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The second quarter is now behind us and for the most part it was a positive one in terms of the market pushing higher almost 40%. This is the second review of my 2009 stock picks through June 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). There was a lot of talk about green shoots this past quarter as Wall Street was looking for any small bit of optimistic data to support the market.

The federal printing presses continued to run at full speed pushing the dollar lower and oil prices higher. While the feds were printing money to cover their deficits, the States do not have that same luxury and many of them are having trouble balancing their budgets to the tune of billions of dollars.

After a nifty rebound off a 52-week low of $5.73, industrial and financial services giant General Electric (NYSE: GE) is in a weird place. The company's shares are trading at around $11.75, which is well below the $15 levels achieved in early May. This would seem odd as GE appears to be well positioned for the Green Shoots Scenario. The company has a big presence in alternative energy, health care solutions, and industrial products -- all big beneficiaries of both the Obama stimulus package and a nascent economic rebound.

So why does the market seem to be scared of GE? A couple of key reasons. First, GE's investments in commercial real estate (CRE) are looking increasingly toxic as the rate of CRE failures soars and CRE debt remains difficult to roll over.

Julia Boorstin covered an interesting topic over at CNBC.com the other day. The Supreme Court, by electing not to review a case involving Cablevision (NYSE: CVC), essentially said that cable companies such as Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) can pursue digital video recorder (DVR) storage on cable-system servers. By doing this, a perceived barrier to entry for subscribing to DVR has been eliminated: you don't have to deal with a clunky box. Cable should theoretically see an increase in customers who adopt DVR technology if remote storage is exploited.

Well, as Boorstin rightly points out, CBS (NYSE: CBS), Disney's (NYSE: DIS) ABC, General Electric's (NYSE: GE) NBC, and News Corp.'s (NASDAQ: NWS) Fox do need to worry. These DVR technologies basically translate to a drop in the economic value of advertising. Let's face it: who watches commercials when they don't have to?

The federal government, for better or worse, has been increasing the money supply as fast as it can in an attempt to prevent a collapse of our financial system, stabilize the housing market, improve the employment outlook and rehabilitate our nations infrastructure.

Most economists have some fear of inflation as a result of this, even if the fear is not for three to five years. To combat the increase in money supply we need to balance it out with an increase in productivity.

This morning's trading was looking solid enough and had enough overseas support with gains in Europe that it seemed as though we were going to have a rock solid end to one of the best performing quarters in years.

The Russell trade and the quarter-end failed to help. A quiet ISM-prelude from Chicago Purchasing Managers was one thing, but a weak consumer confidence took the wind out of the sails of the bulls. The good news is that shares managed to close off their lows, but it still wasn't an up day. Here were today's unofficial closing bell levels:

Dow 8,448.06 -81.32 (-0.95%)
S&P 500 919.47 -7.76 (-0.84%)
Nasdaq 1,835.04 -9.02 (-0.49%)

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I found an interesting article in this morning's New York Post examining the poor performance of NBC Universal's Universal Studios of late. In fact, Jeff Zucker of NBC -- a part of General Electric (NYSE: GE) -- is "so concerned" about the unit's performance that he sent his chief financial officer to Hollywood for a month in order to "get more educated on the studio." Before I give my opinion on how to fix the studio (and you know I have one), let's take a look at how good the year has been.

Will Ferrell's Land of the Lost cost $100 million to make, but it brought in $44 million through last Friday. It is this catastrophic flop that caught the attention of Zucker and has him wanting answers from studio boss Ron Meyer. A source noted, "It's really the first time [Zucker] is asking Ron to explain things," as Meyer basically had free rein to run the studio. Zucker now wants to know Meyer's process for greenlighting movies and determining production and marketing budgets.

This week I closed out an option on General Electric (NYSE: GE) I had discussed four months ago regarding the absolute fear in the market place that I felt had driven investors off a cliff (see Chasing Value: Will we be eating out of trash cans?).

At the time I had noticed that GE naked puts, a "sell to open" put option, would pay me, on the spot, 52 cents a share if I would commit to buying the shares if they dropped below $2.50 by January 2011. This meant that my break-even position was $1.98 a share when GE was selling for five times that.

The market was lower most of the day after the Commerce Department reported that consumers were saving a lot more than they were spending. Frankly, after yesterday's big gains today could have sold off much more and there would have been little concern.

Here are today's unofficial closing bell levels:

Dow 8,433.78 -38.62 (-0.46%)
S&P 500 918.48 -1.78 (-0.19%)
Nasdaq 1,838.22 +8.68 (0.47%)

Now, here is an interesting little spat. Michael Bay, according to The Hollywood Reporter, is upset with Viacom (NYSE: VIA). Why? Well, there's a movie coming out this week called Transformers: Revenge of the Fallen. It's the sequel to the big summer hit from a couple years back that brought the Transformers brand into the multiplex culture. Bay directed both projects. And he apparently has taken a tantrum, a little baby-like tantrum, over the marketing of the new film.

The Reporter article, which talks about the TMZ.com post that brought an email Bay wrote in May to the world's attention, says that Bay believes the quality of the marketing support so far on the second Transformers is way below par. He feels no buzz equity surrounding the movie. He doesn't think that an appropriate zeitgeist of support has been synthetically manufactured by the powers that be at Paramount. And he wonders if it might have to do with money: "I cannot figure if this is a cash issue with your company?" Further, he proffers: "Right now we are not an event. We are just a sequel, which is different."

What's the next bubble? Perhaps it's the global spending on infrastructure.

No doubt, there will be some big-time winners, especially large engineering companies. One example: Siemens AG (NYSE: SI), which is the largest engineering operator in Europe.

Interestingly enough, the company said that – over the next three years – it will win about $21 billion in projects from the stimulus bonanza. Something else, roughly 40% of the projects will involve environmental technologies.

What's retirement? Well, as should be no surprise, the legendary former CEO of GE (NYSE: GE), Jack Welch, is redefining the concept. Basically, retirement means working on cool projects.

For example, he recently put together -- with his wife Suzy -- a reality show on MSN.com. It's about the travails of running a business. Oh, and it's also about branded content; that is, Microsoft (NASDAQ: MSFT) pitches its technology on the show.

General Electric (NYSE: GE) closed at $12.15. GE is expected to report Q2 EPS on July 17. GE July option implied volatility is at 58, September is at 56, December is at 53; below its 26-week average of 65, according to Track Data, suggesting decreasing price movement.

Financial Select Sector (NYSE: XLF) overall volatility at 48; 26-week average is 64.

ISE Sentiment Index-ISEE closed at 98 on 6/17/09. ISEE 10-day moving average is 129.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

I caught a very interesting post by Julia Boorstin over at CNBC.com. She discusses a movie studio that apparently wants to change the way movies are made. The company is called DF Indie Studios. Here's what it wants to do: make a dozen or so films each year on the cheap. What is cheap in Hollywood? Try $10 million or less. DF Indie Studios wants to go it alone, which means that it would rather not hook up with a Disney (NYSE: DIS) or a Time Warner (NYSE: TWX) to get distribution for its product. And Boorstin mentions that equity will be used as financing.

This movie-making model is right up my alley. I've written extensively about how Tinsel Town has gotten out of control when it comes to budgets and marketing expenses. Movies simply don't need to cost as much as they do. And projects give away way too many concessions in terms of cash-flow participation. Big stars tend to receive percentages of the gross that are too significant, in my opinion.

If this weekend's box office results say anything, it's that success in the movie business resists predictability. How else do you explain the money that Time Warner's (NYSE: TWX) The Hangover is grossing? I haven't seen the film, so I'm sure there's something to it. Nevertheless, it just didn't seem like it would be a big hit. Guess the word of mouth on it has been pretty good.

Hangover, as of early estimates at Boxofficemojo, took in $33 million at domestic theaters over the past three days, good for first place. It beat Disney's (NYSE: DIS) Pixar project Up, which took in about $30 million and came in second. Hangover actually was the number-one movie last weekend as well. So far, it's taken in more than $100 million.

GE Aviation, a unit of General Electric Co. (NYSE: GE), warned that it expects orders to be cut in half this year amid the ongoing recession. Jack Lutze, the unit's vice president of sales for Europe and Africa, told Reuters that deferrals are rising as airlines postpone spending on new jets. "Everybody is looking to push back 2010," explained the VP.

On the plus side, Lutze reports that GE Aviation has an order backlog that should translate to years' worth of production -- leftovers from a period of expansion earlier this decade in the airline industry. "This industry lurches from boom to bust," he observed. "We lag the industry on the way down and on the way up."