TheStreet.com's Jim Cramer says the value guys threw this party, so respect the hosts.
Sometimes you just feel beaten into being positive. You just say, "OK, enough, I will accept the positives as they are being put out, not as I believe they are."
That's how I felt yesterday about Freddie Mac (NYSE: FRE) (Cramer's Take). The company put out financials yesterday that looked better than expected, and for once I didn't question whether they were.
I didn't because the earnings from so many of the feckless players -- the Fannies (NYSE: FNM) (Cramer's Take), the Washington Mutuals (NYSE: WM) (Cramer's Take) the MBIAs (NYSE: MBI) (Cramer's Take) and the Ambacs (NYSE: ABK) (Cramer's Take) -- are all being greeted with a bizarre positive response, so bizarre that I bought into the "better than expected" rhetoric because I don't want to fight the value guys who are in control right now.
Elsewhere on the site, Doug Kass has been putting up some very strong arguments that numbers from the likes of Freddie are less than meets the eye.
MBIA (NYSE: MBI) reported a larger than expected loss of $2.4 billion, reflecting an unrealized loss of $3.6 billion on its insured credit derivatives. And the stock went up.
Why? Portfolio.comsummed it up this way: "Optimistic comments eclipse dreadful numbers in the bond insurer's release."
Well, isn't that just jolly. The problem is that MBIA has been making optimistic comments all along, trashing short seller William Ackman for bashing the company, while many of Ackman's predictions have turned out to be brilliantly prescient.
Back in February of 2005, MBIA said that it was "very optimistic." The stock has since declined from over $50 to under $10 as the company has reported big losses, come under the scrutiny of rating agencies, etc.
MBIA may very well be on the road to a remarkable turnaround -- I doubt it, but who knows? In the meantime, investors would do well, as always, to believe the numbers rather than the optimistic projections.
It has been a tough year for investors. We have been dealing with recession fears, housing market worries, high gasoline prices and a very weak U.S dollar. As much as we would love to say that the worst is behind us, we still could be in for some more rocky times ahead. So its best to try to figure out which stocks would be best to avoid for the time being.
Richard Gibbons wrote up a nice piece over on The Motley Fool that looks at some of the stocks that we would be wise to stay away from at this time. Regardless good or bad times, he is convinced there are always ways to make money, but in order to find the winners, it is also necessary to pull out the losers.
So how can we separate out the winners from the losers?
Gibbons seems to have a simple answer for this. He believes there is really no use in wasting our time trying to separate the winners from the losers as there are so many great cheap stocks that could offer us a chance to make money. Gibbons' advice is to not choose ugly and risky companies that could put our hard earned money at risk. To makes this clear, he uses a baseball analogy, expressing his options for the curve balls instead of the fastballs.
Shares closed mostly higher today, although this was more of a mixed day between the haves and the have-nots. Boeing Co. (NYSE: BA) managed to keep earnings inline with estimates and were not bad considering the weak airline sector, so its 4.4% gain to $82.09 was a huge relief for the DJIA today. Below are the unofficial closing levels for major US index levels:
Ambac Financial Group, Inc. (NYSE: ABK) posted losses that were wider than expected. It showed losses of $1.7 billion and $11.69 per share and a $3.1 billion in subprime charges. The company sells insurance policies that repay bondholders if issuers default. The 52-week range is $4.50 - $96.10. Shares hit a new low today, and traded down over 40% at $3.45 in the final minutes of trading.
MBIA Inc. (NYSE: MBI) dropped dramatically after Ambac's worse-than-expected earnings report. The rivals are expected to be hit hard by the wave of defaults it insures due to the subprime credit crisis. The two have been struggling to raise capital to cover losses and have suffered downgrades to their credit ratings. MBI shares were down 32% at $9.00 in the final minutes today.
Stock futures indicated a higher start earlier this morning following solid results from internet bellwether Yahoo late Tuesday. As earnings reports have started coming out this morning, though, stock futures have started to reverse direction.
Other than many earnings reports on tap today, investors may look at U.S. oil inventories when out later today after reaching nearly $120 a barrel (10 cents shy) Tuesday. Analysts expect supplies declined in the past week. So far oil has moved somewhat lower today, but remained near $118 a barrel.
U.S. stocks tumbled Tuesday following some disappointing results from several tech and consumer stocks. The Dow industrials dropped 104 points, or 0.82%, the S&P 500 fell 12 points, or 0.88%, and the Nasdaq Composite lost 31 points, or 1.29%.
Despite many upcoming earnings reports, investors will likely continue to focus on Yahoo! (NASDAQ: YHOO), which has reported strong results, beating analyst estimates on both the top line and bottom line. Still, the results weren't phenomenal, or uncovered any surprising issue that might show it could fare better on its own. Yahoo! has until Saturday to accept Microsoft (NASDAQ: MSFT)'s takeover offer of $31 a share or face a proxy fight. Microsoft has already said it wouldn't raise its offer, but of course, nothing is certain at the moment. YHOO shares are down about 0.8% in premarket trading.
TheStreet.com's Jim Cramer says you can call him all the names in the book, but he's right, and the shorts know it.
It was a cause I didn't want to take up. I didn't want to take it up because I knew the short-sellers would paint me as a naïve, clueless defender of the bull, and the long owners wouldn't really understand the idiosyncrasies of the subject. It was a cause I knew the brokers would never defend because their best business that is left is prime brokerage, and they need giant hedge funds to trade with them and can't risk alienating them.
I am talking about the uptick rule, the 70-year-old rule put in by the SEC to stop the process of "raiding" stocks, meaning sending them down by knocking all bids down underneath to where panic could and would ensue.
Today's typical. The Journal breaks its seeming 10-year embargo on mentioning me or my show with a piece that basically says I have no idea what I am talking about and am a fool to bring it up. It quotes James Bianco, from Bianco Research right after me saying, "Anyone who thinks the removal of this rule is somehow causing havoc in the financial markets is hopelessly lost in the bark of one tree and may never be able to see the forest." He then goes on to say, "To suggest that the removal of this rule is causing the markets to go down is to loudly announce, "I don't understand the credit crisis and I am incapable of ever understanding it.'"
TheStreet.com's Jim Cramer says you have to have a plan going in so you don't get forced out.
Some days like Friday you throw out the book and you just say, OK, pick a couple of stocks to defend and let the rest run down without you or scale out of them on the bogus rally you know people will try to mount from an oversold position.
Days like Friday are all about trying not to lose a huge amount of money. They are days where you want to throw a brick at every manager who comes on TV and says, "We don't even look at this stuff because we are long term." You want to throw a brick because these are long-term-sized losses inflicted in a very short time.
Think about it. If I had a nickel for everyone who came on TV and said that the short-term action in Fannie Mae (NYSE: FNM) (Cramer's Take) or Citigroup (NYSE: C) (Cramer's Take) are "no concern of mine," I would be a trillionaire. Saying stuff like that is simply a way of saying, "I am lying to you or lying to myself, I don't know which," because the odds are not getting better that Fannie Mae will get back to $60 anytime in the long term.
Level 3 (NASDAQ:LVLT) is off 7% on news that the company's president is leaving.
Ambac (NYSE:ABK) is indicating that it could open down 15% after the company announced financing last Friday.
Countrywide (NYSE:CFC) is indicating that it could open down 7% on word that the FBI is investigating the company's statements about its financial position.
McDonald's (NYSE:MCD) is indicating a 4% increase on better-than-expected sales for February.
Stocks may trade differently in the pre-market than they do in the regular session.
Douglas A. McIntyre is an editor at 247wallst.com.
Stock futures were lower early Friday morning, but have since changed direction and are now (7:30 a.m.) higher, indicating a positive start on Wall Street. While the same concerns over the credit situations are unchanged, investors will focus much of their attention on upcoming data, specifically the government's monthly jobs report. Futures may still change direction depending on the report.
[Update 9:00 a.m.: U.S. nonfarm payrolls fell by a large 63,000 in February, the second straight decline in employment. This is a clear sign of a recession. Stock futures are declining, suggesting another down day ahead of us on Wall Street.]
On Thursday, U.S. stocks sold off as the dollar hit new lows and oil reached new highs and mounting concerns about the finance sector. An announced default at Thornburg Mortgage didn't help matters. The Nasdaq Composite declined 52 points, or 2.3%, and S&P 500 dropped 29 points, or 2.2%, both hitting their worst levels since 2006. . The Dow Jones Industrial Average lost 214 points, or 1.75%.
At 8:30 a.m. EST, an hour before the opening bell, the government will release February's jobs report. According to estimates from Bloomberg, analysts expect the unemployment rate rose in February to 5%, a two-year high, as firing at builders and manufacturers increased. Nonfarm payrolls probably rose by 23,000. While the rise would be an improvement after last month's decline, it is still weak compared with an average 95,000 a month last year. Investors will dissect the numbers for any signs the economy is in a recession.
TheStreet.com's Jim Cramer says the value guys threw this party, so respect the hosts. 
Here are some highlights from this past week's 
Stock futures indicated a higher start earlier this morning following solid results from internet bellwether Yahoo late Tuesday. As earnings reports have started coming out this morning, though, stock futures have started to reverse direction. 
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Oil hits record $127.43 on supply concerns, raised Goldman forecast
