Upgrades

MWDV – MeadWestvaco upgraded to Market Perform from Underperform at BMO Capital

MS – Morgan Stanley upgraded to Buy from Hold at Collins Stewart

ALLT – Allot Comms initiated with a Buy at BofA/Merrill

MAC – Macerich upgraded to Buy from Neutral at Goldman

WMT – Wal-Mart upgraded to Overweight from Neutral at JP Morgan

DB – Deutsche Bank upgraded to Overweight from Neutral at HSBC

ARRS – Arris target raised to $13 at Kaufman Bros

VECO – Veeco Instruments upgraded to Buy from Hold at ThinkEquity

HAYN – Haynes Intl upgraded to Overweight from Neutral at JP Morgan

NTAP – NetApp upgraded to Outperform from Sector Perform at FBN Securities

HIBB- Hibbett Sporting upgraded to Buy from Neutral at Sterne Agee

CLI – Mack-Cali Realty upgraded to Buy from Neutral at Goldman

KW – Kennedy Wilson initiated with a Buy at BofA/Merrill

RGLD – Royal Gold downgraded to Sector Perform from Outperform at RBC Capital

BYI – Bally Technologies upgraded to Buy from Hold at Deutsche Bank

SBH – Sally Beauty initiated with a Neutral at BofA/Merrill

HOS – Hornbeck Offshore initiated with an Outperform at Wells Fargo

REGN – Regeneron Pharms upgraded to Neutral from Underperform at BofA/Merrill

WDC – Western Digital upgraded to Overweight from Equal Weight at Barclays

HSY – Hershey Foods upgraded to Buy at Ticonderoga

IFF – Intl Flavors upgraded to Overweight from Neutral at JP Morgan

RBS – Royal Bank of Scotland upgraded to Buy at WestLB

SXCI – SXC Health Solutions upgraded to Outperform from Neutral at Cowen

FIRE – Sourcefire target raised to $39 at Stifel Nicolaus

AMAG – AMAG Pharma resumed with an Equal Weight at Morgan Stanley

NFX – Newfield Expl upgraded to Neutral from Underperform at BofA/Merrill

FLR – Fluor upgraded to Buy from Hold at BB&T

AMNB – Am Natl Bankshares initiated with a Market Perform at Keefe Bruyette

FES – Forbes Energy Services initiated with a Buy at Canaccord Genuity

Downgrades

POT – Ticonderoga cuts estimates

GGP – Gen Growth Prop downgraded to Neutral from Buy at Goldman

TX – Ternium S.A. downgraded to Neutral from Buy at Goldman

TGT – Target downgraded to Neutral from Overweight at JP Morgan

SPG – Simon Properties downgraded to Neutral from Buy at Goldman

VNO – Vornado Rlty Trust downgraded to Sell from Neutral at Goldman

VTR – Ventas downgraded to Sell from Neutral at Goldman

UGP – Ultrapar Participacoes initiated with a Buy at BofA/Merrill

RIMM – Research In Motion downgraded to Underperform from Market Perform at JMP Securities

WAG – Walgreens downgraded to Underweight from Overweight at Morgan Stanley

HCN – Health Care REIT downgraded to Sell from Neutral at Goldman

DEST – Destination Maternity downgraded to In Line from Outperform at Imperial Capital Research

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Gapping up

GEDU +98.9%,  BSDM +5.7%, INHX +25.8%, VRTX +6.8%, GPRE +3%,  REGN +6%, REGN +6.4%,

FSIN +1.3%, YGE +2.3%

Gapping down

BP -2.1%, CIM -1.5%, LVLT -1.4%, GLD -1%, TS -4.7%, MT -4.2%, RCL -4.1%, BBL -3.9%, BHP -3.5%,

LYG -7%, RIO -5.9%, FRO -5%, BCS -4.9%, DB -4.9%, HBC -3.2%, UBS -3.2%, SDRL -3.2%, SLV -3.2%,

BAC -3.1%, TOT -2.7%, C -2.6%,

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In Play 

 

On the Wires 

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Yesterday we mentioned the big spasm of “end of the world” analyst notes, as suddenly more and more people on Wall Street conclude that Europe is really going to blow it and collapse.

 

So, how to know if this is really going to come to pass?

In his note cheerily titled US and Europe: At the Point of No Return?, Nomura’s George Goncalves offers some clues.

Pessimistic Path: There are plenty of doomsday scenarios thus we won‟t list them all.  However if the worst case scenario were to unfold we believe that there would be some early warning signals from the money markets because the Fed liquidity from old QEs would dry up quickly for EU banks.  If we were to see 10s break 1.90 in a meaningful way, we would go neutral as the next stop would be 1.40%. Such a move could happen quickly on a panic trade.

In the pessimistic case, the Fed at a minimum would come in with an intra-meeting ease via QE3 and cutting FX line charges in half, especially if ECB started easing too, in our view.  Given the nonlinearity of market risks, we understand why investors are on the sidelines, but we also believe that rates won‟t stay at a new low if the worst case pans out because authorities will respond in force. In fact we now
believe the Fed will be proactive and do QE3 next year.  Good Luck.

The other thing is to just keep an eye on various measures of banks’ willingness to lend to each other. We went over several of them (like the TED Spread, LIBOR/OIS), the other day.

 

10s breaking 190

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DICK bove commentary

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Call of duty hits it out of the park

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All aboard….at your own risk of course.

 

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A really dire view point. 

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“The world didn’t learn its lesson from the recent financial collapse and is doomed to repeat a new downturn in the near future, says Mark Mobius, head of the $50 billion emerging markets unit at Templeton Asset Management.

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius says, according to Forbes Magazine.

Complex financial derivatives, especially credit default swaps tied to the housing sector, threw the country into the worst recession since the Great Depression, and are still out there — all $600 trillion of them — trading without proper oversight or care, Mobius says.”

Full article

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Upgrades

ARUN – Aruba Networks upgraded to Buy from Neutral at Janney Montgomery Scott

MOS – Mosaic initiated with a Buy at Lazard

PERY – Perry Ellis downgraded to Neutral from Buy at Suntrust

SPRD – Spreadtrum Comms initiated with an Outperform at Credit Suisse

NLY –  Annaly Capital Mgmt downgraded to Market Perform from Outperform at Keefe Bruyett

SJM – J.M. Smucker added to Focus List at JP Morgan

RCL – initiated with a Buy at Jefferies

AGU –  initiated with a Buy at Lazard

PANL – Universal Display initiated with a Buy at Goldman

CF – initiated with a Buy at Lazard

CREE – Cree initiated with a Buy at Goldman

POT –  initiated with a Buy at Lazard

EQY – Equity One upgraded to Buy from Hold at ISI Group

ERF – Enerplus Res Fd Trust initiated with an Underweight at Barclays

MASI – Masimo initiated with an Underperform at BofA/Merrill

HPQ – Hewlett-Packard upgraded to Buy from Neutral at Sterne Agee

SNN – Smith & Nephew initiated with a Buy at Societe Generale

BC – Brunswick initiated with a Market Perform at BMO Capital

JCI – Johnson Controls initiated with an Outperform at Macquarie

AMR – AMR upgraded to Hold at Dahlman Rose

BCSI – Blue Coat upgraded to Neutral from Sell at Miller Tabak

MSCC – Microsemi initiated with a Buy at Cantor Fitzgerald

BTE – Baytex Energy Trust initiated with an Overweight at Barclays

DXCM – Dexcom upgraded to Buy from Hold at Capstone

BCSI –  Blue Coat upgraded to Neutral at Sterne Agee

FLS – Flowserve initiated with an Outperform at Wedbush

TSU – TIM Participacoes initiated with an Outperform at Bernstein

XEL – Xcel Energy upgraded to Outperform from Neutral at Macquarie

CNX – CONSOL Energy initiated with a Buy at CRT Capital

RATE – Bankrate target raised to $24 from $21 at Stifel Nicolaus

VIV – Vivo Participacoes initiated with a Market Perform at Bernstein

MRTN – Marten Transport upgraded to Buy at Stifel Nicolaus

BCSI – Blue Coat target raised to $28 from $25 at Stifel Nicolaus

PEGA – Pegasystems initiated with a Buy at The Benchmark Company

F – Ford Motor remains Ticonderoga’s top pick in the auto sector

CTAS – Cintas upgraded to Buy from Neutral at Citigroup

Downgrades

XCO – Exco Resources downgraded to Hold at Stifel Nicolaus

DRI – Darden Restaurants downgraded to Equal Weight from Overweight at Morgan Stanley

SFD – Smithfield Foods upgraded to Outperform from Neutral at Credit Suisse

TDG – Transdigm Group downgraded to Neutral from Buy at BofA/Merrill

VECO – Veeco Instruments initiated with Neutral at Goldman

IPI – Intrepid Potash initiated with a Neutral at Lazard

ESE – Esco Tech downgraded to Hold from Buy at BB&T

CHSI –  Catalyst Health Solutions initiated with a Hold at Stifel Nicolaus

GRPN – Groupon initiated with a Neutral at Wedbush

ANR – initiated with Fair Value at CRT Capital

MTOR – Meritor downgraded to Hold at KeyBanc Capital Mkts

RBCN – Rubicon Tech initiated with a Sell at Goldman

ICE – IntercontinentalExchange downgraded to Underperform from Outperform at Credit Agricole

CYN – City National downgraded to Underperform from Neutral at BofA/Merrill

MRVL – Marvell downgraded to Hold from Buy at Craig Hallum

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Gapping up 

BCSI +20.6%, NLST +11.6%, MHGC +5.9%,  PEIX +9.3%, ARUN +5.6%, MENT +3.4%, BA +2.1%, MHGC +5.9%,

MRVL +3.2%, UBS +2.6%, DB +2.4%, HPQ +1.1%, E +2.8%, SDRL +1.9%, TOT +1.5%,  QCOR +0.8%, BP +0.4%,

BCS +1.1%, SSRI +2.3%, SLW +2.3%, SLV +2%,  GPS +1.3%, ATW +3.2%, GDX +1.3%,  CYBX +2.1%, GLD +1.1%,

Gapping down

CRM -7.2%, DLB -0.7%, HNZ -0.7%, OZM -3.3%, DLB -0.7%, XCO -12.5%, HNZ -0.7% , LEN -1.4%,

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In Play

 

On the Wires

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50/50 shot for debasement….what happens after that is a big question too.

Full article

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Full commentary

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I love the juice

[youtube://http://www.youtube.com/watch?v=aZdo6Hc-Fl8 450 300]

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A new rift in spreads has caused investors to avoid even the safest debt in Europe.

Full article

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More job losses for the world’s economy

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Reading and posting news for iBC has gotten me to read a bit more than i usually would. That is a good thing and I had some ideas I wanted to share with the interwebs.

My first controversial suggestion if to flat out cut all interest on money by 50%. It has been estimated that the cost of everything we buy has about 40% of the total price in interest. 

Usury is a very disgusting concept when you think about money as an instrument of trade. When you trade something for something there is no interest. It is simply an exact exchange. Money should also carry this philosophy as it is an element that we use to trade for something else.

As an example if your neighbor came for a cup of sugar; would you insist on getting a cup of sugar plus say another 1/4 cup for your neighborly generosity ? Granted sugar is not as important as money when considering a time element, but you get the point.

I do not want to kill the banks of their usury ways, but if they are going to use the tax payers money to write down toxic assets and to pay themselves bonuses while main street suffers a fucked up economy; well then they should thank us for saving their skin, not putting them in jail, and make life a bit easier for all the citizens that are essentially helping to save this economy.

This 50% cut in interest would make it easier for existing business to breathe during the economic malaise and allow for new business to start up.

If we could take 20%, half of that 40%, off the top of everything we buy..well then we would all have a bit more money to stimulate the economy. It would result in more consumption.

The second thing I want to suggest is how to fix the housing market. Prices will remain depressed until most of the foreclosure inventory is largely expelled from the market place.

There is much trouble over trying to rewrite existing mortgages that are under water. Since the banks, who have the tax payers money keeping them afloat, do not want to suffer losses on a underwater property; they should devote some of this free money they are getting to bridge the loss gap.

If the banks do not want to do this then uncle Sam should create its own bank to borrow money at 0.25% and perform their own version of QE. They would make the spread off a 30 year bond and like the banks would generate free cash flow.

This free cash flow, which is the taxpayers money to begin with, could be used to to right size all the under water properties and help to speed up the process of helping America to refinance their home. This would freeze or at least dramatically slowdown the foreclosure process and ultimately heal the housing market quicker than what is currently being projected.

The last idea I wanted to share is how to create jobs. First and foremost education is the key to this answer over the long term. Please watch the documentary Waiting for Superman on your NFLX account.

In the short term we should take some of the free cash flow and retool America. Corporations have increased the amount of jobs available, but we have not enough educated and qualified people to fill those jobs.

We have many citizens that have been out of work so long that they are no longer current and are passed over for consideration. Why not help some of these citizens develope new skills, and or provide education so they could  fill those jobs going to H1 Visas.

Sure we won’t fill those jobs right away, but at least we will get more people back into society as a producing citizen. I mean seriously how many citizens can work as a janitor or pizza maker ? There are only so many survival jobs out there. 

Lastly, we must find a way to improve how institutions graduate students.  Without limiting choice and the freedom of choice, we need to steer students towards those degrees that will be readily used in the real world.

My only suggestion to this would be to document the hardships of many lives that could have had better results if the right education was chosen. In a similar way of sending teens to a jail to show them why they do not want to end up there; perhaps we could make students better understand the consequences of their choices.

 

[youtube://http://www.youtube.com/watch?v=SybgWaQy7_c 450 300] [youtube://http://www.youtube.com/watch?v=nUTXb-ga1fo 450 300] [youtube://http://www.youtube.com/watch?v=wOaXTg3nAuY&feature=related 450 300]

 

 

 

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Steven Walsh, CIO of Western Asset, manager of $433 billion, said in a CNBC interview that he believes French bonds are a good value. He did, however, complain about the lack of liquidity of the bond market, something he hasn’t seen since 2008.

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