Wall Street Report: ADP, Chicago PMI, Factory Orders

Today's Coffee

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

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Wall Street Report

Wednesday's Wall Street Report brings the first of the monthly employment data points. Unfortunately, ADP did not serve to sweeten our coffee today, with a decrease in private employment payrolls noted. Still, good news arrived from the manufacturing sector, serving as a surrogate sweetener.

ADP Private Employment Report

ADP produced its Private Employment Report this morning, a precursor to Friday's big government roll call. The data for March offered a bit of disappointment, as private nonfarm payrolls dipped by 23K. Economists see an overall increase for March of 200K, and so some reason for concern enters the picture. Now, the government figure will take into account the massive hiring of census workers, something "private" employment does not measure. This offers the market comfort with regard to the monthly data, but no solace with regard to the ongoing health of the labor market post census work. February's data was revised down 4,000 to a decline of 24K jobs. Despite the negative points made above though, these results still represent the least significant monthly job losses since February of 2008.

Mortgage Activity

Mortgage activity is picking up around new home purchases, a clear indication of the impact of the First-Time Homebuyers Tax Credit. For the week ended March 26, the Market Composite Index of mortgage activity gained 1.3%. Purchase activity improved by 6.8% against the prior week, while the Refinance Index slipped 1.3%. The same thing occurred last week, as real estate agents have begun promoting the tax incentive deadline. The deadline to qualify for the tax break requires entry into contract by April 30, so expect activity to intensify over the rest of the month. Contracted 30-year and 15-year fixed rate mortgage rates rose to 5.04% (from 5.01%) and 4.34% (from 4.33%), respectively.

Chicago PMI

While the Chicago Purchasing Managers Index offered another positive economic indicator, the index at 58.8, missed economists' expectations for a more robust 61.0 (based on Bloomberg's survey). New Ordering activity remained strong, with that component index marking its sixth consecutive month above 60, at 61.8. Production was also reported strong, at 60.5. Most importantly though, inventories finally climbed over the 50 mark (break point for economic expansion), reaching 52.4. Measurable employment gains could follow suit if inventory restocking is not overdone, and is met by increasing consumption. That's a big if though...

Factory Orders

Factory Order growth exceeded expectations in February, growing by 0.6%, versus the economists expectation for a 0.4% gain. Also, January Orders were revised higher to +2.5%, from an initially reported 1.7% gain. Strength was seen in Durable Goods Orders, offering positive signal for the broader economy. Durable order growth amounted to 0.9%, while nondurables rose 0.3%. Gains in durables are greatly impacted by aircraft and defense orders, but also include machinery and heavy equipment, which indicates business investment. Capital Goods Orders, in fact, rose 2% in February. This implies underlying demand on the consumer level, albeit perhaps Asia assisted.

EIA Petroleum Status Report

This weekly measure of oil and distillate inventory levels showed a 2.9 million barrel increase in crude oil stocks in the week ended March 26. Total motor gasoline socks increased by 0.3 million barrels. Distillate fuel inventories, including heating oil, decreased on colder weather in the Northeast. Crude oil and gasoline stores are above the upper limit of the average range for this time of year, which is of course due to the still relatively weak global demand match to production levels. The strengthening dollar has acted to cheapen commodity prices, but after the EU words of support for Greece last week, a wall may lie ahead for the dollar. Also, demand is rising again. In other words, I see higher oil and commodity prices ahead.

Besides all this, Israel has been acting shady, with Netanyahu visiting President Obama quietly and also seeing Medvedev recently. We may be on the brink of war; and trust that the day before war on Iran breaks loose will be much different than what occurred in Iraq. There will be no public notice; no deadline will be issued to Iran with US troops poised on the border. No, it will be swift; it will be strong; and it will be secret.

Federal Actions

The Federal Reserve stops buying mortgage-backed securities today, beginning the unraveling of stimulus. Atlanta Federal Reserve Bank President Dennis Lockhart discussed the economic outlook at a meeting in Hartford, Connecticut. Fed Governor Elizabeth Duke discussed "returning credit to communities" in Arizona.

Corporate News Drivers

Wednesday's confirmed EPS report schedule includes news from: A. Schulman (Nasdaq: SHLM), Acuity Brands (NYSE: AYI), Aehr Test Systems (Nasdaq: AEHR), Air Transport Services (Nasdaq: ATSG), Alloy (Nasdaq: ALOY), AngioDynamics (Nasdaq: ANGO), A-Power Energy Generation (Nasdaq: APWR), Birner Dental Management Systems (Nasdaq: BDMS), BPZ Resources (NYSE: BPZ), Cascade (Nasdaq: CASC), China Agritech (Nasdaq: CAGC), China Grentech (Nasdaq: GRRF), Craft Brewers Alliance (Nasdaq: HOOK), DemandTec (Nasdaq: DMAN), DollarGeneral (NYSE: DG), Emrise (NYSE: ERI), Energy Focus (Nasdaq: EFOI), Entech Solar (Nasdaq: ENSL), Flotek Industries (NYSE: FTK), Global Payments (NYSE: GPN), Glowpoint (Nasdaq: GLOW), Immucor (Nasdaq: BLUD), Inuvo (Nasdaq: INUV), Lindsay Corp. (NYSE: LNN), Micron Technology (NYSE: MU), Mobile Telesystems (NYSE: MBT), NexMed (Nasdaq: NEXM), NN Inc. (Nasdaq: NNBR), Northern Dynasty Minerals (AMEX: NAK), OMEROS (Nasdaq: OMER), Research in Motion (Nasdaq: RIMM), Resources Global Prof. (Nasdaq: RECN), Response Genetics (Nasdaq: RGDX), Rite Aid (NYSE: RAD), Sino Gas (Nasdaq: SGAS), SinoHub (AMEX: SIHI), SmartHeat (Nasdaq: HEAT), The Mosaic Co. (NYSE: MOS), UniFirst (NYSE: UNF), ViewCast (Nasdaq: VCST), WidePoint (AMEX: WYY) and Xyratex (Nasdaq: XRTX).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

This Week: Nonfarm Payrolls Expected to Rise

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

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This Week: Nonfarm Payrolls Seen Rising

Look for the reintroduction of our "Week Ahead" copy, however, it will be produced in a more concise manner, providing mostly factual information. Our daily pre-market articles will now offer the expanded analysis of important economic data points you normally find in "Week Ahead". This is for the sake of efficiency, as the "Week Ahead" copy, as produced here, is a major endeavor requiring the entire weekend. The reason for this is due to our great research efforts that coincide with the writing of the article. Breaking up the work, by distributing it through our daily articles will help us to better function.

Monday

The Personal Income & Outlays Report for February is due at 8:30 AM. Economists see Consumer Spending rising 0.3% over January's level, according to Bloomberg's survey. In January, Spending rose 0.5%, but got some lift from volatile gasoline prices. Personal Income is seen rising by 0.1%, after a similar gain in January. The PCE Price Index looks to show prices rose 0.1% in February, versus no change in January.

The G-8 foreign ministers are set to meet in Canada, with Iran atop the agenda. Meanwhile, in China, a verdict is due on the Rio Tinto (NYSE: RTP) bribery trial. A week after Portugal was downgraded, fellow PIIGS nation, Spain, reports Retail Sales for February. Japan will report its unemployment rate and labor market trends for February. In January, Japan's unemployment stood at 4.9%.

Monday's confirmed earnings report schedule includes: Apollo Group (Nasdaq: APOL), CalMaine Foods (Nasdaq: CALM), China Valves Technology (NYSE: CWT), Digital Angel (Nasdaq: DIGA), Enterra Energy Trust (NYSE: ENT), Generac Holdings (Nasdaq: GNRC), Genta (Nasdaq: GETA), Intertape Polymer (OTC: ITPOF), Kid Brands (NYSE: KID), Neogen (Nasdaq: NEOG), SORL Auto Parts (Nasdaq: SORL), Xfone (AMEX: XFN), China Petroleum (NYSE: SNP), SouthCrest Financial (Nasdaq: SCSG), Tefron (OTC: TFRLF), BioFuel Energy (Nasdaq: BIOF), ChinaCast Education (Nasdaq: CAST), Cosi (Nasdaq: COSI), Cytomedix (AMEX: GTF), Oxford Industries (NYSE: OXM), China Medicine (Nasdaq: CHME), LGL Group (AMEX: LGL), Talon International (Nasdaq: TALN) and Universal Power (AMEX: UPG).

Tuesday

Look for the S&P Case Shiller Home Price Index on Tuesday morning before the open, and you'll likely catch Professor Shiller on Bloomberg Radio as always. However, we again note that this data is old, and so should not be relied solely upon for forecasting. S&P will be releasing data for January, and we begin April on Thursday. We are absolutely certain the delay is due to the in depth due diligence and superb research of the Professor's team (read into what I left out).

December's data showed fourth quarter prices fell 2.5% against the prior year period, based on the S&P Case Shiller US National Home Price Index. Prices have mostly stabilized, as evidenced by the decreasing rate of deceleration over the last four quarters: Q3 2009 -8.7%; Q2 2009 -14.7%; Q1 2009 -19%. December's prices, based on the 20-city composite, fell 3.1% annually.

The International Council of Shopping Centers (ICSC) reports on weekly same-store sales every Tuesday morning in the pre-market. Last week's data covering the period ended March 20, showed sales gained 3.7% over the prior year period (+3.2% in March 13 week). On a week-to-week basis, sales gained 0.1%, versus the -0.4% change the week before. Expect to see stronger gains this week and next due to the earlier fall of Easter this year versus last (by one week).

The Conference Board reports on Consumer Confidence at 10:00 a.m. Tuesday. Confidence dropped through the floor in February, with the index collapsing to 46, from 56.5 in January. The worst thing about the decline was that it was for once reflected in the Expectations Index as well as the Present Situation Index. Stubborn unemployment and housing finally led Americans to second guess economic recovery. Economists are looking for the Index to improve back up to 50 in this March reading.

State Street's (NYSE: STT) Investor Confidence Index also slipped in February, but not due to North American sentiment. The Index eased to 103.9, from 104.6 in January, but the North American component gained 3.3 points through the month. We would have expected Greece trouble to stricken European sentiment, but that was not the case in February; we expect it will be the case in March though. Last month, it was Asia that drove the global sentiment figure to sour.

Farm Prices are due from the Department of Agriculture at 3:00 PM, but Barron's lists the data due on Wednesday (so check). The Bank of Portugal will post its economic forecast, something we expect the rating agencies will be paying close attention to (so should you). French President Nicolas Sarkozy visits with Barrack Obama. Paul Volcker will be addressing "financial reform" in a Washington gathering.

Ford's (NYSE: F) got a meeting with analysts scheduled for Tuesday. The day's confirmed EPS report schedule includes: Aer Lingus (OTC: AELGF.PK), Axion Power (Nasdaq: AXPW), Banco Popular (OTC: BPSAF.PK), Bank of Ireland (OTC: IRLBF.PK), Charming Shoppes (Nasdaq: CHRS), China National Offshore Oil (NYSE: CEO), Chunghwa Telecom (NYSE: CHT), Cobalt Int'l Energy (NYSE: CIE), Dover Saddlery (Nasdaq: DOVR), Edap TMS (Nasdaq: EDAP), FirstCity Financial (Nasdaq: FCFC), Flexible Solutions (AMEX: FSI), Forest City Enterprises (Nasdaq: FCEA), Fortress Int'l Group (Nasdaq: FIGI), FSI Int'l (Nasdaq: FSII), Gammon Gold (NYSE: GRS), Graymark Healthcare (Nasdaq: GRMH), H.B. Fuller (NYSE: FUL), Icagen (Nasdaq: ICGN), Immersion (Nasdaq: IMMR), Kingsway Fin'l (NYSE: KFS), KIT Digital (Nasdaq: KITD), Landec (Nasdaq: LNDC), Layne Christensen (Nasdaq: LAYN), LDK Solar (NYSE: LDK), MI Developments (NYSE: MIM), Nexxus Lighting (Nasdaq: NEXS), NTN Buzztime (AMEX: NTN), People's Liberation (Nasdaq: PPLB), PLC Medical Systems (OTC: PLCSF.PK), SAIC (NYSE: SAI), Sealy (NYSE: ZZ), Team Inc. (Nasdaq: TISI), Ultrapetrol Bahamas (Nasdaq: ULTR), WebMediaBrands (Nasdaq: WEBM), WILLDAN Group (Nasdaq: WLDN), WSP Holdings (NYSE: WH) and Wuhan General Group China (Nasdaq: WUHN).

Wednesday

Wednesday morning brings the first of the monthly employment reports. ADP will produce its Private Employment Report at 8:15 a.m. February's data showed a 20K decline in private non-farm payrolls. The decline was the least significant since February of 2008, however January's data was revised down by 38K to -60K.

The Mortgage Bankers Association reports on weekly mortgage activity each Wednesday morning in the pre-market. Last week's report showed the Market Composite Index of Mortgage Activity decreased 4.2% in the period ending March 19. The Refinance Index slipped 7.1%, as contracted 30-year and 15-year fixed rate mortgage rates rose to 5.01% (from 4.91%) and 4.33% (from 4.24%), respectively. The Purchase Index, though, improved by 2.7%. As real estate firms seek to drive business with promotion of the April deadline for tax incentive, activity should pick up.

The Chicago Purchasing Managers Index is due for reporting at 9:45 AM. February's mark was improved from January, and at 62.6 offered the fifth straight month of readings above 60. New order strength in February leads economists for foresee yet another month above 60, with the consensus forecasting a mark of 61.0 for March.

Factory Orders are due for the month of February at 10:00 a.m. Factory Orders are expected to grow for the reported month of February, given a same-month increase in Durable Goods Orders; also higher energy prices are expected to drive nondurable growth. Economists see a 0.4% increase on average, comparing against the 1.7% gain posted in January.

The EIA Petroleum Status Report is due at its usual 10:30 reporting time. US commercial crude oil inventories increased by 7.3 million barrels in the week ending March 19. Gasoline inventory decreased by 2.7 million barrels. The strengthening dollar has acted to cheapen commodity prices, but after the EU words of support for Greece last week, a wall may lie ahead for the dollar.

Besides all this, Israel has been acting shady, with Netanyahu visiting President Obama quietly and also seeing Medvedev recently. We may be on the brink of war; and trust that the day before war on Iran breaks loose will be much different than what occurred in Iraq. There will be no public notice; no deadline will be issued Iran with US troops poised on the border. No, it will be swift; it will be strong; and it will be secret.

The Federal Reserve stops its purchases of mortgage-backed securities today. Atlanta Federal Reserve Bank President Dennis Lockhart will discuss the economic outlook at a meeting in Hartford, Connecticut. The Department of Agriculture issues its Prospective Plantings survey, with corn acreage expected to increase.

Wednesday's confirmed EPS report schedule includes news from: A. Schulman (Nasdaq: SHLM), Acuity Brands (NYSE: AYI), Aehr Test Systems (Nasdaq: AEHR), Air Transport Services (Nasdaq: ATSG), Alloy (Nasdaq: ALOY), AngioDynamics (Nasdaq: ANGO), A-Power Energy Generation (Nasdaq: APWR), Birner Dental Management Systems (Nasdaq: BDMS), BPZ Resources (NYSE: BPZ), Cascade (Nasdaq: CASC), China Agritech (Nasdaq: CAGC), China Grentech (Nasdaq: GRRF), Craft Brewers Alliance (Nasdaq: HOOK), DemandTec (Nasdaq: DMAN), DollarGeneral (NYSE: DG), Emrise (NYSE: ERI), Energy Focus (Nasdaq: EFOI), Entech Solar (Nasdaq: ENSL), Flotek Industries (NYSE: FTK), Global Payments (NYSE: GPN), Glowpoint (Nasdaq: GLOW), Immucor (Nasdaq: BLUD), Inuvo (Nasdaq: INUV), Lindsay Corp. (NYSE: LNN), Micron Technology (NYSE: MU), Mobile Telesystems (NYSE: MBT), NexMed (Nasdaq: NEXM), NN Inc. (Nasdaq: NNBR), Northern Dynasty Minerals (AMEX: NAK), OMEROS (Nasdaq: OMER), Research in Motion (Nasdaq: RIMM), Resources Global Prof. (Nasdaq: RECN), Response Genetics (Nasdaq: RGDX), Rite Aid (NYSE: RAD), Sino Gas (Nasdaq: SGAS), SinoHub (AMEX: SIHI), SmartHeat (Nasdaq: HEAT), The Mosaic Co. (NYSE: MOS), UniFirst (NYSE: UNF), ViewCast (Nasdaq: VCST), WidePoint (AMEX: WYY) and Xyratex (Nasdaq: XRTX).

Thursday

The close of the Holy Week for Christians the world over leads few public companies to report results over the next two days. However, another special driver may play a role on Thursday. April Fool's Day acts like a superstitious repellant to public companies. Not many firms choose to report their results this day, and who could blame them. It just makes it all too easy for bloggers to make fools of them. We will still give it a go though!

The first of the month brings the domestic Motor Vehicle Sales data, reported by the individual automakers throughout the day. February's data showed a slip in sales on bad weather. Economists see March's aggregate annual pace of domestic sales running at 9.0 million, versus the 7.6 million rate seen in January.

The Monster Employment Index, produced by Monster World Wide (NYSE: MWW), is due for report in the pre-market. Monster's MEI showed strength in February, reaching 124, versus 114 in January. So, while the snow may have affected hiring, it did not impede online recruitment activity. Online job demand improved in all 28 major metro markets measured.

Challenger, Gray & Christmas' Job-Cuts Report showed the lowest level of announced corporate layoffs since 2006 in February. Declared dumpings numbered just 42,090, versus 71,482 in January and 186,350 in February of 2009. There is no consensus figure for this data point.

Weekly Initial Jobless Claims are due for the period ended March 27 at 8:30 a.m. After last week's measure at 442K new filings, economists forecast 440K for the current period. The four-week moving average shows a renewed trend of decreasing claims filings after a recent lull.

At 10:00 a.m., ISM will make its latest reporting of its Manufacturing Index. February's reporting brought the PMI down to 56.5%, from 58.4% in January. February's weaker growth was seen in New Orders, Production, Exports and Prices. Still, remember that a reading above 50 signifies economic expansion. Economists are looking for a reading of 56.1% for March.

Construction Spending eased 0.6% in January, and economists see another dip of 1.1% for February. Given horrible weather and other data that agrees, this should be of no surprise.

Natural Gas Inventory data is due at 10:30 a.m. Last week's data showed a net increase of 11 Bcf in the period ended March 19. Stocks were 121 Bcf above the five-year average for this time of year. As we have now turned the seasonal usage period corner, inventory should continue to build (especially given intensified natural gas drilling).

The Bank of Japan releases its tankan survey of business enterprises. Many overseas markets begin closing Thursday for the Easter holiday, including markets in Argentina, Mexico and Venezuela.

The day's short list of confirmed reports includes news from: Bank of Moscow (MMBM.RTS), CarMax (NYSE: KMX), China Ritar Power (Nasdaq: CRTP), GigOptix (Nasdaq: GGOX), Medical Nutrition USA (Nasdaq: MDNU), Movado (NYSE: MOV), Multiband Corp. (Nasdaq: MBND), NGP Cap Resources (Nasdaq: NGPC), Scholastic (Nasdaq: SCHL) and Worthington Industries (NYSE: WOR).

Good Friday

The stock market is closed for Good Friday, but the bond market is open until about noon. Banks and the US government are open for business, and the feds will report on the state of labor. The Employment Situation Report is due for March in the pre-market. Economists see the unemployment rate steady at 9.7% and nonfarm payrolls gaining by 200K jobs. The national census effort and related hiring are having a positive effect here, but many believe corporations must now compensate for overdoing layoffs over the last year.

There are no corporate earnings reports of note scheduled for Good Friday. However, Apple (Nasdaq: AAPL) starts selling its iPad tablet on Saturday.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Holy Week!

We received a trinity of divine data over the course of the last week that served as a reminder of the good things human beings remain capable of. Christians are just entering their Holy Week, with Easter arriving next Sunday for the Eastern Orthodox, Catholic, and Protestant faiths. So, perhaps some divine intervention played a role in the wonderful wins humanity scored last week.

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

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It was the kind of period that would have the fictional Robin character from the Batman series uttering, "Holy week Batman!" Still, it was the Joker who said, "You ever dance with the devil by the pale moonlight?" In our case, we certainly have danced with a devil of an economy over the past few years, and so it is about time for our hero to triumph just in time for Holy Week.

The divine trinity of data that reached the market last week included a positive course of action for Greece set by the previously fragmented European Union. Due to disagreement within the ranks, especially among politicians in Germany and France - where helping Greece against popular opinion would very likely cost the ruling parties their government; the EU instead found a way to help Greece by incorporating the International Monetary Fund (IMF) into the chaos. The most important point to come out of Brussels was that together the EU would indeed assist Greece to avoid default as a final draw if necessary. Actually, it was the united decision and support that allowed France's Sarkozy and Germany's Merkel to say so. Otherwise, they might have abandoned Greece for the sake of their own hides. However, it did not hurt Greece that its inappropriately named PIIGS (Portugal, Ireland, Italy, Greece & Spain) partner, Portugal, was downgraded by Fitch last week, sending the euro into another death spiral. The action likely helped Germany to see the contagious possibilities that accompany abandoning its Greek cousin.

The second blessed data point to reach the wires last week was news that America would finally do the right thing, and ensure all its citizens have health care. While this will cost some people a few bucks, it will also provide for the basic health care needs of 30+ million uninsured poor people (including writers), who otherwise suffer without it. While my old party embarrassed my human spirit, by employing deceit and dastardly tactics against this good-natured legislation, truth won out in the end. While the jury is still out on the economic impact of the new law, the market found reassurance that filotimo (Greek: love of honor) still exists in the world. The devil, however, sought to place bets on both sides of the table, and set brother against brother as the health care debate separated Americans more than any issue since slavery.

Finally, the United States and Russia took a step for the sake of humankind. While the Strategic Arms Reduction Treaty (START) is, in and of itself, inconsequential in ensuring the world from nuclear annihilation, every small step in the right direction is worthwhile. And while the actions of the two nuclear nations do not save the world immediately from Armageddon, the agreement does reduce the nuclear arms of each nation by one-third. That is no small achievement for man, and surely a pleasing one to God.

Indeed, these three great achievements of the past week should offer mankind reassurance in what good it is capable of achieving. Still, those involved in the hard fight bore a significant political cost to get this good work done. For Christians, it was reminiscent of what our Lord Jesus Christ endured for our sake. Those persecuted and all of us should rejoice this Holy Week, because He told us, "Blessed are those who are persecuted for righteousness' sake, for theirs is the kingdom of heaven."


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Antiquities

Ancient Greek & Roman Art Market

Antiquities Columnist
Randall Hixenbaugh

Randall Hixenbaugh has been involved in antiquities or ancient art as a scholar, collector, and dealer for nearly 20 years. He holds a Master's Degree in Classical Archaeology and has participated in a number of archaeological excavations of Roman and Punic sites in North Africa.

An avid collector himself, he is an accomplished numismatist and a student of Sumerian, Greek, and Latin languages. He is the former Assistant Editor of Minerva Magazine, the International Review of Ancient Art and Archaeology. He is a member of the Archaeological Institute of America and the Metropolitan Museum of Art. Mr. Hixenbaugh is also a member of the Appraisers Association of America, and is one of a handful of individuals qualified to perform appraisals of antiquities for insurance purposes and charitable donation. He is currently preparing to publish a comprehensive study of ancient Greek military helmets.

Mr. Hixenbaugh is the director of Hixenbaugh Ancient Art Ltd., a gallery located at 320 East 81st Street on the Upper East Side of Manhattan. The gallery deals in antiquities from ancient Mesopotamia, Egypt, Greece, and Rome. The gallery specializes in working with clients, both public and private, to build collections of ancient art. Due to his in depth knowledge of the antiquities market, he is able to acquire antiquities with a discerning eye for value and quality. All of the pieces handled by the gallery are legally and ethically acquired, in complete accordance with US and international regulations and laws concerning the import and sale of ancient objects. Hixenbaugh Ancient Art deals only in authentic pieces, and all objects are guaranteed genuine and as described.

Antiquities

Hixenbaugh's Column:

• Market for Ancient Greek Art Remains Robust

Email: Antiquities@ WallStreetGreek .com

Full Disclosure: Randall Hixenbaugh has agreed to Wall Street Greek policy to avoid the authoring of articles about investment securities traded on open exchanges in which he personally owns or holds beneficial interest in. In the event of a special case, we expect Randall will make full disclosure of ownership or beneficial interest, which is his responsibility. The work of contributors to Wall Street Greek is their own, and may not necessarily agree with the opinion of the site or its founder, and does not constitute financial advice. Please see our full disclosure at Wall Street Greek. Tickers: NYSE: BID, Nasdaq: CAICX, Nasdaq: CAITX, Nasdaq: CAIAX, OTC: BLKU.OB, NYSE: TIF, OTC: CRUPF.PK, OTC: AVSTF.PK, NYSE: ZLC, NYSE: SIG, NYSE: BMJ, Nasdaq: DGSE, Nasdaq: NILE, NYSE: LYG, NYSE: RBA, NYSE: KAR, OTC: AVSTF.PK, Nasdaq: CLCT, Nasdaq: CCNG, OTC: BYDC.PK, OTC: CLHSF.PK, NZSE: MOW.NZ, OTC: HAFIF.PK, OTC: WWDA.PK, OTC: AUCI.PK, OTC: TAUTF.PK, OTC: AUCC.PK, Frankfurt: ZUIA.F, Korea: 063170.KQ, OTC: AAQS.OB, NYSE: NBG, NYSE: OTE, NYSE: CCH, Nasdaq: CLMS, Nasdaq: TOPS, Nasdaq: DRYS, NYSE: GNK, Berlin: CUJ1.BE, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD.

Semiconductors & Steel Demand Your Attention

Stocks touched an 18-month high Tuesday, based on the close of the S&P 500 Index. Moreover, two days of steady market rise has many asking why. What gives? Is the market happy for health care? Nope, that's not it. Keep reading...

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

(Tickers: NYSE: TSM, NYSE: INTC, NYSE: AMD, Nasdaq: KLIC, Nasdaq: KLAC, NYSE: TXN, NYSE: STM, NYSE: ADI, Nasdaq: MXIM, Nasdaq: WEDC, Nasdaq: SPRD, Nasdaq: ENTR, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD)

Semiconductors & Steel Demand

The Dow Jones Industrials Average rose nearly a point Tuesday, after grasping for a 0.4% gain on Monday. That does not seem like much of a move, or anything other than coincidental correlation, except for two important economic signals from early cyclical industries.

This latest copy of our report does not unearth any hidden market factor. We are not going to show you the gold that lies beneath the swamp this time around. The financial press has already pinpointed the driver pretty well for the world to see, though two weeks late. There are signs of demand for early cyclical industries.

Signs of demand for early cyclical commodities, semiconductors and steel, can pack a significant market pop, and so we just wanted to make sure you took notice. Now this evidence might not be reliable as a forecaster of sustainable growth (as evidenced in the choppy charts of semi stocks), but either way, I think the upward move in stocks could continue up to the pivotal first quarter GDP report, barring any other significant news. That Q1 GDP number seems more likely to us to soften, or to offer signs of softening economic growth from Q4 2009. We expect pundits will then bring more attention to the common economic back-step that occurs after the first few quarters of economic expansion, when inventory restocking is satisfied. This time around, panic caused retailers to manage bare bone inventory levels, and so the sharp burst in Q4 GDP as restocking occurred.

Back to the current relevant point for traders...

The Dow is already up 3.0% since Taiwan Semiconductor (NYSE: TSM) reported its February sales on March 10. More importantly, for those of you who noticed, and tell me if you did because you deserve some credit, on March 11, the company said it would be hiring 2,400 full-time employees to replace contract workers. That was in addition to the 3,000 engineers the company had already expected to hire.

As we all know by now, companies just do not hire in today's economy. So, it seems clear that Taiwan Semi is seeing some significant change in its marketplace; and Taiwan Semi's marketplace is an important barometer for the rest of the economy. Also, Taiwan Semi is an important player in the semiconductor market, and so we can infer industry demand from its operations. Taiwan's tech-driven economy is seeing declining unemployment and economic growth. While an earthquake may disrupt the company's quarter, that does not impact the signal its actions are sending regarding the state of the global economy.

In other news, a Brazilian steel maker raised prices yesterday, something that does not occur without demand as well. These early cyclical signals are understood by institutional investors, and cash seems to be moving into stocks as a result. The market is off fractionally today, and any significant economic data point disappointment could pull the wind right out of the sales of this signal. However, we may have something here worth noting for short-term trade and for long-term recovery. The medium term is what I'm worried about, so dynamic investment strategy is needed now.



Tuesday's earnings reports included 21st Century Holding (Nasdaq: TCHC), 3Com Corp. (Nasdaq: COMS), Adobe Systems (Nasdaq: ADBE), Ambac Financial (NYSE: ABK), American Shared Hospital Services (AMEX: AMS), Antares Pharma (AMEX: AIS), Appalachian Bancshares (OTC: APAB.PK), Carnival Corporation (NYSE: CCL), Clark Holdings (AMEX: GLA), Comforce (AMEX: CFS), Community Central Bank (Nasdaq: CCBD), CEMIG (NYSE: CIG), Copernic Inc. (Nasdaq: CNIC), Corriente Resources (AMEX: ETQ), CPI Aerostructures (AMEX: CVU), Cyclacel Pharmaceuticals (Nasdaq: CYCC), Cycle Country Accessories (AMEX: ATC), Darden Restaurants (NYSE: DRI), Deerfield Capital (Nasdaq: DFR), Dune Energy (AMEX: DNE), Electro-Optical Sciences (Nasdaq: MELA), Empire Resorts (Nasdaq: NYNY), EntreMed, Inc. (Nasdaq: ENMD), Fifth Street Finance (AMEX: FSC), GeoGlobal Resources (AMEX: GGR), GeoMet, Inc. (Nasdaq: GMET), Inhibitex, Inc. (Nasdaq: INHX), Intelligent Systems (AMEX: INS), Jabil Circuit (NYSE: JBL), K.B. Home (NYSE: KBH), Lime Energy (Nasdaq: LIME), MDRNA, Inc. (Nasdaq: MRNA), MI Developments Inc. (NYSE: MIM), NASB Financial (Nasdaq: NASB), NexMed (Nasdaq: NEXM), Northwest Pipe (Nasdaq: NWPX), Pacific State Bancorp (Nasdaq: PSBC), Peco II (Nasdaq: PIII), Pharmathene (AMEX: PIP), Progress Software (Nasdaq: PRGS), Protection One (Nasdaq: PONE), Psychemedics (Nasdaq: PMD), RHI Entertainment (Nasdaq: RHIE), Sonic (Nasdaq: SONC), Steelcase (NYSE: SCS), Supertel Hospitality (Nasdaq: SPPR), Sypris Solutions (Nasdaq: SYPR), TechTeam Global (Nasdaq: TEAM), TierOne (Nasdaq: TONE), Transcept Pharmaceuticals (Nasdaq: TSPT), Ultrapetrol (Bahamas) Limited (Nasdaq: ULTR), United Guardian (Nasdaq: UG), Valley Financial (Nasdaq: VYFC), Walgreen (NYSE: WAG), Waterstone Financial (Nasdaq: WSBF), Wimm-Bill-Dann Foods (NYSE: WBD) and ZST Digital Networks (Nasdaq: ZSTN).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Cooking Greek Recipes

Cooking Up Greek Recipes

with our

Executive Chef Pinelopi

Pinelopi's (pee-neh-law-pee) mother of the same name had eight children, of which Pinelopi was the youngest. Pinelopi's mother designated the young girl as her kitchen aid, which she rather enjoyed. As they cooked up Greek recipes for family meals together, Pinelopi's mother would share colorful stories of her childhood in Greece, and of the favorite Greek foods she had learned to prepare there. These were Greek recipes that were passed down through generations, and the young girl studied attentively. Little Pinelopi vowed to herself to always replicate these treasured Greek meals to the best of her ability.

Pinelopi's mother enjoyed a natural luxury of Greece, a perivoli or grove of many trees that thrived on the family property, including a variety of fruit and citrus trees, as well as olives and almonds. As a result, Pinelopi tells us, "Mother would make many "teaspoon sweets", which were always served with a cold glass of water. These were made for presentation to visitors, as a requisite offering of Greek hospitality."

Pinelopi (Penny) still views her mother as the best cook ever. She loved cooking Greek food, and inherently passed this passion on to her daughters. Penny says, "Mother not only loved cooking for the family; she loved cooking for everyone, because, simply put, she loved everyone." A sweet example of this generosity was her habit of saving mayonnaise jars, which she would have Pinelopi wash out for her. "Mother would fill the jars with soup for the hobos who rode the railroad." Penny and her mother would pack them in paper lunch bags and leave them for the men to find on the front porch.

"These homeless strangers would inform one another of mother's warm offerings of welcomed homemade soup and sustaining bread. On occasion the men would see mother sweeping the porch or watering her plants, and they would tip their hats to her and call out, "Thank you Mrs." Mother would reply in her broken English, "You welcome.""

Pinelopi has carried on her mother's passion for cooking and also sharing her wonderful dishes and sweets with family, friends, neighbors and strangers. Like many Greek families, hers also endeavored to create entrepreneurial restaurants and diners, but Penny mostly just cooked at home and for family celebrations. Penny wants to share her wonderful treats now with you.

Pinelopi looks forward to sharing her mother's passion for Greek cooking within her new column here. Our Executive Chef will author a series of articles offering these wonderful Greek food recipes, which will warm the pages of Wall Street Greek.

We also invite readers interested in sharing their own Greek recipes or variations of Greek cuisine with us via email to recipes@ WallStreetGreek.com. It will be our pleasure to publish your recipes here and give credit to you, and we will also publish a photograph of you with the dish if you like.

Pinelopi's Greek Recipes:

• Melomakarona - Greek Honey Walnut Cookie
• Vasilopita - Greek New Year's Bread
• Lentil Soup
• Shrimp and Rice Pilaf
• Lamb Souvlaki or Shish Kebab

(Tickers: NYSE: NBG, NYSE: OTE, NYSE: CCH, NYSE: TNP, NYSE: SJM, NYSE: KFT, NYSE: K, NYSE: HNZ, NYSE: SLE, NYSE: MSO, NYSE: GIS, NYSE: UL, NYSE: PEP, NYSE: CAG, NYSE: MJN, NYSE: MKC, NYSE: RAH, NYSE: DLM, NYSE: FLO, NYSE: THS, NYSE: GMK, Nasdaq: DMND, Nasdaq: AIPC, Nasdaq: JJSF, NYSE: BGS, Nasdaq: SMBL, Nasdaq: SENEB, Nasdaq: JBSS, NYSE: OFI, Nasdaq: TSTY, NYSE: DRI, NYSE: NM, NYSE: NNA, NYSE: NMM, NYSE: OSG, NYSE: ISH, NYSE: EXM, NYSE: SB, NYSE: CRU, NYSE: SEA, NYSE: GNK, NYSE: DSX, NYSE: DAC, NYSE: SFL, NYSE: SSW, NYSE: GMR, NYSE: DHT, Nasdaq: DRYS, Nasdaq: TOPS, Nasdaq: EGLE, NYSE: EAT, NYSE: YUM, NYSE: MCD, NYSE: WEN, NYSE: BKC, NYSE: CMG, Nasdaq: CAKE, Nasdaq: JACK, Nasdaq: CBRL, Nasdaq: PFCB, Nasdaq: BOBE, NYSE: CEC, Nasdaq: BWLD, NYSE: DPZ, NYSE: RT, Nasdaq: PZZA, NYSE: CKR, NYSE: DIN, Nasdaq: COSI, Nasdaq: KONA, Nasdaq: ARKR, Nasdaq: DAVE, Nasdaq: RUBO, NYSE: LUB, Nasdaq: NATH, Nasdaq: RUTH, NYSE: MRT, NYSE: FRS, Nasdaq: TAST, NYSE: KKD, Nasdaq: CHUX, Nasdaq: DENN, NYSE: LNY, Nasdaq: CPKI, Nasdaq: RRGB, NYSE: SNS, Nasdaq: BAGL, Nasdaq: STRZ, Nasdaq: CASA, Nasdaq: GTIM, Nasdaq: PRGN, NYSE: KSP, Nasdaq: ESEA, Nasdaq: SBLK, Nasdaq: ONAV, Nasdaq: TBSI, Nasdaq: GLNG, Nasdaq: ACLI, NYSE: JAX, Nasdaq: WEST)

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Palm (Nasdaq: PALM) Future Uncertain

Today's Most Active Stocks

Palm's (Nasdaq: PALM) future is uncertain and its stock price can now be counted in dollars on the palm of one hand. I would AVOID Palm in the very near term, while keeping the trigger finger ready to buy on an effective company mitigation effort or the advent of suitor tech-straordinaire!

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

(Tickers: Nasdaq: PALM, Nasdaq: GOOG, Nasdaq: AAPL, Nasdaq: RIMM, NYSE: VZ, NYSE: T, NYSE: S, NYSE: BBY, NYSE: WMT, Nasdaq: MSFT, Nasdaq: INTC, Nasdaq: CSCO, Nasdaq: ORCL, Nasdaq: ETFC, Nasdaq: HBAN, Nasdaq: SYMC, NYSE: C, NYSE: F, NYSE: BAC, NYSE: GE, NYSE: PFE, NYSE: XLF, NYSE: IWM, Nasdaq: GENT, Nasdaq: SAPX, Nasdaq: FORD, Nasdaq: NMTI, Nasdaq: ASRV, Nasdaq: ADEP, NYSE: POL, Nasdaq: CTEL, NYSE: IDT, NYSE: GTN-A, NYSE: GSL, NYSE: CBC, NYSE: HOO, Nasdaq: RXII, Nasdaq: IPCI, Nasdaq: APPA, Nasdaq: ADUS, Nasdaq: CALC, NYSE: BBX, Nasdaq: ATSG, Nasdaq: TWMC, OTC: RBPAA, Nasdaq: HMNA, Nasdaq: SALM, Nasdaq: BSET, Nasdaq: DPTR, NYSE: NLS, Nasdaq: GCFB, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD)

Palm (Nasdaq: PALM)

Palm, Inc. (Nasdaq: PALM) shares topped the most active list Friday, but on the wrong side of the board, dropping 29% through the close. The stock marked a new 52-week low, closing at $4.00, as compared to its high water mark for the year of $18.09. That is quite a ways down in any market, but even worse in a 12-month period that had the broader market rising sharply.

The smart phone pioneer was toppled by a weak earnings report and disappointing corporate guidance published Thursday after the close. Roughly 408K Palm products sold in the company's quarter ended February 26, which compares horribly against Apple's (Nasdaq: AAPL) 8.7 million iPhones. Palm was already well understood to be a minor player in the broader market, so what really impacted its shares was the fact that sales dropped 29% from its previous quarter, leaving a hefty stock of products sitting in retail back store rooms and warehouses.

Palm lost $0.61 cents a share on an operating basis, well worse than the consensus of analysts had foreseen, which according to Yahoo Finance/ThomsonFN, was a loss of $0.42 per share. In the prior year period, Palm lost $0.89 per share, but that was before the release of its latest product lines led by the "Pre" and "Pixi". The company only brought in revenues of $91 million last year. This year's top line totaled $350 million, which topped the company's recently guided range of $285-$310 million. Why so glum then today you ask?

Well, Palm apparently shipped a ton of product at the close of the quarter, with a total of 960K smart phones sent to distributors, carriers (NYSE: VZ, NYSE: S, NYSE: T) and retailers (NYSE: BBY, NYSE: WMT), too many of which still remain on shelves (if they even made it that far). That means that orders for Palm's fiscal fourth quarter will be down significantly. Jefferies (NYSE: JEF) estimates Palm's Q4 revenues will only amount to $150 million, which does not compare very well at all to the analysts' consensus view for $305 million. It did not help the stock either, when two analysts downgraded the shares. A Kaufman Brothers analyst cut the stock to hold from sell, and a Morgan Joseph analyst cut to underperform from hold.

The pressing problem against PALM shares extends beyond just one quarter, because if Palm's new products are not competitive against the stiff competition at Apple, Research in Motion - Blackberry (Nasdaq: RIMM), and Google - Android (Nasdaq: GOOG), then sales might never reach critical threshold. Palm might die off as a result, like other pioneers that failed to translate early success into sustainable operation. The company is currently actively attempting to mitigate the sales drop-off by sending product communications representatives to retail locations. The move is being undertaken with hope that Palm's customers' servicemen on the retail floor might gain a better understanding of Palm's new goods... and so move more product. Palm is also launching a high profile television marketing campaign through the first couple weeks of the NCAA basketball tournament.

There also remains possibility that Palm's critically acclaimed smart phones could attract the attention of a larger technology company that could perhaps use a foothold into the smart phone market. Hewlett-Packard (NYSE: HPQ) is one name that has been thrown around by industry insiders. That hope and possibility alone is what sets the floor for Palm now, as analysts measure its lifespan based on its current cash burn rate (one analyst estimates that time span at 12 months, considering its expensive ad campaign). Unfortunately for PALM, raising capital now would not be so easy given its most recent numbers. Thus, it appears the company missed its chance to do so between quarters.

Buyers of PALM risk the wealth cutting possibilities that accompany attempting to catch a falling knife. However, as the stock settles and the company explores possibilities with potentially salivating callers, Palm might grasp gains once again. As an analyst, and before looking at numbers, I would be inclined to favor an "avoid," recommendation at this point, since today's action should reflect a good portion of the new information.

While risk of obsolescence and bankruptcy remains the greatest possibility for Palm, I would still keep a keen eye on the broader tech sector for a potential suitor. Palm would very likely only communicate this possibility after exhausting informal outreach. By that time, the stock would likely be significantly cheaper, and the company in a bad bargaining position. So we would not invest just yet on buyout hopes and dreams. If consulted, I would advise Palm executives to give suitors a chance to call over the next few weeks, and then make outreach of their own; AND then close a deal if the company's sales mitigation efforts have failed. Waiting too long often costs shareholders dearly, and several analysts have set their price targets at $0, already shaking more than a few investors out of the stock. Still, those headline catching moves might just create opportunity for risk takers down the road.

In the meantime, we would want to know who is coming and going from Palm headquarters and where Palm executives are traveling to. Greek Philosophy: When the milkman enters a home and stays there for a an hour, we can form a pretty good mosaic view that something other than the sale of milk is doing. Just another unique idea from an independent source.

I would AVOID Palm (Nasdaq: PALM) for now, though with a finger on the trigger.



Today's most active stocks included Palm (Nasdaq: PALM), Microsoft (Nasdaq: MSFT), Intel (Nasdaq: INTC), Cisco (Nasdaq: CSCO), Oracle (Nasdaq: ORCL), E*TRADE (Nasdaq: ETFC), Huntington Bancshares (Nasdaq: HBAN), Symantec (Nasdaq: SYMC), Citigroup (NYSE: C), Ford (NYSE: F), Bank of America (NYSE: BAC), GE (NYSE: GE), Pfizer (NYSE: PFE), Select Financial SPDR (NYSE: XLF), iShares Trust (NYSE: IWM), Direxion Daily Financial Bear (NYSE: FAZ), Wells Fargo (NYSE: WFC), Exxon Mobil (NYSE: XOM), Alcoa (NYSE: AA), Qwest Communications (NYSE: Q), Boston Scientific (NYSE: BSX), JP Morgan Chase (NYSE: JPM).

The day's biggest gainers were Gentium SpA (Nasdaq: GENT), Seven Arts Pictures (Nasdaq: SAPX), Forward Industries (Nasdaq: FORD), NMT Medical (Nasdaq: NMTI), AmeriServ Financial (Nasdaq: ASRV), Adept Technology (Nasdaq: ADEP), PolyOne (NYSE: POL), City Telecom (H.K.) (Nasdaq: CTEL), Emmis Communications (OTC: EMMSP), IDT Corporation (NYSE: IDT), Gray Television (NYSE: GTN-A), Global Ship Lease (NYSE: GSL), Capitol Bancorp (NYSE: CBC), Cascal N.V. (NYSE: HOO), RXi Pharmaceuticals (Nasdaq: RXII), Intellipharmaceutics (Nasdaq: IPCI), Jefferson Bancshares (Nasdaq: JFBI), Federal Home Loan Mortgage (NYSE: FRE), Rexahn Pharmaceuticals (AMEX: RNN), HyperDynamics (AMEX: HDY), CytRx (Nasdaq: CYTR), Rainmaker Systems (Nasdaq: RMKR), Great Wolf Resorts (Nasdaq: WOLF), Monarch Community Bancorp (Nasdaq: MCBF) and Xenith Bankshares (Nasdaq: XBKS).

The day's biggest losers were A.P. Pharma (Nasdaq: APPA), Addus HomeCare (Nasdaq: ADUS), California Coastal Communities (Nasdaq: CALC), BankAtlantic Bancorp (NYSE: BBX), Air Transport Services (Nasdaq: ATSG), Trans World Entertainment (Nasdaq: TWMC), Royal Bancshares of Pennsylvania (OTC: RBPAA), Helios & Matheson North America (Nasdaq: HMNA), Salem Communications (Nasdaq: SALM), Bassett Furniture (Nasdaq: BSET), Delta Petroleum (Nasdaq: DPTR), Nautilus (NYSE: NLS), Granite City Food And Brewery (Nasdaq: GCFB), Pacific Capital Bancorp (Nasdaq: PCBC), Borders Group (NYSE: BGP), Intelligent Systems (AMEX: INS), ValueVision Media (Nasdaq: VVTV), Heckmann Corporation (NYSE: HEK), Newcastle Investment (NYSE: NCT), HMG/Courtland Properties (AMEX: HMG), Saga Communications (AMEX: SGA), The Medicines Company (Nasdaq: MDCO), Emmis Communications (Nasdaq: EMMS) and Lee Enterprises (NYSE: LEE).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Housing Forecast 2010

A Year for Rebuilding

Our housing forecast sees great opportunity in the 2010 residential real estate market. We see a continuation of what began for housing in the summer of 2009. We forecast housing prices to slowly rebound and gain momentum as the year progresses. Thus, we expect 2010 will be a very good year for Housing and Residential Rentals.

Visit the front pages of Wall Street Greek now to see our current coverage of housing and real estate, Wall Street, global financial markets, shipping, fine art, technical analysis, antiquities and global affairs.

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The direction and forecast for the vast majority of American Housing and Residential Rental Properties which qualify for FHA, FNMA, or FMAC financing is up. How quickly appreciation sets in, and to what degree in the year 2010, hinges on how quickly the general economy recovers and the Federal Reserve's response to that recovery. However, our forecast for the Luxury Home Market and the Commercial Market sees ongoing suffering, as these segments continue their price correction until values become extremely compelling or lending rates, terms, and underwriting criteria return to more typical levels.

Although there still remain many challenges, the recovery from the "Great Recession" appears to be underway. Fewer jobs are being lost and some sectors such as temporary employment, which is a typical precursor of job recovery, are actually showing growth. Real Estate in general has been suffering for three years from the effects of the unreal and unsustainable price levels caused by the euphoria and mania associated with the "bubble". Investments in general have been further exacerbated by the ending of a long and prosperous business cycle which culminated in the downfall of such American icons as Bear Stearns and Lehman Brothers. The loss of these institutions caused enormous fear, and a near free fall in the financial world. The ending of the business cycle has been severe, with unemployment reaching the highest level in decades, at over 10%.

"In my opinion, the worldwide stock market rise is signaling a recovery much stronger than most believe."

Many investors and business executives under 45 years of age have never experienced a severe downturn of this magnitude, as they were too young to remember the 1980-1982 or 1973-1974 recessions. Much as my father and grandfather were traumatized by the Great Depression, they have been shocked and traumatized by the vicious correction in the financial markets, never before having witnessed or experienced such turmoil. Many mistrust the recovery and are hesitant to put capital to work for fear of loss, and as a result there is an enormous amount of cash parked in money markets, bank accounts, CD's, and short-term Treasuries that will eventually be deployed. Young investors are unable to recognize an inflection point now, and as such remain safely on the sidelines with their cash. In my opinion, the worldwide stock market rise is signaling a recovery much stronger than most believe.

Our forecast notes that housing across America appears to be at the end of price decline. In most major markets for the last 6-8 months the price of housing has risen. However, there is a huge difference from housing recovering to housing recovered, with most properties purchased in the bubble years 2005-2007 currently "underwater," or not worth the mortgage owed. Typically, housing will flatten and perhaps decline slightly during a recession, only to rebound as the new business cycle gains strength. This correction has been severe, but our housing forecast says the rebound may be even more robust. If the recovery is sustainable for 36 months, housing will be much closer to "recovered."

Lessons of the Past - Bernanke is no Mellon

The Great Depression started off as a normal recession, but was badly managed. As the recession cleared out the excesses typically associated with the end of a cycle and as a new business cycle just started, the well intentioned but misguided Treasury Secretary Andrew Mellon severely restricted money supply to avoid a possible outbreak of inflation. The result was the death of the infant business cycle and a return to an even worse business climate with no confidence and no funds available for business expansion; devastating deflation ensued. The recession worsened, eventually destroying jobs, real assets, security investments, and businesses with unemployment reaching 25%. More than once, the fledgling business cycle tried to ignite, only to be extinguished by a further restricting of the monetary policy. The economy was manipulated in the wrong direction. The drastic loss of jobs, the restrictive monetary policy, and the deflation of assets crippled the economy for a decade. This recession has followed the path typical of past recessions, except Ben Bernanke is Chairman of the Federal Reserve and Chairman Bernanke is a student of the Great Depression.

The Federal Reserve has limited options in raising rates and removing excess money supply. Raise rates too soon, and the Federal Reserve takes a huge risk of forfeiting the recovery; raise rates too late and the Fed risks igniting inflation. The G-20 nations appear to be coordinated in flooding the globe with liquidity and assuming massive debt. Asset prices have dropped across the world, and wealth has been destroyed by the deflating of asset prices. Lenders are jeopardized by the decline in price; their loans encumber properties that are valued below mortgage amounts. To stimulate the economy, the governments of the world have shifted the burden of debt from individual and corporate entities to government auspices.

If asset prices appear to be the problem, asset prices then become the solution. Higher Real Estate prices have the desired effect of re-balancing the loan-to-value ratio needed by lenders to restore their reserves. A lender may have a $320,000 loan on a property that was worth $400,000 in 2006, but is now only $240,000. The bank has a potential loss well in excess of the difference between loan and value; the lender must make provisions for loan loss and increase their reserves, removing potential money from the economy. The owner of the property has lost his precious down payment; personal credit scores are adversely affected, and he has a bleak future of paying off a loan on a property severely deflated. If the asset prices were to recover, the lender and the homeowner would be saved.

This rise in asset prices has another name: Inflation. Rising asset prices and coordinated worldwide inflation will allow the governments of the world to repay the massive debt with dollars at 90%, 80%, or less of today's value; a substantial benefit. Governments will not repay the debt, but inflate the debt away.

During the Nixon years, Federal Reserve Chairman Arthur Burns followed a course of easy money: low rates and substantial increases in the money supply. Burns had followed McChesney, who advocated a tight monetary supply, removing money and raising rates just as the economy started to expand. Richard Nixon desired to ensure his re-election and persuaded the Federal Reserve to follow a policy of lower rates and an increase in the money supply. Arthur Burns became Chairman in February 1970, and by August 1971 wage and price controls were imposed to control inflation. By late 1974, inflation was over 12% and rising. Currently the monetary supply worldwide, and particularly in the US, is many times greater than that supplied by Arthur Burns. The rest is history; some yet to be written.

Quantitative easing has added $1.1 trillion alone into the system, with the total of all US injections by some estimates over $13 trillion, a historic amount. Short-term rates have never in history been this low. Monetary policy hugely affects the economy, but is not obvious for 6-9 months in a normal economy, and can easily take twice as long in a damaged economy. The effects of the historic November 2008 capital injections may not be felt until spring of 2010. Furthermore, politicians are well aware of the fact that unhappy, scared, and unemployed voters tend to remove incumbents from office; in November 2010, all seats in the House and 1/3 of the Senate are up for election. Thus, there is strong possibility for additional programs for jobs, loans, and stimulus prior to the election.

The forecast for 2010 is a repeat of the 70's; price stabilization through mid-2010, then appreciation. Unless short-term rates are raised early, and by that I mean anytime in 2010, housing should continue to recover. Prices of homes will rise, and wages will rise to keep pace with rising prices to balance affordability. Further, the US is the only developed nation with an expanding population of 1.5%; consequently, there exists a need for 1 million new residential units to keep up with family creation. Should a Comprehensive Immigration Policy be initiated, more homes will be needed. New construction will be needed to supply the pent-up demand.

I believe that by the end of 2010, the deflationary forces of de-leveraging will be nearly extinguished, and the economy will be visibly transitioning to inflationary expectations. Lenders will be clearing fewer non-performing and defaulted assets as the economy heals. Those that are liquidated will be processed more efficiently by the use of "Short Sales," and less by the traditional method of judicial foreclosure, as lenders streamline and standardize the process; saving 20-30% by the use of this procedure.

Commercial loans should still be unwinding, but lenders and commercial investors will also be disposing of non-performing assets through the use of short sales and a negotiated deficiency. Apartment owners and owners of residential rentals will enjoy rental increases as absorption of excess finally occurs and demand starts to create shortages; the result of limited new construction. Depressed rental rates should rebound with increases possible of 10-15%. Builders that have changed their product mix to adapt to current trends and price points in line with favorable financing afforded by FHA and FNMA, and additionally are also building on newly acquired land with corrected pricing, will become profitable; some extremely so.

In my opinion, the economy will not experience a double-dip recession, as the Federal Reserve will be slow to raise rates and remove money supply to ensure a recovery. The result will be a stronger recovery than anticipated (but forecasted by the dramatic rise of the global stock markets), and jobs will finally be added to the economy in late 2010 as cautious employers slowly expand their labor force. Unemployment will, however, still likely exceed 8% by year end.

The year 2010 should continue the recovery started in the summer of 2009. I expect housing prices to slowly rebound and gain momentum as the year progresses. Unless the recovery is aborted by premature restrictive monetary policy, the year will be a very good year for Housing and Residential Rentals.

Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (NYSE: FRE), Fannie Mae (NYSE: FNM), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ) and Avatar Holdings (Nasdaq: AVTR).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

The Luck of the Irish Strikes DC

Today's Irish Coffee

A little luck of the Irish touched the Obama Administration today, leading some of the President's most important legislation toward the other end of the rainbow.

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

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The Luck of the Irish

The luck of the Irish struck Washington DC today, as the Obama Administration got its "Hire Bill" passed, and health care looks to be readied by Saturday. The rest of this report covers economic releases, including the Producer Price Index and Mortgage Activity Reports, and important news out of the auto industry.

Washington Drivers

Senate Okays Jobs Bill

The Senate passed a bill intended toward job creation on a bipartisan 68-29 vote. Employers who hire from the unemployment pool will be exempt from paying the 6.2% Social Security payroll tax for those employees through the close of the year. If these newly hired employees stick with the company for a full year, the government will also issue a $1,000 credit to the helpful companies. The bill will likely be signed into law and should help spur stubborn hiring, especially for companies that have been holding off on hiring while waiting on this bill. "The Hire Bill" also provides about $20 billion for highway infrastructure projects, which is something I think all drivers agree is desperately needed now. Finally, there are provisions in the bill that encourage small businesses to invest in growth. I think it's a good move in the exact right direction, and continue to support the Administration's focused efforts to restart American industry and employment.

Health Care by Saturday?

Democrats are reportedly moving toward a rarely used parliamentary action that could enable the passage of a health care bill before the President leaves for Asia. The measure would allow the House to make fixes to the Senate bill, and pass it in the process. Republicans are of course charging foul play, but it seems some concessions will be necessary for the bill to pass anyway.

"We, the uninsured, are looking forward to having health care, and we thank you in Congress who are pushing for it."

Some of the House Democrats like Dennis Kucinich, who has stated that the bill does not go far enough, are being wooed to help the bill through now. At this point, a loss on health care could prove a death blow to the Obama Administration's chances in 2012, and that's something no Democrat will trade his position on health care for. Kucinich is now on board after joining the President on an Air Force One flight to Ohio to discuss the subject. We, the uninsured, are looking forward to having health care, and we thank you in Congress who are pushing for it.

Economic Data

PPI Index

The Producer Price Index (PPI) headlined the economic report slate this morning. February's report showed producer prices fell 0.6%, versus economists' expectations for a 0.2% decline. Headline PPI was mostly driven by a 2.9% decrease in energy prices. Drivers should be enthused, as the gasoline index fell 7.4% in February. Foods prices increased for the fifth straight month though, rising 0.4% in February. Core PPI, which excludes the volatile changes in food and energy, rose just 0.1%, following a 0.3% increase in January. That's a rate the Federal Reserve can digest, and that fits nicely with its position stated in yesterday's FOMC Policy Statement.

Mortgage Activity

The Mortgage Bankers Association reported on weekly mortgage activity this morning. The MBA's Market Composite Index slipped 1.9% last week, driven by a 2.3% drop in the Purchase Index and 1.7% Refinance Index fall. Contracted fixed rates on both 15-year and 30-year fixed rate mortgages decreased slightly, to 4.24% (from 4.32%) and 4.91% (5.01%), respectively. Changes in rates were therefore not the cause of the decline, and neither did the housing tax credit help activity. We cannot blame the weakness on the recent huge rainstorm either, as it had not moved into the densely populated Northeast by the close of the measured period. Maybe this last week's data then displays a harsh reality...

Oil Market News

OPEC convened for an "ordinary" meeting today in Vienna. The conference produced affirmation from OPEC on production quotas and its global demand outlook. We found these next few paragraphs from OPEC's release most critical:

"The Conference reviewed recent oil market developments, in particular supply/demand projections, as well as the outlook for 2010, and noted that, while the global economy is clearly rebounding from the late 2008 and early 2009 recession, with continued positive signals coming from the manufacturing and services sectors, serious threats remain.

Downside risks include:

1. Mounting and potentially unsustainable public debt in the most advanced economies
2. A degrading fiscal position which might lead OECD governments to tighten fiscal and monetary policy, despite rising unemployment
3. Weak demand
4. Persistent global imbalances
5. Rising protectionism

The Conference further noted with concern that, although world oil demand is projected to increase marginally during the year, this rise will be more than offset by the expected increase in non-OPEC supply, meaning that 2010 is likely to witness a decline in the demand for OPEC crude oil for the third consecutive year. The persistently high OECD stock levels (estimated to currently stand at 59-61 days of forward cover i.e. well above their five-year average) indicate that there has been a contra-seasonal stock build in the first quarter 2010 and the overhang in terms of forward cover is expected to continue throughout the year."

I would look toward China for a culprit in the "non-seasonal stock build" described above. With a confrontation with Iran looming, I think it is likely that China is smartly stocking ahead of it. China appears to be building stocks across commodities in fact, perhaps due to concern for a renewed commodity price boom on its burgeoning domestic demand.

Corporate News Drivers

General Motors

General Motors' CFO Chris Liddell said GM has a "reasonable chance" to post a profit in 2010. Liddell also offered the possibility of a GM IPO later this year. GM has some $50 billion in government financing to cover and a 60% government stake to unravel. However, there appears to be little government incentive to rush GM into an IPO too soon. Since Congressmen may not make up the smartest investors' pool, you can't count on that patience holding forever, especially given government budget troubles. That's good news for folks who might like to place a bet on the new GM sometime soon.

Honda Motors

Honda Motors (NYSE: HMC) announced its entry into Toyota's (NYSE: TM) recall hell. Honda declared it would need to bring back over 400K cars, including 344K Odyssey minivans and 68K Element SUVs from the 2007-2008 model years. The problem is apparently a receding brake pedal that moves closer to the floor with time. Clearly, if the brake pedal hits the floor before the brakes are fully engaged, that could be morbid. Honda is surprisingly only down fractionally at this hour; looks like there's still time to short toward the lower $30s. This is good news for Ford (NYSE: F), now the best man standing in the US domestic market. I do not think Ford and GM could have engineered these developments any better than they occurred. Hmmm...

Earnings Reports

The day's corporate earnings releases include 3Com (Nasdaq: COMS), A.C. Moore Arts & Crafts (Nasdaq: ACMR), Abraxas Petroleum (Nasdaq: AXAS), Actuant (NYSE: ATU), American Electric (Nasdaq: AETI), American Independence (Nasdaq: AMIC), BioDelivery Sciences (Nasdaq: BDSI), Blonder Tongue (AMEX: BDR), Cadiz (Nasdaq: CDZI), Central Virginia Bankshares (Nasdaq: CVBK), China Sky One Medical (Nasdaq: CSKI), ChipMOS TECHNOLOGIES (Nasdaq: IMOS), CLARCOR (NYSE: CLC), Clark Holdings (AMEX: GLA), Community Central Bank (Nasdaq: CCBD), Compania Cervecerias Unidas (NYSE: CCU), Corriente Res (AMEX: ETQ), Crimson Exploration (Nasdaq: CXPO), Cycle Country Accessories (AMEX: ATC), Dara Biosciences (Nasdaq: DARA), Dune Energy (AMEX: DNE), Ecology and Environment (Nasdaq: EEI), Empire Resorts (Nasdaq: NYNY), Environmental Power (Nasdaq: EPG), Gainsco (AMEX: GAN), Guess (NYSE: GES), Harbor BioSciences (Nasdaq: HRBR), Herman Miller (Nasdaq: MLHR), Hollywood Media (Nasdaq: HOLL), IHS Inc. (NYSE: IHS), Interleukin Genetics (AMEX: ILI), Interstate Hotels & Resorts (NYSE: IHR), Ivanhoe Energy (Nasdaq: IVAN), Keryx Biopharmaceuticals (Nasdaq: KERX), Kohlberg Capital (Nasdaq: KCAP), Ladenburg Thalmann (AMEX: LTS), Luby's, Inc. (NYSE: LUB), Mines Management (AMEX: MGN), Nevada Gold & Casinos (AMEX: UWN), New Dragon Asia (AMEX: NWD), Nike (NYSE: NKE), Northwest Pipe (Nasdaq: NWPX), Oak Ridge Financial (Nasdaq: BKOR), Optical Cable (Nasdaq: OCCF), Ore Pharmaceuticals (Nasdaq: ORXE), Patrick Industries (Nasdaq: PATK), Preformed Line Products (Nasdaq: PLPC), Puda Coal (AMEX: PUDA), Quadramed Corp. (Nasdaq: QDHC), Raser Technologies (NYSE: RZ), Schiff Nutrition International (NYSE: WNI), Somanetics Corporation (Nasdaq: SMTS), STR Holdings (Nasdaq: STRI), Sunesis Pharmaceuticals (Nasdaq: SNSS), Supertel Hospitality (Nasdaq: SPPR), Synergetics USA (Nasdaq: SURG), TIERONE Bank (Nasdaq: TONE), Tootsie Roll (NYSE: TR), Towerstream (Nasdaq: TWER), Tsakos Energy Navigation (NYSE: TNP), U.S. Gold (AMEX: UXG), Vermont Pure (AMEX: VPS), WPCS International (Nasdaq: WPCS) and ZST Digital Networks (Nasdaq: ZSTN).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

FOMC Policy Statement Moved Shares Higher

The Fed's non-action provided relief to worried traders Tuesday, driving a rally to the close.

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

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FOMC Policy Statement

The Federal Reserve's Federal Open Market Committee (FOMC) published its latest policy statement in the afternoon Tuesday. The market reaction of relief was almost immediate. Ever since the misunderstood move by the Fed to bring discount window activity back to normal, traders have unfortunately driven a fear trade home. Today their fears were proved unwarranted and the market enjoyed a late afternoon rally on Fed reassurance.

The key points were:

1. Economic activity continues to strengthen
2. Labor Market is stabilized
3. Household spending expanding at moderate rate
4. Business spending on equipment and software is up significantly
5. Financial market conditions remain supportive of economic growth

Negative notations included:

1. High unemployment
2. Modest income growth
3. Low housing wealth
4. Tight credit
5. Investment in nonresidential structures declining
6. Housing starts flat at a depressed level
7. Employers reluctant to add to payrolls
8. Bank lending continues to contract

The Fed's Conclusion Therefore:

"The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time."

So the FOMC maintained rates at their lowest possible mark, with the target for the fed funds rate between 0 and 1/4 percent. The Fed continues to expect low resource utilization and low inflation to warrant these exceptionally low rate levels for an extended period of time. The Fed will however stop purchasing agency mortgage backed securities and other agency backed debt at the conclusion of the month, as previously forewarned. Also, the Fed said the last remaining special liquidity facility, the Term Asset-Backed Securities Loan Facility, will be closing over the next few months as well. The vote was nearly unanimous, with only Thomas Hoenig disagreeing with the wording "exceptionally low rates for an extended period of time" again, stating that it might drive another bubble...

Another Fed non-event? Nada! The market turned on a dime and headed higher toward the close as a result of the news. The Dow Jones Industrials ended the day up 0.41% on a marked move higher post the FOMC release.

Editor's Note: The day's earnings reports included 4Kids Entertainment (NYSE: KDE), A.D.A.M., Inc. (Nasdaq: ADAM), AAR Corp. (NYSE: AIR), ADVENTRX Pharmaceuticals (AMEX: ANX), Akorn, Inc. (Nasdaq: AKRX), American Dairy (NYSE: ADY), Anika Therapeutics (Nasdaq: ANIK), Applied Energetics (Nasdaq: AERG), Arbinet (Nasdaq: ARBX), ARIAD Pharmaceuticals (Nasdaq: ARIA), Ascent Solar Technologies (Nasdaq: ASTI), Astro-Med (Nasdaq: ALOT), Athenahealth (Nasdaq: ATHN), Avatar Holdings (Nasdaq: AVTR), AVI BioPharma (Nasdaq: AVII), Bovie Medical (AMEX: BVX), Cardium Therapeutics (AMEX: CXM), China Finance Online (Nasdaq: JRJC), China Fire & Security Group (Nasdaq: CFSG), China Nuokang (Nasdaq: NKBP), CIT Group (NYSE: CIT), CKX, Inc. (Nasdaq: CKXE), Cloud Peak Energy (NYSE: CLD), Communications Systems (Nasdaq: JCS), Competitive Technologies (AMEX: CTT), Connecticut Water Service (Nasdaq: CTWS), Deutsche Bank (NYSE: DB), Discover Financial (NYSE: DFS), Dominion Resources (NYSE: DOM), DSW, Inc. (NYSE: DSW), DXP Enterprises (Nasdaq: DXPE), Dynavax (Nasdaq: DVAX), Emdeon Inc. (NYSE: EM), eOn Communications (Nasdaq: EONC), EV Energy Partners (Nasdaq: EVEP), Ever-Glory International Group (AMEX: EVK), FactSet (NYSE: FDS), Federal Agricultural Mortgage (NYSE: AGM), Focus Media (Nasdaq: FMCN), FX Energy (Nasdaq: FXEN), General Steel (NYSE: GSI), Harvest Natural Resources (NYSE: HNR), Intersections (Nasdaq: INTX), Ivanhoe Energy (Nasdaq: IVAN), KongZhong (Nasdaq: KONG), Lightbridge (Nasdaq: LTBR), Majesco Entertainment (Nasdaq: COOL), MDS Inc. (NYSE: MDZ), Molecular Insight Pharmaceuticals (Nasdaq: MIPI), Old Second Bancorp (Nasdaq: OSBC), Outdoor Channel (Nasdaq: OUTD), Pacific Office Properties (AMEX: PCE), PMC Commercial (AMEX: PCC), Retail Ventures (NYSE: RVI), Retalix Ltd. (Nasdaq: RTLX), Rock of Ages (Nasdaq: ROAC), rue21, inc. (NYSE: RUE), ShengdaTech (Nasdaq: SDTH), Simcere Pharmaceutical (NYSE: SCR), TBS International (Nasdaq: TBSI), TerreStar Corporation (Nasdaq: TSTR), Tix Corporation (Nasdaq: TIXC), Trimeris (Nasdaq: TRMS), Universal Insurance (AMEX: UVE), ValueVision (Nasdaq: VVTV), Vista Gold (AMEX: VGZ), West Marine (Nasdaq: WMAR) and X Rite (Nasdaq: XRIT).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.