MAJOR PAPERS:

• The Wall Street Journal reported that after years of rapid grows, many hedge funds are shutting their doors or merging with others, as expansion has dramatically slowed. As a result, the industry is being dominated mostly by big firms, such as Och-Ziff Capital Management Group LLC (NYSE: OZM), D.E. Shaw & Co., and Paulson and Co.
• Shares of Ctrip.com International Ltd (NASDAQ: CTRP), China's major Internet travel booker with about 58% of the country's online travel business, have dropped about 30% in the last six weeks alone creating a possible buying opportunity, according to the Wall Street Journal's "Heard in Asia". Travel in China is expected to grow solidly in the long-term and Ctrip.com said it expects revenue to grow 30% for the three months ending June 30 from a year earlier.
• In a move that could potentially usher in a new phase in the credit crunch, the Financial Times reported that The Goldman Sachs Group Inc (NYSE: GS) is said to be close to finalizing a plan to restructure a $7B investment vehicle formerly run by Cheyne Capital, a London-based hedge fund.

OTHER PAPERS:

• The Washington Post reported the proposed merger between XM Satellite Radio Holdings Inc (NASDAQ: XMSR) and Sirius Satellite Radio Inc (NASDAQ: SIRI) was under fire yesterday by senior members of the Congressional Black Caucus, who said the deal does not provide enough opportunities for minority-owned programming.

With last week's BusinessWeek article expecting a verdict on the proposed merger between Sirius Satellite (NASDAQ: SIRI) and XM Satellite (NASDAQ: XMSR) soon, I feel that it's imperative that the regulators let the deal happen. Without a deal, both companies will continue to incur heavy losses, and the future of satellite radio will be in jeopardy. It's ironic that the antitrust lot are worried about a monopoly, but without a merger, the entire industry could be finished.

With plenty of competition coming from traditional radio, internet radio, and Apple (NASDAQ: AAPL)'s iPods, the government's worry over lack of competition is unfounded. Rather, the money saved by the merger in new customer acquisition will help keep the companies solvent. Doug McIntyre had a nice analysis of the deal a few weeks back, and he feels that with both stocks' recent rise, Wall Street is telling us that 1) they think the merger is going to go through, and 2) it would be mutually beneficial if it does.

If we can get a quick resolution to this, after months and months of foot-dragging by regulators, and the resolution is in favor of the merger, then this will be a defining movement for the satellite radio industry as it moves ahead and becomes a true media force to be reckoned with.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/03/07.

Baidu(NASDAQ:BIDU) implied volatility Flat as BIDU trades near record Highs. BIDU, a Chinese language internet search provider, is recently trading up $1.83 to $155.89. SUSQ say's "we forecast BIDU will launch some-commerce products in the future to directly exploit the e-commerce take-off in China. We maintain our Positive rating in BIDU." BIDU over all option implied volatility of 40 is near its 26-week average of 43 according to Track Data, suggesting flat risks.

SINA Corp(NASDAQ:SINA) implied volatility Flat as SINA near record high. SINA, a leading online media company and value added information service provider for Chinese communities, is recently up $1.55 to $41.50. GROW raised its rating on SINA to Outperform. SINA over all option implied volatility of 38 is near its 26-week average of 36 according to Track Data, suggesting flat risk.

Option volume leaders today are: Sun Microsystems (NASDAQ:SUNW), Sirius Satellite (NASDAQ:SIRI) and Ford (NYSE:F).

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

Volatility Index S&P 500 Options-VIX up .47 to 10.55.

Baidu.com's (NASDAQ: BIDU) February option prices bid up, March offered lower into EPS on 2/14. Baidu.com, a Chinese language internet search provider, is recently down .39 to $115.60. Baidu.com will report EPS on 2/14. BIDU call option volume of 3,810 contracts compares to put volume of 3,169 contracts. BIDU February option implied volatility is at 67, March option implied volatility is at 46 is below its 26-week average of 56, according to Track Data. Higher near term option implied volatility suggests larger risks into EPS.

EchoStar Communications Corp's (NASDAQ: DISH) low implied volatility suggests less risk as DISH near six-year high. EchoStar is recently trading at $40.92. EchoStar over all option implied volatility of 25 is below its 26-week average of 28, according to Track Data, suggesting decreasing fluctuations.

Sirius Satellite Radio (NASDAQ: SIRI) implied volatility at 9-year low as SIRI near 27-month Low. Sirius Satellite is recently trading at $3.61. Sirius Satellite & XMSR shares were active during the first week of January on increased investor deal chatter. Sirius Satellite over all option implied volatility of 47 is below its 26-week average of 50, according to Track Data, suggesting decreasing price fluctuations.

Cisco Systems Inc's (NASDAQ: CSCO) February straddle suggests normal near term EPS & Outlook risk. Cisco is expected to announce EPS of .31 after the close tonight. Bank of America says "given increasing signs of macro weakness and carrier spending disruptions, we expect Cisco to step back a bit from the extremely bullish tone provided last quarter." Cisco call option volume of 167,762 contracts compares to put volume of 78,881 contracts. CSCO February at the money straddle is priced at $1.70, above its theoretical value of $1.10, according to Track Data, suggesting larger near term price fluctuations.

Option volume leaders today were: Cisco, Google Inc. (NASDAQ: GOOG), Corning (NYSE GLW), Altria (NYSE: MO) and General Motors Corp. (NYSE: GM).

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

On CNBC's MAD MONEY, Jim Cramer hosted Sirius Satellite Radio Inc. (NASDAQ:SIRI)'s CEO Mel Karmazin. As a reminder, Cramer was positive once already this afternoon on his STOP TRADING segment on CNBC. Despite rumors of a deal between Sirius and XMSR Satellite Radio Holdings (NASDAQ:XMSR), Mel said he doesn't need to merge ... but, the company would do what is best for shareholders.

Cramer earlier said the stock could go to $5.00 or higher on its own and could go to $8.00 in a merger situation, and touted the company's third quarter as good. In his opinion, the company will make money in two years. If he had to describe the stock in a phrase, it would be "growth at a reasonable price."

While talking to Karmazin, Cramer noted that having Howard Stern has worked, as they have added over four million subscribers during Stern's tenure with the company. Cramer asked if NASCAR could be as big as Stern, in terms of growth, for Sirius next year. Karmazin said he thinks many will buy the service solely for NASCAR, so yes. With regards to the soft retail market, Karmazin said it certainly has quieted down, but he thinks the holiday season will be gangbusters like last year. Karmazin did admit that his company hasa lot to do to hit its year-end numbers, but still believes Sirius will hit cash flow positive next year on $1 billion in revenues, if it hits targets.

Compared to terrestrial revenues, SIRI is behind only Clear Channel Communications, Inc. (NYSE:CCU) and CBS Corporation (NYSE:CBS) in listeners and will be the third largest or fourth largest radio entity next year after only having four years of operations. He said they will do $3 billion in revenues by 2010. He wants ad revenue about 10% of total revenues, or $100 million next year. Karmazin said there could be a value created in a merger, but they would rather go it alone as they are still adding more partners. He would be open to making an acquisition if it helped shareholders.

Cramer said he thinks that the stock can make a 50% move from here.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.