Economy Blog

I have been lazy with links of late. Lot’s of good stuff out there.
Paul started a conversation on the possible oil bubble . What do you think?
I can’t believe that coaches are now making $6 million/year. That’s a bubble. That’s what the Knicks are offering Mike D’Antoni, a coach that has not taken a team to the NBA Finals. We live in obscene times. No wonder most politicians are raping the public…everyone else is. M…
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Cramer admitted to viewers that he missed the call by not telling investors to buy Continental Resources (CLR) earlier this year. Cramer said he thought about pushing the name in January, but he never followed through. Shares of CLR were at a 52-week high around $26 in January. The stock went on to double to $54. “The lesson to be learned is there’s no perfect pitch in this game,” he said. Continental beat Wall Street estiamtes for its most recent quarter and the company issued a very bullish outlook. “It’s growing production and reserves and spending money on drilling in key areas, exactly what you want in an oil and gas play,” Cramer said. “If I had followed my own rules, I would’ve mentioned this one to you,” Cramer said. “As long as oil and gas stays strong, this one keeps going higher.”
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Cramer recommended auto parts maker Visteon (VC) for a speculative turnaround idea. Visteon was spun off from Ford Motor (F) in 2000 and it hasn’t turned a profit since. Cramer said this could soon change. He explained that Visteon is under-going a huge restructuring initiative by trimming overhead and boosting numbers. Recently, the company reported a $51 million profit, vs. Wall Street estimates of a $40 million loss. C…
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Cramer recommended auto parts maker Visteon (VC) for a speculative turnaround idea. Visteon was spun off from Ford Motor (F) in 2000 and it hasn’t turned a profit since. Cramer said this could soon change. He explained that Visteon is under-going a huge restructuring initiative by trimming overhead and boosting numbers. Recently, the company reported a $51 million profit, vs. Wall Street estimates of a $40 million loss. Cramer thinks investors should buy the stock now since not a single analyst upgraded the stock after it reported its quarterly profit. He said investors could catch a nice move in the shares once the analysts start truing bullish on the name. The company sold 23 unprofitable plants and eliminated 18,000 high pay union workers. Cramer explained that the company is diversify its sales, relying less on Ford and now selling to General Motors (GM), Nissan and Hyundai.
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Every now and again, CNBC puts on a superlative show.  Friday morning’s Squawk Box was one of those times when they hit the ball out of the park.

As I was heading out the door, I heard David Einhorn of Greenlight Capital on CNBC chatting about shorting stock, soft SEC enforcement, and Allied Capital (ALD).  As if this wasn’t enough,William Ackman of Pershing Square Capital was on for a while.
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“My game plan for next week is a traditional one,” Jim Cramer told fans of his “Mad Money” TV show Friday. Cramer decided to focus on companies that are set to report earnings next week. On Monday McDermott (MDR) reports its quarterly earnings, and Cramer thinks the results will be light and the stock will trade lower. He said if MDR’s report takes down Foster-Wheeler (F…
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Cramer admitted to viewers that he missed the call by not telling investors to buy Continental Resources (CLR) earlier this year. Cramer said he thought about pushing the name in January, but he never followed through. Shares of CLR were at a 52-week high around $26 in January. The stock went on to double to $54.
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Cramer placed Martin Sullivan, CEO of AIG (AIG) at the top of his “Wall of Shame” list for worst CEO’s. Cramer said if Sullivan resigned from AIG the stock could go up 10% to 20%. He appealed to the AIG board and shareholders to get rid of Sullivan. “This man has to be fired,” he said. “I cannot believe how bad this guy is.”
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Word On The StreetWORD VIDEO HEREEarnings TradeNext week Wal-Mart (WMT) and Hewlett-Packard (HPQ) are set to report earnings. What is the trade? Adami said HPQ should say good things, but he isn’t sure if the stock will do well in the short-term. He said he likes shares of HPQ for the long-term. Najarian said HPQ’s P/E is cheap and he is looking for an impressive earnings report. Macke thinks HPQ will report a good quarter. Finerman said she wants to see what WMT’s profit margins will be. She thinks margins are going to narrow, but that is already priced into the stock. Macke said guidance will be key from WMT. Najarian likes that WMT is going to cash consumer’s rebate checks for free….
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Great interview on energy markets with T. Boone Pickens from last week’s Milken Global conference in L.A. I was in this one, and enjoyed it immensely.
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BullishApple (AAPL), Intel (INTC), Marathon Oil (MRO), Gencor Industries (GENC), First Solar (FSLR), Applied Materials (AMAT), XTO Energy (XTO), Devon Energy (DVN), CSX Corp (CSX), Union Pacific (UNP), Burlington Northern Santa Fe (BNI), Norfolk Southern (NSC) and Potash (POT).BearishJuniper Networks (JNPR), Sunoco (SUN), Commscope (CTV), Genentech (DNA), Sunpower (SPWR), Ormat Technologies (ORA), Energy Conversion Devices (ENER), Fifth Third Bancorp (FITB), Farm & Construction Machinery (GTE), Intrepid Potash (IPI) and Mellanox Technologies (MLNXj).
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Fast FireFinerman recommended aerospace play Kaiser Aluminum (KALU) before earnings. She was dead wrong and the stock fell 8%. She said she bought more of the stock on the pullback. Macke told investors to buy World Wrestling Entertainment (WWE). Shares have dropped 12% since his call, but he said to buy the stock right here. Pete Najarian and Guy Adami picked Citigroup (C). The traders were way off on this call and shares slid 8%. They both think the stock is a buy now.F…
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Final TradeShares of Priceline.com (PCLN) were among the most actively traded names on the Nasdaq Friday.POPS&DROPSThe following stocks made up some of the big movers for the week.POPS- Sprint (S) traded up 20% after news broke that Deutsche Telekom is considering a bid for Sprint Nextel. Alcoa (AA) popped 8%. Adami said he likes AA. H&R Block (HRB) popped 5%. Applied Micro Devices (AMD) added 13%. True Religion Apparel (TRLG) jumped 16% after the high-end jean maker reported a 35% jump in profits and raised its full year outlook. Macke said sell this stock.D…
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Oil and financial issues, once the glorious rock upon which the market built strong rallies, are now acting as a crushing weight under which investors are being stoned. Equities sank again, closing out the week in decidedly sour fashion, due to another run-up in crude oil and disappointing results from …
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Final TradeMacke said buy UPS (UPS) if Fedex (FDX) takes it down. Adami selected Tesoro (TSO). Finerman said buy June $45 call options on Valero (VLO). Najarian recommended buying Hewlett-Packard (HPQ) ahead of the earnings call.
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Sell Circuit City (CC), Jim Cramer said on CNBC’s “Stop Trading!” segment Friday. Cramer thinks CC is close to being on life support and he doesn’t get why Blockbuster (BB) would want to buy the electronics retailer. He said CC investor are lucky they can get out of this stock at $5 a share. Next up on Cramer’s hate list was Citigroup (C). “Citigroup is so bad that even if it fired 200,000 employees it still wouldn’t be worth owning,” he said. “Were they on the right side of any trade?” he asked Erin Burnett. “Why do I have to own Citigroup when I can own JPMorgan (JPM ) or Goldman Sachs (GS),” he added. Cramer explained that Goldman isn’t issuing stock it’s actually buying back stock. Finally, Cramer said American International Group (AIG) has become a travesty. Cramer said he doesn’t believe a thing AIG says. The world’s biggest insurer reported a $8 million net loss on Thursday and said it will need to raise $12.5 billion, or face more writedowns.
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Improved technology, more power.  We would expect this to be good.

In fact, more power can enable us to do exactly the wrong thing.

This happens all of the time with the world’s most powerful computer, the human mind.  A year ago we reviewed analysts who thought the market looked like a replay of the 1987 crash.  This type of analysis crops up all of the time, often using old charts as evidence.  With the power to search among thousands of choices, picking the time frame, and adjusting the scales, the human computer can "prove" nearly anything.
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The bears have been pissed off for 1,500 Dow points because they are stubborn. As always, along with triple lindy inverse ETF’s, and no uptick rule, they added fuel to the rally.
Despite the continued flood of bad news, stocks ralllied.
This week might have seen a change.
Tonight we have Fedex warning. It’s not that they warned, I mean how could they not be affected, it’s that they did it late Friday and that the stock is getting creamed.
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