Late Night With The Greek
As a prescient author wrote over the weekend, the market sailed some rough seas again today. The winds whipped up yesterday when new home sales were reported, and the seas just got choppier this morning after home builder, Lennar, reported quarterly EPS 73% below the prior year result and pulled this year's guidance. The guidance issue was clearly the driver behind the panicked reaction of the housing segment, after Lennar's CEO mentioned as recently as January that he thought his company might even exceed estimates this year. Now he seems incapable of even forecasting a range. Not that we blame him, but when CEOs of companies don't have a clue about their own market, that typically scares investors.
And then consumer confidence came in lower than expectations... Wall Street Greek wrote this in our most recent weekly warm up: "We believe confidence may have suffered more from recent subprime and global market scares, as recent retail sales figures have not been rich." The Conference Board's reading of consumer confidence measured 107.2, compared to Bloomberg's consensus expectation for 108.4. Confidence measured 112.5 in February. Not good.
On top of all this, and no doubt powered by election fever, Congress is now crucifying subprime lenders. Watch out, it gets worse! News broke this evening that the FBI and the U.S. attorney's office in Charlotte, N.C., along with the Internal Revenue Service and the U.S. Department of Housing and Urban Development are investigating Beazer Homes (BZH) for fraud. Oh my God! With all those government organizations investigating Beazer, who is watching the border?!?! I'm disgusted by this. For years, while the housing sector excelled, regulators, congressmen and news media noticed nothing wrong, and then the cycle turns sour and every Joe rounding the corner of a new housing development is under investigation. It's typical, disgusting, reactive behavior, and it's about time this country ask questions ahead of crises. Wall Street Greek was writing about the likely excesses that were born during the drunken housing boom ahead of time. We need to take responsibility for our society's mistakes, and not just seek out people to blame after the fact.
Oil prices shot up to $68 this evening on a rumor that an Iranian naval vessel had fired upon a U.S. warship. Shortly after the U.S. Navy killed the rumor, prices normalized. However, take note of Tony Blair's tough stance on the issue. He's a strong ruler, and an ideological man, and I think Iran gets the picture by now. I expect Iran to turn over those 15 British sailors soon enough, and if they do not, I expect serious consequences.
The Iranians appear to be trying to even the score after some of their own military personnel were taken custody by U.S. forces in Iraq. The U.K. has already disassociated the two events clearly and convincingly. If those men are not returned before long, you can expect the British to make their point. So, one thing seems certain, volatility is increasing in energy prices. We could go up sharply, down sharply or both before it's all over. We believe the most likely scenario would normally include the quick return of the sailors, but a madman is leading the insane asylum of Iran's government these days.
Straight from our weekly article, tomorrow...
Last month, the durable goods orders report shook the very foundation of the market, driving serious recessionary concerns, while optimists argued that inventory redux was in play. This time around, analysts are anticipating February durable goods orders will grow 3.5%, compared to January's troubling drop of 8.7%.
Ben Bernanke has a second opportunity to calm the market Wednesday, as in last week's policy statement, as he addresses the Joint Economic Committee on the economic outlook. His words will be closely followed, and we would anticipate him to provide that same perspective expressed within the statement. In other words, we expect him to have a nil to positive impact on trading Wednesday.
The Senate Finance Committee will hear experts on currency and the U.S. relationship with China. Seems like we can expect recent case crusader, Hillary Clinton, to pick up the gauntlet again for another publicity opportunity. In light of lending concerns, you may want to pay attention to Wednesday's investor forum held by GMAC and Residential Capital. Alcatel-Lucent will also meet with investors, while Paychex Inc. and Sonic Corp. are scheduled to report earnings.
To receive our reports via email, click here and provide us with your email address. We respect your privacy and will never share your information with any third party. (disclosure)
And then consumer confidence came in lower than expectations... Wall Street Greek wrote this in our most recent weekly warm up: "We believe confidence may have suffered more from recent subprime and global market scares, as recent retail sales figures have not been rich." The Conference Board's reading of consumer confidence measured 107.2, compared to Bloomberg's consensus expectation for 108.4. Confidence measured 112.5 in February. Not good.
On top of all this, and no doubt powered by election fever, Congress is now crucifying subprime lenders. Watch out, it gets worse! News broke this evening that the FBI and the U.S. attorney's office in Charlotte, N.C., along with the Internal Revenue Service and the U.S. Department of Housing and Urban Development are investigating Beazer Homes (BZH) for fraud. Oh my God! With all those government organizations investigating Beazer, who is watching the border?!?! I'm disgusted by this. For years, while the housing sector excelled, regulators, congressmen and news media noticed nothing wrong, and then the cycle turns sour and every Joe rounding the corner of a new housing development is under investigation. It's typical, disgusting, reactive behavior, and it's about time this country ask questions ahead of crises. Wall Street Greek was writing about the likely excesses that were born during the drunken housing boom ahead of time. We need to take responsibility for our society's mistakes, and not just seek out people to blame after the fact.
Oil prices shot up to $68 this evening on a rumor that an Iranian naval vessel had fired upon a U.S. warship. Shortly after the U.S. Navy killed the rumor, prices normalized. However, take note of Tony Blair's tough stance on the issue. He's a strong ruler, and an ideological man, and I think Iran gets the picture by now. I expect Iran to turn over those 15 British sailors soon enough, and if they do not, I expect serious consequences.
The Iranians appear to be trying to even the score after some of their own military personnel were taken custody by U.S. forces in Iraq. The U.K. has already disassociated the two events clearly and convincingly. If those men are not returned before long, you can expect the British to make their point. So, one thing seems certain, volatility is increasing in energy prices. We could go up sharply, down sharply or both before it's all over. We believe the most likely scenario would normally include the quick return of the sailors, but a madman is leading the insane asylum of Iran's government these days.
Straight from our weekly article, tomorrow...
Last month, the durable goods orders report shook the very foundation of the market, driving serious recessionary concerns, while optimists argued that inventory redux was in play. This time around, analysts are anticipating February durable goods orders will grow 3.5%, compared to January's troubling drop of 8.7%.
Ben Bernanke has a second opportunity to calm the market Wednesday, as in last week's policy statement, as he addresses the Joint Economic Committee on the economic outlook. His words will be closely followed, and we would anticipate him to provide that same perspective expressed within the statement. In other words, we expect him to have a nil to positive impact on trading Wednesday.
The Senate Finance Committee will hear experts on currency and the U.S. relationship with China. Seems like we can expect recent case crusader, Hillary Clinton, to pick up the gauntlet again for another publicity opportunity. In light of lending concerns, you may want to pay attention to Wednesday's investor forum held by GMAC and Residential Capital. Alcatel-Lucent will also meet with investors, while Paychex Inc. and Sonic Corp. are scheduled to report earnings.
To receive our reports via email, click here and provide us with your email address. We respect your privacy and will never share your information with any third party. (disclosure)
posted by The Greek | 7:26 PM
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