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Burlington Northern Santa Fe Corp. (NYSE: BNI) does not have a new shareholder. But Warren Buffet’s Berkshire Hathaway Inc. (NYSE: BRK-A) did increase the size of the stake held in Burlington Northern. In another unusual Buffett style move, this was not just a normal "let’s just buy some more of this one."
Daily Archives: December 15, 2008
Buffett Keeps Riding The Reading Railroad (BNI)
Who Ultimately Bails Out U.S. Government?
The Treasury Department and the Office of Management and Budget has now released the Fiscal Year 2008 Financial Report of the United States Government. As you’d guess, there are deficits, shortfalls, warnings, and maybe even old fashioned omens for what lies ahead whether the economic woes of today are solved or whether they go on.
The 52-Week Low Club (HUN)(NT)(EK)(RCRC)
Huntsman (HUN) Merger deal falls apart. Drops to $2.82 from 52-week high of $25.74.
Nortel Networks (NT) As company fights debt problems, Moody’s lowers earnings. Sells down to $.32 from 52-week high of $16.17.
Eastman Kodak (EK) After saying business was weakening, Moody’s may downgrade shares. Dips to $5.97 from 52-week high of $22.74
RC2 (RCRC) Stock upgraded, shares drop to $5.65 from 52-week high of $29.79.
Douglas A. McIntyre
What If Goldman Sachs & Morgan Stanley Actually Make Money? (GS, MS)
This is a very important week for earnings from brokerage firms (or the new bank holding companies). Tomorrow morning we have earnings from Goldman Sachs Group (NYSE: GS) and on Wednesday morning we have earnings from Morgan Stanley (NYSE: MS). Because of the new deleveraged climate, almost everyone on Wall Street is expecting these firms to lose money. This is starting to seem like more of a stretch in today’s markets and today’s economy, but what if these companies somehow manage to actually post profits?
AirShares: The New Carbon ETF, Sort Of (ASO)
There is a new ETF in town, or at least a vehicle that is like an ETF, and this one tracks carbon allowances. AirShares™ EU Carbon Allowances Fund (NYSE Arca: ASO) began trading on the NYSE today. It was launched by XShares Advisors LLC, and this is the first US-traded product that can give exposure to the carbon market by holding European Union Allowances (EUAs) futures contracts.
Technically, a commodity pool and not an ETF. AirShares seeks to provide results similar to the performance of a basket of four carbon credit futures contracts expiring December 2009 to 2012. These carbon credits are certified by the European Union, issued by the European Union Emissions Trading Scheme (EU ETS), and allow the holder to emit one metric ton of CO2.
Homebuilders In Need Of Psychadelics
The news from the homebuilders isn’t looking any better. The NAHB sentiment survey in December came in matching the level of 9.0 in November. The association sees no improvement in the terms of sales or conditions from the month before. Some sectors have continued to get worse.
A Little Good News for Chesapeake Energy (CHK, RRC, SWN, DVN)
In a bit of good news this morning for Chesapeake Energy Corporation (NYSE:CHK), the Deutsche Bank analyst who downgraded Range Resources Corporation (NYSE:RRC), Southwestern Energy Company (NYSE:SWN), and Devon Energy Corporation (NYSE:DVN) maintained Chesapeake as one of four energy companies it still rates as a ‘buy’. As a little thank-you, Chesapeake announced its fourth-quarter dividend this morning.
CNX Gas Reports Large New Well (CXG)
CNX Gas Corporation (NYSE:CXG) reported this morning that it is producing 6.5 million cubic feet of natural gas production from a well in the Marcellus Shale. The well represents CNX’s highest daily production rate of any well in the company’s history.
Facebook Is Dead
Putting advertising on social network websites like Facebook or News Corp (NWS) MySpace has never made sense. They claim to have tens of millions of "members", "users", "friends". Some of those people are doing dark and deeply disturbing things online. Others are looking for a date or communicating with other agoraphobics.
The whole idea of building a social network is a bit of a fraud. The sites actually "suggest" new friends for you, people like Jim Cramer and the recently deceased pin-up girl turned crazy old woman Betty Page. For a lot of the visitors who have no friends, it may actually be a useful service.
Typical Facebook user posts pictures of themselves in their underwear, their kids, their pets–especially exotic birds. The site has become a rabbit warren of the perverse, the sociopaths, and the lonely–all people who would rather communicate in a semi-anonymous online world instead of face-to-face.
Schwab (SCHW): More Bad News For Citigroup (C)
Schwab (SCHW) said that trades by its customers dropped 18% from October to November falling to "408.0 thousand", as the firm likes to put it.
The market still seems volatile. All that moving around in stocks during October seems to have helped Schwab customer trading volumes. Perhaps November actually was more tranquil, or a lot of Schwab customers lost all their money and dropped out of the market completely.
Energy Company Downgrades Hit E&P Companies (RRC, SWN, DVN)
News from the energy patch just keeps getting worse. Global consumption is down, consumer prices are down, and just about every company is reducing spending on exploration and production. This morning a Deutsche Bank analyst rubbed a little more salt into the wounds, cutting Range Resources Corp. (NYSE:RRC), Southwestern Energy Co. (NYSE:SWN), and Devon Energy Corporation (NYSE:DVN). These were formal ratings downgrades where the companies were cut from ‘buy’ to ‘hold’.
Hedge Fund Business Gets Worse, Nice While It Lasted
The number of hedge funds topped 10,000 earlier this year. Watch for about 3,000 of those to be gone soon.
According to Bloomberg, "Almost a third of hedge funds will shut or merge after the $1.5 trillion industry posted its worst ever performance this year."
That may be bad for hedge funds, but it is worse for the broader market.
Day Trader Alert: Biogen Idec & Another PML Case (BIIB, ELN)
Biogen Idec Inc. (NASDAQ: BIIB) just came out with an SEC filing showing that on December 11, 2008, regulatory agencies were notified of a confirmed case of progressive multifocal leukoencephalopathy. In other words, it found another PML case in a multiple sclerosis patient treated with TYSABRI. This is also affecting shares of its partner Elan Corp. plc (NYSE: ELN).
Goldman Sachs Cores Apple (AAPL)
Many investors and traders alike have been hoping that Apple Inc. (NASDAQ: AAPL) would be largely immune or at least a little shielded from the horrible consumer trends. It looks like Goldman Sachs is now joining the ranks of analysts who believe this is not the real case.
Economic Policy And The Bush Era
By John Tamny RealClearMarkets
Economist Charles Kadlec has long pointed out that bull markets and strong economic eras don’t die of old age, but due to legislative failure. Economics textbooks for decades have suggested that economies are merely cyclical, but this conventional wisdom was turned on its head during the 20-year period bookended by the Reagan and Clinton presidencies.
While there’s perhaps a little bit of economic mythology surrounding Ronald Reagan’s presidency, he got the important policies right. Put simply, work that is penalized less alongside non-inflationary money values leads to all manner of economic activity.
Read more…
Pali Research Slaps Sell Rating On Baidu.com (BIDU)
Pali Research slapped a dreaded Sell rating on Baidu.com (BIDU), saying short-to-mid-term uncertainties are much bigger than opportunities. The firm set a $90 price target on Baidu.com, which is 21% below Friday’s close of $114.
Analysts at Pali said Baidu.com’s business model has become very controversial and been challenged by advertisers, internet users and lawyers. They think the controversial situation is highly likely to lead to the birth of new regulations defining rules and standards for the search market in China. The analysts said new regulations would be negative to Baidu.
No Help Yet in Manufacturing
Manufacturing in the NY FED district appears to be running at near-record lows. The Federal Reserve Bank of New York’s Empire Manufacturing Index is still a fairly new index, but activity fell again down 0.3 to -25.76 in December over November.
$2 Trillion In Home Value Gone In A Year
One year. $2 trillion gone. According to Reuters, "Homes in the United States have lost trillions of dollars in value during 2008, with nearly 11.7 million American households now owing more on their mortgage than their homes are worth, real estate website Zillow.com said."
A homeowner with a mortgage which is underwater is more likely than someone who still has equity to default or go through a foreclosure.
Jet Fuel Price Drop Gives Airlines Some Room? No (AMR)(DAL)(UAUA)
Jet fuel prices dropped in November as did passenger traffic. Just this last summer, people were flying but the cost of fuel was pushing big carriers toward bankruptcy.
Fuel prices were such an issue that AMR (AMR) dropped to $4 from a 52-week high of $17.25. Delta (DAL) and United (UAUA) has similar drops. AMR has rebounded to $9.50.
Top Pre-Market Analyst Upgrades (MO, BBY, CFL, CEPH, GILD, LMT, TNDM, NOC, TLAB, MTN)
These are the top pre-market upgrades and positive analyst calls we have seen from Wall Street this Monday morning:
- Altria (NYSE: MO) Raised to Overweight at JPMorgan.
- Best Buy (NYSE: BBY) Raised to Buy at Piper Jaffray.
- Brink’s Home Security (NYSE: CFL) Started as Outperform at Oppenheimer.
- Cephalon (NASDAQ: CEPH) Started as Buy at Goldman Sachs.
- Gilead (NASDAQ: GILD) Started as Buy at Merriman Curhan Ford.
- Lockheed Martin (NYSE: LMT) Started as Buy at Societe Generale.
- Neutral Tandem (NASDAQ: TNDM) Raised to Outperform at Baird.
- Northrup Grumman (NYSE: NOC) Started as Buy at Societe Generale.
- Tellabs (NASDAQ: TLAB) Raised to Overweight at Barclays.
- Vail Resorts (NYSE: MTN) Raised to Outperform at Wachovia.
Jon C. Ogg
December 15, 2008
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Today’s top tickerspy Indexes Home Furnishing R... +14.1% Ethanol and Biofu... +5.1% Electronics Retai... +2.1% Diabetes Stocks +2.0% Memory Chip Stock... +2.0% 
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