Pisani: Tim Geithner in Big Trouble?

At a rather somber meeting of about a dozen hedge fund traders last night, it was widely agreed that big banks will get much smaller in the next couple of years. Most did not feel that Glass-Steagall would be brought back, but the biggest banks will be forced to sell off pieces as a way to reduce the "too big to fail" conundrum.

All agreed that Paul Volcker was back in a big way, that he was well liked, had few enemies, and was the intellectual godfather of this proposal, and that the Obama administration had bought into the plan.

It was also agreed that Timothy Geithner was in deep trouble.


1) CNBC's parent company GE was up 4 percent pre-open, reported earnings of $0.28, two cents ahead of expectations; revenues were higher as well. J.P. Morgan echoed most of the sentiment on the Street in their note this morning: "A modest beat, without too much noise." Credit quality appears to be stabilizing.

2) Dividend raises coming, finally? GE mentioned this morning there may be a dividend hike coming down the road...and that they saw buyback "opportunities" in 2010. Other companies have already raised their dividend: Carnival (CCL) did it this week, in the last few months Dr. Pepper Snapple, National Oilwell Varco, and Wynn raised dividends.

3) Finally starting to get a little action in IPOs.

a) Chesapeake Lodging Trust (CHSP), a REIT that was formed to invest in high-end hotel properties, finally priced its IPO at 7.5 million shares at $20.00, that was cut from 12.5 million shares.

b) Symetra Financial (SYA), a life insurance company, priced its IPO of 30.4 million shares at $12.00. That's a little more money than they initially talked about raising: 27 million at $12-$14. Berkshire Hathaway owns 26 percent of the company.

c) Cellu Tissue Holdings priced 8.3 million shares at $13. Cullu Tissue makes private label tissue products. As one trader quipped, it's a wipe.

3) Harley-Davidson falls 6 percent pre-open on a bigger-than-expected loss (loss of $0.63 vs. loss of $0.32 consensus). The motorcycle manufacturer saw poor demand (shipments plunged 53 percent) and tighter margins (20 percent vs. 32 percent in prior year's quarter).

2010 "will continue to be a challenging year," with first quarter shipments seen down 24 percent to 30 percent from the year-ago period.

4) Schlumberger is down 1 percent despite its Q4 earnings beat ($0.67 vs. $0.64 consensus). Although improving demand for oilfield drilling helped revenues top estimates, lower prices put some pressure on margins.

While the oil service firm's sees increasing demand and stable prices for oil in 2010, the outlook for the natural gas market is more tempered. Chief Executive Andrew Gould warns that "the (natural gas) markets remain generally oversupplied."

5) McDonald's is up fractionally in pre-market trading after topping estimates by a penny amid a 2.3 percent rise in Q4 global same-store sales. In 2009, the fast food giant saw greater comp store sales overseas (Europe up 5.2 percent, Asia/Mid-east/Africa up 3.4 percent vs. U.S. up 2.6 percent).

6) More sell on good tech news: AMD falls 5 percent after reporting better-than-expected revenues and margins. The chipmaker also topped earnings estimates (loss of $0.08 ex-items vs. loss of $0.17 consensus), and its bottom line was boosted by a $1.25 billion legal settlement payment from Intel .

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