Dogtooth Oscar Nominee for Best Foreign Film

Greek Film Flirts with Oscar!

Wall Street Greek Film & Theatre Columnist Penelope Karageorge takes a close look at Dogtooth, Greece's Oscar nominee for Best Foreign Film. Karageorge speaks with the film's stunned Writer/ Director Yorgos Lanthimos, and several others about the film and the Greek film industry, as Dogtooth takes the stage among the world's best.

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Dogtooth, Oscar Nominee for Best Foreign Film

Greece's Dogtooth, a ground-breaking, tragi-comic film written and directed by Yorgos Lanthimos, has been nominated for an Oscar for Best Foreign Language Film. Dogtooth faced enormous competition in the international arena, with 66 films from around the world in contention.

"Getting nominated was unexpected. It has made me and my collaborators extremely happy," Lanthimos exclaimed.

In Dogtooth, a husband and wife keep their children imprisoned in their house, where they play weird games and learn a language devised by their parents, while indulging in bizarre, sexless sex. It's funny, offensive, tragic and brilliant.

If Lanthimos was surprised, actor Christos Stergioglou, who plays the father, said he was "in a state of shock" over the nomination. "The film shows what stupidity can lead to – when you want to control everything, even under the pretext of love and protection. It is both a very serious and ridiculous subject!" Stergioglou said.

"This nomination is a fine tribute to Lanthimos," said NYC Greek Film Festival director James DeMetro. "He has made a strikingly original film that deserves the attention it has received worldwide. But the nomination is also wonderful for the Greek film industry. Greek films are shown all over the world, but the American market has been resistant and unwelcoming. This nomination is bound to attract attention to the Greek film industry. It sends a clear message that Greek filmmakers are turning out world class films that deserve to be seen."

The New York Greek Film Festival early committed to Dogtooth with a screening and panel discussion on the film, an event so successful that it had to move to a larger venue to accommodate an overflow crowd. An exceptional panel including Dan Georgakas, editor of Cineaste Film Quarterly; psychologist Dr. Tom Mallios; and Vangelis Caltychos, Columbia University professor, analyzed the film and discussed the intriguing issues that it raised.

A.O. Scott, film critic for The New York Times, pointed out: "Mr. Lanthimos is part of a Greek generation of filmmakers whose work is iconoclastic, formally daring and sometimes abrasive. These directors, in turn, are part of a loose network that spreads across much of the world, linked by the promise of festival exposure and the challenge of raising money in a worldwide climate of economic constriction."

"Their work is almost invisible here, though it commands a fair amount of attention in the flourishing and contentious cinephile wing of the blogosphere. But it is nonetheless available to anyone with the curiosity and patience to navigate the new, fast-evolving cosmos of V.O.D. and streaming Web video... a whole world of movies is out there waiting to be discovered."

Time Out New York senior film critic Joshua Rothkopf named Dogtooth one of the Ten Best Films of 2010.

The Oscars will be awarded tonight, Sunday, February 27, in Los Angeles. Films competing with Greece's Dogtooth include Denmark's A Better World; Canada's Incendies; Mexico's Biutiful; and Algeria's Outside the Law.



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How My Father Learned to Love Spaghetti and Panagiota Too

New York Stories

Wall Street Greek's New York Short Story Writer and Story Teller Nicholas Zaharakos shares with us a wonderful love story, intimate to his own heart. The story telling of his parents' courtship has a lovely nuance, a comedic twist that will raise an eyebrow and inspire a smile.

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Nick shares with us the spark that started his pen in this instance...

I had an embarrassing experience at work last year. I completely forgot my personal password for the computer that I use there. After five futile attempts at trying to remember it, the security feature for the machine completely shut it down. I was forced to leave a message on the voice mail of the Management Information Services Department (MIS for short), explaining my predicament and humbly asking for help.

They let me wait a few hours (I guess to teach me a lesson). Then a technician, who probably knows that he makes far less than I do, paid my office a visit. He performed a lot of rapid-fire keystrokes that had me bewildered, but unfroze the computer. He then asked me to key in a new password that he hoped I would somehow be able to remember. I was going to grab a couple of slices of pizza for lunch, and because that was on my mind, I decided to use pizza as my password. That worked out well, so when I had to replace that password as required after sixty days I used bagel as the next one. Since then, I have selected a different food item and have yet to plead with MIS to get me out of the "I forgot my secret password, and I never wrote it down someplace sad song."

This little episode made me realize how important food is in my life. Indeed, my family name of Zaharakos comes from the Greek word for sugar, "Zahari". When someone pins me with the ethnic tag, "you're Greek!" My reply has become, "I'm also as American as Spinach Pie!" I have grown (quite literally grown) from being one of seven small children living with grandparents as well as Mom and Dad in a small railroad flat, searching in the refrigerator for something to eat and only finding the makings for a ketchup sandwich. Now I pray for the strength to resist the temptations of rich deserts, my biggest enemy is anything made of chocolate. I now count calories, and have at times gone through the agonies of the "D" word, a diet.

Now, or it's about time, to the real food story.

How My Father Learned to Love Spaghetti and Panagiota Too

One of my father's first jobs I'm told was at Harry's Restaurant, in Brooklyn. Harry always wore a bow tie and was known never to take off his jacket or step into the hot kitchen. His post was the cash register. My father's name was Stavros, which was Americanized to Steve. He became one of the cooks, and worked long hours six and sometimes seven days a week. He would naturally take his meal break during a slow time of the day. There was a certain type of unspoken etiquette at that time that was recognized by eating places that ranged from small coffee shops with just stools to fancy and expensive restaurants. That is, that the help was supposed to eat well. The only thing that they had to pay for if they smoked, were cigarettes. My father quickly developed a fondness for steak, probably because he came from an impoverished village where meat was scarce.

When my father first started to regularly sit down for a steak dinner in a booth just outside the kitchen, Harry would walk by and say in his thick accent and with a finger wagging, "Steef, steak no good for you, Steef, steak no good for you." Harry was obviously a bottom line man. My father tried to ignore these admonitions, even though he knew that the restaurant business was not a democratic institution. Also, in short time my father started to have company during his late afternoon meal break; a young woman named Panagiota, Bertha in English (who eventually became my mother). Now, when Harry would scold my father about his steak eating habits, the stakes were much higher. My father needed to keep his job just as much he wanted to impress Panagiota.

One of the perennials on the menu was spaghetti. It was precooked. When needed, you just grabbed a handful of it; put it in a strainer into a pot of boiling water that was kept on the stove. The spaghetti became hot in a minute, ready to accompany meatballs or clams or other sauce. Almost overnight, my father started having a strange addiction for spaghetti. Every day, he would heap a mountain of it on his plate with butter and cheese.

Now when Harry would inspect as he walked by he would nod his head and pleasantly exclaim, "Steef, spaghetti good for you, spaghetti good for you, Steef." When Harry was back safely at the cash register, my father would lift off the spaghetti with his fork and enjoy the steak hidden underneath.

I am just as sure, (though remember, I wasn't around then) that he also doubly enjoyed the company of Panagiota too.



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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.

Wall Street Fandango

Director Stephan Morrow Directs Brilliant, Uncon- ventional Shisgal Comedy

Wall Street Greek Film and Theatre Columnist Penelope Karageorge gets into the creative mind of Greek-American Director Stephan Morrow, as the two discuss famed Playwright Murray Shisgal's work, Wall Street Fandango.

(Photo left to right: Playwright Murray Shisgal, Director Stephan Morrow, Director Ulu Grosbard, actress Rose Gregorio, a Tony nominee)

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Wall Street Fandango

Can dynamic director Stephan Morrow succeed in bringing Wall Street Fandango, an absurdist tragic-comedy by Murray Shisgal, to the Broadway stage? In Fandango, two financial industry men – a super-successful, rule-breaking bon vivant and a plodding hedge-fund manager - forge a close friendship that leads ultimately to a reversal of fortunes. Fandango is timely, provocative, hilarious, and smart. It takes risks with performer duets, a "rap" solo, a ballet interlude, and breaking the fourth wall – performers addressing the audience directly.

We talked with Greek-American Morrow (originally Morros - changed by a grandfather) at The Cupcake, a coffee shop near The Actor's Studio. Loaded with opinions, Morrow could easily be at home in Europe's talking capital, Athens, a city for which he claims an affinity.

"Drop the N word from your vocabulary," Morrow insists, kicking off our conversation. "Networking is the N word. You have to develop collegiate relationships with people, with fellow artists, with colleagues. You're not selling shoes. Networking does not apply to the arts!" Morrow leans across the table, his face dark with concern.

Morrow segues from personality to personality as he talks. "I was very influenced by Elia Kazan. He really gave me a break when he mentored me into The Actor's Studio in the mid-eighties. I learned dramaturgy from Kazan. I learned structure from Kazan. He was the moderator in the unit, so I'm pretty astute about why a play does or doesn't play."

A long collaboration with Norman Mailer led to his staging Mailer's The Deer Park at the Actor's Studio. Playwright Shisgal saw the work, was impressed, and asked Morrow to direct Wall Street Fandango. Morrow hadn't known Shisgal, the author of the enormously successful Broadway hit Luv and co-author of the film Tootsie, despite the fact that they were both in the playwright/director unit at The Actors Studio. "I noticed this older man who would occasionally bring a lot of gravitas to his criticism. I was flattered when Murray offered me the play."

Morrow read the script with astonishment and delight. "I found it better and more literate than about ninety percent of what I'd seen on Broadway," Morrow recalls. "What I like most about it is that it's not TV writing on stage, which just bores the hell out of me. There's a difference. There's the voice of the playwright and there's an emotional action forward. Don't forget. Stage is part of ritual, and there's magic."

At three staged readings, audiences gave a major "thumbs up" to Wall Street Fandango, and 45 Bleecker committed to giving the play a run. But overnight and without warning, the theatre was forced to close, sending Fandango into production limbo.

But Morrow's not giving up on Wall Street Fandango. "I honestly believe it will make it to Broadway, and when it does, it will be a huge hit and play forever." Of course he would be delighted to meet with any Greek or other "angels" with a love of and instinct for good theatre!

Meanwhile The Theatre for the New City has commissioned him to direct a play by an L.A. writer, John Steppling, Dogmouth. "It's about hobos on trains, like Aryan nation guys – they're despicable but it's good writing. I always try to find the humor in the dramas I direct. If I see a production, and there's nothing to laugh about, I figure there's something wrong with it. Everything has humor in it. Hamlet has humor."

A veteran of the Off Off-Broadway arena, Morrow is dedicated to keeping modern classics alive, and founded The Great American Play Series. Morrow grew up in the Fort Hamilton section of Brooklyn. A graduate of the University of Buffalo, he began his theatre career at the Now Theatre Repertory Company in Buffalo.



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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 Wide Divide Between the Confidence of Consumers and Investors

Equity Strategy

The shortened week started off by offering an intriguing contrast of economic data. A duo of confidence measures reached the wire at the same fateful moment, but that's about all they had in common. The Conference Board's Consumer Confidence measure and State Street's (NYSE: STT) Investor Confidence mark could not have been separated by a more wide divide. However, the simple act of turning on your television should give you the reason why.

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The Wide Divide Between the Confidence of Consumers and Investors

While the Consumer Confidence Index jumped by 5.6 points, the Investor Confidence measure fell by 9.2. Each of the two important economic barometers measured the month of February, so a difference in timing was not at play. The difference between the two measures is neither regional, as North American Investor Confidence fell in communion with Global Confidence, dropping by 6.8 points to a mark of 92.5 in February.

We should have led you by now to the key difference between the two measures. While North American consumers could care less about global unrest, North American investors find it quite meaningful. As gasoline prices rise toward $4 though, well then it should matter to the American shopper as well.

A Closer Look at Consumer Confidence

A closer look at the Consumer Confidence metric sucks some of the wind right out of the bubblistic expansion in the index. The consumers' gain in confidence was mostly prospective. As we've seen in similar past increases in this measure, though, those prospective hopes can quickly be pulled out from under us, leaving investors who had banked on gains as a result of them finding they are suddenly without footing.

Consumers' views of current conditions remained near despair, as the Present Situation Index increased to 33.4, from 31.1. While there was improvement in sentiment, the details show a very low count of respondents were actually found to be in a good mood. Only 12.4% of those surveyed said business conditions were good, and just 4.9% said jobs were plentiful. A great many more people felt like things were horrid. Some 39.6% said business conditions were bad, while 45.7% said jobs were hard to get. Do you see how the message changes when expressed in detail, rather than by the headline alone? While all measures gained, the absolute view remained the same, and that was that the business environment is terrible.

And while the respondent representatives of American consumers saw a bad current state, they were looking toward a better tomorrow. Ah the American spirit never dies. That optimism also helped the broader confidence index, as Americans were hopeful. The six-month outlook for business conditions improved, yes, but by just four-tenths of a point, to a measly 24.4%. Fewer people thought business conditions would worsen over the next half year, but that may simply be because they can't get much worse. As far as the job market goes, those expecting a better labor environment actually fell. Though, once again, fewer people thought things could get much worse. It's not such a rosy report at closer inspection, and that truth lends this overall article to lean toward the case for lighter stock positions.

Investor Confidence Shows Smart Money Running

February's Global Investor Confidence Index shed 9.2 points, dropping to a mark of 91.6, from 100.8. The North American Confidence Index moved to 92.5, from 99.3. Things were not much better in Europe or Asia. European investors were especially shaken by the unrest across their borders, with the representative index losing 13 points, moving to 19.8. The Asian Index lost 4.3 points to 92.2.

This index measures the movement of capital by institutional investors, or some of the smart money. Thus, this decrease signals that institutions are reducing equity positions this month (measures short of 100). State Street's commentary rightly attributes the majority of the blame on Middle Eastern and North African unrest. The money manager also reports that European softness is probably also seeing impact from its own region-specific issues, including the European Financial Stability Facility and upcoming March negotiations on sovereign debt. We will neither leave out the rising concern of the ECB with regard to inflation, which should lead the regional bank to begin the liquidity unwind ahead of the US Federal Reserve.

Conclusion: Lighten Up On General Equity Positions

State Street makes notation of favorable capital movement into the financial and energy sectors, some of which is clearly due to the Middle Eastern unrest. Meanwhile, technical indicators galore have continued to offer omen of upcoming correction. Given the catalyst of civil unrest, which seems to be contagious, the cut in confidence makes perfect sense. We expect if the unrest continues, then consumer confidence will wane as well. Gasoline prices affect the consumer mood significantly, as fuel use cuts into the American family's budget rather deeply. Considering the rise in price in all sorts of other goods, then we see all the more case to reduce US equity holdings near-term.



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.

Thank You Mr. Bernanke

Real Estate Analysis

In his latest piece, Wall Street Greek Real Estate Columnist Michael Douville thanks Mr. Bernanke for what he sees as an intentional effort by the Federal Reserve to inspire inflation. Douville posits that the eventual result will be a recovering real estate market and profits for brave and visionary real estate investors.

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Thank You Mr. Bernanke

Thank God for Ben Bernanke! There is a black hole in the Sands and Chairman Bernanke is keeping the event horizon at bay. Lenders are bleeding capital in the Sand States of California, Nevada, Florida, and Arizona. These are the lenders that provided the money for buyers to feed the Real Estate Bubble; they are guilty of "excessive exuberance".

Many of the loan programs in hindsight were pure folly; guaranteed to fail. However, the lenders lent the money. They did not: recommend or guide the borrowers to any particular loan program from a full menu of loan products; they did not suggest the borrowers misstate their income or outright lie; they did not recommend owner occupied loans when the property was an investment purchase. They just lent the money. The ultimate lenders never met the borrower, they just lent the money.

Thousands of properties are sold each month with a huge loss to the lender. Investors are reaping enormous potential rewards at the expense of the lender. Many homes are bought below replacement prices; prices so low the builders and Housing Starts are struggling because they are finding it difficult to compete with distressed properties. Lenders need to clear the balance sheets and rid themselves of non-performing or at-risk loans. They are looking toward the future. Astute investors are also looking toward the future while they collect their monthly cash flow.

A typical short sale transaction involves a property sold at 40-60% of former value... a terrific bargain. The short sale property was probably sold by a seller that may have scraped together 3-10% of the 2005-2007 purchase price as down payment; the lender provided the balance. A home sold today for $80,000 in Surprise, Arizona, a suburb of Phoenix, is typical. The home was likely purchased for $200,000 in 2005 with a loan balance of $180,000. The lender will not only lose the difference between the loan amount and the new purchase price, but also has incurred all of the cost of sales, which usually nets the lender about 80% of the new discounted sales price... a net of approximately $64,000. That's a loss of $116,000 in just 5 years. That money disappears! There is no velocity of money from that transaction. Instead, it is a contraction of credit. Capital is lost! This is only one transaction of thousands structured the same way.

This is a Capitalistic Economy; money is the fuel. Banks and lenders have lost huge sums of capital through this correction in value. How is this money replaced? Billions upon billions of dollars need replacing. The Federal Reserve has: allowed the lenders to borrow at less than 0.25%, and lend to borrowers and even back to the Federal Reserve at 2.5% to 4%; been buying US Treasuries and earning interest; replacing lost capital and re-liquefying the system; and expanding its balance sheet. Without this extra capital, the US Economy and the Global Economy would have failed. The correction is still unfolding and thought by many to be two-thirds to three-quarters of the way through.

Beyond 2010 will be the recovery in prices; probably a slow recovery for the next 18-24 months to correct the excesses in housing. There should be no statistical inflation until the correction has run its course, as the losses in housing offset rising prices elsewhere. No one will know the day the correction ends until well after the fact. The Federal Reserve will continue adding liquidity to ensure the recovery, adding until inflation ignites. In 18-24 months, the credit contraction will have run its course and the capital will start to flow.

Once the losses start to diminish, there will be velocity of money as surpluses start to develop. There should be inflation in other segments of the economy such as food and energy, services, taxes, etc., before housing prices start to rebound. Rents should start to rise prior to any recovery as supply tightens. With housing starts at such low levels, any sign of recovery will fuel higher rents as household creation expands. Many believe there has never been a situation where a central bank has been unable to cause inflation. It is a matter of time, and housing will benefit greatly.

There is probably another wave of properties yet to be liquidated. As employment finally starts to gain traction, there will be fewer. However, there still exists a window to position a portion of a portfolio as a wealth strategy or hedge against future inflation. Single family homes are in a clearance stage. Rents allow for a steady cash flow after all expenses and may be poised for a substantial increase. Should inflation ignite, which appears to be the ultimate goal of the Federal Reserve, housing in recovery mode will reward a patient real estate investor. Buy a rental or a vacation home and thank Mr. Bernanke.



Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), 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), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO), Alliance Resource Partners L.P. (Nasdaq: ARLP), Alliance Resource Holdings (Nasdaq: AHGP), Atlas Pipeline Partners L.P. (NYSE: APL), Atlas Pipeline Holdings (NYSE: AHD), Atlas Energy Resources (NYSE: ATN), Boardwalk Pipeline Partners (NYSE: BWP), Breitburn Energy Partners (Nasdaq: BBEP), Buckeye Partners (NYSE: BPL), Buckeye Holdings (NYSE: BGH), Calumet Specialty Products (Nasdaq: CLMT), Capital Product Partners (Nasdaq: CPLP), Cheniere Energy Partners (AMEX: CQP), Constellation Energy Partners (PCX: CEP), Copano Energy (Nasdaq: CPNO), Crosstex Energy (Nasdaq: XTEX), DCP Midstream Partners (NYSE: DPM), Dorchester Minerals (Nasdaq: DMLP), Duncan Energy Partners (NYSE: DEP), Eagle Rock Energy Partners (Nasdaq: EROC), El Paso Pipeline Partners (NYSE: EPB), Enbridge Energy Partners (NYSE: EEP), Encore Energy Partners (NYSE: ENP), Energy Transfer Partners (NYSE: ETP).

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.

January Weather Hampered Economy and Could Hurt Stocks

As we suspected, January weather is proving to have hampered economic activity. Blizzards and super storms rampaged across much of the nation last month, and economic reports are now showing the effects born to the economy. The latest such report, and broad reaching measure to make this case, is Leading Economic Indicators, but we've also seen data from companies like FedEx offering good reason to adjust expectations and portfolios.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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January Weather Hampered Economy and Could Hurt Stocks

As a publisher, I can give you firsthand testimony to the economic effects of January's weather. Almost all of my advertisers have reported dead business through the month, which has weighed on our own cash flow as well. January offered a rude awakening as to just how perilous are the operations of small businessmen, who have weathered the worst part of the recession, but are still just scraping by, and with little leeway for error. While I've wanted to publish this article for several days now, I've been hampered by the issues weighing on our clients. Still, we at least made mention of our expectations for this weather effect in this week's "Business Calendar."

Economic reports should continue to prove out that the harsh weather that battered all of the country in January, especially the population concentrated Northeast, provided a speed bump to economic growth. The few January reports that have reached the wire to-date offer enough support to our case, but the stock market has not shown ill-effect as yet.

The Leading Indicators Index, reported for January this morning, showed only a 0.1% increase. The meek result compared against December's revised 0.8% increase and November's 1.1% rise. The Conference Board, which puts the LEI together, reported that while the economic trend is a growing one, current economic conditions remain weak. The cumulative change in the LEI over the last six months is a solid 3.0%. However, the Board reported that the Coincident Economic Index, which measures current conditions, rose just 0.1%, following a 0.3% increase in December and 0.2% rise in November. Furthermore, the Conference Board's Lagging Economic Index dropped 0.1%.

The factors behind the softness in January were listed as weaker housing permits and poor labor market indicators. We've posited here before that the weather likely played a role in weird results from the Labor Department last month, if not keeping depressed job searchers buried at home. We've likewise warned that the weather might throw off January's housing data, some of which has already been released, with more to come next week.

Other reports have more clearly depicted the sad season we describe here. Industrial Production, reported Wednesday for January, produced a 0.1% decrease where economists were looking for a 0.5% increase. Capacity Utilization also confounded economists, falling to 76.1% from a revised 76.2% rate in December. Economists were looking for an improvement to 76.3%. Now, Industrial Production actually softened partly due to lower utility production on warmer average temperatures in January, which is a counter to our argument. Though, Factory Production in isolation and excluding motor vehicle production, rose modestly 0.1%, agreeing with our theory.

The softer data piles on... The month's Housing Starts data showed a slippage in permitting activity, as the pace slowed to 562K, from 627K in December. Furthermore, single-family home authorizations fell 4.8% to 421K. The pace of single-family housing starts also fell 1% to 413K. January's Retail Sales (and sales excluding autos) rose 0.3%, but both figures missed the economists' consensus expectations for 0.5% increases.

As economists seem to have overlooked the weather in January, they have likely conveyed a certain optimism to strategists, who have likewise guided portfolio managers and analysts. As more data points are reported for January, and if they are reported significantly off, then stocks could sell off briefly over the short-short-term on a shift in understanding.

Indeed, some companies have been directly impacted by the weather already, and others will likely report earnings impact in their Q1 releases. FedEx (NYSE: FDX) cut its projected fiscal third quarter EPS forecast to a range of $0.70 to $0.90, from $0.95 to $1.15, due to in part to "winter storms." Analysts had been looking for EPS of $1.02 on average, based on Bloomberg's data. Whether directly or indirectly, and based on my anecdotal witness, I think we can expect companies to report weather impacted results for this quarter. With economists, strategists and analysts potentially all off the mark, there's risk to stocks.

Given the January weather is not an ongoing issue, you can look for analysts to blow off any negative surprises, and to guide investors to stick with their recommendations as they also save face. The weather is still considered a temporary and insignificant factor in valuation (though that's increasingly debatable given climate change), and so any damage to stocks should be only a trading hit that might open opportunities for long-term buying interests in good names. However, most technical charts, including those by our Technical Analyst, show a market overdue for a correction. Thus, perhaps we have here a catalyst.



The day's corporate wire offers investor days at Gazprom (OTC: OGZPY.PK), Disney (NYSE: DIS), Crane (NYSE: CR), Health Net (NYSE: HNT), Symmetry Medical (NYSE: SMA), and JDSU (Nasdaq: JDSU). The EPS wire includes Duke Energy (NYSE: DUK), Waste Management (NYSE: WM), Nordstrom (NYSE: JWN), PG&E (NYSE: PCG), CF Industries (NYSE: CF), J.M. Smucker (NYSE: SJM), 3D Systems (Nasdaq: TDSC), ABB (NYSE: ABB), Acorda Therapeutics (Nasdaq: ACOR), Akeena Solar (Nasdaq: WEST), Alere (NYSE: ALR), Allied World Assurance (NYSE: AWH), Alnylam Pharmaceuticals (Nasdaq: ALNY), Altisource Portfolio (Nasdaq: ASPS), Ameresco (Nasdaq: AMRC), American Public Education (Nasdaq: APEI), Amerigon (Nasdaq: ARGN), Anadigics (Nasdaq: ANAD), Antigenics (Nasdaq: AGEN), Apache (NYSE: APA), Argo Group (Nasdaq: AGII), Aruba Networks (Nasdaq: ARUN), Athenahealth (Nasdaq: ATHN), Barrick Gold (NYSE: ABX), Brocade Communications (Nasdaq: BRCD), Build a Bear (NYSE: BBW), Builders FirstSource (Nasdaq: BLDR), Cabela’s (NYSE: CAB), Career Education (Nasdaq: CECO), Clearwire (Nasdaq: CLWR), Corn Products (NYSE: CPO), Developers Diversified (NYSE: DDR), Dr. Pepper Snapple (NYSE: DPS), Ecolab (NYSE: ECL), EOG Resources (NYSE: EOG), Freightcar America (Nasdaq: RAIL), Gentiva Health (Nasdaq: GTIV), Golden Energy Marine (Nasdaq: SHIP), Goodrich (NYSE: GDP), Healthsouth (NYSE: HLS), Hornbeck Offshore (NYSE: HOS), Huntsman (NYSE: HUN), Hyatt Hotels (NYSE: H), Intuit (Nasdaq: INTU), Investors Title (Nasdaq: ITIC), KKR Financial (NYSE: KFN), LaBranche (NYSE: LAB), Liz Claiborne (NYSE: LIZ), National Retail Properties (NYSE: NNN), Oil States International (NYSE: OIS), PG&E (NYSE: PCG), Pool Corp. (Nasdaq: POOL), Pride International (NYSE: PDE), Red Robin (Nasdaq: RRGB), Revlon (NYSE: REV), Rogers (NYSE: ROG), School Specialty (Nasdaq: SCHS), Strayer Education (Nasdaq: STRA), Timberland (NYSE: TBL), Toro (NYSE: TTC), TRW (NYSE: TRW), Ventas (NYSE: VTR), Virgin Media (Nasdaq: VMED), Weight Watchers (NYSE: WTW), Williams (NYSE: WMB) and more.

This article should interest investors in Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), State Street (NYSE: STT), Janus (NYSE: JNS), T. Rowe Price (Nasdaq: TROW), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM), Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI).

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.

Quo Vadis, Aegyptus?

Where to Now Egypt?

The crowds are celebrating; fireworks light up the nighttime sky above Tahrir Square and all of Cairo; the bogey man has fled and tomorrow will shine anew. So goes the old Pharaoh into the sunset of Sharm el-Sheikh. Thus, Global Affairs Columnist Daniel Salem Padovano asks the question that concerns all of Egypt in the wake of revolution.

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Quo Vadis, Aegyptus?

Mubarak's last year posed problems of stability and control to the regime; his time had indeed come. The deteriorating economic conditions and forcing his son's presidential candidacy (if not outright succession) made for unease and uncertainty. In several respects, it seemed as if Egypt was stepping back to before the July 26, 1952 Free Officer's Revolution. One Pharaoh overstepped his bounds and overstayed his time (and usefulness) thus paving the way for his own downfall.

This is the first time that Egypt has been without a central leader (or leaders) in nearly two centuries. A unique time for a land used to Pharaohs, Viziers and Kings.

As the Nile greets a new dawn, the question is: Wither goest thou Egypt?

Now the real work begins.

The end of the Mubarak era is not the end of the era of the Free Officer's Movement. The military remains in control of Egypt, pretty much as it has since 1952. The Supreme Council of the Armed Forces (SCAF) is in charge for the foreseeable future. Whatever course Egypt takes, it will be guided by the military.

As the guardian of Egypt and the 1952 Revolution, the military sees itself committed to the goals of that Revolution. Those goals are a secular state where the most modern and stable state institution (the military) manages the state. That the military leaders would hand over the country to the less disciplined masses is not an option. This is an institution that for better or worse has brought Egypt from a colony into the modern world. This guiding hand will not disappear; it is only now deciding how it will begin to rule.

So far, the military leaders are moving towards some form of representative democracy. The Mubarak Constitution has been suspended and the Parliament dissolved. The military is also planning to remove the State of Emergency laws in place since October 6, 1981. These are and were the key demands of the protestors. Plans are being made to create a committee to rewrite the constitution. Officially, elections are still planned for late September, 2011, however, concerns abound as to whether or not political parties will be ready.

The last time Egypt had a fully functioning multi-party parliament was in the mid-1950's. When this new parliament comes into session, the only other fully functioning parliaments in the Middle East will be those of Israel, Lebanon, Turkey, Iraq and Iran.

What needs to be kept in mind is that all of these developments are "extra-constitutional", meaning outside of the constitution, as the constitution no longer exists. The military is also on new ground as it appears that they will step back once things are more settled.

This proposition means that the military steps back into the shadows and gradually cedes power (but most likely not full authority) to civilian rule. The difference being that power would rest in the hands of the SCAF. The authority (and the amount of authority) to make that power real and effective would still rest in the hands of the military.

This change from military domination (if things progress that way) towards representative democracy is revolutionary. It would mean that the senior officers believe that the 1952 Free Officers Revolution has run its course. If they do not believe this, then little will change (maybe some window dressing).

On its own, this development would be as big as Mubarak's resignation. New reports Saturday and Sunday indicated that many junior officers (Colonel and below) have little trust or faith in the senior officers. (The senior officers are seen by the junior officers as "too" connected to the old regime). It would be the ultimate irony, if in the midst of "reform", a new officer's revolt followed.

Other challenges facing the Supreme Command of the Armed Forces and the soon to be Constitutional Committee are tackling the endemic corruption and getting the economy to function properly. One hopeful sign is one of Saturday's SCAF communiqués. In this communiqué, SCAF stated corruption would no longer be tolerated and would be prosecuted. Additionally, Mubarak era officials and public employees suspected of corruption will face prosecution. It will be interesting if this indeed does come to pass and whether or not military personnel will be among those charged.

SCAF and the new leaders that emerge will also need to concentrate on creating access to the economy for Egyptians, job creation and disengagement of the state / military apparatus from the economy. Not an easy task, but one that will need to be tackled.

As the new dawn arises over the Nile, will the land of Egypt trod a new path or await the rise of another Pharaoh?



This article should interest investors in: Market Vectors Egypt Index ETF (NYSE: EGPT), Egyptian Mobile (OTC: EGYMF.PK), Telecom Egypt (OTC: TEGPY.PK), T. Rowe Price Africa & Middle East (Nasdaq: TRAMX), T. Rowe Price Institutional Africa & Middle East (Nasdaq: TRIAX), Cellcom Israel (NYSE: CEL), Aberdeen Israel Fund (AMEX: ISL), Northrop Grumman (NYSE: NOC), Raytheon (NYSE: RTN), Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NYSE: IWM, NYSE: TWM, NYSE: IWD, Honeywell (NYSE: HON), General Dynamics (NYSE: GD), Rockwell Collins (NYSE: COL), Goodrich (NYSE: GR), L-3 Communications (NYSE: LLL), SAIC (NYSE: SAI), FLIR Systems (Nasdaq: FLIR), EMBRAER (NYSE: ERJ), Spirit Aerosystems (NYSE: SPR), BE Aerospace (Nasdaq: BEAV), TransDigm Group (NYSE: TDG), CAE (NYSE: CAE), Hexcel (NYSE: HXL), Esterline Technologies (NYSE: ESL), Teledyne Technologies (NYSE: TDY), Curtiss-Wright (NYSE: CW), HEICO (NYSE: HEI), Triumph Group (NYSE: TGI), Orbital Sciences (NYSE: ORB), AAR Corp. (NYSE: AIR), Kaman Corp. (Nasdaq: KAMN), AeroVironment (Nasdaq: AVAV), Smith & Wesson (Nasdaq: SWHC), DigitalGlobe (NYSE: DGI), GenCorp (NYSE: GY), Hawk (AMEX: HWK), LMI Aerospace (Nasdaq: LMIA), Exxon Mobil (NYSE: XOM), Halliburton (NYSE: HAL), Schlumberger (NYSE: SLB), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX), Noble Energy (NYSE: NBL), Baker Hughes (NYSE: BHI).

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.

Why Lacking Home Builder Confidence Conflicts with Anecdotal Evidence of Traffic

Housing Analysis

The latest take of builder confidence indicates it remains in the doldrums, despite recent anecdotal evidence otherwise. We suspect the difference is due to the inclusion of many small builders in the NAHB survey, and so the data here should not reflect some of the traffic pickup larger builders have reported.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers: NYSE: BAC, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: GS, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: SRS, NYSE: URE, NYSE: IGR, NYSE: XIN, Nasdaq: RYHRX, Nasdaq: TRREX, NYSE: TOL, NYSE: HOV, NYSE: DHI, NYSE: BZH, NYSE: LEN, NYSE: KBH, NYSE: PHM, NYSE: NVR, NYSE: GFA, NYSE: MDC, NYSE: RYL, NYSE: MTH, NYSE: BHS, NYSE: SPF, NYSE: MHO, AMEX: OHB, NYSE: VNQ, NYSE: PNC, NYSE: JPM, Nasdaq: HOFT, NYSE: ETH, NYSE: PIR, NYSE: WSM, NYSE: HD, NYSE: LOW, AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Nasdaq: AVTR, NYSE: AIV, NYSE: EQR, NYSE: AVB, NYSE: UDR, NYSE: ESS, NYSE: CPT, NYSE: SNH, NYSE: BRE, NYSE: HME, NYSE: MAA, NYSE: ELS, NYSE: ACC, NYSE: CLP, Nasdaq: AGNC, NYSE: SUI, NYSE: AEC, NYSE: PMT and AMEX: TWO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Why Lacking Home Builder Confidence Conflicts with Anecdotal Evidence of Traffic

The National Association of Home Builders (NAHB) issued its monthly Housing Market Index (HMI) for February. The HMI stuck at 16 for the fourth month in a row, which is confounding if you have been following the chatter from the large builders. However, I think I understand why there is a variance between the two.

The NAHB surveys builders of all sorts, including large and small. Well, there is a big difference between the large builders and the small ones, and that is access to capital. Large publicly traded homebuilders like Toll Brothers (NYSE: TOL), K.B. Home (NYSE: KBH), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE BZH), Hovnanian (NYSE: HOV) and others can raise money in the capital markets. Thus, these larger builders have more flexibility than the smaller private firms, who rely almost solely on banks for important construction loans. This limitation, given the current real estate environment, is a significant disadvantage for small builders. I expect that this is the reason why they are reporting back about a harsher operating environment than the news we hear from the big builders, which have noted improvement.

The HMI has three component indexes, and two of the three showed improvement through the February recording date. Current Sales Conditions was noted better, with that component index up two points to a mark of 17. The reading that measures builders' sales expectations for the next six months also gained in February, rising one point to a mark of 25. The component that measures traffic of prospective buyers stayed put at 12. Small builders do not see traffic, because they are less likely than large builders to have active sample homes in the current environment; and they are going to have fewer of them, which could also be skewed to poorer markets. Something certainly does not add up. Last week, even as Beazer Homes (NYSE: BZH) reported a poor fiscal first quarter, its CEO still noted a 50% sequential month increase in new home orders in January, and said the rate was about equal to the prior year.

Some of the commentary reported by the NAHB is telling as well. One respondent complained that, "... an extremely tight lending environment continues to make it almost impossible to obtain credit for viable new and existing projects, and most do not see that situation improving anytime soon." While certainly true, this illustrates the composition of the NAHB survey, and its significant inclusion of small builders.

Therefore, the NAHB survey's HMI Index should lag in showing the recovery that larger, publicly traded builders will report first. Since we can only trade the shares of publicly traded companies, this report gets in the way of our trading profits. It blurs the reading of the situation with noise and knots up decision making, which might lead investors to miss the recovery in those shares.



Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), 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), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO).

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.

INFLATION - January 2011 Import and Export Prices Fuel Worry

Inflation Signs

January's Import and Export Price Report showed significant price increase in both imports and exports, and unfortunately, across both overall measures and those excluding food and fuel. We posit that the chatter that has overwhelmed the financial airwaves of late, making an argument we made years ago mind you, is worth listening to once again. Inflation portends to blindside the market and its caretakers, the group of merry men who shrug off all evil until it is upon them.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative Tickers: NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, NYSE: STT, NYSE: JNS, Nasdaq: TROW, NYSE: GE, NYSE: WMT, NYSE: MCD, NYSE: AA, NYSE: AXP, NYSE: BA, NYSE: CAT, Nasdaq: CSCO, NYSE: CVX, NYSE: DD, NYSE: DIS, NYSE: HD, NYSE: HPQ, NYSE: IBM, Nasdaq: INTC, NYSE: JNJ, NYSE: KFT, NYSE: KO, NYSE: MMM, NYSE: MRK, Nasdaq: MSFT, NYSE: PFE, NYSE: PG, NYSE: T, NYSE: TRV, NYSE: UTX, NYSE: VZ, NYSE: XOM, Nasdaq: PAYX, NYSE: MAN, NYSE: RHI, Nasdaq: JOBS, NYSE: MWW, NYSE: KFY, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, Nasdaq: KELYA, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, NYSE: JOB, Nasdaq: TSTF, NYSE: NYX, NYSE: SPY, NYSE: DIA, NYSE: SDS, NYSE: QLD, NYSE: DOG, Nasdaq: QQQQ.

INFLATION: January 2011 Import and Export Prices Fuel Worry

Inflation chatter is all the rage again on the financial airwaves. You will recall our important work on this subject from several years ago (and other pieces). If not for a near depression that depressed prices as demand was desolated, the inflation topic would probably have been the highest concern globally over the last few years. However, now that the global economy is recovering, and with China firing up all engines, inflation signs and concerns are resurfacing. Once again, the scent is first found in raw material resources, including rare earth metals, but also in the high use commodities of energy and agriculture. Those factors were at play again in driving January 2011 Import and Export Prices higher. For now, talking-head speak-easies are blowing off the possibility of feed through to finished goods, but it won't be the first train that runs them over either. Stick with The Greek, and I'll do my best to keep you out of the way of the loco.

More signs of economic recovery, and also inflation, were found in the latest import/export prices data, reported today by the Bureau of Labor Statistics for January. Import prices gained 1.5% in January, marking the fourth consecutive month of plus one percent increases. That is something that last occurred in July 2008, which to help you recall the period, was a time in which the now extinct Washington Mutual beast still roamed the earth, though in small numbers.

The drivers of import price growth are the same now as they were then, commodities, including energy. Fuel import prices increased 3.9% in January, a snail's pace compared to the 14.1% jump that characterized the previous three months. But January's pace is not to be ignored, and neither is the 12.4% increase of the past year, a period characterized by economic recovery.

Behind the gains in energy prices were a 3.4% increase in petroleum prices, which have since been dwarfed on Middle East upheaval. And look deeper, as Natural Gas prices advanced 13% through the month. It was a period in which much of the US got buried in snow. In fact, cold and snowy weather so affected fuel usage, that natural gas recently fell below its five-year average for this time of year. As reported by the EIA in its weekly update, for the period ending February 4, Natural Gas Inventory stood 45 Bcf below the five-year average. If things were to continue to trend, we might test the bottom of the historical price range, though the weather is warming significantly across the country this week. Still, the hijacking of several oil tankers in a short span of time, along with raised Middle East worries, have oil supply uncertainty adding to push natural gas prices higher with oil; it being a regionally sourced commodity that is increasingly a replacement resource for oil.

"Drunken train track wandering market guides should take note of the horn in the distance..."

Drunken train track wandering market guides should take note of the horn in the distance, as non-fuel import prices increased by 0.8% in January. The noteworthy rise was driven by industrial supplies and materials (unfinished metals and chemicals drove this), finished goods, and foods, feeds, and beverages. Consumer goods prices moved 0.3% ahead, with the largest contributors to the increase coming from a 0.9% hike in apparel, footwear, and household goods prices, and a 4.0% rise in jewelry prices. Prices for automotive vehicles rose 0.5%, led by a 1.2% increase in parts prices. Here we see examples of price increase that affect every consumer.

Price increase is still mostly found in raw materials or unfinished goods, but in the case of rising cotton prices, it is finding its way through to textiles and clothing (apparel up 0.9%). Meanwhile, the government just approved increased ethanol usage in gasoline, which in the past led to mayhem within the whole of agriculture. While December's increase in non-fuel import prices was just 0.3%, November's also marked 0.8%, another measure that draws comparisons to 2008.

Export Prices

Export prices also increased significantly in January, rising 1.2%. The advance for the full year was 6.8%, the largest 12-month increase since that same late 2007 (Sept.) through 2008 (Sept.) period; just before the walls came completely tumbling in on the economy. As the economy improves, it also affects demand for agricultural goods. It is not that people eat more, though that is certainly the case as well (especially for the malnourished), but also that they eat more proteins and more processed foods. As families rise in class, which is occurring in China and India, they also consume more, and more proteins. This in turn pushes prices higher for proteins and for the feeds used to raise livestock, which are likewise derived from agriculture.

Meanwhile, what seems to be climate change driven drought in Russia and this year in China, restricting important supply sources, will only increase pressure on the whole of agricultural goods, and inevitably processed foods. Agricultural export prices rose 3.2% in January, adding to a dramatic 12-month advance of 22.6%. Price increase was driven by advances in soybeans, corn and wheat. While cotton declined fractionally in January, it has more than doubled over the past year. And a recent freeze in Mexico has completely wiped out some vegetable crops and will certainly drive prices higher for Americans.

That is not the end of the story though, as prices for non-agricultural exports also advanced considerably, rising 0.9% in January. Higher prices for industrial supplies and materials, capital goods, and automotive vehicles more than offset a 0.4 percent drop in prices for consumer goods. Higher airfares also contributed to the overall increase, and those of course are impacted and related to increased fuel costs. Consumer goods prices might also benefit from dollar play (longer term), and also economies of scale gained as sales grow. Nonagricultural goods prices are up 5.3% over the last 12 months; that's pretty inflationary for dollar pegged trading partners.

China

Prices of goods imported from China increased 0.3% for the fourth month in a row. Chinese goods are up 1.4% over the past year. That's healthy price rise, and you will see more of this if the US government gets its way with regard to the Yuan. You might see more US jobs return too, but that is debatable, since they might simply find a new foreign home, say maybe Indonesia. Prices of goods from Japan and all our major trading partners were up, with significant increases from the EU, Mexico and Canada, due to fuel.

Conclusion

The pace of price increase should intensify as competition for scarce resources squeezes them. With factors at play like civil unrest, wild weather and even pirating and regulation (like with off-shore oil drilling), it seems clear to me that the inflation train is roaring our way. We think dollar dilution, and the Fed's inflated view of its ability to reverse the curse, should also burden the economy in the future, especially if US Treasuries lose their luster globally. Meanwhile, outside of recent stock market gains, wealth is down due to home value declines. Income should be down also, given high unemployment. Banks may be opening up a bit, but it should take some time, to maybe never, before free capital flow comes to be again (and good riddance). Thus, there's a tight rein around economic horsepower.

We must look towards the expansion of the developing world as the cure for what ails us. In this regard, the birth of new democracies is a good thing, but global instability and weak human nature are ugly flies in that ointment, and could ruin everything.



Article should interest investors in Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), State Street (NYSE: STT), Janus (NYSE: JNS), T. Rowe Price (Nasdaq: TROW), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM), Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), General Employment Enterprises (NYSE: JOB), Alliance Resource Partners L.P. (Nasdaq: ARLP), Alliance Resource Holdings (Nasdaq: AHGP), Atlas Pipeline Partners L.P. (NYSE: APL), Atlas Pipeline Holdings (NYSE: AHD), Atlas Energy Resources (NYSE: ATN), Boardwalk Pipeline Partners (NYSE: BWP), Breitburn Energy Partners (Nasdaq: BBEP), Buckeye Partners (NYSE: BPL), Buckeye Holdings (NYSE: BGH), Calumet Specialty Products (Nasdaq: CLMT), Capital Product Partners (Nasdaq: CPLP), Cheniere Energy Partners (AMEX: CQP), Constellation Energy Partners (PCX: CEP), Copano Energy (Nasdaq: CPNO), Crosstex Energy (Nasdaq: XTEX) and TeamStaff (Nasdaq: TSTF).

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.

Business Calendar - Full of Hearts and Economic Reports

Weekly Schedule

This week's schedule is full of economic reports. Given the rough January weather, there's a strong chance the data could disappoint.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

(Tickers: NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ)

Business Calendar - Full of Hearts and Economic Reports

Monday

While there were no proper economic reports released Monday, we received two important data points. President Obama released his budget proposal. New York Federal Reserve President William Dudley spoke at the bank's quarterly economic press briefing on household debt and New York economic trends.

In overseas news, China's economy surpassed Japan's to become the second most important in the world, behind the United States. Enthused by events in Egypt, protesters took to the streets of Iran, Yemen and Bahrain.

In corporate news, EchoStar (Nasdaq: SATS) is acquiring Hughes Communications (Nasdaq: HUGH) for $1.3 billion. The EPS schedule highlighted news from Agilent (NYSE: A), Marriott (NYSE: MAR), Masco (NYSE: MAS), FMC Technologies (NYSE: FTI), Arch Capital Group (Nasdaq: ACGL), Beacon Enterprise Solutions (Nasdaq: BEAC), Administaff (NYSE: ASF), Advanced Energy Industries (Nasdaq: AEIS), Advanced Photonix (AMEX: API), Amicus Therapeutics (Nasdaq: FOLD), AML Communications (Nasdaq: AMLJ), Aoxing Pharmaceutical (AMEX: AXN), Ark Restaurants (Nasdaq: ARKR), Arthrocare (Nasdaq: ARTC), Atlantic American (Nasdaq: AAME), Atlas Air (Nasdaq: AAWW), Bob Evans Farms (Nasdaq: BOBE), Bridgeline Digital (Nasdaq: BLIN), Camco Financial (Nasdaq: CAFI), Cano Petroleum (AMEX: CFW), Carver Bancorp (Nasdaq: CARV), Castle Brands (AMEX: ROX), China Direct (Nasdaq: CDII), China Direct Jo-Jo Drugstores (Nasdaq: CJJD), China Nutrifruit (Nasdaq: CNGL), Citizens Community Bancorp (Nasdaq: CZWI), Corgenix Medical (Nasdaq: CONX), Cubic Energy (AMEX: QBC), Curtiss-Wright (NYSE: CW), Cytokinetics (Nasdaq: CYTK), DG Fastchannel (Nasdaq: DGIT), Diebold (NYSE: DBD), Dynasil (Nasdaq: DYSL), Dynatronics (Nasdaq: DYNT), Encore Capital (Nasdaq: ECPG), EnviroStar (AMEX: EVI), First Advantage Bancorp (Nasdaq: FABK), Flagstone Reinsurance (NYSE: FSR), FMC Technologies (NYSE: FTI), Forward Air (Nasdaq: FWRD), Gencor Industries (Nasdaq: GENC), Good Times Restaurants (Nasdaq: GTIM), Ikonix (Nasdaq: IKNX), Insight Enterprises (Nasdaq: NSIT), Kapstone Paper (NYSE: KS), KVH Industries (Nasdaq: KVHI), Limelight Networks (Nasdaq: LLNW), Mercer International (Nasdaq: MERC), Mesa Laboratories (Nasdaq: MLAB), MFA Financial (NYSE: MFA), Mitek Systems (Nasdaq: MITK), Napco Security Systems (Nasdaq: NSSC), Nordic American Tanker (NYSE: NAT), North European Oil (NYSE: NRT), OmniAmerican Bancorp (Nasdaq: OABC), Onstream Media (Nasdaq: ONSM), OPTI (Nasdaq: OPTI), Pope Resources (Nasdaq: POPE), PrePaid Legal (NYSE: PPD), Qualstar (Nasdaq: QBAK), Rand Logistics (Nasdaq: RLOG), Rand Worldwide (Nasdaq: RWWI), Remedent (Nasdaq: REMI), Scientific Industries (Nasdaq: SCND), Sino-Global Shipping (Nasdaq: SINO), Skilled Healthcare (NYSE: SKH), STEC, Inc. (Nasdaq: STEC), Stewardship Financial (Nasdaq: SSFN), Sutor Tech (Nasdaq: SUTR), Tegal Corp. (Nasdaq: TGAL), The Singing Machine (NYSE: SMD), Ultra Clean Holdings (Nasdaq: UCTT), United Fire (Nasdaq: UFCS), Uranium Resources (Nasdaq: URRE), U.S. Dataworks (Nasdaq: UDWK), Valspar (NYSE: VAL), Walter Energy (NYSE: WLT) and Winn-Dixie (Nasdaq: WINN).

Tuesday

Tuesday offers eight economic reports, six of which reach the wire in the premarket. Retail Sales data for January, which is due for release at 8:30 AM ET, looks to garner much attention. Economists forecast sales increased 0.5% month-to-month, comparing against the 0.6% gain in December. Bloomberg reports the analysts range from -0.5% to +1.0%. Excluding autos, sales are expected to match December's 0.5% rise.

Also at 8:30, look for the New York Fed to report on its Empire State Manufacturing Survey. The General Business Conditions Index is seen rising to 15.0 in February, up from 11.92 in January.

Import and Export Price data are also due by 8:30 AM ET. January import prices are seen rising 0.8%, after gaining 1.1% in December. Export prices increased 0.7% in December. The Treasury International Capital (TIC) report is up for release at 9:00 AM. Last month's data covering the month of November showed net foreign purchases of long-term securities at $85.1 billion.

The two regular same-store sales reports are also due Tuesday morning. Last week's ICSC weekly same-store sales data covering the period ending February 5 showed sales gained 2.2% week-to-week and 2.5% over the prior year period. Redbook's survey showed a year-to-year sales gain of 2.7%.

Business Inventories data for the month of December are due for 10:00 AM release. Economists see inventories 0.7% higher, compared to the 0.2% increase in November. Business level sales rose 1.2%, offering a complementary data point that took the Business Inventory-to-Sales ratio down to 1.25, from 1.27.

Finally, the Housing Market Index is due at 10:00 AM as well. This report from the National Association of Home Builders should show an increase in builder confidence, as companies like Beazer Homes (NYSE: BZH) have been reporting sharply improved traffic and orders through the first few months of the year. Last month's report covering the month of January showed no change with the HMI stuck at 16.

At 10:00 AM, look for Cleveland Bank President Sandra Pianalto to give a speech to women in Akron.

In overseas news, the Bank of Japan (BOJ) is expected to keep interest rates steady. Markets in Indonesia, Malaysia and several other nations will be closed for the Prophet Muhammad's birthday.

The corporate wire brings investor days for J.P. Morgan Chase (NYSE: JPM), LeapFrog (NYSE: LF), and American Water Works (NYSE: AWK). The Technical Securities Analysts Group will hold a seminar in San Francisco. The EPS wire highlights reports from Dell (Nasdaq: DELL), Analog Devices (NYSE: ADI), Marsh McLennan (NYSE: MMC), Nabors Industries (NYSE: NBR), Watson Pharmaceuticals (NYSE: WPI), CenturyLink (NYSE: CTL), 1st United Bancorp (Nasdaq: FUBC), Aaron’s (NYSE: AAN), ACI Worldwide (Nasdaq: ACIW), Active Power (Nasdaq: ACPW), Allscripts-Misys Healthcare (Nasdaq: MDRX), American Campus Communities (NYSE: ACC), American Capital (Nasdaq: ACAS), American DG Energy (Nasdaq: ADGE), American Medical Systems (Nasdaq: AMMD), Amtrust Financial (Nasdaq: AFSI), Barclays (NYSE: BCS), BHP Billiton (NYSE: BHP), Capella Education (Nasdaq: CPLA), Cedar Fair (NYSE: FUN), Century Aluminum (Nasdaq: CENX), Chemed (NYSE: CHE), China Precision Steel (Nasdaq: CPSL), Cincinnati Bell (NYSE: CBB), CIT Group (NYSE: CIT), Colfax (NYSE: CFX), Compugen (Nasdaq: CGEN), Cynosure (Nasdaq: CYNO), and many others.

Wednesday

Look for the regular Mortgage Activity data from the Mortgage Bankers Association in the premarket. Last week's report covering the period ended February 4 showed the Market Composite Index fell 5.5%. Refinancings decreased 7.7%, while the Purchase Index fell 1.4%. Contracted rates on fixed rate 30-year mortgages increased to 5.13%, from 4.81%.

January Housing Starts are due at 8:30 AM. Economists are looking for the annual pace of sales to gain speed to 540K, from 529K in December.

The Producer Price Index (PPI) is also up for release at 8:30 AM. January is expected to show prices rose 0.7%, which compares with the 1.1% increase in December. Excluding food and energy, Core PPI is expected to increase 0.2%, against the like gain in December.

Industrial Production data is due at 9:15 AM. January's data is expected to show an increase of 0.5%, versus the 0.8% increase in December. Capacity Utilization is expected to have improved to 76.3%, from 76.0% in December.

EIA's Petroleum Status Report is due at 11:00 AM. Last week's data covering the period ended February 4 showed crude oil inventory increased by 1.9 million barrels. Gasoline inventory rose by 4.7 million barrels. Both oil and gasoline stocks stood above the upper limit of the average range for this time of year.

At 2:00 PM ET, the Federal Open Market Committee (FOMC) releases its meeting minutes for its late January meeting. It's expected to make for interesting reading, given debate surrounding quantitative easing and the prospect of inflation.

Treasury Secretary Timothy Geithner will testify before the Senate Finance Committee on the Treasury Budget.

In corporate news, look for investor days from Gartner (NYSE: IT) and Timken (NYSE: TKR). The earnings wire highlights data from NVIDIA (Nasdaq: NVDA), Express Scripts (Nasdaq: ESRX), Devon Energy (NYSE: DVN), Deere (NYSE: DE), Abercrombie & Fitch (NYSE: ANF), Health Care REIT (NYSE: HCN) and many more.

Thursday

Another busy economic day includes five economic reports and several important speeches from Fed representatives. In the premarket, be sure to catch the Weekly Initial Jobless Claims data. Last week's report covering the period ending February 12 showed claims fell to 383K, but we wrote that weather likely played a role. Economists are thus looking for this latest data to show an increase in claims to 410K.

The Consumer Price Index (CPI) is up for release at 8:30. Economists expect January's data to show 0.3% increase in consumer prices. Excluding food and energy prices, economists see the Core CPI rising 0.1%.

At 10:00 AM, look for January's Leading Economic Indicators report. Economists see a 0.2% increase in the LEI, which is less enthusiastic than the 1.0% increase seen in December.

The Philadelphia Fed Survey is up at 10:00 AM as well. Economists see improvement there to 22.0, up from 19.3 in January.

EIA's Natural Gas Report is up at 10:30 AM. Last week's report covering the period ending February 4 showed natural gas inventory fell by 209 Bcf, to a level 45 Bcf below the five-year average for this time of year.

A major hearing by the Senate Banking Committee brings Federal Reserve Chairman Bernanke, FDIC Chair Sheila Bair and SEC boss Mary Schapiro to testify on the implementation of Dodd-Frank reform. Meanwhile, the Senate Budget Committee will examine the President's Budget Proposal.

The day also brings appearances by Fed men: Richard Fisher, Charles Evans and Dennis Lockhart.

The corporate wire offers investor days at Gazprom (OTC: OGZPY.PK), Disney (NYSE: DIS), Crane (NYSE: CR), Health Net (NYSE: HNT), Symmetry Medical (NYSE: SMA), and JDSU (Nasdaq: JDSU). The EPS wire includes Duke Energy (NYSE: DUK), Waste Management (NYSE: WM), Nordstrom (NYSE: JWN), PG&E (NYSE: PCG), CF Industries (NYSE: CF), J.M. Smucker (NYSE: SJM) and more.

Friday

At 8:00 AM, Fed Chairman Bernanke addresses a French conference on Global Imbalances and Financial Stability. Meanwhile, the G-20 finance ministers and the world's central bank governors are also meeting in Paris.

The corporate wire brings the 2:1 split of MassMutual Financial. The EPS wire highlights news from Campbell's Soup (NYSE: CPB), Progress Energy (NYSE: PGN), Pinnacle West Capital (NYSE: PNW), AmeriGroup (NYSE: AGP), Barnes Group (NYSE: B), Brady Corp. (NYSE: BRC), America’s Car-Mart (Nasdaq: CRMT), Brookfield Asset Management (NYSE: BAM), Calpine (NYSE: CPN), Cenovus Energy (NYSE: CVE), China Medical Technologies (Nasdaq: CMED), Digital Realty Trust (NYSE: DLR), Eldorado Gold (NYSE: EGO), Elster Group (NYSE: ELT), Generac (Nasdaq: GNRC), Gold Fields (NYSE: GFI), Healthspring (NYSE: HS), HMS Holdings (Nasdaq: HMSY), Hospitality Properties Trust (NYSE: HPT), Lance (Nasdaq: LNCE), LifePoint Hospitals (Nasdaq: LPNT), Lincoln Electric Holdings (Nasdaq: LECO), LyondellBasell (NYSE: LYB), NV Energy (NYSE: NVE), Ruth’s Hospitality (Nasdaq: RUTH), Ship Finance International (NYSE: SFL), SouFun Holdings (Nasdaq: SFUN), TomoTherapy (Nasdaq: TOMO), Tower International (Nasdaq: TOWR), TravelCenters of America (AMEX: TA), Ultra Petroleum (NYSE: UPL), Windstream (Nasdaq: WIN), Yingli Green Energy (NYSE: YGE), and Yucheng Technologies (Nasdaq: YTEC).

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