The Trusted Choice for the Wall Street Voice http://www.minyanville.com 2007 Minyanville Publishing and Multimedia, LLC. All Rights Reserved Bloomberg reports Nobel Laureates Myron Scholes and Joseph Stiglitz predict the credit crisis will cause more pain while analysts at Goldman Sachs project half of the world’s economy faces recession. Scholes who won the Nobel prize in Economics in 1997 said in an interview in Germany “There will be a global recession… [with] still a tremendous amount of deleveraging still necessary.” Stiglitz who won the award in 2001 said that the world economy would continue to underperform below its potential for some time and that this would result in a “social loss” through weaker unemployment. Earlier this morning analysts ... http://www.minyanville.com/articles/index.php?a=18624 Thu, 21 Aug 2008 16:20:00 EST Could Lehman Brothers (LEH) be the target of a hostile takeover? During the 1989-1991 recession 25% of the financial universe disappeared. Today in an entirely more daunting crisis only 10% has vanished. Toddo expects to see both further consolidation and bankruptcies. Known quantity: Commodities are surging again. Unknown quantity: Why? Toddo thinks 1 of 2 things is in play: Investors suddenly awoke to the notion that a Fannie Mae (FNM) and Freddie Mac (FRE) bailout will wax the dollar or something is afoot on the Iran front and we just can't see it. Now watch this! Toddo's checking out ... http://www.minyanville.com/articles/index.php?a=18623 Thu, 21 Aug 2008 16:15:00 EST The bailout of Fannie Mae (FNM) and Freddie Mac (FRE) has taken center stage in Washington the housing crisis is worsening and blowhards on either side of the aisle are crying "Nationalization!" Minyanville asks the poignant question: Who are we bailing out next? http://www.minyanville.com/articles/index.php?a=18622 Thu, 21 Aug 2008 14:30:00 EST I'm not above mixing a few metaphors if it helps me to explain the market's condition. S&Ps have been stuck in a range since Tuesday's open and it's reminding me of poker. The analogy might be helpful.Tuesday's gap down and its entire session spent in negative territory can be equated to a Hold'em player being dealt pocket aces (two aces are the best "starting hand"). Wednesday's session ranged sideways probing either side of Tuesday's range. This is much like the player who "slow-plays" his pocket Aces - he's not making a big bet which would reveal the strength of ... http://www.minyanville.com/articles/index.php?a=18619 Thu, 21 Aug 2008 14:15:00 EST While everyone focuses on Fannie Mae (FNM) and Freddie Mac (FRE) in my opinion there are 3 other possible disasters waiting in the wings.1. Regions Financial (RF): The company needs to raise $2 billion says Sanford Bernstein. What are their options for doing so? They can sell debt. The problem here is that I believe you couldn't sell debt if you wanted. The last reported trade in RF paper was 2 weeks ago nearly +700 to the 30 year or close to 12%. The company's preferred trades at 10%. And the stock is now a 'single digit midget' near $8 a share. ... http://www.minyanville.com/articles/index.php?a=18620 Thu, 21 Aug 2008 14:00:00 EST Poor poor FDIC - ever the Treasury Department’s whipping boy.The latter gets to smack the former around like a badminton birdie because the FDIC’s primary responsibility is to clean up the Treasury’s messes. And these days there are messes aplenty. It goes like this: The Treasury oversees a regulatory body called the Office of Thrift Supervision or OTS that’s tasked with keeping tabs on federal thrifts (which are just mortgage companies moonlighting as federally chartered banks).Until recently the OTS was responsible for monitoring IndyMac Bancorp which collapsed last month under the weight of misplaced mortgage bets. The FDIC is now ... http://www.minyanville.com/articles/index.php?a=18617 Thu, 21 Aug 2008 13:15:00 EST Please pass the ketchup - and the profits.   Heinz (HNZ) the world’s largest ketchup maker says first-quarter profits climbed 12% to $229 million or $0.72 per share. Analysts forecast earnings of $0.66 per share; the company earned $205.3 million or $0.63 per share in the same period last year. Sales increased 15% to $2.58 billion.   The company also sells Ore-Ida French fries and Lea & Perrins sauces.   A lot has been written about how salsa now outsells ketchup but most of it can be filed under what Mark Twain called “lies damned lies and statistics.”   Information ... http://www.minyanville.com/articles/index.php?a=18614 Thu, 21 Aug 2008 12:45:00 EST Toddo explains no news is bad news for government-sponsored enterprises Fannie Mae (FNM) and Freddie Mac (FRE). The inherent risk of moral hazard: Once it starts it's hard to stop. http://www.minyanville.com/articles/index.php?a=18616 Thu, 21 Aug 2008 12:30:00 EST Kevin Depew's Five Things You Need to Know to stay ahead of the pack on Wall Street: It was a full year ago while speaking at the Kansas City Fed's annual symposium in Jackson Hole WY that Fed Chairman Ben Bernanke explicitly outlined The Bernanke Put. But reading news stories previewing Bernanke's upcoming Jackson Hole speech it seems few really listened to last year's version. "A year after speech Bernanke may have to eat his words " says USA Today. No he won't. Let's review.1.  What Did Bernanke Say Last Year? Speaking at the last year's symposium in Jackson Hole Bernanke sought to reassure financial markets ... http://www.minyanville.com/articles/index.php?a=18613 Thu, 21 Aug 2008 12:15:00 EST There’s certainly no indication that the hamburger an old American standby is being replaced by alfalfa sprouts.   Burger King (BKC) second only to McDonald's (MCD) says extended hours and a new Steakhouse hamburger boosted profits.   Burger King says fourth-quarter net income rose 42% to $51 million or $0.37 per share beating analysts’ estimates by $0.03. Sales grew 9.5% to $646 million for the period ended June 30.   In the same period last year Burger King earned $36 million or $0.26 per share on sales of $590 million.   Sales at restaurants open at least 13 months ... http://www.minyanville.com/articles/index.php?a=18615 Thu, 21 Aug 2008 12:00:00 EST Whether they know it or not all investors experiencing the bear are faced with the age-old question of what to do with their long-term holdings in a bear market. The typical decision to make is “Do I sell it all or do I ride it out?” Unfortunately most individual investors don't consider a third alternative one that most professional investors decide all the time: "How much and when do I increase or decrease the proportion of what I own relative to the market’s mix?"The portfolio management difference between the above can be summed up as follows:  Long-term buy and ... http://www.minyanville.com/articles/index.php?a=18612 Thu, 21 Aug 2008 11:00:00 EST Comedian Jerry Seinfeld best known for his “show about nothing ” will receive about $10 million to endorse Microsoft (MSFT.) Has Bill Gates thought this one through? Linux and Apple (AAPL) devotees love to sneer that Microsoft Windows is nothing much - so you can just hear them chortling at the idea of Seinfeld Mr. Nothing himself plugging it. It doesn't help that Seinfeld's character owned several different Mac computers over the course of the sitcom's run - and the MacWarehouse catalogue was once casually displayed on the coffee table.The new $300 million ad campaign is part of Microsoft’s ... http://www.minyanville.com/articles/index.php?a=18611 Thu, 21 Aug 2008 10:45:00 EST Greetings from New York where in the interest of my always beloved full-disclosure I've made the same trade with CNBC this week as I did last. Specifically I've given them Olympian two-a-day efforts for the first 4 days this week in exchange for a 3-day weekend . As if that weren't enough to start my countdown to the end of Fast Money's 5–6 taping tonight (8:31 as I type) I'm taking all next week off as well. If a flame burns brightest just before going dark I oughta be about full supernova tonight at 5:45. Here's what I'm watching ... http://www.minyanville.com/articles/index.php?a=18610 Thu, 21 Aug 2008 10:30:00 EST Many have been writing to ask how the chart and commentary in M3 Contraction - The Future Is Now can possibly be correct. Here is the chart and a snip of text once again for convenience. The key sentence below is in bold. The Telegraph is reporting that the contraction in the US money supply points to a Wall Street crunch ahead. "The US money supply has experienced the sharpest contraction in modern history heightening the risk of a Wall Street crunch and a severe economic slowdown in the coming months.Click to enlargeData compiled by Lombard Street Research shows ... http://www.minyanville.com/articles/index.php?a=18609 Thu, 21 Aug 2008 10:15:00 EST Tut. Tut. Some folks are frosted because Olympic gold metal winner Michael Phelps has agreed to endorse Kellogg’s (K) Frosted Flakes. You know frosted as in sugar; sugar as in baaaaaad. “I would not consider Frosted Flakes the food of an Olympian ” Rebecca Solomon a nutritionist at Mount Sinai Medical Center told the New York Daily News. “I would rather see him promoting Fiber One. I would rather see him promoting oatmeal. I would even rather see him promoting Cheerios.” She’s missing an obvious point: The food of an Olympian is money. Phelps 23 won a record 8 ... http://www.minyanville.com/articles/index.php?a=18607 Thu, 21 Aug 2008 10:00:00 EST