What has Blackstone (NYSE: BX) been doing with all those theme parks it's been buying? Well, the answer is becoming a bit clearer now. The private equity firm is getting ready to take theme park operator Merlin Entertainments public early next year.

Several investment banks have already been called to advise on the transaction, including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Deutsche Bank (NYSE: DB), UBS (NYSE: UBS), and Nomura (NYSE: NMR). If all goes as planned, the deal could be good for $3.33 billion.

Deutsche Bank (NYSE: DB) closed at $64.23. DB September option implied volatility is at 49, October is at 51; below its 26-week average of 66, according to Track Data, suggesting decreasing price movement.

Credit Suisse (NYSE: CS) closed at $47.94. CS October option implied volatility of 47 is below its 26-week average of 62 according to Track Data, suggesting decreasing price movement.

UBS AG (NYSE: UBS), Switzerland's biggest bank, closed at $17.02. UBS September option implied volatility is at 54, October is at 56; below its 26-week average of 70, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Interesting article in today's Wall Street Journal, dealing with spies, critics, and Deutsche Bank (subscription required). In what seems to me as a rather over-the-top move, Deutsche Bank (NYSE: DB) used spies to keep tabs on its critics -- and the scope of the operation may be a bit more expansive than originally believed. In May, Deutsche Bank found efforts involving "questionable investigative or surveillance activities" that its security department and outside contractors conducted. The "monitoring" took place four separate times from 2001 to 2007, with the bank using a detective (and "others" according to the article) to basically spy on people affiliated with the bank.

The detective told the Journal that he received a list of names in 2006, a list of people that the security department wanted the detective to watch. The bank contends that the spy mission was conducted by its security department and made no mention of its legal department. This cloak-and-dagger game cost two executives their jobs last month, and could lead to more.

Analyst Upgrades

• Barclays upgraded Anglo American (NASDAQ: AAUK) to Overweight from Equal Weight based on a potentially higher bid from Xstrata (OTC: XSRAY) or a white night willing to pay a premium for the group, higher copper prices, and improving operating performance.
• Janney Montgomery upgraded Chiquita Brands (NYSE: CQB) to Buy from Neutral citing improved bagged salad margins, strong free cash flow, solid banana trends, and valuation. The firm has a $13 target on the stock.
• Wunderlich upgraded Legacy Reserves (NASDAQ: LGCY) to Buy from Hold due to the firm's belief that the back of the crude board is still very cheap, the firm's increased distribution outlook, and the movement of the stock after the discontinuation of the company's talks with Apollo.
• Deutsche Bank (NYSE: DB) was upgraded to Buy from Neutral at UBS.
• UBS (NYSE: UBS) was upgraded to Outperform from Neutral at Credit Suisse.
• Illinois Tool Works (NYSE: ITW) was upgraded to Outperform from Market Perform at Wachovia.

Analyst Upgrades

• Citigroup upgraded Deutsche Bank (NYSE: DB) to Hold from Sell citing reduced legacy risks and strength in the fixed income franchise.
• Janney Montgomery upgraded Fuel Systems (NASDAQ: FSYS) to Buy from Neutral based on valuation, the OEM market in Europe for alternative transportation is growing faster than expected, and the $30M equity raise was smaller than expected.
• Freeport McMoRan (NYSE: FCX) was upgraded to Outperform from Market Perform by FBR Capital. The firm believes that the company will benefit from copper supply issues over the long term, and it thinks the stock has reached an attractive entry point.
• Black & Decker (NYSE: BDK) was upgraded to Neutral from Underperform at Credit Suisse.
• American Tower (NYSE: AMT) was raised to Overweight from Neutral at JPMorgan.
• EMC Corp. (NYSE: EMC) was upgraded at Barclays to Overweight from Equal Weight.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Capital Agency Corp. (NASDAQ: AGNC) earnings prospects earned it an analyst's upgrade.
• Broadpoint Securities Group Inc. (NASDAQ: BPSG) earnings prospects improved with recent acquisitions.
• Clorox Co. (NYSE: CLX) was upgraded on the belief that its fiscal year outlook is too conservative.
• Deutsche Bank (NYSE: DB) earnings prospects resulted in an upgrade from JPMorgan.
• Lululemon Athletica Inc. (NASDAQ: LULU) Q1 profit and same-store sales fell and it offered a weak outlook.
• Movado Group Inc. (NYSE: MOV) bested Q1 expectations and forecast a considerable profit for the full year.

Analyst upgrades:

• Citigroup upgraded Emergency Medical Services (NYSE: EMS) to Hold from Sell as it believes earnings estimates and valuation multiples could expand should Congress extend insurance coverage to the currently uninsured. The firm raised its target on shares to $38 from $29.
• JPMorgan upgraded Deutsche Bank (NYSE: DB) to Neutral from Underweight on expectations the company's fixed income business will drive earnings.
• KeyBanc expects U.S. Steel (NYSE: X) to benefit from a global recovery in flat-rolled products and a potential stabilization in energy end markets. The firm upgraded shares to Buy from Hold.
• Yahoo! (NASDAQ: YHOO) was upgraded to Buy from Hold at Soleil.
• Pinnacle Financial (NASDAQ: PNFP) was upgraded to Equal Weight from Underweight at Stephens.
• BP Plc (NYSE: BP) was raised to Buy from Hold at ING Group.

Transportation company DryShips Inc. (NASDAQ: DRYS) started the session on a positive note this morning after announcing a new waiver agreement with Deutsche Bank.

DRYS, which is struggling under the weight of a hefty debt burden, said it has reached a pact with Deutsche Bank regarding the waiver terms for a credit facility worth $1.125 billion. The facility covers two drillships that are currently under construction.

"We are delivering the waivers as promised and we hope to conclude discussions with the rest of the lenders in the near future," stated CEO George Economou.

Suntech Power Holdings (NYSE: STP) has priced its follow-on public offering at $12.50 per share. The company will be issuing 20 million American Depositary Shares to raise a total of $250 million. The stock is being issued under an existing shelf registration filing.

Underwriters UBS (NYSE: UBS), Goldman Sachs (NYSE: GS) and Deutsche Bank (NYSE: DB) have an option to purchase up to 3 million to cover any over-allotment.

The sages say to sell the news and have started calling the market grossly overbought on the near-term, yet stock enthusiasm is at the exact opposite of how negative things were 6 weeks ago. We have 6 million on the jobless claims now, although this week showed a real decline in new claims. The rally came on late in the day after the market was down triple-digits at one point. Here are the unofficial closing bell levels:

Dow 8,125.43 +95.81 (1.19%)
S&P 500 865.29 +13.23 (1.55%)
Nasdaq 1,670.44 +43.64 (2.68%)

Top Analyst Calls

While the stock market is rallying, the credit markets are still working on the assumption of absolute disaster. Where is such a dire forecast coming from?

Deutsche Banks published a study that shows the gloomy reality that the credit markets are predicting. They used the iBoxx index of investment grade corporate bonds and found that default rates in Europe are priced at 38%, in the US at 40% and at 51% in the UK. All of these readings are worse than in the Depression.

Nintendo (OTC: NTDOY) is one of those stocks that you just want to own but are not sure that you should own. How many times have you heard that the Wii is selling like hotcakes and that the company is beating the heck out of Sony's (NYSE: SNE) PlayStation 3 and Microsoft's (NASDAQ: MSFT) Xbox 360?

You've heard it a lot. Plus, you may even know how fun the Wii is from personal experience. Maybe you own one and are right now trying to finish the last level of Wario Land: Shake It!. And even if you don't own one, chances are one of your friends does.

Do you feel good about $173 billion of your tax money helping to keep American International Group (NYSE: AIG) from going bust? If you made the decisions that put AIG at death's door you might be. But the odds are pretty good that you had absolutely nothing to do with AIG's failure and received not a penny of compensation during the time when its executives were reporting profits -- and getting millions in compensation that they're not paying back now that it's losing money.

That's one of the reasons why I was arguing on KCRW's To the Point that the U.S. ought to disclose who is getting the taxpayer money that goes to AIG. After all, they just got another $30 billion this week after reporting history's biggest quarterly loss of $61 billion. A professor on the program suggested that we should not disclose the names of the recipients because it would threaten the stability of the financial system. I thought this professor's argument was unpersuasive -- and now we'll get a chance to see who was right.

Today was a disappointment all around. We were supposed to be up for once. That didn't hold. The "no nationalization" talk failed to help keep the broad market afloat. The breath of relief was quickly replaced by more flight to quality and panic protection. It feels as though the rest of the air is coming out of the market as Joe Public throws in the towel. Here were today's unofficial closing bell levels:

Dow 7,115.42 -250.25 (-3.40%)
S&P 500 743.36 -26.69 (-3.47%)
Nasdaq 1,387.72 -53.51 (-3.71%)

Top Analyst Calls

Mall operator General Growth Properties, Inc. (NYSE: GGP) has seen its share price plunge more than 98% during the past year, with the equity recently plummeting into penny-stock territory amid concerns about a possible bankruptcy filing. Maybe I'm just an impatient member of the MTV generation, but it struck me today that these Chapter 11 rumors have been swirling around Wall Street for what seems like ages. Can we get some closure on this soap opera, GGP?

Well, according to a report today in the Wall Street Journal, GGP's deadline to renegotiate a $900 million loan on two luxury malls in Las Vegas came and went Thursday with no resolution. The mall mogul is still in talks with its lenders to negotiate a new deal -- but it's now haggling outside the confines of its forbearance agreement, which means those lenders, led by Deutsche Bank (NYSE: DB), can demand payment at any time.