Clare Baldwin and Sarah Lynch are unambiguous: “As U.S. regulators review rules on shares issued by private companies,” they write, “they must not make it too easy for hot Internet companies such as Facebook or Twitter to avoid the scrutiny that goes along with an initial public offering.”

They’re talking, of course, about the letter which SEC chairman Mary Schapiro sent to Darrell Issa on Wednesday. It’s a long and pretty boring document, and it’s certainly not as revolutionary as some of the press coverage would make you think. Jean Eaglesham, who broke the news without printing the letter, set the tone of the subsequent discussion by saying that the SEC review “could remake the way American start-ups raise capital,” “would upend the normal path for fledgling companies to raise funds,” and “could shut out many ordinary investors from one of the fastest-growing market sectors.”

But it’s hard to see

Below we present you with a list of four companies releasing earnings this week that have seen significant insider buying over the last six months.

If you're interested in getting ahead of the market, this list might offer you an interesting starting point given that managers are buying into their own companies. Full details below.

Click for expanded images


1. Bank of America Corporation (BAC): Banking Industry. Market cap of $136.43B. Earnings release scheduled for April 15. Net shares purchased by insiders over the last six months at 79,500 shares, which represents a 1.8% increase in insider ownership. Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.21). The stock has lost 27.53% over the last year.



2. SUPERVALU Inc. (SVU): Grocery Stores Industry. Market cap of $2.0B. Earnings release scheduled for April 14. Net shares purchased by insiders over the

The bulls just didn't have enough gas in the tank to make it three weeks in a row. The lack of gain, however, isn't even the alarming part; stocks only lost ground to a tiny degree. The red flag is the shape of the chart and the way things progressed over the last five days.

We'll look at that idea in detail below. First up though, a quick review of the major economic numbers.

Economic Calendar

Last week was minimal in terms of economic data flow, and only a small amount of the small amount we got actually meant anything. What's that? Unemployment claims – both new and continuing – sank a tad (not enough), while consumer credit levels soared well beyond expectations (up $7.6 billion versus the forecasted $2.0 billion increase).

The coming week will be more turbulent; here are the biggies to watch for, in that they actually

Perhaps an interim top in Crude as prices are down over 4% today with the front month trading back near $109/barrel. We expect to see some downside follow through in tomorrow’s session and have a first target at the 20 day MA, about $3 from current pricing. That should equate to a 15-20 correction in the distillates as well. In our opinion natural gas is a buy…we’re suggesting July futures or July bull call spreads. We feel there is roughly 20 cents of risk while we see 40 cents of potential profit…trade accordingly. The indices have lost ground for the last three sessions but there has been very little downside movement. We continue to like scaling into bearish plays as we feel the sentiment has become far too bullish. We anticipate a 3-5% correction is around the corner. Shorts in the Aussie are far from out of the woods as

4:14 PM, Apr 11, 2011 --

• NYSE down 38.17 (-0.5%) to 8,445.77
• DJIA up 1.06 (+0.01%) to 12,381
• S&P 500 down 3 (-0.3%) to 1,324
• Nasdaq down 8.9 (-0.3%) to 2,772

GLOBAL SENTIMENT

• Hang Seng down 0.38%
• Nikkei down 0.5%
• FTSE down 0.04%

UPSIDE MOVERS

(+) LVLT buying Global Crossing.

(+) GLBC sold for $23.04 a share.

(+) AMMD sold to Endo Pharma for $30 a share.

(+) TYC reportedly shown bid interest.

(+) AA gaining ahead of earnings

In anticipation of tonight's report, Senior Quantitative Analyst Rocky White crunched the numbers to see if there's any correlation between the market's reaction to AA's quarterly earnings and the near-term performance of the S&P 500 Index (SPX).

"Since 2005, if AA rises the day after their earnings release, then the

Sentiment

Stocks are trading mixed on a relatively slow news day Monday. With no economic data or earnings of importance, some of the early focus was on deal news after Endo Pharmaceuticals bid for American Medical Systems and Level 3 said it was buying Global Crossing. The Dow Jones Industrial Average opened steady. However, a modest wave of selling pressure surfaced mid-morning and both the Dow and NASDAQ were in the red at midday. The tone of trading then took a wait-and-see attitude ahead of earnings from Alcoa (AA). The aluminum maker and component of the Dow unofficially starts the first quarter earnings-reporting season after the closing bell. The earnings calendar is relatively light until next week, however, and then investors will digest a flood of reports in the weeks that followed. Some pre-earnings jitters might be setting in. The Dow Jones Industrial Average is down 15 points and the

The inflationary impact of rising commodity prices is overstated, but -- and that’s a big but -- it doesn’t mean rising commodities are necessarily good or should be ignored by policymakers. The various Federal Reserve banks are out in full force in recent weeks in an effort to talk down the impact of rising commodity prices. Although they’ve denied that QE2 is leading directly to higher commodity prices (which is total nonsense according to the BOJ), it’s clear that the Fed is worried about the price increases enough to feel the need to defend itself.

The latest report is from the Chicago Fed. In what is actually a very good paper, its authors discuss the impact of rising commodity prices. They state:

The recent run-ups in oil and other commodity prices and their implications for inflation and monetary policy have grabbed the attention of many commentators in the media. Clearly,

At the very beginning of 2010, Federal Reserve Chairman Ben Bernanke defended Alan Greenspan’s 1% interest rate policy of the early 2000s, saying that it did not cause the “housing bubble.” At the time, we wrote that, reading between the lines, Bernanke was doing more than protecting the Fed’s integrity: He was preemptively absolving himself and his zero percent interest rate policy from causing any problems.

Since then, oil prices have gone from $80 per barrel to above $110, a jump of 40%. The Goldman Sachs Agricultural Index is up 55%. Gold is up more than 30%. But of course, the very top decision-makers at the Fed – the “three amigos” of loose money, Bernanke, Yellen, and Dudley – do not see this as a problem that warrants a change in monetary policy. They are still dead set on using measures of “core” inflation, which exclude food and energy.

In

By Andy Obermueller

Linked here is a detailed quantitative analysis of Genuine Parts Company (GPC). Below are some highlights from the above linked analysis:

Company Description: Genuine Parts Co. is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price

2. 20-Year DCF Price

3. Avg. P/E Price

4. Graham Number

GPC is trading at a premium to all four valuations above. The stock is trading at a 14.6% premium to its calculated fair value of $46.81. GPC did not earn any Stars in this section.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash

By Karl Smith

Jim Hamilton has a post on health care that is excellent because it illustrates precisely what is wrong with conventional wisdom on this issue.

First he says:

The historical growth of federal expenditures on health care is unsustainable. Over the last 20 years, Medicare and Medicaid expenditures grew at an 8.4% continuously compounded annual rate (data source: CBO). That’s 3.75% faster per year than GDP grew, and for that difference in growth rates, federal health care expenditures as a percentage of GDP would double every 18.5 years. If those historical growth rates were to continue, federal health expenditures would rise from their current 5.4% of GDP to 10% of GDP by 2027 and 20% of GDP by 2045. Something has to give.

In a very tiny sliver of a way this is true. It is impossible for some segment of GDP to grow by more than GDP

The financial media is making a big fuss over the report that PIMCO is now short U.S. Treasuries. This isn’t all that surprising, given the firm’s incessant fear mongering about government default. Of course, that hasn’t stopped it from buying instruments backed by the full faith and credit of the U.S. (as it's been riding the coattails of the real bond guru, Jeff Gundlach, into MBS), but who needs facts when you can make headlines by giving the appearance that you are sympathetic to the fears of the common man?

But more importantly, PIMCO’s big move is eerily reminiscent of QE1 when Bill Gross predicted surging yields. Of course, he top ticked the market to the day and yields immediately tanked. In early 2010, Gross said:

Won’t that (the end of QE1) put upward pressure on interest rates?
“I think it will. I mean, the mortgage market would be your

I have a new article up at National Review Online where I argue that the best way for Congress to narrow the Fed's mandate is through nominal GDP level targeting. One point mentioned in the piece is that because a nominal GDP target ignores aggregate supply shocks it dominates an inflation target. This applies equally well to a price level target. Another way of thinking about this is that movement in the price level is a symptom of all underlying shocks, whereas movement in nominal spending is an underlying shock itself (i.e. an aggregate demand shock). The Fed will be far more effective if responds directly to the underlying shock over which it has influence -- the aggregate demand shock -- than responding indirectly to an imprecise symptom of that shock.

The importance of nominal spending shocks can be seen in the three figures below. The first figure shows the

The following IPOs are expected to price this week:

Arcos Dorados Holdings Inc. (ARCO), the world's largest McDonald's (MCD) franchisee with 1,755 locations in Latin America and the Caribbean, plans to raise $874 million by offering 62.5 million shares at a price range of $13 to $15. At the mid-point of the proposed range, Arcos Dorados will command a market value of $3 billion. Arcos Dorados, which was founded in 1967, booked $3 billion in sales last year. ARCO is located in Buenos Aires, Argentina. BofA Merrill Lynch (BAC), J.P. Morgan (JPM) and Morgan Stanley (MS) are the lead underwriters on the deal.

Box Ships Inc. (TEU), a newly formed Paragon Shipping- (PRGN) and CEO-backed Greek containership owner, plans to raise $160 million by offering 10 million shares at a price range of $15 to $17. At the mid-point of the proposed range, Box Ships will command a market value

Over the weekend, Nobel laureate Joseph Stiglitz called for a new global reserve currency.

The world economy needs a new global reserve currency to help prevent trade imbalances that are reflected in the national debt of the U.S., said Nobel-prize winning economist Joseph Stiglitz.

A “global system” is needed to replace the dollar as a reserve currency and help avoid a weakening of U.S. credit quality, said Stiglitz, a professor at Columbia University in New York. The dollar fell to an almost 15-month low against the euro last week, and the U.S. trade deficit widened more than forecast in January to the highest level in seven months.

“By taking off the burden of any single country, we don’t have to have trade deficits,” Stiglitz said in an interview in Bretton Woods, New Hampshire. “Things would be much worse if it were not the case that Europe was having even more

<< Return to Part 1

David Altig gives Allan Meltzer a more charitable read than I did:

Generally speaking, the Meltzer strategy offers what I perceive to be two critical criteria for a viable exit plan. One is that the winding down of the mortgage-backed securities (MBS) and long-term Treasury securities on the Fed's balance sheet should be conducted in a way that avoids market disruption and distortion as much as possible. The second is, of course, that the excess reserves held in the banking system — the liability side of the Federal Reserve’s balance sheet — have to be removed or "locked up" as needed to avoid an inflationary expansion of broad money and credit.

I take Altig seriously, but believe he is giving Meltzer far too much credit.

First off, there is nothing in the Meltzer plan that keeps the excess reserves "locked up." Instead, Meltzer claims that

Larry Swedroe was interviewed at Seeking Alpha and as always had some interesting things to say. I generally disagree with him on most things but he is usually interesting. Swedroe is an index investor who favors DFA funds (in many instances anyway) and does not think that any real value can be added with analysis in the context of making active decisions.

There are several points made in the interview that while they can be correct do not have to be universally correct, which calls for a little more detail for people to decide what is better for them based on both sides of these issues.

In pointing out the potential folly in economic forecasting, he notes that a year or so ago, the chief economist from Goldman Sachs said the biggest risk to the economy was deflation while the chief economist from Morgan Stanley was more worried about inflation.

With the near government shutdown averted in the eleventh hour last week, all eyes have now turned to the inflation-related data due out later this week, as well as the kickoff to March 2010 quarterly earnings results. As we have come to expect, Alcoa (AA) will kick off earnings after the market close today, but the real meat in terms of earnings and economic data will not be felt until the second half of the week.

Oil Prices Continued to Climb; EIA Gas Expectations and Food Prices

As such, near term oil and its recent rise will once again be in the crosshairs as will goings-on in Libya and the rest of the Middle East. With oil crossing over $112 per barrel, investor concern over the ability of the consumer’s ability to continue to spend is likely to mount. Supporting this concern is the recent forecast offered by the U.S.