(Click charts to expand)

Honda Motor, Hold, PT at $34 -

Apple's (AAPL) relentless innovation has disrupted its industry, sending competitors scurrying to stay relevant. The iPhone, along with Google's (GOOG) Android, sheared profits at Nokia (NOK) and Research in Motion (RIMM). The GPS capability of the iPhone created a far cheaper alternative to Garmin's (GRMN) navigation systems. The iPad threatens Hewlett-Packard (HPQ) and Dell (DELL) PC sales.

The Dismantling of Apple's Competition: Smashing Operating Margins

Competing against Apple hasn't been good for your margins. The competition has been forced to cut prices, increase marketing costs, and spend more on R&D in a frantic effort to defend against Apple. As a result, operating margins aren't what they used to be. For example, Garmin, Nokia, and Research in Motion's margins have tumbled since 2007 while Apple's have soared.

(TTM is trailing 12 months. Data from Morningstar.)

Apple's stronger margins have translated into extraordinary product profitability.

Apple's earnings per unit sold have skyrocketed:

It isn't just Apple (AAPL) that's stuck with all that cash. There is more money on the sidelines parked in cash, in both private and public companies combined, than at any other time in the past half-century. It's north of $2 trillion. Here's a few big non-financial cash hoarders as of the most recent quarter:

• Apple (AAPL): $97 billion
• Microsoft (MSFT): $51.7 billion
• Google (GOOG): $45 billion
• Amazon (AMZN): $9.5 billion
• Berkshire Hathaway (BRK): $37.5 billion
• Dell Computer (DELL): $13.8 billion
• EMC (EMC): $6.3 billion
• eBay (EBAY): $5.93 billion
• General Electric (GE): $137 billion
• Verizon (VZ): $10.8 billion
• Cisco (CSCO): $44.3 billion
• IBM (IBM): $11.3 billion
• 3M

Yesterday's dividend payments do not guarantee tomorrow's dividend payments. On the contrary, if dividends exceed earnings there is a serious question as to whether a company can continue to disburse the same payments to its shareholders. Payout ratios (dividend payments divided by earnings) which are greater than 1 are cause for scrutiny: investors must find reasons to explain how this dividend yield is sustainable.

Unfortunately, owners of stocks which cut dividends might face a double whammy: reduced income and reduced stock prices. The drop in stock prices upon the announcement of a dividend cut is rationalized by academics as a signaling mechanism. Finance professors view a dividend cut as a way for management to express lowered company expectations to shareholders. In short, "money talks" and reduced dividend payouts result in lower income and lower capital gains.

Stock Selection Criteria

Payout ratios well above 1. This is used as a quick

by Rachael Granby and the Market Currents team

Eurozone headed for recession. The European Commission now forecasts a mild recession for the eurozone, with the region shrinking 0.3% this year. As recently as November, the EC had expected 0.5% growth this year. One of the sharpest country revisions is for Spain, now expected to contract 1% vs. prior forecast of +0.7%. Euro +0.4% to $1.3293.

BP, Anadarko face possible fines. Anadarko Petroleum (APC) and BP (BP) are liable for civil damages related to the Gulf oil spill, District Judge Carl Barbier ruled yesterday, exposing the two firms to billions of dollars in potential fines. Transocean's (RIG) liability is still up in the air after it wasn't named a "responsible party" in the decision. The government's case goes to trial on Monday. Premarket: BP -0.2%, RIG +6.6% (7:00 ET).

RBS loss widens. RBS (RBS) reported its 2011 net loss widened to

Financial markets have enjoyed a strong start to 2012 after a very difficult 2011. Investors have begun to believe that the Eurozone crisis is being brought under control by Mario Draghi, the new head of the European Central Bank (ECB), who has taken a much more proactive approach than his predecessor Jean-Claude Trichet. But the crisis is only experiencing a temporary reprieve; the global financial system is leveraged to an unprecedented extent and is truly in an unprecedented situation.

Among the programs that have been implemented under Mr. Draghi is the LTRO (Long Term Refinancing Operation), which has stabilized the funding of European banks. Under this program, the ECB loaned almost €500 billion of 1% 3-year money to the banks in December and reportedly will be making a second, larger loan this month. European bank stocks have rallied in response to this program, which has removed the risk of imminent

The Bank of England's release of the Monetary Policy Committee's (MPC) notes is cited as a major reason for Wednesday's sell off. By a 9 to 0 consensus, it was decided the BoE would increase their asset purchases by £50B, expanding the potential money supply, and trying to stimulate the economy. This decision had been previously announced February 8th, but the surprise for the market Wednesday was that two members advocated an even larger increase in the bank's purchases.

We had suggested in an article published prior to the report the British version of QE would prove negative for the pound and a short above the 1.59 was warranted. Granted, had you been fortunate enough to get short at those levels, the trade took a while to develop.

The timing of the sell off yesterday is curious. One of the financial papers suggested because two MPC members voted for an

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday February 22.

Nike (NKE), VFCorp (VFC), Lululemon (LULU), Harman International (HAR), Harley Davidson (HOG), Urban Outfitters (URBN), Honeywell (HON), Eaton (ETN), General Electric (GE), Boeing (BA), General Motors (GM), Ford (F), Schlumberger (SLB), Alcoa (AA)

Why aren't stocks lower because of rising gas prices? One explanation is that the consumer isn't feeling the pain yet, as evidenced by strong quarters and performances from Nike (NKE), VFCorp (VFC), Lululemon (LULU), Harman International (HAR), Harley Davidson (HOG) and Urban Outfitters (URBN). Cramer mentioned a few other reasons why the economy might withstand the high price of gas.

1. Unemployment is lower, growth is high.

2. Interest rates are still low.

3. Some companies, especially those that deal with energy saving devices like Honeywell (HON), Eaton (ETN) and General Electric (GE), perform well when energy prices are high, since

Record high farmland values and strong farm income were highlighted in the Federal Reserve Bank of Kansas City's recent fourth quarter survey of Agricultural Credit Condition. The survey detailed several indicators of farm financial conditions in the 10th District including farmland values, interest rates on farm loans, and credit supply and demand.

Rising Farmland Prices

2011 posted a record high, 25% increase year-over-year in farmland values. The value of nonirrigated and irrigated cropland in the District climbed 8.9% and 7.5%, respectively, compared to third quarter gains of 2011. District ranchland values increased 3.1% in the fourth quarter marking a year-over-year increase of 14%.

Farmland values soared to record highs due to strong farmer demand. Absentee land owners saw this increase in demand as an opportunity to sell their land, and did so. Farmer purchased farmland jumped to 73% of total sales in 2011 compared to 60% in 2005. Outside investor

There is also much debate of what to use for earnings. The leading contenders are reported earnings and operating earnings. Some, like Robert Shiller, building off the work of Benjamin Graham, suggest taking a 10-year average, often called "P/E10." I use the most recent trailing four quarters of operating earnings because they eliminate non-recurring items and I believe that current earnings are usually the best basis for predicting future earnings. (We can save the debate on P/E 10 for the comments section or

Gold

I've previously written about the framework for a sustainable fiat money in the form of the Modern Monetary Theory. In this article, I will describe the critical deficiencies of a metal-based currency that could, with no exaggeration whatsoever, bring about a permanent decline of our living standards and the end of the economy as we know it.

Private Sector Cannot Save Without Government Dis-saving

First, let's start with a simple thought experiment, where I illustrate one of the most important findings of MMT. Imagine that you live on an island with four other people, and there is a total of $10 in circulation on the entire island.

The five of you form a very "fiscally responsible" government that will not print any new money, and will not run a deficit. So, the total money supply of the island will forever stay at $10, which means each of you will have,

Analysts (most notably, CNBC analysts) are beginning to call for $5 gasoline to hit pumps by this summer. I don’t know if they will – but it’s certainly within the realm of possibility.

And though we’re still patting ourselves on the back here in the United States for increasing oil domestic oil output, the problem has little to do with oil supply, and everything to do with refinery capacity.

For significant periods of time, refineries have swung in between profitability and non-profitability. Though the politicians at the helm mean to “punish” oil companies with higher taxes, these taxes frequently hit the bottom line of refiners harder than anyone.

Refining is a costly business – not just because it’s heavily taxed at about 10% before a single barrel of gasoline is even sold, but because of the massive shipping, storage and actual product and refinery costs.

And though refining can experience

Regular readers of my articles know that one of my favorite long term sectors in the market is the energy complex. The combination of high oil prices, new drilling technologies and increasing M&A activity provide strong tailwinds for the entire sector. I am particularly fond of smaller energy firms with consistently growing earnings and solid fundamentals that should make investors money just by continuing to execute against strategic plans, with a bonus of being strong acquisition targets. One such stock is Newpark Resources (NR).

Newpark Resources, Inc., together with its subsidiaries, provides fluids management, waste disposal, and well site preparation products and services primarily to the oil and gas exploration and production industry in the United States and internationally. The company operates in three segments: Fluids Systems and Engineering, Mats and Integrated Services, and Environmental Services. (Yahoo Finance).

8 Reasons to pick up Newpark at $8 a share:

• Newpark is

It is human nature to want to jump on the what's hot bandwagon and ignore what is considered boring. Long considered the domain for 'widows and orphans', utilities have developed a somewhat stodgy reputation. Why are utilities considered good for widows and orphans? Here a few reasons:

1. They are generally less volatile than the market (low beta).

2. They sell what people need no matter what the economy is doing, thus;

3. Their dividends tend to be more stable and secure.

Utilities have their own special set of challenges. Their debt and shares outstanding tend to grow over time - not the preferred direction for either. Also, there are industry-specific issues that utilities face, such as radioactive waste for nuclear power plants and air pollution for old coal-fired generators. However, despite their risks, utility dividend stocks have been, and will continue to be, a cornerstone for conservative income investors.

Stocks discussed on the Lightning Round session of Jim Cramer's Mad Money TV Program, Wednesday February 22.

Bullish Calls:

Toll Brothers (TOL): "If you are going to buy a homebuilder, buy the highest quality...a lot of guys are going to downgrade the homebuilders...they think they have run too much...they have caught a couple of downgrades, and they have further downside, but TOL is the head of its class."

Akorn (AKRX), Regeneron (REGN): "Interesting ophthalmology play...my favorite ophthalmology play is Regeneron, which was knocked down because one practice was not using its drug right. I'm going to say buy Regeneron and take advantage of that decline."

United Health (UNH): "It's been on fire...unbelievable...it has pulled away from the pack. I think it can work its way higher. Catch it on a down day, not an up day."

TAL International (TAL): "This is a terrific situation...with a good yield and good momentum

Some basic information about the companies is presented in the table that follows:

X is the larger of the two firms by market capitalization, and has a higher debt to equity ratio. The two companies have been underperformers over the last 5 years, with X losing 68% of its value and STLD shareholders down 24% over the same period. STLD does offer a respectable dividend yield of 2.6%.

Next, I observed the historical growth rates of revenue,

This week, much like any other over the past six months, has been heavily focused on Greece. Tuesday (the first trading day of the week) opened strong with the Dow touching 13,000 for the first time in almost four years. But the day ended on a sour note, forcing equities to surrender nearly all of their gains, as many are still concerned over the long-term outlook for the indebted European nation. Yesterday saw Fitch downgrade Greece stating that a default was “highly likely”, which has only added fuel to the fire. While the euro zone will undoubtedly remain in the foreground for the week, investors will try to focus their attention on a number of U.S. data releases [see also Why No Investor Should Own GLD].

Today will see the weekly U.S. unemployment claims hit the market, which tends to have a measurable impact on volatility and market direction. Unemployment

Back in the early 1900's, 40% of the American workforce made their living from farming. Today, less than 2% of the U.S. Populace works on a farm. What this means to me is that a major polarity shift in business could soon move that number higher as Americans look to protect themselves against long term inflation.

Could we be in the early stages of a multi-year boom for farming in this county? My research tells me that we are only in the early innings of the great boom for the American (and overseas) farmer because of what the price of oil and gold are telling me about inflation pressures and the Dollar. Farming is one of the best hedges against runaway inflation and it seems to me that even though farm prices are up around 12% per year over the longer term, the capacity for farmland to protect investor capital

A cheap stock is the basis for every future return. Beside cheap fundamentals and pricing ratios of a company, the expected growth is an additional important item for investors. After the moderate increase of major stock market indices since the beginning of the year (Dow Jones +5.9% and S&P 500 +8.0%), there are still cheap stocks with attractive dividends.

I screened the market by the cheapest large capitalized dividend stocks; stocks with a market capitalization of more than $10 billion, positive dividends and an expected earnings growth of at least 25 percent for the next year. The valuation of the companies is cheap in terms of growth because they have a price to earnings ratio of less than 20 and a price to sales ratio of less than 2. Only ten stocks fulfilled these criteria. Here are the detailed results:

1. Telefonica (TEF) has a market capitalization of $25.96 billion.

Now that Apple (AAPL) has experienced a huge run-up over the last couple of months, and a huge intra-day reversal on Feb. 15, it could be an ideal time for an iron condor trade. Why? Because there are many reasons to believe that Apple, like every stock, needs time to digest its 25% move to the upside and has settled into a trading range between 450 and 530. If you share that belief, it will be difficult to earn short-term profits via a traditional directional trade. And it's that exact environment where an iron condor trade shines.

Most simply (and you can skip this part if you already trade iron condors), an iron condor combines a bull put spread and a bear call spread. Both spreads provide a net credit that defines your maximum gain. Your maximum loss is equal to the spread between the two put strikes (or two

Looking for an easy way to trace the progress of the housing bubble? Look no further than the 26 years of financial data provided on the website of luxury home-builder Toll Brothers (TOL). See how revenue grew from $125 million in 1986 (802 homes completed) by relatively steady progress to $2.3 billion in 2002 (4430 homes).

Then something odd happens: 2003 suddenly balloons to $2.7 billion, and from there it's a heady ride to a peak of $6.1 billion in 2006 (8601 homes). Revenues and completions have been on a downward slide every year since then, culminating in 2011's $1.5 billion (2611 homes). But Toll Brothers has survived to tell the tale, and 2011 saw a return to profitability for the first time in four years. (Toll Brothers Financial Summary 1986 - 2011 (pdf))

Toll Brothers doesn't build basic, first home buyer dwellings. Instead the company operates in the luxury

Over the past month, we have witnessed an attempt by GeoInvesting, through a series of blog posts (which occurred 3 days prior, 2 days prior, and 1 day prior to L&L Energy (LLEN) options expiration in January, and two days prior to options expiration in February - see here) to place uncertainty in the minds of investors of LLEN regarding LLEN's well documented ownership via SEC filings of Ping Yi. GeoInvesting and their affiliates and friends (a colleague of GeoInvesting did call T Squared to let them know they sell research to investors prior to releasing such reports to public consumption) have disclosed they have a short position in the stock and will benefit if the stock drops as a result of their actions.

The crux of their argument has relied primarily on:

1. Conversations with an anonymous and unverified individual named Mr Wu that were not independently validated and questionable

DaVita, which is Italian for "giving life" is precisely what DaVita, Inc. (DVA), the company, does for its patients. This company has produced a superb record of consistent earnings growth that held through the recessions of 2001 and 2008 as if they never happened.

Demographics indicate a huge opportunity for this quality healthcare company that provides life-saving products and services to its patients. Consequently, we believe that the growth potential of this company is well defined, and significantly above average. Therefore, investors seeking above-average growth of principal should examine this company more carefully.

Growth stocks are defined as companies with high rates of change of earnings growth of 15% to 20%, or more. Growth stocks offer the potential for share prices to rise in lockstep with their profit growth in the long run. Therefore, the PEG ratio formula (price equals growth rate) tends to be the most appropriate formula used

While consumers and governments across the world are strapped for cash, corporations have plenty. Rather than signal long-term trust and pay more generous long-term oriented dividends, many of them have adopted share repurchases to buy back their own stock.

Investors welcome these announcements as they boost earnings per share and provide a lot of support for the share price during the repurchase periods.

FMC (FMC) announced an additional $250 million repurchase program, representing 3.7% of outstanding shares. During the last couple of years, it already repurchased some 6% of its outstanding shares at very favorable levels. In comparison, the diversified chemical company pays about $40 million in dividends per year.

Nordstrom (JWN) announced an additional $800 million share repurchase program, which represents 7.5% of outstanding shares. The fashion retailer still had $270 million left under its current repurchase program. The addition to the program is roughly four times its annual

Do you remember HAL 9000 from "2001 A Space Odyssey"? It was a mega computer on a spaceship that was prepared to do anything to conclude its mission. Arthur C. Clarke, the author of the book, was 10 years too early, however. Since 2010, his vision has taken shape under another name: HFT.

On Feb. 13, the New York Stock Exchange experienced its lowest volume for non-holiday trade in over a decade. If we consider that High-Frequency Trading platforms (HFT) now account for 60%-75% of daily volume, we can easily conclude that HFT is the only game in town. The volume of transactions today is 40%-50% lower than it was three years ago.

Investopedia describes HFT as:

A program-trading platform that uses powerful computers to transact a large number of orders at very fast speeds. High-frequency trading uses complex algorithms to analyze multiple markets and execute orders based on market

The big news this week is that Greece received another bailout and that private debt placements will be forced to take a 54% haircut (above the 50% haircut from a deal back in October). So that should signal better days are ahead and that this whole mess is behind us, right? There is an article in the Wall Street Journal that outlines the deal. So even when this deal is expected to save Greece an additional 107 billion euros, on top of the savings from the other bailouts, debt as a percentage of gross domestic product is only expected to improve to 120.5% by 2020 (from more than 164% now). So the answer to the question that this is behind us is clearly an emphatic no.

I equated the recent announcement for Greece to a poker game. Greece right now is definitely the short stack at the table, and just