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From Briefing.com
Periodicals Wrap-Up for Tuesday, September 16th
WALL STREET JOURNAL: Deutsche Telekom’s (DT) T-Mobile USA will next month begin selling s Google (GOOG) powered smart phone called the “Dream,” the Wall Street Journal reported, and it is designed to directly compete against Apple’s (AAPL) iPhone and Blackberry’s made by Research in Motion (RIMM). Pricing has not been released…Before Bank of America (BAC) there was Goldman Sachs (GS), according to the Wall Street Journal’s tale of how Merrill Lynch (MER) first sought a minority investment of less than 10% by Goldman before falling to the Bank of America…NEW YORK TIMES: There is another potential failure lurking in the form of insurance giant American International Group (AIG), which the New York Times said poses a bigger threat to the financial system than Lehman Brothers (LEH) ever did because it plays a key role in several markets including mortgages, corporate loans and credit derivatives. Additionally, there is a “substantial possibility” AIG will be forced into liquidation if it is unable to meet its obligations, which some feel would be “as close to an extinction-level event” since the Great Depression…FORBES: Franco Bernabe, the CEO of Telecom Italia (TI), is expected to propose the spin-off of the company’s fixed line network and sell off stakes in the spun off business to institutional investors. Citing La Repubblica, Forbes said the move is likely to be opposed by Telefonica (TEF), its largest shareholder…
Asian Markets Wrap-Up for Tuesday, September 16
Asian stocks fell sharply. The decline was triggered by Lehman’s (LEH) bankruptcy and the problems plaguing AIG (AIG). JAPAN: The Nikkei 225 sank 4.95% to 11,609.72. Aozra Bank (AOZOF) plummeted 16%, after it was revealed that the bank is Lehman’s largest creditor. Shinsei Bank (SKLKY), another Lehman creditor, also fell 16%. Insurer Tokio Marine (TKOMY) fell 13%, and T&D Holdings, another insurer, sank 6.3%. Energy company Inpex dropped 11%. AUSTRALIA: The S&P/ASX 200 Index lost 1.4% to 4,750.80. Infrastructure company Babcock & Brown plunged 34% on concerns that it can’t pay its debt. National Australia Bank (NABZY) declined 4%, while Australia & New Zealand Banking Group slipped 3%. Woodside Petroleum (WOPEY) dropped 3.2%. AROUND ASIA: China’s CSI 300 sank 3.72%, while Taiwan’s Taiex slumped 4.89% and Hong Kong’s Hang Seng tumbled 5.44%…Japan’s central bank injected $24B into the country’s financial system, while Australia’s central bank pumped $1.5B into that nation’s system.
Merrill first hoped for a Goldman Sachs investment-WSJ
Before Bank of America (BAC) there was Goldman Sachs (GS), according to the Wall Street Journal’s tale of how Merrill Lynch (MER) first sought a minority investment of less than 10% by Goldman before falling to the Bank of America. And while Merrill CEO John Thain was once Goldman’s president and Goldman was interested in Merrill’s wealth management business, in the end Merill’s hopes to remain independent failed as Lehman Brothers (LEH) went bankrupt. Also, Merrill’s talks with Morgan Stanley (MS) quickly died.
AIG’s future hinges on immediate restructuring plan-WSJ
Even though New York State has made $20B available and there may be a $75B lending facility from J.P. Morgan (JPM) and Goldman Sachs (GS), for AIG (AIG) that won’t be enough, reports the Wall Street Journal. As its losses mount, the company has yet to seize upon the urgent need for a restructuring plan. Its delays will also mean that they’ll have to take less for businesses that it will sell. Still, that’s better than the alternative.
New York Fed ’stands ready’ for further operations today-Bloomberg
Fed to conduct large liquidity injection this morning-CNBC
New York Fed to arrange ‘large’ overnight repo ’shortly’-Bloomberg
Goldman Sachs-GS reports Q3 EPS $1.81 vs. consensus of $1.71
Reports Q3 revenue $6.04B vs. consensus of $6.23B.
American Int’l-AIG: NY Gov. Paterson believes AIG has a day-CNBC
New Governor Paterson believes AIG has a “day” to get a deal done.
Apple-AAPL: Removed from Conviction Buy List at Goldman
The shares are down (-1.1%) in the early pre-market following the removal of the shares from Goldman’s Conviction Buy List. The firm maintained a Buy on the name. There is a bearish cup and handle pattern in progress on the daily chart that has downside potential to the $120 area. The stock appears to have double-topped on a weekly basis. A key level to watch is the 100-week moving average which is a loose-fit proxy for the long-term uptrend line. That moving average was last at $135.51. A breakdown below this uptrend proxy would break the five-year uptrend.
FDA PDUFA Date for Gilead Sciences NDA for Inhaled Aztreonam Lysine on 9/16
CME Group-CME: Stock is probably best performer in current environment@WCHV
Wachovia believes the stock is protected by its $5 special dividend, and the firm notes that CME’s volumes are up 18% year-over-year so far this month. The firm maintained their Outperform rating.
Failure of AIG would cause major damage, columnist writes-NY Times
The collapse of AIG (AIG) would cause much larger problems than Lehman’s (LEH) bankruptcy has created, according to Michael Lewitt, the president of a money management firm and a former Drexel Burnham employee. In the wake of the ratings agencies’ downgrade of AIG, there is a good chance that the insurer will have to liquidate itself, triggering the greatest market disruption and damage since the Great Depression, according to Lewitt.
Jim Cramer’s “Mad Money”
Cramer said, the fall of Lehman Brothers (LEH), Merrill Lynch (MER) and American Int’l Group (AIG) demonstrated once again the need for market “transparency” and the evils of CEO “arrogance and denial.” Cramer singled out Richard Fuld, Lehman’s CEO, who, he said, passed up opportunity after opportunity to save his company. Cramer removed Fuld from his Wall of Shame, because he “drove his company to bankruptcy.” By contrast, Cramer had kinder words for John Thain, Merill Lynch’s CEO. He said Thain did the most he could for his company, which has agreed to be purchased by Bank of America (BAC). Cramer said he had urged AIG to take action but said his advice fell on deaf ears. Cramer called Monday’s historic market collapse “a disgraceful period in laissez-faire capitalism” that was marked by poor government oversight. Cramer welcomed Wachovia (WB) CEO Robert Steel to the show. Steel said, “We’re working through this, and we’re making progress.” But he stressed that going forward will take greater transparency, which will generate confidence in the assets that are being bought and sold. Also, the system needs enough capital, he said. Steel said he thought the Fed was doing a “good job” of trying to provide liquidity and working with banks to provide capital. Wachovia is working to understand the issues and working on its balance sheet. Steel said the company is raising more capital themselves, cutting the balance sheet, cutting the dividend, and cutting other costs. Steel also said any rate cuts by the Fed would help keep people in their homes, and that $10B of his company’s $500B loan portfolio was “problematic.” When asked if it was his goal to simply prepare Wachovia to be sold to somebody else, Steel said “we’re going to do what’s right for shareholders,” but he was focusing on getting the business back on track. MAD MAIL: Cramer thinks Under Armour (UA) is overvalued and Nike (NKE) is undervalued. Cramer also said there was not going to be a bottom in financials until the mess in American Int’l Group (AIG) and other names is settled. LIGHTNING ROUND: (Bullish) UN; TRN. (Bearish) V; GOOG; FSTR.
Fast Money position recap- Guy likes JNJ, Joe likes long AA, Pete likes LOW, Jeff doesn’t like anything…
Macke Owns (WMT), (TTWO), (MSFT); Adami Owns (AGU), (BTU), (C), (GS), (MSFT), (INTC),( NUE); Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (AMGN) Call Spread; Najarian Owns (MS) And (MS) Collar; Najarian Owns Owns (NOK) And Is Short (NOK) Call; Najarian Owns (RIMM) Call Spread; Najarian Owns (TSO) Call Spread; Najarian Owns (WB) Puts; Najarian Owns (XLF) And (XLF) Collar; Terranova Owns (NOV), (X), (POT), (FCX), (EOG), (AAPL), (GS), (KOL), (VLO), (SA); Terranova Owns (AIG) Puts And Owns (AIG).
Ok that was horrible and it looks to get worse. LEH,BAC,MER,%5EDJI,%5EGSPC,XLF">Nouriel Roubini says there will be no stand alone investment banks after this debacle. Meaning GS and MS will be bought or go under sometime soon. This is the same guy who was dead on with the market problem and says we are headed for an S&P level of around 1000. The AIG problem if not solved will take us there in a hurry. AIG has one day and it would be akin to a Hail Mary Pass in football. Looking to profit and protect long positions and looking for scalps….Fed decision day today so it will be very eventful, see you in the trading room to share an abundance of ideas….
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