The Goldman Sachs (GS) fraud charge by the SEC is big news and the blogosphere is buzzing with opinion as the facts continue to come out.  This won’t go away anytime soon and I’d imagine the SEC is out to prove it’s new and improved and ahem… actually doing its job.  Of course this may lead to overreactions and firms and individuals will be made examples of to prove they mean business.  Going after Goldman certainly makes a statement.

Part of moving on and improving for the SEC means coming clean on past mistakes including the blind eye to the Stanford and Madoff ponzi schemes.  Buried amidst the Goldman fraud buzz today was the SEC issuing a report on the Stanford ponzi.  Is it a coincidence that this report was issued on a day it would be buried on the back burner?  Not a chance.

The results of the investigation reveal why the SEC wouldn’t want this in the headline news.  The investigation reveals the SEC was suspicious of Stanford Financial as far back as 1997 when it believed returns on CD’s were highly unlikely.  They didn’t conduct a meaningful probe until 2005 and didn’t bring a lawsuit until last year.

The report singles out the former head of the SEC’s enforcement office in Forth Worth, Texas, Spencer Barasch, accusing him of quashing attempts to pursue Stanford then trying to represent him as a lawyer in private practice.  Apparently an examination official at the SEC said to her boss in 1997 “keep an eye on these people because this looks like a Ponzi scheme and someday it’s going to blow up”.   The report also says that in 2003 a letter from a Stanford insider was forwarded to the SEC saying in all caps that Stanford “will destroy the life savings of many.”

Current SEC Chairman SEC Chairwomen was out with a bit of damage control today saying the SEC has improved its examinations and  that much has changed in the agency’s leadership and procedures.  Hey, it only took 3 years to bring this charge against Goldman so they’re on the right track!

I’ve had a few people ask if it was a good time to invest in Goldman and to that I say I can’t tell you how to trade individually because it’s against SEC rules!  Seriously though, If I were trading GS I’d be looking at the 150 level.  It’s taken out key support at the 168 level where the 50 and 200 day moving averages, so  the next support area is around 148 – 150 where it found support in January.  Take out that level and it could be a rough road ahead for Goldman shareholders.  You can get a detailed trend analysis of Goldman here.

The news has certainly helped pressure the dollar in the last couple days, but the dollar remains bullish for now and just consolidating recent gains.

From BNET

BNET doesn’t see any immediate gratification unless others get on board  and says, “Chambers’ promise depends on cable operators and their telecom rivals abandoning greedy habits like doling out bandwidth in metered increments and randomly hiking service rates. So, this could take a while.”

From ChannelWeb

ChannelWeb reports that Cisco’s statement of 12x the capacity is aimed at competitor Juniper which has issued a statement saying the claims are misleading: “The claim of 12 times the traffic capacity of the nearest competing system is based on a theoretical maximum of 72 interconnected CRS-3 chassis in order to achieve the 322Tbps total capacity — this will likely never be deployed in practice due to space, power, and manageability realities.”

From Yankee Group

The Yankee Group notes that the CRS-3 is IPv6 ready, designed to handle the explosion of mobile devices, “cloud ready” and 10x the speed of the closest competitive product but doesn’t quite live up to the big hype.

Quote: “So, did the Cisco CRS-3 live up to the immense hype that preceded it?  No, I don’t think so. But they did set a very high bar.  It’s a good solid announcement that will allow network operators to put a foundation in place to drive differentiated multimedia and mobile services.”

In my opinion, the technology is great and a big step towards handling the explosion of data, but let’s put it in perspective.  As a UBS analyst pointed out today, the high end router market represents less than 5% of Cisco revenues.  The new router may be a game changer for the internet in the years to come, but it’s probably not a game changer for the stock price.

Shares of Cisco were flat today.  Get your CSCO trend analysis here.

The ad debuted during the Superbowl and features the baby boy apologizing to his girlfirend for not calling her.   She accuses him of having that “milkaholic Lindsay” over.  The lawsuit claims that many celebrities are known by their first name (ie Madonna, Cher) and that Etrade is knowingly trying to profit from the name Lindsay which everyone assumes is Lindsay Lohan. 

She’s suing for $100 million and removal of the ad.  The Grey Group, which produced the ad, is saying it’s just a popular name and is the name of someone on their team.  As  for Etrade, they are basking in the glow of free media attention which this is sure to generate.  Well done.

::: >>> Click Here For Your FREE Etrade Analysis

The biggest IPO story since Google will continue to leave investors wondering.  While the Facebook IPO will happen, there are still no imminent plans with founder Zuckerberg saying “we’re definitely in no rush”, according to a WSJ article today.  He makes a good point in that the company is in the envious position of not requiring massive capital to build factories or even market the product, so the same motivations for going public quickly aren’t there.  Adding to the delay may be the fact that Zuckerberg, as the WSJ points out, is a micro manager who may be having a tough time relinquishing some control of the company of which he owns 25% of and controls voting power.

However, an IPO will take place as investors and shareholders have been promised and the company has been taking measures to prepare for it.  In 2008, the executive team was expanded highlighted by the hiring of Google exec Sheryl Sandberg and adding Netscape founder Marc Andreessen to the board.  Of course, the rumors, speculation and predictions are flying and many think the company will go public next year with a market cap of nearly $40 billion based on the current revenue number and applying a multiple similar to that of Google.  The company apparently was cash flow positive last year and believes revenue could reach $2 billion this year.

In the meantime, Zuckerberg found a way to ease the growing impatience of its employees for a big pay day ahead of an IPO.  Last year, $100 million in shares were sold to Russian firm Digital Sky Technology which also invested another $200 million giving them a 3.5% stake in the company without increasing the shareholder base.  Just an appetizer of what will likely be a rain of cash for Facebook employees. 

I’m a big fan of Zappos.com and won’t buy shoes anywhere else.  Great customer service.  Free shipping both ways and a huge selection.  They will continue to operate independently as a wholly owned subsidiary of Amazon with current management in place.  If Amazon is smart, they’ll let keep it that way. 

Both companies are big on customer service, making the purchase a good fit.  Here’s a video that Bezos did for Zappos employees discussing the importance of the customer.

>>> Click Here For Your Free Amazon Analysis

Alpha Pro Tech (APT) – protects people with disposable protective apparel such as masks.

Generex Biotechnology (GNBT) – developing drug delivery systems.

Hemispherx BioPharma (HEB) – engaged in drug therapies for viral and immune based chronic disorders.

BioCryst Pharmaceuticals (BCRX) – develops drugs that block enzymes involved in cancer, viral infections and autoimmune diseases.

AVI BioPharma (AVII)- developing of ribonucleic acid (RNA)-based drugs targeting a range of diseases.

Sanofi-Aventis (SNY) – pharmaceuticals and human vaccines through sanofi pasteur.

CombiMatrix Corporation (CBMX) – develops molecular diagnostics, nanotechnology and defense, and homeland security markets.

Gilead Sciences (GILD) – could benefit from TamaFlu sales.

Off the top of my head I can think of 3 companies that might be hurt by swine flu fears ..

Sanderson Farms (SAFM), Zhongpin (HOGS), Tyson Foods (TSN)

The airlines could very well be hit as well Alaska Airlines (ALK), AMR, Delta (DAL), Southwest (LUV), Continental (CAL), Allegiant (ALGT)

I tried to embed the video, but their code is a mess so here’s the link to the video. 

This bill would essentially halt most shorter term trading, greatly decreasing market liquidity not to mention putting many out of business.  This bill would be an absolute disaster.. For example, on a roundtrip trade of 100 shares of Google you’d be hit with a $170 tax bill!  You better believe these higher costs will be passed through in mutual funds as well.

This page makes it easy to sign a petition and send an email to your congressman/congresswoman urging them to vote no on this.

http://www.rallycongress.com/no2tradertax/1536/tell-congres-to-block-trader-tax/

Here’s a link to contact Peter Defazio directly

Track the progress of this bill here