Wall Street Greek: Welcome Back Greek America!

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Welcome Back Greek America!

Greek American economist analyst strategist philosopher

August is a very special month for a great many Greek Americans. If you are reading this passionate Greek American publication, you very likely already know why. It's about the fulfillment of a dream that renews itself each year.

The fantasy is born from a feeling that strikes most of us sometime after Christmas. As naturally as flocks of exotic birds migrate each spring, we Greeks feel the burning desire to return to the home of our ancestors. Memories of the motherland bombard us with warm visions of pristine beaches and tables full of our favorite foods that satisfy our souls as equally as our stomachs.

A burning desire strikes us even before the flowers bloom; we must purchase our airplane ticket - destination Athena. In so doing, we realize we are securing the dream; we are forcing its realization. Greece is our medicine, you see; it's how we recharge our batteries to make it through the work filled toil of the remainder of our year. So as you return now renewed, we welcome you back Greek America! You are looking well.

By this time, most of you have returned from your charismatic villages and warm family reunions, and are already contemplating the "back to school" necessities of your own families. Your batteries are fully charged, and you are ready to reinvent your workplace. Hold on to that feeling, because it is a beautiful joy that warms all those around you.

It's probable that your return has also rekindled your interest in the economic situation and the stock market recovery. Oh, and we take it you have heard about the raging health care debate, where battles are being waged on many a town hall floor. While you may have been following these things via your restful balcony laptop interludes or Internet Café get-aways, you were likely only half attentive, given all the beautiful people passing by. So, we thought we might recap the month for you here, and help you back on your economic horse.

Lucky for you, a great portion of other Americans also take off in August, driving light trading volume and lazy days. Still, economic data, and market trends matter just the same. The Dow Jones Industrials Index rose 3.5% through August, while the broader S&P 500 climbed 3.6% and tech-heavy Nasdaq gained only 1.5%. The year's recovery rise has taken the Dow 44% higher year-to-date through the close of trading on September 4, 2009.

Stock market recovery has preceded economic recovery, though it's been anticipatory of it. In so doing, it has followed near perfectly its historical trend of leading the economy by six months or so. Economic "green shoots" began sprouting even before you left for Greece, and have continued to offer hope. Real estate prices have found base, and have even improved generally speaking over recent months, as have the pace of home sales, though ever so slightly. The manufacturing sector has also found safe footing, thanks to government intervention and stimulus like "cash for clunkers." Meanwhile, consumer and investor sentiment, as well as the flow of funds into US assets have improved, and the dollar even found strength for a bit.

However… over the past week, and following our warning at Wall Street Greek, the market began to reconsider certain excesses. We wrote that "Flighty Financials Threaten Stock Market Correction," and stocks swiftly followed suit, led lower by those aforementioned financial sector speculatives. The Dow gave back 1.1% last week, as stocks like AIG (NYSE: AIG), Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) returned as much as 20% of their value. What troubles the market even more, is the burden of still rising, and rather hefty, unemployment, which was noted last week up three-tenths of a percent, to 9.7%. So, welcome back Greek America, but the party is over.