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Halftime—Doug Kass: The Market Has Hit the Top

Monday, 8 Nov 2010 | 1:54 PM ET

Unconvinced the Federal Reserve will be successful in lifting the US economy by injecting an extra $600 billion into its banking system, famed strategist Douglas Kass said Monday the market has topped.

But Kass, founder and president of Seabreeze Partners, added that he thought the market had hit a top at 50 or 60 points ago in the S&P 500. It seems investors don't share his skepticism over what effect quantitative easing will have on the economy.

Kass's Call: Are We Near the Top?
Discussing whether QE2 can fuel the top, with Doug Kass, founder & president of Seabreeze Partners.

"To me, there's an artificiality of the program," Kass explained. "We had 'Cash for Clunkers.' Now we have 'Cash for Stock Market Gains.'"

Kass has gained attention in the past for his read on the market. Less than a week before the S&P 500 hit a generational low of 676 on March 9, 2009, Kass went on CNBC and predicted the bottom. On July 6, 2010, he said the market had made its lows for the year and so far, that has also proved to be true.

Watch the video to see the full conversation with Doug Kass — it starts at 7:50.

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UNUSUAL ACTIVITY: MGM

From the options market, Jon Najarian is watching the casino names, but some "Unusual Activity" has kept him in only one name: MGM Resorts.

There were more than 70,000 calls in MGM traded Monday, noted Najarian, co-founder of optionMONSTER.com. The stock is up sharply, so a lot of things are going right for this company, he said. His upside target in the short-term is $15 a share.

Najarian thinks investors will get more upside out of MGM than its gambling competitors Las Vegas Sands or Wynn Resorts . Aside from some deep-in-the-money calls against stock, Najarian got out of Las Vegas Sands last week.

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CALL TO THE FLOOR: ATMEL

When it comes to smartphones, they're the hottest thing out there: touch screens.

Call to the Floor: Atmel
Shares of chip-maker Atmel up 125 percent in 2010, with Steven Laub, Atmel CEO.

So how can you get in on the touch-screen craze? Atmel may be a derivative play, being as it makes microprocessors for touch-screen devices, including the Samsung Galaxy tablet that'll be sold in Verizon stores starting Thursday.

Steve Laub, CEO ofAtmel, appeared on Monday's "Halftime Report" to talk about the popularity of touch-screen devices, how his company is benefiting from it and his outlook for the future.

Watch the video to see the full interview.

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RETURN TO THE GOLD STANDARD?

Leading economies should consider adopting a modified global gold standard to guide currency rates, World Bank president Robert Zoellick said on Monday in a surprise proposal before a potentially acrimonious G20 summit.

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Writing in the Financial Times, Zoellick called for a new system of floating currencies as a successor to the Bretton Woods fixed-exchange rate regime, which broke down in the early 1970s and involved measuring currency rates against gold.

That is the "weirdest" idea RiverTwice Research's Zachary Karabell said he's heard from an official in a while, doubting such a thing would ever be implemented. Gold is an inelastic system in an elastic world, he argued.

Najarian also dismissed the idea, having said there's "no possibility" of it actually happening. With the US dollar rising and Europeans also pushing their common currency, gold will become less attractive.

To see the full segment, watch the video.

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IRISH CDS HIGHER AS DEBT FINANCING FEARS RISE

The cost of protecting government debt against default in Ireland and Spain rose on Monday on fears about Ireland's ability to fund its budget.

Five-year credit default swaps (CDS) on Irish government debt rose by 29 basis points since the New York close on Friday to 607 bps, while the Spanish equivalent rose by 11 bps to 261 bps, according to CDS monitor CMA. It means the cost rises to 607,000 euros to protect 10 million euros-worth of Irish government bonds.

Despite this, Stuart Frankel's Steve Grasso noted the S&P is holding on. He thinks it's "quite shocking" that the index is down just three handles. Banks being able to pay dividends, he added, is also very positive for the overall market. He said he may have to rethink his bearish sentiment.

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CALL THE CLOSE

Grasso is waiting for a sell-off, but technicals tell him otherwise. If the market closes above the 1,225 level in the S&P, he may become bullish.

Meanwhile, both Najarian and Karabell agreed and remain bullish.

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Trader disclosure: On November 8, 2010, the day this video was recorded, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (BAC), (DD), (F), (GDXJ), (LVS) and (YHOO). Terranova owns (APA), (AAPL), (ARUN), (AXP), (C), (DIS), (GOOG), (GS), (FCX), (HES), (IBM), (ISRG), (MCD), (NKE), (OIH), (ORCL), (OXY), (PCP), (PEP), (PFE), (POT), (UPL) and (VRTS). Joe Terranova also owns (FCX), (FFIV) and (SLB) puts. Guy Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC) and (MSFT).

For Brian Kelly:
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital own (JEF)
Accounts managed by Kanundrum Capital own (TD)
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (CLF)
Accounts managed by Kanundrum Capital own (ANDE)
Accounts managed by Kanundrum Capital own (GPRE)
Accounts managed by Kanundrum Capital own (JJG)
Accounts managed by Kanundrum Capital own (HD)
Accounts managed by Kanundrum Capital own (PCL)
Accounts managed by Kanundrum Capital own (XHB)
Accounts managed by Kanundrum Capital own (FCX)
Accounts managed by Kanundrum Capital own (JO)
Accounts managed by Kanundrum Capital own (EWH)
Accounts managed by Kanundrum Capital own (MCP)
Accounts managed by Kanundrum Capital own (MOT)
Accounts managed by Kanundrum Capital own (HBC)
Accounts managed by Kanundrum Capital own (SWC)
Accounts managed by Kanundrum Capital own Euro
Accounts Managed By Kanundrum Capital own (POT) Calls
Accounts managed by Kanundrum Capital are short Japanese Yen

For Joe Terranova:
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CMS)
Virtus Investment Partners own more than 1% of (CSC)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (FCFS)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SOA)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (WMB)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DRYS)

For Guy Adami:
Adami’s wife works at Merck

STEPHEN WEISS
Weiss owns (DIS)
Weiss owns (FWLT)

RICH ILCYSZYN
***No Disclosures***

RON SHAH
***No Disclosures***

TIM BOYD
***No Disclosures***

MIKE KHOUW
Cantor Fitzgerald makes a market in (AAPL)
Cantor Fitzgerald makes a market in (AOL)
Cantor Fitzgerald makes a market in (BAC)
Cantor Fitzgerald makes a market in (BWA)
Cantor Fitzgerald makes a market in (C)
Cantor Fitzgerald makes a market in (CSCO)
Cantor Fitzgerald makes a market in (DISH)
Cantor Fitzgerald makes a market in (F)
Cantor Fitzgerald makes a market in (GOOG)
Cantor Fitzgerald makes a market in (HGSI)
Cantor Fitzgerald makes a market in (INFY)
Cantor Fitzgerald makes a market in (INTC)
Cantor Fitzgerald makes a market in (JDSU)
Cantor Fitzgerald makes a market in (JPM)
Cantor Fitzgerald makes a market in (LVS)
Cantor Fitzgerald makes a market in (MCD)
Cantor Fitzgerald makes a market in (MDRX)
Cantor Fitzgerald makes a market in (PCLN)
Cantor Fitzgerald makes a market in (RAX)
Cantor Fitzgerald makes a market in (YHOO)



CNBC.com with wires.

  Price   Change %Change
ATML
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LVS
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MGM
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VZ
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WYNN
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