Semi-Charmed: NSM "engineers" big gains

Stock indexes essentially grabbed back what was lost yesterday....It marked the 12th straight positive Friday finish for the Dow Industrials. Probably a record. Since historically, the Dow has finished in positive territory on a daily basis a bit less than 55-percent of the time, the probability of twelve straight positive Friday finishes works out to be about 1.5 events per 1000. Not insurmountable, but an event likely to occur once, maybe twice in one's career on Wall Street. And why might Friday's be somewhat more frothy than say a Wednesday? I believe we can chalk it up as yet another among many mutating outgrowths from the M&A and private-equity orgies as folks try to align themselves ahead of the "sure to be" announced mega-LBO announcement on Monday. We're witnessing layers upon layers of speculation on a daily basis (circa June 2007).....National Semiconductor (NSM) announced an accelerated $2-billion share buyback to be financed with a bond issuance (read: leverage). FYI, the company has about $800-million cash on its balance sheet. Earnings and revenues were a bit better than expected, but the latest semiconductor to announce a robust package of financial engineering really goosed the stock, finishing up nearly 4-points, or 16% and was deemed to be good for every other semiconductor stock on the planet. The SMH (semiconductor HOLDR) was up 3%--nearly matching the returns for the semiconductor group's first 156-days of 2007. Is it mere coincidence that the same industry and its executives that institutionalized the art of "backdating" option grants, have now patented the "leverage buyback?"