Blood Money in Davos - Gaza, Erdogan and Peres

By Markos N. Kaminis

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

After the dust settles, despite the powerful corporate news that moved the market this week, and regardless of the record setting lows seen in nearly all the period's economic data-points, what I will remember most about the week just passed will be the fiery exchange of words between an Israeli President and a Turkish Prime Minister.

(Article interests: Nasdaq: XISLX, Nasdaq: AMDAX, Nasdaq: AMDCX, Nasdaq: GULF, Nasdaq: TRAMX, Nasdaq: TRIAX, AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD, NYSE: SDS)

The mysterious annual meetings that occur in Davos, Switzerland among the world's elite of power and wealth offered the perfect platform for an affluent discussion of a geopolitical powder keg. As a panel that included Shimon Peres, Recep Tayyip Erdogan, Ban Ki-Moon and the Secretary General of the Arab League, Amr Moussa, erupted into a devastating, yet contained explosion, I wondered how many who viewed it understood its future significance.

The United Nations' Secretary General blankly called for peace and ceasefire, as would be expected from his position, and he noted the UN's kind direction of $613 million in aid to Gaza. Arab League boss and influential Egyptian political head Amr Moussa noted the sum would not be nearly enough to undo the destruction caused by the "unbalanced" reaction of Israel. However, the most interesting point made by the ember-filled Moussa was an implication of ultimatum. His face withholding knowledge, his voice echoed that if the current situation stood unchanged a year from now, there were other options for the Arab League, including those involving "guns."

Erdogan held back nothing in his defense of the Palestinians, while Shimon made an equally compelling case for Israel's right to ensure the security of its people. Erdogan recalled the fallen children, while Shimon reminded him of the nightly terror of those Israeli citizens who live within range of Gaza's regular rocket fire. The futility of the ageless argument was as clear as day. What makes this problem so difficult to resolve is that both sides are right in the basis of their complaints, and what destroys hope is the muddle of their actions. The true solution can only come through tolerance, generosity and love, not to mention amnesia.

However futile the pandering panel's purpose, the administrators of it in Davos committed a dangerous mistake in my opinion. Being a Greek, I know my Turkish cousins intimately, and I realized quickly the development of scorn before me. Mr. Shimon was given opportunity at the end of the discussion to make Israel's case. Sitting awkwardly to his right, Erdogan seemed to take Shimon's words as sharp personal dagger to his side, and he clearly felt a sincere passion for his Palestinian brethren.

Perhaps equally compelling him to wage his crusade was an awareness of the group before him, men and women of power and might, wealth and insight, a group he sought acceptance from. So he nervously took notes to rebut Shimon, but the administrators were more interested in keeping to their schedule than in allowing these two influential and powerful individuals to air grievances that might lead to some mutual understanding. Instead, the naive administrators who feared the oysters in the hall might sink into a mush of ice and water, failed to note Mr. Erdogan's Turkish pride.

When Shimon finished, Erdogan swiftly spoke up and steadfastly held his ground. He was insistent for the opportunity to stand up to Shimon's judgments against his wisdom. Shimon had challenged Erdogan, his intelligence and his comprehension of global affairs, and like every Greek knows, when you engage a Turk or Greek, you had better be prepared for his full acceptance of that challenge and his response to it.

As the annoying mediator from the Washington Post, David Ignatius, kept at interrupting, perhaps never aware of how precariously close he was to the Turkish blade, Erdogan attempted to shorten his response, as a civilized man might. Still, it took all the composure he could muster to withhold the demon within himself. His rebuttal to Peres included recollection of past Israeli strikes and Muslim deaths, which the hypocrite labeled as barbarism. God perhaps saved the ears of that congregation by not inviting me to Davos, lest I had reminded the Turk of the barbaric murders of more than a million Armenians, some one million Greeks and thousands upon thousands of Kurds and Georgians in the ethnic cleansing that rid Asia Minor of Christians. No Turk can ever credibly use the word "barbaric" until those crimes are acknowledged, and reconciliation attempted.

So ironically, the Turk who still fails to recognize those past atrocities as crimes against humanity, who attempts to keep the voices of the slaughtered silenced even to this day, was himself silenced. Erdogan offered last rights in passing, warning the crowd he might never return to the unjust gathering. Groups of sympathizers walked out of the meeting in concert as a mediator attempted to read the united words of religious leaders.

Take note, Prime Minister Erdogan's pride was badly scathed, and he will forever relate the painful injury to Israel and the West, and its cause to the defense of his holy brother. Scorn was born before the world in Davos, a scorn that might one day place Turkish troops alongside those of Iran. No matter how off-plan or even unfair the concession might have been to allow the Prime Minister an extra word, that's a scenario worth missing a meal to avoid.

Besides Erdogan's angered tantrum, the world might take careful note of the quiet warning of the Arab League Secretary General, and of the hero's reception the Turk received upon his return home. A stew is brewing in the Middle East, already cooked and served over decades, but coming to a boil once again with new ingredients and spices. The polished palettes of Davos got an early tasting, and the world awaits its indigestion.




Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Stock Market Summary Video - Jan-30-09

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We offer a stock market summary on a daily basis via either video or word format. Visit our site when you've missed the day's news due to travel or other business. You should see a video player here, but if you do not see it from your vantage point, simply click the image below:


Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: NYSE: XOM, NYSE: CVX, NYSE: HON, NYSE: DNA, NYSE: HMC, Nasdaq: AMZN, NYSE: PG, AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: SDS, NYSE: QLD)

Market Briefing - Jan-29-09

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You should see a video player displayed here providing the day's business news summary, which is produced by Bloomberg this time. If you do not see the player, simply click on the image below and you will be taken to our blog site.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD, NYSE: SDS)

New Home Sales Sink , but Look Closer

By Markos N. Kaminis - Economy & Markets:

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

Every once in a while we blogging fools can't quite find the right word to describe a situation. This was not the case this morning however, when the Census Bureau and HUD released the New Home Sales data for December. Still, we urge you to read on, because the situation is more complicated than it seems. This latest report paints a dire environment indeed, but of an isolated segment of the housing market.

(Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD, NYSE: SDS)

Yowsers!

The annual pace of new home sales sank to a new record low in December. Running at 331K, the sales pace was 15% below November's revised rate. In fact, sales have not been this low ever before, at least not since 1963, when record keepers began keeping count. Bloomberg's consensus of economists were knocked off their feet by the news, as the forecasters were looking for a pace of 400K... and they probably considered that a bad number! Last month's sales were 44.8% below the 600K pace set in December of 2007.

As new home demand disappears, pricing is adjusting rapidly. Prices are now in a death-dive (they're falling anyway), as the median price for homes sold in December reached $206,500, with the average measuring $246,900. Case Shiller's Home Price Index confirmed the trend earlier this week, as it showed prices fell 2.2% in November alone among the 20 metropolitan regions surveyed. We can only speculate on December, but today's news seems to confirm we're in for more of the same.

Most home builder CEOs seemed distraught to us when the pace of sales fell below 500K. They should be on suicide watch now! Last week, the National Association of Home Builders (NAHB) Housing Market Index showed builder sentiment at an all-time low of 8 in January, and down from 9 in December.

At this pace, the inventory of homes available for sale actually increased in December, to 12.9 months. That's NOT good, and most experts have been looking toward a different trend for these metrics. We should also note that December's pace is probably not representative of the norm for the next 12 months; at least we hope so. This change in home inventory is reminiscent to me of a deceptively low P/E ratio that sees a stock continue even lower as the "E" (earnings) portion of the ratio trends downward. To the layman, it's like rejoicing that a flood hasn't destroyed the second floor of your home, while the water is still rising.

Home builder stocks understandably reacted harshly to the news. As of early afternoon trade the stocks were down:

* Toll Brothers (NYSE: TOL) -6.5%
* Pulte Homes (NYSE: PHM) -7.9%
* NVR Inc. (NYSE: NVR) -7.8%
* D.R. Horton (NYSE: DHI) -11.5%
* MDC Holdings (NYSE: MDC) -4.7%
* Lennar Corp. (NYSE: LEN) -8.1%
* Centex Corp. (NYSE: CTX) -8.4%
* KB Home (NYSE: KBH) -7.3%
* Ryland Group (NYSE: RYL) -0.4%
* Hovnanian (NYSE: HOV) -8.4%
* Beazer Homes (NYSE: BZH) -6.3%

Housing Now Suffers from Recession

Over the past few weeks, we've received a plethora of housing data to look over. While the individual reports offered a note of hope here or there, the overwhelming message conveyed was that housing is now suffering NOT from the bubble, but from the recession. Spending is down and lending standards are tight, so the housing recovery is pushed out further.

Existing Home Sales - December

Existing home sales, reported on Monday, was one of those few bright spots. Existing sales represents a much greater portion of the overall market (93.5%). For this reason, the data is more useful toward the accurate diagnosis of market health. However, at the height of the bubble, new home sales represented nearly 20% of total sales. Home builders are in survival mode now though, and so the normal run rate is somewhere in between these two proportions.

Still, Existing Home Sales improved 6.5% in December, to an annual pace of 4.74 million units. Record keepers attributed the improvement to lower home prices. Inventory levels also improved 11.7%, leaving a 9.3 month supply of homes for sale. That compares against November's level of 11.2 months. This is clearly a different picture than that painted by the New Home Sales Report today, and yet another reason to read Wall Street Greek. We make sense of it all for you.


Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Market Wrap Up - Jan-28-09

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Today's market wrap up is produced by the Associated Press. You should see a video player here, but if you do not, simply click on the image below.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD, NYSE: SDS)

International Monetary Fund (IMF) Sounds the Alarm

By The Greek: Economy & Markets:

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Global voices are speaking loudly today, as the International Monetary Fund (IMF) and the International Labor Organization (ILO) joined with individual voices from Davos to warn and advise on the global economic outlook. While we hope to address the other two topics shortly, this article focuses on the IMF report.

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Today's business news was light on domestic economic data, but international sources filled the abscess adequately enough. The IMF updated its World Economic Report and its Global Financial Stability Report today, and in so doing, warned that global economic growth would nearly cease in 2009. Specifically, the IMF forecast growth at 0.5%, a rate not seen since World War II. Still, contraction in the U.S., Europe and Japan (3 largest economies), will be saved by emerging market strength (namely India and China), according to the IMF gurus.

The IMF noted that despite the many varied actions of the world's central banks, the situation remained "acute." This is a message repeated this afternoon by the U.S. Federal Open Market Committee. The American Fed has cut rates to a historic mark, or rather range of between zero and 0.25%.

The IMF pegs the cure to global ills as a necessary restructuring of the banking system in order to free up credit. In fact, the IMF seems to have borrowed directly from the Fed's playbook. Of course, it's a lot easier to offer advice than to implement it, but the IMF seems to buy into the need for a "bad bank" approach. There's that term again, and we'll surely dedicate an article to it soon enough.

Unclogging credit by making ill banks well again can be accomplished perhaps by cutting out problem assets. However way you serve it though, banks are going to be especially careful about lending, since once considered safe jobs are now walking the line. Therefore, assets will weigh much more heavily than income when banks decide on loan agreements, and those assets are deflating across the board. So, lending can't really recover to recent levels anytime soon. Also, lending will only be available for those who can surely handle it. So, while the economy recovers, it seems the rich will get richer and the poor will see assets sold through debtor in possession. At best, the employed poor will be stuck in limbo, but at least many will maintain employment thanks to fiscal stimulus. Who keeps their job will depend a lot on how our government allocates that stimulus.

The IMF urges nations with room to spare on monetary policy to use it quickly, and it advises those countries without room (you know like us) to creatively devise means of manipulation. When risk creates a wide spread, other means will be necessary to close that particular gap and inspire lending/borrowing for that particular instrument.

Something I found especially interesting was an allusion to protectionism on China's part, and advice to it to change the game, so to speak. The IMF literally states, "However, many emerging and developing countries are facing a need to adjust to permanent adverse shocks in access to external financing and terms of trade." Okay, so this may apply to smaller nations than China, and strictly to capital access, but we still hope the IMF was planting some sort of subliminal message!

In a non-Geithneresque manner (and in my mind), the IMF seems to have told China, stop cheating man! The words "terms of trade" (at least when taken in isolation) imply to me that the IMF is asking China to play fair (or at least fairer) in a new environment, or otherwise risk trade war in a period in which the world can't even afford a friendly tariff or two. While this may all be a wonderful figment of my imagination, might that statement, snuck in at the very end of the IMF press release today, have spoken loudest nonetheless? How about in Bizarro World??? Don't forget this comes just a few days after Geithner's statement.

Several concerns and remedies were addressed in the commonly agreed upon playbook, and so victory or defeat is left now to the players. It depends wholly on how they execute upon the game-plan. It seems there's still hope for our little world, but many pieces remain in play and several chess players must collude to move together. On this planet of selfishly aligned groups and nations, humanity's prosperity depends on cooperation. While I'm generally a proponent of human creativity, when it comes to cooperation, I only believe it possible when all the participants agree on its dire necessity, unfortunately.


Today's Noteworthy EPS Reports:

Adaptec (Nasdaq: ADPT), Affymetrix (Nasdaq: AFFX), Airgas (NYSE: ARG), AirTran (NYSE: AAI), Ameriprise Fin'l (NYSE: AMP), Astoria Fin'l (NYSE: AF), AT&T (NYSE: T), Avocent (Nasdaq: AVCT), Baker Hughes (NYSE: BHI), Becton, Dickinson (NYSE: BDX), Boston Properties (NYSE: BXP), Boston Scientific (NYSE: BSX), Cabot (NYSE: CBT), CACI Int'l (NYSE: CAI), Canon (NYSE: CAJ), Cirrus Logic (Nasdaq: CRUS), Citrix Systems (Nasdaq: CTXS), ConocoPhillips (NYSE: COP), Covance (NYSE: CVD), Energen (NYSE: EGN), Fair Isaac (NYSE: FIC), FormFactor (Nasdaq: FORM), General Dynamics (NYSE: GD), Green Mountain Coffee (Nasdaq: GMCR), Hess (NYSE: HES), Hoku Scientific (Nasdaq: HOKU), Lam Research (Nasdaq: LCRX), LandStar System (Nasdaq: LSTR), Legg Mason (NYSE: LM), LSI Corp. (NYSE: LSI), Manitowoc (NYSE: MTW), MeadWestvaco (NYSE: MWV), Methanex (Nasdaq: MEOH), Murphy Oil (NYSE: MUR), Pfizer (NYSE: PFE), Praxair (NYSE: PX), Qualcomm (Nasdaq: QCOM), Regis (NYSE: RGS), Robert Half (NYSE: RHI), Ryland (NYSE: RYL), SAP AG (NYSE: SAP), Sepracor (Nasdaq: SEPR), Starbucks (Nasdaq: SBUX), Susquehanna Bancshares (Nasdaq: SUSQ), Symantec (Nasdaq: SYMC), Teradyne (NYSE: TER), Tetra Tech (Nasdaq: TTEK), Allstate (NYSE: ALL), Boeing (NYSE: BA), New York Times (NYSE: NYT), Tidewater (NYSE: TDW), Tractor Supply (Nasdaq: TSCO), Tyco Electronics (NYSE: TEL), USG (NYSE: USG), WellPoint (NYSE: WLP), Wells Fargo (NYSE: WFC) and World Acceptance (Nasdaq: WRLD).

Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Nightly Business News

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Tonight's nightly business news summary is available here, but if you do not see our video player from your vantage point, you will need to advance to our blog page by clicking upon this image:


Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: SDS, NYSE: QLD)

10 Signs Your Boss is Running a Ponzi Scheme

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In today's environment, everyone is concerned about the security of their job... and the legitimacy of their boss. Given the actions, indictments and investigations of Bernie Madoff, Arthur Nadel, Nicholas Cosmo and others, we have to wonder, how rare is honesty on Wall Street? So, given these concerns, you need to know if your boss is running a Ponzi Scheme. Here's a list of some of the red flags you should look for.

(Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD, NYSE: SDS)


Ten Signs Your Boss is Running a Ponzi Scheme:


10 - When your boss' office confidante commits suicide, no matter what your boss says...

9 - When your boss comes back from lunch stoned...

8 - When your firm's Legal Counsel asks you if you want to buy a classified file...

7 - When your boss' telephone calls are mysteriously all forwarding to you...

6 - When salesmen start returning your inquiries concerning life insurance...

5 - When you see your boss signing corporate checks off to the hot dog vendor...

4 - When you notice your boss putting five differently colored passports into his briefcase...

3 - When you find your boss sleeping under your desk in the morning...

2 - When your boss opens a new "informal" office in a bathroom stall, and asks you to call him if you see a group of dark-suited men enter the building...

1 - When your boss is Bernie Madoff...


Please see our disclosures at the Wall Street Greek website and author bio pages found there.

This Week: GDP + EPS = Double Trouble

By The Greek - Economy & Markets

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

The ongoing bear party invites a dose of double trouble for stocks this week. Investors should not be surprised by the rush of earnings misses, slashing of corporate guidance and announcements of business consolidation that will likely drive stocks this week. Economists are also expecting the worst for the fourth quarter reporting of gross domestic product on Friday, so a mauling seems certain for the market.

(Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD, NYSE: SDS)

The Week Ahead

Monday

Happy Lunar New Year! The Year of the Ox is supposed to be a prosperous one for people who work like oxen. I should be okay then...

Because of this week's delayed publishing of this article, the day's duo of economic reports have already hit the wire. Leading Economic Indicators for December unexpectedly rose 0.3%, against consensus expectations for a 0.3% decline. Needless to say, that was quite a surprise! However, the increase had much to do with the massive expansion of money supply and the yield spread. Those two prospective factors offset continued declines in building permits, the average workweek, supplier deliveries, and initial unemployment claims. In other words, we're in the desert, so don't bank on that oasis you see ahead of you.

Existing Home Sales, reported for December, were also improved and above consensus! Wait a second here, are we so use to darkness that we don't recognize daylight any longer? Existing home sales were reported running at an annual pace of 4.74 million in December, versus expectations for 4.4 million. November's read showed sales running at 4.49 million.

Monday's earnings schedule highlights reports from Alberto Culver (NYSE: ACV), American Express (NYSE: AXP), Amgen (Nasdaq: AMGN), Caterpillar (NYSE: CAT), Crane (NYSE: CR), Danaher (NYSE: DHR), Eaton (NYSE: ETN), Freeport-McMoRan Copper & Gold (NYSE: FCX), Halliburton (NYSE: HAL), Heritage Oaks Bancorp (Nasdaq: HEOP), JDA Software (Nasdaq: JDAS), Kimberly Clark (NYSE: KMB), McDonald's (NYSE: MCD), McKesson (NYSE: MCK), Netflix (Nasdaq: NFLX), Old National Bancorp (NYSE: ONB), Olin Corp. (NYSE: OLN), Pactiv (NYSE: PTV), Park National (NYSE: PRK), Peoples Bancorp (Nasdaq: PEBO), QLogic (Nasdaq: QLGC), Quest Diagnostics (NYSE: DGX), Reinsurance Group of America (NYSE: RGA), Sealed Air (NYSE: SEE), Steak 'n Shake (NYSE: SNS), Steel Dynamics (Nasdaq: STLD), Texas Instruments (NYSE: TXN), Tyson Foods (NYSE: TSN), VMware (NYSE: VMW), Volterra Semiconductor (Nasdaq: VLTR), W.W. Grainger (NYSE: GWW), Weatherford (NYSE: WFT), WellCare Health (NYSE: WCG), Wyeth (NYSE: WYE), Zions Bancorp (Nasdaq: ZION) and Zoran (Nasdaq: ZRAN).

Tuesday

Tuesday's market focus, besides a likely flood of dire corporate reports, should be attending to the start of the latest Federal Open Market Committee meeting. Considering the Fed has pretty much gone to zero already on rates, a debate on Fed impotence/virility should be center of attention. The Bank of Japan will publish its December meeting minutes as well.

Last week's ICSC Weekly Same-Store Sales data reportedly benefited from retail markdowns post the holidays. You see, week-to-week sales rose, however, when compared against the prior year, sales declined 1.8%. Look for deep deterioration to take a grip of this report now, and for retailers to see their hardest days since The Great Depression.

The Conference Board is scheduled to report on Consumer Confidence at 10:00 a.m. The consensus of economists surveyed by Bloomberg sees a slight improvement in store this month (to 39, from 38). Needless to say, both are tragically low. Speaking of tragic, the S&P Case Shiller Index is reported at 9:00 AM, and it might be useful if it weren't reported two months too late. The data for November will be noted on this day.

Tuesday's earnings news includes Alliance Financial (Nasdaq: ALNC), Altera (Nasdaq: ALTR), Amylin Pharmaceuticals (Nasdaq: AMLN), Avery Dennison (NYSE: AVY), BJ Services (NYSE: BJS), Black Box (Nasdaq: BBOX), Bristol-Myers Squibb (NYSE: BMY), Calamos Asset Management (Nasdaq: CLMS), Callaway Golf (NYSE: ELY), Carpenter Technology (NYSE: CRS), Check Point Software (Nasdaq: CHKP), Delta Airlines (NYSE: DAL), DuPont (NYSE: DD), E*Trade Financial (Nasdaq: ETFC), East West Bancorp (Nasdaq: EWBC), EMC Corp. (NYSE: EMC), Energizer (NYSE: ENR), First Cash (Nasdaq: FCFS), FPL Group (NYSE: FPL), Gilead (Nasdaq: GILD), Jacobs Engineering (NYSE: JAC), Lexmark Int'l (NYSE: LXK), Molex (Nasdaq: MOLX), Nomura Holdings (Nasdaq: NRSCF.PK), Norfolk Southern (NYSE: NSC), Nucor (NYSE: NUE), Peabody Energy (NYSE: BTU), Plantronics (NYSE: PLT), Rayonier (NYSE: RYN), RF Micro Devices (Nasdaq: RFMD), Siemens AG (NYSE: SI), St. Jude Medical (NYSE: STJ), Sterling Bancorp (NYSE: STL), STMicroelectronics (NYSE: STM), Stryker (NYSE: SYK), Sun Microsystems (Nasdaq: JAVA), Tellabs (Nasdaq: TLAB), Temple-Inland (NYSE: TIN), The Hershey Co. (NYSE: HSY), The McGraw-Hill Cos. (NYSE: MHP), Travelers (NYSE: TRV), US Steel (NYSE: X), Valero (NYSE: VLO), Verizon (NYSE: VZ), Waters (NYSE: WAT), Websense (Nasdaq: WBSN) and Yahoo (Nasdaq: YHOO).

Wednesday

It's that time of year again. Turn on CNBC and watch the "Money Honey" reporting live from Davos, Switzerland. The famed World Economic Forum runs from January 28th through February 1st, and kicks off with an address by Russian PM Vladimir Putin. Get this, Vlad baby is declaring that foreign investment in Russia will be treated like domestic companies are... Sure Vlad, we just met you... We don't remember what happened to British Petroleum (NYSE: BP), nor do we recall the scores of imprisoned (possibly dead) domestic entrepreneurs in Siberia.

The FOMC announcement and policy statement at 2:15 should get a collective "ho hum" from the pits, unless the language in the statement diverges from bland. There's a decent chance of that, as these are anything but bland times we live in. The Fed is expected to keep its rate "target range" between zero and 0.25%.

The Mortgage Bankers Association weekly Purchase Applications Report is set for its usual pre-market reporting (a tumble weed rolls by). At 10:30, the regular EIA Petroleum Status Report should get extra attention this week. OPEC claims production cuts are up to par, and that consortium members are sticking to their quotas. Even so, demand seems to be waning at least as quickly. If factories are not closed, then they are being idled for weeks, like General Motors (NYSE: GM) announced on Monday. Shut plants mean less energy usage and heating needs, which in turn means less demand for fossil fuels. That does not even speak for the declining demand for gasoline as layed off workers stay home and watch Oprah.

Citigroup (NYSE: C) kicks off its financial services conference on Wednesday. The earnings schedule highlights news from Adaptec (Nasdaq: ADPT), Affymetrix (Nasdaq: AFFX), Airgas (NYSE: ARG), AirTran (NYSE: AAI), Ameriprise Fin'l (NYSE: AMP), Astoria Fin'l (NYSE: AF), AT&T (NYSE: T), Avocent (Nasdaq: AVCT), Baker Hughes (NYSE: BHI), Becton, Dickinson (NYSE: BDX), Boston Properties (NYSE: BXP), Boston Scientific (NYSE: BSX), Cabot (NYSE: CBT), CACI Int'l (NYSE: CAI), Canon (NYSE: CAJ), Cirrus Logic (Nasdaq: CRUS), Citrix Systems (Nasdaq: CTXS), ConocoPhillips (NYSE: COP), Covance (NYSE: CVD), Energen (NYSE: EGN), Fair Isaac (NYSE: FIC), FormFactor (Nasdaq: FORM), General Dynamics (NYSE: GD), Green Mountain Coffee (Nasdaq: GMCR), Hess (NYSE: HES), Hoku Scientific (Nasdaq: HOKU), Lam Research (Nasdaq: LCRX), LandStar System (Nasdaq: LSTR), Legg Mason (NYSE: LM), LSI Corp. (NYSE: LSI), Manitowoc (NYSE: MTW), MeadWestvaco (NYSE: MWV), Methanex (Nasdaq: MEOH), Murphy Oil (NYSE: MUR), Pfizer (NYSE: PFE), Praxair (NYSE: PX), Qualcomm (Nasdaq: QCOM), Regis (NYSE: RGS), Robert Half (NYSE: RHI), Ryland (NYSE: RYL), SAP AG (NYSE: SAP), Sepracor (Nasdaq: SEPR), Starbucks (Nasdaq: SBUX), Susquehanna Bancshares (Nasdaq: SUSQ), Symantec (Nasdaq: SYMC), Teradyne (NYSE: TER), Tetra Tech (Nasdaq: TTEK), Allstate (NYSE: ALL), Boeing (NYSE: BA), New York Times (NYSE: NYT), Tidewater (NYSE: TDW), Tractor Supply (Nasdaq: TSCO), Tyco Electronics (NYSE: TEL), USG (NYSE: USG), WellPoint (NYSE: WLP), Wells Fargo (NYSE: WFC) and World Acceptance (Nasdaq: WRLD).

Thursday

Economic data flow picks up Thursday and intensifies further on Friday. On Thursday morning, look for the Durable Goods Orders Report and the Weekly Initial Jobless Claims data at 8:30 a.m. ET. Durable Goods Orders are forecast to drop 2.0% in December, after a 1.0% decline in November. Initial Jobless Claims, which jumped back up last week after a short hiatus below the 500K level, are expected to run around 575K at this read (589 last week).

Bloomberg's consensus of economists forecasts December's New Home Sales ran at an annual rate of 400K. The sales pace stood at 407K a month ago. We've had some contrasting data on this topic of late, but one tends to trust the negative at this point. The EIA Natural Gas Report is due at its usual 10:30 reporting time. Also, the Reserve Bank of New Zealand is scheduled to offer its latest monetary policy decision.

Charles Schwab (Nasdaq: SCHW) will provide an update on its operations and the earnings schedule keys news from 1-800-Flowers.com (Nasdaq: FLWS), 3M (NYSE: MMM), Affiliated Computer (NYSE: ACS), Alaska Airlines (NYSE: ALK), Alliant Techsystems (NYSE: ATK), Altria Group (NYSE: MO), Amazon.com (Nasdaq: AMZN), American Electric Power (NYSE: AEP), AmeriCredit (NYSE: ACF), AutoNation (NYSE: AN), Ball Corp. (NYSE: BLL), Black & Decker (NYSE: BDK), Broadcom (Nasdaq: BRCM), Brunswick (NYSE: BC), Cash America (NYSE: CSH), Celgene (Nasdaq: CELG), CEMEX (NYSE: CX), Chattem (Nasdaq: CHTT), Chubb (NYSE: CB), Colgate-Palmolive (NYSE: CL), Columbia Sportswear (Nasdaq: COLM), Continental Airlines (NYSE: CAL), Digital River (Nasdaq: DRIV), Dollar Fin'l (Nasdaq: DLLR), Eastman Kodak (NYSE: EK), Electronics for Imaging (Nasdaq: EFII), Eli Lilly (NYSE: LLY), Ethan Allen (NYSE: ETH), Ford Motor (NYSE: F), Fortune Brands (NYSE: FO), Gold Fields Ltd (NYSE: GFI), Integrated Device Tech (Nasdaq: IDTI), Int'l Speedway (Nasdaq: ISCA), Int'l Paper (NYSE: IP), Investment Technology Group (NYSE: ITG), JetBlue Airways (Nasdaq: JBLU), Kennametal (NYSE: KMT), KLA-Tencor (Nasdaq: KLAC), Maxim Integrated (Nasdaq: MXIM), Monster Worldwide (NYSE: MWW), Newell Rubbermaid (NYSE: NWL), OptionsXpress (Nasdaq: OXPS), PerkinElmer (NYSE: PKI), PMC-Sierra (Nasdaq: PMCS), Polaris (NYSE: PII), Quixote (Nasdaq: QUIX), Raytheon (NYSE: RTN), SEI Investments (Nasdaq: SEIC), Smith Int'l (NYSE: SII), T. Rowe Price (Nasdaq: TROW), US Airways (NYSE: LCC) and more.

Friday

We're guessing you'll all be peaking through your fingers when fourth quarter GDP is reported on Friday morning. Economists are expecting dramatic economic contraction of 5.4%. The economy backed up 0.5% in Q3. The consensus for the death count ranges from 3% to 7%, so the market has a lot of room to range on the news and thus we have the makings of a market-moving event.

Also at 8:30, the Employment Cost Index is seen increasing 0.7%; only a slight rise here, as companies cut benefits and employees both! Also note that as companies consolidate costs, they often replace higher paid employees with new folks.

The National Association of Purchasing Managers Chicago posts its Purchasing Managers Index at 9:45. NAPM's measure is expected to slip to 34.0, from 34.1 in December. Readings below 50 signify business contraction, so it would be difficult to find solace in a reading a little higher than expected. The Reuters/University of Michigan Consumer Sentiment read is set for 10:00 a.m. Friday. Economists forecast a reading of 61.9, vs. the same level at last check.

With the Russia/Ukraine gas row seemingly settled, the Prime Minister of Belarus is expected in Moscow to discuss its partnership with the unruly Ruskies. Farm Prices are due at 3:00 PM.

The earnings schedule highlights news from Active Power (Nasdaq: ACPW), Ametek (NYSE: AME), Arch Coal (NYSE: ACI), Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), Gannett (NYSE: GCI), Harte-Hanks (NYSE: HHS), Honda Motor (NYSE: HMC), Honeywell (NYSE: HON), Horizon Lines (NYSE: HRZ), Idexx Labs (Nasdaq: IDXX), Johnson Outdoors (Nasdaq: JOUT), Kulicke & Soffa (Nasdaq: KLIC), Overstock.com (Nasdaq: OSTK), PACCAR (Nasdaq: PCAR), Procter & Gamble (NYSE: PG), Simon Property Group (NYSE: SPG) and Wilmington Trust (NYSE: WL).

Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Wall Street Week - Obama Mania

By Markos N. Kaminis - Economy & Markets:

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

Obama mania swept over the nation last week, as Martin Luther King, Jr. Day was followed by the inauguration of America's first African-American president. The energy thrown off by the inauguration and related events seemed to revive the nation, at least for the day. The incoming administration's diligent preparation was evident almost immediately, as the new chief touched off his term with a whirlwind first day.

(Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, NYSE: SDS, NYSE: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK)

If you didn't get the "change" message through the never-ending presidential campaign, you got it now! On day one, Obama froze the pay of his staff and also all executive orders submitted during the Bush Administration's midnight hour. Guantanamo Bay is closing; withdrawal from Iraq seems likely over the next 16 months; Secretary of State Clinton brought back old faithfuls in George Mitchell and Richard Holbrooke to help run the show in the hot spots of the Middle East and Afghanistan/Pakistan, respectively; and economic stimulus is on the way by President's Day.

The biggest change perhaps came from Obama's reaching across the table, not only to the GOP, but also across the world. In his inaugural speech, it seemed to me his words, "we will extend a hand if you are willing to unclench your fist" was directly intended for Iran and perhaps Russia.

On Friday, Obama met with his domestic adversaries, the Republicans. There's a sort of tussle brewing over the new Administration's economic stimulus plan. Obama wants to put about $825 billion more to work towards America's industrial future, our infrastructure, foreclosure salvation and to help low-income Americans. However, word is that the Republicans are seeking more of the same broad reaching tax cuts we saw last year, and less spending.

The week just passed was light on economic data, but it exposed new lows for the housing market. The National Association of Home Builders noted that builders' confidence reached a record low in January. The NAHB's Housing Market Index dropped to 8, from the previous low of 9 recorded last month. A day later, the government reported Housing Starts for December collapsed to a record level not seen ever, and record keeping began in 1959. Starts fell 16% from a revised November level, to an annual pace of 550K in December. Building Permits, an indicator of pending activity, also touched down on a record low, at 549K.

Weekly Initial Unemployment Claims jumped up to 589K, from 527K (revised) a week before. We forecast this here, as the stimulant of holiday shopping is now passed. Without this stimulant, retailers are left in a dead-zone now, and so layoffs, store closings and even bankruptcy are a real likelihood for many of these businesses through 2009. The International Council of Shopping Centers reported its weekly same-store sales data as usual. In the week ended January 17, sales fell 1.8% from the prior year period. However, markdowns gave sales a 1.1% boost over the week just prior.

This week holds some interesting economic reports and a full schedule of earnings reports. On the economic slate, Leading Indicators for December will give economists a last chance to tweak their Q4 GDP forecast. The GDP report is scheduled for Friday, and the outlook is dire. Take a breath and have a seat now, because economists forecast Real GDP for Q4 contracted by 5.4%. See more on the coming week in our pending "Week Ahead" piece.


Please see our disclosures at the Wall Street Greek website and author bio pages found there.

The Week in Video: Obama Week

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.



We've compiled 58 videos for you this week, highlighting the new president's first week in office. President Obama hit the ground running, so there was no shortage of footage. The business week was not short of market moving news either, and international events were plentiful as well. If you do not see the video player before you, please simply click on the ticket below to advance to our video blog post.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, NYSE: SDS, NYSE: QLD, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK)

Today's Business Summary - The New Sexy

By Markos N. Kaminis - Economy & Markets:

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

This article is not as boring as the title makes it seem, so read on! Business news is anything but boring these days. In fact, it's the new sexy! Today's market-moving business included some more depressing data out of the U.K. This was a rough week for the Brits, and we're guessing the pubs are full tonight. The economic scene offered no reports, but plenty of D.C. happenings, including Tim Geithner bad mouthing our loan shark, China. President Obama spoke to the GOP today about fiscal stimulus, and while he offered an open ear, he made "no promises." The corporate front was troubling, but Google showed there's still money to be made, or at least there was anyhow, before they made it all.

(Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD, NYSE: SDS)

Overseas Markets

Overseas markets traded tumultuously today, as U.K. economic contraction in Q4 was the worst seen since 1980. GDP contracted by 1.5% in the fourth quarter, after a 0.6% drift in Q3. Applying the popular recession measuring stick of two consecutive contracting quarters, this marked the first recession in the U.K. since 1991. That news compounded upon yesterday's revelation that China's growth slipped to 6.8% in Q4, taking its full year rate to 9.0%. Growth fell short of what economists had foreseen, and raised panic levels in Asia.

Meanwhile, unimaginable speculation about pending bank nationalization across the globe is raising the level of investor concern the world over. Global corporate news releases have only offered more reason for worry. For instance, China's largest car maker declared today its 2008 profit would be more than halved due to slowing sales in China and South Korea. Also, a UBS analyst noted expectations for a 10% dividend decline across European firms (in 2008) and another 3% this year. Despite the heavy dose of reality, European markets flattened out by the close of trading.

Asia:

1. MSCI Asia APEX 50: -1.4%


2. Japan NIKKEI 225: -3.8%


3. Hong Kong Hang Seng: -0.6%


4. China CSI 300: -0.6%


5. India BSE SENSEX 30: -1.6%

Europe:

1. DJ Euro STOXX 50: -0.6%


2. UK FTSE 100: +0.01%


3. France CAC 40: -0.7%


4. Germany DAX: -1.0%

(Prices as of hour of publishing, which may not be the close)

Economic Events

There were no economic reports on today's schedule, but President Obama met with GOP lawmakers in order to win the opposing party's favor for his stimulus package. He is, of course, hearing suggestions and likely making concessions in order to do so. Republicans are concerned that the President's plan is too forward looking, and will not get people to work quickly enough. The GOP is pushing for more of the same tax refunds we saw last year.

Tax cuts are welcomed, we have to agree, but we would direct them to the lowest tax brackets where they might make meaningful impact. I'm not sure that people who remain fully employed necessarily need a tax cut, where that money could be spent to create jobs and bring long-term gains for the nation. I would like to see greater assistance to those forced to work part-time now and barely making it, and those unemployed who are seeking work (you know, but not bums like me). We (America, and actually me too) need to find money, and make proper use of it.

I for one would like to see smart government spending, and cuts in areas where we are wasting funds. I agree that investment in our long-term energy independence is important, and believe it will put people to work over the long run as well.

Sorry to offend Republicans (I'm now an Independent), but Obama's plan really incorporates a form of trickle-down economics, since he seeks to create jobs by promoting industry. Was that right there, blasphemous of me to say? Will I ever be welcome at another GOP shindig? We need an alternative energy infrastructure in America, something I've been pushing for for over eight years now! Many concerns could be remedied this way: energy independence could be gained; global warming quelled; Middle East tensions perhaps somewhat eased.

Through experience, I've come to see too many struggling citizens of countries in peril too often blame America for anything and everything wrong in their individual lives because of our demand for oil. I suggest that argument can be proven false through energy independence. Let me say that again in case you missed it! Too frequently, I find the case made against America that everything we do is driven by our oil interests. I'm not so naive to say oil has not swayed some political decisions here or there, and that it even lies behind a few supposedly noble political causes. But, the view outside the United States is too often overwhelmingly biased toward this argument.

In case you think I missed it... it being the whole Timothy Geithner thing, where he pissed off our most important trading partner and our most critical lender, China... well I didn't. The topic is just too big to discuss here. It'll have to have it's own place on our little blogosphere... stay tuned

Corporate News Drivers

Depressing corporate news dominated market direction this week. However, one bright spot came from Internet search giant Google (Nasdaq: GOOG). The tech leader reported earnings last evening, and it was one of very few companies to actually beat estimates. As a result, GOOG shares jumped $18 or 5.9%. Sales jumped 18%, and both revenue and profits exceeded estimates when excluding charges. That 18% sales increase represented a not insignificant $870 million dollars more than the year ago period.

General Electric (NYSE: GE) shares sank 10.8% through late afternoon trading, despite meeting analysts views. That said, meeting estimates meant posting 44% lower net income than the prior year period. Investors were not only concerned about the present though, as there's growing fear that GE could lose its coveted AAA credit rating and find itself forced to cut its dividend eventually... as the global economy sags upon it.

A sign of the times? Even though it had warned investors a month ago, Schlumberger (NYSE: SLB) still posted results that disappointed today, though only by a penny. What troubled shareholders most was management's warning that customers were likely to reduce spending in 2009. The shares, however, followed the price of oil, which soared 6.6%. SLB followed suit and rose 10%. You need to know why oil traded up, considering the economy is finished and the world sunken. Well, it seems traders finally started thinking about what we warned you would be the stabilizing factor for oil eventually, draws from storage. OPEC cuts are anticipated to start working shortly, and limited supply means higher pricing, even when the supply is held captive by an unruly consortium. Love all my Arab brothers... send money (or potatoes) for nice words though.

Are people trading down, and if they are, how far down? For instance, would motorcycle enthusiasts hit by financial strife ride bicycles instead? Judging by Harley Davidson's (NYSE: HOG) news today, they just might! Noting a slowdown in motorcycle sales, Harley is closing plants and laying off 1,100 employees. The company's fourth quarter earnings fell 60%, and its shares shed 7% today as a result.

The Wall Street Journal reported that Pfizer (NYSE: PFE) is in talks to buy rival drug maker Wyeth (NYSE: WYE). Wyeth shares rocketed higher 12.6%, and even Pfizer's shares edged up on the news, something atypical of acquirers in merger deals... unless special "synergies" exist. Speaking of SYNERGY! Did you see 30 Rock last night? "Never bad mouth synergy!"


Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Daily Business News - Jan-22-09

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.



On a daily basis, we provide a video or text summary of the day's business news and economic activity. You should see a video player before you, but if you do not, simply click on the ticket image below this text and you will be directed to our blog.

Today's market activity was greatly impacted by difficult corporate news from Microsoft (Nasdaq: MSFT), Intel (Nasdaq: INTC), Southwest Airlines (NYSE: LUV), Northrop Grumman (NYSE: NOC), eBay (Nasdaq: EBAY), Huntsman (NYSE: HUN) and several others. Most notably, Microsoft declared it would layoff 5K employees and refrain from providing EPS guidance. Needless to say, the outlook is suspect, and the present fell short of expectations as well. The day's economic news was sour also, as weekly jobless claims jumped and housing starts plummeted. The Dow fell 1.3%, while the Nasdaq dropped 2.8%.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, NYSE: QLD, NYSE: SDS, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK)

Money IS Available

By Michael Douville - Real Estate Market:

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

As a working broker, I interact daily with clients, and routinely scan for properties to purchase. I operate in "real time": using current closed sales; pending sales; and active list-prices for homes to assist in our buying decisions. This contrasts with "market models." Although these models act as great confirmation tools, the indicators may lag the present conditions by as much as 30 days. Statisticians, or the designers of these models, use accumulated data that is always slightly late in judging market activity.

(Article interests: NYSE: SRS, NYSE: URE, NYSE: IGR, NYSE: XIN, Nasdaq: RYHRX, Nasdaq: TRREX, NYSE: TOL, NYSE: HOV, NYSE: BZH, NYSE: BAC, NYSE: FRE, NYSE: FNM, NYSE: LEN, NYSE: PHM, NYSE: NVR, NYSE: GFA, NYSE: MDC, NYSE: CTX, NYSE: KBH, NYSE: RYL, NYSE: MTH, NYSE: XIN, NYSE: BHS, NYSE: SPF, NYSE: MHO, NYSE: OHB, NYSE: WCI, NYSE: NYX, AMEX: DIA, AMEX: SPY, AMEX: SDS, AMEX: DOG, AMEX: QLD, NYSE: QLD, NYSE: SDS, AMEX: VNQ, Nasdaq: QQQQ, Nasdaq: VGSIX, Nasdaq: AVTR)

November was a terrible month, but December which has not yet been reported, was an excellent month in hard hit California and Arizona. Further, the numbers espoused as indicators for the whole market, and actually represent statistics of homes that have sold. In a given month, it is very possible to see greater influence from one segment versus another represented in the data. The recent market turmoil has resulted in a lopsided sales chart, because the most recent quarterly sales were largely found in the lower price segment (entry to mid-level). These sales reflect a favorable financing environment and the affordability factor of those segments, thus distorting the actual total market value.

There is plenty of mortgage money available for qualified homebuyers. The pundits in the popular mediums of TV, Internet, and print have scared the public into believing there is no financing available, or at least that it is extremely difficult to obtain. While it is true mortgage underwriters require documentation to prove qualification, those who are truthful with their credentials can easily obtain a loan, while those who are untruthful cannot; that is as it should be.

The mortgage market is returning to normal and the healing process is underway. Conventional loan programs are plentiful for buyers with even less than 20% down payment, and are available with mortgage rates under 5% fixed for 30 years. Even buyers with as little as 5% down can find conventional programs fully underwritten by mortgage insurance companies with very reasonable rates - in the mid 5% for a 30-year fixed rate loan. Homes are much, much more affordable now than just 12-18 months ago. Investors have historically paid a higher premium because of the perceived additional risk; however, just this week, loans for non-owner occupied buyers were quoted at 5.1% - 30 year fixed rate with 25% down. These lower rates will support higher prices and allow for much greater cash flow.

In addition to conventional programs, the FHA has aggressively marketed their programs with their standard down payment requirement of 3%. The entire down payment can even be gifted by a family member. Further, FHA is fully insured, and there is flexibility for loan underwriters to accept buyers with written letters of explanation in order to mitigate credit and income issues. This further expands the ability to purchase homes, and is creating an opportunity to obtain property at these price levels to many thousands of additional buyers. With few new homes coming to market, absorption of the excess inventory is underway.

The area of greatest improvement has been in the non-conforming "Jumbo" loans. These loans are above the conforming limits and are generally not sold in the secondary markets of Fannie Mae or Freddie Mac. These high-end loans are typically held in individual lenders' portfolios and remain on the balance sheets. With the bankruptcy of Lehman Brothers and the loss of several large financial institutions, the price of "jumbo" loans skyrocketed to prohibitive levels of 8-9%. The upper price ranges, though not immune to foreclosures, are not as affected by the downward price pressure caused by anxious asset managers. However, the consequence of much higher rates has been little or no buyer interest in the upper price ranges; the selling activity has been limited, thus resulting in market stress and downward pressure on prices. In the last three weeks, rates have tumbled to the low 6% range. Down payment requirements are still in the 20%+ range, but the typical luxury homebuyer uses far more capital than the average first time buyer (a 30-60% down payment is not unusual).

The statistics used by many of the published Housing Indices have been relatively absent of expensive homes, due to the restrictive nature of recent credit markets. With normalization of credit, more high-end homes will be sold, greatly affecting the medium and median home price. Obviously, if 100 homes are sold at an average price of 300,000, and now four homes in the $1.5 million range are added to the mix, the indices' average prices will rise dramatically.

Has the loss of this range put pricing pressure on the overall market? Has the lack of sales for this huge segment of the market exaggerated the housing price decline? If so, then the addition of high-end homes will soon show rising prices nationally.

One segment of the real estate market still under pressure is the Commercial Market. Loans underwritten by lenders have much higher down payment requirements and much more stringent credit criteria, thus better insulating the lender to market declines such as we are experiencing now. The duration of commercial loans, however, currently places them at risk. Most commercial loans are written with a term of less than 10 years; at the end of the term, the building would have been sold or a new loan would be obtained. Lenders are still risk averse, and would much rather place 100 residential loans for $10 million than one commercial loan for the same amount.

Owners with appealing buildings, in good markets, and with solid credit are still adversely affected; those with loans nearing the end of the loan term are having difficulties obtaining reasonable funds. Developers and builders with construction loans to rollover are finding the same challenges. Although hard on the commercial developers, this is limiting the new inventory coming to market, and thus helping with the absorption of the excess.

"I expect that those who have been fortunate enough to buy in 2009, will reap the rewards in 24-36 months."

In conclusion, residential mortgage money is plentiful and at historically low rates. Buyers with limited savings can find many loan programs to finance homes that can be bought at huge discounts to recent prices. However, sanity has returned to underwriting: not only does a buyer need a down payment, but they must QUALIFY for the loan and PROVE it. The healing process is underway. There are lots of quality foreclosures affecting the market and creating huge opportunities for current buyers; however, there is a finite supply. In my opinion, the year 2009 will show rising prices with fewer foreclosures as the year unfolds, and eventually rising mortgage rates as well. Normal market conditions could return by 2010 and a rental housing shortage may even develop by 2011. I expect that those who have been fortunate enough to buy in 2009, will reap the rewards in 24-36 months.


Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Market Moving News - 01-21-09

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.



You should see a video player here covering the day's stock market news, but if you do not, then simply visit our site.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK, NYSE: QLD)

The Battle for Gaza

By Daniel Padovano: Global Affairs

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

The fighting in Gaza has dynamics that will lead to several changes in the Middle East. The seriousness and strength of the fighting is indicative of what both Hamas and Israel see as national survival.

(Article interests: Nasdaq: GULF, Nasdaq: TRAMX, Nasdaq: TRIAX, AMEX: ISL, Nasdaq: XISLX, AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK)

For Hamas, the struggle is for the organization's very survival both as a military and political organization. For Israel, the struggle has two sides: one is to secure the towns and cities of Southern Israel; and the second is to remove Hamas from power.

What happened was a major battle in an ongoing Palestinian civil war. In 2007, Hamas effectively removed the Gaza Strip from Fatah's control. Although there was some fighting then, Hamas rose to power through elections. However, Hamas's victory resulted in both an ideological and geographical split for the Palestinians.

Israel's "Operation Cast Lead" was both a defensive and offensive operation. The objectives, such as they are, were to 1) secure and protect southern Israel from rocket attack and 2) to create a climate that will make it impossible for Hamas to rule Gaza.

The achievement of these goals is yet to be seen. The relentless Israeli military action has resulted in a much reduced volume of rocket attacks, largely due to the destruction of rocket storage facilities and the deaths of Hamas fighters and their engineers.

The currently agreed to ceasefire, even if only for 10 days, would need to be predicated on some sort of observer force separating Gaza from Israel. Both Egypt and Israel have no desire to have observers on Egyptian or Israeli soil. Instead, the observers would be on the Palestinian territory within the Gaza Strip (Egypt would be fully responsible on its side of the border for the Rafah border crossing).

The international peacekeeping presence would physically deprive Hamas fighters of launch positions on the border proper. It is also very likely that some type of Hamas demobilization, including the destruction of rockets and launch platforms not previously destroyed will need to be accomplished. Also included would be the destruction of any remaining smuggling tunnels.

The second factor pointing towards a realization of the first goal is the scale of the physical damage to Gaza. The damage so far is estimated to be near, or above $2 billion. This includes wide damage to power and water supplies, the near total destruction of Palestinian government offices and some 25,000 homes destroyed. Over 250 smuggling tunnels have also been destroyed. The scale and scope of rebuilding will be epic to say the least. In addition to the physical destruction, Hamas lost several key people (both political and military); among them the man largely responsible for coordinating rocket attacks into Israel.

"Assuming that Hamas (as an institution) survives the current Battle for Gaza, it will be too broke and battered to effectively rule, let alone control Gaza."

Parts of the Gaza Strip are in ruins. The volume of destruction, economic dislocation and expense in rebuilding will be beyond Hamas's capability. Assuming that Hamas (as an institution) survives the current Battle for Gaza, it will be too broke and battered to effectively rule, let alone control Gaza. Signs of friction between Hamas units based in Gaza and those based in Syria have already surfaced. If this is true, and if Hamas's leadership is of differing opinions, then Hamas's leadership and administrative capabilities in Gaza may have already been seriously compromised. The strength and ability of its armed wing is also unknown and it may be a while before a post battle assessment can be concluded due to the devastation in the Gaza Strip.

If Hamas has been damaged enough, and becomes split, it may have no other option but to work with Fatah and whatever international organizations are able to operate in Gaza. The rebuilding effort should occupy most of the region's players for the next few years. (Saudi Arabia has already pledged $1 billion for reconstruction).

If Hamas does not survive, the ensuing power vacuum will probably become the ward of either the United Nations or Fatah (which controls the West Bank). That precludes a total breakdown and descent into total anarchy.

Removing Hamas from power (whether by outright removal or if it is weakened so badly that it has no choice but to work with Fatah) is something that would be favorable to Egypt, Israel and Fatah. Neighboring Jordan and Saudi Arabia would see this as a benefit as well.

For Fatah, the destruction or removal of Hamas could potentially result in Fatah regaining control of Gaza either on its own or through the assistance of whatever international observers are on the ground (post military action). Note that this may be a nominal handover. Hamas's 2007 victory over Fatah was due to the people's support of Hamas. It will be the residents of Gaza that will determine whether or not Fatah is able to rule in their name. Fatah and Israel will and must recognize this fact. Fatah and Israel need to keep in mind that even a weakened and split Hamas may yet remain in control of the Gaza Strip.

For Egypt and Israel, the removal (or destruction) of Hamas relieves both nations of having a fundamentalist and militant Islamic entity on their borders. Additionally, Israel would be relieved of constant missile attacks. The recent missile attacks have placed more Israeli cities and towns at risk than before. Hamas's Iranian supplied Fajr-3 rockets have increased Hamas' reach 25 miles beyond Gaza's borders, something that had not been attained by the Palestinians.

Egypt, Jordan and Saudi Arabia have their own reasons for seeing Hamas removed from power or destroyed. Largely, this is due to Iran's physical as well as ideological support for Hamas. Hama's fundamentalism, militancy and social activism are seen as destabilizing and threatening to their regimes. Many in these countries support Hamas. On its own, Hamas is an inspiration for many in the region.

Approximately 70% of Jordan's population is Palestinian and has ties to both parts of the Palestine National Authority (West Bank and Gaza Strip).

Saudi Arabia and Egypt also distrust Hamas's close ties to Iran. Saudi Arabia, in particular sees Iranian influence potentially surrounding it. To the east of Saudi Arabia is Iran proper, to the north is Iranian supported Hezbollah in Lebanon and on the northwest, Iranian supported Hamas in the Gaza Strip. Rumors have already leaked out that Iranian engineers were assisting Hamas fighters in improving and constructing rockets fired into Israel during this recent conflict, and they may still be in Gaza.

The ceasefire (of 10 days duration) may be the beginning of a shift in power dynamics in the Middle East. If the reports come to fruition, it would signal several things: 1) that Hamas went as far as possible and has come close to losing, 2) that Israel remains the dominant power broker in the region and 3) that Israel is able to prevail over an armed guerrilla force (this exorcises the result of the 2006 war in Lebanon against Hezbollah).

If the ceasefire holds, Gaza may very well find its way back into Fatah's control. Whether or not this happens will be dependent on the people of Gaza and on Israel. Regardless of Fatah's desires, it is the people of Gaza who will decide whether or not they will recognize and allow Fatah to assume control and function.

The same ceasefire would also see the placement of another international peace keeping force in the Middle East. Presumably this one would have more authority to act than its UNDOF, UNIFIL and UNTSO counterparts. Current arrangements will most likely include either a European Union and American, or a NATO force under American command. It is also possible (but in no way confirmed) that Turkey may be asked to coordinate whatever Gaza Observer Force comes into being. Turkey, was until 1917, the ruling power in what is today Israel and Palestine.


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President Barack Obama - The Moment

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The moment of President Barack Obama's swearing in as America's 44th president and his inaugural address are provided here by Wall Street Greek and courtesy of CSPAN. If you do not see the video player, simply click on the ticket here to view the video at our website:


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Week Ahead: New Sheriff in Town

By The Greek: Economy & Markets:

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

There's a new sheriff in town! This holiday shortened week will be dominated by the entrance of one Barack Obama, the 44th President of the United States of America. His inauguration, one day after the nation honors one of its greatest African-American shining stars, Martin Luther King Jr., is simply uncanny. Talk about dreams realized, so many are wrapped up in one today...

(Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK)

The Week Ahead

While the week itself is a short one that is light on economic data, the popular press will flood the wires just the same. Media will speculate about the possibilities and limitations on our new leader. There will be high hopes for the future and sober concern for the present. Almost immediately, President Obama's stimulus plan will take center stage.

Monday

U.S. markets were closed on Monday for Martin Luther King, Jr. Day. We honored his memory here by highlighting his famous "I Have a Dream" speech. Overseas, discussions at the Arab Economic Summit in Kuwait were distracted by events in Gaza, though Israel has vowed to be out before Obama is sworn in. In Paris, post last week's rate cut, ECB President Trichet gave a keynote speech.

Despite the holiday, a few companies reported earnings on Monday, including Northrop Grumman (NYSE: NOC), Schwab (Charles) (Nasdaq: SCHW), First Defiance Financial (Nasdaq: FDEF), H.B. Fuller (NYSE: FUL), Logitech Int'l (Nasdaq: LOGI), S&T Bancorp (Nasdaq: STBA) and Washington Federal (Nasdaq: WFSL).

Tuesday

Martin Luther King, Jr.'s dream is realized on Tuesday. That is clear to me, because I don't believe there could be a greater testament to the equality of the races within the United States once the 44th president is sworn in. Barack Obama will be the first American of African descent to lead our nation, and the day's events should be quite memorable. It'll be near impossible to tear me away from the TV set anyway.

The State Street Investor Confidence Index is due for release at 10:00 a.m. State Street (NYSE: STT), looks at the composition of investment portfolios in order to assess risk taking. The measurement is taken from the Wednesday before the report's release, so it is current. We might have anticipated that investors would be moving into risk to start the year, especially out of government bonds and into corporate debt. However, given all the sour news sprouting up on Main Street since about January 3rd, risk aversion remains prevalent for now.

The Bank of Canada has a monetary policy meeting scheduled for Tuesday, and it is expected to cut rates by 50 basis points. Fifty seems to be the standard these days, given the actions of the BOE and ECB. Looks like we set the standard destination though... zero. The rest of the world's central banks are quickly approaching it.

China is scheduled to report on fourth quarter GDP growth on Tuesday. Barron's notes the economic expansion rate may slip to 7%, marking the nation's slowest annual pace of growth in nine years.

Earnings season picks up a bit on Tuesday with news from Parker-Hannifin (NYSE: PH), Precision Castparts (NYSE: PCP), Forest Labs (NYSE: FRX), CSX (NYSE: CSX), Johnson & Johnson (NYSE: JNJ), IBM (NYSE: IBM), State Street (NYSE: STT), BancFirst (Nasdaq: BANF), Candela (Nasdaq: CLZR), Capital Bank (Nasdaq: CBKN), Cree (Nasdaq: CREE), Dearborn Bancorp (Nasdaq: DEAR), Dr. Reddy's Labs (NYSE: RDY), Fastenal (Nasdaq: FAST), Fulton Financial (Nasdaq: FULT), Hancock Holding (Nasdaq: HBHC), IberiaBank (Nasdaq: IBKC), Jefferies (NYSE: JEF), Lee Enterprises (NYSE: LEE), MGIC Investment (NYSE: MTG), New Oriental Education & Technology (NYSE: EDU), OMNOVA Solutions (NYSE: OMN), Pacific Continental Corp. (Nasdaq: PCBK), Packaging Corp. of America (NYSE: PKG), PetMed Express (Nasdaq: PETS), Pinnacle Financial Partners (Nasdaq: PNFP), Pulaski Financial (Nasdaq: PULB), Regions Financial (NYSE: RF), Renasant Corp. (Nasdaq: RNST), Suncor Energy (NYSE: SU), Supertex (Nasdaq: SUPX), TD Ameritrade (Nasdaq: AMTD), VIST Financial (Nasdaq: VIST), West Coast Bancorp (Nasdaq: WCBO), Westell Technologies (Nasdaq: WSTL) and Woodward (Nasdaq: WGOV).

Wednesday

Randall Kroszner resigns from the Federal Reserve Board of Governors, but Tim Geithner might not be leaving just yet, given his recent tax disclosure. A similar tax issue kept at least one recent appointee from taking his seat at Homeland Security, so why would Geithner get a pass to the Treasury? That will be the question of the day, as he faces hearings before the Senate Finance Committee. After all, he's replacing a guy, in Hank Paulson, who has been scrutinized for Wall Street loyalties and straying from his word. So, you can expect Congress, which is still bearing its TARP scar, will be especially mindful of who replaces Hank.

The ICSC-Goldman Weekly Same-Store Sales Report will be published on Wednesday this week due to the holiday. Sales fell dramatically last week, down 2.2% year-to-year. It was the first full week absent holiday shopping stimulant, and we expect more of the same shopping softness this week. The Mortgage Bankers Association's Purchase Applications Index might be reported on Thursday this week instead of Wednesday. Check back in here later in the week for a more solid schedule as we insure the date. Mortgage activity has benefited for the most part from long-rate contraction, but housing starts have remained scarce nonetheless.

Alternative energy looks to benefit from the Obama plan, and a group of solar energy folks are set to meet just in time in Las Vegas on Wednesday. At 1:00 p.m., look for the National Association of Home Builders to report its Housing Market Index. In December, the index stuck at the record low set in November, a reading of just 9. Overseas, the Bank of England will release the minutes of its January meeting.

Wednesday's earnings list includes Abbott Labs (NYSE: ABT), United Technologies (NYSE: UTX), Progressive (NYSE: PGR), Burlington Northern (NYSE: BNI), Hudson City Bancorp (Nasdaq: HCBK), eBay (Nasdaq: EBAY), Northern Trust (Nasdaq: NTRS), Air Products & Chemicals (NYSE: APD), Apple Inc. (Nasdaq: AAPL), U.S. Bancorp (NYSE: USB), Action Semiconductor (Nasdaq: ACTS), ADTRAN (Nasdaq: ADTN), Allegheny Technologies (NYSE: ATI), AllianceBernstein (NYSE: AB), AltiGen Communications (Nasdaq: ATGN), Amdocs Limited (NYSE: DOX), AMR Corp. (NYSE: AMR), BlackRock (NYSE: BLK), Breeze-Eastern (AMEX: BZC), Celadon (Nasdaq: CLDN), Charlotte Russe (Nasdaq: CHIC), CNH Global (NYSE: CNH), Coach (NYSE: COH), Community Trust (Nasdaq: CTBI), F5 Networks (Nasdaq: FFIV), Hexcel (NYSE: HXL), iGate (Nasdaq: IGTE), II-VI Inc. (Nasdaq: IIVI), Kinder Morgan Energy Partners (NYSE: KMP), LaBranche & Co. (NYSE: LAB), McMoRan Exploration (NYSE: MMR), MTS Systems (Nasdaq: MTSC), Noble Corp. (NYSE: NE), NV Energy (NYSE: NVE), NVE Corp. (Nasdaq: NVEC), Polycom Inc. (Nasdaq: PLCM), Popular (Nasdaq: BPOP), Raymond James (NYSE: RJF), Rurban Financial (Nasdaq: RBNF), Sanmina-SCI (Nasdaq: SANM), Sara Lee (NYSE: SLE), Seagate Technology (NYSE: STX), SLM Corp. (NYSE: SLM), Somanetics (Nasdaq: SMTS), UAL Corp. (Nasdaq: UAUA) and Wipro Limited (NYSE: WIT).

Thursday

December's Housing Starts will be reported bright and early at 8:30. Bloomberg's consensus of economists forecasts an annual pace of 615,000 units, compared to 625,000 reported in November. Last month's reading sat 47% lower than the November 2007 check. Hope springs eternal for a seasonal uptick once the flowers sprout and mortgage rates dig in even deeper. Here's to hoping anyway...

Weekly Initial Jobless Claims bounced right back up above 500K in the first post holiday reading last week. Bloomberg's group of economists is looking for it to spike much higher this week, to 610K, from 524K last week. We have to agree. Post Christmas, warm hearts are freezing over and retailers are reporting trouble. Americans are saving again (read stuffing money under mattresses), banks are hoarding cash and businesses are starving. Thus, unemployment is still rising. But, never fear, here comes Obama and his huge fiscal stimulus plan.

The EIA Petroleum Status Report noted increased crude oil inventory last week (+1.2 million barrels), as demand declines faster than OPEC's so-called production cuts. One has to wonder how closely the consortium, which is notorious for cheating, is keeping to its quotas. Without draws from inventory, or war with Iran, we can't see oil stopping its slide lower yet. However, it should not be long now for both... Meanwhile, the Green Power Conferences offers a discussion on carbon markets in New York on Thursday.

Overseas, look for the Bank of Japan to set monetary policy as it closes out its regular meeting. The BOJ doesn't have much room to work with though.

Barron's writes Citigroup (NYSE: C) might formally announce its bank split up on Thursday. The day's heavy earnings schedule includes Union Pacific (NYSE: UNP), Exelon (NYSE: EXC), Capital One Financial (NYSE: COF), Sherwin-Williams (NYSE: SHW), Google (Nasdaq: GOOG), Lockheed Martin (NYSE: LMT), UnitedHealth (NYSE: UNH), Consolidated Edison (NYSE: ED), Microsoft (Nasdaq: MSFT), SunTrust Banks (NYSE: STI), BB&T (NYSE: BBT), Baxter Int'l (NYSE: BAX), Bank of NY Mellon (NYSE: BK), A.O. Smith (NYSE: AOS), Advanced Micro Devices (NYSE: AMD), Amcore Financial (Nasdaq: AMFI), American River Bankshares (Nasdaq: AMRB), AmeriSourceBergen (NYSE: ABC), Associated Banc-Corp (Nasdaq: ASBC), AU Optronics (NYSE: AUO), Avnet (NYSE: AVT), AVX Corp. (NYSE: AVX), BancorpSouth (NYSE: BXS), Bottomline Technologies (Nasdaq: EPAY), Brinker Int'l (NYSE: EAT), Cabot Microelectronics (Nasdaq: CCMP), Canadian National Railway (NYSE: CNI), CIT Group (NYSE: CIT), Citizens Banking (Nasdaq: CRBC), City National (NYSE: CYN), Columbus McKinnon (Nasdaq: CMCO), Comerica Inc. (NYSE: CMA), Community Bank System (NYSE: CBU), Cubest Pharmaceuticals (Nasdaq: CBST), Cypress Semiconductor (NYSE: CY), Deluxe (NYSE: DLX), Digi Int'l (Nasdaq: DGII), EZCORP (Nasdaq: EZPW), Federated Investors (NYSE: FII), Fifth Third Bancorp (Nasdaq: FITB), First Commonwealth Financial (NYSE: FCF), First Financial Bankshares (Nasdaq: FFIN), First Financial Holdings (Nasdaq: FFCH), Great Southern Bancorp (Nasdaq: GSBC), Huntington Bancshares (Nasdaq: HBAN), Imation (NYSE: IMN), Interactive Brokers (Nasdaq: IBKR), Int'l Game Technologies (NYSE: IGT), Intuitive Surgical (Nasdaq: ISRG), ITT Educational Services (NYSE: ESI), J&J Snack Foods (Nasdaq: JJSF), Janus Capital (NYSE: JNS), Kelly Services (Nasdaq: KELYA), KeyCorp (NYSE: KEY), Knight Capital (Nasdaq: NITE), LSI Industries (Nasdaq: LYTS), M&T Bank (NYSE: MTB), Matthews Int'l (Nasdaq: MATW), MEMC Electronic Materials (NYSE: WFR), Meredith Corp. (NYSE: MDP), Microsemi Corp. (Nasdaq: MSCC), Monro Muffler (Nasdaq: MNRO), NetScout Systems (Nasdaq: NTCT), Nokia (NYSE: NOK), NSTAR (NYSE: NST), OceanFirst Fin'l (Nasdaq: OCFC), Old Republic Int'l (NYSE: ORI), People's United Fin'l (Nasdaq: PBCT), Potash Corp. (NYSE: POT), ScanSource (Nasdaq: SCSC), Southwest Airlines (NYSE: LUV), SVB Fin'l (Nasdaq: SIVB), Synaptics (Nasdaq: SYNA), Synovus (NYSE: SNV), Taiwan Semi (NYSE: TSM), TCF Fin'l (NYSE: TCB), Technitrol (NYSE: TNL), Teledyne (NYSE: TDY), Tempur Pedic (NYSE: TPX), Twin Disc (Nasdaq: TWIN), UCBH Holdings (Nasdaq: UCBH), Valley National Bancorp (NYSE: VLY), Zoll Medical (Nasdaq: ZOLL) and a few others.

Friday

The Bank of Japan will follow up its policy statement with its monthly report on Friday. Because of the holiday, look also for the EIA Natural Gas Report on Friday this week instead of Thursday.

Darden Restaurants (NYSE: DRI) will hold its annual investor conference today. The earnings schedule includes Xerox (NYSE: XRX), Schlumberger (NYSE: SLB), General Electric (NYSE: GE), China BAK Battery (Nasdaq: CBAK), Dime Community Bancshares (Nasdaq: DCOM), GATX Corp. (NYSE: GMT), Harley-Davidson (NYSE: HOG), KT Corp. (NYSE: KTC), Old Second Bancorp (Nasdaq: OSBC), Sify Ltd. (Nasdaq: SIFY), United Community Banks (Nasdaq: UCBI) and Webster Fin'l (NYSE: WBS).

Please see our disclosures at the Wall Street Greek website and author bio pages found there.