Buzz Bits: Dow, Nasdaq Move Higher
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Editor's Note: This is a small sample of the content available on the Buzz and Banter.
Bell Buzz - Todd Harrison - 3:49 PM
- Hey, it could be worse!
- I'm admittedly wary of deflation although I'm prolly still in the stagflation camp. Either way, I'm long some yellow metal and keep it tucked away for a rainy day. It's not a trade--it's an investment--but that investment could bear fruit, particularly if the dollar dandruff continues to flake.
- Are you ready for some Turkey? I am, although I'm gonna be doing the muted version of the holiday as I nurse myself back to health. Too much nasty airplane air tends to be health-unfriendly. Either way, I'll be in the saddle on Friday, which puts me in the minority at MVHQ. Yeah, the editorial team can't believe it either.
- With that--and it's admittedly not much--I'll wish you all a healthy and happy holiday. Be good to others and better to yourself as we give thanks for all we've got. May peace be with you.
Position in gold equities
LBO/Private Equity - John Succo - 11:53 AM
Kevin's comments on the new LBO/Private Equity is spot on. It all revolves around low interest rates and lax thinking on risk.
The difference with FCX/PD deal is the massive asset base that supports the debt being assumed. But imagine what would happen to the situation if copper prices dropped substantially?
In fact, this is an example of how it is all tied in to liquidity. Liquidity can come from only two sources: income or credit.
Traditionally, liquidity was generated over time as production created income, income is saved, and investment is made from this pool. Add in a little debt to get the ball rolling and the U.S. economy grew just fine. Someone somewhere then decided that normal business cycle where the market decided to tighten was obsolete. Our central bankers decided to take control and "smooth" out the liquidity cycle by creating credit from nothing when the market didn't want to.
Today we have a never ending cycle of credit and liquidity. When I argue with bulls I don't argue that stocks will go down, I argue that debt is not infinite and that each increase in stock prices are accompanied by an increase in debt. LBOs today are a perfect example of that.
A huge source of liquidity has been the re-levering of companies. They are issuing debt (corporate bonds and convertibles) at unprecedented terms and buying back there stock. This helps EPS per share and insiders sell their stock (massive insider selling is going on). The liquidity train will end when debt is too heavy to carry. That either happens when real rates go up or the debt gets too big.
Some of us do not think that day is far away.
Metal Health Day - Kevin Depew - 11:30 AM
Note the move today in gold and silver, with silver breaking through key resistance intra-day, hitting the 13.25 level earlier this morning. Gold (basis Dec. futures) will need to push above 638 to break an equivalent resistance level.
As well, watch the Amex Gold Bugs Index (HUI) here as it tests the near-term downtrend line. A move to 345 is a breakout. The level to watch in the PHLX Gold & Silver Index (XAU) is 144.
Copper started out strong as well. The 3.16 level was breached earlier before backing off. 3.08 is now support with continuation of this rally possible to as high as 3.30.
What you need to know... - Jon Doctor J Najarian - 8:12 AM
Dell (DELL) Earnings Bacchanalia! It was worth the wait, as the six day delay of the computer maker's earnings surprised everyone and signaled an end to the five quarter earnings decline. Bear Stearns was the first major house to upgrade, but there will be more my friends!
John Deere Green! When the ag equipment maker announced earnings the Street reaction was negative, but God help those that sold in the early hours of trading yesterday, as shares rose nearly $9 off the lows to explode to fresh 52-week highs! Wachovia upgraded as well.
Mobile Phone Sales Up 21.5% - According to Gartner, worldwide mobile phone sales were up nearly 22% to 251 million units in the third quarter. Gartner now expects the full year sales to be just shy of 1 billion units!
Brocade (BRCD) Steams Past Estimates - On revenue of $208.8 million, a 44% jump from a year ago, BRCD posted a profit of $20 million, or $0.07 per share, nearly 20 x the same quarter a year earlier! Both revenue and bottom line were ahead of Street estimates.
Position in DELL, BRCD
Position in gold equities
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