This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

Pilgrim's Pride's home roots in the small town of Pittsburg, Texas, perhaps explain why it is the largest chicken producer in the U.S., even ahead of competitor Tyson Foods, Inc. (NYSE: TSN) in Arkansas. In 1946, Lonnie "Bo" Pilgrim dressed like a standard Pilgrim and tucked a small chicken under his arm when completing orders for customers. He gave away free chicks when he sold chicken feed as a way to expand his market for chicken feed. As of today, Pilgrim's Pride operates chicken processing plants in 13 states and Mexico and processes 44 million chickens per week, resulting in 9 billion pounds of chickens per year and over 528 million chicken eggs per year.

Pilgrim's Pride's operations are almost exclusively located in the U.S. close to its farms, and it has become the second-largest chicken supplier to Mexico as well. It does have processing plants in Mexico and Puerto Rico. Along with such huge chicken-producing numbers come a few problems, as a huge product recall in 2002 due to Lysteria contamination killed seven people and made over 40 customers sick. In 2004, more than 24,000 hens were destroyed after a strain of avian flu was found in Hopkins County, Texas.

Pilgrim's Pride is still based in the same location where it was founded over 60 years ago, but today stands as a completely vertically-integrated company: it owns every process and facility from egg to table, as it says. Wal-Mart Stores Inc. (NYSE: WMT), Publix Super Markets (OTC: PUSH) and KFC, a division of Yum! Brands (NYSE: YUM) ,can be counted as some of Pilgrim's Pride's largest customers.

Be sure to check out more Big Company, Small Town posts.

The United States is an enormous, diverse nation, and there's perhaps no better evidence of that than the U.S.'s current economic cycle.

The finances of many states have deteriorated to such a degree that they appear to be in recession, even though the nation as a whole may not be, a survey of 50 state fiscal directors concluded.

The states: budget deficits abound

The National Conference of State Legislatures' survey says that "arguing whether the national economy is in recession is almost beside the point" because the fiscal condition of some states has declined so much that they appear to be in a recession.

In all, 23 states, including hard-hit housing slump states Florida, California, and Nevada, expect to report budget deficits in the next fiscal year, fiscal 2009, with the aggregate revenue shortfall reaching $26 billion. Further, more than two-thirds of the states said they are concerned or pessimistic regarding their F2009 revenue outlook.

Historically, most states experience a decline in revenue as the U.S. economy contracts, as the economic slowdown results in lower retail sales, which lowers sales tax revenue -- a major source of revenue for many states. Job layoffs also decrease state income tax revenue. Further, state social service costs typically increase, as unemployment claims increase and applications for income/food/energy assistance rise.

Florida, California hard hit

Economist Peter Dawson told BloggingStocks Friday the NCSL data is in-line with the profile of this cycle's economic slowdown. "From the research we can see that the states under most stress are those that rank very high regarding mortgage default and housing foreclosure lists, with Florida and California being the most obvious examples," Dawson said. "These states are going to be under fiscal stress for a considerable period of time due to the size of their housing correction."

Moreover, Dawson said because of California's and Florida's size, "it will be very hard for the nation to grow at capacity until these states have started to grow." Hence, a return to robust economic conditions nationally, "could be a year to 18 months off, assuming growth resumes nationally by late 2008," he said.

Tuesday's primary victories in Ohio, Texas and Rhode Island gave Sen. Hillary Clinton, D-New York, about all her campaign could hope for: solid performances and a chance to close the delegate gap in the next primary, in Pennsylvania on April 22.

Still, the delegate math remains rough for the candidate seeking to become the first woman nominated for president by a major U.S. political party. Sen. Barack Obama, D-Illinois, leads in delegates, 1477-1391, including pledged superdelegates, according to a Washington Post tally, and the Clinton campaign's strategy will now be to try to close the delegate gap to 60 or so with a win in Pennsylvania. Two caucuses, Wyoming and Mississippi, occur before the Pennsylvania primary, and Sen. Obama is expected to win each and increase his delegate lead heading into Pennsylvania.

In 187-delegate Pennsylvania, the demographics favor Sen. Clinton -- she's leading in statewide polls there - - and the Clinton campaign likes its chances. Pennsylvania has a large working class -- which, along with women voters and Latin-Americans, forms the bulk of Clinton's base. If Sen. Clinton registers a solid win in Pennsylvania, she can make the case that although Sen. Obama has the delegate lead, she has won in the major states of New York, California, Texas, Ohio and Pennsylvania, and probably would have won in Florida, had the delegate count been included in the Democratic Party's nominating process. That big-state coalition, and the fact that she's the candidate of the working class, would be two strong philosophical points as the campaign attempts to secure pledges from the to-date 353 un-pledged superdelegates. (Note: The number of un-pledged delegates is likely to decline by the end of the primary season on June 3.)

The oil market, to put it diplomatically, has not provided a great deal of encouragement lately for policy makers attempting to stimulate U.S. economic growth.

Further, time was when an $80 or $85 price would be considered unreasonably high, or even outlandish. But given oil's breakthrough and close above key, psychological resistance of $100 per barrel this week, $80 looks almost like an acceptable price.

Moreover, oil mogul and billionaire T. Boone Pickens says we may get there. Providing a ray of light for concerned business executives, consumers and public officials, Pickens, who accurately predicted oil's rise to $100 per barrel, told CNBC Thursday oil should drop $10-15 in the second quarter of 2008.

"I think oil's going to back off," Pickens said during the interview. "The weakest quarter is the second quarter. We'll drop $10 or $15 a barrel in the second quarter. I think we'll be back above $100 in the second half of the year."

Things are bigger down in Texas. Especially controversies that blend beef with cheesecake.

Thirty-year-old B-list actress Alicia Silverstone (of Clueless fame) did a commercial for controversial animal rights group PETA recently. In it, the actress, an animal rights activist and recent convert to vegetarianism, climbs out of a pool to seductive music. She offers the camera various come hither-looks as she drips dry, and in an inane voiceover, tells the camera about how her life has changed since she's become a vegetarian.

I suppose the idea is to show us how good she looks, now that she's no longer eating meat. Too bad being a vegetarian hasn't boosted her vocabulary. "It's so amazing!" Is it now? I'm so convinced.

MOST NOTEWORTHY: Apple (AAPL), large-cap semis, and CDC Corp (CHINA) were today's noteworthy initiations:

• Apple (NASDAQ: AAPL) was initiated with a Buy rating and $160 target at Banc of America, as the firm still sees a significant amount of upside in the stock from Mac share gains, strong iPod unit growth, and the iPhone, which they believe is being underestimated.

• Caris believes investors should focus on companies with strong product cycles that are gaining market share. They resumed coverage of Intel (NASDAQ: INTC), Texas Instruments (NASDAQ: TXN) and National Semiconductor (NASDAQ: NSM) with Above Average ratings, and resumed Advanced Micro (NYSE: AMD) with a Sell rating; Caris started Intel with a $26 target, Texas Instruments with a $41 target, National Semi with a $29 target, and AMD with a $10 target.

• CDC Corp (NASDAQ: CHINA) was initiated at Piper Jaffray with an Outperform rating and $11.50 target.

OTHER INITIATIONS:

• Banc of America started shares of Hewlett-Packard (NYSE: HPQ), Sun Microsystems (NASDAQ: SUNW) and Dell (NASDAQ: DELL) with Buy ratings and a $56 target, $6.25 target and $35 target, and shares of IBM Corp (NYSE: IBM) with a Neutral rating and $125 target.

• BMO Capital started shares of NuVasive (NASDAQ: NUVA) with an Outperform rating and $33 target.

• Raymond James initiated shares of Petro-Canada (NYSE: PCZ) with an Outperform rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Limited Brands, Inc (LTD), Applied Materials, Inc (AMAT), Williams-Sonoma, Inc (WSM) and Texas Instruments Inc (TXN) were some of today's noteworthy downgrades:

• Limited Brands Inc (NYSE: LTD) was downgraded to Neutral from Buy at Banc of America, to Neutral from Accumulate at Buckingham, to Hold from Buy at Citigroup and to Market Perform from Outperform at Wachovia following the news of selling a majority interest in its Express brand and announcing the intent to explore strategic options for the company.

• Elsewhere, Cowen downgraded shares of Applied Materials (NASDAQ: AMAT) to Neutral from Outperform due to Q3 order guidance and limited visibility. American Technology removed Applied Materials from its Focus List.

• Williams-Sonoma (NYSE: WSM) was cut to Market Perform from Outperform at Piper Jaffray on concerns about mall traffic trends at the end of Q1 for both Pottery Barn and Williams-Sonoma brands.

• Texas Instruments (NYSE: TXN) was cut to Sector Performer from Outperformer at CIBC on valuation...

OTHER DOWNGRADES:

• Merriman downgraded Lam Research Corp (NASDAQ: LRCX) to Neutral from Buy.

• UBS cut Air France-KLM (NYSE: AKH) to Neutral from Buy.

• ThinkEquity downgraded Jazz Technologies, Inc (AMEX: JAZ) to Source of Funds from Buy.

• Nordstrom, Inc (NYSE: JWN) was taken down to Market Weight from Overweight at Thomas Wiesel.

• Longbow downgraded Ingersoll-Rand Co Ltd (NYSE: IR) to Neutral from Buy on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

No, not that spare tire. This isn't going to be a just another blog post about diet and fitness -- you're not that lucky. This is about actual nasty, filthy old junk tires and what we're doing about them. Of course, I'll intersperse some investment ideas for your consideration, but basically I'm just talking trash. A few of our readers would say that for me, that's just par for the course.

An article at Phillyburbs.com revealed that last year, of the approximately 300 million tires discarded, 261 million were recycled in some manner. Most of the remaining slugs were properly processed for landfill or are sitting in piles over at my neighbor's place waiting for the Wisconsin Department of Natural Resources to say something about it (again). Suffice it to say that in the area of tire recycling, for the most part, we have taken up the challenge and we are doing something about it.

Well, it's here again. Next Wednesday, the South by Southwest (SXSW) Music Festival kicks off in Austin, Texas. I won't be attending, so don't look for a sequel post to this one about how much fun I had or what acts I saw perform. Needless to say though, many music listeners and fans will be attending the festival, now in its 21st year. If there is a larger festival in terms of sheer number of venues, I am not aware of it. But, the fact that more than 1400 acts perform in 65 venues makes the amount of music just immense, in the simplest of terms.

These numbers follow a previous blog by me about how concerts and music festivals are only positive forces for the music industry. The only problem is that there is no "real" way to translate the experience of attending the shows outside the actual festival. Of course, that does not stop Apple Inc.'s (NASDAQ:AAPL) iTunes store from including music and videos from various performances, but these always seem to be the largest acts and the venues they play. I'm reminded of the Coldplay videos that were showcased on iTunes last year.

In any case, if any readers are attending the festival next week, I implore you to enjoy the music for what it's worth because you won't experience music that way anywhere else (especially on a CD or from a download). Of course, the advantage of live musical performances is always that the experience is better than listening to an album in your home, or at least that is this blogger's opinion and past experience. At the same time, opening a new CD for the first time and listening to an album has its perks as well, but that is another story and opinion for another time.

The TXU (NYSE: TXU) deal looks more like a political campaign, not a buyout.

That is, according to the Dallas Morning News, the private equity buyers – KKR and the Texas Pacific Group (TPG) – had some important meetings yesterday. For example, there was a get-together with the mayor of Dallas, Laura Miller. There was also a meeting with members of the Texas Business for Clean Air.

How did it go? Like any political situation, it's a bit complex.

Basically, it looks like the politicians are still skeptical – but they are still not saying "no."

Keep in mind that TXU has had a myriad of fights with political groups over the past couple years. Thus, it will definitely take some time to build trust.

Apparently, KKR and TPG are exploring the idea of bringing a Texas company into the deal. This could help ameliorate some of the concerns.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Private equity firms wouldn't have given TXU Corp. (NYSE:TXU) the time of day if the company wasn't based in Dallas

Owning a utility in that area is a license to print money. People need to crank their air-conditioners up in the summer when temperatures top 100 degrees Fahrenheit. It also gets really cold in the winter, which requires plenty of heat.

Moreover, as Bloomberg News points out things are going really well for TXU. The company rebounded after a disastrous overseas expansion plan nearly drove it bankrupt. Electricity prices in Texas have increased thanks to the surge in natural gas. This makes the company's power plants more valuable, Bloomberg says.

Their predictable cash flow has made electric utilities attractive for private investors before and will make them even more attractive now. Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) acquired MidAmerican Energy and PacifiCorp, utilities serving the Midwest and Pacific Northwest.

Phone lines in electric utilities across the U.S. are buzzing thanks to the $32 billion TXU buyout, which had been talked about in the press for at least a week. Other deals are sure to come.

The TXU investors lead by Kohlberg Kravis Roberts & Co. and Texas Pacific Group agreed to assume $13 billion in debt. Even though the buyout is the largest ever, the investors, including Goldman Sachs Group Inc. (NYSE:GS) haven't bitten off more than they can chew.

The economy in Texas is booming and is expected to have another strong year in 2007, according to the Federal Reserve Bank of Dallas. All of that economic prosperity will have to be powered by something.

Volatility Index S&P 500 Options were up today .37 to 10.79.

Tyco's (NYSE: TYC) option implied volatility was flat as investors digested the Tyco SEC spin-off filings. Tyco is expected to break itself up into three publicly traded company's at the end of April of 2007 (Electronics $12.7 billion in revenue, Healthcare $10 billion in revenue & Fire & Security Engineered products $18 billion in revenue). Prudential said "Investors buying Tyco shares based on sum-of-the-parts valuation may want to reconsider given that prevails expected highest multiple businesses likely to incur highest tax rates (30%+) in year 1 & 2." Tyco's overall option implied volatility of 21 is near its 26-week average, according to Track Data, suggesting non-directional price risks.

Option volume leaders today were: Yahoo (NASDAQ: YHOO), Apple Computer (NASDAQ: AAPL), Texas Instruments (NYSE: TXN), Amgen (NASDAQ: AMGN), and Google (NASDAQ: GOOG).

Note: The Daily Option Update is provided by Options Specialist Paul Foster of Theflyonthewall.com.

Well, it looks like the UK's Financial Services Authority is not a fan of private equity. The government agency is concerned that a mega deal will inevitably implode – leaving governments with the tab. Another concern: private equity transactions often lead to layoffs.

As a result, expect more scrutiny from the UK.

This is certainly big news for US private equity players. After all, it is getting tougher to find good deals here. So, why not move overseas? In fact, Europe is certainly ripe for restructuring.

But David Bonderman, who heads the Texas Pacific Group, is not happy about the UK's stance. While he admits there could be problems – it is still not inevitable. He also complained that private equity is being "demonized."

OK, maybe it is. But, Mr. Bonderman is making huge amounts of money from his deals. So, can't he take some criticism? Might it be possible that private equity firms are doing bad deals?

Actually, as private equity firms grow in size, there is a need to get more politically savvy – especially in light of the Dems sweep of the Congress. There is also an investigation – by the Justice Department – of possible antitrust violations of private equity firms.

No doubt, Bonderman is brilliant when it comes to structuring deals. But he definitely needs to get some better coaching when it comes to dealing with US and foreign governments.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Financial Statements.

Each year, International Business Machines Corp. (NYSE:IBM) spends about $6 billion on R&D. It not only allows the company to launch better products -- but is also a source of licensing revenues. And the occasional lawsuit, such as the one filed against Amazon.com. The amount? Like most of these kinds of suits, it is unspecified. IBM's suit covers five patents, which cover things like storage, customer recommendations and other common features that any e-commerce company would provide.

Interestingly enough, IBM filed its case in Texas, which tends to be favorable to patent-holders. But, one thing is certain: patent litigation is time-consuming. So, unless there is a settlement (which does not seem like something Amazon.com likes to do), expect this case to continue for several years.

And, as seen with the stock price of Amazon.com, investors seem blissfully unconcerned. The stock is up this morning after the news by 24 cents to $32.81.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

You can fry anything, say the Texans I know. And indeed, much of my favorite food lore is fried things from the state and county fairs of the South and Midwest. There are the ever-infamous fried Snickers bars. Deep-fried macaroni and cheese. Deep-fried strawberries. Most favorite of the moment, though, is deep-fried Coke.

After hitting Texas state fairs this September, deep-fried Coke won the "most creative" title in Dallas. And it does sound creative, although I'm still a little confused as to what it is. MSNBC calls it a "gelatinous cola-infused snack" and Matt Corbin has a detailed photo essay on flickr that shows the truth: it's doughnut dough, mixed with Coke concentrate, fried, topped with whipped cream, and served in a soda cup.

While it's arguably great PR for Texas (they're creative! even if they won't live all that long, they sure are bigger and better), this can't really strike love and joy in the hearts of the PR folks at The Coca-Cola Company (NYSE:KO). See, deep-fried with whipped cream on top isn't exactly the perfect brand image right now. Everyone's trying to be healthier, from The Walt Disney Company (NYSE:DIS)'s campaign to take its Princesses off nutritionally unworthy snacks, to PepsiCo, Inc. (NYSE:PEP)'s struggle to push baked options in the inner city, even and especially Coca-Cola itself, which is about to release its calorie-burning green tea drink, Enviga.