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From Breifing.com

Periodicals Wrap-Up for Monday, September 22nd
WALL STREET JOURNAL: According to a person familiar with the matter, shareholders concerned about American International Group’s (AIG) $85B loan agreement with the federal government will meet to discuss alternatives to the plan. The Wall Street Journal reported that shareholders exploring the idea include some of AIG’s largest mutual-fund holders…FINANCIAL TIMES: The Financial Times reported that Morgan Stanley (MS) decided to temporarily suspend its merger talks with Wachovia (WB), after the Federal Reserve allowed Morgan Stanley to become a bank holding company. Morgan Stanley may completely abandon merger talks with Wachovia this week, inside sources said…The Financial Times also reported that Japanese investment bank Nomura (NMR) has won the competition to acquire most of the Asian operations of Lehman Brothers (LEH), according to inside sources. Nomura will initially buy all of Lehman’s Asian businesses except for its South Korean operations, but may buy these operations in the future…NEW YORK POST: Legg Mason (LM) is considering taking itself private, inside sources said. The New York Post reported that asset manager has been mulling over the option of selling itself to one or more private equity firms; under this scenario, the private equity firms would spin off most of Legg Mason’s funds after buying the company…

Asian Markets Wrap-Up for Monday, September 22
Asian stocks advanced and were led by financial and commodity firms who were spurred by the U.S. proposal to buy bank assets. Australia and Taiwan restricted the short sales of stocks. Most markets there gained…JAPAN: The Nikkei 225 Stock Average rose 169.73, or 1.4%, to 12,090.59, while the broader Topix index was up 19.57, or 1.7%, to 1,168.69. Resona jumped 10% to Y147,900. Mizuho Financial Group (MFG) added 2.9% to Y460,000. Nomura Holdings (NMR) increased 9.6% to Y1,430. Honda (HMC) was up 5.1% to Y3,500. NGK Insulators surged 13% to Y1,326. Nissan Motor Co. (NSANY) climbed 6.4% to Y803. Mitsubishi leapt 6.6% to Y2,840. Inpex Holdings advanced 9.7% to Y1.037M…CHINA: The CSI 300 Index gained 134.50, or 6.5%, to 2,207.61. Bank of China was up 10% to 3.70 yuan. China Construction Bank Corp. was also up 10% to 4.61 yuan. Industrial & Commercial Bank of China Ltd. added 10% to 4.16 yuan. China Life (LFC) was up 10% to 22.96 yuan. Ping An was also up 10% to 37.10 yuan…AUSTRALIA: The S&P/ASX 200 Index advanced 216.40, or 4.5%, to 5,020.50. ASX fell A$1.90, or 5.5%, to A$32.60. Babcock & Brown surged 55% to A$1.23. Macquarie Bank increased 5.3% to A$38.70. BHP Billiton (BHP) jumped 12% to A$39.70. Rio Tinto Group (RTP) rose 9.4% to A$111. Fortescue surged 25% to A$7.15. Murchison Metals gained 16% to A$1.41. Seven Network lost 5.8% to A$6.55…AROUND ASIA: In Hong Kong, the Hang Seng Index Index advanced 304.47, or 1.58%, to 19,632.20.

U.S. equity futures continue to point to a lower open
Stock futures continue to point to a lower open but are off of earlier levels. Global markets rallied overnight as details of the government’s bailout start to materialize. The Fed gave approval to Morgan Stanley (MS) and Goldman Sachs (GS) to become bank holding companies. That will make Goldman Sachs the fourth largest bank holding company. The move allows both firms to set up commercial banks and to draw off of the deposits of the bank which will bolster their resources. However, the banks will be subject to stricter regulations that commercial banks are expected to meet. :

Sources say rumors about in-home iPhone activiation “are true”-Boy Genius Report
According to a tip from an employee at an Apple (AAPL) retail store, rumors about in-home iPhone activation “are true,” meaning one can pre-activate the phone at home and buy the phone at the Apple store later. The source also says that some apple stores received 4GB iPod Nanos, which were “quickly recalled” and that rumors the 8GB iPhone will be discontinued are “probably untrue”.

Hedge fund managers must now pick their banking partners with caution-WSJ
Thanks to the government’s new financial rules the Wall Street Journal’s “Heard on the Street” points out that hedge fund managers have a number of reasons to cautiously pick their banking partners.The result? Funds will look to more stable commercial banks.

Foreign banks look for global bailout-NY Times
The New York Times reports that the financial bailout that began in the U.S. looks as though it could go global, a move which many believe could intensify scrutiny by critics and raise its cost. Over the weekend, foreign banks such as UBS (UBS) and Barclays (BCS) successfully lobbied to be able to sell American mortgage debt owned by their U.S. units to the Treasury. Critics believe Treasury Secretary Henry Paulson “needs to justify why a wider bailout” is in the national interest. The benefits are likely to be large for European banks with U.S. operations if the plan is approved in Congress.

SEC to amend list of companies on short sale list
“In light of the familiarity of the exchanges listing financial institutions with the nature of their respective businesses, the Commission has determined to amend this Order to provide that the listing markets shall select the individual financial institutions with securities covered by the Order. The Commission expects each national securities exchange listing financial institutions to immediately publish a list, on its internet Web site, of individual listed companies with common equity that will be covered by the Order�s prohibition on short sales. The Commission expects these lists to cover banks, savings associations, broker-dealers, investment advisers, and insurance companies, whether domestic or foreign, and the owners of any of these entities.”

Technology Trader: Google is cheap again - Barron’s
Columnist Eric Savitz says, while we are not seeing bargains of the same magnitude that we saw in the fall of 2002 when the Nasdaq was 1,000 points lower, there certainly are some tech stocks that clearly look cheap. One example is Google (GOOG). Back in Savitz’s March 31 column, he argued it made sense to start building a position in the stock, which was then in the high $430s. The call looked brilliant for a while thought Savitz, as GOOG climbed into the $590s in May. But now the stock is almost exactly where it was in March. And Savitz once again would assert that the stock is too cheap to ignore. To support his thesis, Savitz refers to a report last week from Jeffrey Lindsay, the Internet analyst at Bernstein Research. While Lindsay trimmed his EPS estimates and target price from $700 to $660 conceding that Google was likely to feel some effects from the weakening economy, and banks/brokers, for instance, might not be buying as many ads as they were before; he also laid out a case for why the stock at current levels is simply too cheap. In his report, Lindsay took on the task of drawing up a list of horrible events that would make Google’s business worth less than $400 a share. He writes that “even with the most pessimistic macro outlook we can engineer — a blighted global economy with perversely high oil prices,” the company would be worth at least $535 a share. Savitz’s bottom-line is: the stock already appears to be more than discounting a worst-case scenario - buy it, he says.

Where to Put Your Money Now - what to buy, and avoid - Barron’s
As the markets churn, sorting winners from losers is a fluid exercise. Barron’s says it would be wise, at this juncture, to avoid chasing the shares of leading regional banks, several of which hit new 52-week highs on the opening Friday. Richly priced regionals include Wells Fargo (WFC), US Bancorp (USB) and PNC Financial (PNC). The market was buzzing Friday with talk that many regional banks will take advantage of the lift in their stock prices to raise new capital in the next two weeks. With the market for preferred shares in shambles, banks probably will have to raise common equity. Potential candidates for equity issuance include Bank of America (BAC), BB&T (BBT) and Zions Bancorp (ZION). Barron’s says, Industrial stocks, energy and basic-materials issues and even the overall market could be better bets than many financials because if the federal actions have their desired effect, the economy is apt to be stronger in 2009. Many industrial, energy and materials stocks command less than 10x projected 2008 profits, and they typically have far better balance sheets than the average financial company. There are attractive alternatives for savvy investors looking to park cash without giving up yield or safety. Treasury-note yields have collapsed to around 2% for two-year maturities and 3.8% for 10 years. Even better buys await well-heeled, sophisticated investors in the municipal-bond market. The panic on Wall Street has resulted in extraordinary bargains in munis, even those with the implicit backing of Uncle Sam. Barron’s pegs the following stocks as “winners”: Bank of New York (BK); State Street (STT); Goldman Sachs (GS); Morgan Stanley (MS); Merrill Lynch (MER); Ace (ACE); Chubb (CB); Travelers (TRV). Barron’s pegs the following as stocks to “avoid”: Greenhill (GHL); Lazard (LAZ); US Bancrop (USB); Wells Fargo (WFC); Moody’s (MCO).

Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of September 19: Endesa Chile (EOC), Fuel Tech (FTEK), Somanetics (SMTS), Arena Resources (ARD), IPG Photonics (IPGP), Gorman-Rupp (GRC), Sohu.com (SOHU), NCI Inc (NCIT), Collective Brands (PSS), Nasdaq Omx Group (NDAQ), Vistaprint (VPRT), Southwestern Energy (SWN), Riskmetrics Group (RMG), Charles Schwab (SCHW), LaBarge Inc (LB), TD Ameritrade (AMTD), AZZ Inc (AZZ), Synaptics (SYNA), Lufkin Industries (LUFK), Perrigo (PRGO), Mindray Medical (MR) Netlogic Microsystems (NETL), Quanta services (PWR) Greif Inc (GEF), Middleby Corp (MIDD), Chart Industries (GTLS), Interwoven (IWOV), FPIC Insurance (FPIC)

Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of September 19: Synutra Intl. (SYUT), CF Industries (CF), Gmarket Inc (GMKT), Herman Miller (MLHR), Syniverse (SVR), Emcor group (EME), Cornell Corrections (CRN), EnPro Industries (NPO), Strayer Education (STRA), CSG Systems (CSGS), Olin Corporation (OLN), Ansys Inc (ANSS), JinPan International (JST), Brinks (BCO), ITC Holdings (ITC), M&F Worldwide (MFW), Forrester Research (FORR), Northern Trust Corp (NTRS), Covance (CVD), Sybase (SY), Qlogic (QLGC), NN Inc. (NNBR), Mastercard (MA), Herbalife (HLF), Koppers (KOP), Shaw Communications (SJR), Insteel Industries (IIIN), Altra Holdings (AIMC)

Morgan Stanley-MS: Levels to Watch
The stock has traded lower and higher this morning following news that it will come under regulation as a bank holding company along with GS. The Financial Times earlier reported that merger talks with Wachovia (WB) had been suspended. At the same time Mitsubishi UFJ Financial Group announced an investment stake of up to 20% of the company. Resistance levels to watch as potential upside objectives are at $30.15, $30.73, $31.20, $31.73, $32.45. Support levels to watch as potential downside objectives are at $28.71, $28.01, $27.54, $26.05, $25.66, $24.87.

Northeast Banks: MTB; PFS, AF, & SUSQ downgraded@STFL
Stifel recommends taking profits while you can as stocks are being driven by short-term factors and overt emotions and not fundamentals. The firm downgraded MTB to Hold from Buy and PFS, AF, and SUSQ to Sell from Hold.

Goldman Sachs-GS: Levels to Watch
Following on the surprise announcement that GS will come under regulation as a bank holding company, the shares are down (-3%) in the pre-market on light volume. One consequence of the change in regulation is that the company will have to meet new capital requirements that will mean leverage in a range of 10:1 down from a range of 20:1 or more. This is bound to have an impact on the forward business that was unanticipated just last week. Support levels to watch as potential downside objectives are at $124.34, $122.36, $120.40, $117.25, $114.95. Resistance levels to watch as potential upside objectives are at $128.00, $131.69, $134.16, $136.79.

Ratings Agencies and Financials
Although there is a ban on short-sales of Financial names in the US, the credit rating agencies are still active where downgrades or upgrades of debt are concerned. This has some interesting potential impacts that could come under the general heading of unintended consequences. While many Financials were being bid-up furiously on Friday, AMBAC Fin’l (ABK) and MBIA Inc (MBI) fell and are continuing to fall sharply in the pre-market after Moody’s placed both under review for possible downgrade. MBI is currently down (-8.5%) and ABK is down (-18.6%). There could be larger than usual downdrafts as a layer of demand due to the ban has been removed that might otherwise have buoyed up prices. Keeping an eye on any downgrade action in the Financials is now more than ever critically important.

XL, ALL, RNR, & TRV: Expect Q3 impact from poor hedge fund results@UBSW
UBS said poor Q3 hedge fund performance will hurt XL, ALL, RNR and TRV due to their hedge fund exposure.

Apple-AAPL laptop checks are negative@JMPS
JMP Securities’ checks indicate that there is little demand for MacBook Pro, while their semiconductor checks in Asia indicate that Apple has been canceling memory orders. JMP Securities maintained their Market Perform rating.

Property prices in Manhattan expected to take a hit in 2009-WSJ
Even as the median price of an apartment in Manhattan climbed above $1M for the first time in 2008’s second quarter, real estate there is golden no more and a correction is coming, probably next year, according to the Wall Street Journal’s “Heard on the Street”. Major factors include will the loss of Wall Street jobs, tightening credit and the stronger dollar which has led to more foreign purchases.

CME Group-CME target raised to $450 from $400, reiterate Buy@SBSH
Citigroup is seeing evidence that investors are shifting from the OTC derivatives market to futures exchanges such as CME due to counterparty concerns. They believe this volume pick-up should reduce earnings revisions fears for CME.

Jim Cramer’s “Mad Money”
Friday, Cramer said that “rallies are for selling”. Cramer said the astonishing 779-point rally over the past two days can only mean one thing: sell. Cramer advised selling 20% of your portfolio on Monday. Cramer recommended taking profits in stocks like Wells Fargo (WFC), US Bancorp (USB) and Zion’s Bancorp (ZION), and consider selling stocks in other sectors such as natural gas, technology and retail that have been up huge since last Wednesday. He said Target (TGT) is a good candidate to trim. As for things to buy, Cramer said he likes Clorox (CLX) which should report a good quarter and be a good defensive play. Next, Cramer credited Paulson for single handily preventing a run on our banking system. He said the government is now trying to do everything, from buyouts to trusts to regulations, to restore stability. The only downside, he said, will likely be just a few hedge fund failures. Despite the market’s huge rally, Cramer said there are still some stocks worth buying. On that note, he recommended private label food maker Ralcorp Holdings (RAH). Cramer said Ralcorp should benefit as grocery chains get more aggressive about pushing their private label brands. But he said the real catalyst is the falling costs of commodities, which should flow right to the bottom line. He also sees Ralcorp as a potential acquirer if consolidation in the industry occurs. Cramer likened RAH to Treehouse Brands (THS) which he said is up $18 since he recommended it on Aug. 18, 2007 at $24 a share. MAD MAIL: The wife of investor Boone Pickens called Cramer regarding the large sale of Clean Energy (CLNE). According to Pickens, it was her stock, not his, that was sold for personal reasons and both she and he, still support the company. Cramer said Goldman Sachs (GS) is not in the “Sell Block” although he acknowledges the negative pressure the firm, and the stock, is under. LIGHTNING ROUND: (Bullish) T; VZ; ABX; AUY; EXC; EP; NUE; SD. (Bearish) EMC; AXP; NCC; NLY.

Fast money position recap- Macke Owns (MSFT), (WMT); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman’s Firm Owns (MSFT), (NOK); Finerman’s Firm Owns (WFC) Puts; Finerman’s Firm Owns (BIIB) Calls, (DNA) Calls; Finerman’s Firm Is Short (BBT), (IYR), (IJR), (MDY), (SPY), (IWM); Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (ETFC); Najarian Owns (NOK) And Is Short (NOK) Call; Najarian Owns (RIMM) Call Spread.

The market is fairly lacluster this morning after the weekend and oil is up. I’m looking to go long in energy and basic materials. Going to stay nimble and I do expect continued volatility. The market seems confused and it will take time to sort out the mess. Look at energy, fert, and steel names. I’m looking to stay defensive. Pick plays with a high probability of success, have focus and patience, run technicals through supply and demand. Great Luck and Happytrading! See you in the myhappytrading.com Trading Room!