Today's Key News - Thailand's Mistakes

U.S. equities are moving higher today, as new housing starts came in ahead of expectations. However, the report was not conclusive, as permits declined. Overseas, the Bank of Japan kept rates steady, and Asian markets were mixed but mostly positive. U.S. equities should tread cautiously as tomorrow's conclusion to the two day Fed meeting looms.


Asia:
Hang Seng Index +0.47%; Shanghai/Shenzhen 300 +0.5%; NIKKEI 225 +0.9%; Taiwan TAIEX -0.02%; BSE SENSEX 30 +0.48%; KRX 100 -0.02%; Ho Chi Minh -1.42%


U.K., Europe & Middle East:
DJ STOXX 50 Index +0.73%; FTSE 100 +0.41%; CAC 40 +0.81%; DAX +0.32%; Russian RTS Index -0.82%


Key Headline News:

• *** New housing starts for February were reported above expectations today, running at an annual pace of 1.525 million. The result was 9% above January's low reading. There is some indication that speculative building continues in some instances, we would expect with very small players, as housing completions dropped 9.4% and permits declined 2.5%. A report yesterday showed that sentiment among home builders fell this month compared to February, and that does not lead to expectations for a turn in trend. Further data, this week and next, will add clarification on home prices and existing home sales. We continue to anticipate that tighter lending standards and increasing foreclosures will add pressure to the housing market this year.
• *** The Bank of Japan kept rates steady today at 0.5%, but the news had just a slight impact on trading as it was widely anticipated.
• *** Concerns are increasing in Latin America about the U.S. economy, and the impact it could have on the economies of its neighbors. As a result, credit may tighten as lenders in the region take that risk into account.
• *** Thailand's non-elected government, which does not reflect the will of its people, continues to make economic mistakes, in our view. It's most recent error was in breaking patents to produce generic versions of drugs. While this should make those specific medicines cheaper for its citizens, it also discourages foreign investors from the country. Wall Street Greek strongly believes American consumers should be boycotting the goods of Thailand and Venezuela, and punishing these governments for recent anti-American, anti-democratic and self-serving efforts. We believe that in the long run, these governments will hurt their economies and their people. While we should help those who seek to help their people, we should also punish those who openly push against American companies, the American government and the American people.
• *** Accredited Home Lenders Holding received some support from a hedge fund today. Farallon Capital Management provided LEND with a five-year $200 million loan, for which it will receive 13% interest and 3.3 million warrants. LEND is coming up with capital to help it stay afloat, but it's doing so at high cost. Also, in the end, it will still be left operating in the mortgage business. Full Disclosure: We hold both long and short option positions in LEND.
• *** Russia is pressuring Iran, stating that if Iran does not halt uranium enrichment efforts, Russia will stop supplying Iran with nuclear fuel. There are so many different ways to read into this that we probably should not speculate. One thing is almost sure though, Russia likely has selfish reasons for its action, not a goal to act for humanity.

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