Category: Articles

Wachovia (WB) insiders are buying shares in their bank by the truck load.

After chronicling the latest purchases on November 20th, Wachovia director John Baker decided to part with $558,000 of his own cash to buy more shares.

This latest activity brings the total purchases from insiders since the “banking crisis” began to near $7 million. It also happens to be the most shares bought by insiders at a financial institution during that time frame.

Good news? Sure. Does it mean the stock is destined to turn around and begin an ascent tomorrow? No. It does mean that those folks with intimate knowledge of the firm operations are in a hurry to get shares faster than their employee stock plans will provide them. That is very good.

If you are a long term holder getting in bed with insiders buying shares is rarely a bad idea, especially when the buying is this heavy.

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I was thinking about getting a new blackberry from Research in Motion (RIMM) for my birthday next year and just in time, a neat little device is being planned.

From Unstrung:
The 9000-series is described by Carmi Levy, an analyst at AR Communications Inc. , as “the future of the BlackBerry franchise,” a complete breakaway from the device’s business roots. Instead, the new series targets the consumer space served by the Pearl and Curve models.

“The 9000 is supposed to be a touch-screen device, very similar in form factor to the iPhone,” Levy says. “Which means that it is not an enterprise-friendly device.”

The 9000 series will break from the traditional half-screen, half-keyboard look of the BlackBerry. The handsets will also incorporate an upgraded multimedia system, along with the standard push email capabilities. Better MP3 and video capabilities are crucial if RIM is to take on Apple, Google, and others.

Levy speculates that RIM will introduce the 9000-series in the first quarter of next year. “They were originally shooting for the second half of 2007,” he notes.

The touch-screen devices, however, won’t mean the end of the line for the 8000 series, because businesses will still need devices with proper QWERTY keyboards. “There will be incremental updates. They won’t disappear,” Levy says.

Among the updates will be “a Curve with WiFi,” according to Levy. These devices may have other updates like GPS location tracking and higher resolution onboard cameras as well

I have toyed with folk’s iPhone from Apple (APPL) but just disdain At&T (T) slightly more than my carrier Sprint(S) so that rules out Mr. Jobs’ (had he not tried to screw every penny out of the device he would have sold millions more of them). Since I am pretty sure the price of my leaving them would be a child, I am going to stay with Sprint for now. That and their network is leap and bounds better than the “T’s” is.

I am very intrigued by this phone and cannot wait to see and try it. A new phone is in the cards for the bday and this just might fit the bill.

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Southern Union (SUG)= 50%
Hormel Foods (HRL)= 23%
American Express (AXP)= 20%
Becton Dickinson (BDX)= 16%
Mattel (MAT)= 15%
Whole Foods (WFMI)= 11%

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UPGRADES
US BioEnergy USBE Soleil Sell » Hold
TIBCO Software TIBX Bear Stearns Underperform » Peer Perform
PetroChina PTR Bear Stearns Underperform » Peer Perform
Omega Health OHI UBS Sell » Neutral
Anglo American AAUK HSBC Securities Neutral » Overweight
CNOOC Ltd CEO Citigroup Hold » Buy

DOWNGRADES
Hecla Mining HL CIBC Wrld Mkts Sector Perform » Sector Underperform

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Sears, Oprah, , Hysteria, Verizon

– Chad Brand has a great piece on Sears

– TV in a fridge, an attempt to get more men in the kitchen?

– Felix Salmon has a notable piece on those who push hysteria.

– Another reason to hate Verizon.

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Jane Genova has this tidbit from an attorney on the Rhode Island Supreme Court on Sherwin Williams (SHW) litigation.

The last paragraph is the most interesting:
“Our Midwest attorney lead-paint watcher who doesn’t encourage the third gen in the family to enter law differs with my take on the Rhode Island Supreme Court. This attorney opines, off the record:

“I respectfully disagree with your perception that the Rhode Island Supreme Court will not overturn the lower court’s decision. There are so issues which are under appeal. Surely, the Rhode Island Supreme Court will sense that it’s called upon to address and correct some of what might have been errors from the original trial. At the top of that list are the instructions which were given to the jury.

“As I see it, it would be best for Rhode Island if the Supreme Court there corrects all or at least most of all that. Therefore, the damage of those rulings could be fixed in the eyes of those who reside outside of the state.

“If this winds up going to the U.S. Federal Court, it will take decades for Rhode Island to re-brand itself. That will only occur with a complete political overhaul. In addition, if this goes to the U.S. Supreme Court, it will be a major embarrassment for Motley Rice, the lower court and even the Rhode Island Supreme Court. Due process was never afforded to the defendants and legal interpretations were of one man’s mind.

“Furthermore, I am not sure if everyone realizes that if nothing is overturned and if all goes forward, each property to be abated is technically a separate trial. Plus, the defendant bar is in a position to use the dysfunctional rulings used against them to sue each local city and landlord for contributing to the public nuisance. That is the strange thing: Rhode Island can collect their money as does Motley Rice and then each city can be sued for not enforcing laws already in the books. These cities have fewer resources and have a great chance of losing and/or depleting their resources fighting each case.”

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The recent Fed meeting minuted were released today and for those counting on another rate cut in 3 weeks, you might want to rethink that.

From the Meeting:
“In their discussion of individual sectors of the econ-omy, participants noted that the recent declines in housing activity—while substantial—had largely been anticipated. Nonetheless, the potential for significant further weakening in housing activity and home prices represented a downside risk to the economic outlook. Most participants pointed to the deterioration in non-prime mortgage markets as well as higher interest rates and tighter credit standards for prime nonconforming mortgages as factors that had exacerbated the deterio-ration in housing markets, and they noted that these developments could further limit the availability of mortgage credit and depress the demand for housing.

Some participants also pointed to downside risks to the housing market stemming from the large volume of substantial upward interest-rate resets that were likely on subprime mortgages in coming quarters, which could lead to a faster pace of foreclosures in the near term, thereby intensifying the downward pressure on house prices. Participants generally agreed that the available data suggested that consumer spending had been well main-tained over the past several months and that spillovers from the strains in the housing market had apparently been quite limited to date. Nevertheless, a number of participants cited notable declines in survey measures of consumer confidence since the onset of financial turbulence in mid-summer, along with sharply higher oil prices, declines in house prices, and tighter under-writing standards for home equity loans and some types of consumer loans, as factors likely to restrain con-sumer spending going forward.

Moreover, anecdotal reports by business contacts suggested a softening in retail sales in some regions of the country. Participants expressed a concern that larger-than-expected declines in house prices could further sap consumer confidence as well as net worth, causing a pullback in consumer spending. All told, however, participants envisioned that the most likely scenario was for consumer spend-ing to continue to advance at a moderate rate in com-ing quarters, supported by the generally strong labor market and further gains in real personal income. Meeting participants noted that capital expenditures had grown at a solid pace in recent months and that the financial turmoil generally appeared to have had a limited effect on business capital spending plans to date. Nevertheless, business sentiment appeared to have eroded somewhat amid heightened economic and financial uncertainty, potentially restraining investment outlays in some industries.

However, participants noted that conditions in corporate bond markets had improved since the September FOMC meeting, and that credit availability generally appeared to be ample, albeit on somewhat tighter terms. Participants judged that moderate growth of investment outlays going for-ward was the most likely outcome. A number of par-ticipants saw downside risk to the outlook for nonresidential building activity, reflecting elevated spreads on commercial-mortgage-backed securities and a further tightening of banks’ lending standards for commercial real estate loans.

Data on economic growth outside the United States indicated that the global expansion, though likely to slow somewhat in coming quarters, was nevertheless on a firm footing. The continued strength of global growth and the recent decline in the foreign exchange value of the dollar were seen as likely to support U.S. exports going forward. Readings on core inflation received during the inter-meeting period continued to be generally favorable, and meeting participants agreed that the recent moderation in core inflation would likely be sustained.

The slower pace of economic expansion anticipated for the next few quarters would help ease inflationary pressures. Nonetheless, participants expressed concern about the upside risks to the outlook for inflation. The recent increases in the prices of energy and other commodities, along with the significant decline in the foreign exchange value of the dollar, were cited as factors that could exert upward pressure on prices of some core goods and services in the near term. Increases in unit labor costs also could add to inflationary pressures.

Moreover, participants expressed concern that some measures of inflation compensation calculated from TIPS securities had risen this year, although they viewed inflation expectations generally as remaining contained. Participants were concerned that if headline inflation remained above core measures for a sustained period, then longer-term inflation expectations could move higher, a development that could lead to greater inflation pressures over the longer term and be costly to reverse.”

Energy prices have to eventually find their way into the CPI number and when they do, any chance of a rate cut is zero. What the Fed may choose to do instead rather than have their hands tied when that eventually happens is keep rates where they are now to force a mild slowdown and let that take the pressure off oil demand and thus its impact on consumers. This then leaves them the flexibility they want down the road should growth slow dramatically to cut rates to spur it.

Bank stocks like Citigroup (C), Bank of America (BAC), Wachovia (WB) and Wells Fargo (WFC) may get hit again on the news but they are all in fine shape and any additional selling will be a great chance to pick up more cheap.

The only way I see another rate cut in December is if there is another dramatic shock to the system. Barring that count on the status quo..

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Friday’s Picks

No Picks

Wednesday’s Results
Jeff Macke recommended buying Microsoft (MSFT). Open $34.58 Close $34.23 LOSS

Guy Adami preferred Freeport McMorRan (FCX).Open $91.85 Close $90.06 LOSS

Karen Finerman said to short iShares Dow Jones US Real Estate ETF (IYR).Open $67.05 Close $66.55 GAIN

Pete Najarian is buying Pulte Homes (PHM) Open $10.60 Close $9.25 LOSS

Records: Since 6/21/2007

Guy Adami= 46-40 = 60%
John Najarian= 13-4 = 76%
Jeff Macke= 53-35 = 62%
Pete Najarian= 35-36 = 48%
Tim Seymore= 5-5 = 50%
Karen Finerman= 29-21 = 59%
Stacey Briere-Gilbert= 3-0 = 100
Ned Riley= 1-0 = 100%
Carter Worth= 0-1 = 0%

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