ed

General Motors (NYSE: GM) has finally come up with something to save its bacon. It will team with a number of utilities including Con Edison (NYSE: ED) and Duke Power (NYSE: DUK) to create a broad market for electric cars.

According to The Wall Street Journal, "Auto makers need the cooperation of utilities since they control the new technology's primary fuel -- electricity -- and must make sure that the vehicles' recharging processes mesh with the electricity grid and don't inadvertently undermine grid reliability." In other words, no one wants the cars to cause brown outs. GM also plans to negotiate special rates to make its electric cars cheaper to recharge.

The announcement is one of GM's first intelligent moves in a long time. It has allowed its reliance on pickup trucks and SUVs to drive down its sales and cut its market share in the US. Foreign rivals that kept lines of smaller cars now have products with broad appeal to consumers. This is particularly true of their hybrids.

GM's concern remains whether being late to the market will make it too late. Its potential customers want fuel-efficient cars now, when the price of gas is high. GM will lose billions of dollars while it tries to catch up.

The competition will not be sitting still.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• The books of Fannie Mae -- Federal National Mortgage Association (NYSE: FNM) -- and Freddie Mac -- Federal Home Loan Mortgage Corporation (NYSE: FRE) -- are being examined by the Federal Reserve and the Office of the Comptroller of the Currency to review their financial condition, according to the Wall Street Journal.
• The Wall Street Journal also reported that the Chevy Volt, an electric car from General Motors Corporation (NYSE: GM), is slated to roll out in two years and it received a major boost from 36 utilities that operate in 40 states who agreed to work together to make the plug-in vehicle possible. Among the utilities are American Electric Power Company Inc (NYSE: AEP), Consolidated Edison Inc (NYSE: ED), Duke Energy Corporation (NYSE: DUK), and Edison International (NYSE: EIX).
• Struggling mortgage lender Paragon is reportedly in talks with The Blackstone Group LP (NYSE: BX) about a potential takeover by Blackstone, the Financial Times reported.

OTHER PAPERS:

• The New York Times reported that TiVo Inc (NASDAQ: TIVO) will today introduce a "product purchase" feature in partnership with Amazon.com Inc (NASDAQ: AMZN). Under TiVo's plan, the television remote control will be turned into a tool for buying products that are advertised and promoted on talk shows and commercials.

Next week is sure to be filled with fun and volatile market conditions. The highlight will be the Fed decision on key rates, due on Wednesday, April 30, following a two-day meeting. Anytime the Fed has the floor, the markets listen. Tuesday and Wednesday will be filled with speculation up until the time of the announcement of a cut or pause.

There are many possible outcomes for this meeting, as we have seen a substantial change in investor sentiment regarding the potential need for further rate cuts. The buzz on the street is for a cut of 25 basis points and then a wait-and-see attitude from there. I think that is the most likely direction.

There has been a great deal of concern that all the recent rate cuts have not provided the benefit to consumers the economy needs. Clearly, there is a fatty clog within our financial circulatory system. Traditionally, the Fed likes to see how its actions trickle into the economy before it continues too far down one path, which would argue for a pause now. Plus, the Fed does not want to run out of ammunition by cutting rates too far too fast. But there is no question that we are dealing with a more aggressive Fed than we have seen in decades, so I think we will see another small rate cut.

In typical times, investors with years to invest look for innovative, dynamic companies in growth sectors. It is the lifeblood of a healthy, growing equity market.

But as most investors/readers know, these are not typical times. And under these conditions, sometimes tried-and-true safety of capital, plus a modest return, is more than enough. Consolidated Edison (NYSE: ED) is a prudent play with the above in mind.

Utility Consolidated Edison, or "Con Ed," is the holding company for the primarily electric utility that serves the five boroughs of New York City, most of Westchester County, N.Y, other parts of New York state, Pennsylvania and New Jersey.

Residential and commercial electric utility customers represent the company's main revenue stream, comprising 63% of revenue in 2006. Natural gas customers accounted for 16%, non-utility revenue 14% and steam 5%. In short, Con Ed is a classic regulated utility play, and its results reflect that:strong, steady cash flow, low customer turnover, conservative technology implementation cycle, and a solid dividend.

MAJOR PAPERS:

• According to the Wall Street Journal's (subscription required) "Heard on the Street" column, content firms such as Akamai Technologies (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW) are getting hammered, and there appears to be no letup in sight because while online traffic is up 60% a year over the last few years, those firm's shares are expensive and, says S&P's Scott Kessler, "There's plenty more room for [Akamai and Limelight] to fall."
• TiVo (NASDAQ: TIVO) is looking at a new revenue source -- being paid to give out market research to advertisers, reported the Wall Street Journal. The company plans to announce today that it will add demographic data, including age, income, marital status and ethnicity, about its viewers.
• The Financial Times (subscription required) reported that Ford (NYSE: F) is likely to have to pay any buyer of its Jaguar and Land Rover units because of a $2B pension deficit, according to people close to the situation.

OTHER PAPERS:

• The New York Times reported that Con Edison (NYSE: ED) was fined $18M for service disruptions in 2006, including the nine-day blackout in western Queens, NY.
• The Associated Press reported that Baidu (NASDAQ: BIDU) is considering listing on the Hong Kong and mainland China stock markets, according to the company's CEO.

If I had to pick a stock to buy and hold for the next 50 years, Huaneng Power International Inc. (NYSE: HNP) would be one of my top candidates. As the largest utility in China, it will participate in the nation's growth no matter what form it takes.

Imagine buying Consolidated Edison (NYSE: ED), Pacific Gas & Electric Corp (NYSE: PCG), Duke Energy (NYSE: DUK) or the Southern Company (NYSE: SO) when they were in their infancy. Now imagine that they were all one company and the growth curve was compressed into one third the time. If you can visualize this picture then you can understand why I favor HNP. I have been banging the HNP drum for a long time --see Huaneng Power: Get into China for 2007 -- and last year I wrote GOOG is OK but HNP could be better! As it turned out, HNP was better then and it is better now! The chart shows a comparison of both stocks' performance over the last year. Google Inc. (NASDAQ: GOOG) did very well, but HNP did about 24% better, including the dividend.

Some investors seek growth, while other investors -- particularly when rising interest rates threaten to shorten a bull market's run -- seek value with a decent yield.

If the current concerns over rising interest rates have left you feeling a little squeamish, you may want to consider Consolidated Edison (NYSE: ED).

Con Ed's shares have has fallen off a cliff recently, down to about $46.50 as of Monday's close from near $53 early this spring, but fear not: ED will be around in the years ahead. ED is the holding company for the electric and gas utilities that serve New York City, most of Westchester County, NY and parts of New Jersey and Pennsylvania.

Consolidated Edison (NYSE: ED) reported good first quarter earnings of $256 million, $0.99 EPS, up 41% from 1Q 2006 earnings of $181 million, or $0.74 per share. A big enough increase to make even a jaded in-bound strap hanger smile. Con Edison posted these numbers despite a $10 million loss, $0.04 per share, in complicated net mark-to-market valuations. This amount is only one-third as big as net mark to market losses of $31 million in 1Q 2006. Con Edison management states the earnings increase is a result of sales growth, a stretch of colder than normal temperatures during the early part of 1Q as well as a utility rate hike for NYC.

Con Edison transmits electricity, gas and even steam, and all three sectors recorded volume increases during 1Q 2007, electricity up 2.6%, gas up 7.4% and steam up 0.5%. Con Edison will continue its expansion and updating schema in both NYC and several surrounding boroughs during FY 2007 and beyond, and recently began the process of issuing an additional 11 million shares at an average price of $50.60 to fund these ambitious programs. The stock recently closed at $50.95, and its P/E ratio of 15.9 is less than the industry average of 17.10. Con Edison has annual revenues in excess of $12 billion, with assets valued at over $27 billion. It is one of the largest investor-owned energy companies in the US.

New York City energy supplier Consolidated Edison of New York (NYSE: ED) is in the midst of an ambitious $1.4 billion investment program to ensure uninterrupted electricity delivery even during summer peak demand months. Con Edison is investing in upgrades in both its infrastructure delivery system and its emergency response system. On Long Island alone, Con Edison has spent $90 million to upgrade facilities in order to prevent another blackout like the one that hits Queens during summer 2006. Con Edison has inspected 6,000 electric structures; installed 25 miles of secondary underground cable; installed 101 network transformers; and added microprocessor relays to detect equipment malfunctions promptly.

Queens was not the only borough to receive attention. Con Edison spent almost $500 million on construction of three substations in the Bronx and Manhattan; allocated $739 million for distribution system upgrades and $137 million for transmission upgrades. Con Edison will spend $7.5 billion over the next five years to upgrade its transmission and distribution system, as well as to add capacity. Electricity demand in its service area has grown annually by close to 200 megawatts, the equivalent of adding an additional 200,000 homes every year to the grid. For summer 2007, Con Edison has projected a peak load of 13,575 megawatts, of which 80% is reserved for New York City use.

In case all these upgrades nonetheless fail, Con Edison has also beefed up its emergency response system, including an enhanced system for tracing outages; the installation of 500,000 smart meters that can automatically send outage messages; new procedures for dispatching repair crews; and 250 new telephone lines to tell them where they need to go.

With consumer confidence shaky, real estate a mess and financials in turmoil, are there any safe havens in this market? There are a few.

When in doubt, there's always utilities. People need air-conditioning and heat regardless of how the market is doing. Plus, many pay dividends. Exelon Corp. (NYSE:EXC), which owns utilities in Chicago and Philadelphia, rose $1.02 to $69.97 in after-hours trading, rebounding from a drop-off in regular trading. Duke Energy Corp. (NYSE:DUK), Public Service Enterprise Group Inc. (NYSE:PEG) and Consolidated Edison Inc. (NYSE:ED) also were up.

But remember that even the most nervous consumer spends their money at some places, but is far more selective. They want to get the most bang for their buck. Investors today sent shares of some of those companies down today. Below are a few examples.

McDonald's Corp. (NYSE:MCD) -- Even in an uncertain economy, parents are still going to take their kids to the home of the Golden Arches. People are even eating the company's healthier fare. Go figure. Shares fell 2.6% today to $43.88. The stock is trading at a forward price-to-earnings ratio of 16.5, lower than both Wendy's International Inc. (NYSE:WEN) and Burger King Holdings Inc. (NYSE:BKC).

On tonight's MAD MONEY show on CNBC, Cramer was doing less trading talk.

He featured the upcoming IPO coming to market next week called AeroViroment (AVAV). He says you can buy it up to $20.00 but sell above $25.00. Here is the detail for the pricing and the background, plus what he likes about it.

Cramer also discussed what he called some "bond replacements" that are good for retirement accounts and that are similar to bonds.

He likes Consolidated Edison (NYSE:ED) and Southern Co. (NYSE:SO), because of their higher yields. Here is the comparison to the 10-year plus some rationale for why he likes them, even though he says they are boring.

Have a great weekend!

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.