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The Wall Street Greek blog is the sexy & syndicated financial securities markets publication of former Senior Equity Analyst Markos N. Kaminis. Our stock market blog reaches reputable publishers & private networks and is an unbiased, independent Wall Street research resource on the economy, stocks, gold & currency, energy & oil, real estate and more. Wall Street & Greece should be as honest, dependable and passionate as The Greek.



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Thursday, June 28, 2012

A Crisis of Injustice

justice
I see the media pumping the wire with warnings of a fiscal cliff we all know very well will be legislated away. I ask, what of the unemployment cliff and the forgotten folks falling off of it every single day?

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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.

Weekly Jobless Claims was reported effectively unchanged for the latest covered period, but unchanged is synonymous with stagnant, which will lead to a spoiling, as I just reported. The total number of Americans receiving a benefit of some sort, including through the extension program, rose 71,724 to 5.89 million. I wish to remind my loyal readers that this figure has been improving over recent months by attrition as much as economic growth. I expect that a great number of long-term unemployed Americans are simply falling off the unemployment cliff when their benefits run out.

Where do these people go for help after they stop receiving benefits, and what of the 4%+ of Americans who were unemployed before the crisis began? Those people couldn’t find work any better than the people qualifying for the extension program, but they were left to fend for themselves. Those people were the first to foreclosure by Wells Fargo (NYSE: WFC) and friends, and the first to be sued for their debt defaults against our later bailed out banks. Why weren’t they rescued like Bank of America (NYSE: BAC) and Merrill Lynch, or J.P. Morgan Chase (NYSE: JPM) and Bear Stearns. When AIG (NYSE: AIG) and General Motors (NYSE: GM) got handouts, those folks had their cars repossessed and their lives lost without insurance to even cover the cost of their funerals. Instead of sending them checks big enough to cover their trouble, the Bush Administration blindly sent insignificant gifts out to all Americans, rich or poor.

And today, while no longer wanted by most peddlers of Visa (NYSE: V) and MasterCard (NYSE: MA), the likes of Capital One Financial Corporation (NYSE: COF) are luring them back in with 0% interest rates that convert to 23% a few months later. Warren Buffet, of Berkshire Hathaway (NYSE: BRK-B, NYSE: BRK-A), says he’s not sure what he would do if he were poor and had a family to feed. He does not judge those less fortunate than himself, or less gifted in business. So when they rob Wal-Mart (NYSE: WMT) for lack of better sense to sack Saks (NYSE: SKS), they get arrested. As they survive on welfare, the crooks at the rating agencies (based on Representative Kucinich’s description), who rated mortgage-backed securities investment grade deep into the real estate bubble, the bumblers at those firms who effectively ruined millions of lives through that aforementioned negligence, suffered not one arrest. Instead, our jails will fill further with the customers of their business partners, as the assets of Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and the rest of the banks that are even bigger now than they were when they were too big to fail fill with the shadow inventory of what use to be homes filled with families.

It’s getting worse dear friends, not better. Kicking the can down the road is more like pushing the snowball up the hill. It will roll back down and smother us all. Please follow me as I seek to do more to level the playing field, and to serve justice and the true American way, the one our forefathers envisioned.



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.

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Wednesday, June 27, 2012

U.S. Data Trumps Europe for Now - Why 5 Stocks Are Moving

Wall Street sign
Stocks were up into the midday Wednesday, as a decent flow of U.S. economic data and a few corporate reports outweighed ongoing European-based anxiety. Enjoy it while you can, because I expect the tide to turn as we approach the EU summit result Friday. Much emphasis is being placed on the importance of the event by relevant parties in Italy and Spain and the financial markets, as Germany seems to hold course. The SPDR S&P 500 (NYSE: SPY) is up 0.9% near noon, but I expect we’ll head lower ahead of Friday.

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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.

Wall Street Today


Durable Goods Orders were reported for the month of May this morning. The data was better than miserable but less than robust, and many are focusing today on the slowing of China and its impending impact on activity. Durables orders recovered by 1.1% after losing 0.2% (revised) in April. Economists had been looking for a smaller 0.4% increase, based on Bloomberg’s survey. Excluding high-ticket transportation items, durables orders rose 0.4% against last month’s reported decline of 0.6%. Economists had been looking for a gain of 0.8% here though. Boeing (NYSE: BA) benefited from twice as many orders in May (8) versus April. Nondefense capital goods orders excluding aircraft, which is closely followed as a measure of economic health, gained 1.6% in May, against an April decline of 1.4%. Unfortunately for long traders, the positive leaning data will likely be overwhelmed by Europe and China concerns before long.

Mortgage activity fell off in the latest reported week. A dramatic swing in refinance activity lower was likely the result of the pulling forward of activity into the prior week. The Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey showed its Market Composite Index fell 7.1% in the week ending June 22, 2012. Mortgage rates were mixed through the week, with average effective rate increases in 30-year fixed rate jumbo loan contracts and 5/1 ARMS contracts offset by effective rate decreases in 30-year fixed rate conforming loan contracts, FHA sponsored 30-year fixed rate mortgages and 15-year fixed rate mortgages. The Refinance Index fell 8% week-to-week, as the prior week’s initiation of lower premiums for FHA sponsored loan refinancing drew forward pending business. The Purchase Index, measuring applications for mortgages tied to the purchase of homes, decreased 1% as it normalized against the prior week’s catalyst. Major mortgage lenders shares including Bank of America (NYSE: BAC) were under pressure this week, partly on the Moody’s downgrade of late last week and on heightened concern about Europe.

The National Association of Realtors (NAR) reported its Pending Home Sales Index increased 5.9% in May. The gain came off a 5.5% decline in April, but the index was at its highest level in two years, at a mark of 101.1. Economists had been looking for the measure of new contract signings to increase just 1.2%. It’s a mild positive for stocks, but in my view, not enough to overcome the global weight against the market for long. The nation’s third largest homebuilder by revenues, Lennar (NYSE: LEN), reported Street-beating operating earnings and its shares were up 5% as a result. The company reported strong backlog and order growth, driving the gain.

The EIA’s Petroleum Status Report covering the week ending June 22 showed crude oil inventory decreased slightly by 0.1 million barrels but remained above the upper limit of the average range for this time of year. Total motor gasoline inventory increased by 2.1 million barrels, but remain in the lower limit of the average range for this time of year. Crude oil futures were higher on the day while the nearest term Gasoline RBOB futures were still off 1.1% just after the report was published. The United States Oil ETF (NYSE: USO) was up 0.6% on the news while the United States Gasoline ETF (NYSE: UGA) was lower 0.7%.

The corporate wire has a slew of deal restricted analysts at the major Wall Street houses including Barclays (NYSE: BCS), Citigroup (NYSE: C), Credit Suisse (NYSE: CS) and Bank of America – Merrill Lynch (NYSE: BAC) issuing their first research since the Facebook (NYSE: FB) IPO, with the average analysts’ price target at approximately $37.71, with the reports still flowing. The above listed banks all rated Facebook (NYSE: FB) with ratings equivalent to neutral positioning. BMO Capital Markets rated the stock “underperform,” and set its price target at $25. The analysts of the three lead banks of the IPO underwriting, Morgan Stanley (NYSE: MS), J.P. Morgan (NYSE: JPM) and Goldman Sachs (NYSE: GS) all rated Facebook a “buy” and set target prices at $38, $45 and $42, respectively. In my report published today, I discuss the overvaluation of Facebook and other social media firms based on spammer skewed member data. Follow me at the Wall Street Greek blog.

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.

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Tuesday, June 26, 2012

Consumer Confidence Drops to 5-Month Low

tired shopper After falling precipitously in May, Consumer Confidence fell even further this month, to a 5-month low. The Conference Board’s Consumer Confidence Index declined to 62.0 in June, against economists’ expectations for a monthly reading of 63.5 based on Bloomberg’s survey. The index marked even lower ground than May’s dive to 64.4, revised down from 64.9 at its initial reporting. The reasons should be clear, as economic data points have trended poorly and European issues have raised question about impact to our economy, the financial system and the value of stocks. This strikes Americans where it hurts, their retirement savings accounts. The SPDR S&P 500 (NYSE: SPY) was essentially unchanged on the news, while the more closely tied Consumer Discretionary Select Sector SPDR (NYSE: XLY) was surprisingly higher by more than a half point Tuesday morning. Though the SPDR S&P Retail (NYSE: XRT) was moving lower, as would be expected.

consumer products review blogger 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.

Consumer Confidence


Lower confidence has not yet reflected perfectly through to actual consumer spending, though recent retail trade data has been softer. The reason is probably better understood via study of the component measures of the confidence tally. The consumer view of the present situation actually increased in June while expectations for the future declined. The Present Situation Index gained to 46.6 in June, up from 44.9 last month. The Expectations Index, which varies more wildly driven by fear and greed, dropped to 72.3 this month, from 77.3 in May. The absolute value of the index as compared to the Present Situation measure says something about the optimism of Americans with regard to money making hope, while also reflecting their close following of global financial market news.

Yet, it’s not just intangibles that are affecting the views of those surveyed. The latest employment data has been less than enthusing; in fact, most domestic economic data points seem to me to be trending poorly. The question is: will consumers pull back their spending in a more significant manner? Lynn Franco, Director of Economic Indicators at the Conference Board, had something to say about that today:

"Consumer Confidence declined in June, the fourth consecutive moderate decline. Consumers were somewhat more positive about current conditions, but slightly more pessimistic about the short-term outlook. Income expectations, which had improved last month, declined in June. If this trend continues, spending may be restrained in the short-term. The improvement in the Present Situation Index, coupled with a moderate softening in consumer expectations, suggests there will be little change in the pace of economic activity in the near-term."

If you look at the details of the monthly data, the absolute values have continued to reflect a terribly poor situation, while the changes month-to-month are highlighted by the popular press as either great or disastrous news.

  • 14.9% of consumers say business conditions are good
  • 35.1% say business conditions are bad
  • 41.5% say jobs are hard to get
  • 7.8% say jobs are plentiful
  • 15.5% expect business conditions to improve over the coming six months
  • 16.2% expect business conditions to worsen
  • 14.1% see more jobs ahead
  • 20.6% see fewer jobs
  • 14.8% expect their income to increase

The component survey results show a clearly pessimistic feeling about the current situation, which reflects poorly for the economy and consumer spending, in that it could be much better. Certain retailers have benefited and should continue to benefit from such an environment, including especially Dollar Tree (Nasdaq: DLTR), Amazon.com (Nasdaq: AMZN), eBay (Nasdaq: EBAY), Costco (Nasdaq: COST) and Wal-Mart (NYSE: WMT). As far as stock recommendations go, I favor DLTR over the rest for reasons discussed within this report. Keep receiving articles like these by following me at the blog and via email. Thank you.

Article interests investors in: S&P Retail ETF (NYSE: XRT), Wal-Mart (NYSE: WMT), Pier 1 Imports (NYSE: PIR), Ethan Allen (NYSE: ETH), Hooker Furniture (Nasdaq: HOFT), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Apple (Nasdaq: AAPL), Best Buy (NYSE: BBY), The Limited (NYSE: LTD), Chicos (NYSE: CHS), Ann Taylor (NYSE: ANN), The Gap (NYSE: GPS), Macy’s (NYSE: M), JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), TJX Company (NYSE: TJX), Kohls (NYSE: KSS), Costco (Nasdaq: COST), Target (NYSE: TGT), Wet Seal (Nasdaq: WTSLA), Hot Topic (Nasdaq: HOTT), American Eagle Outfitters (NYSE: AEO), Aeropostale (NYSE: ARO), Abercrombie & Fitch (NYSE: ANF), Saks (NYSE: SAK), Tiffany (NYSE: TIF), Talbots (NYSE: TLB), Lumber Liquidators (NYSE: LL), Builders Firstsource (Nasdaq: BLDR), Fortune Brands (NYSE: FO), Leggett & Platt (NYSE: LEG), Tempur-Pedic International (NYSE: TPX), Acuity Brands (NYSE: AYI), La-Z-Boy (NYSE: LZB), Select Comfort (Nasdaq: SCSS), Sleepy’s (NYSE: ZZ), Furniture Brands (NYSE: FBN), Natuzzi (NYSE: NTZ), Sears (Nasdaq: SHLD), Dillard’s (NYSE: DDS), Bon-Ton (Nasdaq: BONT), Cost Plus (Nasdaq: CPWM), Baker’s Footwear (Nasdaq: BKRS.OB), Bebe Stores (Nasdaq: BEBE), The Buckle (NYSE: BKE), Cache (Nasdaq: CACH), Casual Male (Nasdaq: CMRG), Cato (Nasdaq: CATO), Christopher & Banks (NYSE: CBK), Citi Trends (Nasdaq: CTRN), Collective Brands (NYSE: PSS), Destination Maternity (Nasdaq: DEST), Dress Barn (Nasdaq: DBRN), DSW (NYSE: DSW), Finish Line (Nasdaq: FINL), Footlocker (NYSE: FL), Gymboree (Nasdaq: GYMB), Guess (NYSE: GES), J. Crew (NYSE: JCG), Jones New York (NYSE: JNY), Jos. A Banks (Nasdaq: JOSB), New York & Co. (NYSE: NWY), Men’s Wearhouse (NYSE: MW), Syms (Nasdaq: SYMS), The Children’s Place (Nasdaq: PLCE).

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.

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Greece, Greeks and Greek Soccer Should Demand More

Greek CEOs The Greek crisis and the performance of the Greek national soccer team inspired this editorial opinion piece perhaps long overdue.

As I watched Greece’s pivotal soccer match versus its political prodder Germany, a quarter-final game for the 2012 UEFA European Cup, I could not help but notice the similarities of the Greek team’s approach to Greece’s efforts to mitigate its financial crisis.

I renounced my ethnicity more than once during the course of Greece’s attempt at Euro 2012, and pleaded tearfully with the Lord to just give us this if not anything else. I knew divine intervention would be necessary, and just asked for a few crossbar and goalpost saves to assist our embattled goalie and bombarded defense. Alas, it was not to be, as the third ranked Germans overwhelmed the still improving Greek soccer program (ranked 15 by FIFA).

Despite the advancements of the Greeks over the years, I still found myself frustrated with the strategy employed and the execution of play on the field. I’m not a passive follower of soccer, having walked on to my NCAA Division I college soccer program, and having played and coached competitive sports all my life. My critical mind and discerning vision is neither limited to economic and securities analysis, or at least I like to think so. Thus, I noted the many issues that constrained my ancestral ethnic team against the advanced play of the Germans. In that same regard, I see why Greece has struggled economically speaking.

A Few Similarities between Greece and the Greek National Team:

  • Each are led by foreigners who cannot fully understand Greek nature nor Greek potential
  • Each employ a defeatist strategy, defensively postured to endure not conquer
  • Each often regress to selfish though passionate flails at scoring
  • When not stressed, the Greeks and Greece act lackadaisically and passively
  • Each fails to notice risks effectively

With all due respect to Greece’s excellent coach, Fernando Santos, and to Greece’s questionable European economic advisors, the view from the outside inward inherently falls short of producing adequate understanding. Only a Greek can truly know the strengths and weaknesses of the Greeks, and therefore, only a Greek can structure a system that will play to those strengths and weaknesses. That leads me to the second and third points.

The last two coaches of Greek soccer have employed defensive schemes. It’s because of a lack of confidence in the skill and potential of Greek players. This, in turn, is because of the long-term history of Greek soccer, which has fallen well short of the results of its rivals in Germany, France, Spain, Italy, England, the Netherlands and Portugal. Obviously, the development of league play has helped those nations to better their domestic talent. As more Greek players fine tune their craft in the advanced leagues of Europe, Greece will benefit as well.

The same lagged development applies to the problems with Greece, which was stymied by the West’s abandonment of it to Ottoman domination for centuries. After the world wars of the last century, Greece was stripped barren and left to grow as best it could without the fertile support of the West. Therefore, its culture strayed for survival’s sake, away from its brilliance of ancient times.

You see, the survivalist’s mantra is often a selfish one, born out of necessity. The survivor trusts in what he controls only and strives to the utmost to make his own way. Thus, perhaps the Greek businessmen of today, while creating thriving businesses, micromanage them and rarely scale to optimal potential. The Greek economy is thus dysfunctional, because Greek businesses do not feed one another fluidly. I’m sorry to say that I believe for the most part, the only time a Greek helps another Greek is when his hand is greased. It’s not enough to win the trust of a business partner or to act for the sake of good faith. In this, maybe Greeks are just the same as everyone else.

There’s plenty of passion in Greece, for life and for the good fight when a challenge avails. Challenge, in fact, brings out the best in Greeks. But without a challenge, I feel we fall into a trap of relaxation and lackadaisical play. It’s hard not to be this way when you have lived long enough in Greece, which for me is pure paradise. When it comes to managing a nation, though, there had better be no loss of focus. Perhaps it’s the same lulling life that led Greek government managers to underestimate risk when they undertook too many projects for their bleak budget to handle, piling on debt to manage it all. Once the economy came under pressure, capital dried up and Greece was left in crisis. That’s not to mention the lies the government told to get into the euro-zone and to keep its debt issues hidden.

What I would like to see from Greece and the Greek team moving forward is a hatred for losing. The team and Greek politicians and business managers should hate losing so much to make it intolerable. This intolerance should drive the necessary energy for winning, to lead players and managers to learn how to win and to approach their training and business and government operation with a fire for victory. I think it’s this competitive spirit that drives success in the United States, Germany and China today.

And the defeatist attitude needs to be reversed. Greeks are just as athletic, intelligent and creative as any Spaniard, German or other European. There’s no reason why the team shouldn’t be able to go head to head with its competition.

I also have a pet peeve with regard to cheating and lying, including the sort the Greek team (and other teams) employ to draw penalty or win some minor battle. It’s a lie when you fake an injury on the field of play, and the law on cheating and lying is plainly clear and applies to soccer as well as to life. If our players would fight through tough plays, like I know they can, I’m certain they would do better than they do by generating bad karma through lies on the fair field of play. Likewise, corporate and government corruption globally and corruption generally in Greece disgusts me. We should be better than that, based on the dictum of our faith, period! Once again, this is not a Greek problem, but a societal problem globally. Practicing false expertise while in actuality cheating and lying is also without excuse, especially when one judges others from that position. This again is a societal flaw, not a Greek one, but I would like to see us (people) rise above it.

There’s no reason why the Greek nation cannot lead Europe once again. But for that to happen, the nation must digest the reality of the situation together. The Greek citizenry must continue to push its politicians to do the right thing, or be replaced, even by newcomers. Perhaps, finally, the legacy of certain family dynasties garnering unwarranted levels of respect in Greece has ended. Leadership must be earned on a daily basis for it not to become complacent, and it should be regardless of last name or the legacy of ancestors.

You know, Nike (NYSE: NKE) had that great slogan, “Just do it,” and the old owner of the Oakland Raiders, Al Davis, use to say, “Just win baby!” It’s a simple message, but it’s true through the goal mouth. When victory is your goal, you find creative ways to make it happen when conventional methods do not work. Fervor and vigor - who has got it? That team or nation will be the victor nine times out of ten, unless the game clock stops first, because it will work hardest to make it be.

It’s the responsibility of the Greek government now to be creative, to find ways to create an expanding budget surplus and to create income opportunities for Greek citizens. It’s also the Greek government’s responsibility to raise its voice to the referee when treatment is unfair, and to that I refer to the IMF and EU, which are overstressing Greece. Granted, Greece dug its own grave, but the EU need not push the nation into it now, especially after leading it into the cemetery in the first place.

Whether it be with regards to Greece, the Greek citizenry or the Greek national soccer club, victory is going to take will, effort and creativity. Enough words like these have been written though. Now is the time for action and success or failure, and the respective fallout due to each. For Greece, I wish only the best, but I also demand the best of all Greeks.

See also Greece vs. Germany - A Game for Pride.

Editor's Note: This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

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.

Greek carpenter contractor Philadelphia

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Friday, June 22, 2012

Greece vs. Germany - A Game for Pride

Greece vs. Germany

Greece vs. Germany


From the very moment Greece was issued aid by its European partners, its harshest critic and most stern policeman has been Germany. The Germans, you see, are budget minded and perennially profitable. Thus, the nation’s austere populace wonders aloud why they should pay for Greek negligence.


Greeks on the streets of Athens and Greek-Americans in New York City counter with arguments about the infinite contributions of the Greek culture to society, the foundation upon which modern day Germany stands. Greeks will neither shy from reminding embarrassed Germans about the tonnage of gold and ancient relics stolen away during World War II, not to mention 10% of the Hellenic Republic’s population sacrificed in its impossible defense against the Nazis. That was one of the largest percentage losses by an Ally during the war, though did not compare to the atrocities suffered by the Jewish people.


So, in retrospect, perhaps it’s not too much to ask Germany for a little slack today, so that Greece might stand on its feet again. However, after the Greeks voted to endure continued austerity for the sake of remaining in the euro-zone, and to honor their debts to the EU and IMF, German Chancellor Angela Merkel only reiterated a strict stance for hard days for Greece. Others in Italy and Spain, where the taste of Greece’s pain is almost familiar, called for an extension of the time line for Greece to pay back its debt. Such grace would allow Greece to more gradually employ necessary measures in a means that might not overburden its economy and its people.


Much insult and injury has been delivered by each party in this family argument, but on Friday the nations will each get a chance to vent in a very competitive and direct manner. Greece faces Germany, you see, in the quarterfinals of the UEFA European Championship. To the winner goes the pride.


Picking the Winner
Greece does not match up well against Germany today in many regards, but if a comparison were made taking into account the course of history, well then we would have a different favorite. Let’s have some fun then picking a winner between Greece and Germany in this marquee matchup…


Category
Greece
Germany
FIFA World Soccer Ranking
15
   3
Population
10.8 Million
     81.9 Mln.
GDP Global Rank
#35
     #4

      
Military Size
     #29
#30
Contributions to Humanity


History


Passion


Most Euro Victories
1
  3
Most Recent Euro Victory
  2004
1996
Best Story If Victorious





**    Data by Wikipedia, except millionaires list which was published by Bloomberg Businessweek, and “Passion,” “History,” and “Best Story If Victorious,” which were determined by your very biased author.


Greece does not have a whole lot going on these days, save soup kitchens and suicides. Its population is much smaller than Germany’s, but its military is larger including reserves. Greece’s economy cannot compare to the cornerstone of Europe, which is Germany. As far as publicly traded companies, well, that is part of the problem. Greece’s industrial base is much less important than Germany’s, with Greece’s focus on tourism, agriculture and shipping. Take note though that the domicile of Greece’s significant shipping industry is not formally within Greece, and so not one company makes the list below.


The National Bank of Greece (NYSE: NBG) trades in penny stock territory at $1.76 per share in New York, though it’s still sporting a market capitalization of $1.68 billion. Germany’s best known bank is Deutsche Bank (NYSE: DB), trading upward of $35 per share, valuing the company at $32.7 billion. Germany’s largest companies are in fact on the tip of the tongue of most Americans, while Greek firms are generally not known except by Greek-American stock nerds like your Wall Street Greek.

Germany’s Largest Companies Notable to Americans:

  • Allianz Worldwide (OTC: AZSEY)
  • Daimler-Chrysler (OTC: DDAIF)
  • Deutsche Bank (NYSE: DB)
  • Siemens (NYSE: SI)
  • Munich Re (MUV2.F)
  • BMW Group (BMW.DE)
  • Volkswagen (OTC: VLKPY)
  • BASF (OTC: BASFY)
  • Commerzbank (OTC: CRZBY)
  • Bayer (OTC: BAYRY)
  • ThyssenKrupp (OTC: TYEKF)
  • SAP (NYSE: SAP)

  • National Bank of Greece (NYSE: NBG)
  • Alpha Bank A.E. (OTC: ALBKY)
  • Agricultural Bank of Greece (ATE.AT)
  • Viohalco S.A. (BIOX.AT)
  • Bank of Cyprus (BOC.AT)
  • Coca-Cola Hellenic Bottling Co. (NYSE: CCH)
  • Ellaktor S.A. (ELTEX.AT)
  • Hellenic Petroleum (ELPE.AT)
  • EFG Eurobank Ergasias S.A. (OTC: EGFEY)
  • Hellenic Telecommunications (OTC: HLTOY)
  • INTRALOT S.A. (OTC: IRLTY)
  • Marfin Financial Group (OTC: MRFGY)
  • Marfin Investment Group (MIG.AT)
  • Motor Oil Corinth Refineries (MOH.AT)
  • Mytilineos Holdings (MYTIL.AT)
  • OPAP SA (OTC: GOFPY)
  • Public Power Corp. (PPC.AT)
  • Titan Cement (TITK.AT)
  • Piraeus Bank (TPEIR.AT)
  • TT Hellenic Postbank SA (TT.AT)

It’s a list of never heard of names for most of you.


Clearly, economically speaking, Greece is a second class citizen. Much of this is because of the great brain drain that occurred for Greece after Ottoman rule and during the dark days following World War II. Whether because of communism and civil war, or for survival’s sake, a great many Greeks left Greece and are now domiciled across the globe. Greeks are leaving again today for their own survival, and are being welcomed across the globe by their brethren. It’s unfortunate that sometimes they never return.


As far as soccer goes, there’s a beautiful fairness in play. On any given day, any given team can beat any other team. That is because it will not be 80 million against 10 million on Friday; GDP nor personal wealth will matter when the national teams meet on the pitch. What will matter is passion and pride, two factors which run richly in Greeks. Yet, the Greek team is overmatched, as is clear by the FIFA rankings and by the play of both teams through the tournament thus far. But, these two teams have not met yet. Germany is a strong soccer squad, and just like its culture, it succeeds through science and scheme. For Greece, though, the game itself often determines how well the team plays. When Greece met with host Poland in the first round, it seemed to have compassion for the lesser rival, and the result was a tie. Against the Czech Republic, perhaps the Greek team recalled its important victory en route to its magical 2004 triumph, and so a loss resulted. When it came to Russia, winning was critical to the Greek team, and so they played to their full potential. Beating Germany is more than critical; it is a national necessity.

Editor's Note: This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

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.

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Thursday, June 21, 2012

3 Signs Job Market is Collapsing

job search By The Greek

Three important labor market data points reached the wire over the course of the past week. Given what is developing globally, they contribute to my concern that the job market, economy and stock market face serious threat. The number of job openings declined significantly and the number of newly unemployed continues to creep higher. Those are leading edge indicators of the labor situation, and they could very well reflect deterioration in our broader economy. With the latest Fed forecast indicating stagnant expert expectations for the unemployment rate as well, investors had better take heed.

The latest data to reach the wire was of course Thursday’s Weekly Jobless Claims Report, which showed that the flow of the newly unemployed continues to creep higher. The latest data covering the week ending June 16 showed new filers for unemployment insurance was just slightly under the revised prior week figure, at 387,000 (-2K). The figure was still 5K higher than economists’ expectations at the consensus, based on Bloomberg’s survey. The four-week moving average of jobless claims illustrates our point best, as it increased 3,500 on its way up to 386,250.

Wedding Cakes NYC Meanwhile, earlier this week, the Bureau of Labor Statistics published its Job Openings and Labor Turnover Survey. The monthly report showed that job openings declined by 325,000 in April, to 3.4 million. Job opportunities dwindled across all major categories, including total private and government sectors, and also more specifically in manufacturing, professional and business services, and within state and local governments. The same report showed that layoffs and discharges increased across the Northeast, Midwest and West, while improving in the South.

Finally, within the Federal Open Market Committee’s (FOMC) economic forecasts, we found that unemployment is expected to moderate at a slower pace of improvement. The Fed cut its unemployment rate forecasts for 2012 to 8.0% to 8.2%, from 7.8% to 8.0% in April; and it reduced its 2013 unemployment projection to 7.5% to 8.0% from 7.3% to 7.7%.

Clearly, the labor situation is indicating new economic stumble through these three data points, and certainly a tougher job market. Given the flow of general economic data has likewise reflected a domestic stall, and with Europe deteriorating as expansion in China slows, investors in cyclical industries had better take heed. Industrial commodity companies should be at the forefront of sensitivity should global economies stall, with risk highlighted in names like Alcoa (NYSE: AA), BHP Billiton (NYSE: BHP), Rio Tinto (NYSE: RIO), Freeport-McMoRan Copper & Gold (NYSE: FCX) and Vale S.A. (Nasdaq: VALE).

This report also highlights softness in job openings at business services firms, and so companies at the forefront of trouble should include advertising agencies like Omnicom (NYSE: OMC), The Interpublic Group (NYSE: IPG), Focus Media (Nasdaq: FMCN) and Lamar Advertising (Nasdaq: LAMR). Employment servicers should also be impacted obviously, including Monster World (NYSE: MWW), Robert Half International (NYSE: RHI), Korn Ferry International (NYSE: KFY) and Manpower (NYSE: MAN).

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.

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Wednesday, June 20, 2012

False Alarm in Mortgage Data

unibrow The latest Weekly Mortgage Applications data produced by the Mortgage Bankers Association (MBA) offered a concerning data point Wednesday. Purchase applications, or those mortgage applications tied to the purchase of homes, dropped a dramatic 9%. But, never fear dear readers, as the reason for the decline proved irrelevant.

mortgage analyst expert 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.

Mortgage Applications


For the week ending June 15, 2012, the MBA’s Market Composite Index of overall application activity decreased 0.8% on a seasonally adjusted basis. The Purchase Index, though, dropped 9% through the same period, raising an eyebrow at minimum, or for a Greek like me, maximum. As it turns out, the scary decline was “likely” due to a recalibration following the Memorial Day holiday. “Likely” is the MBA’s descriptive term, and is troublesome in its uncertainty, because if they don’t know then who can? I’ve followed this report regularly over the last several years, though, and have noted significant skew around three-day holidays. I’ve theorized that while the data is adjusted for the holiday, perhaps the fall-off in activity on the Friday before and the Tuesday following the long weekend is not accounted for. In any event, it’s very likely you need not worry about the latest drop.

bombonieres That said, I’ve recently reported that I still see homebuilders’ shares as a risky option as far as equities go. For traders, though, I think the securities should offer a useful tool. That’s because I expect the high-beta cyclical stocks will be at the whim of macroeconomic scares while also putting up decent EPS results as they gain market share from smaller crisis-hobbled competitors. Thus, there should be plenty of long and short opportunities for day traders of the group. See more about this topic via my article entitled Buy Homebuilders? No! Nein! Oxi!, which is focused on their longer term hinge to a deteriorating global economy.

The MBA’s latest report also noted a 1% increase in the Refinance Index, as mortgage rates remained near historical record lows. In fact, conforming and jumbo loan rates for 30-year fixed rate mortgages did mark new lows on average, at 3.87% and 4.06%, respectively. FHA-backed 30-year rates inched up to 3.72%, while 15-year fixed rate mortgage rates rose slightly to 3.25%.

The MBA also noted that FHA refinance volume “exploded to an all-time high, more than doubling over the week.” It was because new, lower FHA premiums on streamlined refinance loans came into full effect. The opportunity was not missed by those in need of reducing their financing costs, and that’s a good thing for the economy and those struggling to make mortgage payments.

The nation's most important mortgage originators should factor mortgage activity into their valuation in some degree or another, though the shares are moving today on the much more important Fed catalyst. Still, in 2011 the largest originators were Wells Fargo (WFC), down 0.6% today, Bank of America (NYSE: BAC) +0.4%, J.P. Morgan Chase (NYSE: JPM) +3.8%, Citigroup (NYSE: C) +2.1%, Ally, PHH Corp. (NYSE: PHH) -0.7%, U.S. Bancorp (NYSE: USB) -0.1%, Quicken, Flagstar Bancorp (NYSE: FBC) +2.9%, and BB&T (NYSE: BBT) unchanged.

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.

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Fed Statement 06-20-12

fed statement
As published by the Federal Reserve


Release Date: June 20, 2012

For immediate release
Information received since the Federal Open Market Committee met in April suggests that the economy has been expanding moderately this year. However, growth in employment has slowed in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending appears to be rising at a somewhat slower pace than earlier in the year. Despite some signs of improvement, the housing sector remains depressed. Inflation has declined, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates 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 at least through late 2014.

The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchase Treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less. This continuation of the maturity extension program should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed continuation of the maturity extension program.

Our Commentary - How the News is Affecting Stocks:

The SPDR S&P 500 (NYSE: SPY) moved immediately lower once the news was announced, but it and the index of the same name pushed into the green shortly afterwards. The SPDR Dow Jones Industrial Average (NYSE: DIA) was similarly lower before rising, and the same result was seen in the PowerShares QQQ (Nasdaq: QQQ). Financials would be expected to be most sensitive to Federal Reserve actions, and the Financial Select Sector SPDR (NYSE: XLF) was tracking the broader indexes. Bank of America (NYSE: BAC) and Citigroup (NYSE: C) were moving in the same manner, but each remained in the green on the day after the report. Important American firms General Electric (NYSE: GE), Exxon Mobil (NYSE: XOM) and retailers including Amazon.com (Nasdaq: AMZN), which we've recently written about, were all doing a bit better than the broader indexes.

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.

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Wall Street Today - A Hot One for Ya

Wall Street The hot day for the East Coast will be a sizzler for Wall Street as well. That’s because the latest relief rally has hinged itself onto the Federal Reserve Announcement due at 12:30 PM ET today. The Fed has broken up its format into three chunks, with a 12:30 PM policy announcement followed by the 2:00 PM release of the FOMC Forecasts, followed by the Chairman’s press conference at 2:15 PM ET.

The extravagance of the matter has only added to the hopes of the market, but alas, I fear the market may be disappointed today; first, because I’m not sure the Fed sees a need for new action (though the market is desperate for ingenuity), and secondly because I do not believe there’s much the Fed can do at this point, except further spread risk for a later grand finale for the dollar. This is the key market driver today without a doubt. Expectations will continue to drive market action up to the announcement, and the series of Fed actions through the steamy afternoon will control the close. At the open, the SPDR S&P 500 (NYSE: SPY) was down fractionally, perhaps already feeling the heat on the Fed will drive the market to faint.

The stocks likely to best reflect the effect of the Fed will be the financials, including the nation’s largest: Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Citigroup (NYSE: C), Wells Fargo (NYSE: WFC), Morgan Stanley (NYSE: MS), et al. The last five days trading in the Financial Select Sector SPDR (NYSE: XLF) shows a certain positive expectation (attribution to Yahoo Finance for the chart). Unfortunately, I expect those hopes will be deflated in short time.

Chart forFinancial Select Sector SPDR (XLF)

The rest of the economic slate is light for Wednesday, including only the regular mortgage applications report and the petroleum inventory data.

The Mortgage Bankers Association (MBA) reported on Weekly Applications earlier this morning. For the week ending June 15, 2012, the MBA’s Market Composite Index showed a mortgage activity decline of 0.8% week-to-week on a seasonally adjusted basis. Mortgage applications tied to the purchases of homes fell by 9%, while the MBA’s Refinance Index gained by 1% on mortgage rates still near all-time lows. The MBA said the change in “purchase activity” was likely due to recalibration related to the Memorial Day holiday, and is therefore not as alarming as it may seem on the surface. Thus, the shares of homebuilders like PulteGroup (NYSE: PHM) and Toll Brothers (NYSE: TOL) and other market participants including Fannie Mae (OTC: FNMA.OB) and Freddie Mac (OTC: FMCC.OB) are likely to be unaffected by the news.

The EIA reports on Petroleum Status at 10:30 AM ET each Wednesday. In its last report covering the period ending June 8, U.S. commercial crude oil inventories decreased by 0.2 million barrels, but remained above the upper limit of the average range for this time of year. Total motor gasoline inventories fell by 1.7 million barrels with the summer driving season upon us now. Gasoline stores were below the lower limit of the average range for this time of year, though gas prices continue to ease with rising economic concerns. The shares of Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) were each trading fractionally higher to start the day Wednesday.

In conclusion, the day’s trade should be driven by the Federal Reserve actions starting at 12:30 PM. We’re looking for market disappointment on little to no new action and/or a realization that there may be little new constructive action the Fed can take at this point.

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.

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Tuesday, June 19, 2012

Homebuilder Shares in My Dog House

homebuilders The title here highlights the truth, which is that the housing market remains pitiful. The National Association of Home Builders (NAHB) reported its Housing Market Index (HMI) Monday. The inherently biased industry trade group promoted the news of its one point gain for the month of June, over a revised lower prior month result. On that news, the SPDR S&P Homebuilders (NYSE: XHB) gained 2% Monday, with the shares of major builders Toll Brothers (NYSE: TOL), PulteGroup (NYSE: PHM), Lennar (NYSE: LEN), K.B. Home (NYSE: KBH), D.R. Horton (NYSE: DHI) and Beazer Homes (NYSE: BZH) up between 1.9% and 4.1% on the day. However, the absolute value of the index continues to reflect a dire situation for most home builders and remains hard for me to celebrate.

homebuilder blog 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.

Homebuilder Sentiment


The HMI improved to a mark of 29, up from 28 for May, revised from 29 at its initial reporting. The NAHB’s chairman said the gain was “reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today’s low prices and interest rates.” The economy is stagnating, though, with unemployment holding high and new labor data reflecting a stalling. Consumer confidence has hinged on fear around the European situation and stock market volatility. Economic activity has been tangibly impacted by lighter European buying and its impact to the global economy. Housing’s spring selling season has fallen short of hopes, based on the housing data flow to date.

The HMI report showed current sales conditions improved, with a relative component measure rising two points to 32. That’s the highest it’s been since April 2007, but it’s still poor. Builders’ views for the next six months were unchanged in June, with the component index measuring it remaining at a mark of 34. The most telling statistic is the measure of prospective buyer traffic, because it’s not based on hope or a subjective opinion, at least not as much as the other data points. Prospective buyer traffic was unchanged, and the index measuring it was stuck at a morbid mark of 23.

Regional results were mixed with the Midwest measure up five points to 31 and the West up four points to 33. The Northeast measure fell two points to 29 and the South dropped two points to 26. Please take careful not of this next point. Each of these numerical measures is deeply short of the breakpoint mark of 50, where delineation occurs between builders’ opinions of good and poor conditions. So, I ask you, how poor must housing market conditions be if the index measuring it is 20 points short of breakeven? I think I've made my point...

This article should also interest investors in home builders 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) and Orleans Homebuilders (AMEX: OHB).

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.

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Monday, June 18, 2012

Take Profits on Harsh Greek and European Realities

Greek crisis All is well with Europe, as the pro-euro and accepting of austerity Greek political party, New Democracy, garnered the majority of the second vote. Danger has been averted, so now Greece and Europe can return to the service of the devil we all know. The bounty of this victory is the same economic distress Europe was dealing with a month and a half ago, which while better than what might have been today, still sucks.

Greek reporter 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.

Greek Victory?



After a short burst for stocks on the win of the lesser devil, the SPDR S&P 500 (NYSE: SPY) was down fractionally in early morning trade; the PowerShares QQQ (Nasdaq: QQQ) and SPDR Dow Jones Industrial Average (NYSE: DIA) were mixed, reflecting market indecision. Spanish bond yields stuck stubbornly higher as investors took note of how close we stand to the abyss. Europe has turned downward into the morn, with the iShares S&P Europe 350 Index (NYSE: IEV) and the Vanguard MSCI Europe ETF (NYSE: VGK) down 1% and 0.6%, respectively at this hour. Poor Asian traders were lured into celebration by Sunday’s newswire, only to be trapped deep into the green by the close. The Nikkei 225 and Hang Seng closed higher by 1.8% and 1.0%, respectively. However, Asian tied securities trading in the States are reflecting a different likely open for Asia Tuesday, with the iShares MSCI All Country Asia ex-Japan (Nasdaq: AAXJ) trading shyly down fractionally.

The big foreign based international banks probably best reflect the election result market driver, and the shares of those and a U.S. representative here are decidedly lower:

Company
Intraday Performance
Deutsche Bank (NYSE: DB)
-2.1%
Banco Santander (NYSE: STD)
-4.2%
Citigroup (NYSE: C)
-1.3%
Credit Agricole (Paris: ACA.PA)
-3.1%
UBS (NYSE: UBS)
-1.5%
Societe Generale (Paris: GLE.PA)
-3.6%
Lloyds (NYSE: LYG)
-2.1%
Barclays (NYSE: BCS)
-2.1%
Credit Suisse (NYSE: CS)
-1.8%
ING Groep (NYSE: ING)
-4.0%
National Bank of Greece (NYSE: NBG)
-3.9%


So what to do now?
Last week, I suggest investors look to a rally as I expected the PIIGS to escape slaughter. In the process, I also contemplated this market reflection of reality. The market is selfish with a what have you done for me lately mentality. So, as investors reflect on the still deteriorating economic situation in Europe and the deeply flawed focus on austerity, initiated at precisely the wrong moment, opportunities for capital gain are limited. That said, Southern Europeans should continue to get into better shape on starvation, and psychologists and social workers should continue to be swamped with booming business. What it means for us traders scraping for profit is the end of the election-tied long trade. Close it out if you haven’t yet, or get caught with a bag of worms. Let me reiterate though that for the long-term I still see a deteriorating global political and economic situation.

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.

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