Stock Market Wrap - Regulation Clearly Necessary

Let's face it, we're animals! We keep messing things up with our greedy tendencies. So, maybe we actually do need some caretaking, i.e. regulation.



The opinions expressed within the video may not agree with those of The Greek. Please see our disclosure at our site, Wall Street Greek. For readers: AMEX: DIA, AMEX: SDS, Nasdaq: QQQQ.

The Greek's Week Ahead - Bulls Play April Fool?

While many would label Ben Bernanke the April fool, the market might instead slap that tag on the foreheads of the countless pundits who came out last week calling the stock market’s bottom. However, Friday’s key employment report from the Labor Department holds the potential to sink shares into new low territory and make the pundits look foolish.

The market moved lower last week, but lost some pizzazz, which is a good thing in this case. Volatility diminished, which is perhaps a sign that bad news is getting old, while hope remains on the back burner for later offering. The Dow Industrials moved lower 1.2% on the week (-7.9% Ytd.), while the S&P 500 fell 1.1% (-10.4% Ytd.). The Nasdaq Composite actually rose fractionally, which illustrated the hopeful nature of the market last week. When we eventually begin rising in earnest, you can expect low-quality growth stocks to lead the way, in our view.

Whether we experience a special economic contraction this time around, or just one of average variety, should depend greatly on how well the Fed is capable of keeping capital flowing to vital organs. I hear you! This is at the expense of the dollar... Still, the reason I'm encouraged by Fed effort is because I have great concern about the leverage that pervades our every facet of life. I do not think that quitting the addiction of leverage cold turkey is worth the pain of withdrawal from liquidity, as I'm not sure we'll survive it. We need to wean the economy back to health and then wean ourselves off leverage through stricter regulation. Force feeding America, and the financial system, to suddenly find religion will only hurry our race to financial Armaggeddon.

The Week Ahead

Monday

The first quarter ends, and the week kicks off with news from the Midwest, when the National Association of Purchasing Managers – Chicago reports on the area’s manufacturing condition in March. Considering that the Philly Fed Survey posted a negative 17.4 and the Empire State Manufacturing Survey was measured at negative 22.2, we would be surprised to find good news even from the Midwest at this point in the economic cycle. Bloomberg pinpoints economist expectations close to ours, with the consensus looking for a reading of 46.0 in March. Recall that a measure short of 50.0 signifies economic contraction and matches with the results of New York and Philadelphia regions.

Treasury Secretary Hank Paulson is scheduled to make a speech on recent issues, while San Francisco Fed President Janet Yellen is set to talk about foreclosures and community development.

The Democrats are supposed to decide on whether to invite the potentially influential Floridian delegation to their convention. The USDA will issue its crop report, as commodity traders anxiously await to see how particular plants stand in farmers' acreage plans.

Earnings lighten considerably this week, but expect reports from H.B. Fuller (NYSE: FUL), Abraxis Biosciences (Nasdaq: ABII), A-Power Energy Generation Systems (Nasdaq: APWR), Banks.com Inc. (AMEX: BNX), Carrington Laboratories (Nasdaq: CARN) and Clarient Inc. (Nasdaq: CLRT).

Tuesday

We’ll have a second serving of manufacturing news, when the Institute for Supply Managers reports its manufacturing index for March on Tuesday. February’s data measured at 48.3, again representing contraction of business activity. Economists expect the index to reach only 48.0 this time around, according to Bloomberg.

Motor vehicle sales are reported at the beginning of each month, and you can expect an April Fools' joke of a report this time around. We here at The Greek will be keen to see this week’s ICSC-UBS same-store sales data, considering last week’s report showed growth cut off at the knees, with sales rising just 1.0%. This compared to growth rates upward of 2.0% in February.

Construction spending in February is seen having decreased 1.1%, compared to a decline of 1.7% in January. Of important international note, Japan's tanken survey of March business sentiment is due on Tuesday.

In equity market news, Russell Investments expects to launch global equity indexes. In Vegas, the very interesting CTIA Wireless Industry show kicks off. Tuesday's earnings include Immucor (Nasdaq: BLUD), Adstar Inc. (Nasdaq: ADST), Alseres Pharmaceuticals (Nasdaq: ALSE), Exfo Electro-Optical (Nasdaq: EXFO), OMNOVA Solutions (NYSE: OMN), Rus Berrie (NYSE: RUS) and Telkonet (NYSE: TKO).

Wednesday

Starting on Wednesday, the economic community goes on employment watch, with the regular monthly bombardment of jobs data beginning. The first news will come from the Challenger Job-Cut Report before the market open. This data offers a look into the monthly planned layoffs of American companies. After starting the year mildly, the last two months of data have offered upward of 70K planned firings.

Also before the market open Wednesday, ADP will post its employment report that covers job market changes in the private sector. This data, which acts as a preview to the Labor Department’s pending news, turned negative last month, when 23,000 jobs were reported lost. Many of those recently unemployed folks held positions in the manufacturing sector. So, it should be no surprise then why economists expect factory orders to post a decline of 0.6% for the month of February.

Every Wednesday brings two regular reports. In the early morning, the Mortgage Bankers Association posts its take on weekly mortgage activity. After long-term rates declined sharply (0.24%) on the last fed funds rate cut (0.75%), mortgage applications came to life according to last week's data. Refinancings of course led the way, and that has to be a good thing. The Fed might have finally found critical threshold to help Americans lower their capital costs, and for a lucky few who may still have equity in their newly purchased abode, an opportunity to get out of difficult loan agreements.

Also reporting on a regular basis, the EIA Petroleum Status Report is once again important to traders. Speculation has left the building, and investors are now concerned about domestic consumption in a recessionary environment. Also, the strategic oil reserve has been topped out, so one special source of draw is off the table. In other words, all signs point to lower oil prices... except Iran, which looms as an ever present event risk. Oh, and then there's the dollar...

Just in time to take credit for mortgage activity, the Fed Chief will be in the spotlight a couple times this week. Bernanke will reach Capitol Hill on Wednesday, as he testifies before the Joint Economic Committee, addressing the economic outlook.

Wednesday earnings include Research in Motion (Nasdaq: RIMM), Best Buy (NYSE: BBY), Micron Technology (NYSE: MU), Monsanto (NYSE: MON), AngioDynamics (Nasdaq: ANGO), Blonder Tongue Labs (AMEX: BDR), CarMax (NYSE: KMX), Finlay Enterprises (Nasdaq: FNLY), Landec Corp. (Nasdaq: LNDC), Lululemon (Nasdaq: LULU), RegeneRx Bio (AMEX: RGN), Rex Stores (NYSE: RSC), Ruby Tuesday (NYSE: RT) and UniFirst (NYSE: UNF).

Thursday

The Fed concludes its public appearance parade on Thursday as Bernanke sticks around the Capitol in order to testify before Congress on the Bear Stearns (NYSE: BSC), JP Morgan Chase (NYSE: JPM) deal. Ben will be joined by JPM's Jamie Dimon for some must see TV. Fed bosses Yellen and Mishkin are both set for evening appearances on Thursday.

Thursday offers the Monster Employment Index, which measures job postings at some 1,500 websites. The data is considered more important than the Help-Wanted Index, now that everyone gets their news online. The Monster Index decreased slightly last month to 165.

Weekly initial jobless claims takes a backseat this week to all the other employment data, but offered no comfort last week when reported at 366K. We have noticed the Bloomberg consensus figure regularly predicting no change in new claims, so either economists find difficulty in predicting week-to-week change or there are in fact no significant forecasts.

ISM’s take on the non-manufacturing sector comes Thursday morning, and since the service sector is so important to American economic growth, this report carries weight. February’s data came in at a still expansionary reading of 50.8, but economists are calling for a drop to 49.0 for the March measure. EIA's Natural Gas report is set for its usual release at 10:30 a.m.

Thursday's earnings reports include Acuity Brands (NYSE: AYI), Constellation Brands (NYSE: STZ), Cascade Corp. (NYSE: CAE), Hooker Furniture (Nasdaq: HOFT), Lawson Software (Nasdaq: LWSN), Matrix Service (Nasdaq: MTRX), Rostelecom (NYSE: ROS), RPM Int'l (NYSE: RPM), Saba Software (Nasdaq: SABA) and Schnitzer Steel (Nasdaq: SCHN).

Employment Friday

As the drum rolls, Friday brings the highly anticipated Employment Situation Report. Before the market opens, we will discover if unemployment increased from last month’s level of 4.8%. Remember, the unemployment rate did not make sense last month, since we lost jobs during the period. The government noted a high degree of individuals leaving the workforce altogether. But, these people did not officially leave the workforce because they retired fat and wealthy. Rather, unemployment benefits ran out for a good number of them.

So, this seemingly positive data actually represented rather dire news. How are those people suppose to now pay their mortgages, fuel their vehicles and even eat... Economists expect the unemployment rate to return to 5.0% in the March reading.

Nonfarm payrolls dropped sharply last month, and traders will be on edge as we await this month’s data, with the economy deeper in what most believe is recession. The consensus of economists surveyed by Bloomberg expects jobs to have decreased by 50,000 in March. The report threatens to sober up antsy market pundits, and make some look like April fools.

Friday's short list of earnings reports includes A. Schulman (Nasdaq: SHLM), Family Dollar (NYSE: FDO), The Mosaic Company (NYSE: MOS), AZZ Inc. (NYSE: AZZ) and Blyth (NYSE: BTH). Markets in China, Hong Kong and Taiwan are closed Friday.

We hope you have again found value in our weekly market-moving event planner, and we look forward to providing your daily commentary each day. Please find our disclosure at Wall Street Greek.

Wall Street Week in Video Review - March 24-28

Another interesting week for your perusal.



The opinions expressed within the videos may not agree with the view of The Greek. Please find our disclosure at Wall Street Greek.

Daily Market Wrap - Is the Worst Over?

Has the market turned the corner? Reuters seems to think so.



The opinions expressed within the video may not agree with the opinion of "The Greek." (disclosure)

Inflection Point Defined in Stock Market Context

What is an inflection point, or point of inflection? Well, do you ever feel as if the stock market has the personality(ies) of Dr. Jekyll and Mister Hyde? Don't panic, the chaos actually makes perfect sense. At times like these, points of inflection, the market is sure to have mixed emotions and for good reason.

I can almost hear the burly traders speaking in their Brooklyn/Queens tongue now. I hear them complaining to their wives after arriving home from a desperately needed after work beer with the boys, "this market is like Dr. Jekyll and Mister Hyde!" One day we're positive and hopeful and the next day we're back down in the dumps.

But don't fret, we need not rush Mr. Market to Bellevue, America's oldest public hospital that is perhaps best-known for its mental health program. He does not need a psychiatrist. Like most troubled souls, all he needs is time to see and understand his problems as logical consequence and progression.

Inflection points are by definition points of directional change, or according to my dictionary the point where a curve changes direction. I believe the topic is best studied non-specific to second, hour, day or week. It's too difficult to be that precise in the pegging of its arrival. However, like any point of measurement on a timeline, we reach it in apparent linear or non-linear fashion, depending on the time period used as the basis for measurement. For instance, if we study monthly data, the trend should look more linear than if we look at it on a per minute basis.

So in other words, the market only appears to suffer from multiple personality disorder when we study it on a short-term basis, like daily. Years from now, economists will look back at this period using monthly stock market index price points, and they will find it quite easy to see stock market and economic trend. They will likewise easily note the market's true inflection point.

Good News Bad News

At inflection, the market is barraged by mixed messages on a daily basis. At this particular inflection point, which would be one reflective of economic trough (hopefully we're there), the messages are completely different than those at economic peak. The federal government, including the Federal Reserve Bank, the Treasury Department and Congress, has taken substantial action to spur economic expansion. That's the good news, offering reason for stock price appreciation, and hope.

At the same time, the real economic data trend is one representative of deterioration. The news flow is getting worse, not improving. Even so, we've yet to record a quarter of economic contraction. If you play stocks by the economic book, you would still be months away from taking long positions.

However, Mr. Market does not play by the economic book. He's much more complex than that. He's what's called "efficient" in university lecture halls the world over. He absorbs all available information and prices it. He weighs reported facts at face value and their future implications employing probabilities. In other words, he considers Wednesday's reported durable goods orders at face value. At the same time, he knows the Fed's actions should help spur economic growth, and he weighs the probability of how much benefit will come versus harm (inflation) and when it is most likely to arrive. This helps him estimate where durable goods orders, and other economic measures, will rate months from now. Both these data points, present and future, play a role in the market's pricing of securities. Of course, non-economic related industry and company specifics play an important role for each individual security as well.

The point is that while economic data flow and news seem dire now at the point of inflection, and short-term trading reacts to it, the market is at the same time weighing how government and private sector actions might drive future economic conditions. This stew of data is simultaneously pricing securities, and should start to lead the stock market higher well before economic conditions are reported improved. So, don't get lost in the mayhem of the minute. Be aware that you will fight a wall of worry on your way to capital gains, and never more so than at the inflection point of economic trough.

Come back to The Greek every night for the "Daily Market Wrap," our video piece to help you catch up on the day's news. For Readers: AMEX: SPY, AMEX: DIA, Nasdaq: QQQQ, AMEX: SDS, AMEX: DOG, AMEX: QLD, NYSE: NYX. (disclosure)

Daily Market Wrap - Housing News Dominated

The focus of this video is the new home sales report, however, the durable goods data actually caused most of yesterday's damage. Read our article to understand what really moved the market on Wednesday. The housing data was actually a net positive on the day.



The views expressed in the videos does not necessarily agree with that of Wall Street Greek. Missed today's news, never fear, Wall Street Greek has it for you. Log in at your convenience and catch up. (disclosure)

Strong Housing Data Outweighs Durable Goods Weakness

Another day, another economic disappointment. Durable goods orders came in not only short of expectations, but moving in the wrong direction as well. Still, we could not be more enthusiastic about this week's housing data.

(Stocks in this article: NYSE: DB, NYSE: CCU, NYSE: BP, NYSE: MOT, NYSE: JPM, NYSE: BSC, Nasdaq: TTWO, Nasdaq: ERTS, NYSE: AES, NYSE: FNM, NYSE: FRE, NYSE: BA, AMEX: SPY, AMEX: DIA, Nasdaq: QQQQ, AMEX: QLD, AMEX: SDS, AMEX: DOG, NYSE: HOV, NYSE: TOL)

Durable Goods Orders (February)

The number came in this morning, down 1.7%. With the economy tanking, you might have thought a decline was expected, but it was not. Considering that January's durables were reported down by a depressing 4.7%, economists expected February's report to make up for the sharp decline with new order growth of 0.7%. You see, in this just-in-time inventory world we live in, orders can fluctuate wildly because of light inventory carries across industries. That makes this report an even harder pill to swallow.

This means the economy is not just easing into recession, but perhaps collapsing into a deeper version of it. Yo Greek! Not so heavy in the morning! "I hear you," he said to himself... (and then laughed, which is even worse). Hey, spread out! It's not alcohol, for the concerned, just good old healthy exhaustion. Okay, back to topic........

This durable goods figure, marking the second contraction in a row might be erased next month by a stronger rise than just 0.7%. But, the market does not want to hear that now. When the metric was expected to show growth, there's just no positive spin that can be tossed on it. Let's try anyway. Excluding transportation, which can often cause big swings in the numbers due to the exorbitant price of aircraft from the likes of Boeing (NYSE: BA), orders decreased 2.6%. That's not working either!

Excluding defense, which can cause wild swings because of government forgery of numbers devised to fool you all into thinking there is no recession despite the potato you had for dinner last night, orders fell 1.6%. Yikes! Of course we jest, government regulator readers. Forgery is much better enjoyed in a progressive capitalistic environment than forgery in the rest of the world. Corruption is universal after all.

Is there no way we can make this report good? Defense orders actually fell 10.1%. When the government can't even buy guns for wars, that's just horrible. Guess Iraq turned out to be an even worse blunder than we thought. Now we don't have funds to spur the economy with defense spending even, or any spending, unless we continue to pile on debt and depress the dollar. Yeah, I'm an Independent now! Even so, Iran needs bombing someday because I would rather be poor and alive than a still poor dead man.

Wait, get up off the floor and cancel those sell orders. We found an increase! Unfilled orders of manufactured goods rose 0.8%, marking the 33rd month of the last 34 that have shown increase. Wait a second, that's not good news either! When people are not filling goods orders, there could be bad reasons for that, like for instance non-payment.

Mortgage Activity

Ha, just when you thought The Greek was going to hit you with a double whammy of bad economic news and stay true to theme, it turns out mortgage activity posted a strong increase in the week ended March 21. Application volume increased 48%, driven largely by an 82.2% rise in refinancings. The purchase index also rose 10.7%. This is good anyway you look at it.

Okay, mortgage rates dropped 0.24% because the market expected the world to end, but also because it expected the Fed to cut rates (and it did). Refinancings can be nothing but good, at least now that mortgage brokers are supposedly not allowed to trick trusting Americans into cunning mortgage traps. Perhaps credit markets are freeing up also, thanks to the government's easing of restrictions on Fannie and Freddie (NYSE: FNM, NYSE: FRE), but that would not be reflected in this data yet. All in all though, this is the second bit of good news for the housing market in three days, if not the last 12 months!

New Homes Sales

New home sales ran at an annual pace of 590,000 in February, exceeding economist expectations for a pace of 578K. Make that three bits of good housing news. Wow, I have to say, this is a good sign. The Fed may have done enough at this point to help housing find footing. The only question left to answer is if the government has done enough to inspire consumer spending. We'll get a premature reading of that on Friday.

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Daily Market Wrap - Stocks Little Changed

Stocks were little changed today, and that was probably a good thing considering the fact that news flow was overwhelmingly negative. See our market commentary below for more detail, and enjoy the video!



As usual, opinions expressed within the videos do not necessarily agree with the view of The Greek. If you operate a business that employs a web strategy, we can help to significantly improve your effectiveness. Ask us how - Email: ads @ WallStreetGreek.com. (disclosure)

Economic Viagra Takes Time

Economic data welcomed back investors to the reality of recession, which I remind you is just now setting in. Still, investors were right to be enthused over the past few trading days. We just need some time for the Viagra to kick in.

(Stocks in this article: Nasdaq: SIRI, Nasdaq: XMSR, NYSE: CMC, NYSE: TTM, NYSE: F, NYSE: JPM, NYSE: BSC, NYSE: VLO, Nasdaq: NOBL, NYSE: TMA, NYSE: BAC, AMEX: SPY, AMEX: DIA, Nasdaq: QQQQ, AMEX: QLD, AMEX: DOG, AMEX: SDS, NYSE: PFE)

A trio of reports this morning reminded ambitious investors of the economic realities of recession. The federal government has gone to great length in order to preserve the economy and the stock market in this election year. Markets were rightly enthused by this effort recently, especially the Fed's work to protect the financial system from the one week demise of Bear Stearns (NYSE: BSC). This is being referred to as the current economic cycle's crescendo event, while we continue to point toward Iran here. Anyway, the Fed saved us as usual last week and the market reacted as expected.

Waiting for Economic Viagra to Reach the Bloodstream

We are in the period of the economic cycle where stimulants have been taken, but have not hit yet. You get me? The United States has not even recorded a quarter of economic contraction to this point, and heck, we still have not even closed the first quarter. Considering the decent probability of two consecutive quarters of contraction, which defines recession, there should still be a whole lot of bad news ahead of us. So, while we are getting excited based on expectations, we experience short-term disappointment that the good stuff has not kicked in yet. Get me again?

Weekly Same Store Sales

This morning, the International Council of Shopping Centers reported its weekly same-store sales data, and it was ugly. Sales tanked for the week ended March 22nd, only rising 1.0%. That compared to 1.6% growth the week before, and is markedly down from February rates that ran upward of 2.0%. Last year, sales growth ranged in the 2% - 4% area, and in 2006 ran 4% or higher. You see the trend... Consumers are spending less. Considering our economy is so dependent upon domestic consumption and spending, expect recession.

Consumer Confidence Index

The Conference Board reported its Consumer No Confidence Index for the month of March, and the call is unanimous; Americans officially believe the economy is miserable. The Index measured 64.5 for March, marking a 35-year low. This compared to expectations for a reading of 73.0, according to Bloomberg's tally. Yet another reason to believe consumers are closing the spending spigots.

Later on this week, we will get much more direct information on consumer spending when February's Personal Income and Outlays data is reported on Friday. That report could hold more punch that today's trio, so beware. Bloomberg reports consensus expectations for a spending increase of 0.1%, month-to-month. Spending rose 0.4% in January. You can imagine how dire the headline will read if the number undershoots consensus. And of course, this critical report that also contains the Fed's favorite inflation barometer, comes on Friday, when people are prone to panicked stock sales.

S&P Case Shiller Home Price Index

Down 11.4%! That's more like it. Yesterday's notation within the existing home sales report showed the median price of a home fell 8.2% in February. We, like you, were elated. However, today's data matched up better with expectations, as S&P Case Shiller noted prices fell 11.4% in January.

A day late and a dollar short? Yes, as usual. If February's early signs prove out, then today's data is muted and housing may be nearing bottom. But, don't get your hopes up. We seem sure to bounce around the bottom for awhile yet, unless the Fed goes to zero! (That's a joke, you inflation centric maniacs!) At this pace, it would not take long anyway, and tax rebates will be arriving with the spring flowers. Last I checked though, homes still cost more than $600; actually it's $196K on median. Still, too many mortgages are set to reset soon, and the flood of foreclosures continues, so while the pace of housing erosion seems to be slowing, the direction change is likely a ways off yet. Sorry Ara, my Armenian friend in the business.

Inquire about advertising at The Greek. If you operate a business that employs a web strategy, we can help to significantly improve your effectiveness. Ask us how - Email: ads @ WallStreetGreek.com. (disclosure)

Daily Market Wrap - JP Morgan Ups Bid, What Nice Guys

JP Morgan Chase (NYSE: JPM) must have heard The Greek screaming bloody murder, or were you thinking the firm grew a conscious over the weekend. JPM raises its bid from $2 to $10. Why, we ask? Is Bear Stearns (NYSE: BSC) the most confusing valuation equation in history? We suspect maybe the opportunistic Morgan heard footsteps of other interested parties, perhaps some of them walk softly, carry a big stick full of U.S. treasury securities and speak Chinese? Chinese investors got a good look at BSC in the recent past, and while they might not have been interested in the stock plus $60, two bucks is a whole other story.



Home sales rose for the first time in months, and the median price actually declined less than we heard it would. Good news indeed, and welcome!

The videos may not agree with the view of The Greek. Inquire about advertising at The Greek. If you operate a business that employs a web strategy, we can help to significantly improve your effectiveness. Ask us how - Email: ads @ WallStreetGreek.com. (disclosure)

The Greek's Week Ahead - Fed Nearly Out of Bullets! Thank God?

One has to wonder what exactly turned the stock market around last week, while at the same time slapping some sense into the dollar and shooting down commodities like geese in open season? A lot happened last week, so it's not so easy to discern which factor was most important in driving change. We had many variables in play that ranged from the so-called bailout of Bear Stearns (NYSE: BSC); to the Fed's opening of its coffers for the I-banks; to the easing of restrictions on Fannie (NYSE: FNM) and Freddie (NYSE: FRE); to the 75 basis point rate cut. But could it be that all, or possibly none of these factors actually drove the change in market sentiment???

Bear bailout...

We are quite sure Bear Stearns employees have a few other choice words to describe the deal that left them high and dry, and for many, unemployed. The Fed brokered, or was it strong-armed, Bear's managers into settling for $2 a share in exchange for JP Morgan Chase's (NYSE: JPM) acceptance of Bears' risk (kind of). Nice guys, those fellas at JPM are... Oh, and by the way, they also got some $60 to $80 of book value, insured by the Fed.

While it's easy to rip the deal now, if the Fed let Monday start without one, Bear Stearns might not exist today, not even at $2. Bear's mistake was in not moving its Thursday scheduled earnings report up to the Friday before it's demise. Still, Monday morning should have been soon enough to appease the market's concern; unfortunately it was not soon enough to appease the Fed's.

After Bear's competitors all reported better than expected numbers last week, and Bear basically pulled its report from the board, it seems plainly obvious that BSC would also have had uplifting news to note. Apparently, this information is now insignificant, or would that be embarrassing, to report posting selling out for next to nothing...

Was it Fed action, or its limited ability to take future action that helped stocks and the dollar, and hurt commodities?

As the Federal Open Market Committee cut the fed funds interest rate 75 basis points, to 2.25%, it became plainly obvious there’s only so much the Fed can do before it runs out of gunpowder. Is it possible, however, that the stock market viewed that reality as a good thing. Maybe the stock market's rise displayed its satisfaction with the fact that there’s only so much more damage the Federal Reserve can do to the dollar going forward.

While the government, from all its facets, desperately worked to spur the election-year economy, stocks came back to life last week at the expense of newly rich commodities. The dollar also regained some serious lost ground by the close of trading on Friday.

Yet another possibility exists as to why this occurred. Perhaps the Fed’s words also scared some trigger happy, profit-rich investors out of commodity plays at the end of last week. The FOMC Policy Statement published last Tuesday contained this prescient notation, “The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization.”

Stocks got a noticeable lift on Tuesday, before giving back ground on Wednesday. By Thursday, however, the dollar was surefooted and strengthening, stocks rising and commodities crashing. The Dow Industrials closed the week up 3.4%. After first weakening sharply, the dollar strengthened to finish the week at 1.54 euros. Gold and oil closed the period well off where they started it.

Or, maybe none of the aforementioned factors drove the change, or all of them combined. Plenty of cash has built up on the sidelines, as noted by a Barron's article this weekend. The panicked public has stored some $3.45 trillion in money-market funds, and that compares to $2.2 trillion stashed away at the market low of March 2003. Plenty of capital was also piled up in the commodity market, so when catalyst came forth, money started moving into better balance (read back into equities).

The Week Ahead

The last week of March offers little in the form of market-moving economic events, and mostly wraps up prior reports with final update.

We took a look at a recent forecast published by the National Association of Home Builders. The group is projecting a bottoming of housing starts this year, with modest improvement in 2009. The group interestingly forecasts the fed funds rate to average 2.17% in 2008, and that would seem to imply their view that the Fed should be near finished in its expansionary rate action.

The group's fed funds rate projection for 2009, however, looks flawed to us, as it forecasts a rate of 2.13%. At first sign of economic stability, we expect the Fed to quickly hike rates to combat inflation. Thus, we would look for a higher average fed funds rate in 2009 than in 2008. Recall the Economic Fishtail of a monetary policy we anticipate Bernanke and Mishkin are planning, as per their own discussion in white papers and consistent with current inflation concerns.

Monday

We will get some indication of the current housing situation when February’s Existing Home Sales Report hits the wire on Monday and when New Home Sales are reported on Wednesday. Bloomberg’s consensus sees the annual pace of existing home sales running at 4.85 million in February, compared to 4.89 million in January.

The week ahead holds a few noteworthy earnings reports including Monday's news from 3Com (Nasdaq: COMS), Tiffany & Co. (NYSE: TIF), Walgreen (NYSE: WAG), A.C. Moore Arts & Crafts (Nasdaq: ACMR), Feldman Mall Properties (NYSE: FMP), Hastings Entertainment (Nasdaq: HAST), Inplay Technologies (Nasdaq: NPLA), Phillips-Van Heusen (NYSE: PVH), Radnet Inc. (Nasdaq: RDNT), Sonic (Nasdaq: SONC), Universal Power Group (AMEX: UPG) and a few more.

Tuesday

The state of the consumer will receive another check up this week, as the Conference Board’s Consumer Confidence Index is reported on Tuesday and the University of Michigan’s Consumer Sentiment Index reaches the wire on Friday. Bloomberg’s consensus is looking for a reading of 73.0 for the Conference Board measure, down from 75.0 in February. The ICSC will also weigh in with its weekly take on same-store sales. Last week's figure offered 1.6% sales growth, year over year.

Tuesday's earnings include Fortress Investment Group, LLC (NYSE: FIG), Jabil Circuit (NYSE: JBL), Yamana Gold (NYSE: AUY), ACME Communications (Nasdaq: ACME), Aehr Test Systems (Nasdaq: AEHR), American Medical Alert (Nasdaq: AMAC), Blyth (NYSE: BTH), Casual Male Retail Group (Nasdaq: CMRG), China Netcom (NYSE: CN), Commercial Metals (NYSE: CMC), Compton Petroleum (NYSE: CMZ), Comstock Homebuilding (Nasdaq: CHCI), Comverge (Nasdaq: COMV), CPI Aerostructures (AMEX: CVU), FiberNet Telecom (Nasdaq: FTGX), FSI Int'l (Nasdaq: FSII), Hana Biosciences (Nasdaq: HNAB), Henan Zhongpin Food Share (Nasdaq: HOGS), Kirkland's (Nasdaq: KIRK), Neogen (Nasdaq: NEOG), SAIC, Inc. (NYSE: SAI), Targeted Genetics (Nasdaq: TGEN), ValueVision (Nasdaq: VVTV), WSP Holdings (NYSE: WH) and Zi Corp. (Nasdaq: ZICA).

Wednesday

Economists measured by Bloomberg expect February’s Durable Goods orders, scheduled for report on Wednesday, to increase 0.7% month-to-month. This compares with a sharp order decrease in January. Recall, because of widespread penetration of efficient just-in-time processes, orders and inventories now move on a dime and can show volatility when reported.

New Home sales are seen running at a rate of 575K in February, compared to 588K in January. While we are still analyzing winter data, spring is the most important season for housing. Still, the continuation of the decreasing sales trend in February should dim near-term hopes for the industry's shares. The S&P Case Shiller Home Price Index (Jan.) should not offer any good news either, as prices likely continued their slide.

Look for the regular mortgage activity and petroleum status reports on Wednesday morning. Petroleum inventory information should regain trading significance now that the loft is coming out of oil prices. Fed rate cut dissenter, Richard Fisher, is scheduled to find a microphone on Wednesday when he addresses a group in Texas.

Wednesday earnings include Deutsche Bank (NYSE: DB), Oracle (Nasdaq: ORCL), Paychex (Nasdaq: PAYX), Alloy (Nasdaq: ALOY), Antares Pharma (AMEX: AIS), Babcock & Brown Air (NYSE: FLY), Bluefly (Nasdaq: BFLY), China Sunergy (Nasdaq: CSUN), Citi Trends (Nasdaq: CTRN), CKE Restaurants (NYSE: CKR), Edap TMS (Nasdaq: EDAP), GenCorp (NYSE: GY), HearUSA (AMEX: EAR), Huaneng Power (NYSE: HNP), Pep Boys (NYSE: PBY), PFSweb (Nasdaq: PFSW), Resources Global Professionals (Nasdaq: RECN), Response Genetics (Nasdaq: RGDX), Robbins & Myers (NYSE: RBN), TRI-S Security (Nasdaq: TRIS) and XELR8 Holdings (AMEX: BZI).

Thursday

Thursday's final take on fourth quarter GDP is expected to still show an increase of just 0.6%. Weekly Initial Jobless Claims, a closely followed barometer of the labor situation, is seen drifting to 370K, from 378K reported this past week. February's reporting of aggregate corporate profits is due for release at 8:30 a.m., and the Natural Gas Report at 10:30.

Thursday's earnings include ConAgra Foods (NYSE: CAG), Lennar Corp. (NYSE: LEN), Red Hat (NYSE: RHT), Williams-Sonoma (NYSE: WSM), Accenture (NYSE: ACN), Apollo Group (Nasdaq: APOL), CNOOC Ltd. (NYSE: CEO), Chunghwa Telecom (NYSE: CHT), Coleman Cable (Nasdaq: CCIX), Conn's Inc. (Nasdaq: CONN), Dolan Media (NYSE: DM), DSW Inc. (NYSE: DSW), Eldorado Gold (AMEX: EGO), Elixir Gaming (AMEX: EGT), Finish Line (Nasdaq: FINL), Fred's (Nasdaq: FRED), Full House Resorts (AMEX: FLL), Gammon Gold (AMEX: GRS), Global Payments (NYSE: GPN), McCormack & Co. (NYSE: MKC), Movado (NYSE: MOV), Noble Int'l (Nasdaq: NOBL), P&F Industries (Nasdaq: PFIN), Restore Medical (Nasdaq: REST), Rubios Restaurant (Nasdaq: RUBO), Scholastic (Nasdaq: SCHL), Spectrum Control (Nasdaq: SPEC), Texas Industries (NYSE: TXI), The Wet Seal (Nasdaq: WTSLA), TIBCO Software (Nasdaq: TIBX), UTi Worldwide (Nasdaq: UTIW) and Xyratex (Nasdaq: XRTX).

Friday

Personal Income and Outlays are expected to show increases in February of 0.3% for income and 0.1% for spending. The PCE Deflator is expected to still measure hot (above 2.0% yr/yr), bringing inflation concerns back into focus.

Fed rate cut dissenter #2, Charles Plosser, will address a group overseas on Friday; all ears will be on Plosser, as we seek more detail on exactly what he's thinking. Considering the sudden drop in commodity prices last week, Friday’s Farm Prices Report should garner some attention. The Department of Agriculture releases its data at 3:00 p.m. The University of Michigan Consumer Sentiment Index is expected to read 70.0 for March, down from 70.8. Ironically, poor sentiment should help stock fuel for an eventual robust rally.

Friday's earnings reports include Coca-Cola Hellenic Bottling (NYSE: CCH), KB Home (NYSE: KBH), Centennial Communications (Nasdaq: CYCL), Centerstate Banks of FL (Nasdaq: CSFL), IAMGold (NYSE: IAG), Modtech Holdings (Nasdaq: MODT), North Pointe Holdings (Nasdaq: NPTE) and Steelcase (NYSE: SCS).

Inquire about advertising at The Greek. If you operate a business that employs a web strategy, we can help to significantly improve your effectiveness. Ask us how - Email: ads @ WallStreetGreek.com. (disclosure)

Week in Video Review - Irish Style

Enjoy the videos! This week's theme is "Irish Style."



As always, the views expressed in the videos do not necessarily agree with the views of Wall Street Greek. (disclosure)

Daily Market Wrap - Commodity Crash

The dollar bounced and commodities tanked on Thursday, the last day of trading ahead of the Good Friday holiday.

As always, the opinions expressed within the videos do not necessarily agree with the view of The Greek. For AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD. (disclosure)

Stock Market Wrap - Rules Eased for Fannie & Freddie

The rules are eased for Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), while Morgan Stanley (NYSE: MS) beats expectations, but the Dow declines anyway.

As always, the opinions expressed within the videos do not necessarily agree with the opinion of The Greek. (disclosure)

Bear Stearns, One Day to Oblivion

Earnings reports from Goldman Sachs, Lehman Brothers and Morgan Stanley have appeased market concerns. With this in mind, one has to wonder if Bear Stearns could have lasted another day, how might its shares have recovered.

(Stocks in article: NYSE: BSC, NYSE: GS, NYSE: LEH, NYSE: V, NYSE: FNM, NYSE: FRE, NYSE: VZ, NYSE: DFS, NYSE: MS, NYSE: TMA)

With Goldman Sachs (NYSE: GS), Lehman Brothers (NYSE: LEH) and Morgan Stanley (NYSE: MS) all reporting EPS that were better than analyst expectations, one has to wonder where Bear Stearns (NYSE: BSC) might have been today. Late last week, Bear moved its earnings report forward to Monday from its Thursday scheduling, and it probably had the right idea. But, after its fire sale, it moved the report back out indefinitely.

Here's what's up. Bear probably had some decent news to report as well. Instead of worrying about scheduling, Bear should have focused on getting a press release together on Friday, and reported earnings before the weekend that ended up fostering its downfall. The sense of urgency should have been there, and its clear that they understood it since they moved the earnings report forward to Monday. Over the weekend though, the Fed likely strong-armed and scared Bear's management into a deal for the sake of the financial system. Meanwhile, BSC shareholders got screwed over.

With 30% of the shareholder ownership controlled by employees, we suspect shareholders would be well-advised to now shoot down the deal that is stripping them of their pants, and show who the real boss is. What's left to lose anyway... The downside is not much, another two bucks!

There were a lot of bonehead decisions that came to play in this one, all of which were driven by fear. First and foremost, someone started and spread a destructive rumor that turned Bear from Wall Street pillar to pariah overnight. The fifth largest giant on Wall Street was chopped up for less than the building that housed it. Of course, any buyer of Bear has to bear it's risks, and thus the reasoning for the blockbuster price.

Even so, Bear's shares are trading well-above the deal price, and that usually indicates the strong expectation of a competing offer. CNBC has openly called that possibility into doubt, saying that Fed intervention effectively killed it. They offered possibility that debt holders are buying shares to insure the shareholder vote swings their way.

However, the New York Post published an article today that says Bear Chairman Jimmy Cayne and significant shareholder, Joe Lewis, are doing their best to ressurrect their lost boatload of capital. The article, also summarized at Reuters, says the two have approached some significant private equity and banking capital... like the kind that could be moving BSC shares higher. We would go so far as to say the buying is either coming from existing shareholders or these newly approached White Knights. The Greek suspects the Bear Stearns story has not come to the nascent tragic end that was first reported.

A lot of folks are angry that the Fed even acted at all, and we want to outline why they did for you. Bear Stearns was highly levered in positions that threatened spreading the company's disease throughout capital markets. At the same time, an unstable Bear, meant investors in Bear's asset management vehicles might draw significant capital due to the prisoner's dilemma.

The prisoner's dilemma is when two criminals agree not to implicate each other and to claim innocence. In the situation, if both prisoners stay quiet, they both go free. However, if one rats out the other, and the other stays quiet, one goes to prison and the rat goes free. If both prisoners lose their cool, they both go to prison. Thus, the dilemma. What will the other guy say in isolation...

Investors in Bear Stearns managed portfolios might keep the capital in play, but if other investors drew capital in significant numbers, the funds would have to liquidate holdings, pressuring the investments held through significant forced sales. As a result, even loyal investors would get nervous and sell as well. The activity could spill over into other securities and other portfolios might also start selling off. In other words, there existed potential to trigger a mass selloff in the entire market. This is just one reason why the Fed intervened.

That's not going to appease the only loser, Bear Stearns shareholders. Considering the whole spark of the turmoil might have been a false rumor, the government might be wise to correct the situation. It's been rumored that the Fed scolded bankers not to spread false rumors about their competitors, and that seems to imply the possibility of that occurance in this instance. We have no information to help place blame, but we welcome it if a reader has an idea. Comment to this article anonymously if you like, and help us shed light on who might be to blame. The SEC would like to know also...

Bear Stearns shareholders, say a prayer. You still have a chance to recover some wealth. We feel for you here at The Greek.

(disclosure)

Daily Market Wrap - Fed Cuts by 75 BPS

The Fed matched its recent record rate cut with another 75 basis point move on Tuesday.



As always, the opinions expressed within the videos do not necessarily coincide with the opinion of The Greek. (disclosure)

Yo Bernanke! Fool Me Twice Shame on Me!

Relief soothed the market this morning, as something other than disastrous news from the investment banking community proved the world was actually not coming to an end, at least not yet. High hopes for a 100 basis point Fed rate cut later this afternoon has buyers finding their way to equities, with advancers leading decliners nearly 10 to 1 in the early going.

(Stocks in article: NYSE: GS, NYSE: LEH, NYSE: WMT, NYSE: RTP, NYSE: XOM, Nasdaq: YHOO, NYSE: DAL, NYSE: NWA, NYSE: FNM, NYSE: FRE, NYSE: FDS, NYSE: UBS, Nasdaq: CWCO)

All Eyes on Fed

All eyes are on the Fed, with high hopes for a 100 basis point rate cut. The treasury market has already priced it in, and the Fed has not failed to disappoint treasury expectations yet. Time and again, I've been caught listening to Fed words rather than realizing the group is just a scared silly bunch that jumps at the President's and market's beckon call (thank God!). So, my bet is on a big rate cut this time around, whether it be 75 points or the 100 mark the treasury market is betting on.

Now that I've said it, they will of course only move by 50 points, which is what I really believe is the amount they should move this time around. Still, I recall that period this past November and December when Bernanke flat out said he would not cut, repeated it in mannerism and language at a follow up address, and then got in line behind his elder at the Fed and the President, and cut rates by exactly what the treasuries had priced in. Thank God he did, but he proved a little shaky a leader in that process. It's possible he's just a pawn to the market, but at the same time tried to fool it into backing off. That would make him as cunning as Putin, and I don't see that.

In fact, the whole group in Washington has been quite the reactionary bunch. Treasury Secretary Paulson finally said something indicating an expectation for recession. He said the economy was experiencing a sharp downturn. Really? What do you know! Hey, I don't know about you, but I was thinking, it's about $#$% time!

You can only play the PR game for so long before you just end up pissing off the world's economists, strategists and investors out there who know you are just singing a tune that's supported by a view that we're all stupid. Putting yourself in their shoes though, scaring consumers out of the mall by forecasting the obvious recession would not serve any good purpose either. So, while their cheerleading has been annoying to the wise, it may have been wise for the whole.

Producer Price Index

Inflation signs were completely ignored this morning, since the market had already binged on panic on St. Patties Day. While the headline figure showed a rise of 0.3%, short of expectations, Core PPI jumped 0.5%. That compared to expectations for a rise of 0.2%. Panic was also put off since changes in producer prices do not translate in a predictable manner to consumer price changes, at least not over the short term. However, allow me the opportunity to frighten.

February's price changes missed the recent rocket rise of commodities, including oil and distillates. The headline figure will be higher in March, and these prices should find there way to your pockets soon enough. We were forecasting this long ago, and it's started playing out finally and even caught consensus recognition at this point.

Nothing has changed. However, the Fed has high hopes domestic recession will help ease pricing, while at the same time it does its best to stave off recession. We discussed this topic in much more detail in our week ahead copy that you can see by clicking this link, The Greek's Week Ahead - Holy Week!.

(disclosure)

Daily Market Wrap - Market Survives Bear Scare

Enjoy the newest facet of our service, the daily video market wrap.


As always, the opinions expressed within the videos do not necessarily coincide with the opinion of The Greek. Thank you. (disclosure)

Holy Hell! Don't Panic...

Bear Stearns sold for $2 a share over the weekend to sure up the financial system. Bear basically became the sacrificial lamb to save the rest of the investment banks, but JP Morgan got to eat the whole feast... or is it rat poison.

(Stocks in this article: NYSE: BSC, NYSE: JPM, NYSE: LEH, AMEX: SPY, AMEX: DIA, Nasdaq: QQQQ, AMEX: QLD, AMEX: DOG, AMEX: SDS, NYSE: GS, NYSE: MS, NYSE: C, NYSE: CS, NYSE: DB, NYSE: MER, NYSE: BCS)

Over the weekend, the Fed opened up the discount window to all the investment banks to insure what killed the Bear would not also cause mass extinction on Wall Street. At the same time, the Fed promised to keep the offer open for at least six months. The Fed also cut the primary credit or discount rate a quarter point to close the spread between it and the fed funds rate. I seem to recall The Greek and others recommending the closing of that spread a while back...

To further insure that all of New York's Financial District did not commit mass suicide today, the Fed is also offering backstop to JP Morgan's (NYSE: JPM) bid for Bear Stearns (NYSE: BSC) in the sum of $30 billion to cover its illiquid assets. The pain will all be felt by Bear Stearns' shareholders (or rather sh*tholders), which may be 30% composed of BSC's employees according to Barron's. Expect plenty of lawsuits as these people watched their stock crash from over $70 down to $2 in ten days. This is going to prove reminiscent to Worldcom for some folks.

Call in PETA!

The Greek spoke with an anonymous JP Morgan representative over the weekend, and according to her, what happened to Bear was just plain tragic. The $17 billion or so of cash on the company's balance sheet disappeared almost overnight as the leverage it had employed proved in hard core fashion why leverage increases risk. An ugly rumor got started (I have some ideas here) that Bear was in trouble. All of a sudden, nobody wanted to take the other side of Bear's trades, or risk any capital tied in any way to Bear. Or, maybe Bear really was in trouble.

Bear Stearns' new building is worth roughly $1.2 to $1.5 billion alone according to Bloomberg and Barron's, respectively, so how the hell do you buy the entire firm for $240 million? Well, you're taking on Bear's risk, and that risk is poison apparently. Still, Big Brother Fed has got your back so poison might not taste too bad at all.

Global markets tanked today as a result of concern for the most important economy in the world. Gold jumped $30 early this morning (now just $16 higher) and the dollar fell to a record low againt the euro of 1.59 (more recently about 1.58). Lehman Brothers looked as if it would be pressured in the premarket.

Don't panic folks! Lehman Brothers (NYSE: LEH) is now on death watch, but probably should not be. Regarding the market, a lot depends on what you folks do now. If you all rush to your computers and sell sell sell, then we'll crash today no matter what the Fed does. But, if the Fed plays its hand in full this morning, and goes through with its FOMC move that probably would have occurred tomorrow; instead acting today before the market open, then maybe it can once again breath life into this struggling patient. The fact is that initial reactions are already looking overdone. It's a good thing that this all played out well enough ahead of the market open for cooler heads to prevail, we hope...

Thank you. (disclosure)

The Greek's Week Ahead - Holy Week!

The Greek's Week Ahead is the most comprehensive "week ahead" market-moving event planner in existence.

The week ahead will offer a shortened trading period due to Western Christianity’s celebration of Good Friday. Speaking of good Fridays, we have had a few doozies over the past several periods. Two weeks ago, the Employment Situation Report sent markets for a spin, and then last week Bear Stearns needed rescue when it could not find counter-parties willing to deal with it. Thank Benjamin, JP Morgan Chase and the New York Federal Reserve played savior and kept Bear liquid, and solvent for that matter.

Unlike Eliot Spitzer, the market was having a relatively decent week until the Bear Stearns emergency. For the week, the Dow closed higher 0.5%, the S&P 500 moved lower 0.4% and the Nasdaq was unchanged. Four-week moving average mutual funds flows continued to show improvement for equity funds, with net inflows averaging $835 million. Still, money funds drew in $18.5 billion in comparison, but this continued a decreasing trend in the level of cash inflow to the sector.

Overseas, every major European market closed lower for the week, except Belgium and also Spain on the heels of its election. Finland dropped the most, down 4.0%. The broad DJ STOXX Index fell 1.2%. In Asia, all major markets fell, with the Indonesian market leading the losers as it collapsed 10.6%. India moved 1.2% lower, Japan 4.35% and Hong Kong 3.5%.

Gold closed the week just under $1,000 per troy ounce, at $999.50. Light sweet crude closed up $5, to $110.21 per barrel. Natural gas finished higher, to $9.87 per mmbtu. The dollar closed weaker to 1.5665 euros.

Before the Bear Stearns blowup... last Friday morning’s Consumer Price Index for February seemed just the right fuel for a strong finish to the week when it offered data showing no change in prices. However, as it turns out, the period recorded completely excluded the recent price rise of oil and distillates, like for instance gasoline! Everyone who drives or has seen a newspaper headline over the past month knows that gasoline has marked record territory recently. So, it appears next month’s CPI will not be so pleasant.

As usual, the Fed’s action to keep Bear alive spurred much debate. It smells of a bailout, and that always draws the ire of free market capitalists. There’s a moral hazard to rescuing one company that fails due to its own excessive risk taking. There’s a concern this might encourage haphazard risk management at other firms, since there’s an understanding that the Fed is there for rescue if necessary.

However, The Greek disagrees with the moral hazard argument, since we view the alternative unacceptable. If not for this and recent Fed action, we expect the American economy would be well on its way now to depression, not just recession, and that stock prices would be much lower.

The Week Ahead

This week offers important barometers of manufacturing sector condition and a timely meeting of the Federal Reserve.

Monday

A new governor takes over in New York and an important area manufacturing barometer will be measured on Monday. The day's Empire State Manufacturing Survey and Industrial Production reports, and the Philadelphia Fed Survey on Thursday, threaten to show manufacturing activity deteriorated. In their last reporting, New York and Philly area manufacturing dropped off sharply. Bloomberg's consensus is looking for a March Empire State General Business Conditions Index level of -6.3. Economists are looking for a February decrease in industrial production of 0.1%, and capacity utilization of 81.3%, which compares to 81.5% in January.

Monday’s Treasury International Capital Report will measure foreign demand for long-term U.S. securities in January. December’s data showed a decrease in foreign investment demand from the month just prior. Tuesday’s State Street Investor Confidence Index will show how Americans feel about the same topic. We expect neither group is very optimistic.

The Current Account for Q4 is due early Monday morning, while the Housing Market Index for March is set for 1:00 PM release.

Monday's most noteworthy earnings reports include Bear Stearns (NYSE: BSC), Conseco (NYSE: CNO), 4Kids Entertainment (NYSE: KDE), AES Corp. (NYSE: AES), Acusphere (Nasdaq: ACUS), Bruker Biosciences (Nasdaq: BRKR), Cosi (Nasdaq: COSI), Excel Maritime Carriers (NYSE: EXM), GeoMet (Nasdaq: GMET), Goldleaf Financial (Nasdaq: GFSI), Houston Wire & Cable (Nasdaq: HWCC), Neurogen (Nasdaq: NRGN), Ocean Power Tech (Nasdaq: OPTT), Perry Ellis (Nasdaq: PERY), Repros Therapeutics (Nasdaq: RPRX), Shuffle Master (Nasdaq: SHFL), Syntroleum (Nasdaq: SYNM), The PMI Group (NYSE: PMI), US BioEnergy (Nasdaq: USBE), Vicor (Nasdaq: VICR) and WCI Communities (NYSE: WCI).

Tuesday

Le Rogue Trader, Jerome Kerviel might be set free by a Parisian Court on Tuesday. Speaking of criminals, some consider recent Federal Reserve action as highway robbery of dollar value. Heading into last Friday, the treasury market had been forecasting that the Federal Open Market Committee would decide on a 50 basis point rate cut (half of a percentage point) this week. However, in the mayhem of Friday morning, rate cut expectations rose to as high as 100 basis points.

More than a handful of economists would rather the Fed not cut rates this time around, considering the further damage it could do to the dollar. There’s well-founded concern that in mitigating recession, the Fed might also spur future inflation that could do even more and longer-lasting economic damage. However, we agree that the Fed has to face the challenge at hand first, before looking beyond to a potential problem. The Fed is hopeful prices will naturally find suppression due to decreased domestic demand for goods and services. Globalization, however, threatens to keep the overall supply/demand equation tight, and thus prices high. We expect the FOMC will cut rates by 50 basis points on Tuesday.

The ICSC-UBS Weekly Same-Store Sales results last week surprised on the short side of recent trend. Sales rose only 1.6% last week, year-to-year, while retail sales were reported down 0.6% in February. We estimated that overall sales trends contrasted with same-store sales growth because of mounting store closures and slowing new store openings.

Last week's CPI data proved benign, but February's PPI data is due out on Tuesday morning. Bloomberg's survey shows expectations for headline price increase of 0.4% and a Core PPI rise of 0.2%. February Housing Starts are seen measuring 990K, compared to 1.012 million reported in January. The aforementioned State Street Investor Confidence Index is due at 10:00 a.m.

Tuesday's earnings reports include Adobe Systems (Nasdaq: ADBE), Darden Restaurants (NYSE: DRI), EnergySolutions (NYSE: ES), Gamestop (NYSE: GME), GenTek (Nasdaq: GETI), Goldman Sachs (NYSE: GS), Healthways (Nasdaq: HWAY), Lehman Brothers (NYSE: LEH), Radyne Corp. (Nasdaq: RADN), Somanetics (Nasdaq: SMTS), Tsakos Energy Navigation (NYSE: TNP) and more.

Wednesday

Wednesday brings the regular pre-market Mortgage Bankers' Association reporting of weekly mortgage activity. The Fed's action from early last week was partly intended to bring mortgage rates down. We'll see...

At 10:30, the EIA's Petroleum Status Report gets yet another opportunity to pound common sense into oil prices, but does supply/demand matter when the valuing currency is losing its worth by the minute.

Wednesday earnings reports include China Mobile (NYSE: CHL), General Mills (NYSE: GIS), Morgan Stanley (NYSE: MS), Nike (NYSE: NKE), Avalon Pharmaceuticals (Nasdaq: AVRX), Borders Group (NYSE: BGP), Charming Shoppes (Nasdaq: CHRS), Cintas (Nasdaq: CTAS), CLARCOR (NYSE: CLC), Discover Financial (NYSE: DFS), Emisphere Technologies (Nasdaq: EMIS), Guess (NYSE: GES), Herman Miller (Nasdaq: MLHR), Lindsay Corp. (NYSE: LNN), North American Palladium (AMEX: PAL), Petroleum Development (Nasdaq: PETD), Pinnacle Gas (Nasdaq: PINN), Ross Stores (Nasdaq: ROST), The Marcus Corp. (NYSE: MCS), Ulta Salon, Cosmetics and Fragrance (Nasdaq: ULTA) and more.

Thursday

Welcome to the witching hour, quadruple witching that is. Weekly Initial Jobless Claims are expected to measure 360K, after sticking at 353K last week. Leading Economic Indicators for February is set for Thursday reporting, and will give some further indication of how likely economic contraction is for the first quarter. Bloomberg's consensus is looking for a 0.3% decrease for February.

The Philly Fed Survey, which scared the cheesesteak out of the market last month, is widely expected to sit in negative territory again this time around at -20.0. The EIA Natural Gas Report at 10:30 should again offer bearish data.

Thursday's earnings include Carnival Corp. (NYSE: CCL), FedEx (NYSE: FDX), New York & Co. (NYSE: NWY), CRA Int'l (Nasdaq: CRAI), CryoCor (Nasdaq: CRYO), dELiA's(Nasdaq: DLIA), Genpact (NYSE: G), Global Options (Nasdaq: GLOI), Hellenic Telecommunications (NYSE: OTE), Luby's (NYSE: LUB), Palm (Nasdaq: PALM), Progress Software (Nasdaq: PRGS), Shoe Carnival (Nasdaq: SCVL), The Children's Place (Nasdaq: PLCE), Winnebago (NYSE: WGO), WorldSpace (Nasdaq: WRSP), Worthington Industries (NYSE: WOR) and more.

Because of the holiday on Friday, U.S. equity and bond markets will be closed. Markets in Hong Kong, Singapore and the U.K. will also be closed.

Thank you. (disclosure)

Wall Street Week in Scandalous Video Review - March 10 - 14

Enjoy the videos! This week's theme is "scandalous."



As always, the views expressed in the videos do not necessarily agree with the views of Wall Street Greek. Thank you. (disclosure)

Fed Puts Out Bear Stearns Fire

The trading plague that fell upon Bear Stearns (NYSE: BSC) nearly killed it this morning before JP Morgan and the NY Fed showed up with penicillin.

(Stocks in article: NYSE: BSC, NYSE: JPM, Nasdaq: MSFT, Nasdaq: YHOO, NYSE: ANN, Nasdaq: ZUMZ, NYSE: DNA, Nasdaq: PSUN, Nasdaq: SIGM, NYSE: LLY, NYSE: LIZ, AMEX: SPY, AMEX: DIA, Nasdaq: QQQQ, AMEX: QLD, AMEX: SDS, AMEX: DOG, NYSE: LEH, NYSE: MER, NYSE: C, NYSE: GS, NYSE: C, NYSE: MS)

The entire group of investment banks sold off in sympathy to Bear's 30+% drop. Lehman Brothers (NYSE: LEH) fell off about 9%, Morgan Stanley (NYSE: MS) slipped 5%, Goldman Sachs (NYSE: GS) fell 4%, JP Morgan Chase fell 4%, Merrill (NYSE: MER) slipped 3%, Citigroup (NYSE: C) 3%. Bear is down 34% at this hour. The Greek knows a strong mutual fund manager over there and a hedge fund manager, and I hope for the best for those two.

We can look at the current situation in two separate manners. We could ignore the emotional extreme high and low patterns of human behavior, and say the world is coming to an end. However! I recall not too long ago when the same headless chickens gaining airtime today on CNBC and selling the market to bare bottom lows, were claiming sellers were just "lemmings."

Let's keep a level head shall we? The market typically corrects every 3 or 4 years on average, over the last 100 or so years. Recession is a normal happening. The same greed that drives market bubbles has changed its form to that of fear, driving panic today. The business news is gaining headline, front-page status, so we are likely getting close to crescendo.

Geopolitical Event Will Bring the Real Crescendo

However, I do not sense the bottom yet. That famed "crescendo" is not here yet. We suspect it will come with a geopolitical event. This bull-crap developing in South America will evolve into a war that draws the continent into conflict, if Chavez is not stamped out soon. Colombia has effectively sealed alliance between Ecuador and Venezuela now against it. Even so, the American backed nation still holds overwhelming advantage. But, it's a powder keg surrounded by flint. Colombia is not one united nation you see, but one diseased by an internal enemy as well. Chavez will seize upon the first opportunity he gets; he'll wait until the United States is busy elsewhere. In the meantime, he'll continue to support Colombian rebels every way he can.

In the Middle East, Iran is trembling. Israel is starving Gaza, weakening it. Why? To force Hamas out of power, maybe. But, the strategic oil reserve is full. Bush wants to fill it further. Why? Think about why Bush wants to fill the reserve further, when flooding the market with oil now would help ease economic stresses. We expect Israel, with the aid and cover of U.S. forces, will bomb Iran in the next few months. That's your crescendo sell-off catalyst. That's when commodities spike.

Do they top on that day though? That depends on what Russia has planned and what China decides upon when its energy partner is enveloped in war. Heavy handed fists hold power in Russia and in the United States. Unfortunately, open hands are needed now more than ever.

Bear Stearns & the Fed Rescue

Thank God for the Federal Reserve. If the Fed were abolished like Ron Paul and Jim Rogers have openly called for, the U.S. economy would now be well on its way to a depression similar to that of 1929. Without the liquidity it's offering that is admittedly weakening the value of the dollar, we would be in depression already. Would you prefer that?

If nobody wanted to trade with Bear Stearns today, and the Fed was not there to secure liquidity, Lehman Brothers (NYSE: LEH) would be next, and then the entire financial system would freeze up. The stock market would have crashed and the economy would have fallen. Americans have their wealth tied up in pension funds, IRAs and 401K savings plans invested in capitalizing American companies. When confidence in those shares falls apart, America falls apart. Thank God for the Fed and a pat on the back is offered to Ben Bernanke today from The Greek. We have an obligation to preserve the market, because preserving it, preserves America as well.

Economic Data & Analysis

Consumer Price Index

February's Headline and Core CPI showed no change from January, offering good news to the market that was expecting increases of 0.3% and 0.2%, respectively. Futures immediately showed hope for market inflection, but then the Bear news broke.

Inflation was nowhere to be found in today's report, kind of. Not in energy prices anyway. Not in gasoline?!? Gasoline impacted the index in our favor (through the measuring date) by 2.0%. Just about everybody who drives or reads an occasional newspaper knows gasoline prices have risen and that this factor will stab us in the back next month. So, it's hard to gain too much conviction to go long from a report you know will be significantly different when reported next time around. Still, the market wanted to go long on it this morning, and our own headline for this article was set to read, something like "Watch Out this Afternoon." It was a trading play mistaken for a bear market turn. So, it was fitting that it was a bear, Bear Stearns, that killed it.

University of Michigan Consumer Sentiment

The preliminary March report showed confidence at 70.5, versus expectation for 69.5. However, I bet if you measured it this morning, it would stumble somewhere south of 60! When is Saint Patties Day, I need a drink already.

Thank you. (disclosure)

Reign of Poor Economic Data Pours On

Today's economic data releases offered nothing but bad news, but what's a little more water when you are already soaking wet.

(Stocks in article: NYSE: TM, NYSE: F, NYSE: GM, NYSE: M, NYSE: TLB, XETRA: VOW.DE, Nasdaq: HYMTF.PK, Nasdaq: ERTS, Nasdaq: TTWO, NYSE: TGT, Nasdaq: NSRGY, NYSE: WM, AMEX: SPY, AMEX: DIA, Nasdaq: QQQQ, AMEX: SDS, AMEX: DOG, AMEX: QLD)

The dollar continued to slide yesterday and this morning, and global markets were none too pleased. ECB President Trichet, who I thought was a venereal disease until recently, was caught this morning criticizing "disorderly currency moves," calling them "undesirable." Sorry about that Jean-Claude, but what did you expect after you kept rates steady last week? vou vou vou...

After this is all said and done, Trichet could come out looking worse than Bernanke. Critics will argue that he had clearer signs of economic deterioration to act upon than Bernanke, including the very important lead evidence in the U.S. economic data. America is still too important a market for developed Europe, which contrasts to the situation in Asia where developing domestic consumption is driving sustainable growth.

Trichet is keeping up the inflation fight, so perhaps one of these two is destined to come out looking like the genius and the other the fool. Which do you think is the fool? Comment at the bottom of the article (at the site for email readers).

Economic Data & Analysis

Retail Sales

Monthly retail sales for February surprised even us this morning. The report showed sales fell 0.6% from January, versus expectations for growth of 0.2%. We expected the metric to show growth as well, since weekly ICSC same-store figures had improved over the month. So, this seems to indicate that retailers are reeling in growth of new stores and possibly closing a bunch of existing locations. That would coincide with the employment report, which showed the retail sector shedding jobs almost as quickly as manufacturing and construction. We've already noted the store closings at Macy's (NYSE: M), Talbots (NYSE: TLB) and others. Expect that trend to expand as some of the poorer running chains still grew during the drunken shopping spree of the last forever years.

Detroit readers should be interested to know that excluding autos, retail sales fell just 0.2%. In other words, cars still ain't sellin. Good news came from VW (XETRA: VOW.DE) though, with a report that the automaker is actually considering setting up a new plant in the U.S. The Greek knows a couple guys that might be interested in selling one or two of those things, Ford (NYSE: F) and General Motors (NYSE: GM). And get a load of this, Toyota (NYSE: TM) is actually concerned that the rising yen might impact its profits and the competitiveness of its prices versus Korean counterparts like Hyundai Motors (Nasdaq: HYMTF.PK). How about that about face...

If you're digging for good news, health and personal care stores saw a sales increase of 0.5%. Health care is still safe to invest in until the general election campaigning begins in earnest and the Democratic nominee emerges as the leader. Efforts to bring Socialist like health care to all, which by the way, as a noncorporate citizen, I benefit from, should cut profits for health care providers and drug developers and producers. In other words, if you elect the Robin Hood of health care, you had better also sell the sector and send me some money as well. There's one group I like though in the sector no matter what, but I'm not leaking it ahead of my portfolio introduction. Ha ha...

Weekly Initial Unemployment Claims

At 353K, weekly jobless claims matched the prior week measure. Well, at least the rate of addition of newly unemployed didn't deteriorate. There's not much more to say about that. However, let's consider how bogus the 4.8% unemployment rate is. Nonfarm payrolls decrease two months in a row and unemployment improves? Okay... The excuse, or wording, for how and why this occurred is that some people left the workforce. Right... And why did they leave the workforce? It was not because they all won the lottery.

It was more likely because they couldn't find jobs before their unemployment benefits ran out. So, now they're out there still unemployed and also unaccounted for, while still facing monthly bills, and while still underwater in mortgage and other debt. Yeah, that's a healthy situation... So, if you read anywhere that the unemployment rate change was a positive, think again.

Signs of rising unemployment could be seen in today's report that foreclosures rose 60% in February, versus the same period of 2007. However, don't get scared by the big headline every single media outlet made sure to highlight and exaggerate today. In fact, the rate of increase is decreasing, since bad numbers from the prior year are finally getting lapped. The rate should continue to improve as the months progress, unless of course unemployment increases substantially or the price of bread reaches $10. Great, but both of those things seem possible, or dare we say likely?

Import Prices

Finally some good news. Import prices rose just 0.2% in February. But wait! Excluding petroleum price change, prices actually rose 0.6%! Holy expensive guacamole Batman! Mrs. Consumer, you better be worried this number. It means commodity prices are making there way through the system of manufacturers, distributors and retailers to you. The technical term on the Street for this is, "pass through." Yep, and right to you. How's that hot potato...?

Thank you. (disclosure)

Gold Prices Touch $1,000, Bag of Chips $3.49!

Gold prices touched $1,000, oil surpassed $110, so I gotta wonder when PepsiCo is going to screw me over too.

(Stocks in this article include: NYSE: PEP, NYSE: WMT, NYSE: HD, NYSE: LOW, NYSE: SFD, NYSE: CVS, NYSE: BKC, Nasdaq: CPVNF.PK)

Gold touched $1,000 today, but everything is higher. Anyway, nobody buys gold anymore; now they sell it. I certainly will not be treating any lovely ladies anytime soon, especially considering my new ban on jewelry purchases that followed my waste of $15K on a diamond ring for a marriage that only lasted three years.

Here's what matters to The Greek these days:

1. Junior Whopper Off the Burger King (NYSE: BKC) "Value Menu": $1.27 after tax, with cheese it's like $1.59! What a ripoff.


2. Bag of Chips: $3.49, but you gotta wonder...


3. 18 Pack of Coors Light: $14.99 before tax at 7-Eleven (best price in NYC)

Well, actually, the price of Doritos, my favorite chips, have stuck at $3.49 for quite some time. Still, you have to wonder when PepsiCo (NYSE: PEP) will tighten the noose around my neck even further. It's enough to lose sleep over really. Soon, I may even have to give up a meal a day to support Doritos expenditures. I've already dropped lunch to support my ouzo habit. By the way, did I mention to SEND MONEY FAST!

An 18-Pack of Coors Light can be had for $14.99 at the local 7-Eleven here in the city. The Greek use to consider 7-Eleven a no-show, dead-duck company after watching it flail against WaWa, a super-well-run (I believe private) chain that has some stores in my local Philly area. But, 7-Eleven seems to have a niche opportunity in New York City, or it would if it held a couple brains in its headquarters. Here's an example of how a bad management team can blow an opportunity, sort of like how Smithfield Foods (NYSE: SFD) has not optimized its pork opportunity in China.

7-Eleven stores are just about as empty in NYC as they are everywhere else around the country. Here's why. The stores are operated employing a national business model that in and of itself is also flawed. First off, the stores are ugly. The colors are the same they've been since my high school days, decades ago. I can't believe I can say that in plural.

In case you haven't noticed my dear 7-Eleven peeps, the world has gotten a lot cooler since the late 80s. So, aesthetically, the model stinks. Secondly, the stores waste space on things nobody wants except drunks shopping at 3 AM. Who else would eat one of those chili-dogs that have been spinning around for ten hours in the roto-roller? It's like the classic munchie shop for suicidal maniacs.

The management team needs to walk into the store of its locally run competition. There's no room for huge markets in the city, and nobody wants to walk more than a block to get to the market (or back from it with bags in hand), and everyone walks in this city. So, you have to sell regular market type items, like milk, eggs, bread and the bag of chips too.

7-Eleven has the opportunity to pressure its competition through bulk purchasing and undercutting on price. Believe it or not, even New Yorkers on the Upper East Side don't like getting shafted on the price of a gallon of milk. And these days, more of us are paying attention to price than ever before. This is why CVS (NYSE: CVS) is kicking butt here.

NYC is dominated by small markets run by mom and pops. So, there's opportunity for a larger store operation to come in and undercut the little guys and put the mammas and the papas out of business in good old American Wal-Mart-like (NYSE: WMT) fashion. It has happened time and again.

Working as a carpenter with my father during my childhood and while in college, I witnessed first hand the rise of Home Depot (NYSE: HD) and the fall of the good old American family run lumber yard. It was sad actually. When you know the people running these businesses, they become like family. Then they're replaced by Lowe's (NYSE: LOW) and Home Depot customer service punks who do not know the difference between ceramic tiles and Jim Cramer's favorite linoleum floor. I'm sorry, but Warren Buffet helped to ruin all the other nice old folk in this country. Now, instead of running hardware stores, they're all bunched together in old folk homes or at the racetrack. I think Warren has stolen their souls too, cause he's too nice to be so rich.

Anyway, it makes me sick to see 7-Eleven missing such a great opportunity. Kudos to Gristedes, the Greek run NYC market chain. You're scoring goals, while 7-Eleven faces bankruptcy again!

Thank you. (disclosure)

Petroleum Status

The EIA's Petroleum Status Report this morning continued to produce information that counters logic for current energy pricing.

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Petroleum Status

The EIA Petroleum Status Report showed inventory build three times higher than expected, and served as a splash of cold water on the face of commodity traders. We said here in our weekly article that perhaps continued inventory building at heavy pace might force inflection point against the wild driver of momentum in the oil trading pits. But hey, what we do we know. Two weeks ago we labeled our weekly article, "Set to Retest Market Lows" (we then did) and then labeled this week's article, "Buy the News" (looks like you did). Sometimes, I scare myself to tell you the truth. But, I'm not psychic, or I would be on a beach in Greece instead of a stuffy New York City apartment. Or, I would be working for Goldman Sachs (NYSE: GS), since they seem to have the psychic market cornered.

Besides softening domestic demand, the strategic oil reserve draw should be winding down by our estimation. Last year, the government announced it would fill the reserve, and we diligently calculated that by March end, the reserve should be filled and Iran should be trembling. Might this be part of the reason inventory status is so changed... In any event, oil has no right rising in price, based on U.S. demand alone.

And, if global demand is the driver, than pricing should have reached this point sometime last year. European growth is burdened now, and China must eventually see some impact despite its own robust domestic growth. While it takes time to build power plants, it only takes hours to contemplate their fuel demands. Thus, the global demand factor was known.

So, why didn't oil rise to these levels when global economies looked flawless? Perhaps the barrier of historic price record itself stood in the way, as traders moved cautiously into the darkness of new pricing territory. They tested the water, found it lukewarm, but feared it might be cold deeper within and backed away before testing again. Could there be any other tangible reason for the energy equation?

Negative correlation to the dollar's direction has been just about perfect over the last ten dollars of oil price rise. So, oil price rise may be nothing but illusion at this point. It's just that your dollar cannot purchase what it use to, and the trend continues deteriorating. Even decoupling the two would have no economic consequence on American consumption cost. We would still be paying more for it in real dollars.

Or, is oil simply overpriced due to momentum? How far can momentum push price in an efficient marketplace? Or, are well-advised and capitalized investors buying oil ahead of a coming war. These are the possibilities. Tell me what you think is the real driver, if not a combination of each factor. Because the greatest of all factors, demand as measured by the EIA figures, says oil should be moving lower, not higher.

We will publish a solution for the dollar drift issue in a coming article. This is a symptom of a problem America must cure or otherwise settle for relegation as less than global leader.

Thank you. (disclosure)