Financial News Summary 06-30-11

The day's financial news summary highlights progress in Europe and effort towards it in the United States. The Greeks passed the second critical legislation tied to austerity today, allowing for the distribution of the next tranche of aid from the EU and IMF. German banks promptly joined the French in guaranteeing the rollover of near-term maturing Greek debt. In the States, S&P levied a warning to the U.S. that a downgrade is imminent should the government not raise the debt ceiling in time to avoid technical default. Congress is working overtime to ensure that doesn't happen. Meanwhile, mixed economic data reached the wire today amidst a bit of corporate news too.

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 include: NYSE: MHP, NYSE: MCO, NYSE: TM, NYSE: F, NYSE: GM, OTC: MZDAY.PK, OTC: NSANY, NYSE: HMC, NYSE: LLY, Nasdaq: NTAP, Nasdaq: CACI, OTC: EADSY.PK, OTC: NISTY.PK, Nasdaq: APOL, NYSE: AZZ, Nasdaq: CAMP, Nasdaq: CARV, NYSE: CBK, NYSE: STZ, NYSE: DRI, Nasdaq: DMAN, NYSE: GY, Nasdaq: LBIX, NYSE: MKC, NYSE: MEI, Nasdaq: MITL, NYSE: MSM, Nasdaq: QTWW, Nasdaq: SCHN, Nasdaq: SWHC, NYSE: WOR, Nasdaq: XRTX.

Financial News Summary

Rating Agencies Levy Threats at Congress
Standard & Poor’s (NYSE: MHP) warned the public today that it would immediately slash the United States’ highest possible credit rating to “selective default” if the August 4 deadline comes to pass without a debt ceiling hike. A director of the company said U.S. Treasuries maturing on the 4th of August would be downgraded to D, while other treasuries would also be cut as a result. Earlier this month, Moody’s (NYSE: MCO) also warned of a downgrade of the United States should the deadline come to pass.

Senate Determines to Cancel Holiday Vacation
The U.S. Senate, at the prodding of the President, has determined to cancel it’s week long vacation for the Independence Day holiday, and will return to session on Tuesday the 5th of July. Treasury Secretary Timothy Geithner has already warned Congress not to push this issue to the midnight hour or to use it as a political prong, and I agree fully. Today I listened to an economist correctly depict the issue as akin to playing Russian roulette with a fully loaded gun.

Greece Passes Austerity Implementation Legislation
Why it had to be a two-phased process, we’ll never know, but the Greeks increased the drama today as they passed phase 2 of the austerity legislation. This effectively cleared the way for the release of the next tranche of aid from the EU and IMF that will keep Greece solvent into September. German banks promptly reacted to the passage, committing to rollover all debt extended to Greece that is due to mature through 2014. This accounts for nearly half of all Greek debt held by German institutions, and with the commitment from the French institutions adds some further clarity to Greece’s fiscal future – a risk is hedged.

Jobless Claims Stick Too High
Weekly Initial Jobless Claims were reported today for the period ending June 25. Claims fell by 1,000 to 428K. The stubborn state of employer non-hiring is clearly evident in the four-week moving average of jobless claims, which increased by 500 to 426,750.

Chicago PMI Improved Significantly
The Chicago Purchasing Managers Index (PMI) report for the month of June showed the Business Barometer Index rose to 61.1, from 56.6 in May. Economists were looking for a much lower result of 53.0, based on Bloomberg’s survey. Production and New Orders grew, while Order Backlogs declined. The index is a total barometer of Midwestern business activity, and may reflect gains of U.S. automakers like Ford (NYSE: F) and GM (NYSE: GM) on Japanese producers like Toyota (NYSE: TM) in June.

Consumers Find Some Confidence
Bloomberg’s Consumer Comfort Index, a weekly measure of the consumer mood, showed improvement this week. The index moved to negative 43.9 though, from negative 44.9 the week before.

Natural Gas Inventory
The latest Natural Gas Report from the EIA, covering the period ending June 24, showed an increase of 78 Bcf, taking it to a level 243 Bcf below the mark set last year and 63 Bcf below the five-year average for this time of year. We are currently in a build period for natural gas, and moderate temperatures have helped to stave off summer demand for electricity.

Fed Speak
St. Louis Federal Reserve Bank President James Bullard briefed reporters after a conference on quantitative easing. Thomas Hoenig also addressed an audience today. Treasury Secretary Timothy Geithner is addressing the Clinton Global Initiative meeting.

Corporate News
The corporate wire highlights Mazda Motor’s (OTC: MZDAY.PK) launch of a remodeled Demio subcompact. Companies meeting with analysts or investors include Eli Lilly (NYSE: LLY), NetApp (Nasdaq: NTAP), CACI International (Nasdaq: CACI), EADS (OTC: EADSY.PK) and Nippon Steel (OTC: NISTY.PK). The day’s EPS schedule includes Apollo Group (Nasdaq: APOL), AZZ Inc. (NYSE: AZZ), CalAmp (Nasdaq: CAMP), Carver Bancorp (Nasdaq: CARV), Christopher & Banks (NYSE: CBK), Constellation Brands (NYSE: STZ), Darden Restaurants (NYSE: DRI), DemandTec (Nasdaq: DMAN), GenCorp (NYSE: GY), Leading Brands (Nasdaq: LBIX), McCormick (NYSE: MKC), Methode Electronics (NYSE: MEI), Mitel Networks (Nasdaq: MITL), MSC Industrial Direct (NYSE: MSM), Quantum Fuel Systems Technologies (Nasdaq: QTWW), Schnitzer Steel (Nasdaq: SCHN), Smith & Wesson (Nasdaq: SWHC), Worthington Industries (NYSE: WOR) 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.

Mortgage Applications Dropped Despite a Rate Decline

The latest data from the Mortgage Bankers Association (MBA) showed mortgage activity declined last week despite better mortgage interest rates. What do you think was the reason for the decline?

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: GS, NYSE: MS, NYSE: WFC, NYSE: TD, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: PNC, NYSE: JPM, NYSE: BBT, NYSE: CIT, NYSE: BKU, Nasdaq: UBSI, NYSE: BK, Nasdaq: MBFI, NYSE: AF, NYSE: NYB, Nasdaq: HCBK, Nasdaq: PBCT, Nasdaq: FNFG, Nasdaq: CFFN, Nasdaq: WFSL, Nasdaq: ISBC, Nasdaq: NWBI, Nasdaq: STSA, NYSE: OCN, NYSE: FBC, NYSE: PFS, Nasdaq: COLB, Nasdaq: KRNY, Nasdaq: BRKL, Nasdaq: DCOM, Nasdaq: FFIC, Nasdaq: DNBK, OTC: FCNCA.PK, NYSE: SNV, Nasdaq: UBSI, Nasdaq: HMPR, Nasdaq: WSBC, Nasdaq: CHCO, Nasdaq: SASR, OTC: FCBN.OB, Nasdaq: SCBT, NYSE: WL, Nasdaq: WSFS, Nasdaq: SBSI, Nasdaq: STEL, Nasdaq: UBSH, Nasdaq: EGBN, Nasdaq: FBNC, Nasdaq: ABCB, Nasdaq: TBBK, Nasdaq: FCBC, Nasdaq: CCBG, Nasdaq: FISI, Nasdaq: NKSH, Nasdaq: CZNC, Nasdaq: CHFN, Nasdaq: SBCF, Nasdaq: TIBB, Nasdaq: AMNB, Nasdaq: UCBI, Nasdaq: MBRG, Nasdaq: HBOS, Nasdaq: ZION, Nasdaq: EWBC, NYSE: CYN, NYSE: BOH, Nasdaq: SIVB, Nasdaq: WABC, Nasdaq: CATY, Nasdaq: UMPQ, Nasdaq: GBCI, Nasdaq: PCBC, Nasdaq: PACW, NYSE: WAL, OTC: FBAK.OB, Nasdaq: FIBK, Nasdaq: NARA, Nasdaq: WCBO, Nasdaq: TCBK, Nasdaq: TBNK, Nasdaq: WCBO, Nasdaq: BMRC, Nasdaq: HAFC.

Mortgage Applications Dropped Despite a Rate Decline

The Mortgage Bankers Association reported on mortgage activity today for the week ending June 24, 2011. The news was surprising, as activity declined despite improved interest rates. The MBA’s Market Composite Index, which reflects mortgage application activity, fell by 2.7% in the period. However, the movement was hard to justify, given that contracted rates on 30-year and 15-year mortgages averaged 4.46% (down from 4.57%) and 3.64% (from 3.7%).

Refinancing activity was also down despite the improvement in rates, with the MBA’s Refinance Index dropping 2.6%. Yet, the refinance share of overall activity still managed to gain ground to 69.5% from 69.2% of total mortgage activity. This was due to the pitiful fact that Purchase Activity declined as well. The MBA’s Purchase Index fell 3.0% against the week before.

The four-week moving averages for the Market Composite Index and the Purchase Index are both a bit disconcerting. The four-week average of the Market Composite Index was up only 0.7% against the prior week, while the Purchase Index average was down 1.5%. Refinancing activity, however, was up 1.5% over the latest four-week span.

It’s hard to say what the cause of the decline was last week. Weather can impact week-to-week comparisons, and another wave of tornadoes did blow through the Midwest and East last week. We just heard Bloomberg Radio Host Pimm Fox relay the comments of a housing executive; he apparently noted that home shopping drops off sharply if a weekend is rainy generally versus dry. The start to summer also brings with it slower business activity generally, as well as a less active housing market (versus spring). It’s also possible that global uncertainty froze Americans last week, given all the trouble with Greece. Domestically, the possibility of the government finding empty coffers on August 2nd, without a debt ceiling hike, could mean no unemployment insurance payout or other benefit distribution, but we doubt the unemployed are house shopping now generally. Perhaps public sector employees are shaking in their work-boots.

What do you think was the cause of the slippage in mortgage activity last week?



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), BB&T (NYSE: BBT), CIT (NYSE: CIT), Bank United (NYSE: BKU), First Citizens (OTC: FCNCA.PK), Synovus (NYSE: SNV), United Bankshares (Nasdaq: UBSI), Hampton Roads Bankshares (Nasdaq: HMPR), WesBanco (Nasdaq: WSBC), City Holding (Nasdaq: CHCO), Sandy Spring (Nasdaq: SASR), First Citizens (OTC: FCBN.OB), SCBT Financial (Nasdaq: SCBT), Wilmington Trust (NYSE: WL), WSFS Financial (Nasdaq: WSFS), Southside Bancshares (Nasdaq: SBSI), Stellar One (Nasdaq: STEL), Union First Market (Nasdaq: UBSH), Eagle Bancorp (Nasdaq: EGBN), First Bancorp (Nasdaq: FBNC), Ameris (Nasdaq: ABCB), The Bancorp (Nasdaq: TBBK), First Community (Nasdaq: FCBC), Capital City (Nasdaq: CCBG), Financial Institutions (Nasdaq: FISI), National Bankshares (Nasdaq: NKSH), Citizens & Northern (Nasdaq: CZNC), Charter Financial (Nasdaq: CHFN), Seacoast Banking (Nasdaq: SBCF), TIB Financial (Nasdaq: TIBB), American National (Nasdaq: AMNB), United Community (Nasdaq: UCBI), Middleburg Financial (Nasdaq: MBRG), Heritage Financial (Nasdaq: HBOS), Zions Bancorp (Nasdaq: ZION), East West Bancorp (Nasdaq: EWBC), City National (NYSE: CYN), Bank of Hawaii (NYSE: BOH), SVB Financial (Nasdaq: SIVB), Westamerica (Nasdaq: WABC), Cathay General (Nasdaq: CATY), Umpqua (Nasdaq: UMPQ), Glacier Bancorp (Nasdaq: GBCI), Pacific Capital (Nasdaq: PCBC), PacWest (Nasdaq: PACW), Western Alliance (NYSE: WAL), First National Alaska (OTC: FBAK.OB), First Interstate Bancsystem (Nasdaq: FIBK), Nara (Nasdaq: NARA), West Coast (Nasdaq: WCBO), TriCo (Nasdaq: TCBK), Territorial (Nasdaq: TBNK), Washington Banking (Nasdaq: WCBO), Bank of Marin (Nasdaq: BMRC), Hanmi (Nasdaq: HAFC), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), United Bankshares (Nasdaq: UBSI), Bank of New York Mellon (NYSE: BK), MB Financial (Nasdaq: MBFI), Astoria Financial (NYSE: AF), New York Community (NYSE: NYB), Hudson City (Nasdaq: HCBK), People’s United (Nasdaq: PBCT), First Niagra (Nasdaq: FNFG), Capitol Federal (Nasdaq: CFFN), Washington Federal (Nasdaq: WFSL), Investor’s Bancorp (Nasdaq: ISBC), Northwest Bankshares (Nasdaq: NWBI), Sterling Financial (Nasdaq: STSA), Ocwen (NYSE: OCN), Flagstar (NYSE: FBC), Provident (NYSE: PFS), Colombia Banking (Nasdaq: COLB), Kearny (Nasdaq: KRNY), Brookline (Nasdaq: BRKL), Dime Community (Nasdaq: DCOM), Flushing Financial (Nasdaq: FFIC), Danvers (Nasdaq: DNBK).

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 News Summary 06-29-11

Today's Wall Street News Summary highlights the passage of Greek austerity legislation against the backdrop of massive Greek protests opposing the measure and the Hellenic Republic's government. The day also offered data on home sales and mortgage activity, as well as oil and gasoline inventory. On the corporate front, Bank of America and BJ Wholesale Club headed the wire.

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: BJ, NYSE: KSU, NYSE: CSX, Nasdaq: SYMC, Nasdaq: DELL, Nasdaq: ADSK, NYSE: AZO, NYSE: GIS, NYSE: AYI, AMEX: API, NYSE: AM, Nasdaq: CJJD, Nasdaq: DSWL, NYSE: FDO, NYSE: FC, NYSE: GIS, NYSE: KBH, NYSE: LNN, NYSE: MON, Nasdaq: RLOG, NYSE: UNF, Nasdaq: VIMC, NYSE: ICE, Nasdaq: ETFC, Nasdaq: SCHW, Nasdaq: AACC, NYSE: AMG, NYSE: AMP, Nasdaq: AMTD, Nasdaq: BGCP, NYSE: BK, NYSE: BLK, NYSE: CIT, Nasdaq: CLMS, NYSE: CME, NYSE: CNS, Nasdaq: COWN, Nasdaq: DHIL, Nasdaq: DLLR, Nasdaq: DUF, Nasdaq: ECPG, Nasdaq: EF, NYSE: EFX, Nasdaq: EPHC, NYSE: EVR, Nasdaq: EZPW, Nasdaq: FBCM, Nasdaq: FCFS, NYSE: FII, NYSE: FMD, NYSE: FNF, Nasdaq: FNGN, Nasdaq: FXCM, NYSE: GBL, Nasdaq: GCAP, Nasdaq: GDOT, Nasdaq: GFIG, NYSE: GHL, Nasdaq: GLCH, NYSE: GS, Nasdaq: IBKR, Nasdaq: INTL, Nasdaq: INTX, NYSE: ITG, NYSE: IVZ, NYSE: JEF, NYSE: JMP, NYSE: JNS, NYSE: KBW, NYSE: KCG, NYSE: LAZ, NYSE: LM, Nasdaq: LPLA, AMEX: LTS, NYSE: MA, NYSE: MCO, NYSE: MF, NYSE: MGI, Nasdaq: MKTX, Nasdaq: MRLN, NYSE: MS, Nasdaq: MSCI, NYSE: MTG, Nasdaq: NEWS, NYSE: NFP, NYSE: NNI, Nasdaq: NTRS, Nasdaq: NTSP, NYSE: OCN, NYSE: OPY, Nasdaq: OXPS, Nasdaq: PICO, NYSE: PJC, NYSE: PMI, Nasdaq: PNSN, Nasdaq: PRAA, NYSE: RJF, Nasdaq: SEIC, NYSE: SF, NYSE: SFE, NYSE: STT, NYSE: SWS, Nasdaq: TROW, NYSE: V and Nasdaq: VRTS.

Wall Street News Summary

Greece Passes Austerity Measures
The Greek Parliament voted for the five-year austerity plan pushed upon them by the IMF and EU, despite incensed protests by the Greek people outside the building. It was a $40 billion value creating measure, raising taxes and cutting spending. The passage of the legislation allows the IMF/EU to release the next tranche of aid to Greece to allow it to remain solvent. It’s not over though, as Thursday brings a vote on the implementation procedures of the austerity measures. Meanwhile, Greeks are increasingly opposing their government, which they do not believe is representing their interests.

Mortgage Activity Eases
The Mortgage Bankers Association (MBA) produced its weekly Mortgage Activity Report Wednesday in the premarket. This week’s data, covering the period ending June 24, showed mortgage activity eased despite rate improvement. The MBAs Market Composite Index dropped by 2.7% on a seasonally adjusted basis, while contracted 30-year fixed rate mortgage rates dropped moderately.

Pending Home Sales Turn Around in May
The Pending Home Sales Index was reported for the month of May at 10:00 AM this morning. The data, produced by the National Association of Realtors (NAR), showed the Pending Home Sales Index rose 8.2% on a month-over-month basis, to a level of 88.8 in May. Pending Home Sales is a forward looking measure, which measures contract signings, so more good news for housing. Also, each region reflected the improvement seen overall.

Oil & Gasoline Inventory Data
The EIA Petroleum Status Report, released at 10:30 AM, showed both crude oil and gasoline stores experienced draws from inventory in the period ending June 24. Crude oil inventory fell by 4.4 million barrels and remains at a level above the upper limit of the average range for this time of year. These draws do not include draws from the strategic petroleum reserve. Total Motor Gasoline inventory decreased by 1.4 million barrels and fell to the middle of the average range for this time of year.

Federal Reserve Governor Sarah Bloom Raskin is giving a speech on rebuilding the American economy in Washington D.C. at 12 PM ET.

Farm Prices, which covers all agricultural products, will be reported at 3:00 PM.

Wall Street was in focus, as Bank of America (NYSE: BAC) came to a settlement agreement and has set aside $14 billion dollars to reimburse those harmed by mortgage backed securities it and its subsidiaries (Merrill Lynch) sold. Of this amount, $8.5 billion will be immediately paid out to heavy hitter investors like PIMCO.

BJ Wholesale Club (NYSE: BJ) agreed to be taken private today by Leonard Green & Partners and CVC Capital Partners at a price of $2.8 billion. That translates into $51.25 per share for shareholders of BJ.

Meeting with Wall Street analysts or shareholders, Kansas City Southern (NYSE: KSU), CSX (NYSE: CSX), Symantec (Nasdaq: SYMC), Dell (Nasdaq: DELL), Autodesk (Nasdaq: ADSK) and Autozone (NYSE: AZO).

The earnings schedule highlights data from General Mills (NYSE: GIS), Acuity Brands (NYSE: AYI), Advanced Photonix (AMEX: API), American Greetings (NYSE: AM), China Jo Jo Drugstores (Nasdaq: CJJD), Deswell Industries (Nasdaq: DSWL), Family Dollar Stores (NYSE: FDO), Franklin Covey (NYSE: FC), General Mills (NYSE: GIS), K.B. Home (NYSE: KBH), Lindsay (NYSE: LNN), Monsanto (NYSE: MON), Rand Logistics (Nasdaq: RLOG), UniFirst (NYSE: UNF) and Vimicro International (Nasdaq: VIMC).

Article should interest investors in Intercontinental Exchange (NYSE: ICE), E*Trade Financial (Nasdaq: ETFC), Charles Schwab (Nasdaq: SCHW), Asset Acceptance Capital (Nasdaq: AACC), Affiliated Managers (NYSE: AMG), Ameriprise Financial (NYSE: AMP), TD Ameritrade (Nasdaq: AMTD), BGC Partners (Nasdaq: BGCP), Bank of New York Mellon (NYSE: BK), BlackRock (NYSE: BLK), CIT Group (NYSE: CIT), Calamos Asset Management (Nasdaq: CLMS), CME Group (NYSE: CME), Cohn & Steers (NYSE: CNS), Cowen Group (Nasdaq: COWN), Diamond Hill Investment (Nasdaq: DHIL), Dollar Financial (Nasdaq: DLLR), Duff & Phelps (Nasdaq: DUF), Encore Capital (Nasdaq: ECPG), Edelman Financial (Nasdaq: EF), Equifax (NYSE: EFX), Epoch (Nasdaq: EPHC), Evercore Partners (NYSE: EVR), EXCorp. (Nasdaq: EZPW), FBR Capital Markets (Nasdaq: FBCM), First Cash Financial (Nasdaq: FCFS), Federated Investors (NYSE: FII), First Marblehead (NYSE: FMD), Fidelity National Financial (NYSE: FNF), Financial Engines (Nasdaq: FNGN), FXCM (Nasdaq: FXCM), Gamco Investors (NYSE: GBL), GAIN Capital (Nasdaq: GCAP), Green Dot (Nasdaq: GDOT), GFI Group (Nasdaq: GFIG), Greenhill (NYSE: GHL), Gleacher (Nasdaq: GLCH), Goldman Sachs (NYSE: GS), Interactive Brokers (Nasdaq: IBKR), INTL FCStone (Nasdaq: INTL), Intersections (Nasdaq: INTX), Investment Technology (NYSE: ITG), Invesco (NYSE: IVZ), Jefferies (NYSE: JEF), JMP Group (NYSE: JMP), Janus Capital (NYSE: JNS), KBW (NYSE: KBW), Knight Capital (NYSE: KCG), Lazard (NYSE: LAZ), Legg Mason (NYSE: LM), LPL Investment (Nasdaq: LPLA), Ladenburg Thalmann (AMEX: LTS), Mastercard (NYSE: MA), Moody’s (NYSE: MCO), MF Global (NYSE: MF), Moneygram (NYSE: MGI), MarketAxess (Nasdaq: MKTX), Marlin Business Services (Nasdaq: MRLN), Morgan Stanley (NYSE: MS), MSCI (Nasdaq: MSCI), MGIC Investment (NYSE: MTG), NewStar Financial (Nasdaq: NEWS), National Financial Partners (NYSE: NFP), Nelnet (NYSE: NNI), Northern Trust (Nasdaq: NTRS), NetSpend (Nasdaq: NTSP), Ocwen Financial (NYSE: OCN), Oppenheimer (NYSE: OPY), optionsXpress (Nasdaq: OXPS), PICO (Nasdaq: PICO), Piper Jaffray (NYSE: PJC), PMI Group (NYSE: PMI), Penson Worldwide (Nasdaq: PNSN), Portfolio Recovery (Nasdaq: PRAA), Raymond James (NYSE: RJF), SEI Investments (Nasdaq: SEIC), Stifel Financial (NYSE: SF), Safeguard Scientifics (NYSE: SFE), State Street (NYSE: STT), SWS (NYSE: SWS), T. Rowe Price (Nasdaq: TROW), Visa (NYSE: V) and Virtus Investment Partners (Nasdaq: VRTS).

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.

Real Estate Prices Stabilizing

Data reported over the last two weeks offered yet more positive signals for real estate investors. Both the FHFA and Standard & Poor’s real estate pricing metrics have now illustrated positive changes in average home prices in April.

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: Nasdaq: ITIC, 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: SPG.

Real Estate Prices Stabilizing

Last week, the FHFA House Price Index produced its first monthly increase since May 2010. The index, which measures only the prices of homes backing mortgages that have been sold to or are guaranteed by Fannie Mae (OTC: FNMA.OB) or Freddie Mac (OTC: FMCC.OB), rose 0.8% on a seasonally adjusted basis from March to April. Of course, residential real estate prices were still 5.7% lower than April of 2010, which benefited from the first-time homebuyer tax break.

This week, the S&P Case Shiller Home Price Index also showed pricing strength for April. Both Case Shiller’s 10-City and 20-City Composite Indexes posted their first monthly increases in eight months. Shiller’s 10-City Composite, which is inclusive of the ten most important metropolitan statistical areas (MSAs) in the U.S., improved by 0.8% in April over March. Shiller’s 20-City measure gained 0.7% against the prior month. Just like with the FHFA data, year-to-year comparisons still reflect relative weakness largely due to last year’s tax-incentive driven market strength. On a yearly basis, the 10-City Composite was 3.1% short of last year’s mark, while the 20-City measure was down 4.0%.

Housing markets are of course varied and regional, and so the broader measures cover and conceal regional variation. The FHFA data showed regional strength in New England, which is defined by the FHFA as the states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut. The FHFA’s New England accounting showed 2.2% improvement in April. Meanwhile, the FHFA’s Mountain Division, which includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico, marked a 1.3% decrease in April.

Case Shiller’s data showed that while 13 of 20 MSAs experienced price increase, 6 of 20 MSAs still experienced month-over-month price decline in April; those cities included Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa. According to Case Shiller, Washington D.C. continues to shine, showing a 3.0% monthly price increase and 4.0% annual improvement. Cleveland, Detroit and Las Vegas are the three markets where average home prices are lower now than they were in 2000. Phoenix and Atlanta are close to their 2000 price points.

March had just marked a new crisis low, according to S&P. An economist at the company suggested not buying too deeply into the month’s move, while noting seasonal spring strength in other housing data points through May. FHFA’s data is seasonally adjusted though. The S&P representative also reminded readers of the Home Price Index report that bank lending remained tight, but he notes a slight decline in consumer credit defaults, based on S&P data.

According to the S&P report, average home prices across America were relatively similar to those found in the summer of 2003. Also, the peak-to-current price difference for the 10-City and 20-City Composites were -32.6% and -32.8%, with the peak found in June/July 2006. FHFA shows its U.S. Index is 19.3% below its April 2007 peak, and roughly at its January 2004 level.

The price charts seem to show the market about where it should be, in my opinion. While the rainiest April on record; a hard time for tornado alley; the deep flooding of the middle/south of the country; and Libyan conflict led gasoline prices - contained spring activity, comparable annual home sales rates going forward are modest, and so the second half of the year offers some opportunity for annualized home sales growth. Thus, with a shift to an inventory consuming environment, and given the adequate degree of price decline to now, I see reason enough to look for pricing stabilization over the next few months in real estate, if the bottom was not just marked in March. Of course, any new catastrophe undermines everything.



Editor's Note: Article should interest investors in Investors Title (Nasdaq: ITIC), 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), 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), Simon Property Group (NYSE: SPG).

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.

All Hell Breaking Loose?

Since our last technical analysis installment, the S&P has fallen below the April 18th low of $1294.70 and has remained below that level for nearly the entire month of June. As predicted, index prices have also since fallen 3% to a short term low around 1258 and presently sit just above another key support: the March 16th low of 1249 (see "A" in Figure 1). Should that level fail, indeed "all hell may break loose"!

All Hell Breaking Loose?

The tension in the current price movements is accentuated by several converging lines of support and resistance:

• Resistance: the April low of 1294;
• Support: the March low of 1250;
• Resistance: 20 day moving average at 1287;
• Support 200 day moving average at 1264;
• Resistance: the falling trend-line that has acted as resistance to any rally -- see grey dotted line labeled with “B” above

Of particular note is the current price relative to the 200 day moving average. A decisive drop below this level would likely prompt institutional selling.

In any case, index prices are definitely poised for a big move in either direction. With austerity measures in Greece hanging on a single-vote; with the possibility of pre-earnings announcements looming any day; and with seasonal weakness likely through the end of June, short-term capitulation to 1233-1240 would seem a precursor to any significant Fourth-of-July rally. Let the sparks fly!



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) 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.

All Hell Might Break Loose this Week

The week ahead includes the first Friday of July, but not a monthly employment report to boot. More importantly, it marks a critical vote for a long-term austerity plan for Greece. Given that the Greeks will be rallying for a 48 hour long protest up to the vote, all hell could break loose in Athens, across Europe and global markets this week.

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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All Hell Might Break Loose this Week

If Greece fails to ratify its five-year austerity plan, the EU and IMF cannot send the next tranche of lifesaving capital to the financially embattled nation of my forefathers. Based on the frustrated state of the Greek populous, nothing is guaranteed and everything is possible this week in Athens.

Monday

The week kicked off with an uncharacteristic economic report. Usually falling on a Friday, the Personal Income and Outlays data for the month of May came due at 8:30 AM this Monday. Economists surveyed by Bloomberg were looking for a month-over-month increase of 0.4% for Personal Income. However, income came in up only 0.3% against a revised lower rate of growth for April (+0.3%). This simply reinforces the fact that laborers have very little muscle to flex nowadays. Consumer Spending was expected to be unchanged in May against April, and the result was as expected. However, the Fed’s favorite inflation gauge, the Core PCE Price Index, was hot at +0.3%, against a warm 0.2% increase in April. Economists were looking for only a 0.2% rise in May.

President Obama called a meeting with Senate leaders today, after the GOP walked out of debt ceiling discussions last week. Minneapolis Fed President Kocherlakota offered his thoughts on leverage and taxes, as the Minneapolis Fed also published its Midyear Outlook.

Nissan (Nasdaq: NSANY) produced its mid-year business plan, through which it broadcast its target for 10% U.S. auto market share. Nortel Networks (OTC: NRTLQ.PK) auctions off patents, while Tribune Co. looks to exit bankruptcy. Six Flags (NYSE: SIX) split 2-for-1.

The day’s EPS schedule highlights news from Nike (NYSE: NKE), Standard Microsystems (Nasdaq: SMSC), American Learning (Nasdaq: ALRN), Ninetowns Internet Technology Group (Nasdaq: NINE) and Park Electrochemical (NYSE: PKE).

Tuesday

A general strike is set for Greece, and is scheduled to run through two days and right up to the Greek Parliamentary vote for austerity. Thus, things could get uglier than ever in Athens starting Tuesday and certainly Wednesday.

Last week, the FHFA House Price Index actually showed price increase for the period measured. The Case Shiller Price Index is due for release Tuesday morning at 9:00 AM. This report, produced with Standard & Poor’s, covers data from the month of April, so it is hardly relevant today. The monthly Existing Home Sales Report offers more relevant data.

We will receive the regular ICSC Weekly Chain Store Sales data in the premarket hours. Last week’s report, produced in conjunction with Goldman Sachs (NYSE: GS), showed sales fell against the prior week by 0.7% in the period ending June 18. Year-to-year comparison showed soft growth of 2.2%. Redbook’s weekly data showed sales increased 4.2%.

Two confidence data points reach the wire at 10:00 AM. The Conference Board reports on Consumer Confidence for June, with economists’ expectations set for a reading of 62.0. That would compare with the May reading of 60.8, which was down 5.2 points from April.

Also at 10 AM, look for the State Street (NYSE: STT) Investor Confidence Index for June. The index for May showed investor confidence improved, with the index rising to 104.1, from 97.3. Only North American investor confidence actually illustrated a leaning toward risk.

The Senate Banking Committee will be discussing housing finance reform. Dallas Federal Reserve Bank President Richard Fisher is scheduled to give an address on the economy.

The corporate wire includes Microsoft’s (Nasdaq: MSFT) introduction of a cloud-based version of Office. Nike (NYSE: NKE), Devon Energy (NYSE: DVN) and Sony (NYSE: SNE) are meeting with analysts or shareholders Tuesday. Tokyo Electric Power (OTC: TKECF.PK) has its annual meeting. The corporate earnings schedule highlights news from Arcadia Resources (AMEX: KAD), OMNOVA Solutions (NYSE: OMN), Progress Software (Nasdaq: PRGS), RF Monolithics (Nasdaq: RFMI), Sealy (NYSE: ZZ), Shaw Group (Nasdaq: SHAW) and SYNNEX (NYSE: SNX).

Wednesday

The Mortgage Bankers Association (MBA) produces its weekly Mortgage Activity Report Wednesday in the premarket. Last week’s data showed a slight rise in mortgage rates caused a decrease in mortgage activity. The Market Composite Index fell 5.9% for the period ending June 17.

The Pending Home Sales Index is due for the month of May at 10:00 AM. April’s report produced an index fall to 81.9 from 92.6 in April. Much of this year’s early housing market data was skewed by April weather and spiked gasoline pricing, while year-to-year comparisons matched up against tax-incentive driven activity in 2010.

The EIA Petroleum Status Report is up for release at 10:30 AM. Last week’s report covering the period ending June 17 showed crude oil inventory fell by 1.7 million barrels to a level above the upper limit of the average range for this time of year. Gasoline inventory decreased by 0.5 million barrels to a level near the upper limit of the average range for this time of year.

Federal Reserve Governor Sarah Bloom Raskin is giving a speech on rebuilding the American economy in Washington D.C. at 12 PM ET. Farm Prices, which covers all agricultural products, will be reported at 3:00 PM.

Meeting with analysts or shareholders, Kansas City Southern (NYSE: KSU), CSX (NYSE: CSX), Symantec (Nasdaq: SYMC), and Dell (Nasdaq: DELL). The earnings schedule highlights data from General Mills (NYSE: GIS), Acuity Brands (NYSE: AYI), Advanced Photonix (AMEX: API), American Greetings (NYSE: AM), Family Dollar Stores (NYSE: FDO), Franklin Covey (NYSE: FC), K.B. Home (NYSE: KBH), Lindsay (NYSE: LNN), Monsanto (NYSE: MON), Rand Logistics (Nasdaq: RLOG) and UniFirst (NYSE: UNF).

Thursday

Weekly Initial Jobless Claims are reported each Thursday morning at 8:30 AM ET. Last week’s data, covering the period ending June 25, showed claims rose 9K to 429K. This week, economists are looking for 420K, which is still really bad.

The Chicago Purchasing Managers Index (PMI) is due for reporting at 9:45 AM ET. This report for the month of June is expected to show the index value fell to 53.0, from 56.6 in the prior period, based on Bloomberg’s survey of economists.

Bloomberg’s Consumer Comfort Index is a weekly measure of the consumer mood, due for release at 10:00 AM ET Thursday. Last week showed deterioration in the index, with its value dropping to -44.9, down from -44.0 the week before.

The EIA Natural Gas Report is up for release at 10:30 Thursday. Last week’s data covering the period ending June 17 showed an increase of 98 Bcf, taking it to a level 64 Bcf below the five-year average for this time of year.

At 9:00 AM ET, St. Louis Federal Reserve Bank President James Bullard will brief reporters after a conference on quantitative easing. Thomas Hoenig will also be speaking. Treasury Secretary Timothy Geithner will address the Clinton Global Initiative meeting Thursday. The day marks the deadline for the IMF to replace DSK. The likely new head is expected widely to be Christine Lagarde.

The corporate wire will highlight Mazda Motor’s (OTC: MZDAY.PK) launch of a remodeled Demio subcompact. Companies meeting with analysts or investors include Eli Lilly (NYSE: LLY), NetApp (Nasdaq: NTAP), CACI International (Nasdaq: CACI), EADS (OTC: EADSY.PK) and Nippon Steel (OTC: NISTY.PK). The day’s EPS schedule includes Apollo Group (Nasdaq: APOL), AZZ Inc. (NYSE: AZZ), CalAmp (Nasdaq: CAMP), Christopher & Banks (NYSE: CBK), Constellation Brands (NYSE: STZ), Darden Restaurants (NYSE: DRI), DemandTec (Nasdaq: DMAN), McCormick (NYSE: MKC), Methode Electronics (NYSE: MEI), Mitel Networks (Nasdaq: MITL), MSC Industrial Direct (NYSE: MSM), Schnitzer Steel (Nasdaq: SCHN), Smith & Wesson (Nasdaq: SWHC), Worthington Industries (NYSE: WOR) and Xyratex (Nasdaq: XRTX).

Friday

The Bank of Japan (BOJ) issues its tankan survey of business conditions, something that will get notably more attention than usual globally. Markets are closed in Canada and Hong Kong, and the U.S. preps for the three-day Independence Day weekend.

Motor Vehicle Sales will be reported Friday for the month of June. The economists’ consensus expectation is for an increase in the annual pace of sales to 9.6 million, from 9.1 million in May.

Reuters and the University of Michigan will report on Consumer Sentiment at 9:55 AM ET. Economists are looking for this last reading for June to show sentiment stuck at an index value of 71.8.

The Institute for Supply Management (ISM) reports on its manufacturing index at 10:00 AM ET. Economists are looking for the index value to fall to 52.0, down from 53.5 previously. That’s dangerously close to the 50.0 break-point between economic expansion and contraction.

Also at 10:00 AM, Construction Spending data for the month of May – economists are looking for a 0.3% decline in construction spending, versus the 0.4% increase in April.

The corporate wire includes Torchmark’s (NYSE: TMK) 3-for-2 stock split. The EPS schedule potentially offers data from 1 800 Connect (Nasdaq: CNCT), American Learning (Nasdaq: ALRN), Anchor Bancorp Wisconsin (Nasdaq: ABCW), Authentec (Nasdaq: AUTH), BMB Munai (AMEX: KAZ), Bridgford Foods (Nasdaq: BRID), Brooklyn Federal Bancorp (Nasdaq: BFSB), Carver Bancorp (Nasdaq: CARV), CDC Corp. (Nasdaq: CHINA), China Automotive Systems (Nasdaq: CAAS), China Integrated Energy (Nasdaq: CBEH), China Jo Jo Drugstores (Nasdaq: CJJD), China Natural Resources (Nasdaq: CHNR), China Technology Development (Nasdaq: CTDC), CyberDefender (Nasdaq: CYDE), Euro Tech Holdings (Nasdaq: CLWT), Friedman Industries (AMEX: FRD), Funtalk China (Nasdaq: FTLK), Gramercy Capital (NYSE: GKK), Gravity (Nasdaq: GRVY), Highway Holdings (Nasdaq: HIHO), HQ Sustainable Maritime (AMEX: HQS), Leading Brands (Nasdaq: LBIX), Life Partners Holdings (Nasdaq: LPHI), Longtop Financial (NYSE: LFT), Mexco Energy (AMEX: MXC), MSCI (Nasdaq: MSCI), National American University (Nasdaq: NAUH), Omega Navigation (Nasdaq: ONAV), Providence & Worcester Railroad (Nasdaq: PWX), Puda Coal (Nasdaq: PUDA), SearchMedia Holdings (AMEX: IDI), ShengaTech (Nasdaq: SDTH), Simulations Plus (Nasdaq: SLP), Syms (Nasdaq: SYMS), Tel-Instrument Electronics (AMEX: TIK), United Bancshares (Nasdaq: UBOH), Universal Security (AMEX: UUU), VCG Holding (Nasdaq: VCGH) and Waccamaw Bankshares (Nasdaq: WBNK) and Wilber (AMEX: GIW).

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.

House Votes Down Libya War, then Slips Obama a Twenty to Buy a Gun

I woke up Friday morning to the sound of the television playing lightly. I had fallen asleep watching Hillary Clinton testify about the highly disputed withdrawal from Afghanistan, just announced this week by President Obama. Thus, C-SPAN was probably the cause of my rough night’s sleep, full of nonsensical complaints from Democrats, Republicans and anarchists on the Independent line at 3 AM.

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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House Votes Down Libya War, then Slips Obama a Twenty to Buy a Gun

I woke up to a preacher opening the House of Representatives with a prayer. That strange sight was followed by a clearly novice Congressmen reciting the Pledge of Allegiance in what seemed like a rite of passage. The politicians littering the sparsely populated hall faced the flag behind the Speaker of the House, who turned his back to me to do the same. I think it was the first time I’ve heard the pledge recited since elementary school. Thus, I had to pinch myself, because it was like some strange nightmare reminiscent of past fantastic scares caused by watching Craig Ferguson and drinking Jamaican Rum.

I woke up from the dream before I died, I suppose ahead of murder by an angry Representative. Dennis Kucinich lambasted his Democratic brother, the president, for his unconstitutional war on Libya. The Ohio little-man’s advocate surely risked a heart-attack, raising his blood pressure to its maximum so early in the morn. I remembered how he once flew in Air Force One to the Midwest, when the president needed him to back off his righteous rant for an important vote. I thought, well at least I can be sure he wasn’t brainwashed or microchipped or replaced by an alien on that day, because he was adamantly in opposition to President Obama on this day. Why he was mad was not so clear. It could have been because he couldn’t keep up his streak of running for president this coming election year, with the incumbent Obama blocking the way. Or, it could have been the same reason Congressman Pall mentioned, which was the president’s oversight of the constitution when determining to rain down rockets on Muammar Gaddafi.

You can’t blame Obama for not coming to Congress for approval, despite the fact that the declaration of war is still within the realm of the people’s house. I mean, if I were President, I would also follow the lead of Ronald Reagan and every president since when determining I needed to knock some sense into a despot. They would have to pull that whip from me kicking and screaming.

On this day, the House was voting to authorize conflict with Libya about 100 days after the start of the latest fabulously named war game - Operation Odyssey Dawn. Cool right? It’s like the Desert Storm nonsense the Pentagon designed to drum up recruits. I suppose they have PR people devising them, and like a trailer for a film it draws your support. The name of these operations also tricks twittering teens without college admission tickets into enlisting into the marines. Odyssey Dawn has a different ring to it than “I’m going to risk my life for a bunch of ragtag Libyan tribesmen.”

I wonder if the Libyan issue is not at the core of this week’s torrential trading, yet while still hidden behind the popular press’ vision. You see, Libya produces high-quality oil, the kind refined into the all important gasoline at the heart of the latest consumer concern and manufacturing mayhem. It’s no coincidence that oil spiked and fired gasoline to $4 once conflict erupted in Libya, not to mention the mess in Bahrain.

As time has passed, it’s become clear that no Libyan, not Gaddafi nor angry toothless peasant fighter-man, has interest in disrupting the nation’s sacred cash cow. And with the lip service of the Saudi’s following OPEC’s greedy grimace, we now have the IEA releasing 2 million barrels a day (over 30 days) from its emergency reserves. The U.S. is also contributing to this supply from its strategic oil reserve. You see, while it took a while, the highly touted economic Brainrust hired by the Obama Administration, finally figured out that gasoline matters to the economy and that Libya matters to gasoline. It’s sort of like a 2+2 math equation, so the Ivy Leaguers up there missed it. They were understandably spending their time with algorithms designed to determine how far the downfall would be if the debt ceiling were allowed to collapse. All in good time, or rather, all in short time… I suppose that catastrophe will cue the third horn blowing angel. I fell asleep before intermission, so forgive me if we are up to the fourth siren already.

Anyway, the House of Representatives took up two important bills Friday involving the hostilities in Libya, though the Obama Administration says they are more like a slap-fight than “hostilities,” which would have required them to cease unauthorized operations already by law. The first legislation, taken up while Kucinich was still boiling, was the authorization for the President to wage a watchamacallit - but not a war - against Libya. The House, with a ragtag group of Democrats and Republicans, voted that down. Yet, with the President’s argument that what he’s having in Libya is just a little harmless argument between friends, only employing missile firing Predator aircraft like sharp biting words, he could continue.

The second bill could have stopped him though, as it covered the appropriation of funding toward the conflict. However, those same so-called righteous representatives voted that bill down, thereby slapping the President’s hand and enjoying the solid short-takes they’ll use in their campaigning next year. Jolly good service my dear proxies.

In any event, Libya matters. Since we started on this path, we must now get the semi-catatonic Gaddafi out of office in order to secure safe passage of Libya’s special oil. We’ll design a top of the line constitution for the toothless tribesmen who take over to corruptly run their government, and everything will get back to normal. It seems the Europeans also understand the importance of winning the war in Libya, and are in it with conviction. Thus, it should be a short time now before we hear the song sung in Tripoli, the King Slug is dead, long live the new CIA implant!

Article interests investors in 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), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK).

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.

Global Market Demise and I Know Why

Thursday’s global market demise had plenty good reason why investors might head for the door. The NIKKEI narrowed 0.34%, the DAX was down 1.8% and the FTSE fell 1.7%. On any given day there are a slew of reasons why stocks and the broader market might rise or fall, so looking across the globe for a common denominator can be difficult. However, we’re relatively confident we’ve identified the culprit for you.

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.

Relevant tickers: NYSE: DB, NYSE: STD, Nasdaq: ITUB, NYSE: UBS, NYSE: WBK, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: NBG, NYSE: RY, NYSE: BFR, NYSE: IRE, NYSE: BMO, NYSE: CM, NYSE: ING, NYSE: C, NYSE: DIA, NYSE: SPY, Nasdaq: QQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, Nasdaq: NDAQ, NYSE: ICE, Nasdaq: ETFC, Nasdaq: SCHW, Nasdaq: AACC, NYSE: AMG, NYSE: AMP, Nasdaq: AMTD, Nasdaq: BGCP, NYSE: BK, NYSE: BLK, NYSE: CIT, Nasdaq: CLMS, NYSE: CME, NYSE: CNS, Nasdaq: COWN, Nasdaq: DHIL, Nasdaq: DLLR, Nasdaq: DUF, Nasdaq: ECPG, Nasdaq: EF, NYSE: EFX, Nasdaq: EPHC, NYSE: EVR, Nasdaq: EZPW, Nasdaq: FBCM, Nasdaq: FCFS, NYSE: FII, NYSE: FMD, NYSE: FNF, Nasdaq: FNGN, Nasdaq: FXCM, NYSE: GBL, Nasdaq: GCAP, Nasdaq: GDOT, Nasdaq: GFIG, NYSE: GHL, Nasdaq: GLCH, NYSE: GS, Nasdaq: IBKR, Nasdaq: INTL, Nasdaq: INTX, NYSE: ITG, NYSE: IVZ, NYSE: JEF, NYSE: JMP, NYSE: JNS, NYSE: KBW, NYSE: KCG, NYSE: LAZ, NYSE: LM, Nasdaq: LPLA, AMEX: LTS, NYSE: MA, NYSE: MCO, NYSE: MF, NYSE: MGI, Nasdaq: MKTX, Nasdaq: MRLN, NYSE: MS, Nasdaq: MSCI, NYSE: MTG, Nasdaq: NEWS, NYSE: NFP, NYSE: NNI, Nasdaq: NTRS, Nasdaq: NTSP, NYSE: OCN, NYSE: OPY, Nasdaq: OXPS, Nasdaq: PICO, NYSE: PJC, NYSE: PMI, Nasdaq: PNSN, Nasdaq: PRAA, NYSE: RJF, Nasdaq: SEIC, NYSE: SF, NYSE: SFE, NYSE: STT, NYSE: SWS, Nasdaq: TROW, NYSE: V and Nasdaq: VRTS, NYSE: LEN, NYSE: CAG, NYSE: WLP, NYSE: DFS, Nasdaq: CSCO, Nasdaq: ORCL, NYSE: ACN, Nasdaq: CYAN, Nasdaq: FINL, NYSE: HRB, NYSE: MU, NYSE: RAD, Nasdaq: TIBX.

Global Market Demise – We Know Why

After taking back significant ground at the close, the Dow (NYSE: DIA, NYSE: DOG) was still down 0.5% and the S&P 500 Index (NYSE: SPY, NYSE: SDS) was short 0.3%. The slide in American stocks followed declines in Asia and Europe. After searching for drivers, I lean heavily towards Europe this time, given its degree of decline versus Asia. If the declines were equal between Asia and Europe, I would have pinned President Obama with the blame, and considered that his statement Wednesday evening with regard to nation building at home (versus in Afghanistan) took away a degree of certainty global markets have grown quite used to regarding the United States’ willingness to police the world. However, it looks as though this was not the case, despite my feeling that it should be considered overseas. We have evidence of it in Libya and now Afghanistan.

Given that the decline started before American markets opened, we can rule out the possibility of new labor market data in the U.S. driving it. Weekly Initial Unemployment Insurance Claims increased by 9K in the latest reported period, taking new benefits filers up to 429K. That certainly didn’t help matters, but it is not the source of the day’s demise either.

Thus, the day’s dastardly driver must have originated in Europe, and we can be fairly certain of that thanks to the decline of the euro as well. Europe’s most significant market moving news derived from the European Banking Authority (EBA). The EBA warned area banks to be more realistic about their Greek debt holdings. In other words, most of Europe’s financial institutions with exposure to Greece have not accounted adequately for the possibility of a Greek default. You can bet they have not even pondered a Portuguese pitfall.

The EBA will be announcing results to its latest stress testing of 91 European banks around July 13. The regulator said it had given its banks guidance to “address inconsistencies and excessive optimism” on sovereign exposures. If that did not feel like a slap to the face, we suppose European investors might still get it when they reach home this evening to their portfolio perusing wives.

The EBA test will consider how its banks might fair through a two-year recession. What’s new about the situation is that previously European politicians and also regulators like the EBA have not even given sovereign default a note of consideration. Given the latest uproar around the release of the current tranche of support to Greece, and debate about how well Greece is managing austerity (you should be envisioning rioting now), it would seem default is becoming digestible among despots. Its repercussions had neither been accounted for completely by trusting investors, and so the day drew market ire and capital withdrawal. More bad breath was borne from the mouth of the European Central Bank head, Jean-Claude Trichet. The ECB chief raised alarm in Europe when he said financial stability for the region was “flashing red.”



The day’s earnings included Lennar (NYSE: LEN), ConAgra Foods (NYSE: CAG), WellPoint (NYSE: WLP), Discover Financial Services (NYSE: DFS), Cisco Systems (Nasdaq: CSCO), Oracle (Nasdaq: ORCL), Accenture (NYSE: ACN), Cyanotech (Nasdaq: CYAN), Finish Line (Nasdaq: FINL), H&R Block (NYSE: HRB), Micron Technology (NYSE: MU), Rite Aid (NYSE: RAD), TIBCO Software (Nasdaq: TIBX), Deutsche Bank (NYSE: DB), Banco Santander (NYSE: STD), ITA (Nasdaq: ITUB), UBS (NYSE: UBS), Westpac Banking (NYSE: WBK), Lloyds Banking Group (NYSE: LYG), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Bank (NYSE: AIB), Banco Latinamericano (NYSE: BLX), National Bank of Greece (NYSE: NBG), Royal Bank of Canada (NYSE: RY), BBVA Banco Frances (NYSE: BFR), The Bank of Ireland (NYSE: IRE), Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), ING Groep (NYSE: ING), Citigroup (NYSE: C), SPDR Dow Jones Industrial Average (NYSE: DIA), SPDR S&P 500 (NYSE: SPY), PowerShares QQQ Trust (Nasdaq: QQQ), ProShares Short Dow 30 (NYSE: DOG), ProShares Ultra Short S&P 500 (NYSE: SDS), ProShares Ultra QQQ (NYSE: QLD), NYSE Euronext (NYSE: NYX), The NASDAQ OMX Group (Nasdaq: NDAQ), Intercontinental Exchange (NYSE: ICE), E*Trade Financial (Nasdaq: ETFC), Charles Schwab (Nasdaq: SCHW), Asset Acceptance Capital (Nasdaq: AACC), Affiliated Managers (NYSE: AMG), Ameriprise Financial (NYSE: AMP), TD Ameritrade (Nasdaq: AMTD), BGC Partners (Nasdaq: BGCP), Bank of New York Mellon (NYSE: BK), BlackRock (NYSE: BLK), CIT Group (NYSE: CIT), Calamos Asset Management (Nasdaq: CLMS), CME Group (NYSE: CME), Cohn & Steers (NYSE: CNS), Cowen Group (Nasdaq: COWN), Diamond Hill Investment (Nasdaq: DHIL), Dollar Financial (Nasdaq: DLLR), Duff & Phelps (Nasdaq: DUF), Encore Capital (Nasdaq: ECPG), Edelman Financial (Nasdaq: EF), Equifax (NYSE: EFX), Epoch (Nasdaq: EPHC), Evercore Partners (NYSE: EVR), EXCorp. (Nasdaq: EZPW), FBR Capital Markets (Nasdaq: FBCM), First Cash Financial (Nasdaq: FCFS), Federated Investors (NYSE: FII), First Marblehead (NYSE: FMD), Fidelity National Financial (NYSE: FNF), Financial Engines (Nasdaq: FNGN), FXCM (Nasdaq: FXCM), Gamco Investors (NYSE: GBL), GAIN Capital (Nasdaq: GCAP), Green Dot (Nasdaq: GDOT), GFI Group (Nasdaq: GFIG), Greenhill (NYSE: GHL), Gleacher (Nasdaq: GLCH), Goldman Sachs (NYSE: GS), Interactive Brokers (Nasdaq: IBKR), INTL FCStone (Nasdaq: INTL), Intersections (Nasdaq: INTX), Investment Technology (NYSE: ITG), Invesco (NYSE: IVZ), Jefferies (NYSE: JEF), JMP Group (NYSE: JMP), Janus Capital (NYSE: JNS), KBW (NYSE: KBW), Knight Capital (NYSE: KCG), Lazard (NYSE: LAZ), Legg Mason (NYSE: LM), LPL Investment (Nasdaq: LPLA), Ladenburg Thalmann (AMEX: LTS), Mastercard (NYSE: MA), Moody’s (NYSE: MCO), MF Global (NYSE: MF), Moneygram (NYSE: MGI), MarketAxess (Nasdaq: MKTX), Marlin Business Services (Nasdaq: MRLN), Morgan Stanley (NYSE: MS), MSCI (Nasdaq: MSCI), MGIC Investment (NYSE: MTG), NewStar Financial (Nasdaq: NEWS), National Financial Partners (NYSE: NFP), Nelnet (NYSE: NNI), Northern Trust (Nasdaq: NTRS), NetSpend (Nasdaq: NTSP), Ocwen Financial (NYSE: OCN), Oppenheimer (NYSE: OPY), optionsXpress (Nasdaq: OXPS), PICO (Nasdaq: PICO), Piper Jaffray (NYSE: PJC), PMI Group (NYSE: PMI), Penson Worldwide (Nasdaq: PNSN), Portfolio Recovery (Nasdaq: PRAA), Raymond James (NYSE: RJF), SEI Investments (Nasdaq: SEIC), Stifel Financial (NYSE: SF), Safeguard Scientifics (NYSE: SFE), State Street (NYSE: STT), SWS (NYSE: SWS), T. Rowe Price (Nasdaq: TROW), Visa (NYSE: V) and Virtus Investment Partners (Nasdaq: VRTS).

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.

Federal Reserve Monetary Policy Statement 06-22-11

What follows is a verbatim copy of the Monetary Policy Statement of the Federal Reserve's Federal Open Market Committee (FOMC). The policy statement was released on June 22 at the conclusion of the Fed's two-day meeting. The Fed held rates steady and announced it would conclude its purchases of $600 billion of longer term Treasury securities by the end of this month.

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

Federal Reserve Monetary Policy Statement

Release Date: June 22, 2011

For immediate release

Information received since the Federal Open Market Committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected. Also, recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated; however, the Committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline toward levels that the Committee judges to be consistent with its dual mandate. Inflation has moved up recently, but the Committee anticipates that inflation will subside to levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee continues to anticipate that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee will monitor the economic outlook and financial developments and will act as needed to best foster maximum employment and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.



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) 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.

Mortgage Activity Fell in 6-17-11 Week

Mortgage activity fell in the latest reported period, as noted today by the Mortgage Bankers Association. However, this afternoon’s Fed announcement weighs heavily on future trend, as interest rates will be sensitive to any Fed action or verbal communication.

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: GS, NYSE: MS, NYSE: WFC, NYSE: TD, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: PNC, NYSE: JPM, NYSE: BBT, NYSE: CIT, NYSE: BKU, Nasdaq: UBSI, NYSE: BK, Nasdaq: MBFI, NYSE: AF, NYSE: NYB, Nasdaq: HCBK, Nasdaq: PBCT, Nasdaq: FNFG, Nasdaq: CFFN, Nasdaq: WFSL, Nasdaq: ISBC, Nasdaq: NWBI, Nasdaq: STSA, NYSE: OCN, NYSE: FBC, NYSE: PFS, Nasdaq: COLB, Nasdaq: KRNY, Nasdaq: BRKL, Nasdaq: DCOM, Nasdaq: FFIC, Nasdaq: DNBK, OTC: FCNCA.PK, NYSE: SNV, Nasdaq: UBSI, Nasdaq: HMPR, Nasdaq: WSBC, Nasdaq: CHCO, Nasdaq: SASR, OTC: FCBN.OB, Nasdaq: SCBT, NYSE: WL, Nasdaq: WSFS, Nasdaq: SBSI, Nasdaq: STEL, Nasdaq: UBSH, Nasdaq: EGBN, Nasdaq: FBNC, Nasdaq: ABCB, Nasdaq: TBBK, Nasdaq: FCBC, Nasdaq: CCBG, Nasdaq: FISI, Nasdaq: NKSH, Nasdaq: CZNC, Nasdaq: CHFN, Nasdaq: SBCF, Nasdaq: TIBB, Nasdaq: AMNB, Nasdaq: UCBI, Nasdaq: MBRG, Nasdaq: HBOS, Nasdaq: ZION, Nasdaq: EWBC, NYSE: CYN, NYSE: BOH, Nasdaq: SIVB, Nasdaq: WABC, Nasdaq: CATY, Nasdaq: UMPQ, Nasdaq: GBCI, Nasdaq: PCBC, Nasdaq: PACW, NYSE: WAL, OTC: FBAK.OB, Nasdaq: FIBK, Nasdaq: NARA, Nasdaq: WCBO, Nasdaq: TCBK, Nasdaq: TBNK, Nasdaq: WCBO, Nasdaq: BMRC, Nasdaq: HAFC

Mortgage Activity Fell in 6-17-11 Week

The Mortgage Bankers Association (MBA) today reported on mortgage activity for the period ending June 17. The MBA’s Market Composite Index of overall mortgage activity fell 5.9%, mostly due to a drop in refinancing activity on an increase in mortgage rates.

The seasonally adjusted Purchase Index, which measures mortgage applications filed for home purchases (new or existing), fell 2.8% against the week just prior. The MBA’s Refinance Index took a much harder landing route, dropping 7.2% against the week earlier period.

The reason for the decline is clear, as contracted rates on 30-year and 15-year fixed rate mortgages rose to 4.57% (from 4.51%) and 3.7% (from 3.67%), respectively. It’s not much of a change, yet any change in rates affects the economic feasibility of a vast number of potential refinancing opportunities. The share of refinancing deals declined as a percentage of the whole in this latest period, to 69.2%, from 70%.

The four-week moving average of the Market Composite Index still shows an increase of 0.4%, with the Purchase Index down 0.7% and recent refinancing activity moving that index up 0.8%.We cannot read anything into the week’s activity though, as the direction of rates are at the whim of Federal Reserve decision-making, with a decision pending as this article is being published.

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), BB&T (NYSE: BBT), CIT (NYSE: CIT), Bank United (NYSE: BKU), First Citizens (OTC: FCNCA.PK), Synovus (NYSE: SNV), United Bankshares (Nasdaq: UBSI), Hampton Roads Bankshares (Nasdaq: HMPR), WesBanco (Nasdaq: WSBC), City Holding (Nasdaq: CHCO), Sandy Spring (Nasdaq: SASR), First Citizens (OTC: FCBN.OB), SCBT Financial (Nasdaq: SCBT), Wilmington Trust (NYSE: WL), WSFS Financial (Nasdaq: WSFS), Southside Bancshares (Nasdaq: SBSI), Stellar One (Nasdaq: STEL), Union First Market (Nasdaq: UBSH), Eagle Bancorp (Nasdaq: EGBN), First Bancorp (Nasdaq: FBNC), Ameris (Nasdaq: ABCB), The Bancorp (Nasdaq: TBBK), First Community (Nasdaq: FCBC), Capital City (Nasdaq: CCBG), Financial Institutions (Nasdaq: FISI), National Bankshares (Nasdaq: NKSH), Citizens & Northern (Nasdaq: CZNC), Charter Financial (Nasdaq: CHFN), Seacoast Banking (Nasdaq: SBCF), TIB Financial (Nasdaq: TIBB), American National (Nasdaq: AMNB), United Community (Nasdaq: UCBI), Middleburg Financial (Nasdaq: MBRG), Heritage Financial (Nasdaq: HBOS), Zions Bancorp (Nasdaq: ZION), East West Bancorp (Nasdaq: EWBC), City National (NYSE: CYN), Bank of Hawaii (NYSE: BOH), SVB Financial (Nasdaq: SIVB), Westamerica (Nasdaq: WABC), Cathay General (Nasdaq: CATY), Umpqua (Nasdaq: UMPQ), Glacier Bancorp (Nasdaq: GBCI), Pacific Capital (Nasdaq: PCBC), PacWest (Nasdaq: PACW), Western Alliance (NYSE: WAL), First National Alaska (OTC: FBAK.OB), First Interstate Bancsystem (Nasdaq: FIBK), Nara (Nasdaq: NARA), West Coast (Nasdaq: WCBO), TriCo (Nasdaq: TCBK), Territorial (Nasdaq: TBNK), Washington Banking (Nasdaq: WCBO), Bank of Marin (Nasdaq: BMRC), Hanmi (Nasdaq: HAFC), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), United Bankshares (Nasdaq: UBSI), Bank of New York Mellon (NYSE: BK), MB Financial (Nasdaq: MBFI), Astoria Financial (NYSE: AF), New York Community (NYSE: NYB), Hudson City (Nasdaq: HCBK), People’s United (Nasdaq: PBCT), First Niagra (Nasdaq: FNFG), Capitol Federal (Nasdaq: CFFN), Washington Federal (Nasdaq: WFSL), Investor’s Bancorp (Nasdaq: ISBC), Northwest Bankshares (Nasdaq: NWBI), Sterling Financial (Nasdaq: STSA), Ocwen (NYSE: OCN), Flagstar (NYSE: FBC), Provident (NYSE: PFS), Colombia Banking (Nasdaq: COLB), Kearny (Nasdaq: KRNY), Brookline (Nasdaq: BRKL), Dime Community (Nasdaq: DCOM), Flushing Financial (Nasdaq: FFIC), Danvers (Nasdaq: DNBK).

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 Great Real Estate Debate

The great real estate debate will certainly rage on today, as Existing Home Sales were reported lower through May. The debate pits those who view the weights on real estate still too burdensome to allow for sales growth against those who expect sales to grow this year on an annual basis.

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: Nasdaq: ITIC, 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: SPG.

The Great Real Estate Debate

The Existing Home Sales data actually exceeded the low bar set by economists. With the consensus expectation set for 4.75 million, sales of existing homes rose at an annual rate of 4.81 million through May. The result was still disappointing though, as it marked a 3.8% decline from April’s rate of 5.0 million (revised from 5.05 million). Those who argue that real estate is still in for another couple years of decline, or at least struggle, would have you know that this May was still 15.3% short of May of 2010. Last year’s sales pace ran at 5.68 million, fueled greatly by the temporary tax incentive provided by the government for first-time buyers.

The blue sky forecasters, however, would remind bottom-seekers that extraordinarily wet weather affected April contract signings. Existing home sales and new home sales measure completed transactions. Thus, it seems obvious that the wettest April on record, not to mention tornado tormented in parts of the country, kept homebuyers from walk-throughs and from entering into contracts, which affected closings down the road in May. It takes about 30 to 60 days to close on a home.

Recent oil and especially gasoline price spikes, driven by the war in Libya and turmoil in Bahrain, impacted the consumer mood and consumer spending over recent months. We expect $4 gasoline also kept some from buying a home, as housing affordability went by the way-side in many monthly income calculations. That said, things have changed for the better with regard to gasoline and weather, and so there’s reason for optimists to chirp, however prospective the real estate pessimist sees it.

The pessimists will remind us that some factors have nothing to do with weather nor gasoline and aren’t going away soon either. With 1.8 million distressed properties on the market still, prices continue to decline, giving little incentive to enter the market today. I would argue that foreclosures are a draw to the market for bargain seekers and investors. Indeed, investors accounted for 19% of purchase activity in May, versus 14% last May. Meanwhile, housing affordability is awesome today.

The median price of sale of existing homes was 4.6% less this May than last May. Distressed property sales, which typically get a 20% haircut, represented 31% of sales in May. Some argue that the inventory of distressed property would take two years to burn off given the current rate of sales. But the optimist would complain about the simplicity of such a calculation; the sales rate is improving when we exclude last year’s tax incentive driven activity.

But… they’ll say, don’t forget the affect of lower pricing in relation to the home many might leave; I’m speaking here of the lost leverage toward step-up property. A voice would no doubt also rise, reminding us of the many homeowners with underwater mortgages; those poor saps who bought homes in the last couple years of the housing bubble when things really got insane. Finally, the economy wasn’t a smooth running engine even before the latest dip in manufacturing and consumer mood, not to mention the pace of GDP growth.

Yet, dear dreamers, mortgage rates remain conducive to activity. Based on data from Freddie Mac (OTC: FMCC.OB), the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.64% in May, down from 4.84% in April. But nobody is lending, they would rebut! Still, I’ve taken note of recent lobbying efforts, even public relations moves, toward easing regulation and facilitating homeownership in America. We would of course pray that effort did not include bringing back liar loans from the dead (may they rest in peace). I expect though that U.S. politicians, heading into the election year, will look toward reviving the American dream while locking up the animals that perverted it.

The NAR reports inventory fell 1.0%, to 3.72 million existing homes for sale. Housing hounds would rather point to the inventory level marked in months, which deteriorated to 9.3 months from 9.1 in April. However, because sales pace is dynamic and should improve, it seems best to me to look toward the hard inventory number of homes for sale.

I note a positive development in the divergence of different markets. Where economies are improving and employment especially so, housing prices have stabilized or are growing. I’m talking about places like Texas. This is a good sign for the rest of the nation. In every turn, there is a starting point, and in a broad and diverse marketplace, there should be a starting place. Even in this latest report, we saw strength in the Northeast, where the median price of a home sold rose 6.1%. The population concentrated region only saw a 2.5% decline in sales. The West was also impressive, as sales levels held steady. Weather impact was evident though in the Midwest and South, where sales sank 6.4% and 5.1%, respectively.

The debate rages on, and you are challenged to choose your side. I’m looking for growth off the low base, a point made time and again in articles I’ve authored this year. My greatest concerns are not intrinsic to the real estate market, but rather tied to the economy that I view still vulnerable, and to the high possibility of disruptive events over the next several years. That said, there are bargains to be had across the United States, and I would take advantage of the vastness of the distressed property pool, which for certain has helped to reduce risk for foreclosure bidders. What say you on the topic of the great real estate debate?



Editor's Note: Article should interest investors in Investors Title (Nasdaq: ITIC), 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), 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), Simon Property Group (NYSE: SPG).

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