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:

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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...

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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).

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Martin Luther King, Jr.

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Today is a special day for the whole of humanity. It is the day we remember the life of a man who testified for the equality of mankind. When we had strayed, this man subjected himself to persecution in order to remind us that all men are created equal. The day, the man and his life's accomplishments symbolize all that is just and true. This spiritual leader will forever inspire men to fight for righteousness in the face of impossible adversity. He lived the life we are all meant to live, a saint's life. What he accomplished with love, no army ever took by force. Today we honor one of the greatest men to ever have walked the earth, Martin Luther King, Jr.

Here for your viewing, we've placed the video of a shining moment in a brilliant life, MLK's heart-warming, hopeful and God pleasing "I Have a Dream" speech. If you do not see the video from your vantage point, please click here: MARTIN LUTHER KING - I HAVE A DREAM


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Inaugural Addresses in American History

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If you do not see the video player from your vantage point, please click through the link here to find: INAUGURAL ADDRESSES IN AMERICAN HISTORY


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Wall Street Week - Hope for Miracles

By Markos N. Kaminis - Economy & Markets:

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Last week's "Miracle on the Hudson" was perfectly timed for a market that needed a reason to believe. The Dow Jones Industrials Index put in another losing week, falling 3.7% this time. Stocks started the period hopeful that despite the prior week's sad holiday shopping tally, maybe a fresh slate would offer reason for rise.

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The week marked the official start of earnings season with the traditional report of Alcoa (NYSE: AA). However, the aluminum king was downgraded by a Deutsche Bank analyst even before it reported its $1.19 billion loss on Monday. Harsh corporate news dominated the week from start to finish. Citigroup (NYSE: C) awoke to selling pressure, as investors worried about its longevity as a going concern. By mid-week, Citi had sold half its stake in its Smith Barney brokerage unit to Morgan Stanley (NYSE: MS). In closing, Citi reported an $8.3 billion loss and broke the company up into two pieces.

Meanwhile, banks on the other side of the pond were not doing much better. HSBC (NYSE: HBC) shares were bombarded when a Morgan Stanley analyst expressed his view that the company might need to raise about $30 billion dollars. Investors were not enthused by the prospect of a dividend cut and/or share dilution. Meanwhile, Deutsche Bank (NYSE: DB) prepared to lose 4.8 billion euro in the fourth quarter, setting it up to report its first full year loss in five decades. A Luxembourg judge ordered UBS to return Madoff invested funds to a client who had requested their return before Bernard was indicted. Tough luck for UBS, because a mere mention within the same sentence as the pariah is harmful to brand value.

The week's trouble was not limited to banks though. Apple Incorporated's (Nasdaq: AAPL) iconic leader Steve Jobs was forced to take a leave of absence due to the increased complexity of his illness. By Friday, rumors had spread regarding the possibility that Jobs might need a liver transplant. Apple's shareholders are certainly concerned about the man for many reasons, one of which is the valuation premium the shares have commanded in comparison to peers like Microsoft (Nasdaq: MSFT). Jobs' value added leadership and strategic foresight have been accounted for within Apple's share price, and the uncertain outlook immediately put that premium at risk. Finally, Intel (Nasdaq: INTC) reported revenue expectations for Q1 that were not outside of analysts' range. Thus, after warning investors a week earlier, a relief rally ensued on Friday.

On the economic front, Tuesday's ICSC-Goldman Weekly Sales Report, measuring the first full week lacking holiday shopping stimulant in some time, showed same-store sales collapsed 2.2% year-to-year. Wednesday confirmed the hard times ahead for retail, as December's Retail Sales were reported down 2.7%, a much steeper fall than forecast by economists.

Weekly Jobless Claims, also measuring the post holiday dead zone, rose again toward recent high water marks. Claims at 524K, measured far above the prior period's 470K (revised). The week's regional manufacturing surveys from the Philly and New York areas showed ongoing sector concern. Adding to trading tumult, sentiment measures from RBC and Reuters/University of Michigan sat near six-year and half-century lows, respectively.

The Consumer Price Index (CPI) offered some relief on Friday. The core figure, which excludes volatile food and energy, showed prices unchanged in December, versus expectations for a modest increase. This was welcomed news, as it seems to have left the Fed unhampered by inflation for now. The ECB concurred as it cut its target interest rate by 50 basis points on Thursday. Europe received more U.S. sourced troubles this week though, as S&P cut its sovereign rating on Greece by one notch, to A-. S&P also recently warned Greece's European neighbors Spain, Portugal and Ireland of possible rating cuts.

Hope sprouted when President-Elect Obama sought and later received the second portion of the TARP funding. On Obama's petition, President Bush requested it for him and a skeptical Senate cleared the way for its release.

The week ahead also offers hope. The survival of an airplane and all its passengers on Thursday afternoon, despite its complete loss of engine power, served to renew belief in miracles. This wonder was well-timed, as President-Elect Obama becomes President Obama on Tuesday. With him ride the hopes of not only the nation, but perhaps the world, and it seems another miracle might be needed to save it.


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Today's Economic Reports Analysis

By The Greek - Economy & Markets:

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Today's economic reports did not really offer much revelation, but the information conveyed is interesting just the same. The day brought data on consumer prices, industrial production, consumer sentiment and long-term securities trade.

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Consumer Price Index (CPI) - December
Today's report on December's CPI offered good news. Core prices, or those excluding volatile food and energy, were unchanged, versus expectations for a 0.1% increase. Prices fell almost across the board, excluding medical care and education & communication segments. These were offset by decreases in the prices of lodging away from home, airline fares, new and used motor vehicles, apparel and recreation. Perhaps surprising to you, rents rose, but with home ownership under pressure, rental demand may temporarily benefit in reasonably priced segments. Eventually though, we would expect intensifying price sensitivity to pressure the rental market.

Headline CPI declined 0.7% in December, against the consensus forecast for a 0.9% drop. Energy was the key component to the move, as those prices fell 8.3%, driven by a 17.2% decrease in gasoline. Despite rising prices on the producer level, consumer prices for food goods decreased fractionally.

The 12-month period comparison produced a 0.1% increase, the smallest since 1954's price decline. However, the meaningful rise of the year before (4.1%), largely attributed to volatile energy and commodity prices, offers defining color to the numbers. It's also interesting that most of the year's defining price action came in the last quarter. In any event, inflation seems in hiding for now, but we should be careful not to let the economic enemy sneak up behind us.

Industrial Production Report - December
As expected, industrial production fell and capacity utilization eased. However, the degree of deterioration was not correctly foreseen. Production fell 2.0%, versus the expert view for a 1.0% drop. Meanwhile, Capacity Utilization contracted to 73.6%, compared against an anticipated 74.6% reading.

Despite the degree of demise, this report should not come as any surprise. The manufacturing sector, especially auto and related businesses, is contracting now at an intense pace. Production at mines, which is also measured by the report, is also down. December's overall production levels were off 7.8% from a year ago.

Treasury International Capital - November
The Treasury International Capital Report, or TIC, shows the flow of funds into or out of long-term securities between the U.S. and international investors. The bad news is that foreigners are selling off American securities on net, $56 billion worth in fact. The sad news is that Americans are selling off foreign securities too ($34.3 billion), leaving the TIC at negative $21.7 billion.

Even so, the $56 billion accounted for just 1.8% of the total value of all foreigners' transactions in U.S. securities in November. So, even though it looks like a big scary number, and like foreigners are abandoning us, it's all relative to a much larger transaction count. What some of you might find troubling though is that "official institutions" (vs. private investors) sold off a significant bit of Treasury Bonds and Notes in December, though again a relatively insignificant amount. Still, it's the monthly difference that bothers me.

Look at the numbers:

Nov: -$26.2 Billion
Oct: -$1.1 Billion
Sep: +$4.9 Billion
Aug: +$4.8 Billion

Does this signal the beginnings of dollar destruction? Recall, China and oil producing nations have been funding our Treasury budget irresponsibility, and should they stop doing so, we may find ourselves unable to fund ongoing budget needs. Nothing like force feeding responsibility, but what happens when social security and medicare turn from surplus to deficit, and then to monster deficit. How will we fund anything? What will the dollar be worth then? Buy gold for long-term holdings if you are as worried about this as I am.

Reuters/Michigan Sentiment
Today's Reuters/University of Michigan Consumer Sentiment Survey showed improvement, but not meaningfully so. January's preliminary measure read 61.9, versus 60.1 at last check, and against consensus expectations for 59.0. My father has a great saying that perfectly describes the insignificance of this data. He says, "when you are already soaking wet, a little more water is of no concern." This reading is still too close to the measure's half-century low mark. We're drowning in it folks!

I found it telling that the expectations measure was significantly lower than the current conditions component of the index. The sentiment reading says consumers are dug in deep for the long haul. Despite cheap gasoline and sales galore across the retail space, consumers are more concerned about their future security than they are about living it up now.

Don't look toward Obama to change that either. In fact, he would be wise to set the bar low and pound home the fact that times are really tough now. By doing so, he would have nowhere to go but up in public opinion polls, as the economy improves even ever so slightly. He might remove himself from any future blame as well, and it would increase his already slim chances of reelection in my opinion.


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Airplane Crash Lands in Hudson River

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BREAKING NEWS: U.S. Airways plane makes emergency landing in the Hudson River.

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U.S. Airways Flight 1549 on its way to Charlotte, North Carolina from La Guardia Airport in New York City, experienced a "double bird hit" as described by the pilot. Apparently both engines were damaged, but the pilot hoped to make his way to Teterboro Airport in New Jersey or to return to La Guardia. As fate would have it, he soon realized he would have to attempt a water landing in the Hudson River. He warned passengers, "brace for impact" and before they knew it the plane was afloat atop the river.

The passengers made their way onto the wing of the Airbus 320 aircraft, as it miraculously stayed afloat. A passenger told reporters, "I think everyone made it off." Early reports are that "everyone" included some 155 passengers. U.S. Coast Guard units that regularly patrol the area responded quickly and a ferry that was nearby dropped life jackets into the water.

Miracles do happen!

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Today's Business News - Jan-15-09

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.

Today's business news highlights: the ECB's rate cut; heavy post holidays job cuts; Apple's Jobs' takes sick leave; PPI shows core prices sticky; RBC sentiment measure sours; NY & Philly area manufacturing sluggish; 2008 foreclosure count; JP Morgan sees loss; Bank of America may need more money; UBS ordered to return Madoff funds; PMs of Ukraine and Russia plan meeting; natural gas storage data; Japan posts tough economic data.

(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)

Overseas Markets

Asia was roiled today by a weak economic report issued in Japan. Economists' expectations were horribly off, as Japanese machine orders dropped the most in 21 years. November orders contracted 16.2% on a monthly basis, offering statistical confirmation of anecdotal signs seen from Sony (NYSE: SNE), Panasonic (NYSE: PC), Toyota (NYSE: TM) and Nissan (Nasdaq: NSANY). The news affected the entirety of Asia, as Japan remains the second most important economy in the world.

Asia:

1. MSCI Asia APEX 50: -4.72%


2. Japan NIKKEI 225: -4.92%


3. Hong Kong Hang Seng: -3.37%


4. China CSI 300: -0.02%


5. India BSE SENSEX 30: -3.46%

Europe:

1. DJ Euro STOXX 50: -1.77%


2. UK FTSE 100: -1.42%


3. France CAC 40: -1.84%


4. Germany DAX: -1.94%

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

Economic Data Analysis

Weekly Initial Jobless Claims
In this week's "Week Ahead," we speculated that recent weekly jobless claims improvement were very likely affected by the holiday season (read warm hearts). This morning, the new claims report for the week ended January 10, which represents the first full week post holidays, showed new claims filers jumped back up to 524K. This week's tally exceeded both the consensus view for 500K and the prior week's revised sum of 470K. Still, due to recently lower results, the four-week moving average declined by 8,000, to 518.5K.

The highest insured unemployment rates in the week ending Dec. 27 were in Oregon (7.4%), Michigan (6.6%), Idaho (6.3%), Wisconsin (6.0%), South Carolina (5.4%), Arkansas (5.3%), Nevada (5.2%), Pennsylvania (5.2%), Indiana (5.1%), and Montana (5.1%). The largest increases in initial claims for the week ending Jan. 3 were in New York (+24,465), North Carolina (+19,749), Georgia (+18,308), South Carolina (+14,905), and Virginia (+7,362), while the largest decreases were in California (-14,796), Kansas (-13,313), Michigan (-11,956), Illinois (-9,727), and Ohio (-7,499).

We expect the weeks to come will take January and February layoffs above those seen in December. The auto sector, which is now under the gun to save cash, will likely lead job consolidators again this month, but we expect the retail industry to join construction as close runners up. In February, we expect a mass purging of retail jobs to begin.

Producer Price Index (PPI)
December's Headline PPI followed anticipated trend as it declined by 1.9%, but it missed the extent of expected decline slightly as consensus sat at 2.0%. However, Core Prices, or those excluding food and energy goods, were expected to rise 0.1%, but increased 0.2% month-to-month. The message we take out of the report is that prices are generally sticking close to the high water marks set when the commodity bubble pushed all things higher. This month's price change on the headline figure was still greatly influenced by energy price ease, which measured -9.3% in December.

NY & Philly Manufacturing
Both the Philly and New York area manufacturing environments improved based on this month's measurement, but with both index readings stuck in negative territory, the reports offered little good news for current activity. The Empire State Manufacturing Survey came in at negative 22.2 this month, improved from negative 25.8 in December. The Philly Fed Survey's Diffusion Index of Current Activity improved this month to -24.3, from -36.1 in December. Both market reports noted generally depressing sentiment among participants. While both surveys produced poor employment expectations for the months ahead and lower prices paid for production inputs and offered for their own products, they differed in that the Philly region query showed some hope for the future. Generally though, one should not take these reports as good news.

Foreclosure Tally
RealtyTrac produced its 2008 U.S. Foreclosure Market Report today, noting an 81% increase in foreclosures. Nearly 3.2 million filings were counted on over 2.3 million properties. The real estate information tracking and services firm produces a report each month, and foreclosure filings have been improving on a monthly basis until December. Fourth quarter activity actually declined versus Q3, but December raised concern as activity increased 17% over November. Some 1.84% of all U.S. housing units received at least one foreclosure filing last year, up from 1.03% in 2007. Nevada, Florida and Arizona posted the highest foreclosure rates nationwide.

RBC Cash Index
RBC's sentiment measure set a six-year low, reaching a mark of 13.3, versus December's 15.3. For those who find a ray of sunlight even in a hurricane, the reports' Expectations Index improved in January to -11.3, from -21.2. Negative still sucks, but the report's producers attribute it to hope tied to the entry of the Obama Administration.

Corporate News Drivers

Apple's Jobs Takes Leave
Last evening, Apple Inc. (Nasdaq: AAPL) CEO Steve Jobs sent a letter out to the company's employees. Jobs indicated he would take a medical leave of absence due to new developments regarding his illness. His leave is anticipated to last until July, leaving Tim Cook in charge of day to day operations. Jobs stated he would remain involved in strategic decision making despite his time off.

Apple trades at a valuation premium to peers like Microsoft (Nasdaq: MSFT), and much of that is rightly attributed to the value-add Steve Jobs presents. Thus, today, the stock is off 4.8% at the hour of publishing.

J.P. Morgan Reports Loss
J.P. Morgan (NYSE: JPM) issued a news release this morning, stating the bank expected to post a 76% lower profit in Q4. This anticipation included a one-time gain and gains related to risk management efforts (perhaps hedging activity). Excluding those gains, the company noted it would lose about $0.28 per share. JPM was fractionally higher through midday, as the consensus estimate was for neither loss nor gain. Analysts might incorporate "risk management efforts" into an investment banks' operating results, but now that JPM is a bank we might argue these gains shouldn't be included. Thus, JPM's results should perhaps present a disappointment to the Street today. Even so, the general feeling among investors is that JPM has offered better performance than peers in navigating this tough environment, and financial sector allocated capital has to flow somewhere.

Bank of America Needs Capital
A source in the know, though unknown to us, indicated that Bank of America (NYSE: BAC) is facing a tough Q4 thanks to its Merrill Lynch acquisition. As a result, the company has reportedly been speaking with the Treasury Department since December. While the first set of TARP funds are gone, new fund distribution is under debate, and BAC looks at the front of the line for another handout.

The TARP debate looks tough at the moment, so without a clear plan for new capital usage and oversight, and penalty risk for Secretary-Nominee Geithner, we can't see it Congressional approval. If BAC is desperate, the shares may be in for tough going in the near-term, and we would avoid them. BAC is smartly down 20% today.

UBS Ordered to Return Madoff Dough
Contrary to expectations on the ground in the U.S., UBS (NYSE: UBS) has been ordered by a Luxembourg court to turn over 30 million euros invested in a UBS fund that had invested it in Bernie Madoff's ponzi portfolio. The investor of those funds had requested them in November, before Bernard was arrested, and never received them. While any profits garnered are expected to be demanded returned by U.S. or European courts, we suppose this investor has a case for now. However, investors who lost principal will likely be repaid some fractional portion by false profits paid out. This is getting messy...

Today's Earnings Reports
Thursday's earnings schedule includes Amphenol (NYSE: APH), AEP Industries (Nasdaq: AEPI), ASML Holdings (Nasdaq: ASML), Bank of the Ozarks (Nasdaq: OZRK), Briggs & Stratton (NYSE: BGG), Capital Product Partners (Nasdaq: CPLP), CRA Int'l (Nasdaq: CRAI), Genentech (NYSE: DNA), Home Bancshares (Nasdaq: HOMB), Intel (Nasdaq: INTC), Marshall & Isley (NYSE: MI), POSCO (NYSE: PKX), Sealy Corp. (NYSE: ZZ), Shaw Communications (NYSE: SJR), Shuffle Master (Nasdaq: SHFL), Simmons First National (Nasdaq: SFNC) and Westamerica Bancorporation (Nasdaq: WABC).

Commodities, Currency and Other

After rising on recent Saudi production noise, oil prices are tumbling below $35 today as the reality of economic catastrophe takes the driver's seat again. It's an amazing feat as well, considering the bitter cold biting down on America today. This is a sign to traders who are long crude that it's still too early. Only conflict in Iran or the pending impact of OPEC production cuts will turn oil around, and both of those may not be far off in the horizon. Still, it's quite risky to be long crude here this week. Reported today, working natural gas in storage saw a net draw last week, declining 94 Bcf, but this didn't disturb oil traders one bit. In fact, even natural gas futures declined today.

Geopolitical and Global Affairs

ECB Rate Cut
The ECB cut its target rate for the main refinancing operations of the Eurosystem by 50 basis points today, to 2.0%. Despite all the fuss Jean-Claude Trichet raised over recent months, relentless economic decline necessitated another dramatic cut. The ECB has cut by a total of 225 BPS since October 8th. The ECB noted inflationary pressures are diminished due to a weakening economic outlook. Trichet expects inflation to keep in line, and sees medium term price risk "broadly balanced."

The ECB noted economic turmoil has broadened beyond the financial sector. European export demand has declined as well thanks to global softening. Trichet noted ongoing weakness seen through the coming quarters.

PMs of Russia, Ukraine Plan Meeting
Under great pressure from Europe, the Prime Ministers of Russia and the Ukraine will meet in Moscow on Saturday to work on resolving their natural gas row. Even after supposedly reaching accord this week, implementation has been controversial so that gas is not adequately reaching European users as yet. EU representatives refused to meet with Russia (by Russia's request) unless Ukrainian representatives were also present. Russia appears to be purposely finding ways to impair the Ukraine and Southeastern Europe. Germany's Chancellor Angela Merkel has openly stated that these ongoing problems threaten long-term trust in Russia.


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Business News Summary - Jan-14-09

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



There should be a video player here, but if you do not see one, then simply click through the following link to see it on our site: DAILY STOCK NEWS VIDEO

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Today's Financial Markets News - Jan-14-09

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.

We've compiled, sorted and analyzed the day's market-moving news for you. Today's financial news highlights: dire December retail sales; diving import & export prices; shrinking business inventories; Deutsche Bank (NYSE: DB) sees loss; HSBC (NYSE: HBC) needs capital; Citigroup (NYSE: C) merges brokerage unit with Morgan Stanley unit (NYSE: MS); Tiffany (NYSE: TIF) notes tough holidays; Nortel (NYSE: NT) files for bankruptcy; S&P threatens downgrades for much of Europe including Greece; China passes Germany in GDP; missiles flying from Lebanon and Clinton scrutinized. The broader markets are lower through midday thanks to overwhelmingly negative news flow.

(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)

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

Asia:

1. MSCI Asia APEX 50: +0.48%


2. Japan NIKKEI 225: +0.29%


3. Hong Kong Hang Seng: +.027%


4. China CSI 300: +4.21%


5. India BSE SENSEX 30: +3.30%

Europe:

1. DJ Euro STOXX 50: -5.21%


2. UK FTSE 100: -5.94%


3. France CAC 40: -5.12%


4. Germany DAX: -5.02%

Shares turned down globally, as the start higher in Asia was canceled in Europe on several possible factors. Sovereign credit downgrade threats against several European nations certainly did not help. Several large foreign based financial institutions reported tough news, namely Deutsche Bank (NYSE: DB), Barclays (NYSE: BCS) and HSBC Holdings (NYSE: HBC). Besides this, the Chinese economy surpassed Europe's Germany to become the third largest globally. U.S. data in the pre-market played a role as well, maybe the key role, as retail sales were reported worse than forecast.

Economic Data & Analysis

Retail Sales - December

December's retail sales news was reported this morning, and the report offered dire data. We would have expected the market to be well-prepared after last week's holiday sales report from the International Council of Shopping Centers (ICSC) and individual retailers' chain store sales reports. However, the degree weakness was worse than the expert forecast and sent stocks lower. Retail sales were reported down 2.7% month-to-month, versus economists' consensus expectation for a 1.2% drop. Excluding autos, sales fell 3.1%, versus expectations for a 1.3% decline. Comparing to December of 2007, sales fell 9.8%. Still, last week's report from the ICSC, where it noted December sales were the worst in 40 years, down 1.7%, had already inflicted adequate pain (or so we thought). The market was apparently not adequately beaten last week though, as the broader indexes moved lower through midday.

Import & Export Prices

December's Import & Export Prices Report noted steep declines for both; however, the steady dive of energy prices led the segment to maintain its role as the key driver. Import prices sank by 4.2%, versus steeper expectations for a 5.3% dive. Prices have fallen for five months in a row and are down 21.7% overall since July! Petroleum was the obvious driver for the fifth month in a row, down 21.4% in December. Commodity and raw materials price drops also continued, and capital goods prices declined modestly while food prices rose on net. Export prices fell as well, moving 2.3% lower, as "everything must go" is the new sales mantra!

Business Inventories

November Business Inventories shrunk 0.7%, versus expectations for a 0.5% drop, and coming off of a 0.6% fall in October. Businesses have been keen to move inventory, versus the risk of ending up moving it at liquidation pricing in bankruptcy proceedings. While inventories declined, sales fell at a much greater rate, down 5.1% from October. Because these figures are not adjusted for price changes, clearly price discounting played a significant role. Thus, the inventory-to-sales ratio jumped to 1.41, as compared to 1.24 just a year ago.

Corporate News Drivers

Citigroup
Last evening, Citigroup (NYSE: C) clarified its business with Morgan Stanley (NYSE: MS), as the two answered rumors by closing a deal to merge business units. Citigroup is effectively selling 51% of its Smith Barney retail brokerage unit, with expectation to unload the remainder of its stake in five years time. The deal generates immediate cash and operating cost savings, helping Citi manage the short-term and restructure itself for the long-term.

Deutsche Bank
Deutsche Bank (NYSE: DB) reported expectations for a fourth quarter loss of 4.8 billion euro. Is anyone surprised? Apparently a great many of you were, as the stock is down about 9% today as of the hour of publishing.

HSBC Holdings
A Morgan Stanley analyst's note indicates expectations that HSBC will need to raise $30 billion, likely through the halving of its dividend and other capital raising efforts. HSBC promptly dived, and is about 7.4% lower at the hour of publishing here.

Tiffany
Tiffany (NYSE: TIF) reported holiday period sales data nearly a full week after its peers. The results were no different though, as TIF noted a 24% same-store sales decline through the holidays. Overall sales fell by 21%, leading the luxury jewelry retailer to slash its profit forecast. Tiffany is only down fractionally today, which may confuse you. Since its high-end peers reported horrible news last week, bets mounted all week long against Tiffany's stock. This is a pure case of buy (or sell in this case) the rumor and sell (buy) the news. Don't cry for Tiffany's though, as the company still expects to earn $2.25 to $2.30 a share before charges this fiscal year.

Nortel Networks
Nortel (NYSE: NT) filed for bankruptcy protection today, so the continent's largest telecom equipment maker bites the dust. Here's yet another victim of the financial crisis of our time.

Earnings Report Schedule
The day's earnings include CLARCOR (NYSE: CLC), Courier Corp. (Nasdaq: CRRC), HDFC Bank (NYSE: HDB), LeCroy Corp. (Nasdaq: LCRY), Mercantile Bank (Nasdaq: MBWM), Volt Information Sciences (NYSE: VOL) and Xilinx (Nasdaq: XLNX).

Commodities, Currency, Fixed Income and Other

S&P Downgrades Europe
After warning four European nations of potential downgrade over the past week, S&P followed through by cutting the sovereign debt rating of Greece by one notch to A-. Spain, Ireland and Portugal have also been warned, not to mention Russia. Polls show that public pressure is only mounting on Greece's sitting government, and this latest hit took the Athex Composite Share Pr Index down 5.47% today.

Oil Inventories
The weekly EIA Petroleum Status Report noted an oil inventory build of 1.2 million barrels. The increase in inventory turned the price of the commodity around. Oil started the morning rising, as cold weather bears down on the nation. However, a somewhat surprising build, as OPEC cuts are only just taking hold, turned the price trend around. We should move lower until traders note the day's bitter cold once a few guys return from cigarette breaks. Really, it can be nearly that simple when you're studying the price on a minute-by-minute basis. It's the longer term bets that require more significant analysis. T. Boone Pickens, who may have been talking his book today since he's deep in wind power bets, predicts the price of crude could return to over $140 a barrel when the economy turns.

Geopolitical & Global Matters

Conflict Unites Gazan Factions and Hezbollah
Al Jazeera reported recently that weaker factions are joining Hamas against Israel. What was much more notable today were rockets firing on Israel that originated in Lebanon. Talk about coalition seems to be the Middle Eastern them today, as al-Qaeda Chief Osama Bin Laden also called on all Muslims to unite against Israel because of its battering of Gaza.


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Stock News Wrap - Jan-13-09

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



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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 and AMEX: SDK.

Morning Market Report - Jan-13-09

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.

Our morning report is back, and we plan for its availability in the pre-market . What began as "Morning Coffee" and "Wake Up Call" is here again regularly for your early morning market preparation. This morning: Ben Bernanke gets schooled; weekly sales take a dive; Germany approves stimulus; Russia asks the impossible; oil slides; trade deficit narrows; Citigroup (NYSE: C) loses market confidence; Sony (NYSE: SNE) takes entire Nikkei lower; Biden assures of responsible withdrawal from Iraq.

(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 market opened lower this morning as economic concerns hijacked news flow. However, since the break of trading shares have recovered. There remain hopes of a "January Effect," though its absence thus far has been logically attributed to a deteriorating economic situation. The most important driver of the day appears to be Ben Bernanke's address at the London School of Economics this morning.

Overseas Markets

Asia:

1. MSCI Asia APEX 50: -0.53%


2. Japan NIKKEI 225: -4.79%


3. Hong Kong Hang Seng: -2.17%


4. China CSI 300: -2.32%


5. India BSE SENSEX 30: -0.42%

Europe:

1. DJ Euro STOXX 50: -1.57%


2. UK FTSE 100: -0.87%


3. France CAC 40: -1.47%


4. Germany DAX: -1.41%

Economic Data & Analysis

The Chairman
Federal Reserve Chairman Ben Bernanke today addressed the London School of Economics (LSE), one of Europe's and the world's most admired centers of learning. The Chairman's topic of discussion was "The Crisis and Policy Response." It's gotten so big, it can now be referred to by one name, sort of like Madonna.

His discussion raised early concerns, as he failed to inspire confidence that the end might be in sight. Instead, he warned that future asset purchases might be necessary. Recall, that's what the TARP was slated for before the jumpy Hank Paulson sent it elsewhere.

Trade Deficit Narrows
The International Trade Deficit reportedly narrowed in November. That's a good thing right? Well, that depends on what the driver was. It was not changed by the revival of American industry last month, but by the decline of energy import prices and the dearth of American demand for any goods whatsoever.

ICSC Weekly Same-Store Sales
Today's regular release of retail weekly same-store sales data showed that business fell off a cliff since holiday shopping impetus disappeared. Year-to-year sales fell 2.2%, and sales declined 2.3% on a week-to-week basis. This is consistent with the chatter we're picking up from the retail space. Thus, we suggest steering clear of tempting stock prices as they seek to lure you into a potential valuation trap, at least by this analyst's eye.

President Seeks to Free Up TARP for Obama
Anything Obama can convince George to do before he takes office will weigh less heavily on his own legacy. While President Bush asks for the second half of the TARP funds, this allows Obama to freely request his own aid without facing criticism as his own spending tally mounts.

Treasury Budget - December
December's Treasury Budget will be reported at 2:00 PM ET. It's expected the report will show a counter-seasonal budget deficit for December. You see, the federal government usually posts an uncharacteristic surplus in December, as it collects tax payments. This time around, TARP and other federal spending allocated to save the economy will take even December's money away.

The Treasury Deficit is a mounting concern, and could very likely take down the American empire eventually. When we rely on foreigners to finance our spending at an increasing rate, and we do this in an increasingly fiery geopolitical environment, it's trouble brewing. What happens if the spigot ever gets turned off? Will Americans be capable of buying bonds like they did in WWII? It's something to think about.

Corporate News Drivers

Citigroup (NYSE: C) faced headwinds this morning as yesterday's asset sale spurred concern about Citi's future. Investors are starting to question Citi's long-term viability. We hope to have something more to say on this topic later today.

Sony (NYSE: SNE) shares started lower in Asia and kept the pace in the States as news broke that soft demand for electronics might drive Sony's first operating loss in 14 years. Japanese paper "The Nikkei" reported the electronics maker might lose $1.1 billion from operations this year. The report was so ill-received in Japan it drove the entire nation's market lower.

In other corporate news, Genentech (NYSE: DNA) and Abbott Laboratories (NYSE: ABT) present at the JPM Conference. The day's earnings schedule highlights news from CalAmp Corp (Nasdaq: CAMP), Infosys Technologies (Nasdaq: INFY), Insteel Industries (Nasdaq: IIIN), Life Partners Holdings (Nasdaq: LPHI), Linear Technology (Nasdaq: LLTC) and Majesco Entertainment (Nasdaq: COOL).

Commodities, Currencies, Fixed Income and Other

Oil prices started the day lower, but Saudi Arabia later announced that while January's production cuts were on target, a pending production cut to start in February would be greater than previously planned. That news has prices stabilizing this morning.

Meanwhile, the Ukraine is asserting that Russia's demands regarding gas routing is impossible to effect. Reports are that while pipelines are open, little gas is actually flowing through to parts of Europe. So, despite hopes that Southeastern Europe might avoid a winter freeze, concerns are now renewed.

Geopolitical & Global Affairs

Ban Ki-moon is in the Middle East, and he's saying, "Hey you guys, didn't you hear? We supreme decision-makers at the U.N. decided you have to stop fighting." He said that both Israel and Hamas must obey the will of the world and honor the ceasefire resolution. All we have to say is, if you're planning to head into Gaza itself, watch out Papa Smurf.

Vice President-Elect Biden was in Iraq today on a "surprise" visit. Is anybody surprised by these regular visits anymore? Just about every time a political head travels to the Middle East, he stops off in Iraq. I think everybody expects it by now!

Biden affirmed that the Obama administration will seek a responsible withdrawal of troops from Iraq, but he left out the part about then taking those troops to Afghanistan. So protesters can replace the "Stop the Iraq War" posters with "Stop the Afghan War" cards. This one is even more dangerous than the Iraqi endeavor, as we are likely to find ourselves engaged with al-Qaeda, Afghan warlords and Pakistani tribes that are allied with their neighbors against the foreigners (that's us).

In the late evening, Germany approved a 50 billion euro economic stimulus package that provides 36 billion this year. The DAX promptly responded by dropping 1.4%.


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Daily Stock News - Jan-12-09

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



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Week Ahead: Central Bank Chaos Theory

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

By The Greek - Economy & Markets:

The Week Ahead

The week ahead offers several opportunities for global financial markets to lose confidence in the potency of the world's central banks. Besides the European Central Bank (ECB) monetary policy decision scheduled for Thursday, several U.S. bankers are slated to speak publicly this week. Also, President-Elect Obama's newest Fed nominee will face Congressional questions this week. Meanwhile, the Fed's Beige Book of regional economic conditions might also expose internal confusion and hidden concerns. The number of events scheduled offer too much opportunity for central bankers to appear lost in chaos, which in turn would raise global concern that world economies might be effectively be lost at sea without a sail.

Monday

The Detroit Auto Show sets the stage this week, as needy auto makers attempt to balance the importance of putting on of an impressive show against the risk of creating impression of wasteful spending of government and taxpayer funds.

Monday formally kicks off earnings season with the traditional report from Alcoa (NYSE: AA), but the week's earnings schedule is still light. This quarter's earnings are the most spread out, as companies take longer to produce their full year reports. Also, companies reporting intermediate fiscal quarters tend to report earlier. Finally, retailers generally report their year-end data post closing on the last day January, taking their reports out even longer in the season than is typical.

China should publish several economic reports this week. While common sense says to expect the worst for December's data, there seems to exist a sense of hope that China might magically find a powerful domestic driver to keep it on the growth road. This topic and more will likely be covered at a meeting of the world's central bank heads in Switzerland. Someone had better keep an eye on these folks and insure they're not loading discrete accounts up with bailout dough, as the recently revised minutes of the FOMC noted a higher level of concern (read terror) than has been otherwise conveyed... not to mention a sense of helplessness.

United Nations Secretary General Ban Ki-moon will visit Israel and the Palestinian territories to let the leadership know in person about the new resolution his group just passed. He has to travel to the region since not a silent minute ensued the UN's call to ceasefire. Ban would be wise to watch his back while inspecting the scene, since bombs have already destroyed a UN school. We suspect that not even Papa Smurf is safe there.

JP Morgan Chase (NYSE: JPM) is holding its annual health care conference this week. Markets are closed in Japan, but the day's U.S. earnings report schedule includes A. Schulman (Nasdaq: SHLM), Bank Mutual (Nasdaq: BKMU), Brookline Bancorp (Nasdaq: BRKL), Commerce Bancshares (Nasdaq: CBSH), Dynatronics (Nasdaq: DYNT), Frontier Financial (Nasdaq: FTBK), Labranche & Co. (NYSE: LAB), M&T Bank (NYSE: MTB), Peoples Educational Holdings (Nasdaq: PEDH), Schwab (Nasdaq: SCHW), Wegener (Nasdaq: WGNR) and Zep (NYSE: ZEP).

Tuesday

While the famed meeting in Davos starts on January 28th, the World Economic Forum issues its Global Risk report on Tuesday. Keeping with overseas news, Federal Reserve Chairman Bernanke will visit the London School of Economics (LSE), where he will discuss "The Crisis and Policy Response." Japanese markets open Tuesday to new data on Japan's bank lending for the month of December.

In the wake of last week's report from the International Council of Shopping Centers (ICSC), showing the holiday shopping season was the worst such period in 40 years, the ICSC's weekly sales news should be of interest to traders on Tuesday. Last week's report showed sales fell 0.8% year-to-year, an improvement from the prior week's 1.8% slide.

A couple important economic reports are slated for release Tuesday. At 8:30 a.m., November's trade deficit is expected to have narrowed to $51.5 billion, from $57.2 billion in October. This reflects lower prices paid for oil more than anything else. Less overall demand for goods and services in the United States is matching up against also decreased demand for U.S. goods overseas as global recession takes hold. Since we're a net importer and a consumption economy, as demand declines the trade gap logically narrows. Did you know that America's third most important exported good is scrap metal? What's that say about job and manufacturing migration...

The Treasury Budget is due at 2:00 p.m. Bloomberg's consensus of economists forecasts a December budget deficit of $83 billion, versus a prior year surplus of $48 billion. December typically produces a surplus because of tax payments received by the federal government. The deficit expected this time around has a lot to do with TARP and government spending programs created to treat the economy.

Genentech (NYSE: DNA) and Abbott Laboratories (NYSE: ABT) present at the JPM Conference. Tuesday's earnings schedule highlights news from CalAmp Corp (Nasdaq: CAMP), Infosys Technologies (Nasdaq: INFY), Insteel Industries (Nasdaq: IIIN), Life Partners Holdings (Nasdaq: LPHI), Linear Technology (Nasdaq: LLTC) and Majesco Entertainment (Nasdaq: COOL).

Wednesday

Economic reports lead the day's news flow on Wednesday. In the pre-market, look for the regular mortgage activity data from the Mortgage Bankers Association. Despite rate decline, mortgage activity let up some last week. We'll find out if that was purely seasonal or a sign that Fed actions could prove near useless for housing, the result of a rocketing jobless rate, dire sentiment and a rising savings rate. That would be terrifying, and would play into the argument that the Fed may be near impotent, at least temporarily and with regard to housing. I hate to say it, but Ron Paul is starting to sound less insane to me. I'm increasingly concerned with the Treasury deficit, which I view a dangerous concoction when mixed with geopolitical instability.

A week after chain store sales release, overall Retail Sales for the month of December are due at 8:30. Bloomberg's consensus forecasts a 1.2% decrease from November, and excluding auto sales, a 1.3% decline. This compares against 1.8% and 1.6% drops, respectively, in November. Since the bad news is already widely known, we can't see this report doing much damage this week.

At 8:30, Import and Export Prices are set for release. December's Import Prices are seen declining by 5.3% month-to-month, versus a 6.7% drop in November. This figure is finding significant impact from energy price decline. Speaking of energy, the EIA's regular Petroleum Status Report is due at 10:30. OPEC cuts and cold weather should be set to drive net inventory draws, stabilizing oil prices eventually.

November Business Inventories are set for release at 10:00 a.m. Inventories are seen falling 0.5% in November, compared to 0.6% in October. The problem is that sales have been dropping at a faster rate, leading the inventory-to-sales ratio's rise. Look for the Fed's Beige Book of regional economic conditions at 2:00 p.m. Here's another chance to expose a panicked group of bankers. The Bank of Thailand might cut rates big on Wednesday; Barron's forecasts the possibility of a 100 basis point slashing.

Tiffany (NYSE: TIF) reports on December sales a week later than most of its peers. The day's earnings include CLARCOR (NYSE: CLC), Courier Corp. (Nasdaq: CRRC), HDFC Bank (NYSE: HDB), LeCroy Corp. (Nasdaq: LCRY), Mercantile Bank (Nasdaq: MBWM), Volt Information Sciences (NYSE: VOL) and Xilinx (Nasdaq: XLNX).

Thursday

There's yet another opportunity for a central bank to be exposed on Thursday, when the European Central Bank (ECB) makes its monetary policy decision. Jean-Claude Trichet had been signaling a pause might be in store, but speculation has increased that another rate cut is likely, and for good reason!

Several Fed Presidents are slated to address groups on Thursday, with Janet Yellen, Charles Evans and Dennis Lockhart scheduled. Fed Board nominee Dan Tarullo testifies before Congressional committee, as part of his confirmation hearing. The New York and Philly Fed districts publish their monthly business conditions data on Thursday. The Empire State Manufacturing Survey is seen sitting at -25, versus -25.8 in December, signaling ongoing weak regional conditions. The Philly Fed is seen reporting its General Business Conditions Index at a level of -35, versus -32.9 last month. While Philadelphia area conditions seem worse, Philly can still boast current sports dominance over New York, as the Eagles defeated the Giants over the weekend. That combined with a Phillies World Series victory has the so-called second city sitting pretty.

The regular weekly Initial Jobless Claims data is due at 8:30 ET, and economists forecast the weekly job loss count at 500K even this time around. Last week, the figure stood at 467K, but we believe it benefited from holiday warm-heartedness. December's Producer Price Index (PPI) is due in the pre-market as well. The inflation gauge is seen falling 2.0%, but after taking energy and food prices out, it's expected to rise by 0.1%. Inflation is of little concern to most currently, but also widely expected to become a problem soon enough, thanks to all the federal government efforts and related money creation.

The RBC Cash Index, a sentiment measure, is due out at 10:00 a.m. RBC measures household spending and sentiment, and it doesn't take a brain surgeon to figure out this is going to be especially weak now. The EIA reports on Natural Gas Inventory at 10:30. As cold weather hits the nation, traders may already begin anticipating next week's data, making this week's release meaningless. The FCC is voting Thursday on rules to ease the transition to all-digital broadcasting.

Thursday's earnings schedule includes Amphenol (NYSE: APH), AEP Industries (Nasdaq: AEPI), ASML Holdings (Nasdaq: ASML), Bank of the Ozarks (Nasdaq: OZRK), Briggs & Stratton (NYSE: BGG), Capital Product Partners (Nasdaq: CPLP), CRA Int'l (Nasdaq: CRAI), Genentech (NYSE: DNA), Home Bancshares (Nasdaq: HOMB), Intel (Nasdaq: INTC), Marshall & Isley (NYSE: MI), POSCO (NYSE: PKX), Sealy Corp. (NYSE: ZZ), Shaw Communications (NYSE: SJR), Shuffle Master (Nasdaq: SHFL), Simmons First National (Nasdaq: SFNC) and Westamerica Bancorporation (Nasdaq: WABC).

Friday

The last day of the week closes heavy on data this time around. At 8:30, the Consumer Price Index (CPI) is seen falling 0.2% on a year-to-year basis and 0.9% on a month-to-month check. The data driver is clearly drastic energy price decline. Excluding food and energy, the Core CPI is expected to increase 0.1% month-to-month, and increase 1.9% on an annual basis. Prices are proving a bit stubborn, as we predicted in previous copies of this report. It's easier for corporate America to take prices higher than it is to cut, for obvious reasons. However, eventually, sticky lower component prices and competition should force consumer prices down a bit.

December's Industrial Production is seen falling 1.0% and Capacity Utilization is expected to decline to 74.6%, versus 75.4% in November. Soon plant closings will start offsetting the effects of work stoppages and work shift reduction.

The Treasury International Capital (TIC) data is due at 9:00 a.m. TIC measures the flow of funds into or out of long-term financial assets in the U.S. versus international. The global nature of this recession makes this data less important than it otherwise might be. The Reuters/University of Michigan Consumer Sentiment Index is expected to soften to 59.0 this month, versus 60.1 at last check.

The IEA is set to publish its monthly oil-market report on the same day Middle Eastern leaders meet in Qatar to discuss Palestine and the current conflict.

The U.S. bond market will close early on Friday, ahead of Martin Luther King Jr. Day on Monday. In equities, look for earnings news from First Horizon National (NYSE: FHN), Johnson Controls (NYSE: JCI) and PPG Industries (NYSE: PPG) to close out the week.

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Wall Street Week - Counting the Dead

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By The Greek - Economy & Markets:

Burdened by harsh employment data and crippling corporate news, the stock market took a step backwards last week. The Dow Jones Industrials Index slid 4.8% in its first full week of trading in the new year. If you have been reading our blog, you were not surprised, as we warned of a "Bear Market Wake Up Call" in our "Week Ahead" article.

(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)

Beginning on Wednesday, with the release of the ADP Private Employment Report, the market became consumed by fear. Anxiety kept building toward Friday's Employment Situation Report, which is offered monthly by the Department of Labor. In the meantime, Intel (Nasdaq: INTC) and a slew of retailers cut earnings guidance, workforce and stores in Macy's case (NYSE: M).

Geopolitical troubles compounded upon the situation, as the conflict in Gaza spread to include Lebanon. At the same time, much of Europe faced a new cold war with Russia, literally, as Moscow turned off the gas that warms much of Southeastern Europe and the Balkans. Slovakia declared a state of emergency, as frigid weather met Putin's cold heart. By the end of the week, pressure from the world community had forced a U.N. ceasefire resolution and also drove Russia and the Ukraine to find a way to keep the gas flowing to Europe. The two nations have agreed to the use of monitors to insure gas is not illegally siphoned. As for Gaza, missiles continued to fly and bombs to land.

ADP's Private Employment Report on Wednesday showed nonfarm payrolls fell by a whopping 693K in December. Challenger's Job-Cut Report the same day noted planned layoffs rose by 275% in December, versus the prior year period. It was the worst such December since at least 1993, when tracking began. Details of the week's jobs reports showed that the recession had spread to encompass small and medium sized businesses and almost every segment of the economy, except health care.

As retailers reported terrible individual December chain store sales on Thursday, the International Council of Shopping Centers (ICSC) announced that this past holiday shopping season was in fact the worst since 1969. Even stalwart Wal-Mart (NYSE: WMT), which had returned 20% to investors in 2008 when including dividends, noted worse than expected December sales and reduced its fourth quarter guidance.

ADP's jobs data promptly raised concern about Friday's DOL report. As a result, the economists' consensus forecast for the monthly job loss tally crept slowly higher. Friday's data only confirmed the market's fear. Unemployment was reported up four-tenths of a percentage point, to 7.2%. This exceeded the consensus view for 7.0% and even the high-end forecast for 7.1%. Nonfarm payrolls fell by 524K on net in December, and the outlook seems bleak for January. Auto makers, parts suppliers and metal fabricators are expected to cut many more employees, and some argue 60K have already been lost this month. Meanwhile the poor fourth quarter reports that are widely anticipated for retailers should drive store closings, bankruptcies and more job loss from that segment of the economy. Needless to say, the market had plenty good reason to drop some weight this past week.

While employment is a known lagging indicator for the economy, most see ongoing job losses through 2009. Thus, the significance of Obama's stimulus package cannot be overstated. It appears the President-Elect has done a good job of building a bipartisan coalition of Republicans and Democrats. If that can be accomplished, maybe anything can. Economic survival, let alone revival, seems to hang in the balance.


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Business News Summary - Jan-9-09

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Employment Situation Report - Unemployment Jumps

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By The Greek - Economy & Markets:

Today's Employment Situation Report was perhaps the most highly anticipated in history, at least until January's data is released. After the miserable news from ADP on Wednesday, and the resulting creeping higher consensus forecast for the DOL release, today's dire data was well set up. Even so, the news was still like a horror movie, in that you knew something bad was about to happen, and you got scared anyway. Economists are widely speaking of deep pain for the year ahead, and this realization has the market reevaluating its earlier excitement. Thus, shares are broadly lower today and for the week as well.

(Article interests: NYSE: RHI, NYSE: MAN, NYSE: KFY, 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 Department of Labor reported a net 524K nonfarm payroll decline in December, nearly matching the recently creeping higher consensus forecast. This figure takes the infamous birth/death rate adjustment into account, so many prefer to look toward the total number of newly unemployed for a cleaner figure. Besides probably being more realistic, it makes for a better headline and presents well for the insightful analyst. A total of 632K jobs were lost in December. Thank us later for the comeback material you can use at the water cooler, where your office's annoying Mr. Know-It-All will declare 524K jobs were lost.

Either way you slice it, it's trouble. The unemployment rate jumped to 7.2%, from November's 6.8% (revised from 6.7%). Furthermore, it exceeded the consensus estimate for 7.0%, and it even topped the high-end view for 7.1%. So those who were relieved by the 524K number can now revert to holding their breath again.

A total of 11.1 million Americans are now unemployed, and another 8.0 million are considered underemployed while working part-time versus a full-time preference. This disappointed group is 3.4 million larger than it was last year.

A few hopeful economists took solace from recently lower weekly initial jobless claims results, but we attribute those to the warm-hearted effects of the holidays. You see, it's still hard for most of us to fire someone before Christmas. I myself was considering firing my assistant, Odi, who doubles as my dog, and couldn't bring myself to do it when he gave me that look.

One strategist (we missed the name) noted this morning on Bloomberg radio that another 60K jobs are already gone from the auto sector in January, and he noted his expectation for a 700K loss when this January's tally is reported on February 6th.

Retrospective consideration alone provides enough worry for the auto sector. The largest manufacturing job losses last month came in auto and auto related groups. Fabricated metals shed 28,000 jobs, while motor vehicle parts lost 21,000. Since the start of the recession, motor vehicles and parts industries have cut 17% of their workforce, and we're not through yet. Next week's auto show will likely be the lowest key such event in history, as the bailed out General Motors (NYSE: GM) and Chrysler, and the potentially in need Ford (NYSE: F), are mindful of flamboyant spending perception. After AIG's (NYSE: AIG) $500K retreat and GM's corporate jet usage, there's little patience left in the halls of Congress. This group might yet need to return to DC for another round of aid. We expect the auto show will highlight hybrid and new technology designs in concept vehicles.

I didn't realize there were still jobs to be lost in construction, but a whopping 101K more were cut in December. It's very likely that most of the recent cuts are coming in commercial construction. Similar municipal jobs may be the last to go, but their time is likewise coming if Obama's stimulus package doesn't live up to expectations. State wells are dry, and creative budgeting can only go so far before municipal workers find themselves on the unemployment line with Wall Street and Detroit. A portion of the construction job cuts may be the last few for home builders (or not!) before another wave of industry bankruptcy. New construction is at such a lull that we cannot imagine there being any excess workforce still around. In related news, KB Homes (NYSE: KBH) reported a narrowed net loss today. I guess it's a good thing when you bleed to death at a slower rate.

One economist today announced that job losses might keep increasing through the middle of 2010! Another expert wisely noted that unemployment, as terrifying as it is, is a lagging indicator. Companies are very slow to cut workforce, because training and severance costs are so high. That's what they say anyway, but poor economic foresight and denial are likely equally at fault. When layoffs finally occur in force though, it's usually deep into the downturn. We hope Obama can bail us out along with everyone else, or writing lugs like me might find themselves busy typing up resumes for folks, and that's just not much fun. Keep the faith my friends.



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Stock Market Wrap Up - Jan-8-09

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Retail Industry Death Row

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By Markos N. Kaminis - Economy & Markets:

If you work in retail, then you probably feel like a prisoner on death row. Any day now, your number might be called to face the electric chair, mildly known as the unemployment line. Times are tough in the now exposed as saturated store environment, and consolidation is a necessity to avoid bankruptcy. Retailers reported Chain Store Sales for the month of December today. Accompanying the reports were announcements of several internal earnings forecast reductions and cost consolidation actions, including store closures. You can expect many more reports like these as retailers close out their fiscal fourth quarter this month.

(Article interests: NYSE: KSS, Nasdaq: DLTR, 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 Greek has been harping on the pending demise of retail for over a year now, if not longer. Thus, our readers may be more relieved than concerned on days like these. Sentiment turned so lousy through the second half of '08 though, that all correlations went to 1.0, and everything fell in concert. Still, I believe those who may already be looking for early cyclical ideas would still be better served refraining from the retail space now.

I recall telling a Research Director during an interview in 2006 (I think) that the pending recession would call for retail favor toward discount stores. I didn't get that job because it was still early in the cycle, and the Director didn't have the foresight to see what was coming. The space took a valuation hit early on in the downturn, but then recovered as prognosticators looked toward economic recovery too soon. The fact is that the deepest cuts in consumer spending are still ahead of us.

Without the support of guilt-inspired holiday spending, retailers are left naked out in the cold here. Therefore, the next few months will serve as harsh catalyst for corporate action. Indeed, as corporate executives eye-over December and fourth quarter operational performance, it should be plainly apparent that growth plans need reigning in and that weaker stores might be better off closed than fixed.

We have already seen the quick demise of a few players that had been operating on the fringe. Names like Linens 'n Things, Mervyn's, Talbots (NYSE: TLB) and Circuit City (NYSE: CC) closed shop over the past year or so. Tough times serve for shakeout, separating the strong from the frail. You might compare it to the Spartan custom of tossing their sickly or imperfect babes from cliff's ledge. That's what retailers face now. After some time, if the child was found clinging to life alone on the cold hillside, he was given another chance to be a Spartan. Maybe I should note here that I'm not implying you buy Spartan Stores (Nasdaq: SPTN); that is not unless it displays Spartan spirit.

As early as last year, even Macy's (NYSE: M) was closing shops, as the department store segment was the first hit. After all, who would value the convenience of a one-stop-shop over the better pricing of specialists in hard times? Only discounters like Wal-Mart (NYSE: WMT) offer both, and so it was lifted as one of a handful of retail industry stocks to appreciate in value this past year. Wal-Mart returned an astounding 20% to investors in 2008 when taking dividends into account.

The International Council of Shopping Centers just reported that December same-store sales fell 1.7% overall. The holiday season finally gave in, after years of battling. Though we now know those years were aided by illegal substance abuse(i.e. credit). Guess we'll have to mark up the record with plenty of asterisks. This holiday season was the worst in forty years, according to the ICSC. Not since 1969, have things been this bad. Trivia question: What significance has 1969 to The Greek? (comment below)

Even mighty Wal-Mart cut its forecast today after weaker than expected same-store sales (though still positive 1.7%, excluding gasoline). If people are having trouble affording even Wal-Mart, then we'll have to move to the deep discount niche for safe haven. Family Dollar (NYSE: FDO) actually posted solid results yesterday and got a thumbs up from Jim Cramer. Jim noted that FDO does well in times like these, and recently traded below its average P/E for such troubled times. People still gotta eat folks, and survive; they'll just do it cheaper now. We have to agree on the FDO call, though I also buy into the old adage, "you get what you pay for." FDO is up much over the past couple days, so you might want to take that into account when considering entry point.

Wal-Mart still fared better than its peers, as Target's (NYSE: TGT) sales fell 4.1% and Costco's (Nasdaq: COST) dipped 4%. Still, gas contributes significantly to Costco's results, and excluding that factor (gas prices declined) same-store sales actually rose. Closer inspection of the broad spectrum of retailers better illustrates the decimation.

December Same-Store Sales:

• Wal-Mart (NYSE: WMT): +1.2%


• Target (NYSE: TGT): -4.1%


• Costco (Nasdaq: COST): -4.0%


• Macy's (NYSE: M): -4.0%


• J.C. Penney (NYSE: JCP): -8.1%


• Sears (Nasdaq: SHLD): -7.3%


• Neiman Marcus: -27.5%


• Saks (NYSE: SKS): -19.8%


• Gap (NYSE: GPS): -14.0%


• Limited Brands (NYSE: LTD): -10.0%


• Abercrombie & Fitch (NYSE: ANF): -24.0%


• Wet Seal (Nasdaq: WTSLA): -12.5%


• Family Dollar (NYSE: FDO): +6.0%

Note the especially hard times for luxury. When sales prices are higher, each sale matters more. We think this might have something to do with the change. Also, the nascent strength of the dollar might have eaten into tourist purchases of expensive gifts, especially in flagship stores in New York and elsewhere.

Just as I would not buy a boat while expecting a hurricane, I would not buy most retail now either. Still, if you are looking for a few names that might find last minute pardon from death row, here are a few ideas... It's clear money is piling into discount, and that could drive momentum a while longer (read Family Dollar). Target actually beat analysts' expectations in posting its December sales decline, and that may have had something to do with its recent decision to shift product toward more everyday needs like groceries. It definitely had something to do with price reduction for market share gain, and that should be apparent in softer margins come reporting time. Anyway, it's cheaper than Wal-Mart on a P/E basis, and is attempting to adjust to the climate in order to become more like Wal-Mart, so it might be worth a closer look. You might want to do a little praying too if you dare dabble in retail now.


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Macy's News (NYSE: M) - Sales & Stores Decline

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By The Greek - Economy & Markets:

Macy's news today was not so hot. The department store retailer posted lower monthly same-store sales, and at the same time announced it would be closing more stores, similar to an action taken last year. Still, our inspection of the company's solvency turns up solid footing... for now.

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

Today Macy's (NYSE: M) announced another 11 stores would be closed this year. Macy's claims this is part of its yearly pruning, but as far as I can remember, this pruning is something unique to the last couple of tough years. A total of 960 jobs look to be shaved by this particular cost consolidation effort. In a separate release, Macy's announced its December same-store sales fell 4%, while total sales dipped 4.7%. The rate is likely to deteriorate in early '09, absent the guilt catalyst aid of holiday shopping. We've come to that view based on our inspection of the greater sales decline of 7.5% in the broader November through December period.

Macy's managed to reduce inventory levels by 7.5%, as compared to last December-end. The company, like others, hopes to operate with lighter inventory through these hard times. The problem here is a sort of reverse leverage effect, as fixed costs stick. Also, less than optimal sales pricing will compound upon those stable costs and eat into margin comparisons. Retailers are likely working on offsetting that by managing inventory costs through various means. An example of one might be supplanting top brands offered for sale with lower cost names.

Macy's also noted strong online sales, and we're guessing this is due to a nascent online initiative (thus easy comps) and effective web marketing effort. Needless to say, the store cut its earnings guidance substantially anyway, and stocks never react well to that. M fell 3.4% today.

Macy's attempted to appease concern by noting it has $1 billion in cash and an open bank line for another $2 billion. It fails, however, to mention that it is already steeply indebted. Its EBITDA-to-interest expense ratio seems to adequately cover for now though, at about 5.2X. We generated that ratio by rough estimate, extrapolating last quarter's interest expense through four quarters and applying the trailing 12 months' EBITDA (all from Yahoo Finance). We should note that the ratio wouldn't be much different if we used the trailing 12 months' interest expense as well, but that would not best reflect most recent debt levels and costs. Now, keep in mind that Macy's EBITDA going forward will very likely decrease while its interest expense might rise, but there's some leeway implied in the 5.2X figure. Analysts use this measure because if you can't pay your debts, you go bankrupt plain and simple. I don't see Macy's going bankrupt just yet, and it has better positioned itself for harder times.


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Daily Stock Market Summary - Jan-7-09

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Jobs Data Doomsday

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By Markos N. Kaminis - Economy & Markets:

Today's duo of jobs reports provided dire data. ADP serves as a precursor to the Labor Department's Employment Situation Report, which is due for Friday release. The implication of ADP's news is that the job market is failing fast and furiously. Heading into today's data, economists had been forecasting a 7.0% unemployment rate, but reevaluation is clearly in process now.

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

Challenger, Gray & Christmas released its Job-Cuts Report today, which is its monthly tally of planned corporate layoffs. The news was another tough chew, with December's reading of 166,348 not much short of November's 181,671. Besides the ADP data, keeping us from celebrating the improved layoff news was the fact that December represents a unique period of the year, when any leftover human warmth of heart is supposed to prevail. The holiday season may have caused some employers to show mercy, and it certainly kept some bankers from lowering the hammer.

Banks reportedly forgave debt deadlines through the holidays, especially for retailers on the fence. The hope was that some would miraculously raise cash through inventory push. Distressed retailers, and even clearly sunken ones like Circuit City (NYSE: CC) welcomed the opportunity to unload inventory at better than liquidation prices. Though some of the 70% sales we saw on the bloodied street couldn't have been far off liquidation value.

The early part of the year offers little opportunity for revenue recovery, though sales will find every holiday, from Martin Luther King's birthday to Arbor Day. Heck, some sellers might make up holidays for the sake of creating a unique sales promotion! They had better, because otherwise I see retail taking over the lead of greatest corporate firer from 2008's champs, the financial and auto sectors.

A closer inspection of 2008, shows it was the worst for layoffs since 2003, with 1,223,993 total firings across Challenger's board. Also, while the December data seemed merciful when compared against November, it still produced 275% more layoffs than December of 2007. In fact, it was the worst such December since tracking began in 1993!

The ADP Report

Even if you're name isn't Scrooge, today's ADP Employment Report would have soured your mood. ADP declared the private sector shed a whopping 693K nonfarm payrolls in December. Adding insult to injury, the employment firm revised November's tally up to 476K jobs lost from an initially reported 250K.

As the recession began, most of the job losses were originating from large businesses, or those employing 500 people or more. In fact, jobs kept increasing for some time in the small business sector, which encompasses firms that employ 49 people or less. A clear indication that hard times have now spread, reaching every nook and cranny of American society, is that small businesses reportedly fired 281K people this past month. Since medium-sized operations managed 321K cuts, most of the month's damage came from America's backbone. Also, the service sector is now paying the most, with 473K jobs lost from the core segment of American business.

This all sets up for a bone crushing Employment Situation Report come Friday morning. Heading into today, Bloomberg noted consensus estimates for a net 500K nonfarm payroll decline. Based on ADP's data, we could be in for a morale deflating news event, one that wakes up the bear market, as we alluded to in this week's Greek's Week Ahead. Unemployment was seen rising to 7.0%, from 6.7% before today. We venture to say both these forecasts are understated, and the market seems to agree. The Dow Jones Industrials Index, which had enjoyed hopeful trading since last Friday, turned down today.

Thursday offers two more noteworthy employment reports to further sour the mood. Monster Worldwide's (Nasdaq: MNST) Employment Index is due along with the regular weekly jobless claims data. The market should increasingly speculate on how bad Friday might be as a result. Before today, Bloomberg's group produced worst case scenario estimates of 750K for nonfarm payrolls and 7.1% for unemployment. We expect these are now creeping higher.


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Daily Stock Market Wrap - Jan-6-09

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If you do not see the video, please click here: DAILY STOCK MARKET WRAP.

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 and AMEX: SDK.

Stock Market Wrap Up: Jan-5-09

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Starting today, you'll find a stock market wrap up video or article here daily. We've heard you, and are responding to fill your financial market needs. If you do not see the video from where you are, click here: STOCK MARKET WRAP UP.

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.

Week Ahead: Bear Market Wake Up Call

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By The Greek - Economy & Markets:

The old bear market gets a wake up call this week, as a slew of key reports seem poised to offer more of the unprecedented sort of data we've now gotten use to. The bear apparently started his hibernation early, following heavy holiday feasting. The market has been on a little bit of a roll of late, especially benefiting from light volume and hopeful money flows over the last and first trading days of 2008-09. We might have been enthused about momentum building, with heavy stores of capital sitting idle, if not for the outbreak of war in the Middle East and a slew of dangerous economic reports targeting this coming week. So, it looks like the bear is due for a rude awakening, and I for one, won't be around to bear the grump's wrath.

The Week Ahead

Arguably the busiest week of the economic monthly calendar kicks off the year's first full trading week with a bang. The period brings monthly Motor Vehicle Sales, the release of important FOMC meeting minutes, Chain Store Sales and all the month's important employment data. Yes, it will be quite a week, and one that likely offers plenty of reason for the festive stock market to rethink things a bit. Thus, if the market holds its ground through this harsh environment, benefiting from capital distribution, look to that as a good sign for more of the same in January.

Monday

Washington will steal the limelight most of Monday, as Barack Obama, who is now in DC, plans to meet with Congressional bosses to discuss legislative agendas, including Obama's well-publicized economic stimulus package. Of course, events in Gaza make a presidential press briefing highly likely for George Bush as well, as Nicholas Sarkozy, Tony Blair and a Russian delegate head to the Middle East to attempt a rescue. Up on the Hill, the Inspector General of the SEC will face the firing line, as a House subcommittee questions him about how Bernie Madoff's ponzi scam got past him.

Auto makers are set to report monthly Motor Vehicle Sales for the month of December on Monday. This report comes just as major auto suppliers are shortening their work weeks and planning plant holidays to save money. Visteon (NYSE: VC) announced last week that it would layoff 2,000 employees, and on Monday it begins a new four-day work week. Vehicle sales data from GM (NYSE: GM), Ford (NYSE: F), Toyota (NYSE: TM) and Honda (NYSE: HMC), among others, will be reported intermittently throughout the day, so you have to keep checking in (we haven't noted the trend here for hour of individual reporting). Aggregate December sales are seen running at an annual pace of 7.4 million, after sinking to 7.6 million in November.

"The Greek" shared a few brews with a couple Ford lug nuts this weekend; needless to say, they were a little stressed out. We had a good couple of hours of debate about government aid and old times. Recall I've been for the aid, but also demanding of the UAW. Let's just say, there were no awkward quiet moments. Thanks for the beers boys and sincere best wishes.

November's Construction Spending Report is due at 10:00 a.m. Bloomberg's consensus of economists forecasts a 1.3% decline in monthly spending, compared against October's drop of 1.2%. KB Home (NYSE: KBH) reports earnings on Friday, which could prove more of a market moving event than this well-anticipated poor data point. Monday's earnings schedule is a quiet one, with news emanating from The Mosaic Company (NYSE: MOS), Piedmont Natural Gas (NYSE: PNY) and Dynatronics (Nasdaq: DYNT).

Macworld kicks off its week without the usual keynote speech from Apple's Steve Jobs (Nasdaq: AAPL). It seems plainly clear that Jobs is not in good health, but the stock still has some ground to give if that news ever actually reaches the wire. We hope it doesn't though of course.

Merrill Lynch (NYSE: BAC, NYSE: MER) and Credit Suisse (NYSE: CS) have scheduled conference calls with clients and interested parties to discuss the reinsurance renewals pricing outlook.

Tuesday

Last week, the ICSC Weekly Same-Store Sales data indicated sales fell off a cliff on a year-to-year basis. We're not looking for improvement any time soon; in fact, we're looking for retail bankruptcies to bloody the pages of financial press in the weeks ahead. Look for this week's ICSC data in the pre-market (7:45). Redbook's less useful survey is due around 8:55 as well, and has tracked ICSC when we've checked.

November's Factory Orders are due at 10:00 a.m. Bloomberg's consensus forecasts a 2.5% monthly decline, coming off of a 5.1% drop in October. As we fall deeper into recession, spending falls off and manufacturers and service providers alike consolidate operations. Last week's ISM Index sank to 32.4, its lowest point since 1980. New orders, especially, were hit hard in the December reading, so you can expect factory orders to deteriorate from here.

ISM's Nonmanufacturing Index is due for release at 10:00 a.m. EST. The consensus sees a reading of 37.0 this time around, after the measure touched 37.3 in November. Remember, measures below 50 signify contraction. You get the point...

Also at 10:00, the National Association of Realtors releases its Pending Home Sales Index. It's expected to have dropped in November, to a level of 88.0, from 88.9 reported in October. The Federal Open Market Committee is scheduled to release the minutes of its historic last meeting (December), through which it reduced the fed funds rate to an unprecedented range of 0-0.25%. Needless to say, the minutes should prove interesting reading.

Brown Harris Stevens, a Manhattan real estate brokerage house on the high end, reviews fourth quarter residential sales. Needham & Co. kicks off one of The Greek's favorite conferences on Tuesday. Needham brings hundreds of growth companies, some worth buying into, to address investors once a year. This year's event takes place at the New York Palace Hotel. I'm not sure I'll make it this time around, but I've discovered more than one new name at this event in the past and recommend a visit if you can get in.

Tuesday's light EPS schedule includes Acuity Brands (NYSE: AYI), Aehr Test Systems (Nasdaq: AEHR), AngioDynamics (Nasdaq: ANGO), Finish Line (Nasdaq: FINL), Global Payments (NYSE: GPN), Landec Corp. (Nasdaq: LNDC), Neogen (Nasdaq: NEOG), Premier Exhibitions (Nasdaq: PRXI), Resources Global Professionals (Nasdaq: RECN), Standard Microsystems (Nasdaq: SMSC), Team Inc. (Nasdaq: TISI) and Xyratex (Nasdaq: XRTX).

Wednesday

All the morning buzz will be about the two monthly employment reports set for release. ADP's Private Employment Report (8:15 ET) is an approximation tool, used by the pros to make last minute adjustments to their Labor Department report forecasts (due Friday). Challenger's Job-Cut Report (7:30) notes the month's tally of planned corporate layoffs. Both these figures have been staggering in recent months, and there's all the more reason to expect another horror show on Wednesday.

The day also brings its regular weekly reports. In the pre-market, the Mortgage Bankers Association data on application activity should note similar news to recent trend. Activity has spiced up a bit as mortgage rates have ebbed. The EIA Petroleum Status Report, at 10:35, last week noted a slight crude inventory increase of 0.5 million barrels. This came a week after a significant draw from stores. Gaza is clearly the foremost driver of energy prices at the moment, with all eyes on Arab states' reactions. An Iranian official has called on oil producers to cut shipments to Israel, and his voice has already found some support from Bahrain.

By mid-morning, all eyes will move to DC, as all living ex-Presidents join Barack Obama and George W. Bush for lunch. We're guessing this is where and when they discuss aliens, secret societies, subsurface White House chambers and the Bat-phone.

Citigroup (NYSE: C) is still holding its Entertainment, Media and Telecom Conference in Arizona, but shrimp is off the menu this year. Wednesday's earnings slate holds some important names, including Bed Bath and Beyond (Nasdaq: BBBY), Christopher & Banks (NYSE: CBK), Constellation Brands (NYSE: STZ), Family Dollar (NYSE: FDO), Monsanto (NYSE: MON), Supervalu Inc. (NYSE: SVU), Immucor (Nasdaq: BLUD), Merix (Nasdaq: MERX), Richardson Electronics (Nasdaq: RELL), Ruby Tuesday (NYSE: RT), Sonic Corp. (Nasdaq: SONC), Spectrum Control (Nasdaq: SPEC), UniFirst (NYSE: UNF) and WD-40 (Nasdaq: WDFC).

Thursday

Look eastward to the United Kingdom, where the Bank of England is widely expected to cut its key rate by 50 basis points, to 1.5%. It was not all too long ago that this rate stood at 5%.

Weekly Initial Jobless Claims, the staple pre-market report each Thursday, held steadily above the 500K level for many weeks up until last week's dip to 492K. We feel confident that had something to do with the holidays, and this week could offer similar mercy; though Bloomberg's consensus of economist grinches forecast a reading of 540K. Monster Worldwide (Nasdaq: MNST) reports on online job availability, as it releases its Monster Employment Index Thursday morning. Expect further deterioration here as well, but pressure on newspaper companies, forcing many to fold, will help give this figure a jolt once the cycle turns.

Individual retailers will provide their chain store sales results for December mostly on Thursday of this week. As the carnage is noted, so should the guillotines be prepared for staff, unfortunately. Several retailers also note earnings this week, and most of those reports are scheduled for Wednesday. You can expect those specific reporters to also provide their December sales data on the same day.

The regular Natural Gas Report is due at 10:35 from the EIA. At 3:00 p.m., November Consumer Credit is expected to have fallen by $0.5 Billion. In October, credit declined by $3.6 billion. Believe it or not, consumer credit kept expanding surprisingly deep into this recession.

The Consumer Electronics Show is on in Las Vegas, and while many of us can no longer afford new gadgets, we'll still find them interesting to inspect, just as financial media will find them cool to cover. The earnings week finds its busiest day on Thursday, with news from Chevron (NYSE: CVX), Adams Express (NYSE: ADX), Allscripts (Nasdaq: MDRX), Apollo Group (Nasdaq: APOL), DemandTec (Nasdaq: DMAN), FCStone Group (Nasdaq: FCSX), Great Atlantic & Pacific Tea (NYSE: GAP), Healthways (Nasdaq: HWAY), Helen of Troy (Nasdaq: HELE), IHS, Inc. (NYSE: IHS), Lawson Software (Nasdaq: LWSN), Matrix Service (Nasdaq: MTRX), MSC Industrial Direct (NYSE: MSM), Nu Horizons Electronic (Nasdaq: NUHC), Penford (Nasdaq: PENX), PriceSmart (Nasdaq: PSMT), Robbins & Myers (NYSE: RBN), RPM Int'l (NYSE: RPM), Saba Software (Nasdaq: SABA), Schnitzer Steel Industries (Nasdaq: SCHN) and Synnex Corp. (NYSE: SNX).

Friday

Unemployment is expected to break 7.0% when the Labor Department releases its data for December. The jobless rate hit 6.7% in November, and has been steadily rising. We expect it to break 7% cleanly, based on the regular flow of newly jobless we've seen. Nonfarm Payrolls are expected to have decreased by a net of 500K jobs in December, after losing 533K in November. Average hourly earnings are still forecast to increase 0.2%, while the average workweek sticks at 33.5 hours. This report has the potential of scaring the market back into its Fall panic, or perhaps panicked fall.

The Wholesale Trade Report for November is due at 10:00 a.m. Inventories are seen declining by 0.7%, after a 1.1% drop in October. Finally, look for the United Nations to publish its "World Economic Situation and Prospects" report on Friday.

BMW is expected to report its December sales a little later than the rest of its peers. Europeans are, after all, rarely in a hurry. They even entered recession late! Look for earnings news from KB Home (NYSE: KBH), AZZ Inc. (NYSE: AZZ), Northfield Labs (Nasdaq: NFLD) and Greenbrier Cos. (NYSE: GBX).

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.

Debate Topic: Gaza, Palestine, Israel

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Let's debate Gaza, Palestine and Israel's handling of a powder keg of a situation. There has perhaps never been a more debated topic than the Palestinian/Israeli land claim issue. I would venture to say that only God has been debated more often than this topic.

1. Who is to blame for the latest conflict? Hamas for firing missiles or Israel for reacting to it with its full military might? Or is it Hamas' fault, because of its failure to accept Israel as a state, thereby blocking any chance for sincere long-term accord.
2. Do you believe Israel has not given Palestinians enough freedom in the first place, for instance with regard to the use of its ports. Is Gaza a free state or a prison camp?
3. Is Hamas a terrorist group, or does it represent the Palestinian people, especially those in Gaza?
4. Is Israel simply testing Hamas' capabilities, like it may have with Hezbollah, before engaging in a multi-front conflict with greater enemy Iran?
5. How might Israel and Palestine find reasonable and sustainable solution? What do you suggest is the solution that is digestible by all? This is the question of the century.

See TOPIC OF DEBATE ARCHIVE

Please see our disclosures at the Wall Street Greek website and author bio pages found there. Article interests: NYSE: GAF, Nasdaq: GULF, Nasdaq: TRIAX, Nasdaq: TRAMX, NYSE: EIS, 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.

Weekly Videos: New Years 2009

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Please enjoy this week's video collage, which highlights the new year, financial and economic forecasts for 2009, and current affairs including the conflict in Gaza. If you do not see the video player from your vantage point, simply click upon the ticket image here, and enjoy the film. Please advance through videos that do not interest you to be sure to see what does.


The opinions expressed within videos may not agree with the view of Wall Street Greek. 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.

Happy New Year?

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Happy New Year? More like melancholy new year, or maybe, here's hoping to a better new year! It's definitely not a happy New Years Eve nor Day, nor does it feel right to wish anyone a happy new year this time around.

I suppose the folks in Gaza don't want to hear those words today. No fireworks were ignited in Dubai or Egypt either this year. Pilgrims in Israel are not mistaking incoming rocket fire for bottle rockets either. In Syria, Lebanon, Iran, Iraq, Kuwait, Saudi Arabia, Oman, Georgia, Russia, Ukraine, Poland, the Czech Republic, Venezuela, Colombia and Ecuador tension is mounting, so a little alcohol might have been poured for sanity's sake.

I would expect those harmed by the Madoff scheme are not in a celebratory mood either. The charities that had to close their doors because of Mr. Madoff's greed are definitely not feeling it. Alcohol seems better served in the form of Molotov Cocktails in places like Athens, London, Paris, Beijing and Moscow, as unrest sprouts many angry heads seeking change.

The growing group of unemployed and those anxiously anticipating unemployment in the U.S., especially in Detroit and malls across the country, probably didn't splurge on a night out. The rest of us who lost a fortune in the market certainly didn't. Yeah, I would say this image we have here still works though, because the bottle is unopened and the glasses have been quietly ignored... hats abandoned.

Let's face it, there's not much to look forward to in the near-term. All we have is hope. Still, thank God for hope, because hope led men to cross the Atlantic to discover this great country. It was hope, kept alive, that led a black man to become president. Nothing other than hope led millions of the world's tired and poor huddled masses to America. So hope may be all we need in 2009. God bless hope and you. Best wishes in the new year from The Greek.

(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)