Category: Articles

A stunning announcement for owners of GRACO & Simplicity cribs

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) is announcing today a voluntary recall with Simplicity Inc., of Reading, Pa., of about 1 million cribs. The drop-side can detach from the crib, which can create a dangerous gap and lead to the entrapment and suffocation of infants. CPSC is aware of two deaths in Simplicity manufactured cribs with older style hardware, including a 9-month-old child and a 6-month-old child, where the drop-side was installed upside down. CPSC is also aware of seven infant entrapments and 55 incidents in these cribs.

CPSC is also investigating the death of a 1-year-old child in a Simplicity crib with newer style hardware, in which the drop-side was installed upside down. CPSC is warning parents and caregivers to check all Simplicity cribs to make sure the drop-side is installed right side up.

The drop-side failures result from both the hardware and crib design, which allow consumers to unintentionally install the drop-side upside down. This, in turn, can weaken the hardware and cause the drop-side to detach from the crib. When the drop-side detaches, it creates a gap in which infants can become entrapped.

CPSC is also aware of two incidents that occurred when the drop-side was correctly installed with older style hardware, though the upside down installation greatly increases the risk of failure.

The recalled Simplicity crib models include: Aspen 3 in 1, Aspen 4 in 1, Nursery-in-a-Box, Crib N Changer Combo, Chelsea and Pooh 4 in 1. The recall also involves the following Simplicity cribs that used the Graco logo: Aspen 3 in 1, Ultra 3 in 1, Ultra 4 in1, Ultra 5 in 1, Whitney and the Trio.

The recalled cribs have one of the following model numbers, which can be found on the envelope attached to the mattress support and on the label attached to the headboard: 4600, 4605, 4705, 5000, 8000, 8324, 8800, 8740, 8910, 8994, 8050, 8750, 8760, and 8996.

The cribs, which were made in China, were sold in department stores, children’s stores and mass merchandisers nationwide from January 1998 through May 2007 for between $100 and $300.

As an immediate precaution, consumers should check to see if the drop-side is installed right side up. To do this, check to see that the slightly rounded rail with the decorative groove is installed at the top and the plain rail is on the bottom. Next, consumers should make sure the drop-side is securely attached to the tracks in all four corners

Apple’s (APPL) CEO Steve Jobs has been subpoenaed to testify in a stock option backdating case brought by the SEC against Apple’s former general counsel Nancy Heinen. Mr. Jobs and his lawyers will no doubt brush this news aside as “old news”, but it is a perilous situation for him.

Jobs has danced around Apple’s backdating mess, despite it being determined that he helped select the dates. Defenders have said he is innocent because he “didn’t appreciate the accounting implications” of backdating. However, Apple’s former CFO, Fred Anderson has said that Jobs misled him about board actions on stock option grants. This means that one of Jobs’ former confidants is accusing him of lying on this issue. The company’s official investigation pardoned him only because of his mindset about what he did (surprise!!!). It was the old “I did it but did not know it was wrong” excuse. Hard to believe it but it worked.

The subpoena creates a minefield for Jobs. Even though he is only a witness and not a target, the SEC’s and Heinen’s lawyers are sure to ask him questions that will require him to revisit previous statements and this time it will be under sworn testimony. I am guessing that the tone of the conversation this time will be a bit more contentious than the Apple “investigation” was.

Since Apple’s defense of his conduct relies on the distinction between what he knew and thought, Jobs’ testimony will be dissected for any discrepancies related to prior statements and what Heinen’s lawyers believe to be the truth as told to them by their client.

The SEC is no doubt unhappy that a CEO was able to admit to backdating of options and still walk on the action. Does anyone think that this subpoena is not making them very happy to get more testimony from Jobs on the record?

Since Jobs is Apple and without him Apple is just another company, shareholders are going to want to keep close tabs on events here. It looks a bit to me like a set-up but, if Jobs is able to walk away from this unscathed, and he very well may, it will only serve to elevate his “God” like status in the cult that is Apple shareholders.

Either way, it will be interesting..

A Monsterous Cramer flip flop, No way, The Juice, A Tear Jerker

– First Jim Cramer says a 1/2 point cut would be disastrous in this video, then after the 1/2 point cut, says it is wonderful. He is rapidly becoming irrelevant and just a side show.

– This can never happen

– And I thought Micheal Vick was the dumbest person on earth

– If this does not bring a tear to your eyes, you have no soul.

I have read a whole lot on Wal-Mart’s (WMT) new ad campaign but until this morning had yet to see the ads. Personally, I thought they were perfect.

Before we start the conversation, you can view one of the ads here.

What Wal-Mart does with the ads is remind you what you can do with the money you save at their stores. Rather than the previous ad campaign that only told you they had “low prices” they are now saying “look at the fun things you can do with the money you save”. The images of a family vacation with the kids is sure to spur memories in people of their childhood and the desire to create similar memories with their kids.

It also is going to inspire people to want to save a little cash to enable them to do one or two more things on that vacation. Wal-Mart is telling us that if we shop there we can do just that.

What they have done is turned a logical ad campaign that said shop here because it “makes sense to save money” into an emotional one. Now the message is shop here so you can have “more fun and do more with your kids” with the money you save. I found myself smiling during the commercial and that is exactly what Wal-Mart needs. When it comes to money, emotion controls the overwhelming majority of peoples spending habits, not logic.

That is why this campaign will be a winner..

UPGRADES

Danaher DHR William Blair Mkt Perform » Outperform
Motorola MOT Cowen & Co Neutral » Outperform
Oceanfreight OCNF Oppenheimer Neutral » Buy
Nokia NOK Cowen & Co Neutral » Outperform
Audiocodes AUDC Cantor Fitzgerald Hold » Buy
General Mills GIS Credit Suisse Neutral » Outperform
Buckeye Partners BPL Deutsche Securities Hold » Buy

DOWNGRADES

Topps TOPP Wedbush Morgan Buy » Hold
FMC Tech FTI CapitalOne southcoast Buy » Hold
SY BANCORP SYBT FTN Midwest Buy » Neutral
BioCryst Pharm BCRX Caris & Company Above Average » Average
Signature Bank SBNY Oppenheimer Buy » Neutral
VASCO Data Security VDSI RBC Capital Mkts Sector Perform » Underperform
China Medical Tech CMED Brean Murray Buy » Hold
Analogic ALOG Brean Murray Buy » Hold
VeraSun Energy VSE Friedman Billings Outperform » Mkt Perform
Pacific Ethanol PEIX Friedman Billings Mkt Perform » Underperform
Aventine Renewable Energy AVR Friedman Billings Outperform » Underperform

FRIDAY’S PICKS

Jeff Macke recommended Activision (ATVI). Open $20.96

Guy Adami said Oracle (ORCL) is a raging buy. Open $21.04

Karen Finerman liked BEA Systems (BEAS). Open $13.54

Pete Najarian preferred Sohu.com (SOHU). Open $38.76

Thursday’s Picks

Jeff Macke liked Oracle (ORCL).Open $20.84 Close $21.04 Gain $.20

Karen Finerman recommended Limited Brands (LTD).Open $23.47 Close $22.33 Loss $1.14

Pete Najarian preferred Titanium Metals (TIE). Open $32.22 Close $33.54 Gain $1.32

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation weeks)

Guy Adami= 24-17 Gain $40.11
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 29-21 Gain $9.79
Pete Najarian= 17-15 Gain $23.79
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 9-5 Gain $3.25
Stacey Briere-Gilbert= 2-0 Gain $1.61

Iphlop?, Immature Parents, “Made in the USA”, Talking Bulls

– Here is a take on the iPhone that does an excellent job of raising many of the issues I have espoused here.

– If parents are too immature to deal with their differences, how can we expect children to be? Maturity unfortunately does not come with age.

– Save your kids life, buy “Made IN The USA” toys

– This is funny and very true

WOW, this quarter by Goldman (GS) has to go down as one of its most impressive quarters considering both the environment it operated under and the results of it’s peers.

With Morgan Stanley (MS), Lehman (LEH) and Bear Sterns (BSC) all posting lowered results, Goldman not only beat last years $3.26 but sprinted past it at $6.13 which is about a full $2 more than estimates.

Here is the breakdown:

* Investment Banking produced record quarterly net revenues of $2.15 billion, driven by results in Financial Advisory which were 64% higher than the previous record.
* Goldman Sachs ranked first in worldwide announced mergers and acquisitions for the calendar year-to-date.
* Fixed Income, Currency and Commodities (FICC) generated record quarterly net revenues of $4.89 billion, reflecting strength across most businesses.
* Equities generated record quarterly net revenues of $3.13 billion, including record commissions.
* Asset Management generated record management and other fees of $1.15 billion. Assets under management increased 27% from a year ago to a record $796 billion, with net inflows of $50 billion during the quarter.
* Securities Services achieved record quarterly net revenues of $762 million, reflecting continued strength in the prime brokerage business.

Lloyd C. Blankfein, Chairman and Chief Executive Officer said, “Given the difficult environment of the third quarter, many of our businesses were challenged,”.

Challenged? I would love to see what he considered an “easy” quarter. These results blew everyone away and with Goldman some $20 off it’s all time high and trading at a single digit PE ratio, expect a sharp run up in shares today.

In my earnings preview post I expected two key factors to enable Goldman to beat estimates, trading and international operation. Revenue in the trading and principal investments division soared 70% to $8.23 billion. The segment was led by its bond, currencies and commodities business, where net revenue climbed 71% to a record $4.89 billion amid “significantly” higher revenue in the currencies and interest-rate segments.

Did Goldman suffer mortgage write down like the other brokerage houses did? Sure, but unlike the others, these write downs “where more than offset by gains in short mortgage positions”. Duh…apparently they were the only ones who thought of this..

Much was mockingly said about Goldman and their reputation as being the “smartest guys in the room” after they injected $3 billion into one of their funds recently.

This quarter ought to make those same folks eat their words…

Just before T. Boone spoke on CNBC yesterday I made some comments on oil and was please to see he agreed.

He is still very bullish on oil noting that oil production is now 85 million barrels a day and there is a 88 million production goal for Q4, “so production is going up.” He also noted that as some fear oil could go to $100, but he doesn’t think that will happen this year and he thinks that would take a “cataclysmic” event.

He did say that in the very near term he thinks we should get a pullback here to maybe $78 a barrel but long term the trend is up as demand is up and production is flat. He said demand in second quarter of 2008 will fall, but he did not expect supply to increase. If the global economy stays “as robust” as it is now, he said $90 a barrel could be seen next year (10% higher than now). This essentially mirrors the sentiment I wrote about yesterday and does cement my decision to hold my USO position but to not expect much more out of in the short term.

One of his favorite stocks? Suncor (SU)

The interview can be seen here.

Tuesday’s Fed rate cut and explosion upward in both the Dow and S&P has been dissected already more than it really need to be. It all goes back to what Bernanke has been saying all long. Inflation was worry number one, when that was contained, the rest follows.

The inflation gauge, the consumer price index came out (CPI) and it fell for the second straight month after being essentially flat for the summer. Conclusion? Inflation, at least for now at 2% is in a comfortable zone for the Fed. since that has been accomplished, despite skyrocketing oil prices, Bernanke and Co. turned their attention to economic growth.

Now, has this information been release yesterday, the 1/2 point cut would have made much more sense and perhaps we could have avoided to 7,000 posts on it (here included). It did make for good reading though.

It is becoming more apparent with every move Bernanke does or does not make that he is going to lead the Fed is a relatively transparent manner. If growth slows and inflation remains high,rates do not move, if it growth slows and inflation falls, rate cut time. Simple. I think part of the problem is that people are still trying to view Bernanke through Greenspan’s Vaseline covered glasses that obscured everything people thought they understood in his proclamations. A more transparent Fed is a better this for us all, if for no other reason it will not be the dominant news story consistently. A relatively predictable Fed is far more desirable that one that keeps people guessing all the time. Greenspan enjoyed the mystery of the game, Bernanke seems to have no use for it. Good.

Bernanke really is making this simple for us, as soon as we just sit back and listen and stop trying to interpret.

UPGRADES

Pennsylvania Commerce Bancorp COBH Janney Mntgmy Scott Neutral » Buy
LandAmerica Fin LFG Ferris Baker Watts Neutral » Buy
Xenoport XNPT Punk, Ziegel & Co Accumulate » Buy
MFA Mortgage MFA Bear Stearns Peer Perform » Outperform
Robbins & Myers RBN Robert W. Baird Neutral » Outperform
Intersections INTX JMP Securities Mkt Outperform » Strong Buy
Plexus PLXS JP Morgan Neutral » Overweight
Webster Financial WBS Lehman Brothers Underweight » Equal-weight
Assoc Banc-Corp ASBC Lehman Brothers Underweight » Equal-weight
Pacific Capital Bancorp PCBC Lehman Brothers Underweight » Equal-weight
Ruby Tuesday RT JP Morgan Neutral » Overweight

DOWNGRADES

Micrus Endovascular MEND Punk, Ziegel & Co Buy » Mkt Perform
Suncor Energy SU CIBC Wrld Mkts Sector Outperform » Sector Perform
Blue Nile NILE William Blair Outperform » Mkt Perform
Alnylam Pharmaceuticals ALNY Caris & Company Above Average » Average
Zions Bancorp ZION Sun Trust Rbsn Humphrey Buy » Neutral
Furniture Brands FBN Morgan Keegan Mkt Perform » Underperform
Hancock Holding HBHC Stifel Nicolaus Buy » Hold
Silicom Limited SILC WR Hambrecht Buy » Hold
Vonage VG Soleil Hold » Sell
Tongjitang Chinese Medic TCM Brean Murray Buy » Hold
Coca-Cola Ent CCE Deutsche Securities Buy » Hold
Illumina ILMN GARP Research Buy » Neutral
Benchmark Elec BHE JP Morgan Overweight » Neutral
SVB Financial Group SIVB Lehman Brothers Equal-weight » Underweight
Texas Capital TCBI Lehman Brothers Overweight » Equal-weight
Cullen/Frost Bnkrs CFR Lehman Brothers Overweight » Equal-weight
CheckFree CKFR Citigroup Buy » Hold
XM Satellite XMSR UBS Buy » Neutral
Sirius Satellite SIRI UBS Buy » Neutral