain."

Stone on Scaramucci: ‘This guy is the new Gordon Gekko’

A lot of times when a celebrity (or even quasi-celebrity) is interviewed, we like to nitpick with some of the questioning.

In fact, in Tuesday's chat with Oliver Stone, Melissa Lee opened with precisely the right query: Why did you do this movie?

Unfortunately Stone sounded like he's been asked this question gobs of times and opted to mail in a rambling answer including a joke about talking "fast" because the show is Fast Money, and something about computers then and now. "The whole world's changed," Stone says.

The real answer is undoubtedly more complicated. The project emerged gradually, like all films probably do, first with an announcement it was in pre-production, then with Michael Douglas said to be interested but Oliver Stone apparently not returning to direct. Obviously after a script got put together, someone showed it to Stone, he figured, "I can do this," and signed on.

In fact, we're nearly 100% certain that Stone actually was on Fast Money years ago with Dylan Ratigan and talked about "Wall Street" but specifically said he had nothing to do with a rumored sequel. In fact, overnight, we successfully located on CNBC.com an account of Stone's Sept. 26, 2007, appearance on Fast Money. That video doesn't appear to work, so we can't quote directly, but there's nothing in the CNBC description that indicates Stone was doing a sequel. CNBC.com says he was asked about doing a "similar" film and quotes him as saying, “I tried to get involved a few years ago (in a film about Enron) and got completely confused. I didn’t understand what Enron was doing and couldn’t translate what they did — into film terms." Keep in mind this was September 2007, a couple weeks before the stock market peak, and nothing about Gekko-related bubbles. (This updates the initial posting, which said we couldn't find it.)

A cynic might think that Stone and Michael Douglas are merely milking a popular character for a big payday (like, um, a certain professorial action figure who goes by the first name of "Indiana"). We might have the same concerns — after all, there is the tinge of "Godfather Part III" here — except the festival reviews of the film have been extremely positive. Whatever the motivation for redoing Gekko, the end result works, at least on some level, hopefully everyone's.

But back to questions. We noted above that Guy Adami asked a great one. Often on this page we've ended up in "Wall Street" explanations, usually deferring to the extremely comprehensive review on this site. Adami's question refers to a sensitive issue with "Wall Street," whether it's OK to like Gekko.

For the sake of argument, let's skip the fact that movies wonderfully indulge us in fantasy. "All the President's Men" makes you want to be a journalist ... "The Paper Chase" makes you want to go to Harvard Law ... "Rocky III" makes you want to work out, for maybe 45 minutes.

Gekko makes you want to trade stocks or bonds. Stay up all night, analyze something or other, beat the Street, get rewarded, a complete meritocracy. He's rich, he's handsome, he's respected, he's supremely confident, his sense of humor is off the charts. According to the script, he's not really supposed to be that appealing, but he is, just like Michael Corleone, Clubber Lang, The Joker, Professor Kingsfield. Stone obviously saw the appeal in that type of character or he would've found someone like John Malkovich or Gary Busey to scream at people on the phone and breathe heavily at all times, or at a minimum, picked the chumps in "Boiler Room."

Coincidentally, Stone appeared on Fast Money the same day the CNBCfix community was having a discussion about someone hating the fact that idiot pro jocks get paid oceans of money for running around in a stadium for a couple hours.

The truth is that there is no Gekko era or "Donald Trump era." It's a gradually unfolding American/Western/certain-other-parts-of-the-world prosperity in which individuals are able to collect massive amounts of money that would've been unthinkable decades ago — and for whatever reason, good or bad, that offends people. Some teachers and city officials now clear 6 figures. Computer programmers can make double that. The idea that it would take $32 million guaranteed for a pro football star to end his holdout would be a non-starter in 1971. The idea that Alan Alda should get $1 million for every "M*A*S*H" episode in 1974 like Kelsey Grammer and the "Friends" chicks did in 2005 is beyond contemplation. The concept of 20-something millionaires walking into work in shorts and a T-shirt in Redmond or Mountain View wouldn't have gone over too well in 1946. The notion that Ace Greenberg could scoop up in 1958 what Jimmy Cayne collected in the mid-2000s is preposterous.

Where does all that money come from? Contrary to "Wall Street," not from illegal schemes, but ongoing prosperity that continues even during this poor economy. No one's holding a gun to Jets fans' heads demanding they buy season tickets or Sanchez jerseys. No one's forcing people into a pair of Nikes. No one's abducting people into theaters for "Indiana Jones 4." No one's forcing CALPERS, Harvard or tens of millions of Americans with a 401(k) to turn their money over to the stock market instead of just buying Treasury bonds from Ben Bernanke.

Oliver Stone on Tuesday described his protagonist. "What Gekko was, was a buccaneer in the old days. Now, the banks became the buccaneers," Stone said.

Stone also praised Anthony Scaramucci. "This guy is the new Gordon Gekko. But he's straight. And that's the difference, you know, he's clean," Stone said.

Scaramucci asked Stone to predict if Michael Douglas will win an Oscar. "That's like calling a stock," Stone cracked. In fact, given Douglas' health problems, it is undeniable he'll be a sentimental favorite, provided the movie is reasonably as good as the early reviews suggest.

What would ending our dependence on foreign oil do to Canada’s economy?

If we weren't all knee-deep in Gordon Gekko philosophy, we'd certainly take a more detailed crack at T. Boone Pickens.

Pickens, an indirect guest of Fast Money on Tuesday, was interviewed by sizzling Jane Wells in Vegas and managed to link America's oil appetite to the Taliban.

"If you wanna, if you wanna slow down the Taliban, the way to do it is, is, uh, slow down the purchase of OPEC oil, because a lot of that money goes into the hands of the Taliban," Pickens said.

Taking a curious dig at Barack Obama, he pointed to the president's 2008 convention acceptance speech and said Obama claimed "in 10 years we will not import any oil from the Mideast. And that was music to my ears. And he's done nothing, 2 years have passed, never mentioned it again."

He's right. We looked it up and found that Obama in 2008 said this: "And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as president: in 10 years, we will finally end our dependence on oil from the Middle East."

But Anthony Scaramucci asked Pickens what we should do to change that. Pickens' best answer was, "You've got plenty of natural gas."

In other words, what he really means is that we don't have a better alternative for planes and cars than the gasoline engine. So instead of decrying what the government is or isn't doing, why not simply invent a natural-gas-powered car or plane that is superior to an oil-fueled vehicle?

"We have no energy plan," the Policy Guy bemoaned, like he probably does in every one of his CNBC interviews for the last 15 years.

"The price of oil does not determine whether you're gonna do a wind or solar deal," Pickens added.

Tim Seymour agreed that there's a "lackluster commitment" on the part of the government to alternative energy.

That half-empty,
half-full thing again

At the beginning of Tuesday's Fast Money, Guy Adami said, "People are finding new and creative ways to lose money."

Really? Just a few days ago, Jon Najarian was gushing, "These have been 3 of the best trading sessions, Friday, Monday and today, that I've had in basically about 18 months."

K-Fine: Don’t sell HPQ here

Karen Finerman on Tuesday admitted that HPQ was seemingly facing headwinds from every direction. But, she said, "At this valuation I would not be a seller."

Heather Bellini was asked to rule on the HPQ-vs.-ORCL situation. Bellini backpedaled on issuing a legal opinion but said "I think Oracle probably did its due diligence on this one."

Tim Seymour wondered how a guy could get a $40 million severance and then latch on with a competitor. "I assume that HPQ left some doors open, and that seems ridiculous," Seymour said.

On the subject of metals, Seymour said, "I would not go near shorting copper here." Dennis Gartman spoke once again of how he owns gold but not in dollar terms.

Daniel Snyder, and ‘parity’

Daniel Snyder was a nice enough guy to appear on Tuesday's Strategy Session, but not nice enough to actually give the TSS gang thoughtful answers to what could've been relevant questions.

Yeah, we know, he's all excited about playing the Cowboys on Sunday and can't think about anything else, yada yada yada ...

Where Snyder slipped up and actually said something that could make a headline or 2 was when he said "parity" and "competitive balance" and what make the NFL "special."

Parity is 1) not necessarily a good or bad thing, and 2) is not what the NFL has. What the NFL has is financial socialism that rewards franchises for underperformance.

If there is parity, how come the Detroit Lions finish last every year? How come the Oakland Raiders don't win their division every 4 years? How come the Cleveland Browns haven't done anything for about 20 years?

If true parity is the goal, fine. Redraft the veteran players after each season. Then Kansas City and Tampa Bay will have the same shot as Indianapolis and New England.

The NFL has no more "competitive balance" than any other sports league. What it does have is extraordinary revenue-sharing that, in many but not all ways, hands out just as much of the TV and jersey cash to the Jacksonville Jaguars as the Dallas Cowboys.

In many ways, that's a wonderful system. In other ways, it allows the Cincinnati Bengals of the world to latch onto the coattails of the Redskins and Steelers and Dolphins and get paid a proportionate share for delivering, over time and based on several metrics, a far inferior product.

Curious that a savvy businessman such as Snyder, who conveniently overcomes some of that revenue-sharing by possessing the league's largest stadium with extraordinarily high naming rights that feed directly to his own bottom line, is such a champion of parity.

Bystander crashes
Mary Thompson report

CNBC beauty Mary Thompson opened Tuesday's Fast Money Halftime with a live report on some conclusions from SEC chairman Mary Schapiro and quickly got more than she bargained for.

A bystander — unclear if he was one of those anti-capitalism types, or simply a mischief-maker — burst past the CNBC live security team and interrupted Thompson's report, asking "Is this about the ... ouch!"

Thompson coolly and calmly turned the segment back over to Melissa Lee, who looked stunning in the studio in her return after a week's vacation.

"You know, when you do live TV, you never know what's going to happen on the street there," Lee said.

The CNBC video of the incident is right here.

Lee opened with a "Brady Bunch" joke after David Faber flipped a football to Steve Cortes. "Thought we were gonna have a Marcia Brady situation on our hands," Lee said.

Oliver on CNN, too

Last week, you might've seen the Fast Money teaser for Oliver Stone's appearance on the show Tuesday.

Completely by accident, we've already found Oliver on a rival channel Tuesday — CNN.

Host Ali Velshi pointed out that he's in "Money Never Sleeps," shown in the background of a scene conducting a debate with Anthony Scaramucci. Stone says he used that interview because Scaramucci was taking a "hard-line" about letting banks fail whereas Velshi was apparently defending the bailout (we have no clue, we never saw the interview itself).

Stone emphasized a couple subjects, that the film wasn't meant for 2008 (and good thing, he says, because the story was "overcovered," something we agree with), and the power of rumor-mongering.

Stone actually claimed to Velshi that "Jimmy Cohen" went and told Congress that rumor-mongerers were killing Bear Stearns.

Daniel Snyder: No interest
in buying Washington Times

Daniel Snyder took part in an all-too-short Strategy Session interview Tuesday, compounded by his polite insistence on dodging most subjects except to say "I'm only focused on Sunday's big game with the Dallas Cowboys."

What really got our attention was this comment from Snyder:

"One of the things about the National Football League, what makes it special is, we have parity, we, we really have competitive balance."

We'll tackle that one overnight; there's only so much we can do on an afternoon break.

Kate Kelly said there are rumors (you know how Oliver Stone thinks about those) that Snyder wants to (snicker) buy the Washington Times (last report, it costs $1). "No truth whatsoever to the Washington Times; I've never been involved or interested at all," Snyder said.

David Faber disappointingly used up some of the very limited interview time with this tired standard question, "Your take on the overall economic environment?"

"I think things are tough out there," Snyder said.

Faiza Saeed spoke at length on The Strategy Session about European capital-raising and corporations' use of cash.

The NBC Dallas-Fort Worth station mistaken refers to the show as "Strategy Sessions."

Oracle up, HPQ down

Patty Edwards said Tuesday on the Fast Money Halftime Report, "I'm an owner of H-P, and I'm also an owner of Oracle, so I guess I'm winning and I'm losing on both ends.

"The thing about H-P, they had that Hurd premium. I didn't believe it, Joe was right on that one," Edwards said.

Edwards said the Oracle exec who's leaving, Charles Phillips, carries a premium of his own, and the possibility he could end up in Hurd's old job is "Your one big hope for H-P."

Jon Najarian and Steve Cortes talked about happenin' takeover chatter in U.S. Steel (apparently the type of stuff Oliver Stone is going to condemn once he shows up on the 5 p.m. show). "Mittal is the alleged suitor," Najarian said.

Michael Haverty, CEO of Kansas City Southern, responded Tuesday to Steve Cortes' question about Mexico with this: "It's a bit like the Prohibition Era in the United States."

Steve Cortes said there are more curmudgeons around the stock market these days than you could find on a "Sarasota shuffleboard court."

Karabell: Economic strengths
flying under political radar

In a Q&A posted late last week, Zachary Karabell spoke with Chris Hill of the Motley Fool about government reports and the real strength of "the economy," a concept he disputes.

Karabell called the Labor Department unemployment report "a heavily manufactured number" and said lumping the country under one economic umbrella is a mistake. "It seems unseemly to focus on those doing just fine in a world where many aren't, but it definitely skews our perspective, the amount of attention we give to areas of glaring weakness rather than profoundly potent areas of real strength," he said.

Dr. J hopes 3PAR losers
made money in early stages

The Wall Street Journal turns to options go-to guy Jon Najarian for an analysis of traders who finally got burned on 3PAR when they started buying $35 calls. "My only hope is, people who lost money on those today are people who had been in this thing several times already," Dr. J said. (Note: As always, WSJ.com free-vs.-subscription can be unpredictable; if you're not a subscriber and only get the first couple grafs of this story, simply copy and paste Dr. J's quote in a Google search, which will allow you to read in full.)

Steve Liesman suggests rehiring thwarted by diminishing unions

Fast Money semi-regular Gary Kaminsky took a turn with Whitney Tilson, Steve Liesman and NYT wunderkind Andrew Ross Sorkin on Squawk Box last Wednesday.

Of course, the highlight was Trish Regan in red.

But we couldn't help but take note of interesting commentary from Steve Liesman after Gary Kaminsky questioned when the firings would totally end and hirings would begin en masse.

Liesman said one reason for a gap between the end of firings and the beginning of hirings is that there used to be "greater unionization" that made it easier to bring back a mass of workers. Nowadays, Liesman said, "Each hiring decision is an individual contract."

Sorkin countered, "I would go the opposite way," saying it's easier to fire and rehire people who aren't unionized, "because the decisions aren't nearly as hard to make as they used to be."

"And you know that you can get rid of them again should you need to," Regan said.

Liesman made a refreshingly wonderful point about studying recessions that really applies to a bevy of subjects cited by people on CNBC: Way too small sample sizes for drawing historical parallels to anything. "I say this understanding how cruel it sounds. But the trouble for economists with recessions is there aren't enough of 'em" to draw many conclusions, Liesman said.

Whitney Tilson, undaunted by this knowledge, cited a report from some economist at the Fed meeting that apparently said the most recent U.S. recession is kind of the worst kind because it's one of those "extreme leverage-driven bubbles."

Gary Kaminsky said in human-resources-speak, they call hirings "new initiative dollars," a term we weren't familiar with.

[Friday, September 3, 2010]

A range-bound episode

Simon Hobbs concluded his week of guest-hosting Fast Money not with the fireworks we hoped for, but an unfortunately choppy production that struggled to identify many concrete trades.

Guy Adami continued his Gail Dudack routine, saying, "Clearly I've been bearish, I continue to be bearish." Adami picked the half-empty side of the last couple weeks. "People have gotten chopped up in a very defined range like I've never seen it before," he said.

Steve Grasso pointed to 1,039 (the August low) and 1,128 (the August high) and said, "I don't see anything that tells me we've broken that trading range."

Scott Nations said the last couple days has been "Just a bounce from oversold."

LaVorgna refuses victory lap,
as though it’s merited

Stephen Weiss took a turn on the Fast Money Prop Desk Friday and pointed to an apparent growing disconnect between bonds and stocks.

Simon Hobbs told Weiss that Gary Kaminsky has suggested that there might be a new normal with bonds, essentially a permanent demand that's stronger than historical trends.

Weiss politely disagreed. "I heard what Gary said today; I just don't buy it," Weiss said.

Joe LaVorgna said the gist of the Labor Dept. report is that "QE2 is off the table."

Guy Adami said CME is worth a look in the financial space, a recommendation (from many others also) that continues to perplex us, given that the glory days of the exchange sector were clearly 2002-2007 and that these stocks seem to twist in the wind based on 1) government regulations and 2) GDP.

But if it works for Adami, super.

During a rather muddled thread on commodities, rails and emerging markets, Simon Hobbs asked a great question about whether the U.S. is a big copper exporter to China. Either no one knew or was unable/unwilling to cut in with an answer.

$1,248, and counting?

Guy Adami generally says that the problem with gold is that it can just collapse overnight.

Friday he offered a fairly recent gripe heard on Fast Money: "Nobody's been able to verbalize the reason that gold can go down."

Which makes us wonder: Is a prediction or commentary really any good if it's indefinitely wrong? If the show's about Fast Money, what's the point of clinging to a (4-)years-long thesis that hasn't worked?

Kinda like the difference between saying the Yankees are gonna finish in last place one of these years and it'll be bad for everyone with a stake in the team, and that the Yankees are gonna lose tonight.

But Adami did offer an Anglicized twist on gold: "It takes the stairs up, and the lift down."

Steve Grasso recommended H&R Block because "the tax code is totally confusing."

What would the government do
with higher tax collections?

We're not economists, but we just can't help thinking about these things.

There was a little bit of discussion on Friday's Fast Money Halftime Report and The Strategy Session (see below) about extending the Bush tax cuts. (Notice the terminology that is successfully used, "extending the Bush tax cuts," not merely "raising taxes.")

There are a lot of people out there, including centrists in the media, who believe that tax increases are necessary, if not now than in the near future, to cope with massive debt problems on the federal level and in states such as California and Illinois.

The problem with that notion is, how do they know the extra revenue will be spent on debt?

Put this analogy in your living room. A couple owes $10,000 on a credit card. So they owe, let's say, under the favorable terms we've calculated, $200 a month. So they pay that. Next year they realize the balance is $10,500, and a year later, it's $11,000. Eventually they come to the conclusion one of them needs a second job. Once that money starts coming in, suddenly there's the realization that it's now possible to get a new washing machine or upgrade to an HDTV or redo the bathroom shower — and maybe pay down some of that debt level, which will probably be revisited once the 9-year-old car begins to break down.

There is wide disagreement as to what level of debt is too high; that's what makes politics. The problem is that debt is one subject both parties agree on: Whatever "too high" is, we haven't reached it yet.

And that's why, under a Republican who supposedly represents limited government, American taxpayers started charging gobs of goods and services for Iraq and Afghanistan. And people who talk about change and hope and "dumb wars" really just have the same solution as the "limited government" guy, which is to swipe every problem on the national credit card and cut basically nothing.

Who knows, maybe they're right. That maybe the issue isn't returning the balance to zero, but simply recognizing how far we can take it. And as far as any layman can tell, there's a massive bipartisan consensus featuring at the top the most recent 2 presidents, the most recent 2 Federal Reserve chiefs, and extremely wealthy and prominent businesspeople with reputations on the line who warn about printing money but insist, "To be sure, we’ve been doing this for a reason I resoundingly applaud." If they're not concerned about debt, why should anyone else?

Kinahan: This type of
retail investor is different

Steve Grasso on Friday's Halftime Report stated his case for not raising taxes. "The tax cuts should go across the board because the top 5% of income earners spend 40% or are accountable for 40% of the consumer spending," he said.

Jon Najarian said a comment by David Rosenberg, that consumer activity was boosted recently by a lot of state sales tax holidays, actually proves that tax cuts do what they're supposed to do.

But the most interesting exchange involved Grasso and JJ Kinahan sparring briefly over the entry of the retail investor into the market, something Kinahan seems to think is happening.

"When you start to suck in a lot of the retail investors in this, you could get your head ripped off 2 weeks from now," Grasso warned.

Kinahan protested that he actually kind of agrees with that, but that presently, he's only seeing the retail investor re-entering in a "much more cautious and educated fashion," which he considers healthy.

In other words, AMZN, YHOO and AOL aren't going up $55 a day.

"We are clearly in a trading range," said Joe Terranova.

The jobs report is a lagging indicator; stocks have always priced it in

Kate Kelly told The Strategy Session panel (featuring Scott Cohn in for David Faber) and viewers Friday that she knows a lot of bankers and hedge fund types who would "dearly love to see" present tax brackets remain for incomes over $250,000.

Kelly said the typical midterm political strategy would be for the Democrats to play to the base. But the problem with that is, at least for some of them concerning tax rates, "They're actually starting to believe the stimulative argument that Republicans have made."

Yikes.

Or as we often like to say around here, it's a center-right country being run by center-left people trying to give the center-right majority what it thinks it wants.

Scott Cohn asked Kelly, "Politically caving big-time if they do that, isn't it?"

Kelly said yes, but they might decide to do it during the lame-duck session.

Gary Kaminsky said not to get carried away with stock market expectations on tax rates, suggesting there could easily be no "dramatic" meltup or meltdown on whatever happens.

Richard Zinman said "This is one of the best backdrops for investing in stocks that I've seen in my career."

Kate Kelly devoted serious time to getting Zinman to explain how he successfully bolted Citi for Credit Suisse at the right time, but Zinman had no smoking guns to reveal.

Herb Greenberg, though, questioned the Caterpillar P.E. "Investors, maybe they'll get bulldozed." Gary Kaminsky took the other side, saying the company is a great play on international growth and the expectations are for "significant margin improvement."

[Thursday, September 2, 2010]

Capitalism in reverse

Jon Najarian made an outstanding point on Thursday's Fast Money about the White House, but in fact Steve Grasso had made a similar point earlier in the day on Halftime.

The subject was the Mariner accident ... the BP accident ... and why the heck did we stop drilling?

"If jobs are No. 1, it's taking an awful lot of jobs for an accident that only happens once in a helluva long time," Grasso said.

A couple hours later, Najarian, who pointed out he's not running for office, said of the government, "This guy is tone-deaf. That's 75,000 jobs in the Gulf of Mexico that have been idled for no good reason. It's costing all of us."

Coincidentally, in the last couple weeks, this page noted that perhaps — perhaps — the government takeover of GM was a good idea, because shareholders didn't have the brass to cut the fat in the company like debt-conscious politicians do. And now here we are with an example of the pendulum going the other way.

Part of the beauty of capitalism is that labor theoretically goes where the demand is. You could have a command economy where people are rewarded for providing a service no one wants, or you can have a dynamic free market where people are paid for actual usefulness to society.

And what better example of that than petroleum, which is massively important, pays well, provides huge benefit to society ... and the government is going to prevent people from working on it. The BP spill was a terrible disaster. It must be a permanent part of oil-industry dialogue. But the truth is that it changes nothing about the cost/benefit analysis of drilling. So why not stop playing political games, and get on with business, and put people back to work where they need to be?

Steve Grasso said, "You probably wanna be shorting CLH, if there's still no leaks come tomorrow."

Rarely has David Rosenberg
found agreement on Fast Money

Gloom maestro David Rosenberg told the Fast Money gang Thursday that while the data is making some people smile, as a whole, "It's telling me that the economy is still slowing down precipitously ... I still think we're skating on thin ice."

Simon Hobbs argued that one problem with this view as a stock call is that the markets have already priced it in. "The expectation is for exactly what you're describing," Hobbs said.

"I don't agree with that at all. I don't think the market's priced for a double dip," Rosenberg said.

Hmmm. Gotta agree with both here. Rosenberg's right in that a double-dip is not priced in. However, Hobbs is correct in that a largely negative scenario is priced in. So, make of that what you will.

Anthony Scaramucci twice
suggests junk food no-no

Anthony Scaramucci, introducing the Hedge Fund Trade of the Week, said Thursday, "This week's trade is Heinz." That wasn't the controversial part.

This was: "... while people are slathering their hot dogs with ketchup and mustard..."

Later, Scaramucci made a joke. "You can eat hot dogs this weekend with ketchup, and then you can start your Weight Watchers diet by using their products on Tuesday."

See, in some places — namely Chicago — you don't put ketchup on a hot dog. (Pittsburgh we're not totally sure; the Yinz may have different rules, such as the "Pittsburgh rare" steak.)

The official opinion here, however, is that ketchup on a hot dog is OK.

Know that Heinz, by the way, is perhaps the ultimate Steelers sponsor nowadays; its stadium naming rights pretty much pay a key player's salary each season.

Keith Moon, eat your heart out

Tim Seymour on Thursday took a turn in the "Trading Your Passion" series. While all of these profiles have been interesting, Seymour's probably had the most concrete link to trading.

Seymour said being a dummer has trader-type of adrenaline. "It's a rush, it's a thrill," he said.

But instead of claiming that makes him a better businessman, he merely pointed out he could see a long time ago that record labels were losing control of the music industry and plunged into the most appropriate stock at an ideal time (i.e., anytime before about 6 months ago). "The people that control the industry are people like Apple," he said.

A bit of a Brag Trade, maybe, but a decent reminder not to sell your own experiences, or intuition, short.

Simon Hobbs praised Seymour's stage presence. "I've heard Rick Springfield, but not Bruce Springsteen," Seymour cracked.

Hurricanes, in the
rear-view mirror

Guest Greg LoCraft of Morgan Stanley talked about how insurers, perhaps contrary to conventional wisdom, tend to perform better than the overall market during disaster season.

Take that for what it's worth, as LoCraft said he arrived at this conclusion this way: "We looked at almost 20 years of data."

That sounds vaguely reminiscent of all kinds of money managers in 1999 saying, "If you own stocks over any 10/15/20-year span, they always outperform."

Douglas Sipkin also guested and trumpeted Lazard, in part because it "finally got past one of their biggest share overhangs."

Jon Najarian said he likes Lazard and Greenhill as well. "I've been looking to get into both of 'em but they've been running away from me, Simon," said Najarian.

Joe Terranova said Thursday there really is a double dip: A "double-dip in pessimism." Terranova also said, "I have tried for a number of years to buy Dell. And I am no longer trying to buy Dell."

Gary Kaminsky said not to expect the type of year-end chasing as the markets saw in 2009. "This year, the relative underperformance is not the same," he said.

Brad Hintz asked and answered a question on the Halftime Report that is rather telling. "Is this a great time for financials? Probably not," Hintz said.

A run-of-the-mill episode of
Strategy Session really takes off

(Sigh) Please understand the usual disclaimer; we only report these kinds of things because attractive people work in television, people want to see attractive people on television, and the TV business can't succeed without people being attractive on television.

Much of Thursday's Strategy Session was devoted to updates on the Mariner Energy fire, which we quickly came to realize was really kind of a big dud in the whole geo-energy (or whatever the correct term is) space.

In terms of stocks et al, we note that Gary Kaminsky had this to say about the 3PAR battle: "The loser's gonna have to do a lot of explaining as to why they would let it go at this point and why they don't need it."

OK. We knew Michelle Caruso-Cabrera would be good for a highlight, but little did we know how big of a highlight it was going to be.

Caruso-Cabrera at one point spoke with Pat Cassidy, spokesman for Mariner (this wasn't the highlight), and asked, "Mr. Cassidy, thanks for joining us, what can you tell us right now?" Cassidy's response was something along the lines of William Hurt's wrapup in "Broadcast News" when he expertly handles that breaking news production on the renegade Libyan pilot, something about, "Which means we're probably all OK" (not exact words).

Then investor Joe La Ferla, a former American Airlines pilot, came on the set and talked about how to get ahead by not owning single stocks. Fair enough. His real gift was in presenting Gary Kaminsky with a pilot's cap.

Because Kaminsky, who has a 6th sense for these types of things and understands effective television, spectacularly closed the broadcast by putting the hat on Michelle Caruso-Cabrera's head and calling the look "fantastic" and instructing the camera guys to get it on TV. Caruso-Cabrera, being a good sport and also understanding effective programming, struck quite frankly one of the sexiest poses you will ever see on business television ... and even said "You know, I normally only wear these at night," prompting a howl from Kaminsky and undoubtedly anyone else who was watching.

[Wednesday, September 1, 2010]

Barry Ritholtz says a little good Keynesianism would help

Steve Cortes had the audacity on Wednesday's Fast Money to suggest Barry Ritholtz isn't conservative enough.

Ritholtz said stimulus projects are OK, but "When it's over, it's gone; there's no lasting impact."

He mentioned interstate highways and NASA and said "those have had lasting effects that leave behind something for the private sector to build on."

He suggested a construction boom aimed at upgrading the infrastructure might fix that. "We're great at building bridges and roads and tunnels and ports, but we're horrible at maintaining 'em."

That's when Cortes jumped in. "We shouldn't be spending public money, we should be giving it back to the American people who do much smarter things with it than the government. Barry I think I need to send you to lunch with Larry Kudlow," said Cortes, who thinks tax cuts are the panacea. "Do you really believe that government spending and industrial policy can lift the U.S. out of its recent morass?"

Ritholtz said yes, he wants to introduce Cortes to the "world's biggest Keynesians, and that's a little country you may have heard of called China."

Cortes claimed the chart since 2003 proves tax cuts are awesome. Ritholtz wondered where the great charts were in 2001.

Cortes — and we should point out this page agrees with his general limited-government approach — is sipping a bit too much Arthur Laffer Kool-aid. He's using a sample size of about 1 to support a point that is judgmental at best. Tax cuts sometimes seem like a good idea and other times don't. It's an ongoing debate with no permanent resolution, how much we want to put into the public kitty. And in the end it's a lagging debate, because enough constituencies depend on federal cash that it rarely if ever gets cut, and whenever there are revenue shortfalls, they just go on the national credit card.

Ritholtz said it's basically a no-brainer that politicians will throw money at the economy, so "as long as they're gonna do something, I'd rather have them not do something stupid and temporary."

But then he mentioned "high-speed rail" and proposed a "huge Manhattan Project for alternative energy," which are both basically bad ideas, so no point in hopping on that bandwagon either.

Adami flips AAPL

Jon Najarian on Wednesday talked about another great trade of his, but this time curiously included Guy Adami on the booty.

"I love Apple between 240 and 260," Najarian said. "A week ago Guy and I picked it up at 239, which was a gift again."

That's notable, only because Adami's holdings on the Fast Money disclosure pages have been the same 7 stocks — AGU, BTU, NUE, C, GS, INTC, MSFT — for a long time.

Last week, Apple traded under $240 on 3 days, but Adami was on vacation and thus there were no online disclosures for him. Based on what Najarian said, it seems as though Adami used the break to dabble in some short-term market swings.

Jon Najarian gushed about Apple's new sound system that you can stream through your house (will we ever reach a point where we've exhausted the amount of ways we can listen to Jim Croce anyway?), but Jon Fortt told Simon Hobbs that "AirPlay is not a game-changer in my view," because he thinks the "mass market" consumer won't be able to figure it out. Fortt also said neither the iPod nor iTunes has been a huge profit machine in recent years, and the new iPod Touch "is about margins."

Tim Seymour said he's not a buyer until the stock pushes through $260. Until then, "I stay on the sidelines."

"I like Google, down at these levels," said Brian Kelly.

On the markets, Dan Niles reaffirmed his bearish "longer-term view" and shrugged off Wednesday's rally, saying, "That is the bounce that we were expecting."

He dismissed Tim Seymour's enthusiasm for INTC, saying, "The problem is, you don't know what the valuation is," and anybody who thinks they can call a stock bottom in such a cyclical industry is essentially clueless.

Excitement for MSFT apparently hinges on ‘financial engineering’

Heather Bellini got to say a soundbite's worth of material on Microsoft, and quite frankly much of it was less than inspiring, including the part about a tablet being "probably a year away."

What raised eyebrows here was when Bellini, pressed by Simon Hobbs, suggested a possible dividend hike or buyback as "near-term catalysts" that would be based on "somewhat financial engineering."

So in other words, not delivering any exciting new products or services that people would buzz about.

But, a board meeting. Where the most exciting thing is handing out cash, which probably isn't a good long-term business strategy.

Sounds like a buy.

Bellini's price target is $38.

3-D not dead yet

Michael Pachter didn't see a whole lot of upside for NFLX in the new Apple TV streaming plan. It "does a lot more for Apple than it does for Netflix," Pachter said. "I'd be on the short side of Netflix."

Guy Adami asked a good question about IMAX: "Did they jump the shark with 3-D?"

Pachter said 3-D isn't a busted bubble, that in fact he expects "10 or 15 decent movies a year" and thinks IMAX is out front in that industry.

Seymour, Kelly criticize volatility

Guy Adami, who basically every day on Fast Money talks about how he believes the market is headed lower, explained Wednesday's rally this way: "I think it was a lot of short-covering, I think it was the first-day-of-the-month effect."

Jon Najarian said one problem is that most experts just don't get it. "If you laid all the economists and analysts end to end, it would probably be a good thing, because they've been dead wrong about most of the things that are going on here," Najarian said. "I think we're gonna see a rally that continues into the fall."

Brian Kelly, apparently hoping to preserve his typical summer thesis about the PIIGS killing the U.S., tangled with Tim Seymour over all those European problems.

Seymour scoffed at Kelly's Greek-43-PMI concerns, saying Britain, France and Germany were about 3/4 of the EU economy.

"I understand that it's small but it killed the market in the spring," Kelly said.

Both, though, seemed to think the market pivoting so violently on the ISM is a bit over the top. "That 1 number, and a 250-point rally 1 day, doesn't mean that the end is over (sic)," said Kelly.

"This is kind of a joke," Seymour said at one point.

Kelly was playing it down the middle. "I think you can be long and short in this market," he said."

"I think it's very difficult to pick stocks here," Seymour said.

Team Adami-Hobbs referred to "The Super Simon Hobbs rally."

Jon Najarian said Joseph A. Bank suits him, he bought some in the morning.

Steve Cortes said "EM's continue to outperform ... I am long FCX, BHP."

Cortes also asked guest Richard Volpe, "Do people tell you you look like Kiefer Sutherland?" Volpe said he thinks bonds are correcting/going to correct as he predicted because the market previously was "priced to its armageddon."

Dr. J: ‘Wonderful experience’
trading the last 3 days

In case you didn't make gobs of money recently, be glad that Jon Najarian did.

"These have been 3 of the best trading sessions, Friday, Monday and today, that I've had in basically about 18 months," Najarian said on the Fast Money Halftime Report Wednesday. "And one of the reasons for that is, sell the rips, buy the dips. Dougie Kass says it all the time, I preach it, and I practiced it, and it was a just a wonderful experience to be able to, basically, sell into that 165-pointer on Friday, buy into it on Monday, and now today, you get the opportunity to trade out of if it again."

Steve Cortes was rather bullish, but Jared Levy said, "I think we move lower after today's rally." Levy also said he expects an Apple pullback now that the announcement is out, a comment that drew a head-shake from Jon Najarian but not exactly the most ringing endorsement.

"I'm bullish on Apple, and I'm bullish just beyond today, but that's, that's uh, semantics, I guess," Najarian said.

Steve Cortes suggested an Apple derivative play, "Disney in terms of content providers ... I think Disney makes sense here ... we're on the verge of the football season, I think ESPN is going to do very well," he said.

Simon Hobbs said "Steve, content was killed when they digitized music."

MCC declines to treat
‘Strategy Session’ like ‘Kudlow’

Much to our pleasant surprise, smokin' Michelle Caruso-Cabrera took a guest-host turn at The Strategy Session on Wednesday.

Gary Kaminsky even called it "cable TV history."

She looked great in black. Unfortunately, the show was a little light on hoped-for fireworks, nothing about MCC decrying government meddling and calling for the privatization of everything.

Mostly it was rather routine material about whether the market's suddenly in melt-up mode (Guy Adami says it isn't), private equity, KKR.

Mary Deatherage, who is rather tall, said, "To be honest with you, if I tried to advise my clients on day to day, I'd be a crazy person." She also said, "IPOs can be good or bad. ... We tend to not chase them."

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