Bernanke Comes Down from the Ivory Tower

Let's call a spade a spade, and an ace Ben Bernanke? Well, even Jim Cramer has to admit, Ben knows something more now than he did when TheStreet.com's main man tore him a new one. The Federal Reserve action today was significant, and more so in the implications of the effort than in the action itself.

Kudos to the Fed!

In essence, what the Fed appears to have done through today's action is to become a more significant lender of last resort for the mortgage and other tight credit markets. Primary dealers were until this point still wary of investment in troubled credit markets. The Fed has effectively said, "we got your back" to the dealers, "no, really we do."

What's more enthusing about the whole arrangement is that it's clear the world's central banks are working hand-in-hand with the private sector in finding and also in refining effective resolution to credit market strife. Kudos to Ben Bernanke for thinking outside the box and coming out of the ivory tower. He's reached out to the so called real world. Jim Cramer's criticism, that "they know nothing," regarding the Fed's grasp of real world economics, no longer holds water. Let's give credit where credit is due. The beautiful, creative, dynamic human mind is problem solving and finding new ways to cure new economic illness. What's more, the Fed and its challenged Chief look to have been working tirelessly and aggressively and are due recognition for that effort alone.

ICSC-UBS Same-Store Sales

Weekly same store sales moved only 1.6% higher in the week ended March 8th. This defied recent improvement of trend, and compared to the prior week growth rate of 2.1%. Retail sales are due on Thursday, and this result has no bearing on our expectation of decent data, on a relative basis, from the report.

Department stores like Macy's (NYSE: M) and JC Penney (NYSE: JCP) continue to bear the brunt of the pain in retail, stuck between discount and high end. The one stop shop middle class model is not built for the current economic environment. The rich will continue to buy jewelry and designer goods from Tiffany's (NYSE: TIF) and Saks (NYSE: SKS) at tagged prices (do they even tag in these shops?), while more of the lower middle class will migrate to the Wal-Marts (NYSE: WMT) of the world.

International Trade January

January's International Trade Report showed the deficit actually narrowed, versus expectations for a widening on tough oil imports. Both exports and imports rose, thanks to rising prices. The reason the deficit narrowed is logical to us, and ugly for that matter. Domestic demand is on the decline my friends, while global demand remains solid. That's not a good thing, and this report offers no positive news as a result. You're just lucky it was muted by the Fed's pre-market action. Plus, it's not directly clear to the masses that a deficit narrowing in today's environment is bad news. In fact, I bet at least five Congressmen were quoted today naively taking credit for it.

Thank you. (disclosure)