Pharmaceuticals have been alive and merging. The most recent deal is this morning's news that Gilead (NASDAQ:GILD) wants CV Therapeutics (NASDAQ:CVTX), which comes on the heals Roche's purchase of Genentech(NYSE:DNA) and Merck's (NYSE:MRK) proposed merger with Schering Plough(NYSE:SGP).

To highlight defense names in the face of the current spending priorities feels like soaking in gasoline and walking around smoking a cigarette. With that visual as a backdrop, it is also fair to say that Obama is probably just as focused on protecting the motherland as Bush was, and, much as he may dislike it, that will force continued if not increased spending in certain areas of defense. The one name I have been drooling over for years and which is finally coming together in many respects is L-3 Communication (NYSE: LLL).

This post was written by Minyanville contributor Jason Goepfert.

Regarding an observation I saw on the Dow's six straight losses, I show it's happened roughly every 20 years since 1896.

The last occurrence wasn't that long ago, September 2002, though a couple of those months were just barely negative and may actually show a positive return depending on who your data vendor is.

Anyway, what I think is interesting is that the Dow's performance after the others was mixed when looking out one to three months -- sometimes up, sometimes down. After six months, only two of the six were positive and the average risk during those six months was -11%, compared to an average reward of +8%.

This post was written by Minyanville contributor Smita Sadana.

On 2/2, a trading buddy asked me if I would short MasterCard (MA); reason being that financials are looking weak and MA has reached 50-day moving average which could act as a possible resistance and might turn the stock down.

My reply was a unequivocal NO, I wouldn't short MA. Here were the reasons.

1) Financials are weak, down 11% from the high; but notice that MA has not given way. Reaching 50-day moving average is another sign of strength. I don't engage in horse racing, but placing a bet that a strong horse among a group of weak horses will lose, didn't seem right to me!

This post was written by Minyanville contributor Bill Feingold.

With SanDisk (NASDAQ: SNDK) -- which turned down a $26 per share bid from Samsung last fall -- now talking about raising equity at well below half that price, I think shareholders are going to be beyond irate. In what appears to be one of the great breaches of fiduciary duty of all time, management belittled Samsung for being opportunistic, trying to take advantage of a depressed stock price.

Funny, I thought that once you go public, you have made a deal that you are willing to accept the market's opinion of your value. I guess Sandisk's management somehow acquired immunity and forgot to tell everyone else.

This post was written by Minyanville contributor Sean Udall.

Broadcom (NASDAQ: BRCM) reports tonight and it is getting hit due to the poor report from Qualcomm (NASDAQ: QCOM). QCOM lowered guidance quite a bit -- in fact, enough that I likely may not have to worry much about QCOM for the next couple quarters. Low $30's would present solid value.

Getting back to BRCM, I still feel it is one of the few must own chip names. I think it has enough innovation and diversification to avoid the 35-40% sequential reductions I am seeing from many in the chip space. However, I also think a lowering of the bar is priced into BRCM's shares and anything less than a disaster should keep the stock above $16.50 (assuming we avoid another shock down to the whole market). Anything around that level ($16.50) and lower would have me adding the shares. I've taken gains recently in trading shares and am hoping to add BRCM back on just a bit more weakness.

Just after the close yesterday, Newmont Mining (NYSE: NEM) guided up 2009 production and guided 2009 cash costs lower. NEM also announced that it would be purchasing the remaining interest in its majority owned Boddington Mine from Anglogold Ashanti (NYSE: AU) (which equates to 6.6 mln reserve ounces). That's an increase of 8 percent in NEM's Proven & Probable (P&P) reserves at a price tag of $1.2 bln, which will be raised via an equity offering of 19 mln shares.

Based on NEM's 441 mln shares outstanding, we're looking at dilution of just over 4 percent. Thus, in theory, the deal is not even dilutive, given the 8 percent increase in P&P reserves that the company is acquiring with only a 4 percent dilution in equity. Based on what I have seen so far, this looks like a spectacular deal for NEM.

This post was written by Minyanville contributor Lance Lewis.

Banro (NYSE: BAA) jumped 13% yesterday after the company announced that it had finally completed its bankable feasibility study on its Twangiza project and proved up nearly 4 mln ounces of its 10 mln ounce resource. Thus, we can now calculate an NAV for BAA.

BAA has no debt. So, assuming $1,000 gold, 3.67 mln ounces of Proven & Probable reserves, an average cash cost of $429 per ounce over the life of the mine (which is based on the feasibility study), and the estimated $410 mln required for cap ex, we get an NAV of almost $15 a share (which gives zero value to the company's current cash balance of around $20 mln and its remaining 5.6 mln ounce resource at Twangiza, not to mention the resource estimates at its other properties).

The dismantling of the financial stocks is mind-boggling but not entirely unexpected. Last year, we discussed the need for culpability to extend throughout the societal spectrum, from borrowers who over-extended on their credit to the institutions that financially engineered risk to policy makers who were compliant by acceptance.

The fact that many of these names are going to Fannie Mae (NYSE: FNM) is perhaps the healthiest possible scenario through the lens of "taking medicine as a function of time and price." It is, however, massively unfortunate for the employees who simply followed marching orders.

We're talking livelihoods lost here. Life savings evaporated. Careers ruined.

Therein lies the "other side" of the aforementioned "healthy" scenario: societal and structural implications. We've talked about the former ad naseum so I don't think we need to beat that horse. On the structural side -- and something to keep in mind for those calling for the heads of financial professionals -- is the fact that if there isn't incentive for people to fix the system, it simply won't get fixed.

Incentive on Wall Street equals money. The industry will be austere and ripe with humility, mind you, but we must find our way to a healthy supply-demand and a balanced give-and-take. For if we don't crack the code in short order, we risk that our capital market structure will cease to exist altogether.

This post was written by Minyanville contributor Smita Sadana.

Apollo Group (Nasdaq: APOL) was enjoying a bump in price after reporting earnings that were well above estimates, based in increased enrollments. Of course, one can argue that people would go back to school for skill enhancement in these tough recessionary times.

However, two days after that stunning gain, APOL is off 4.9% to $82.55, on a cautious research note from Citron Research, who argue that "this growth is a one time bump."

While I do not endorse any such research or base my trading primarily on it, I am taking note of the negative reaction on double the average volume.

The stock can certainly come in a little and reduce the distance from its 200-day moving average, which is 38% at the current levels. While not at an extreme, it is unusual in this market to find stocks which are trading so far out.

I'm seeing various levels of support on the APOL chart and they range from $75 to $79.

This post was written by Minyanville contributor Vitaliy Katsenelson.

"You should buy Freeport McMoRan (NYSE: FCX), Caterpillar (NYSE: CAT), PACCAR (NASDAQ: PCAR)." That is what I hear from friends of mine, who are in the biz, all the time. They tell me how cheap these stocks are -- three, six, eight times earnings. "You are a value guy! How come you are not loading up on them?" they ask.

Let me tell you when I'll buy "stuff" stocks (if I ever do, because I've never really cared for the cyclicality of that business). It's when everyone stops telling me how cheap they are and that they are "buys."

These stocks are very similar to housing stocks two years ago: housing stocks were down 50% and looked cheap. Value managers bought just to see their stocks get cut in half again and again.

One needs to subnormalize earnings in this environment for all stocks, but stuff stocks need to see their earnings to be "sub-sub-sub-sub normalized." I've said it before, but it is worth repeating: the global economy just started its journey into a recession, and demand for stuff will drop off the cliff most likely to a lot greater degree than anyone imagines.

This post was written by Minyanville contributor Sean Udall.