We may have broken the ultimate barrier to diversity with the election of the 44th President of the United States Barack Obama, but the ranks of minorities in top positions at Fortune 500 companies remain thin and are steadily declining.
Late Monday, Symantec (NASDAQ: SYMC) CEO John Thompson announced plans to retire from the post in March, but will remain on as chairman. Also planning to move out of the corner office until a replacement is found is the CEO of struggling Web portal Yahoo (NASDAQ: YHOO), Jerry Yang.
Their pending exits continue a string of other high-profile minority CEOs over the past year due to various reasons, ranging from Dick Parsons at Time Warner (NYSE: TWX), to Stan O'Neal at Merrill Lynch (NYSE: MER) to Alwyn Lewis at Sears (NASDAQ: SHLD) and William Perez at Wrigley.
Prudential Financial (NYSE: PRU) used to have an advertisement offering consumers a piece of the rock (Gibraltar). Now Hank Paulson's $810 billion Troubled Asset Recovery Plan (TARP) has replaced Pru's rock. Insurance companies around the world are angling to buy a Savings & Loan (S&L) so they can apply for some of that money. So I think it's time to create a mutual fund that will be used to buy an S&L so that the average citizen can get some of that money as well.
Not only are U.S. insurance companies on the hunt for an S&L, there's a European insurer seeking some of our tax dollars as well. The U.S. insurers seeking an S&L include Hartford Financial Services Group (NYSE: HIG), a life and property insurer that has been hit by investment losses, Genworth Financial (NYSE: GNW) and Lincoln National (NYSE: LNC). And the European insurer in question is Amsterdam's Aegon AG, which wants to buy Suburban Federal Savings Bank.
I've been too patient waiting for my share of the TARP. Here's an idea that will make it affordable for the average taxpayer to buy an S&L so we can apply for some of that money -- which is really our money -- as well. We should start a mutual fund and once it has collected enough cash, the fund could purchase a little S&L and then apply for some of that TARP money. With banks, insurance companies and automobile manufacturers getting their piece of the TARP, it's our turn now.
TheStreet.com's Jim Cramer says the action in some of the banks and insurers is sickening.
They've gotten to the fortress banks. They have crushed everything financial because the word is out: No more bonuses and no more dividends if you take federal money under President Obama.
I don't know if it is true. But I sense from the action since the election that something big and bad is happening to the banks and the insurers. It looks like there is a quid pro quo developing and that quid pro quo is that if you want to get help from the government you are not going to get a bonus and you have to hurt your shareholders.
TheStreet.com's Jim Cramer says tons of stocks look like good buys, and they go down all the time.
All weekend I heard it. Stocks have gotten too cheap. Put 'em away cheap. Don't worry about 'em cheap. To which I say, stocks are only cheap if the companies make it. Stocks are only cheap if the bondholders don't claim them.
TheStreet.com's Jim Cramer says this trade has worked all week, but it's a shaky play on the fundamentals.
It's a stubborn market. We sit here and marvel that Barclays (NYSE: BCS) (Cramer's Take) or Mitsubishi (NYSE: MTU) (Cramer's Take) need to raise money when three weeks ago we thought they were going to inherit the earth because they didn't lose money. We liked them because we stubbornly believed they were better.
We thought that Prudential (NYSE: PRU) (Cramer's Take) was The Rock; now it is The Rock like the guy who makes a lot of movies -- not all of them good. Lincoln National (NYSE: LNC) (Cramer's Take) was perceived to be much higher quality than MetLife (NYSE: MET) (Cramer's Take), but that's wrong. The idea that the Hartford (NYSE: HIG) (Cramer's Take) would be in trouble, as it has always been not in trouble, is amazing to us.
We stubbornly cling to the ones that we thought were good until we hear that they need a bailout. Then we turn on them like they were never good or like they are going to go bankrupt.
Legg Mason (NYSE: LM) on Wednesday jumped $3.94, or 30%, to $16.92, after it reported it swung to a fiscal second-quarter net loss. The money manager's results were pulled down by charges to support its money-market funds. Excluding charges, the results beat analysts' expectations and Today LM also gained an upgrade from Jefferies to Buy. Legg Mason continued its upward drive today as shares soared another 20% or $3.44 to $20.36 by 11:25 am.
First Solar (NASDAQ: FSLR) shares jumped 19.3%, or $22.39, to $138.14 by 11:20 am. The company posted third-quarter profit and revenue that more than doubled from last year due to strong demand. Not only did the solar energy company to beat Wall Street's expectations by a wide margin on both bottom and top line, it also boosted full-year expectations, and issued inline FY09 outlook. But that wasn't the end of the good news as First Solar has announced only the day before it is entering the U.S. residential market. Several analysts reiterated their Buy raring on the stock, while Soleil and Merriman both upgraded to Buy.
Hartford Financial Services Group Inc. (NYSE: HIG) fell the most in the Standard & Poor's 500 Index, tumbling 40%, or $8.09, to $11.77 by 11:48 am. The insurer Wednesday reported it has slipped to a loss -- the first quarter in five years -- due to decline in ongoing operations under Property and Casualty insurance segments. HIG also slashed outlook and guidance. Merrill Lynch downgraded HIG to Neutral.
Jefferies upgraded Legg Mason (NYSE: LM) to Buy from Hold on valuation following the recent sell-off, as they find the risk/reward attractive at current levels. However, the firm lowered their target to $23 from $44.
Merriman raised First Solar (NASDAQ: FSLR) to Buy from Neutral after the company showed "industry leading growth" in Q3. The firm has a 12-month price target range of $185 to $195 per share.
Ladenburg upgraded KeyCorp (NYSE: KEY) to Buy from Neutral.
Citigroup upgraded shares of Silicon Laboratories (NASDAQ: SLAB) to Buy from Hold on valuation and expects the company to post above average industry growth in 2009.
Janus Capital (NYSE: JNS) was upgraded to Neutral from Underweight at JP Morgan.
TheStreet.com's Jim Cramer says the safety theme will come back if only because these companies' earnings will be good in six months.
Editor's note: Jim Cramer will present his 2009 stock outlook for the first time at TheStreet.com Investment Conference on Saturday, Oct. 25. Click for details.
Now they come after the Procter & Gambles (NYSE: PG) (Cramer's Take) and the General Mills (NYSE: GIS) (Cramer's Take) and the like, betting that the action will be better in the cyclicals with all of this money being printed worldwide.
Commodities are also coming back because of reflation. And we have to feel that many of the infra and ag names are finally sold out by the hedge fund redemptions.
Here I am speaking of a Freeport McMoRan (NYSE: FCX) (Cramer's Take), with its good yield and a belief that the hedge funds are at last done.
I don't buy it. I like a balanced portfolio, but I want to buy the GIS/PG all the way down because we are going into a recession, not going out of one. These companies pay dividends, raise dividends and have great commodity tailwinds.
MetLife, Inc. (NYSE: MET), which is the largest life insurer in the U.S., got its start 140 years ago. But the recent couple weeks may have been the toughest as the stock price has plunged.
It seems MetLife's woes have just started, though, as the company announced Tuesday it has withdrawn its 2008 earnings estimates. As for Q3, the company expects operating profits of $600 million to $675 million.
At the same time, the company wants to sell 75 million shares to bolster its capital (obviously, this is something that's pretty dilutive in the current environment).
Interestingly enough, MetLife is feeling the pain from heavy investments in alternatives such as hedge funds and private equity. What's more, MetLife holds positions in losers such as Washington Mutual and Lehman Brothers.
Of course, MetLife is not alone. If anything, major insurers have been quite aggressive with alternative investments. Just take Hartford Financial Services Group Inc (NYSE: HIG), which recently pre-announced weak results and raised $2.5 billion from Allianz. This firm too has had to take charges for its alternative investments.
MetLife shares are trading down 6.4% in pre-market trade.
The banking system has been crumbling for over a year, but last month's collapse of American International Group (NYSE: AIG) -- which prompted an $85 billion government takeover -- suggests that insurance is not immune from the problems. As a reminder, AIG got snared in the $62 trillion Credit Default Swap (CDS) market whose growth was spurred by McCain advisor, Phil "Americans are Whiners" Gramm.
Bank of America'searnings plunged 68% to $1.18 billion, or $0.15/share -- missing by 60% analysts' forecast of 62 cents. Bank of America will raise capital by selling $10 billion of common stock and slashing its dividend in half from 64 cents to 32 cents. One analyst cut the bank's 2009 earnings estimate to $2.50 per share from $3 per share -- this is well below the $3.12 per share from a Thomson Reuters analyst poll -- and lowered his price target by $2 to $26.
National City Corp. and its National City Bank both suffered debt downgrades from Fitch. For instance, Fitch slashed the bank subsidiary's long and short-term Issuer Default Ratings (IDR) to A- from A. And it lowered the bank and holding company's Individual rating to C from B.
Today was almost a totally depressing day of a bear market, but by the end of the session, it turned out to be less terrible -- just another bad day rather than a total write-off.
Hopes and rumors of coordinated global rate cuts or some form of coordinated intervention helped stabilize the stock market somewhat by the end of the day. However, the initial shock of Dow below 10,000 rapidly became Dow at 9,500+ before the market recovered sharply from being down 800 points.
The bad thing about today's major selloff is that there was no sense of capitulation and no sense that panic had engulfed Wall Street. Instead, this is just orderly panic where looters and vandals cue up to take action.
Here are today's unofficial closing bell levels: DJIA 9,955.50 (-369.88; -3.58%) NASDAQ 1,862.96 (-84.43; -4.34%) S&P500 1,056.89 (-42.34; -3.85%) 10YR T-Note 3.426% (-0.218%)
National City (NYSE: NCC) was one of the most active of the worst performing banks. Shares were down 27% at $2.54 in the minutes right before the closed.
TheStreet.com's Jim Cramer says too much time has passed, too many institutions are out of cash.
When we say "too big to fail," what we mean is an entity that has so many tentacles in so many parts of the economic superstructure that if it failed, the consequences would be too grave for the system itself.
With the demise of Lehman, we at last see what it is like to have something too big to fail, fail. That's why you can see every insurer go down in the beat of an eyelash, or every broker roll over with lightning speed. It is how you could see commercial paper lines frozen and how you could expect money funds to crater and break the buck.
Lehman was twice as big as Bear and much more far-reaching. It was the other side of the trade, we are discovering, for myriad financial players. Its paper pervaded the system and was seemingly owned like U.S. government paper was. It was levered against and it was priceless collateral that is, well, priceless collateral. It did things with your margin account to gain you a return that reduced your cash to unsecured status.
In short, Lehman may bring down the Western financial world. That's right, it might. Almost everything you are seeing since Lehman's demise can be traced directly or indirectly to Lehman.
Hartford Financial (NYSE: HIG) closed at $62.06 Thursday. HIG October option implied volatility of 52 is above its 26-week average of 40 according to Track Data, suggesting larger price movement.
Travelers (NYSE: TRV), a leading property casualty insurer, closed at $44.61 Thursday. TRV October option implied volatility of 37 is above its 26-week average of 32 according to Track Data, indicating larger price movement.
Genworth Financial (NYSE: GNW) closed at $15.02 Thursday. GNW October option implied volatility of 71 is above its 26-week average of 52 according to Track Data, suggesting larger price movement.
XL Capital (NYSE: XL), provider of global reinsurance coverage, closed at $18.63 Thursday. XL October option implied volatility of 78 is above its 26-week average of 73 according to Track Data, suggesting larger movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
MOST NOTEWORTHY: Seagate, Nortel Networks and Ann Taylor were today's noteworthy downgrades:
Thomas Weisel downgraded Seagate (NYSE: STX) to Market Weight from Overweight as they believe the company's growth will be more muted given high existing market share and overall industry growth.
Baird downgraded Nortel (NYSE: NT) to Neutral from Outperform citing checks that indicate deteriorating US Enterprise sales in the last few weeks of Q1. The firm now expects companies to guide flat QoQ instead of up and to make cautious 2H08 comments.
Ann Taylor (NYSE: ANN) was cut to Neutral from Buy at Piper to reflect concerns over the LOFT division as well as consumer spending.
OTHER DOWNGRADES:
Citigroup lowered TJX Cos (NYSE: TJX) to Hold from Buy.
WestLB downgraded to Hold from Add Novartis (NYSE: NVS).
We may have broken the ultimate barrier to diversity with the election of the 44th President of the United States Barack Obama, but the ranks of minorities in top positions at Fortune 500 companies remain thin and are steadily declining.
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The banking system has been crumbling for over a year, but last month's collapse of 
Today was almost a totally depressing day of a bear market, but by the end of the session, it turned out to be less terrible -- just another bad day rather than a total write-off. 
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