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The Wall Street Greek blog is the sexy & syndicated financial securities markets publication of former Senior Equity Analyst Markos N. Kaminis. Our stock market blog reaches reputable publishers & private networks and is an unbiased, independent Wall Street research resource on the economy, stocks, gold & currency, energy & oil, real estate and more. Wall Street & Greece should be as honest, dependable and passionate as The Greek.

Wall Street, business & other videos updated regularly...

Seeking Alpha

Monday, December 31, 2007

Morning Coffee: What's Next for Housing?

(Stocks in article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: MER, NYSE: LCC, Nasdaq: DPTR, Nasdaq: BIDU, NYSE: M, NYSE: TOL)

On this last trading day of 2007, existing home sales came in better than expected. Hold your horses though, we'll take you through the numbers and show you why the real message is that we have not hit bottom in real estate. That does not necessarily mean we have not bottomed in related stocks, and I've already gone on record looking for a January lift in some of these shares. November's new home sales sank 9%, so this rise in existing home sales to a 5.0 million annual pace from 4.97 million seems contradictory. Also, considering the existing market is much larger than the new market, today's news would seem more important.

However, lost in the numbers is the fact that new home sales data is taken upon the signing of sales contract, while existing data is taken on the closing of the sale, which usually lags by 1 or 2 months. So, if new home sales is the leading indicator, then we should see this existing sales data deteriorate for at least one or two months more. The spring is the most important selling season for housing, so a lot is weighing on what happens after February. Inventory declined, which is a very positive piece of news, but the level remains inflated. Inventory continues too high to support prices and to inspire home builders to look to expansion. We think it will be another 6-12 months before prices stabilize, and much depends on the very volatile geopolitical outlook (I'm talking about Iran).

Consolidation Begins in Retail

Did you notice? It may have already started. Macy's (NYSE: M) is closing nine locations and laying off some 900 employees, though they will have opportunity in nearby stores as they avail themselves. Wall Street Greek is telling you that this will be the them that drives 2008, besides continued geopolitical stresses. Keep your eye on retail, and notice the empty buildings where your favorite stores once offered goods.

Market-Moving News

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Sunday, December 30, 2007

The Greek's Week Ahead - Ominous al-Qaeda Precedent

bhutto massoud al-qaeda
The Greek's Week Ahead has been engineered to prepare you for the events that could impact your portfolio this week.

The week ahead brings with it the turn of the year, but what's in store... Will it just be more of the same? This is the easiest forecast to make, and the one you will see most commonly presented by the talking heads on your favorite financial channel. There will also be the extremists, who will predict extremes in either direction. But this is a topic for a pending article to discuss, "The Year Ahead - 2008," coming soon to Wall Street Greek.

For now, let's just focus on next week. The trouble in Pakistan is the most important issue in the week ahead, despite the employment data due. Chaos has not ceased, but the rise of Bhutto's son to symbolic party leadership at least gives Musharraf's opposition something to focus on rather than destruction. Benazir's husband, Asif Ali Zardari, is taking over active leadership of the party, but he was once known as "Mr. 10%," notorious for taking cutbacks. The wise thing now for President Musharraf to do would be to delay the election and allow the population of the country to ponder the risk of an emotional decision. The world will probably not underestimate that risk either, given Pakistan's store of nuclear warheads.

I've been to a third world country or two in my time, and I have to say, don't judge men by our standards. In poor nations where kickbacks are the norm, however immorally hazardous for the soul this is, it's also the only way for these poorly compensated legislators to survive sometimes. By choosing the public office over private industry, they make a patriotic decision that severely impacts their wallets. This is why corruption runs rampant. The first thing a government that truly seeks the high road should do is to properly compensate legislators, important officials, military commanders and police. It's the only way to reduce corruption that can be corrosive to progress. We have to hope Benazir rubbed off a little bit on Zardari. President Bush looks to be keeping his bets on Musharraf for the sake of the value in keeping the "devil we know."

If Musharraf delayed the election, he would give his opponent a chance to speak, to be heard, to err. He would allow time for the world to weigh in as well. What happens next is yet to be seen, but we will tell you one thing, our trust in Musharraf has decreased significantly also. We now view him as a liar, a serpent even. In order to retain power, he has made a deal with the devil, in fact with every devil that has threatened him. He would deal with a new devil to spear an old one if he had to.

We use to think that his presence in office was a stabilizing force for his country, but we now understand that he is in fact a pressure inducing force that will eventually lead to an explosion, like the one we saw on Thursday that killed that great hope Bhutto represented. We are not saying Musharraf was behind this, but the nonsense coming out regarding the inconsequential cause of death is telling. We know there was gunman; we know there was an explosion. It does not matter if she hit her head or was shot. She died as a result of that attack. It seems Musharraf sees some value in creating illusion, that somehow he will not be blamed for the lack of protection she had if she bumped her head. Now, we believe her own party should have protected her, but Musharraf's actions are still undeniably shady. Even so, we have to weigh the consequences of a Musharrafless Pakistan. But, really, how strong of an ally is he?

The fact that al-Qaeda and Taliban wander Pakistan freely is indefensible. The fact that President Bush trusts Musharraf and Putin is embarrassing, or an ingenious strategy of deception upon deception. She was our gal, Bhutto that is. We wanted her in office, and because of this, her killer could be one of many possible enemies. She could have been as strong an ally as Sarkozy is in France. Al-Qaeda was well aware of this.

We find one thing especially disconcerting about Bhutto's assassination. It bears strong resemblance to the assassination of the head of the Northern Alliance, Ahmed Shah Massoud, which immediately preceded the attacks on the World Trade Center. Considering that New Year's Eve follows by just days this event, and this year's alarm raised by the Chief of Homeland Security when he said he "just had a feeling;" we think there's enough here to be a little worried about this year as much as any. New Year's Eve in Times Square and in every major city is a globally watched event. There is no better way to impact the world with terror than to strike on New Years Eve, in our view. Al-Qaeda itself has been quoted saying some especially ominous things this year, and more than just the usual "we will destroy you all!" Our cause is not to stir alarm, just to remind you of that historical precedence al-Qaeda has of linking assassination with attack.

Let's examine what AQ has to gain from Bhutto's death. Well, unrest now rules Pakistan. If AQ attacks the west now, while chaos rules Pakistan, is Musharraf in position to mobilize forces and efforts against AQ? We say no. The assassination of the Northern Alliance leader was meant to destabilize the most threatening opposition to the Taliban, or sort of insure al-Qaeda's safety after 911. They underestimated us of course, but this was their goal.

Musharraf would clearly be in a difficult position now; at the same time, he just announced some new form of effort (read deception) against AQ on the Afghan border, and this would seem like the complete opposite effect AQ would hope for from the Bhutto assassination... unless al-Qaeda and Musharraf are married. Can we really rule that out as we reflect on Bin Laden's status some six years after the worst attack on American soil in decades?

We do not believe Pakistan is majority fundamentalist militant. However negative sentiment may be toward the U.S., we do not believe the country in majority is militant level negative. Still, the country is near out of control, has a significant fundamentalist presence, and resembles Iran pre-revolution. Thus, we are one bullet in Musharraf's head away from hell. Is it that far-fetched to imagine a foreigner, one of rock star status perhaps, walking into Pakistan and taking leadership like Ayatollah Khomeini did (though he was a patriot of his country). So, is it impossible for Osama Bin Laden to walk into a revolutionary Pakistan and suddenly raise al-Qaeda to nuclear nation state status. We think it's unlikely, considering humanity's love of nationalism, but religion in that part of the world is just about even in importance.

Years ago when I use to talk about Pakistan, and Iran even, and geopolitical unrest, my naive bosses, friends and colleagues, who like most Americans are much more concerned with what's for dinner and how the Yankees are doing, would make fun. We wish the world were as stable as those folks, and as interested in dinner, but unfortunately the world is not. The world is still a very selfish place, and as that greatest generation fades off, we fear the lessons learned by it will be lost as well. We'll discuss the geopolitical picture in broader extent in the "Year Ahead" article. We think you will be surprised with our hope regarding Iran, and President Bush's important decision.

Market-Moving Event Schedule


New Year's Eve marks the last trading day of 2007, and it will be a full one. The bond market closes at 2 p.m., however, while markets in the U.K. and France shut down early. Markets in Japan, Germany, Russia and Brazil will be closed the entire day. The day also marks the deadline for former European colonies to form new trade and investment relationships with the EU.

While you might otherwise expect it to be a light trading day because it comes just ahead of a holiday and marks the close of the year, tax loss selling still might prove meaningful. If you think not, I ask you to remember how people line up at post offices around the country on April 15th year after year. Procrastinators abound, and so trading on Monday will probably be more active than expected.

Monday is not economic data empty despite its near holiday status. Existing home sales for the month of November are set for release at 10:00 AM EST. Bloomberg places consensus expectations at an annual run rate of 4.97 million sales, which exactly matches October's level. Considering new home sales fell off a virtual cliff in November, dropping 9%, Wall Street Greek expects existing sales to follow suit. We say this because home builders market more actively than real estate agencies, we believe.

The semiconductor industry will take tally of its own health on Monday, as the industry's association issues its November global sales report. Sales were up 5% in October. Monday's earnings schedule includes only SINOENERGY Corp. (OTC BB: SNEN.OB).


As the American market resumes trading, many markets overseas remain closed for another day and even through the week in some instances. With the start of the year, Japan takes over leadership of the Group of Eight industrialized nations.

U.S. motor vehicle sales will lead off the day's economic reports at 7:00 AM, but one resource indicates this report could be a day late this time around, so look to Thursday for it in that case. Bloomberg's consensus of experts sees a December measure of 12.3 million sales. Sales of autos have weakened as the consumer has become strained. As a result, auto industry benefits from cost cutting and renegotiation with the UAW are not having as much impact as would be expected otherwise. In other words, the catalyst for share rise has been somewhat stymied.

At 7:45, the ICSC-UBS will report its now widely followed weekly same-store sales data for the period ended Dec 29. The reporting period (last week) was especially important, as the period just following Christmas accounts for approximately 16% of holiday sales. The period being measured also included the last few days before Christmas, which of course are highly significant sales days. The last week measured showed a year-to-year sales increase of 2.8%.

At 10:00 AM, the ISM Manufacturing Index is expected to reach 50.9 for December. Despite supposedly still strong international demand for U.S. goods, Philly Fed and the Empire State Manufacturing data indicated a softening trend here. Only Chicago-land posted a solid measure this time around. We think ISM could come in closer to 50 or below it, indicating contraction. We expect later readings in January and February will fall sub-50.

Construction spending in November is expected to have decreased by 0.3% when posted at 10:00. October's reading showed a deceleration of 0.8%. At 2:00 PM, the FOMC Meeting Minutes from December are due, and we will find this especially interesting reading. Recall, the Fed told us it was neutral, and then individual public discussions by Kohn, Bernanke, Kroszner and Mishkin left reason to doubt and offered up some confusion and conflicting statements. We expect the minutes will prove less enthusiasm inducing than the 25 point move did in December, and that's not saying much. Be careful treading Wednesday afternoon. The earnings schedule looks empty on Wednesday, but preannouncment season is still here.


The big guns of economic and labor concern arrive Thursday morning when the ADP Employment Report, Challenger Job-Cut Report, Monster Employment Index and Initial Weekly Jobless Claims are released. ADP offers up the most important prelude to the Labor Department's report the next day, and the market pays heed to the news. Wall Street Greek believes employment data will show a deterioration of the labor situation in the very near future. We've outlined countless times our view that the next sector of the economy to slip will be consumer sensitive, and that's not breaking news anymore. As retail results falter, and following the busy holiday period, The Greek expects retail/restaurant and other consumer sensitive businesses to begin consolidating operations. Layoffs should precede later store closures, as we are confident that the environment is a saturated one. REITs focusing on commercial space should be a dangerous place for capital now, as should the shares of commercial construction beneficiaries. Jobless claims are seen reaching 345K, and have been noticeably increasing this fall/winter. If you are still standing after the barrage of labor data, November Factory Orders could do you in. However, the consensus is looking for an increase of 0.5% on this measure.

With Pakistan in dismay, and with "Mr. 10%" and a teenager scheduled to take over for Bhutto in the People's Party attempt to win control, oil traders have their hands full this week. That said, they will also receive their regular bit of inventory information from the EIA at 10:30. Remember, last week's supply draw alongside the assassination of Bhutto drove oil up near $100. We could already be there by Thursday, but if not, well we think the odds favor it in the near term.

Thursday's earnings schedule includes Bed Bath & Beyond (Nasdaq: BBBY), Monsanto (NYSE: MON), AngioDynamics (Nasdaq: ANGO), CelebrateExpress (Nasdaq: BDAY), Finish Line (Nasdaq: FINL), Global Payments (NYSE: GPN), Landec Corp. (Nasdaq: LNDC), Neogen (Nasdaq: NEOG), Sonic (Nasdaq: SONC) and UniFirst (UNF).


Friday's Employment Situation Report is not expected to offer a rally cry, to say the least. Bloomberg's consensus is looking for non-farm payrolls to rise only 70,000, which is a recessionary type number. Wall Street Greek expects unemployment to move higher to 4.8%. All indications are that we are heading over 5% in short time from here. Average hourly earnings are seen appreciating 0.3%, which is hot in our view.

Later Friday at 10:00, the ISM Non-Manufacturing Survey is seen measuring 53.8 for December. Sorry Charlie, we are looking for the service sector to start showing weakness. With small business confidence waning, most signs point toward an all around troubled early start to '08.

At 10:30, the EIA offers its storage information concerning natural gas. Natural gas has not fully paralleled oil's move; in previous energy spikes natural gas has moved into double digits, and it's only in the $7 range now. A lot of this has to do with basically full storage of this fuel source, however, with oil so expensive, we think a good deal of energy users could convert to natural gas from heating oil this spring.

Last, but certainly not least, be on the lookout for that disruptive Don Kohn on Friday, as he's scheduled to find a podium. Recall, it was his voice this past fall that rallied market expectations for the rate cut. Friday's earnings schedule includes A. Schulman (Nasdaq: SHLM), AZZ Inc. (NYSE: AZZ), Piedmont Natural Gas (NYSE: PNY) and Texas Industries (NYSE: TXI).

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Saturday, December 29, 2007

The Week in Video Review - Dec 28

While the holiday week of 2007 will forever be known as the week Pakistan lost a great hope and possibly its direction toward democracy, we did our best to mix in some positive and happy video coverage of the week that was.

Opinions expressed within the videos do not necessarily reflect the opinion of Wall Street Greek.


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Friday, December 28, 2007

Morning Coffee: Housing Falls Further


A day after the world shaking assassination of Pakistani opposition leader Benazir Bhutto, oil is moving even higher. Supply draw yesterday and escalating protests on the street in Pakistan have crude approaching $98. I think this is it folks. I think we finally have the catalyst to get over $100 unfortunately, and for as long as unrest reigns in Pakistan, there should be solid oil price support. A few important data points are also impacting the market this morning.

Economic Data Analysis

November New Home Sales fell off of a cliff, reported this morning down 9%. Mind you, there was not too far to fall, after having bounced off a few other ledges already this year on our way down. Sales were running at an annual pace of 647K in November, versus expectations for a 720K run rate. Even with prices still tanking, buyers are unwilling now to enter into a situation where their home equity might immediately lose value after purchase. It's just an unnecessary risk to take, and the market should not improve now until prices stabilize. This will not happen until inventory drops, and with foreclosures still running hot and buyer concern mounting, this should still take a while to begin.

The already well-beaten housing sector just can't bleed much more before dying, and stock movement this morning reflects that. Beazer Homes (NYSE: BZH) immediately moved 2% lower; D.R. Horton (NYSE: DHI) fell 1%; Toll Brothers (NYSE: TOL) eased 0.4%; Hovnanian (NYSE: HOV) was off fractionally. It's a sign that these babies are just about sold out. Investors holding these shares look to keep holding from here, and buy support should come along soon. However, some may go bankrupt anyway, so be careful. I was early to call the move lower, and I'm happy to be first to call a mini-rally in these stocks in January. No portfolio managers wanted to have these shares on their Statement of Holdings going out to fund holders this year-end, but now, there seems value to be had. I would avoid BZH and HOV, but look to add TOL, the best in class in my opinion.

A Greek Story

I want to share a little tidbit from a job interview, an interesting story. A portfolio manager I was speaking with told me he had to hold stocks for diversification's sake, and so he was continuing to hold home builders. This was back in the late summer or fall of 2006. I told him this didn't make sense to me, because there were other options. He had to hold them because everyone else was; if he went out on a limb, he would put his neck at risk. Now let me ask you, would you invest in his fund?

There were plenty of other places to find sector participation while avoiding the clear industry risk that was apparent to me back then. Let me just add another point. I believe in the same interview, with the Director of Research, he asked me what I thought of the retail space. I said, "with tougher times apparently on the way, I would look to high-end retailers and avoid the rest." My view was far from consensus at that time, and he didn't hire me. I'm sure his assets under management are significantly lower this year, and there would seem to be a high likelihood that these PMs are either unemployed or fooling also unwise superiors by blaming their mess on the market. I, however, do not regret speaking my mind over copping consensus views to get a job.

Midwest Activity

Chicago - PMI for December came in above expectations at 56.6, versus much lower expectations. Chicago area manufacturing did not follow the route of the Northeast, where regional data showed softness. Trends don't usually all follow a direct path simultaneously folks, so don't go getting your hopes up based on this report...

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Thursday, December 27, 2007

Today's Coffee: Pakistan Shakes World

(Stocks in this article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: SDS, NYSE: GS, NYSE: BA, NYSE: PCG, NYSE: EP, NYSE: SLM, NYSE: C, Berlin: AHX.BE, Nasdaq: YHOO)

In a very important event that should not be overlooked or understated, Pakistan Peoples Party Leader Benazir Bhutto was killed in an attack this morning. As a result, U.S. equities have been shaken and oil and gold are moving higher.

Petroleum Status

Oil immediately moved higher on the news from Pakistan, but it did not move significantly higher. Perhaps the geopolitical factor had already been priced in after events in Turkey, and with the Petroleum Status report due from the EIA, traders were tentative to bid oil higher.

Then, the Energy Information Administration reported inventories fell by 3.3 million barrels. Bam! Oil popped over $97 on that news, and as unrest likely escalates, oil could finally test that century mark. How the Pakistani situation plays out from here is critical. It's likely that this event will raise up another opposition candidate. We believe Musharraf will now wisely postpone the election, as a near-term ballot would not likely work out in his favor.


Weekly Initial Jobless Claims were reported up slightly from a revised higher level. At 349K claims, the reading exceeded the 343K consensus expectation compiled by Bloomberg. Continuing unemployment is on the rise, and insured unemployment is now at 2.1%, up 0.1% week-to-week. This has been evident in the rising unemployment rate as well of course, but today's report has brought some media attention to the subject. We reiterate our message that new hiring should weaken more drastically than the rate of newly unemployed. However, we continue to expect the consumer sector, especially retail/restaurant, to significantly consolidate in the year ahead, further stressing the economy.

Durable Goods Orders

November orders rose just 0.1%, versus expectations for a much larger 3.0%. Excluding transportation, orders fell 0.7%. We should not be surprised that expenditures for big ticket items have waned, nor that housing-related sales have slipped. The business investment proxy that includes non-defense capital goods excluding aircraft fell 0.4%, following a sharper decline in October. These are recession like figures in our view, and you are finally seeing the signs of what we've been pointing to for quite some time now here.

We continue to favor tax loss sale beneficiaries like the investment banks, and other stocks like Yahoo! (Nasdaq: YHOO), recently beaten back and even downgraded by a reactionary stock analyst recently. Avoid advice from those guys; they're just weak.

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BREAKING NEWS: Benazir Bhutto Killed in Attack

benazir bhutto
Pakistan Peoples Party Candidate Benazir Bhutto was killed in a suicide attack in Pakistan today, around 8:00 a.m. EST. Pakistani reaction to this tragic event will be watched carefully today by American traders. Oil is immediately higher, but just slightly. As insensitive as we are sorry this sounds, the market will likely be more concerned about Pakistani reaction, and how unrest may escalate, then it is concerned with the event itself. Gold is moving higher and equities have indicated a lower open, but the moves are not exaggerated. We will be closely monitoring protests and government reaction.

In the past, assassinations have occurred just ahead of major al-Qaeda terrorist acts, including 911. This should set the markets at quite unease through the New Year as a result. Bhutto would have been a much easier target than Musharraf, and yet holds the potential of inciting similar unrest. We advise resisting the urge to panic now, but including a hedge against market downturn in your portfolio. Tax loss losers could get even cheaper now, so if you have not sold yet, you may consider waiting a day or two longer. I expect market reaction to escalate as unrest unfolds in Pakistan and martial law likely ensues.

President Musharraf is going to look quite ugly as a result of this event, whether he is responsible or not. Remember, he removed the top supreme court judge from office just before his reelection review was to be completed. Bhutto has now been killed just ahead of the election that Musharraf was forced to schedule by the international community and Pakistani popular demand. The international community is going to grow more concerned about Pakistan, as Musharraf looks to have an increasingly weaker hold on his country. The UltraShort S&P 500 ProShares (NYSE: SDS) might prove a nice hedging vehicle, and the CBOE Volatility Index (CBOE: VIX-X.W) should move higher in the very near term.

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Wednesday, December 26, 2007

Morning Coffee: Gift Buying Softness

(Stocks in this article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: TM, NYSE: GM, Nasdaq: COST, NYSE: TGT, Nasdaq: AMZN, NYSE: MA, NYSE: BRK.A)

Welcome back folks. Hope your holiday passed pleasantly, and if it did not, we wish you God's blessing in the year to come.

Happy Holiday Shopping?

This morning, the big question to be answered is how did the holiday shopping go? Did consumers make a go of it or what? Well, the International Council of Shopping Centers posted weekly same-store sales data showing a 2.8% year-to-year increase for the period ended December 22nd. Clearly, the next few days that followed were significant as well. Also, according to ShopperTrak RCT Corp., 16% of holiday sales occur in the week after Christmas. Gift card sales are expected to have risen 42% this year, according to the National Retail Federation, and could prove an important mover of inventory over the weeks to come.

Remember, the population and the economy naturally grows, especially as American longevity extends. So, the deceleration of growth rates is concerning. Mastercard (NYSE: MA) put out an interesting report this morning that noted a 2.4% increase in spending from Thanksgiving to Christmas, excluding gasoline and auto sales. This represents a sharply lower growth rate than last year. Including gas and autos, growth was down to 3.6% from 6.6% a year ago. This news and a late Christmas Eve warning from Target (NYSE: TGT) has the retail sector lower today. Mastercard noted strength in luxury goods and electronic commerce purchases, which coincides with our thoughts about online shopping.

Oil Trade Overdone

Oil is rising upwards of $94 today on new Turkish bombardment of Kurdish positions. 1.9 million barrels a day were shipped out of Iraq in September, which holds the world's third largest oil reserves. Iraq's northern pipeline through Turkey is an important distribution channel, but we would not expect any disruption to shipping to be an ongoing problem if it occurred. There's no surer way to bring the U.S. against Kurdish PKK members in a more direct manner, and Turkey, the country with the most to gain from such an effort, also has much to lose from it. Turkey is content handling the PKK on its own. Iranian meddling is not beyond possibility though. Yet, in the whole scheme of things, this looks like a short-term driver of oil, and we expect the smart way to play this is to use the price strength to take short positions.

October Housing Prices Tank Further

S&P Case Shiller Produced its housing price index for October, showing a 6.7% drop and marking the 10th consecutive such decline. Until inventory is worked down, the housing market is increasingly shifting to a buyers market, but we still have a ways to go. Government efforts to mitigate foreclosures should help some, but we continue to expect foreclosures to run aplenty in '08. However, the drastic increases in year over year figures should dissipate significantly as we have lapped major change.

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Find the Perfect Gift on eBay!

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Tuesday, December 25, 2007

Season's Greetings!

Wall Street Greek wishes our readers season's greetings. God bless you my friends.

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Monday, December 24, 2007

Morning Coffee: Don't Panic, Potter is Buying!

(Stocks in this article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: MER, NYSE: C, NYSE: GS, NYSE: MS, NYSE: GE, NYSE: URI, NYSE: WYE, Nasdaq: TEVA, NYSE: CVX, NYSE: GS, Nasdaq: MAXJ)

"Potter is buying!" exclaimed Jimmy Stewart in It's a Wonderful Life. Goldman Sachs (NYSE: GS) isn't selling either, Goldman is buying, buying up Cheyne Finance, the marquee troubled SIV portfolio. Leading a group of investors, clearly Goldman is once again on the right side of a deal, gobbling up bargains just like Potter. Wall Street Greek believes this is the most important news of the day, and offers further hope for the troubled credit markets and financial system. It also provides a louder buy signal, in our opinion, for investment banks on the cheap. It looks to me like the nonbinding agreement hinges on the investors' ability to negotiate reinvestment opportunities for the creditors of the company. Goldman is looking bright, as usual, as it does not even seem to own yet what it would turnover for profit, if I understand correctly.

Jim Cramer spoke wisely when, last week, he announced Goldman Sachs is a buy. While my only concern is the timing, and possibility of profit taking in early '08, I have to agree the investment banks on the whole look attractive. Jim said Goldman would benefit most from the coming new capital wave driven by sovereign funds. In an important announcement, Saudi Arabia just indicated it would be creating a sovereign wealth fund that could have more than $900 billion to invest. With its neighbors in the Middle East looking to international investment, it appears a competitive nerve has been engaged in Saudi Arabia. The Saudi coffers have been operating under a mandate to invest locally, while other Saudi institutions, individuals and the royal family have not limited themselves in this manner. Also, there's an important benefit to diversification outside the politically strained region that the Saudi's and others cannot ignore.

While Cramer may be right on the valuation of Goldman not being rich versus peers, based on analysts' estimates, the fact remains that some profits could be had from the stock in early '08 and placed into other beaten down shares of GS's rivals like Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS) and Citigroup (NYSE: C). We are shy about touching Citi, with the dividend still at risk, but Citi should clearly be a beneficiary of Saudi investment, considering Saudi royal ownership interest in the firm. In any event, this looks like an interesting sector to consider for '08. The market closes at 1 p.m. today.

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Sunday, December 23, 2007

The Greek's Week Ahead - Time to Buy!

The Greek's Week Ahead has been engineered to prepare you for the events that could impact your portfolio this week.

The holiday week ahead offers up a shortened period that could prove volatile on light volume. A good portion of the market will be on vacation, sipping eggnog and singing carols, or more likely playing poker and arguing with distant relatives!

The Greek has been vocal on our call to rally as we near the end of the year. I continue to expect a late Santa Claus rally to spread into a full-fledged January effect. A pending recession and bullish stock run can in fact go hand in hand my friends, because seasonal capital flows should find deeply valued beaten down shares now appealing.

401K reshuffling could also play a role in where capital flows, as employees the nation over move capital in a reactionary manner out of losing sectors into winners. For this reason, I expect another early run for emerging market shares boosted by fund flows. In Q4, kitchen-sink write-offs sank shares in lending, investment banking, home building and other industries, and while many of these businesses are not due for imminent recovery, the stocks look cheap in some instances and the market is forward looking.




Christmas Eve is a trading day my dear friends, however desolate downtown New York will surely be. Whoever does show up for work on Wall Street, or otherwise manages to peruse a portfolio, will likely take off early anyway. Thus, barring any major breaking news surprise, I would expect a light day typical of the pre-holiday type.

Zero economic data is due for release and the earnings calendar is empty as well. However, the New York Stock Exchange will rebalance several indexes, and Barron’s reports that the NYSE U.S. 100 Index will add Transocean (NYSE: RIG), Deere (NYSE: DE), Union Pacific (NYSE: UNP), CME Group (NYSE: CME), Apache (NYSE: APA) and Southern Copper (NYSE: PCU). The index will remove Automatic Data Processing (NYSE: ADP), Cardinal Health (NYSE: CAH), Capital One Financial (NYSE: COF), Fredie Mac (NYSE: FRE), SunTrust Banks (NYSE: STI) and Washington Mutual (NYSE: WM). The trading day before Christmas will be a shortened one, as equity exchanges close at 1 p.m. Interestingly, the Russian Duma holds its first session on Monday. Of course Tuesday marks the Christmas holiday and all markets are closed.


As traders return with full bellies, they will find some important economic data left to digest. Alongside the Redbook Survey, the International Council of Shopping Centers - UBS will report its more closely watched weekly same-store sales data a day later than normal. This week’s report will carry heavy economic message and repercussions for retail stocks and the consumer sector on the whole, since the data covers the week before the gift-giving peak. The year’s sales trends have weakened steadily, and the week just prior offered reported sales growth of only 2.1% year-over-year. The period just after Thanksgiving proved strong, but December has thus far shown weakness. So, a healthy last minute shopping push would not likely play out significantly for December retail sales when reported.

S&P Case-Shiller should indicate further decline in home prices during October. The Bank of Japan is set to release its meeting minutes from October 31 and November 12-13. On the earnings front, the day after Christmas brings an empty stocking.


Market participants better be off their leftovers diet by Thursday, because they will be met by a heavy data schedule. Bright and early at 8:30 AM EST, Weekly Initial Jobless Claims should be closely watched and well-covered by the media. Over the last few weeks the number has begun to trend higher. Last week’s measure of 346K was 12,000 more than the week before, and the Fed and most economists agree unemployment is on the rise. Bloomberg’s consensus expects a measure of 343K in this latest reading.

The Greek is specifically looking toward poor consumer spending to drive consolidation in retail, restaurant and other consumer-dependant businesses. The only two earnings reporters on Thursday include a retailer and a restaurant, and so Christopher & Banks (NYSE: CBK) and Luby’s Inc. (NYSE: LUB) carry a heavy burden. The individual reports will likely lead pundits to draw broader conclusions on Thursday.

Strategists have yet to predict the next industry collapse your favorite Greek sees. I believe the next leg lower for this economy will likely be driven by consolidation in the retail/restaurant/consumer sector. As a result, unemployment should rise and a saturated retail environment should become exposed. This in turn should drive a recession in commercial construction.

Also on Thursday morning, Durable Goods Orders for the month of November are expected to have increased 2.5%, according to Reuters (3.0% by Bloomberg’s tally). This is in tune with the prior week released personal consumption growth number, but likely not indicative of what’s to come in December and early ‘08.

Due to the holiday, the Mortgage Bankers Association will post its Purchase Applications Index on Thursday this week. Refinancing activity aided by government and lender efforts to stabilize mortgage streams have generated application activity, despite tighter lending standards and stricter regulatory oversight. Last week’s index measured 422.2.

At 10:00 AM, The Conference Board is due to report its Consumer Confidence Index for December. Friday brought a University of Michigan Sentiment reading of 75.5, which while above expectations fell short of November’s reading. Reuters notes an expectation for a December Conference Board reading of 87.0, versus 87.3 last time around. Bloomberg’s consensus forecasts 86.5 on confidence. At 10:30, though a day later than usual, look for the EIA’s Petroleum Status Report.


Friday brings two important economic reports. At 10:00 AM, the Census Bureau is set to report New Home Sales for November. Both Reuters and Bloomberg report expectations for an annual pace of 720K, compared to 728K in October. Nothing new for investors to absorb here, and I suggested investors start picking at Toll Brothers (NYSE: TOL) in my article about a month back.

The National Association of Purchasing Managers – Chicago is scheduled to report on Friday. Recent readings from both the Philadelphia and New York area manufacturing sectors have indicated a weakening trend. Chicago could add confirmation when it reports, and Bloomberg’s consensus of economists is looking for a reading of 52.3, which represents expansion.

The EIA’s regular Natural Gas Report has been pushed back a day to Friday this coming week. At 3:00 PM Friday, Farm Prices for December are due, and wheat has been on quite a run. Pressure continues on foods producers and they have been gradually shifting burden to consumers.

Not a creature was stirring, not even a mouse, but three companies are scheduled to close out the very light earnings week: Cal-Maine Foods (Nasdaq: CALM); Charles & Colvard (Nasdaq: CTHR); and Mesa Air Group (Nasdaq: MESA) are due to report. Happy holidays!



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Friday, December 21, 2007

Morning Report: Santa Sighting

(Stocks in article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: WAG, NYSE: MER, NYSE: CC, NYSE: MMC, NYSE: UBS, Nasdaq: RIMM, NYSE: PHP, Nasdaq: RESP, NYSE: MU, NYSE: C)

Early warning radar has picked up a blip. Though there is a 50/50 chance it could be a Russian multiple warhead missile, bells ringing and children singing seem to indicate it may be Santa Claus. Well, better late than never! Odds are against it being a Russian nuke, with Putin visiting the boardroom of Gazprom to check out his new digs, maybe... An early economic report this morning is helping boost stocks. That said, consumer sentiment at 10:00 could shoot Santa right out of the sky.

Today's Market Factor Analysis:

Personal Income, Consumption and Inflation:

November personal consumption expenditures rose a better than expected 1.1%, versus consensus 0.8%. After adjustment for inflation, consumption rose a strong 0.5%, versus 0.1% in October. While November's strength is impressive, indications are that holiday sales in December have tapered off. The Greek strongly believes the holidays will tap out consumers and help drive recession in Q1. It's like that last sprint to finish a marathon, and then we collapse. Spending outpaced income, meaning consumers are drawing from savings in order to spend. However, we would expect this is typical over the holiday period.

Personal income also rose, but slightly missed expectations as it moved 0.4% higher. We would not expect much better news regarding income in the months ahead, as bonuses are expected lighter in many business lines this year, and we are looking for much employment consolidation in early '08.

The Fed's favored inflation gauge, the PCE Deflator, showed prices moved up 2.2% year over year, and entered the Fed's red flag zone above 2.0%. The Fed seems handcuffed for now regarding its ability to act against rising prices, but this certainly will be on their minds. We expect the Fed will count on some backup of prices that would be expected in recession, or in a slowing economy.

University of Michigan Consumer Sentiment:

Recent readings from this consumer sentiment measure, and others, have not been very uplifting. Expectations for December are for a reading of 74.5, versus 76.1 in November. We are concerned about the recently poor reading in small business confidence. Small businesses have been driving employment growth, and if sentiment there weakens, then employment should lose its base of strength.

Merrill Joins Pack Receiving Foreign Funds:

While UBS (NYSE: UBS) shareholders are up in arms over news that two foreign investors actually combined to fuel capital flow into the firm, Merrill Lynch (NYSE: MER) looks set to join the pack. Merrill is in discussions to bring $5 billion from Singapore's state investment company, Temasek Holdings Ltd., according to the Wall Street Journal. The flood of foreign capital into Wall Street has raised some protectionist eyebrows, but controlling interest has been submitted by none. So, who cares?! To those who argue that in time of heightened national security interest, this could be a problem, I say no way. In times of war, nations seize control and the only risk here is to the foreign investors. Also, I do not expect Dubai or Singapore to declare war anytime soon... China is a whole other story, but we are not going there yet. No stock would be safe to hold in that instance right? So, relax and accept the capital while we need it.

Cramer last night suggested that the next capital wave will be fueled by sovereign investment, and it's clear that this is already happening. Also, as the dollar stabilizes and strengthens, and please see past Greek articles on the topic, foreign capital will find impetus to get in while the bargains are hot. Prices could be going up soon. America is on sale now. I agree with Cramer on this, but I think he's early on his Goldman (NYSE: GS) buy recommendation. I would be short GS into early '08 and look long some of its beaten up rivals, like MER for instance. Citigroup (NYSE: C) still faces that dividend cut risk, but after that plays out, who better to benefit from sovereign investment than the king of the world, Citi.

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Thursday, December 20, 2007

Greek Coffee: Old & New Economy Contrast

In Greece, old souls like myself like to drink a Greek coffee in the afternoon, after siesta. It helps fuel the passion that drives them to squeeze the lemon of life for all the juice it has. (Stocks in article: NYSE: SPY, NYSE: DIA, NYSE: BSC, NYSE: MBI, NYSE: FDX, Nasdaq: GOOG, Nasdaq: QQQQ, Nasdaq: DCLK, Nasdaq: ORCL, NYSE: RAD, NYSE: CAG)

The day offered an interesting mix of past and present contrast. While the Q3 GDP figure went unrevised, its strength looks sure to falter in coming quarters. Reports from the Philly Fed and Conference Board raise concern over the outlook for Q4. Moving forward, I continue to see consumer softness driving a second leg of weakness for the economy. However, despite this weakness I continue to see a bullish market opportunity on the January effect I expect to present itself this year.

Today's Market Factor Analysis:

Philly Fed Survey

The Philadelphia area manufacturing report indicated quite poorly, and offers up a bad omen for future ISM reports. The Philly Fed Survey came in at a negative 5.7, versus consensus expectations for a positive 6.2, according to Bloomberg. CNBC's Steve Liesman indicated that for whatever reason, the Philly Fed measure seems to offer a good predictor for national manufacturing. A negative reading indicates contraction, and considering the Empire State reading weakness earlier this week, it appears manufacturing is moving into recession.

Leading Economic Indicators

The Conference Board's Leading Indicators posted a 0.4% decrease for November, versus expectations for a 0.3% decline. The drop was the third in four months and offers further evidence that the economy is slowing down precipitously into '08.

Weekly Initial Jobless Claims

New unemployment benefits filers measured 346K last week, which amounted to an increase of 12,000 over the week before. We've noticed a clear trend higher now, and the four-week moving average confirms this as it rose 4,250 to 343K. Remember The Greek's expectation for unemployment to increase even further as consumer spending softness leads to layoffs at retail, restaurant and other consumer services firms. This in turn should drive consolidation and a recession in commercial construction.

Market-Moving News:

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Tuesday, December 18, 2007

Greek Coffee: U.S. Policy & Goldman's Reversion

In Greece, old souls like myself like to drink a Greek coffee in the afternoon, after siesta. It helps fuel the passion that drives them to squeeze the lemon of life for all the juice it has.

(Stocks in this article: NYSE: GS, NYSE: BBY, NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, Nasdaq: RIMM, Nasdaq: IRBT, NYSE: C, NYSE: BSC)


As we, occupier, protector, liberator of Iraq, sit back and watch a foreign nation invade that vulnerable country, I have never been more embarrassed or ashamed. Never have we looked so hypocritical and opportunistic. I, a man who supported the invasion of Iraq and now call for the pressuring of Iran, am ashamed. American ideals are not expressed by watching Turkey attack the populous of a country we are actively policing. I dare anyone to say we are not hypocrites in this instance.

You may rebut that the PKK is a terrorist organization, and to this I would answer, suppose Iran was invading Iraq and killing Kurds? Iran also does not get along with the Kurds. It's not so far fetched to imagine. Do you think America would sit back and watch Iran kill Iraqis, the people we have taken under our wing? No, we would not.

What we are doing with Turkey is preserving an important alliance, but how weak are we to allow Turkey to dictate policy to us? I say, flex your muscles with your allies as well when they get out of line. I'm sure Armenians agree with me on this topic, because what's going on is not much different than the genocide they suffered at the hands of the Turks. It's also not much different than the suffering the people of my island ancestry experienced at their hands. Nearly two centuries have passed, and nothing has changed. Enough!


Like Cramer outlined, GS is being taken down. Here's why. There is a mathematical trend, maybe a human condition, called reversion to the mean. Usually, this describes a stock's rise above and fall below its true intrinsic value. In time, the stock should revert to its mean value. Often the market moves above a historic valuation and below it, and this activity generates a mean valuation. History dictates this value is significant and represents normal value. While secular changes can alter the mean, otherwise, it may be a good predictor of future value if your estimates are good.

Goldman Sachs (NYSE: GS) is the lone survivor of the investment banks. Perhaps through ingenious means, or luck, Goldman got onto the right end of trades and actually profited from financial sector woes, or at least offset losses with some smart trading decisions and solid risk management. But, now its valuation differs greatly from that of its peers. In order to keep that valuation, Goldman must continue to make the right decisions.

Outperformance of the past does not guarantee Goldman will make the same standout decisions in the future, and so I believe GS should revert to a mean industry value, and that value is substantially lower in my view. As earnings forecasts are based on past performance, analysts are likely missing the fact that Goldman operates in the same marketplaces as Bear Stearns (NYSE: BSC) and Citigroup (NYSE: C). In this cyclical business, trading earnings are not completely dependent upon a consistent driver. A gain one month could contrast against a loss in the next. This differs from most other businesses, even within the financial sector. Asset managers for instance, and Goldman is also one, earn fees on assets administered, and as that asset base is somewhat consistent and usually growing, you can base related future earnings on past results. Trading income is just different. Other than this, the IPO market and M&A activity could slacken in early '08 despite the Fed's efforts to provide expansionary aid. I just would not own the priciest stock in this business, despite past decision making wins.

While it has preserved more capital, Bear and Citi have raised capital, so I do not see any advantage at Goldman that can be assessed to its past success. Therefore, I expect its estimates are overstated and therefore valuation is as well. Also, I expect any valuation premium it holds due to past performance is not likely to play true either.

Market-Moving News

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Monday, December 17, 2007

Morning Coffee: Central Bank Big Day


It's the big day. The first of the united central bank efforts debuts today. The Fed is auctioning $20 billion of term funds in this first round of action. The earth did not shake, and even the Libor didn't move much... However, The Greek believes the government gets the gravity of the situation and is otherwise rightly targeting the underlying collateral and remediating the problem at its root. However, the degree of assistance might need adjustment higher before it's all said and done. Is that bailout? Yes. Is it necessary to avoid financial cataclysm. Yes. So, would you rather have a free market collapse or a bit of socialist medicine for capital market revival? I know what I want for Christmas. Today's copy is abbreviated.

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Saturday, December 15, 2007

Week in Video Review - Dec 15

Please enjoy our video selections for the week just passed.

We try to keep it as entertaining as possible, but some of the videos may raise an eyebrow. The views expressed in the videos are not representative of the views of The Greek, and it is not our intention to make any political or other kind of statement, or to otherwise offend anyone by any of the selections. We hope you find them interesting, and enjoy the comedy selections this week.


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Friday, December 14, 2007

Morning Coffee: Markets Dazed & Confused

(Stocks in this article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: C, NYSE: BDK, Nasdaq: JBLU, Nasdaq: JASO, NYSE: WM, NYSE: WB, NYSE: WFC, NYSE: CFC)

The market seems dazed and confused currently, trying to figure out if the credit market will implode, if the economy will collapse, if inflation will blaze. This makes us vulnerable to outside shock, a negative catalyst. However, I like it. It's also a sign. When fear gets this frantic, I shift to bullishness as the mentors advise us, as the geniuses of our game teach. Oh, there are serious dangers ahead, but the immediate period seems to offer opportunity.

Importantly, capital flows should shift as we move through the end of the year. We should have a short-term bull to start '08, and after that, I agree the first half of the year will likely hold pitfalls and offer a rocky ride for stock investors. And, if Iran falls into place as I expect it could, my outlook for '08 is actually rather negative. Even so, I say that for now we should be long.

  1. Inflation Fears, Nov. CPI - Today's Consumer Price Index report put the fear of the inflation God back into the market. He's a Pagan no doubt, and could require sacrifice to be appeased. Steve Liesman of CNBC went so far as to say the Fed would raise rates in the current environment if inflation data sends this same concerning message more consistently. November's CPI showed a 0.8% increase, mostly driven by the expensive price of energy last month. Excluding food (also higher) and energy, the Core CPI showed a 0.3% rise. Both measures exceeded expectations, and the trailing twelve month Core CPI (best for gauging the Fed's view of it) indicated a 2.3% increase, up from 2.2% in October. If stagflation, which is the combination of economic doldrums and inflation (in other words the worst case scenario), rears her ugly head, 2008 could be very challenging.

  2. Citigroup's SIV Rescue - Citi announced that in order to avoid the downgrade of seven of its SIVs it would provide required backing, but thus have to bring some of the burden onto its balance sheet. Moody's downgraded Citigroup's debt ratings as a result, but The Greek views this move as productive and wise on Citi's part. I want to reinforce to you my view that the cure to this problem, and the unfreezing of these markets, is clearly tied to reviving the underlying mortgage and credit obligations. I believe the government has clearly embarked on this effort, and as it realizes (hopefully) the extent it must go to insure the stability of the system, we can recover and the instruments can again trade.

  3. Oil's Conflicting Factors - I noticed a strange trend this year, winter. It's actually chilly outside, and it's even snowing. Heating oil traders have noticed the pattern as well, and as the Northeast braces for a Nor'easter, the price of crude and heating oil have adjusted upward. At the same time, the economy, and global economies, are forecast to show significant decreases in growth rate. Therefore, I see this current rise in price as a temporary phenomenon, but continued normal winter weather patterns could sustain prices longer. The IEA today issued its revised '08 demand forecast, and as always it does not agree with OPEC. The IEA noted that despite economic pressure ease, demand would increase in '08. OPEC, which has a vested interest in keeping supply tight to demand, seems to always view things in a placid manner in comparison to the IEA's panicked voice.

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Thursday, December 13, 2007

Morning Coffee: Follow Me

(Stocks in this article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: SDS, NYSE: LEH, NYSE: GS, Nasdaq: COST, NYSE: HON, Nasdaq: MATK, Nasdaq: JOSB, NYSE: NVS, NYSE: C, NYSE: DOW)

Last December, most would have said it was daring for me to suggest homebuilding and the financial system would fall into despair. In fact, many did, though that's all been forgotten now. Believe it or not, the consensus was looking for housing recovery early this year, while I was calling for another leg lower. Homebuilder CEOs were still in denial, and their stocks were significantly more expensive. I was even labeled an Armageddon Analyst. Can my views discounted any longer...

Now that we are in what many are screaming is in fact Armageddon, I'm here to lead you through the fire. Wall Street Greek is actually looking for near-term equity rebound, and you will require the same courage many of you mustered up last year, but our position must now take the other side of the table.

I suggest you refrain from your victory lap now and not fall in love with your short positions. Government backing and efforts are adding confidence to markets, whether the consensus sees it yet or not. Remember, there is a herd and they are still sounding the bearish cry. How many times have you quoted those famous words about buying into fear and selling into greed? Now I ask, how are you reacting when faced with fear? It's difficult isn't it... That's why extraordinary profits are had by some.

The Greek believes capital flows should return in favor of equities as tax loss selling runs dry and value is to be had. Why has the investing public forsaken the lessons of the past? The answer lies in human psychology. Kitchen sink write-offs are a norm in this kind of environment, and you should not allow yourself to be frightened into a corner while corporations do what they can now to clean their books for a fresh '08.

Santa is on his way and the January Effect should be extra effective this year, in my view. If Q4 GDP or corporate profits spur the market into panic, Bernanke and Mishkin are well-schooled in the art of sharp rate cut (I'm talking 100 bps if necessary), and you could expect a big move in such a scenario. If the economy holds, then the current of action will be viewed positively and market confidence returns as well. The caveat here is that we are now extra vulnerable to external catalysts like terrorism or geopolitical conflict. But, we should not let fear rule. The economic headline is drifting from the business page to front page news, yet another sign that the end could be near. I'm looking for a short-term move with a high level of expectation; looking further than that is yet difficult.

  1. November Retail Sales Beat - Sales increased 1.2%, ahead of the expected 0.6% increase. Excluding autos, sales rose 1.8%, versus a 0.7% expectation. So, the late start to holiday shopping, while it was early based on the calendar, saved the month. We say late because sales data was soft heading into the holiday. As we suggested in a previous article, unemployment remains low and the holidays are the holidays. People will shop, and retailers will discount if necessary. We have seen earlier and earlier discounting as retailers try to secure the holiday purchase ahead of their competitors. Gasoline prices have been running high, while easing off the peak in recent weeks; gasoline impacts this figure, as it includes the sales of your local pump stations. So, The Greek took solace in the specific data point that excludes gasoline; it showed a rise of 0.6%. Another positive, almost all measured sectors of retail showed improved sales. The consumer is not dead yet.

  2. November Producer Price Index - PPI increased 3.2%, versus 1.6% expected, and Core PPI excluding food and energy, rose 0.4% versus 0.2% seen. A little hot... Steve Liesman of CNBC pointed out the many factors that play roles in PPI impacting consumer prices, where Fed attention is focused for inflation measure. While it's true that a higher PPI does not necessarily imply an increase in CPI this month, it does imply pressure is increasing on future prices. Margins can only tighten so much for retailers to bear, and at some point, no matter how tight competition may be, consumer prices will rise. Net net, there is no way to view a rise in PPI in a positive light. CPI will be closely watched tomorrow.

  3. Unemployment Claims - At 333K, weekly benefits filings improved off last week's level, which also improved from the week before it. The Greek remains uncomfortable with the long-term trend here, however suttle it has thus far proven. I continue to look for consolidation in the retail/restaurant/other consumer sector in '08, which will in turn impact commercial construction as well, in my view. Therefore, we also expect unemployment to continue on the increase. While I'm bullish stocks now, I'm still looking for a recessionary quarter or two, or more depending on what plays out with Iran and how well we mitigate credit concerns.

  4. LIBOR Shows Positive Signs - While the article I have posted for you below focuses on the sticky LIBOR rate, it has eased off recently higher points. The fate of the economy rests significantly on our ability to mitigate credit risk tied to exotic asset backed securities extending beyond mortgages. We cannot allow this disease to spread to other consumer credit markets.

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