Tuesday, October 20, 2009

Tuesday Morning

US Stocks are slightly negative this morning, despite some better than expected earnings. Even the Nasdaq 100 (QQQQ) is struggling to hold gains, despite 14%-weighted Apple's enormous results last night, pushing that stock near all-time highs in early trading. Pfizer(PFE) and Caterpillar(CAT) also beat estimates and are trading higher. Coca-Cola (KO) missed earnings and is a drag on the Dow, as is UTX.

WSJ op-ed on the tragedy of Michigan's economy.
State lawmakers will soon face large budget deficits again, perhaps as much as $100 billion across the U.S. Here's some free budget-balancing advice: Steer clear of the Michigan model. The Wolverine state is once again set to run out of money, and it is once again poised to raise taxes even as jobs and businesses disappeared.

Worried about current policies, short-selling whiz David Einhorn is long gold.
he decided to invest in gold, even though futures hit a record price of $1,072 an ounce last week. Gold does well when "monetary and fiscal policies go awry," said the hedge-fund manager best known for shorting toppled investment bank Lehman Brothers. Specifically, Einhorn trashed the team's "too-big-to-fail" policy requiring taxpayers to prop up large, troubled institutions, like banks.

Not sure this is something to cheer, but Delaware court rulings may lead to more management-led buyouts.
One of the relics of 1980s deal-making was the large management buyout — such as the bid for RJR Nabisco — which has since seen its demise. But a recent decision in the Delaware Court of Chancery in the case of In Re John Q. Hammons Hotels, has the potential for bringing about a revival of this deal form.

After a massive insider trading bust, NYTimes examines the (sometimes) thin line between aggressive research and insider trading.
Some investment funds canvass doctors to scout out blockbuster drugs. Others pay meteorologists to forecast weather that will affect the price of oil and wheat. And still others hire corporate executives to provide an inside view of companies and industries. But now some of Wall Street’s biggest hedge funds are watching nervously as prosecutors say thatRaj Rajaratnam, a billionaire fund manager, went too far in this relentless quest for a trading edge.

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