• AOL LLC Chief Executive Tim Armstrong told employees yesterday (Thursday) that he will ask for 2,500 volunteers, about one-third of the company’s workforce, to be laid off, The Wall Street Journal reported. The voluntary layoff program, which is part of an effort to trim some $300 million in annual costs, will begin on Dec. 4 and run through Dec. 11. AOL said the layoffs would result in restructuring charges of up to $200 million, which it announced last week

• U.S. Treasury Secretary Timothy Geithner yesterday (Thursday) fended off a Republican congressman’s demand that he resign, Bloomberg News reported. Geithner was asked to step down from his post by U.S. Rep. Kevin Brady, R-TX, who said the public “has lost all confidence in [Geithner's] ability to the do the job.” Geithner responded by blaming Republican leadership and the administration of George W. Bush for much of today’s financial crisis. “I can’t take responsibility for the legacy of crises you bequeathed the country,” he said, noting that by virtually “any measure” the economy is “substantially stronger today than when [President Barack Obama} took office.”

• Benchmark crude for December yesterday (Thursday) slid $2.12, or 2.66%, to settle at $77.46 a barrel on the New York Mercantile Exchange (NYMEX). The decline followed a similar slide in U.S. equities that drove the Dow Jones Industrial Average down 93.87 points, or 0.9%, and the Standard & Poor’s 500 Index down 14.9 points, or 1.34%.

• The Conference Board’s Leading Economic Index climbed 0.3% to 103.8 in October, the highest level since September 2007. “The data indicate that economic recovery is finally setting in. We can expect slow growth through the first half of 2010,” Conference Board economist Ken Goldstein said in a statement.

• U.S. President Barack Obama yesterday (Thursday) said that world powers could deploy new sanctions against Iran “within weeks,” as the Middle Eastern nation had failed to embrace a deal that would ship roughly 75% of its low-enriched uranium to Russia and France for conversion into a power source. “Iran has taken weeks now and has not shown its willingness to say yes to this proposal,” the president said at a joint news conference with South Korean President Lee Myung-bak in Seoul. “Our expectation is that, over the next several weeks, we will be developing a package of potential steps that we could take, that would indicate our seriousness to Iran.”

• DirecTV Group Inc. (Nasdaq: DTV) Chairman John Malone told Bloomberg News that he won’t rule out a possible takeover by AT&T Inc. (NYSE: T) or Verizon Communications Inc. (NYSE: VZ). “Our relationship will continue to broaden and intensify,” said Malone. “It may lead to some more ownership-oriented relationship, or it may not.” DirecTV has about 18 million customers, more than six times Verizon’s FiOS TV service and 10 times AT&T’s U-Verse TV service.

U.S. Rep: Give Regulators Power to Break Up Financial Giants; GM IPO Could Come in Q4 2010, Official Says; Fed May Not Increase Interest Rates Until 2012; Wells Fargo to Buy Back $1.3 Billion in Auction Debt; GE Says Appliance and Lighting Businesses Improving; October Housing Starts Miss Estimates; DirecTV Hires Pepsi Exec as New CEO; AMD to Pay Off $1 Billion in Debt;

• U.S. Rep. Paul Kanjorski, D-PA, chairman of the House Capital Markets Subcommittee revealed a proposal that would empower regulators to break up financial firms that pose a risk to the nation’s economy. Kanjorski’s plan took the form as an amendment to a bill in the House Financial Services Committee that proposed new powers for regulators to police, take over, restructure and close firms that are a “systematic risk.” Targeted at the 50 largest U.S. financial firms, the amendment would require the Financial Services Oversight Council to evaluate several factors in determining whether to take action, such as size, exposure, leverage and relationships.

• The U.S. government wants the eventual initial public offering (IPO) of General Motors Co. (NYSE: GRM) on a fast track and it could come as soon as the fourth quarter of next year, Reuters reports. "Private markets would like to see us exit this investment, and I think they will be more comfortable if we’re on a sustained path out the door than if they think we’re going to try to market time it to maximize return," Ron Bloom, head of the government’s autos task force told the news agency in an interview.

• Policymakers may not raise key interest rates until early 2012, according to U.S. Federal Reserve Bank of St. Louis President James Bullard. “If you look at the last two recessions, in each case the FOMC waited two and a half to three years before we started our tightening campaign,” Bullard said yesterday (Wednesday) in a speech in St. Louis. “If we took that as a benchmark, that would put us in the first half of 2012.”

• Wells Fargo & Co. (NYSE: WFC) agreed to repay roughly $1.3 billion to brokerage clients whose funds were frozen last year as the auction-rate securities market collapsed, the North American Securities Administrators Association (NASAA) said yesterday (Wednesday). The San Francisco-based bank also will pay a $1.9 million fine and reimburse investors that sold their holdings at a discount after the market collapsed.

• Revenue and profit growth for General Electric Co.’s (NYSE: GE) consumer and industrial division are slowly improving, unit President James Campbell said yesterday (Wednesday) at an Oppenheimer Holdings Inc. (NYSE: OPY) conference in New York. Campbell expects the unit, which includes GE’s appliance and lighting businesses, to show “slight” revenue growth in 2010 and “positive operating profit.”

• Housing starts in the United States fell 10.6% in October to a seasonally adjusted rate of 529,000, the Commerce Department said. That’s lower than the expected annual rate rise of 600,000 according to a media forecast of 77 economists polled by Bloomberg News.  

• The DirecTV Group Inc. (Nasdaq: DTV) named PepsiCo Inc.’s (NYSE: PEP) Michael White its next chief executive officer. White was vice chairman and CEO of Pepsi’s its international unit, and is credited by Pepsi CEO Indra Noovi as helping boost sales abroad to almost $20 billion — more than double the amount when he took the helm of that division in 2003.

• Advanced Micro Devices Inc. (NYSE: AMD) is using a $1.25 billion settlement it received from rival Intel Corp. (Nasdaq: INTC) and a new $500 million bond offering to pay off $1 billion in debt, it said yesterday (Wednesday). AMD will put the cash toward buying back $1 billion in 5.75% notes that mature in 2012.

Hu Silent on Yuan; Troubled U.S. Banks May Get Chinese Bailout; SEC Sanctions Doubled in Last Fiscal Year; October PPI Gains; Playboy CFO Quits Amid Talk of Buyout; U.S. Home Builders Still Discouraged; GM Could Lay Off Up to 10,000 European Workers; Costco Stops Coke Product Orders Over Price Dispute

• As expected, U.S. President Barack Obama yesterday (Tuesday) in a summit with Chinese President Hu Jintao urged Chinese policymakers to let the yuan appreciate. “I was pleased to note the Chinese commitment made in past statements to move toward a more market-oriented exchange rate over time,” President Obama said as he stood next to Hu, who avoided the topic in his speech and instead spoke of the need to keep in close contact on “macroeconomic and financial policies and continue to consult, on an equal footing, to properly resolve and address economic and trade frictions.”

• Chinese and U.S. regulators may reach a pact that would encourage financial institutions in China to invest in troubled small- and medium-sized U.S. banks, Reuters reported, citing bankers briefed on the plan. Two senior bankers said U.S. officials, investment bankers, and financial advisers invited them to look at several potential investments in mostly troubled U.S. banks. Bankers in China complained of the difficulty in setting up branches or investing in banks in the United States, thanks in part to U.S. regulators’ strict supervision and approval process for financial deals. More than 100 U.S. banks have failed this year, most of them small- to medium-sized.

• The U.S. Securities and Exchange Commission (SEC) has opened more inquiries, brought claims faster and doubled sanctions in the latest fiscal year, it said yesterday (Tuesday). Fines and orders to forfeit illegal profits rose to $2.4 billion in the 12 months ended Sept. 30, compared to $1.03 billion in the previous year. New inquiries jumped 6% to 944, the SEC said in its 2009 Performance and Accountability Report.

• The Producer Price Index (PPI) for finished goods gained 0.3% in October, the Labor Department said yesterday (Tuesday). That follows a 0.6% decline in September and a 1.7% increase in August. So far this year, prices have increased in six of the first 10 months. Core prices, which exclude energy and food products, fell 0.6% last month after a 0.1% drop in September. Energy and food prices both gained 1.6% after declines in September of 2.4% and 0.1%, respectively.

• Playboy Enterprises Inc. (NYSE: PLA) Chief Financial Officer Linda Havard will resign after the end of the year as speculation that the company will be sold continues to circulate. Separately, Golden Gate Capital LP denied any involvement in talks to buy Playboy, which saw its stock fall 14.23% to close at $4.10 yesterday (Tuesday). Reuters reported last week the adult entertainment company was trying to sell itself for $300 million.

• U.S. homebuilders remained discouraged as the National Association of Home Builders’ (NAHB) sentiment index held steady at 17 in November. A reading of 17 shows that roughly one in six builders think the market is good or fair. Before the housing bubble burst, the index had never been below 20 in its 24-year history; it’s now been lower than 20 for 19 straight months and under the breakeven point of 50 for 43 consecutive months.

• General Motors Co. could cut up to 10,000 jobs in an effort to restructure its European operations, and it may finalize the deal within three weeks, Nick Reilly, interim head of its business there said yesterday (Tuesday) at a news conference. The automaker must reduce its production across the continent by between 20% and 25% as part of a $4.9 billion (3.3 billion euros) restructuring plan.

• Costco Wholesale Co. (Nasdaq: COST), one of the largest wholesale club retailers in the United States, said it will not order more products made by The Coca-Cola Co. (NYSE: KO) due to a price squabble, The Associated Press reported, citing a message on Costco’s Web site. “Costco is committed to carrying name brand merchandise at the best possible prices,” the message read. “At this time, Coca-Cola has not provided Costco with competitive pricing so that we may pass along the value our members deserve.” A Costco executive confirmed the news but would not comment further. The dispute is not expected to last long, The AP reported.

“New” GM to Begin Bailout Repayment; Dollar Drops to 15-Month Low, Gold Continues Record Highs; SEC to Investigate Trading Prior to 3Com/HP Deal; Sprint Pays Down Loan, Stock is Upgraded; Canon to Buy Europe’s Largest Printer Maker; Hitachi to Raise $4.6 Billion in Stock and Bond Sale; Cisco Ups Bid for Video Conference Equipment Maker; Millions of U.S. Taxpayers May Unexpectedly Owe, Treasury Says

• General Motors Co. yesterday (Monday) said it lost $1.2 billion in a bankruptcy-shortened third quarter, but vowed a quick repayment of $8 billion owed to the United States and Canada. Revenue at the “new” GM fell 26% to $28 billion. The company, of which the U.S. government has a 61% stake, has eliminated $78 billion of debt and built its cash reserves to almost $43 billion. GM plans to begin repaying the U.S. and Canadian governments next month, starting with a $1.2 billion payment, followed by quarterly payments.

• The U.S. dollar fell to a 15-month low against a basket of currencies as investors questioned U.S. Federal Reserve Chairman Ben Bernanke’s ability to return it to strength. The dollar declined to an intraday high of $1.48 against the euro as Bernanke said in a speech in New York that the Fed is “attentive” to fluctuations in the value of the greenback and “will help to ensure the dollar is strong.” Meanwhile, the falling dollar grew investors’ appetite for hard assets, which resulted in the price of gold once again rising to a record $1,140 an ounce on the New York Mercantile Exchange (NYMEX).

• The U.S. Securities and Exchange Commission (SEC) will look into a flurry of 3Com Corp. (Nasdaq: COMS) option buying hours before the announcement that Hewlett-Packard Co. (NYSE: HPQ) would buy the company, Bloomberg News reported, citing a person familiar with the matter. Call trading on 3Com hit a 26-month high approximately four hours before H-P made the buyout announcement. “It screams insider trading to the SEC,” Peter Henning, a law professor at Wayne State University in Detroit and former SEC attorney told Bloomberg.

• Sprint Nextel Corp. (NYSE: S) said yesterday (Monday) it has paid $1 billion of its $4.5 billion revolving credit facility, eliminating its outstanding balance on the loan. The company had $5.9 billion in cash and equivalents and $1.6 billion in borrowing capacity under the current facility for a total liquidity of $7.5 billion, it said. Shares in the wireless carrier were up 12.90%, closing at $3.50 after Credit Suisse Group AG (NYSE ADR: CS) upgraded the stock from “Neutral” to “Outperform” while at the same time adding it to its Focus List. Credit Suisse also upped Sprint’s target share price from $4 to $6.

• Canon Inc. (NYSE ADR: CAJ) will make a tender offer of $1.1 billion (730 million euros) in cash for Oce NV (OTC ADR: OCENY), Europe’s largest printer manufacturer, the two companies said yesterday (Monday). Canon will pay $12.87 (8.6 euros) per Oce share, a premium of 70% to Oce’s stock price at the closing bell on Friday. Oce shares skyrocketed 62.16%, closing at $12.00 yesterday.

• Japanese electronics giant Hitachi Ltd. (NYSE ADR: HIT) said it will raise up to $4.6 billion through the sale of stock and bonds, sending its shares downward. The sale will be made up of $1.1 billion in convertible bonds and the rest stock, the company said yesterday (Monday). “Hitachi still needs to push forward the reorganization of its businesses,” Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo told Bloomberg News. Companies that need to boost capital “seem to be rushing to the market that’s shown a recovery,” he said. Hitachi stock closed at $30.45, down 6.71%.

• Cisco Systems Inc. (Nasdaq: CSCO) raised its cash bid for Norwegian video-conference-equipment makers Tandberg ASA (PINK: TBGTF) by 11% to $3.41 billion (19 billion Norwegian kroner), saying the new bid was its final one. Tandberg’s board unanimously recommended the revised bid, Chairman Jan Opsahl said. Cisco has pushed into 30 new business areas, which it says could produce $1 billion a year in revenue.

• More than 15 million U.S. taxpayers could unexpectedly owe when they file their returns because the government was too generous with its Making Work Pay tax credit, a Treasury Department report said. Taxpayers will be at risk if they have more than one job, are married and both spouses work, or receive Social Security benefits while also earning taxable wages. The credit, part of U.S. President Barack Obama’s $787 stimulus package, was supposed to give individuals up to $400 and couples up to $800.

We have been front-running many very positive catalysts since I first recommended buying Amazon.com Inc. (Nasdaq: AMZN) on Feb. 5.

First, that put us ahead of the bull-market rebound in U.S. stocks that started in early March. My recommendation also predated the launch of Kindle 2, as well as stimulus measures deployed by the United States and China in April.

Just as predicted, the U.S. economic recovery has gathered momentum and Amazon has benefited greatly by offering a compelling value proposition to a cash-strapped consumer. 

The loose monetary policy and the massive fiscal stimuli of the U.S. Federal Reserve and the weak U.S. dollar have combined to fuel a rally of the Nasdaq Composite Index and Amazon has outperformed the whole way. 

In June, I recommended that long-term holders maintain their positions in Amazon, and that traders start reining back positions gradually as valuations became extended.  And I took that slightly conservative position, despite my deep conviction that Amazon stock remained unquestionably bullish.

Amazon reported solid second and third-quarter earnings, and the stock has almost tripled from my initial February recommendation.  In fact, the company blew the top of Wall Street estimates and kept running strongly. Operating margins expanded from 3.6% to 4.6% in the third quarter. That improvement is mammoth for a rabid discounter that thrives on volume.

What has this meant for investors? The day before my February recommendation of Amazon, the company’s shares closed at $61.06. By the third week of June, when I reiterated my recommendation, Amazon’s shares had climbed to $82.96 – a gain of nearly 22% in just four months.

Amazon’s shares closed Friday at $132.97, a jump of 60% since the third week of June and a total gain of 118% in the nine months since I labeled Amazon’s shares as a “Buy.”

What can we learn? In the technology sector, one must always be looking ahead to the next wave and its financial implications. With their debates about the future distribution of content – with digital distribution poised to take the place of CDs and DVDs – analysts have failed to factor in that Amazon has found a way to stay in the game: Kindle. Just as MP3 players and iPods have changed the music publishing industry, Kindle has revolutionized the publishing business.

In addition, Amazon has identified another segment of the IT business where it excels: managing a huge, highly efficient storage and computing infrastructure. It has launched its vaunted cloud computing platform, which allows users to rent these capabilities in order to store information and compute it while being linked online to Amazon’s infrastructure.

This allows businesses to outsource the headache of maintaining and optimizing their own infrastructure. It also increases the security and integrity of user data.

So, just as Amazon’s superior online shopping and infrastructure capabilities enabled its runaway leadership in online sales, its innovation will help the company succeed in streaming content like movies and music online.

However, some clouds are beginning to dot the horizon.  Wal-Mart Store Inc.’s (NYSE: WMT) expansion into this field cannot be ignored. And in the hi-tech gadget field, where Amazon is not traditionally been a force, we have seen other players looking to dethrone the Kindle’s success, including Apple Inc. (Nasdaq: AAPL).  The latter is a threat that nobody can slight, given its tradition of obliterating its competition with superior design and functionality.

Of course, even if Apple or others succeed in stealing market share from Amazon in the e-reader market, they won’t dent Amazon’s leadership in selling published content.  In addition, the global roaming capabilities of the Kindle will allow sophisticated clients worldwide that have Amazon accounts to buy its content, expanding the reach of digital book sales no matter which country they’re in.

In any case, we are going to take our original capital out in recognition of the near tripling of our investment and let the rest ride.

Regardless of the outcome of the reader device wars, Amazon will likely benefit from increased online sales and the secular growth explosion that is taking place in the industry.  So I am still confident that, even at these lofty valuations (the stock is trading at 78 times earnings), Amazon will do very well in the long term.

Recommendation: Take your original capital out of Amazon.com Inc. (Nasaq: AMZN) and let the rest ride long term (**).

(**) – Special Note of Disclosure: Horacio Marquez holds no interest in Amazon.com Inc.

[Editor's Note: Commodities are hot. In some cases, white hot.

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If you need help, just ask Money Morning's Horacio Marquez.

As worries about oil escalate - whether those worries are about future supplies, future prices or global-warming - more and more muscle is being placed behind alternative power technologies. That's especially true in the hybrid vehicle market, where a specific technology has emerged as the clear leader.

The technology is lithium-based rechargeable batteries, and its emergence is sending lithium demand skyrocketing.

The profit potential of this market is stunning - but only for investors who can figure out the right way to play it.

Here's the thing: Marquez - a Money Morning contributing editor who also edits the Money Map VIP Trader - has uncovered the lithium-tech leader.
This company is a global player with a solid market cap and is well known within the hybrid industry. But surprisingly few investors know about the company, or have ever even heard its name.

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News and Related Links:

• Money Morning:
  
  Buy, Sell or Hold: Amazon.com Inc. (Nasdaq: AMZN) Remains Unquestionably Bullish
• Money Morning:
  Buy, Sell or Hold: Amazon Stock is Positioned as a Long-Term Winner
• Money Morning:
  How Sustainable is the Kindle’s Early Success?

Intel Pays AMD $1.25 Billion to Settle Multi-Year Lawsuit; WalMart Forecasts Bleak Holiday Sales on Surging Unemployment News; FHA Capital Reserves Lowest in History; Commercial Paper Market Falls For Second Week in Row; Better Ad Market Helps Disney Profit, Sales Grow; British Airways, Iberia to Merge; Barofsky: TARP Will Be a Loss For Taxpayers; Activision Sees Sales of $310 Million on First Day of Game’s Release

• Bringing an end to a multi-year battle, Intel Corp. (Nasdaq: INTC) will pay Advanced Micro Devices Inc. (NASDAQ: AMD) $1.25 billion as part of a legal settlement  between the world’s two largest computer-processor makers. AMD had filed an antitrust complaint against Intel with the European Union, and sued Intel in Delaware in 2005 alleging it controls the market for microprocessors, in part by providing discounts to customers that avoid AMD’s products. The settlement includes all antitrust litigation and patent cross-license disputes, the companies said in a statement today. The companies agreed to new 5-year cross-license pact and Intel also agreed to abide by a set of business-practice provisions.  Intel had 82% of the market for personal-computer processors at the end of the third quarter, according to Mercury Research in Cave Creek, Arizona. AMD had 18%
• Acknowledging its customers are nervous about rising unemployment, Wal-Mart Stores Inc. (NYSE: WMT) posted a higher-than-expected quarterly profit, but lowered its earnings forecast for the holiday quarter that could miss Wall Street estimates.  Wal-Mart is warring with rivals, including Target Corp. (NYSE: TGT) and Amazon.com Inc. (Nasdaq: AMZN), in cutting prices for items ranging from toys to books.  Wal-Mart executives said on Thursday that its shoppers were still worried about the U.S. economy, despite signs that the country is returning to growth, as unemployment hits double-digit levels. "Customers continue to tell us they’re concerned about their own finances and unemployment," Wal-Mart U.S. chief Eduardo Castro-Wright said on a prerecorded call. "We recognize that some customers may be more cautious in their holiday spending."
• The Federal Housing Administration said its reserves fell to the lowest level in history after a record drop in home prices. The government agency that insures at least one of every five U.S. single-family mortgages said its loan insurance ratio, which measures reserves to the amount of loans insured, dropped to 0.53% in the year ended in September, according to an annual actuarial review released by the agency Thursday. The fund is below the 2% threshold FHA is required to maintain by Congress. The insurance program tripled in size last year and has taken on more risk as private industry sources for lenders to finance and insure home loans dried up and the U.S. mortgage default rate rose to a record high. FHA said it’s changing its risk models to account for the possibility that the ratio could fall below zero, which may trigger the need for taxpayer aid.
• After three months of consecutive growth, the U.S. commercial paper market contracted for a second straight week, U.S. Federal Reserve data examined by Reuters showed.  For the week ended Nov. 11, the size of the commercial paper market fell by $76.6 billion to $1.239 trillion outstanding from $1.315 trillion outstanding the previous week. The market can be a gauge of economic activity as it is a vital source of short-term funding for daily operations at many companies. However, technical factors and seasonal adjustment distortions may have contributed to the recent setback, analysts said.
• An improving ad climate and strength in its cable operations helped The Walt Disney Co. (NYSE: DIS) boost its profit and sales in its fourth quarter ended October 3. Disney posted a net income of $895 million, or 47 cents per share, compared to $760 million, or 40 cents per share in the same period a year ago. Revenue grew 4.5% to $9.86 billion, up from $9.44 billion in last year’s fourth quarter.
• After numerous regulatory hurdles, British Airways PLC (OTC: BAIRY) and Spain’s Iberia Lineas Aereas de Espana SA  (PINK: IBRLF) said they have reached a preliminary agreement to merge that will create roughly $593.7 million (400 million euros) of synergies. The deal, expected to closed by the end of next year, will give British Airways 55% of the new company and Iberia the remaining 45%. Iberia’s Chairman Antonio Vazquez will assume the same role with the new company, while British Airways’ Chief Executive Officer Willie Walsh will be CEO.
• Troubled Asset Relief Program (TARP) watchdog Neil Barofsky said the program will “almost certainly” result in a loss to U.S. taxpayers. “We need to temper or be realistic about our expectations, a dollar-for-dollar return is just highly unrealistic,” he said today at the Bloomberg Washington Summit. “It’s almost certainly going to be a loss.” Barofsky pointed out that “tens of billions” of dollar will be lost on the bailouts of General Motors Co. (NYSE: GRM) and Chrysler Group LLC, and that some banks that received TARP money are already failing, nullifying any aid they may have received. It’s currently impossible to determine what the actual loss will be because some programs are still being rolled out by the government, he said.
• Activision Blizzard Inc. (Nasdaq: ATVI) said it sold 4.7 million copies of “Call of Duty: Modern Warfare 2,” generating a record $310 million in sales on Tuesday, the game’s first day of release. Analysts expect the multiplatform title will sell 11 to 13 million copies by the end of the year, Reuters reported. Activision stock closed at $11.44 per share yesterday (Thursday), up 0.53%.

WSJ: Motorola to Sell Network Business; Macy’s Shares Fall After Forecast Misses Estimates; China’s Prices Fall, Trade Surplus Grows; Gold Price Records Continue; iPhone Posts Strong Sales After Debut on Second U.K. Carrier; Britain’s Central Bank Open to More Asset Purchases; Geithner: U.S. Wants Strong Dollar, Lower Deficit; AIG CEO Threatens to Leave Amid Pay Frustration; H-P Buys 3Com for $2.7 Billion in Cash

• Motorola Inc. (NYSE: MOT) is considering selling its set-top box and mobile phone network equipment business for about $4.5 billion, people familiar with the matter told The Wall Street Journal. Private equity firms as well as other communications-gear makers were reported as possible buyers, and JPMorgan Chase & Co. (NYSE: JPM) and Goldman Sachs Group Inc. (NYSE: GS) are said to be advising Motorola on the sale. Declining sales in Motorola’s mobile phone unit this year made the set-top box and mobile phone network equipment business its largest division, with sales of $2 billion. RBC Capital Markets Corp. analyst Mark Sue says a sale of any of Motorola’s other businesses could hurt Motorola’s struggling mobile phone business. “The mobile devices business still needs the rest of the businesses to fund it operations,” Sue told Reuters. “It hasn’t really recovered fully yet so it would be a little too early to cut off the lifeline.”

• Macy’s Inc. (NYSE: M) said it expects fourth quarter same-store sales to fall between 1% and 2%, and earnings of $1 to $1.05 per share, far below estimates of $1.17 per share by Thomson Reuters Corp. (NYSE: TRI). The retailer expects a less severe drop for its full-year same-store sales, forecasting a drop of 5.4% to 5.7%, compared to a prior outlook of a 6% to 8% decline. Macy’s third-quarter net loss narrowed to $35 million, or 8 cents per share, compared to $44 million, or 10 cents per share in the same period last year. Sales dropped 3.9% to $5.28 billion. Shares of the company fell 8.08% to settle at $17.86 yesterday (Wednesday).

• The consumer price index (CPI) in China fell 0.5% in October from a year earlier, narrowing the 0.8% drop in September, government data showed. China’s producer price index (PPI) dropped 5.8% last month compared to a year ago, slowing from September’s 7.0% decline. Its trade surplus grew to $24 billion in October, almost double the previous month’s $12.93 billion.

• Gold futures yesterday (Wednesday) settled at a record of $1,114.60, up $12.10 on the New York Mercantile Exchange (NYMEX) after upbeat key Chinese economic indicators and continued expectations of loose monetary policy throughout the world. “As long as the U.S. dollar is trending down, the gold price is unlikely to soften meaningfully,” analysts at Commerzbank AG (OTC ADR: CRZBY) wrote in a note to clients.

• U.K. wireless carrier Orange said it sold 30,000 units of Apple Inc.’s (Nasdaq: AAPL) iPhone on its first day of availability Tuesday. While that’s a far cry from the 146,000 units sold in its first weekend in the United States, Orange is actually the second carrier in the United Kingdom to carry the handset after O2. The news will likely bolster calls for the iPhone to move to a second carrier in the United States. AT&T Inc. (NYSE: T) is the exclusive iPhone carrier in the United States, but its contract with Apple is set to expire next year.

• Bank of England Governor Mervyn King said he has an “open mind” on new bond purchases, adding to the United Kingdom’s currently planned purchase of $331 billion (200 billion pounds) in assets. The news comes after the United States said it will ease its purchases of mortgage-backed securities (MBS) in the first quarter and the European Central Bank said last week that some long-term financing auctions will end in December. Australia and Norway have already started to raise their key interest rates. “This cautious tone is aiming at keeping the options open for the Bank of England,” said Sarah Hewin, an economist at Standard Chartered Bank told Bloomberg News. “They obviously still do feel that there are risks out there.“

• U.S. Treasury Secretary Timothy Geithner reaffirmed his belief to maintain a strong dollar and reduce the United States’ record-high $1.4 trillion deficit in Tokyo yesterday (Wednesday), addressing concerns in export-heavy Asia. “We bear a special responsibility for trying to make sure that we are implementing policies in the United States that will sustain confidence … in investors around the world that as growth recovers and growth strengthens that we’re going to bring our fiscal position back to a sustainable balance,” he said.

• American International Group Inc. (NYSE: AIG) President and Chief Executive Officer Robert Benmosche, frustrated with the executive pay limitations the federal government imposed on his company told the board he is considering stepping down, people familiar with the matter told The Wall Street Journal. Benmosche last week told directors that he was “done” but gave it a second thought after other board members reacted with shock, the people said. In a meeting with the Obama administration’s pay czar Kenneth Feinberg last week, Benmosche discussed difficulties of complying with the government’s pay policies and retaining talent at the company. Still, the executive told employees yesterday (Wednesday) that he and AIG’s board “remain totally committed to leading AIG through its challenges.”

• Hewlett-Packard Co. (NYSE: HPQ) has entered a definitive agreement to buy 3Com Corp. (Nasdaq: COMS) for $2.7 billion in cash, or $7.90 per share. The move underscores PC makers’ diversification away from their core business amid eroding margins on computers. H-P, the world’s largest PC maker said the merger reaffirms its next-generation data center strategy “built on the convergence of servers, storage, networking, management, facilities and services.”

Dodd Introduces Financial Overhaul Bill; Ex-Bear Stearns Managers Innocent of Fraud; Job Openings Still Scarce; AMEX: Credit Card Spending Up in Oct.; EU Objects to Oracle; Oil Falls As Hurricane Ida is Downgraded; Apple Cell Phone Profits Pass Nokia’s; JPMorgan to Hire 1,200 Mortgage Salespeople

• U.S. Senate Banking Committee Chairman Christopher Dodd, D-CT, unveiled a new bill that calls for the creation of three new government agencies to regulate over-the-counter derivatives and crack down on hedge funds in an ambitious regulatory overhaul. One agency that would be created under the bill would be a Consumer Financial Protection Agency (CFPA) that would regulate mortgages, credit cards and other financial products. “The financial crisis exposed a financial regulatory structure … unable to prevent threats to our economic security,” Dodd said.

• Two former hedge fund managers at The Bear Stearns Cos., Ralph Cioffi and Matthew Tannin were found not guilty of misleading investors who lost $1.6 billion in the first test of the federal effort to obtain convictions tied to the subprime mortgage crisis and recession. A 12-person jury deliberated for less than a day before reaching the verdict, which saved the managers from serving as many as 20 years in prison if convicted. The acquittal could set the stage for any future prosecutions related to the crisis. “Any time the government undertakes a major prosecution in a new area, the outcome certainly influences its thinking about the prosecutability of other potential defendants,” Jacob Frenkel, a former U.S. Securities and Exchange Commission lawyer told Bloomberg News. “Acquittals force prosecutors to rethink their theories and charges.”

• There’s an average of about 6.1 unemployed workers for each job opening in the United States, the Labor Department said. That’s down slightly from 6.2 in October and a sharp increase from just 1.7 workers per opening when the recession started in December 2007. Still, some sectors are showing small signs of life in hiring, such as information technology and sales professionals, government reports and job search Web sites show. “We’ve seen a real spike in the hiring of contract recruiters,” Phil Haynes, managing director of AllianceQ, an employers’ association that includes companies such as Starbucks Corp. (Nasdaq: SBUX), Bank of America Corp. (NYSE: BAC) and Intuit Inc. (Nasdaq: INTU) told The Associated Press. “The recruiters come before the jobs.”

• Annualized billings on credit cards grew 3% from September to October, American Express Co. (NYSE: AXP) said. When adjusted for foreign-exchange rates, the billings fell 1%. That was an improvement over a decline of slightly more than 5% in September and almost 10% in August. “The trends in spending are encouraging, and there are signs that the recession may be approaching an end,” Chief Executive Officer Kenneth Chenault said at a financial services conference organized by Bank of America-Merrill Lynch (NYSE: BAC). Shares of the lender hit their 52-week high of $39.86 before settling at $39.68, up 1.61%.

• Antitrust regulators in the European Union formally objected to Sun Microsystems Inc.’s (Nasdaq: JAVA) proposed $7.4 sale to Oracle Corp. (Nasdaq: ORCL). The “statement of objections” from the European Commission was expected, as it has shown concern that Oracle will be too strong a presence in the database market. The deal has already been given the green light by the U.S. Justice Department.

• Contracts for light, sweet crude for December delivery yesterday (Tuesday) fell 38 cents to settle at $79.05 per barrel on the New York Mercantile Exchange (NYMEX) after Hurricane Ida passed several oilrigs in the Gulf of Mexico without incident. The hurricane has now been downgraded to a tropical storm.

• Apple Inc. (Nasdaq: AAPL) overtook Nokia Inc. (NYSE ADR: NOK) in the third quarter as the having the highest operating profit among cell phone makers, market research firm Strategy Analytics said yesterday (Tuesday). Stategy Analytics estimated Apple’s profit on its popular iPhone stood at $1.6 billion versus Nokia’s $1.1 billion. Nokia still dominates with a worldwide market share of 40%, but has just a 10% share in the United States. “We believe the United States, where Nokia now trails Apple in marketshare, is the key to Nokia’s recovery in 2010,” analyst Neil Mawston told Reuters.

• JPMorgan Chase & Co. (NYSE: JPM) said it will hire 1,200 mortgage loan officers by the end of next year as the company pursues new mortgage business and refinancing opportunities. The new sales staff will work at bank branches in 23 states including California, Florida and Texas. “We have made a number of strategic investments in our organization,” said Dave Lowman, head of home lending at Chase. “We have invested in new systems, aggressively grown our capacity and now are looking to increase our sales force. With our vast branch network and growing customer base, the opportunity for Chase loan officers is tremendous.”

Currency Battle Continues; Dow Hits 13-Month High; Fannie Could Need More TARP Money; Google Buying Mobile Ad Firm; Dish Network Surprises; GMAC Fails to Meet Fed’s Capital Deadline; Sprint Cuts Up to 2,500 Jobs; Las Vegas Sands Macau Business to Go Public; EA Off Its Game

• China rejected calls from Europe and Japan to allow its currency, the yuan, to appreciate against the U.S. dollar until exports revive, Bloomberg News reported, citing state research. China will stick with its “tough stance” on the currency, Zhang Ming, a researcher at the Chinese Academy of Social Sciences told Bloomberg.  “There is no domestic pressure for the yuan to appreciate because exports are still having a year-on-year decline,” Zhu Baoliang said. China has kept the yuan at 6.83 to $1 since July 2008.

• The Dow Jones Industrial Average closed at its highest level in more than a year, rising 203.52 points to close at 10,226.94. The gain followed news that the G-20 finance ministers and central banks agreed to keep current stimulus policies in place. “Central banks around the world are continuing to prop up the economy and support risk taking,” Jack Ablin, chief investment officer of Harris Private Bank told Reuters. “There’s very little regard for valuation.”

• Fannie Mae (NYSE: FNM) said it may have to ask for more funds under the U.S. Treasury’s Troubled Asset Relief Program (TARP) because it can’t sell $5.2 billion in tax credits, The Associated Press reported. The Treasury Department last week blocked the mortgage giant from selling roughly $2.6 billion in low-income housing tax credits to investors that included Goldman Sachs Group Inc. (NYSE: GS). Fannie Mae last week asked the government for $15 billion in aid following its $19.8 billion quarterly loss, bringing the total TARP bill for taxpayers to $60 billion.

• Google Inc. (Nasdaq: GOOG) has signed an agreement to acquire mobile display ad technology provider AdMob Inc. for $750 million in stock. The move marks Google’s latest move to capture a budding market for advertising on mobile phones. “Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time,” said Susan Wojcicki, Vice President of Product Management at Google, which says its mobile searches grew 30% sequentially in the third quarter.

• Dish Network Corp. (Nasdaq: DISH) beat Wall Street estimates by posting a gain of 241,000 subscribers in the third quarter. Analysts’ estimates ranged from a loss of 9,000 to 30,000 subscribers, Reuters reported. The No. 2 satellite television provider reported a net income of $80.5 million, or 18 cents per share, down from a profit of $92 million, or 20 cents per share a year earlier. The company also unveiled an unexpected special dividend of $2 a share.

• The U.S. Federal Reserve said nine of 10 bank holding companies deemed short of capital earlier this year have adequately raised enough reserves to withstand the expected higher unemployment rate and slow economic growth. The one exception, GMAC LLC (NYSE: GMA) is expected to meet its remaining buffer by accessing the government’s financing program for the auto industry. The results of the Fed’s stress tests determined that 10 banks needed to raise $74.6 billion to endure further credit losses.

• Sprint Nextel Corp. (NYSE: S) said yesterday (Monday) it would eliminate up to 2,500 positions within the company to reduce labor costs by at least $350 million on an annualized basis. The United States’ No. 3 wireless phone service expects a charge between $60 million and $80 million during the current quarter for severance and related costs.

• Las Vegas Sands Corp. (NYSE: LVS) is looking to raise up to $3.35 billion on an initial public offering (IPO) of shares in its Macau business, it said in a filing with the Securities and Exchange Commission yesterday (Monday). The offering price for 1.87 billion shares of Sands China Ltd. is expected to be between $1.34 and $1.79 per share. The IPO of the company should help it complete two suspended projects in the Chinese territory.

• Electronic Arts Inc. (Nasdaq: ERTS) posted its 11th straight loss in a row and said it would eliminate 1,500 jobs as the video game industry continues to be hurt by a scaling back in consumers’ discretionary spending. EA’s loss widened to $391 million, or $1.21 per share in the third quarter, compared to a loss of $310 million, or 97 cents per share, in the same quarter last year. Sales slipped to $788 million, down from $894 million. The company said the layoffs will save it at least $100 million and it will incur one-time restructuring charges of $130 to $150 million. In a separate announcement, the company said it has acquired Playfish Ltd. for $275 million in cash, a developer of games for social media Web sites.

Last year, on Aug 25, I recommended readers start buying shares of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) in incremental amounts until the end of 2008. 

I emphasized that Berkshire should be a core, long-term holding in investors’ portfolios and not a stock to trade in and out off.   Today, the stock is about 11% above the price that it finished 2008 at. 

I was always confident that the huge amount of cash on Berkshire’s books would provide it with countless opportunities to pick up quality assets at bargain prices should the market falter.

“Under Buffett, Berkshire Hathaway is a like an astute and disciplined kid in a candy store,” I wrote last August.

Buffet, a savvy and well-financed investor, made the most of this opportunity to cherry pick new acquisitions at ridiculously low valuations and profit handily. Notably, he took big stakes in Goldman Sachs Group Inc. (NYSE: GS) and battery and carmaker BYD Co. Ltd. – both of which he profited handsomely on.

In fact, Berkshire’s concentrated stock holdings, including Wells Fargo & Co. (NYSE: WFC), American Express Co. (NYSE: AXP) and others, have strongly outperformed the Standard & Poor’s 500 Index this year, giving BRK very sizable book value gains. 

And on the operating side, Berkshire’s insurance business has shown gains in insurance premia and in operating cash flow.  All of this added to the already pristine financial strength of the company.

Great crises bring great opportunities and great institutions take advantage of those opportunities.  Berkshire Hathaway, true to its discipline, has done just that. It recognized the immense opportunity and deployed its huge war chest in the greatest acquisition Warren Buffet has ever made – the roughly 76% of Burlington Northern Santa Fe Corp. (NYSE: BNI) that it did not already own.

Warren Buffet is investing in a business that he knows extremely well and that has tremendous long-term potential.  Railroads will almost certainly keep gaining in value as energy prices make them more cost-effective. Burlington Northern benefits from high energy prices because rail is many times more energy-efficient than other modes of transportation, and because it is integral in the transportation of coal, which meets about 50% of the US economy’s fuel needs.

BNI’s large, unique assets make it an absolute bargain at today’s prices.  And with the dim prospects for the U.S. dollar, and with the U.S. economy in recovery mode, money put into any business that is leveraged to energy is likely to pay off. 

The acquisition reduces Berkshire’s huge cash position and the risk of value destruction that would come from inflation. It also increases the beta of Berkshire stock, that is, its sensitivity to equity market swings, due to the strong exposure to a very cyclical business.  At the same time, this move reveals to us the confidence that Warren Buffet has in U.S. economy.

The likelihood that rating agencies will downgrade Berkshire’s credit rating is a modest price to pay for the appropriate strategy at managing one’s balance sheet, eliminating exposure to inflation, and taking advantage of higher prices and greater rail cargo volume moving forward.

Having Berkshire Hathaway stock is a good choice in current conditions.  It’s the perfect time for the company to take advantage of its financial strength and vast war chest.  It has not disappointed, as many of Warren Buffett’s earlier critics have been proven wrong.  It now becomes an even more attractive, astutely diversified play on the rebound of the US economy.

To cap it all, Berkshire has decided to split its Class B stock 50 to 1, making it more accessible to smaller investors.  This is a welcome and long overdue move that will certainly expand the stock’s global appeal.

Recommendation: Buy shares of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) if you haven’t already (**). And if you currently have shares, we encourage you to hold onto or add to them. 

(**) Horacio Marquez owns no interest in Berkshire Hathaway Inc.

[Editor's Note: Commodities are hot. In some cases, white hot.

Oil, gold and silver are the hot commodities of today. But the shrewdest investors will look toward the horizon, and try to project just what the commodity profit plays of the future will be.

If you need help, just ask Money Morning's Horacio Marquez.

As worries about oil escalate - whether those worries are about future supplies, future prices or global-warming - more and more muscle is being placed behind alternative power technologies. That's especially true in the hybrid vehicle market, where a specific technology has emerged as the clear leader.

The technology is lithium-based rechargeable batteries, and its emergence is sending lithium demand skyrocketing.

The profit potential of this market is stunning - but only for investors who can figure out the right way to play it.

Here's the thing: Marquez - a Money Morning contributing editor who also edits the Money Map VIP Trader - has uncovered the lithium-tech leader.

This company is a global player with a solid market cap and is well known within the hybrid industry. But surprisingly few investors know about the company, or have ever even heard its name.

To learn more about this company - to get in ahead of the masses - and to find out more about Marquez's Money Map VIP Trader, please click here.]

News and Related Links:

• Money Morning:
  Buffett Bets on Bright U.S. Economic Future With Burlington Acquisition
• Money Morning:
  Buy, Sell or Hold: Berkshire Hathaway Inc.
• Money Morning:
  Berkshire’s Back, So What’s Warren Buffett Buying Now?