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Wall Street Breakfast: Must-Know Newsby SA Editor Rachael Granby- Bank trio becomes duo. Wells Fargo (WFC) will become the largest U.S. bank by branches with its bid for Wachovia (WB), after Citigroup (C) withdrew from compromise negotiations late yesterday on concerns about the quality of some of Wachovia's assets. Wells Fargo, with a bid valued at $11.4B, expects the purchase to be completed by the end of the year, and denies it will have to absorb assets shakier than originally thought.
- Government considers next steps. As the financial crisis continues to worsen, the U.S. government is considering two dramatic steps to turn around, or at least slow, the damage: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits. The moves, which would mark the government's most extensive intervention to date, are in discussion stages only.
- Credit stays frozen. As frozen credit markets refuse to thaw, the cost of default protection on corporate bonds reaches new global records amid investor concerns the credit crisis will trigger corporate failures as companies struggle to finance their businesses. Interbank lending remains limited, and borrowing from the Fed's expanded discount window continued its trend of setting new highs every week, as the total daily average rose to $420.2B vs. $367.8B last week.
- Oil demand withers. The International Energy Agency warned Friday worldwide oil demand...
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Oil Price- Oil Below $75: Increased Chance of OPEC Production Cuts by Money Morning
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- Jim Cramer's Picks -SampleBetter Choices - Cramer's Lightning Round (10/15/08)by SA Editor Rachael GranbyStocks discussed in the lightning round session of Jim Cramers Mad Money TV program,
Wednesday, October 15.Bullish Calls:Continental Resources (CLR) -- "This is a remarkable decline. All of the high quality ones are down so much, I can't go against it. This is where you pull the trigger.
3M (MMM) -- The moment this stock starts yielding 5%, I'm a buyer. Until then, keep your powder dry.Bearish Calls:Computer Sciences (CSC) -- This is a company that was going to be bought, but they passed up the chance. Now I don't want to buy it."Email continues...
Annaly Mortgage (NLY) -- I think this is a business model that needs to borrow money. Definitively do not buy."
Northrop Grumman (NOC) -- You can't own the defense stocks right now. If I had to own one, I'd look at Lockheed Martin (LMT) with its good dividend. - Stocks & Sectors -SampleSeeking Alpha - Stocks & SectorsInternet
- eBay: Q3 Looks Good but Q4 Guidance Disappoints by Greg Feirman
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Media- A Triple Financial Whammy Afflicts Newspapers by Ken Doctor
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Telecom- Ten Ways to Invest in Louisiana by Stockerblog
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Financial- Switzerland Strengthens Its Banks; Short Interest Remains Low by Jessica Johnson
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- An Outcry from Emerging and Developed Markets Alike by Jonathan O'Shaughnessy
- USANA Health Sciences Inc. Q3 2008 Earnings Call Transcript
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India- Indian Economy Has Much to Cheer About by Equitymaster
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Japan- Sanyo Enters Thin-Film Market, Goes Up Against Sharp by Greentech Media
Asia- Four International Dividend Stocks to Watch by David Hunkar
Eastern Europe- Reality Bites As Stocks Continue To Collapse by The Mole
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- Seven Stocks for an Impending Apocalypse by H.J. Huneycutt
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- Too Early To Buy Homebuilders ETF by Larry MacDonald
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New ETFs- First Trust Launches Infrastructure ETF with Global Reach by Index Universe
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Emerging Market ETFs- Brazil Is the Best of BRIC by Carl T. Delfeld
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US Market- An Outcry from Emerging and Developed Markets Alike by Jonathan O'Shaughnessy
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Housing & Real Estate- Too Early To Buy Homebuilders ETF by Larry MacDonald
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Transcripts- TrueBlue, Inc. Q3 2008 Earnings Call Transcript
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ETF- Too Early To Buy Homebuilders ETF by Larry MacDonald
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Latest Comments11 Comments
A Quick Look at Henry Paulson
While at Goldman, Paulson made >70 trips to China, and it seemed to dovetail into his TNC work. In fact, Paulson was once co-Chair of TNC's Asia Pacific Council. And as Treasury Secretary, China has been a key element of Paulson's agenda, via the four "Strategic Economic Dialogues" held between the U.S. and China.
Therefore, his current work could very well be linked to China and his TNC past.
Understanding Sirius' History Of Converts May Ease the Pain
Financials Have Bottomed? Readers Say We're Nuts
Apple Sells One Million iPhones in Three Days
Apple Sells One Million iPhones in Three Days
Treasury Bailout of GSEs: Laissez-Faire In Serious Jeopardy
The Disastrous Future of the U.S.
Sirius-XM Combination: A Future Microsoft Acquisition?
More on Technical Analysis
Sirius Satellite Radio is Seriously Undervalued
Sirius Satellite Radio is Seriously Undervalued
Hey dolts, wake up: these companies are two years behind on the subscriber forecasts they gave the Street back in 2002, important because said forecasts were essential in order to justify the overwhelming debt load and burdensome opex structure each had deployed. On top of that, the fees that each are paying to offer the programming are so nosebleed-high that they're not generating any return on the investment. And when you have to give warrants, options, and shares to these programming sources in order to sustain the relationships, you're in deep trouble because it merely dilutes your earnings per share all the more. Geez, neither of these two companies is even operating cash flow positive, and you're investing in these companies? Are you that stupid?
The bottom line is that, no matter how much you love the service, XM and Sirius, combined, are roughly 5 to 7 million subscribers short of where they need to be to grow profitably. That's why the merger took place, duh? The combined entity will slash costs to the bone and pray that oil prices have peaked, because without new car sales, even the combined earnings model won't come to fruition. The simple truth is that there aren't enough subscribers to keep satellite radio going for very much longer.
If I were XM and Sirius, I'd plan to sell air time for ads just like every other radio station. They desperately need the extra revenue because, in this weakening economy, I can tell you that it makes no sense for subscribers to keep paying their satellite radio bill if they can't even afford to put gas in the car that's playing it. But that would kill the differentiation between satellite and terrestrial, you say? It's tough being a company that's struggling to survive. Now go sell your shares before you lose your shirts.