Wall Street Greek

Facebook IPO Windfall if Open to its Users

2012-02-01T15:42:00.006-05:00

Imagine how awesome it would it be for Facebook (NYSE: FB) to offer its shares via a social IPO™. With some 800 million users of its now iconic social networking platform, the new king of the internet might score yet more points with its “friends” if it were to offer them access to the company’s IPO. Beyond being just a brilliant public relations maneuver, such access to the new shares should allow the company to achieve an even better valuation than it might otherwise.

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.

For Facebook a Social IPO Would Rock

Just do the math. With 800 million active users, if it were to offer its shares at $100 per, Facebook could generate $80 billion if each of its members bought just one share. Valuation aside, the unsophisticated marketplace would likely bid up Facebook’s value beyond the $100 billion valuation some sophisticated investors say Facebook is worth. And given that there would likely remain strong demand among many institutions, Facebook might then achieve an even greater than $100 billion valuation.

Furthermore, the news of a social IPO would likely push more people globally to join the social network, giving lift to the company’s intrinsic value. Thus, like a Newton’s Cradle, the metal balls that rock each other in perpetual motion on executive desks across the country, Facebook’s members would drive its share value as its share offering drives membership growth. I think that’s just brilliant.

As is, the Facebook IPO is the most heralded and anticipated since Google’s (Nasdaq: GOOG) blockbuster offering about a decade ago. The offering’s proceeds and valuation should exceed Google’s and other major internet IPOs like that of Zynga (Nasdaq: ZNGA), Groupon (Nasdaq: GRPN), Vonage (NYSE: VG), Orbitz Worldwide (NYSE: OWW) and LinkedIn (Nasdaq: LNKD). Just the news of Facebook’s registration sent the shares of stocks that might benefit from Facebook’s valuation soaring. Renren (Nasdaq: RENN) and Zynga (Nasdaq: ZNGA) took off like rockets late last week.

I only wonder if the bankers at Morgan Stanley (NYSE: MS), the investment bank said to be heading up Facebook’s offering, have considered this novel idea. If not, just a tiny cut from the commission would do me just fine fellas.

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.

Stocks Should Drop with Investor Sentiment

2012-01-31T19:20:00.002-05:00

The Dow just closed out the best January in 15 years, but the latest investor confidence survey may foreshadow a different sort of February and full 2012. State Street’s Investor Confidence Index declined, driven by European risk reduction, but U.S. investors are the most cautious of all these days. That stands in perfect contradiction to January’s performance.

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: 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.

Stocks Should Drop with Investor Sentiment

State Street’s (NYSE: STT) survey published Tuesday serves as a sort of confirmation of what I see developing for U.S. markets. The financial company’s measure of investor confidence showed its Investor Confidence Index fell to a mark of 92.4 globally in January, from 94.5 the month before. The decline was mostly driven by Europe, which we recently argued is already affecting the U.S. economy. Investor sentiment across the pond nearly drowned in it, sinking 10.1 points, to a mark of 91.6 in January. The reasons here are clear, as the euro area is near certainly in recession. Greece definitely is, with its GDP sinking in the mid-single digits at last check. But the trouble extends beyond Greece, as evidenced by the broad-ranging set of sovereign debt downgrades by S&P recently. The pain has already been felt across European shares, as the EURO STOXX 50 Price EUR gained 0.5% Tuesday and the iShares S&P Europe 350 Index ETF (NYSE: IEV) gained 0.7%.

Asian investors are apparently feeling a bit better about stocks, with that segment measure up 3.3 points to 96.9 in January’s survey. Still, while the index is sitting below 100, it means even Asian investors are cutting back on risky assets. What troubles me most is what I see developing for U.S. stocks. The Investor Confidence’s North American component index showed the most risk aversion, with a measure of 89.8, down 0.1 from December. The way economic data has been unfolding of late, investor confidence should wane further alongside consumer confidence, which was reported lower Tuesday. In my view, deteriorating data should also turn the tide on the market rally that started in early October 2011. Tuesday’s performance by asset managers seems to agree, with the shares of T. Rowe Price (Nasdaq: TROW), Legg Mason (NYSE: LM), Janus Capital (NYSE: JNS) and Calamos Asset Management (Nasdaq: CLMS) each in the red Tuesday.

State Street’s commentary seems to confer with my view, stating that investors in North America and Europe are maintaining “equity positions that can best be described as defensive.” For as long as the driver of caution was exogenous, despite Europe’s consumption of 20% of U.S. exports, I suppose American stocks could rise. But as the impact of European economic deterioration hits home, and as the ongoing realities within the U.S. economy once again become clear post holiday cheer, I expect further investor confidence deterioration to coincide with real capital damage.

Article should interest investors in 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.

Manufacturing Points to Weakening Economy

2012-01-31T15:50:00.001-05:00

The Chicago Purchasing Managers Index carried a clearly negative message Tuesday, with the Institute for Supply Management (ISM) saying, "key aspects of the report pointed towards a weakening economy." While the sector of the American economy remains secondary to services, it still offers insight into the domestic economy.

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: BA, NYSE: RTN, NYSE: DGI, NYSE: GY, NYSE: GD, NYSE: GR, NYSE: NOC, NYSE: HON, NYSE: LMT, NYSE: COL, NYSE: LLL, NYSE: ERJ, Nasdaq: FLIR, Nasdaq: BEAV, NYSE: TDG, NYSE: SPR, NYSE: CAE, NYSE: ATK, NYSE: HXL, NYSE: TGI, NYSE: ESL, NYSE: MOG-A, NYSE: HEI, NYSE: TDY, NYSE: CW, Nasdaq: CVCO, NYSE: SKY, Nasdaq: NOBH, Nasdaq: PHHM, NYSE: MHK, Nasdaq: IFSIA, NYSE: AIN, NYSE: UFI, NYSE: ITW, NYSE: TYC, NYSE: CMI, NYSE: KUB, NYSE: IR, NYSE: DOV, NYSE: ITT, NYSE: FLS, NYSE: PLL, NYSE: DRC, NYSE: SPW, NYSE: GDI, NYSE: IEX, Nasdaq: NDSN, NYSE: GGG, NYSE: ATU, Nasdaq: MIDD, NYSE: ABB, NYSE: ETN, NYSE: NJ, NYSE: ROK, NYSE: AME, NYSE: RBC, NYSE: TMB, Nasdaq: WGOV, NYSE: CAT, NYSE: DE, NYSE: CNH, Nasdaq: JOYG, Nasdaq: BUCY, Nasdaq: AGCO, NYSE: EMR, NYSE: PH, NYSE: ROP, NYSE: PNR, NYSE: WM, NYSE: RSG, Nasdaq: FAST, NYSE: VMC, NYSE: MDU, NYSE: MLM, NYSE: OC, NYSE: VAL, NYSE: PCP, NYSE: X, NYSE: RS, NYSE: NVR, NYSE: DHI, NYSE: PHM, NYSE: TOL, NYSE: HOV, NYSE: CRH, NYSE: CX, NYSE: EXP, NYSE: FLR, NYSE: MDR, Nasdaq: FWLT, NYSE: ICA, NYSE: SWK, NYSE: TKR, NYSE: KMT, NYSE: LUK, NYSE: MAS, NYSE: WY, NYSE: PWR, NYSE: CBI, NYSE: EME, NYSE: SNA, NYSE: TTC, NYSE: GM, NYSE: F.

Manufacturing Economy Weakening

The Chicago PMI Business Barometer Index dropped to 60.2 this month, from 62.2 in December. It was yet another economic data point leaving economists looking lost. Economists surveyed by Bloomberg were expecting the index to rise to 63.0. More importantly, the decline leaves them to survey whether indeed the economy is slipping into just a slow slug growth rate like the Federal Reserve expects or into a legitimate recession.

The service sector continues to dominate the American economy, and so the manufacturing sector remains secondary today. It also has been buoyed by global demand, and so is an imperfect measure of domestic well-being. Still, however loose a tie manufacturing has to the domestic marketplace, it represents a great hope for many. President Obama, for one, is hopeful America might move forward to restore its industrial base, with a keen eye toward alternative energy. Mitt Romney, who appears set to win the Florida GOP debate, is willing to go a step further to ensure American companies have a better footing with perennially accused trade cheater China. Manufacturing is clearly an important cog for American economic progress. The leaner sector, which clearly benefited from the financial crisis and recession driven restructuring of organized labor contracts like those at General Motors (NYSE: GM) and Ford (NYSE: F), might just have a chance given some of these described actions and other plans for it.

Looking at the Chicago PMI Report, each component measure declined to a less expansionary point, with the seasonally adjusted New Orders Index falling to 63.6, from 67.1 in December. New Orders are of course a critical indicator of the road ahead. Because of the slower pace of ordering, Order Backlogs fell into territory marking economic contraction, with that component index at 48.3 now, from 57.3 in December. The shares of important industrials General Electric (NYSE: GE), Honeywell (NYSE: HON), Caterpillar (NYSE: CAT) and Deere (NYSE: DE) were all in the red Tuesday as a result.

Further inspection of the data shows the Production Index eased to 63.8 from 64.9 in December. The Inventories Index likewise fell to 51.6 from 52.0 in December. Perhaps of greater interest to most, the Employment Index declined to 54.7 from 59.2 in December, showing less propensity to hire among manufacturers. This certainly played a role in the slippage of employment services stocks Tuesday, with Monster Worldwide (NYSE: MWW), Korn Ferry (NYSE: KFY) and Manpower (NYSE: MAN) down approximately 2% to 3% each.

Supplier Deliveries improved, but this only says to me that there exists an environment of less demand. However, Production Material lead time lengthened significantly, which would counter that argument unless production material capacity has been left idle due to slowing demand. I expect there are some seasonal issues at play here, for instance, with regard to irregular maintenance of facilities and plants that may be occurring now.

Further observance of the manufacturing sector is advised now, as it may show the impacts of European strife and the global slowing described, warned of, and expected by the World Bank and IMF, not to mention by yours truly. Wednesday, we’ll receive the ISM Manufacturing Index, which will offer a better national view, where the Chicago PMI measures the Midwest. With regard to ISM’s report for January, economists are once again looking for improvement, with the index seen rising to 54.5, from 53.9 in December. I expect another let down is pending, and that manufacturing is indeed finding a slower growth point for now.

There are all sorts of pressures on the sector, especially within defense, where the U.S. and many other nations are reducing funding. Though shares of Raytheon (NYSE: RTN), Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC) and Alliant Techsystems (NYSE: ATK) traded mixed Tuesday. Still, with fewer orders coming to manufacturers from both private and public sectors, it seems the world may take a break from its fantastic global development of the last decade.

This article should interest investors in Boeing (NYSE: BA), Raytheon (NYSE: RTN), Digital Globe (NYSE: DGI), GenCorp (NYSE: GY), General Dynamics (NYSE: GD), Goodrich (NYSE: GR), Northrop Grumman (NYSE: NOC), Honeywell (NYSE: HON), Lockheed Martin (NYSE: LMT), Rockwell Collins (NYSE: COL), L-3 Communications (NYSE: LLL), EMBRAER (NYSE: ERJ), FLIR Systems (Nasdaq: FLIR), BE Aerospace (Nasdaq: BEAV), TransDigm (NYSE: TDG), Spirit Aerosystems (NYSE: SPR), CAE (NYSE: CAE), Alliant Techsystems (NYSE: ATK), Hexcel (NYSE: HXL), Triumph Group (NYSE: TGI), Esterline Technologies (NYSE: ESL), Moog (NYSE: MOG-A), Heico (NYSE: HEI), Teledyne (NYSE: TDY), Curtiss-Wright (NYSE: CW), Cavco (Nasdaq: CVCO), Skyline (NYSE: SKY), Nobility Homes (Nasdaq: NOBH), Palm Harbor Homes (Nasdaq: PHHM), Mohawk Industries (NYSE: MHK), Interface (Nasdaq: IFSIA), Albany International (NYSE: AIN), Unifi (NYSE: UFI), Illinois Tool Works (NYSE: ITW), Tyco International (NYSE: TYC), Cummins (NYSE: CMI), Kubota (NYSE: KUB), Ingersoll-Rand (NYSE: IR), Dover (NYSE: DOV), ITT Corp. (NYSE: ITT), Flowserve (NYSE: FLS), Pall (NYSE: PLL), Dresser-Rand (NYSE: DRC), SPX (NYSE: SPW), Gardner Denver (NYSE: GDI), IDEX (NYSE: IEX), Nordson (Nasdaq: NDSN), Graco (NYSE: GGG), Actuant (NYSE: ATU), Middleby (Nasdaq: MIDD), ABB (NYSE: ABB), Eaton (NYSE: ETN), Nidec (NYSE: NJ), Rockwell Automation (NYSE: ROK), Ametek (NYSE: AME), Regal Beloit (NYSE: RBC), Thomas & Betts (NYSE: TMB), Woodward Governor (Nasdaq: WGOV), Caterpillar (NYSE: CAT), Deere (NYSE: DE), CNH (NYSE: CNH), Joy Global (Nasdaq: JOYG), Bucyrus (Nasdaq: BUCY), Agco (Nasdaq: AGCO), Emerson Electric (NYSE: EMR), Parker Hannifin (NYSE: PH), Roper Industries (NYSE: ROP), Pentair (NYSE: PNR), Waste Management (NYSE: WM), Republic Services (NYSE: RSG), Fastenal (Nasdaq: FAST), Vulcan Materials (NYSE: VMC), MDU Resources (NYSE: MDU), Martin Marietta Materials (NYSE: MLM), Owens Corning (NYSE: OC), Valspar (NYSE: VAL), Precision Castparts (NYSE: PCP), United States Steel (NYSE: X), Reliance Steel (NYSE: RS), NVR (NYSE: NVR), DR Horton (NYSE: DHI), Pulte (NYSE: PHM), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), CRH (NYSE: CRH), CEMEX (NYSE: CX), Eagle Materials (NYSE: EXP), Fluor (NYSE: FLR), McDermott International (NYSE: MDR), Foster Wheeler (Nasdaq: FWLT), Empresas ICA (NYSE: ICA), Stanley Black & Decker (NYSE: SWK), Timken (NYSE: TKR), Kennametal (NYSE: KMT), Leucadia National (NYSE: LUK), Masco (NYSE: MAS), Weyerhaeuser (NYSE: WY), Quanta Services (NYSE: PWR), Chicago Bridge & Iron (NYSE: CBI), EMCOR (NYSE: EME), Snap-on (NYSE: SNA), Toro (NYSE: TTC), GM (NYSE: GM) and Ford (NYSE: F).

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.

Q4 GDP Growth Severely Flawed

2012-01-27T15:25:00.005-05:00

Fourth quarter Gross Domestic Product (GDP) was reported higher, but the growth rate fell short of economists’ views. Stocks started lower on the news Friday and kept that way as a closer look at the data shows it has gaping holes in it. Thus, American economic activity may not be as supportive of stocks as valuations had accounted for up to today. Our analysis of the GDP report and our global economic outlook certainly advise for investor restraint.

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.

Q4 GDP Warning

The government reported Friday that fourth quarter GDP grew 2.8%, which was well above the third quarter growth rate of 1.8%. Yet, stocks fell at the start of trading, leaving casual observers wondering what gives. Just ahead of closing, the SPDR Dow Jones Industrial Average (NYSE: DIA) was still roughly 0.6% lower, while the SPDR S&P 500 Index (NYSE: SPY) was off by 0.2%. That can be partially explained by the shortfall of Q4 growth to economists’ expectations, which were set at a +3.1% consensus based on Bloomberg’s survey. Still, you would think the much better growth would outweigh a few tenths of a point here or there. Well, that would be a correct assessment, so the reaction of stocks must be defined by a more complex set of factors, and those can be found in the details of the data.

The two most significant issues detracting from the best quarterly GDP growth since Q2 2010 both tie into consumer spending. First, and most importantly, GDP was lifted 1.94 percentage points by a build in inventories. Some are saying that this is okay, since third quarter growth was penalized by 1.35 percentage points due to an inventory draw down, however, I see no relevance. Despite the promotional environment of the fourth quarter, the aggregate performance of retailers was poor. This was also apparent by the December Retail Sales data. In other words, discounters like Wal-Mart (NYSE: WMT) and Costco (Nasdaq: COST) may have continued to steal market share alongside bargain online salesmen like Amazon.com (Nasdaq: AMZN) and eBay (Nasdaq: EBAY), while general operators like J.C. Penney (NYSE: JCP) and poor performers like Sears (Nasdaq: SHLD) now employ reinvention strategies to save themselves. In electronics, the success of Apple (Nasdaq: AAPL) and Amazon seems to come at the cost of Research in Motion (Nasdaq: RIMM) and Hewlett-Packard (NYSE: HPQ). Thus, on the whole, a soft economy leaves a competitive environment that can no longer support all players.

The other point that I see as significant came from the growth of the services sector in Q4, which only managed 0.2%, according to the government. Our services dominant economy cannot sustain significant economic growth without robust activity in services. Also, as I’ve pointed out in the past, the sales galore and holiday imploring environment of Q4 is likely to cost consumption in Q1, if not further. Without demand for services, what then will drive our economy?

Regarding the sustainability of economic growth, we also find issue in another factor that helped to drive spending in Q4. Americans dipped into their savings in order to fund consumption. The government noted that the personal savings rate, which measures savings as a percentage of personal income, fell to 3.7% in Q4, from 3.9% in Q3. Clearly, there’s only so far Americans can dip into savings, and considering the private debt problem that our nation still faces, there’s only so far this factor can drive our economy.

Therefore, and in conclusion, the market is just in its determination to penalize stock valuations now. Also, given the pitfalls that litter our path forward, including European economic recession (20% of American exports sold there) and geopolitical deterioration (Iran et al), investors are correct to proceed with caution.

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 Stays Dovish as Europe Threatens

2012-01-25T14:12:00.003-05:00

What follows is the verbatim copy of the Federal Reserve's Federal Open Market Committee (FOMC) Monetary Policy Statement.

Release Date: January 25, 2012

For immediate release

Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, 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 over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee's dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the 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 its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery 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; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.

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.

Noise Still Drowns Out Housing Data

2012-01-25T12:12:00.002-05:00

Over the last month or so the weekly mortgage activity data produced by the Mortgage Bankers Association has been choppy to say the least. That is because of the imperfect adjustment for holidays, including Christmas, New Year’s and in this week’s data, Martin Luther King Day. However, moving forward, except for President’s Day on February 20, there should be very little noise in the data, barring wild swings in weather. Therefore, we should be able to get a clearer sense of the trend in housing, and as the weather warms, an early idea about the spring surge some real estate pundits expect.

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: AF, NasdaqCM: ASBI, Nasdaq: ABCW, AMEX: BKJ, Nasdaq: BKMU, NYSE: BBX, Nasdaq: BFIN, Nasdaq: BANR, Nasdaq: BCSB, Nasdaq: BFED, Nasdaq: BHLB, Nasdaq: BOFI, Nasdaq: BYFC, Nasdaq: BRKL, Nasdaq: BFSB, Nasdaq: CAFI, Nasdaq: CFFN, Nasdaq: CARV, Nasdaq: CLFC, Nasdaq: CFBK, Nasdaq: CBNK, Nasdaq: CSBC, Nasdaq: CSBK, Nasdaq: COLB, Nasdaq: DCOM, Nasdaq: EBTC, Nasdaq: ESBF, Nasdaq: ESSA, Nasdaq: FFCO, Nasdaq: FFDF, Nasdaq: FBSI, Nasdaq: FCAP, Nasdaq: FCLF, Nasdaq: FDEF, Nasdaq: FFBH, Nasdaq: FFCH, Nasdaq: FNFG, Nasdaq: FSGID, Nasdaq: FSBK, NYSE: FBC, Nasdaq: FFIC, Nasdaq: GCBC, Nasdaq: HFFC, Nasdaq: HMNF, Nasdaq: HBCP, Nasdaq: HOME, Nasdaq: HFBC, Nasdaq: HCBK, Nasdaq: INCB, Nasdaq: ISBC, Nasdaq: JXSB, Nasdaq: JFBI, Nasdaq: KFFG, Nasdaq: KRNY, Nasdaq: KFFB, Nasdaq: LSBK, Nasdaq: LABC, Nasdaq: LSBI, Nasdaq: MLVF, Nasdaq: EBSB, Nasdaq: CASH, Nasdaq: NASB, Nasdaq: NVSL, Nasdaq: NEBS, Nasdaq: NHTB, NYSE: NYB, Nasdaq: FFFD, Nasdaq: NECB, Nasdaq: NWBI, Nasdaq: OCFC, NYSE: OCN, Nasdaq: ONFC, Nasdaq: PFED, Nasdaq: PVSA, Nasdaq: PBHC, Nasdaq: PBCT, Nasdaq: PCBS, Nasdaq: PROV, NYSE: PFS, Nasdaq: PBNY, Nasdaq: PBIP, Nasdaq: PSBH, Nasdaq: PULB, Nasdaq: PVFC, Nasdaq: QCCO, Nasdaq: RIVR, Nasdaq: RVSB, Nasdaq: ROMA, AMEX: SAL, Nasdaq: SIFI, Nasdaq: SMBC, Nasdaq: STSA, AMEX: TSH, Nasdaq: THRD, Nasdaq: TSBK, Nasdaq: UCBA, Nasdaq: UCFC, Nasdaq: UBNK, Nasdaq: VYFC, Nasdaq: WFSL, Nasdaq: WSBF, Nasdaq: WAYN, Nasdaq: WSB and Nasdaq: WVFC.

Noise Drowned Housing & Economic Data

This week’s Weekly Application Survey, covering the week ending January 20, included the Martin Luther King Jr. holiday. It was a bank holiday, and so comes to play in mortgage activity. For the week, the MBA’s Market Composite Index fell by 5% from the week before, handicapped by what we see as inadequate adjustment for the business drop-off that occurs on the Friday before and the Tuesday that follows every three day weekend. I’ve originated this viewpoint and continue to put it forth here.

Purchase Activity, which measures mortgage application activity tied to the purchase of homes, fell by 5.4% from the week just prior. I again attribute this decline to the holiday impact, despite the adjustment by the MBA. On an unadjusted basis, this index fell by 9.7%. However, we still cannot use this data in pure form in our forecasting or investment assumptions, for the reasons aforementioned.

The Refinance Index fell by 5.2%, again on the holiday noise. Mortgage rate direction varied across mortgage categories. For instance, the average contracted rate on 30-year fixed rate mortgages with conforming loan balances (417,500 or less) increased to 4.11% from 4.06% the week before. While the points decreased for 80% loan to value ratios, the effective mortgage rate still rose. As for jumbo loan balances (greater than conforming), the average contracted rate for same term fixed rate mortgages fell slightly to 4.39%, from 4.4%. While points rose here, the effective rate still decreased. FHA sponsored loans saw the average contracted rate on 30-year fixed rate loans rise to 3.97% from 3.91% the week before. Average contracted rates on 15-year fixed rate mortgages rose to 3.4% from 3.33%.

Even the four-week moving average of the Market Composite Index seems to me seasonally skewed as it moves out of the holiday inclusive period. For the latest period, this average was up 4.12%, and it should continue higher as it leaves the holiday season behind.

As we move forward, the weekly data faces little distraction, except for what may come from weather and also President’s Day in February. Thus, those of us studying this data point, and others, will get a clearer view to which to base more solid forecasts upon. That said, this benefit will not account for what may lie ahead of us, which I’ve begun talking about in recent columns. In fact, in my latest article, I based a sell call on paper profit rich homebuilders on this view. Today’s mortgage activity data, along with the Pending Home Sales Index decline and FHFA House Price Index’s monthly price increase have the relative shares of Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), J.P. Morgan Chase (NYSE: JPM) and K.B. Home (NYSE: KBH) trading mixed at this hour. K.B. Home was up 2.9% near noontime, while J.P. Morgan and Wells Fargo were lower by about 1%.

Article should interest investors in Savings & Loan stocks including Alaska Pacific Bankshares (OTC: AKPB.OB), Allied First Bancorp (OTC: AFBA.OB), Astoria Financial (NYSE: AF), AMB Financial (OTC: AMFC.OB), Ameriana Bancorp (NasdaqCM: ASBI), Anchor Bancorp Wisconsin (Nasdaq: ABCW), Bancorp of New Jersey (AMEX: BKJ), Bank Mutual (Nasdaq: BKMU), BankAtlantic (NYSE: BBX), BankFinancial (Nasdaq: BFIN), Banner (Nasdaq: BANR), BCSB Bancorp (Nasdaq: BCSB), Beacon Federal (Nasdaq: BFED), Berkshire Hills (Nasdaq: BHLB), Blackhawk Bancorp (OTC: BHWB.OB), Blue River Bancshares (OTC: BRBI.OB), Bofi (Nasdaq: BOFI), Broadway Financial (Nasdaq: BYFC), Brookline (Nasdaq: BRKL), Brooklyn Federal (Nasdaq: BFSB), Camco Financial (Nasdaq: CAFI), Capitol Federal (Nasdaq: CFFN), Carver (Nasdaq: CARV), Cecil Bancorp (OTC: CECB.OB), Center Financial (Nasdaq: CLFC), Central Federal (Nasdaq: CFBK), Chicopee (Nasdaq: CBNK), Citizens South (Nasdaq: CSBC), CKF Bancorp (OTC: CKFB.OB), Clarkston Financial (OTC: CKFC.OB), Clifton Savings (Nasdaq: CSBK), Close Brothers (OTC: CBGPY.PK), Columbia Banking (Nasdaq: COLB), Consumers (OTC: CBKM.OB), Dime Community (Nasdaq: DCOM), Enterprise (Nasdaq: EBTC), ESB Financial (Nasdaq: ESBF), ESSA Bancorp (Nasdaq: ESSA), Eureka Financial (OTC: EKFC.OB), FedFirst Fin’l (Nasdaq: FFCO), FFD Fin’l (Nasdaq: FFDF), FFW (OTC: FFWC.OB), First Bancorp of Indiana (OTC: FBPI.OB), First Bancshares (Nasdaq: FBSI), First Capital (Nasdaq: FCAP), First Clover Leaf (Nasdaq: FCLF), First Defiance (Nasdaq: FDEF), First Federal Bancshares of Arkansas (Nasdaq: FFBH), First Financial Holdings (Nasdaq: FFCH), First Independence (OTC: FFSL.OB), First Investors Fin’l Services (OTC: FIFS.PK), First Niagara (Nasdaq: FNFG), First Robinson (OTC: FRFC.OB), First Security Group (Nasdaq: FSGID), First South (Nasdaq: FSBK), Flagstar (NYSE: FBC), Flatbush Federal (OTC: FLTB.OB), Flushing Financial (Nasdaq: FFIC), Greene County (Nasdaq: GCBC), HF Financial (Nasdaq: HFFC), HMN Fin’l (Nasdaq: HMNF), Home Bancorp (Nasdaq: HBCP), Home Federal (Nasdaq: HOME), HopFed (Nasdaq: HFBC), Hudson City (Nasdaq: HCBK), Indiana Community (Nasdaq: INCB), Investors Bancorp (Nasdaq: ISBC), Jacksonville Bancorp (Nasdaq: JXSB), Jefferson Bancshares (Nasdaq: JFBI), Kaiser Federal (Nasdaq: KFFG), Kearny Fin’l (Nasdaq: KRNY), Kentucky First Federal (Nasdaq: KFFB), Lake Shore Bancorp (Nasdaq: LSBK), Louisiana Bancorp (Nasdaq: LABC), LSB Fin’l (Nasdaq: LSBI), Malvern Federal (Nasdaq: MLVF), Meridian Interstate (Nasdaq: EBSB), Meta Fin’l (Nasdaq: CASH), NASB Fin’l (Nasdaq: NASB), Naugatuck Valley (Nasdaq: NVSL), New England Bancshares (Nasdaq: NEBS), New Hampshire Thrift (Nasdaq: NHTB), New York Community (NYSE: NYB), North Central Bancshares (Nasdaq: FFFD), Northeast Community (Nasdaq: NECB), Northwest Bancshares (Nasdaq: NWBI), OceanFirst (Nasdaq: OCFC), Ocwen (NYSE: OCN), Oneida (Nasdaq: ONFC), Park Bancorp (Nasdaq: PFED), Parkvale Fin’l (Nasdaq: PVSA), Pathfinder Bancorp (Nasdaq: PBHC), People’s United (Nasdaq: PBCT), Provident Community (Nasdaq: PCBS), Provident Fin’l (Nasdaq: PROV), Provident Fin’l Services (NYSE: PFS), Provident New York (Nasdaq: PBNY), Prudential Bancorp of PA (Nasdaq: PBIP), PSB Holding (Nasdaq: PSBH), Pulaski Fin’l (Nasdaq: PULB), PVF Capital (Nasdaq: PVFC), QC Holding (Nasdaq: QCCO), River Valley Bancorp (Nasdaq: RIVR), Riverview Bancorp (Nasdaq: RVSB), Roma Fin’l (Nasdaq: ROMA), Salisbury Bancorp (AMEX: SAL), SI Financial (Nasdaq: SIFI), Southern Missouri (Nasdaq: SMBC), Sterling Fin’l (Nasdaq: STSA), Teche Holding (AMEX: TSH), TF Fin’l (Nasdaq: THRD), Timberland Bancorp (Nasdaq: TSBK), United Community (Nasdaq: UCBA), United Community Fin’l (Nasdaq: UCFC), United Fin’l Bancorp (Nasdaq: UBNK), Valley Fin’l (Nasdaq: VYFC), Washington Federal (Nasdaq: WFSL), Waterstone Fin’l (Nasdaq: WSBF), Wayne Savings (Nasdaq: WAYN), WSB Holdings (Nasdaq: WSB) and WVS Financial (Nasdaq: WVFC).

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 Greece Iran Oil Connection

2012-01-23T09:09:00.001-05:00

As the west prepares a steep set of sanctions geared to stifle Iran, Greece raises an important query. The debt laden Hellenes would like to know what will happen to their vulnerable economy if the nation’s preferable Iranian oil supply contracts are replaced with more costly sources? Furthermore, if its GDP is impacted as a result of the untimely action, causing it to fall short of qualifying thresholds for its foreign funding, would that be overlooked by its critical debt holders?

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: NBG, NYSE: OTE, NYSE: CCH, NYSE: TK, NYSE: NM, NYSE: NNA, NYSE: NMM, NYSE: TNP, NYSE: OSG, NYSE: ISH, NYSE: EXM, NYSE: SB, NYSE: SEA, NYSE: GNK, NYSE: DSX, NYSE: DAC, NYSE: TNP, NYSE: SFL, NYSE: NAT, NYSE: SSW, NYSE: GMR, NYSE: DHT, NYSE: MPX, Nasdaq: DRYS, Nasdaq: TOPS, Nasdaq: EGLE, Nasdaq: SINO, Nasdaq: PRGN, NYSE: KSP, Nasdaq: ESEA, Nasdaq: SBLK, Nasdaq: ONAV, Nasdaq: VLCCF, Nasdaq: TBSI, Nasdaq: GLNG, Nasdaq: XSEAX, Nasdaq: ACLI, NYSE: DB, Nasdaq: ITUB, NYSE: STD, NYSE: WBK, NYSE: UBS, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: BAC, NYSE: C, NYSE: GS, NYSE: JPM, NYSE: MS, NYSE: EEA, Nasdaq: VEURX, NYSE: PEF, NYSE: EKH, NYSE: GUR, NYSE: EPV, NYSE: VEA, NYSE: DFE, NYSE: DEB, NYSE: IEV, NYSE: RNE, Nasdaq: SERAX, Nasdaq: SERBX, Nasdaq: FEUFX, Nasdaq: FIEUX, Nasdaq: IERAX, Nasdaq: PBEUX, Nasdaq: UEPIX, Nasdaq: PEUGX, Nasdaq: RYAEX

The Greece Iran Oil Connection

It’s a fair question for Greece to ask with its economic growth already under drag by the austerity demanded by the International Monetary Fund (IMF) and its European brothers. Greece sourced a significant 14% of its imported oil from Iran in the first half of 2011, and has sourced up to 23% of its oil imports from its ancient counterpart at times. According to a Bloomberg article quoting an anonymous Greek diplomat, Greece wants to ensure that if that oil is replaced, it will receive identical terms, which exclude financial guarantees.

Under normal circumstances, such a condition would not even be considered, but while Greece is under the economic microscope of the IMF, it wants to avoid new obstacles to reaching already challenging goals set by its lenders of last resort. Thus, last week, Greece held up the EU’s sanctions which would stop the flow of Iranian oil to the region. Agitated European officials have indicated that assurances will be made to Greece, but that the details will be worked out after this week’s agreement on sanctions is in place. It’s unclear whether such hastily made promises will be adequate for Greek politicians who cannot afford to place a single new burden on the shoulders of Greece’s aggravated populace.

Given Greece’s poor credibility, it is unlikely to find better terms on the open market than it gets from its likewise desperate Iranian trading partner. So, the question posed to Europe is, will it subsidize the difference in cost to Greece? Otherwise, some leeway must be given Greece, with regard to the steep economic goals it’s been forced to set.

What we are seeing in this latest situation is similar to the chaos that ensued when the former Greek Prime Minister proposed a referendum for the Greek people to decide for themselves whether their future would be with or without the euro currency. It shows that Europe is no stronger than its weakest link, and that the Greeks have more bargaining leverage than most understand. Finally, Greek politicians seem to be realizing that Europe needs Greece to stay solvent as much as Greece needs its financial assistance. Clearly, the most obvious concern to Europe is how a disorderly disposition of Greece would reel Portuguese, Spanish and Italian debt markets.

The current situation also highlights the important position Iran holds in the stability of the already shaky global marketplace. As the U.S. and Europe gear to pressure the Iranians, the question raised by Greece presents Iran with interesting information. Every plan to cut off Iranian oil is civil and arranged to ease the process, but the situation is not civil, if it is not economic warfare. So I have a question: What if the Iranians were to realize the plan set for them and understand their current position. They might just do the unexpected and cut off their own oil flow abruptly, and so, disruptively to Greece, Europe and the civilized world. Perhaps Greece’s negotiations with the EU in this regard should have been kept in closed quarters.

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.

WARNING - Europe is Already Costing the U.S. Economy

2012-01-17T16:45:00.001-05:00

What is vague is often ignored, and what is possible is sometimes given no weighting by investors, instead overlooked for what is most tangible and certain today. In this regard, so has the threat of European impact to the U.S. economy proven impotent to U.S. stock direction through late 2011 and so far in 2012. However, there exists tangible impact to the U.S. economy that is directly attributable to the nascent trouble in Europe. I suggest investors take note as well, since the impacts should only grow more obvious with time, with their effects eventually burdening U.S. GDP, and finally given credit in the valuation of American stocks.

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.

EU Hurting U.S. Economy

The evidence I point to, which shows the impact of European weakness on the U.S. economy, has come in two forms of late. We’ve seen it in the latest trade data and also in the actions of European companies operating in the U.S. Those actions have included the consolidation of American operations or other reorganization, and the laying off of American workers. That contribution to an already laboring labor market should be felt and understood for its seriousness.

The direct impact, though, is more clearly seen in the latest international trade data, reported last week for the month of November. The U.S. international trade deficit widened by 10.4%, to $47.8 billion, which was far more than economists surveyed by Bloomberg foresaw (consensus -$45 billion). While November imports were $2.9 billion higher, reflective of high season demand perhaps, exports were lower by $1.5 billion. That drop in exports was mostly attributable to goods, as the change in service exports was virtually unchanged. The decrease also countered the year-over-year trend, which showed exports up 10.3% from November of 2010. Certainly, Europe has endured a good deal of pain over the course of those twelve months, and it may be starting to cost U.S. exporters today.

According to the Department of Commerce, the decrease in exports was mostly seen in lower industrial supplies and materials demand ($1.6 billion); and also in capital goods ($0.2 billion) and other areas. That drop in industrial goods demand was counter to the year-over-year trend as well. Somewhat surprisingly, and perhaps contradicting this report, an increase of $0.8 billion occurred in consumer goods exports. Though, this could have been due to seasonal driver.

The most telling of the data came when comparing the month’s trends between Europe and China. While the trade deficit with China narrowed to $26.9 billion, from $28.1 billion in October, the deficit with the European Union widened to $9.7 billion, from $8.0 billion in October. It was the most marked increase in deficit among America’s trading partners.

While what we’ve just discussed is direct and clear, what is developing anecdotally is concerning due to its concealed nature. It thus has the ability of sneaking up on economists and strategists who may not be paying the closest of attention to peripheral information. Therefore, it could bite analysts, brokers and finally retail investors in the behind. Take note that my followers will not be found within that grouping.

While authoring my report on the Ugly Truth About the Economy, I took note of the number of announced corporate layoffs coming from European based firms over a very short recent time span. It was difficult not to notice given my bead on the newswire. Since the turn of the year, we’ve seen American worker layoffs by European based firms: Novartis (NYSE: NVS), Vestas Wind Systems (OTC: VWSYF.PK), RBS (NYSE: RBS), Delhaize (NYSE: DEG) and others. When pressure mounts on a European company, it must look more closely at the ROIC of its projects. While you would expect European based projects to be hit most severely, early stage efforts in the States that are not going to return on investment soon, must also be curtailed in many cases. That means American jobs are lost, despite the government’s declaration of domestic economic gains. It contributes to unemployment, and it depletes tax revenues, curtails consumer spending and costs us in unemployment benefit payouts. It will affect our GDP.

Meanwhile, money center banks with global operations are pointing to Europe as the source of their earnings disappointments, as rumors of related layoffs swirl. The latest to blame the European crisis for its direct and indirect impacts on its operations was Citigroup (NYSE: C) Tuesday. Analysts expect a fourth quarter loss from Morgan Stanley (NYSE: MS) in its upcoming report this week, on market and regulatory pressures. Goldman Sachs (NYSE: GS) will also report later this week. Citi’s Chief Executive, Vikram Pandit, shed light Tuesday saying, ”Clearly, the macro environment has impacted the capital markets and we will continue to right-size our businesses to match the environment.” Citi is cutting 5,000 jobs away, which is more than the 4,500 it said it would in December; that might reflect a deteriorating trend more so than discovered inefficiencies. Despite the already significant job cuts across major international banks with U.S. operations, we very well could see more from the likes of those already mentioned, Credit Suisse (NYSE: CS), UBS (NYSE: UBS) and the rest.

In conclusion, the impacts of European weakness on the U.S. economy are currently visible and already measurable. Yet, the U.S. stock market has reflected enthusiasm tied to a synthetically driven consumer sector and a misleading employment situation, which we discussed here previously. Considering that the struggling region accounts for 20% of American exports, and given its trajectory, it is capable of diverting American recovery and deserves more attention in the weightings of valuation and scenario analysis. The signs of this effect had until now been somewhat vague to see, but they are growing clearer with time, and I expect they will eventually be impossible for the stock market to ignore.

Article is relevant to 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).

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.

Bad Signs for Greece

2012-01-14T16:21:00.002-05:00

The latest days’ news wire has been full of bad signs for Greece. While you have to infer a bit and see implications to developments in order to say so, it’s not too far a reach to see what could be stewing for Greece this winter is not a warming trend.

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: NBG, NYSE: OTE, NYSE: CCH, NYSE: TK, NYSE: NM, NYSE: NNA, NYSE: NMM, NYSE: TNP, NYSE: OSG, NYSE: ISH, NYSE: EXM, NYSE: SB, NYSE: SEA, NYSE: GNK, NYSE: DSX, NYSE: DAC, NYSE: TNP, NYSE: SFL, NYSE: NAT, NYSE: SSW, NYSE: GMR, NYSE: DHT, NYSE: MPX, Nasdaq: DRYS, Nasdaq: TOPS, Nasdaq: EGLE, Nasdaq: SINO, Nasdaq: PRGN, NYSE: KSP, Nasdaq: ESEA, Nasdaq: SBLK, Nasdaq: ONAV, Nasdaq: VLCCF, Nasdaq: TBSI, Nasdaq: GLNG, Nasdaq: XSEAX, Nasdaq: ACLI, NYSE: DB, Nasdaq: ITUB, NYSE: STD, NYSE: WBK, NYSE: UBS, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: BAC, NYSE: C, NYSE: GS, NYSE: JPM, NYSE: MS, NYSE: EEA, Nasdaq: VEURX, NYSE: PEF, NYSE: EKH, NYSE: GUR, NYSE: EPV, NYSE: VEA, NYSE: DFE, NYSE: DEB, NYSE: IEV, NYSE: RNE, Nasdaq: SERAX, Nasdaq: SERBX, Nasdaq: FEUFX, Nasdaq: FIEUX, Nasdaq: IERAX, Nasdaq: PBEUX, Nasdaq: UEPIX, Nasdaq: PEUGX, Nasdaq: RYAEX

Greece May Yet Default

The latest omen came last week, when negotiations broke off between the Greek government and private bondholders. The effort is geared to liquidate about half of Greece’s private debt or 100 billion euros worth at the cost of the bondholders. It’s a lesser evil choice for the bondholders, which is only acceptable because it may help preserve the remaining portion of their investment in or loans to Greece.

This very important effort for Greece’s recovery is now also a critical step for its short-term survival. This is because it must be accomplished in order for Greece to qualify for its next tranche of aid funding from the international community. Representatives of the bondholders stated that they were stepping away in order to “pause for reflection.” The quandary is created because of math and capital markets, as the Greeks are really seeking more than the 50% cut discussed, because the effective market value of the bonds will likely drop immediately when the bond swap takes place. That said, if Greece recovers, the contract value should be approximated by market interest.

Clearly, if Greece defaults, bondholders will be left with empty hands, so Greece does have some negotiating power. However, the bondholders also know that Greece wants to avoid default and that they are needed for that process. It seems to me that whatever will satisfy the IMF is what should be adopted at this point.

Compounding the problem, Greece just reported that its budget deficit expanded in 2011 by 0.8%, to 21.64 billion euros. It was a bit better than the government’s revised forecast, but its details reflect fundamental obstacles to Greece’s economic and fiscal recovery. Despite all the government’s new taxes to lift revenues, and its expense reduction efforts, the budget still widened. That was because personal income tax collection actually softened and its ordinary budget revenue generation fell by 1.7%. Meanwhile, despite its cost cutting efforts, spending rose by 2.8% on the significantly increased debt service costs that plague the embattled nation. There should be no surprise here for readers of my column, as I’ve argued readily against the logic of harsh short-sighted austerity.

The budget deficit is supposed to have shrunk to a smaller portion of Greece’s gross domestic product. How you get there with GDP declining and the deficit rising defies my understanding. Maybe it’s European math. In any event, there’s very little here to reassure the troika nor the capital markets that Greece is making progress, and so the pressure remains.

It seems to me, given Standard & Poor’s sovereign debt slashing of much of the euro zone Friday, that it is hedging if not forecasting Greek default or some sort of unsavory result. Nine countries were downgraded in total, with the most damage done to France and Austria, which lost their top grades. Germany was spared, with its constitutional construct cited as a safety against its government’s potential for making poor decisions.

This coming week, the IMF resumes debt talks with Greece, sending a “mission team” to Athens as part of the review process. All the above discussed matters will be reviewed. Perhaps the presence of the IMF and renewed understanding of the criticality of “private sector involvement” will bring a conciliatory and cooperative tone and progress for Greece. However, the signs are bad.

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.

Stock Apocalypse Now - Updated Technical View

2012-01-12T16:50:00.001-05:00

Since our 2012 technical forecast was issued earlier this year, S&P prices have closed right at key resistance of 1292. Apart from the further maturation of the current rally, not much else has changed.

Figure 1 below divides intermediate Elliot Waves into sub-waves in order to illustrate further the maturity of the current rally:

Intermediate Wave 1 down, shown with black dotted line, consisted of five sub-waves (i) through (v), each of which is depicted with a red dotted line

Note that sub-wave (iii) down was the largest in magnitude

Countertrend rallies consist of three-wave movements, in this case shown
as A through C, and depicted with blue dotted lines

Sub-wave C can be further subdivided into 5 smaller waves (not shown)

It would appear that the S&P is completing the fifth of five sub-waves within wave C of intermediate Wave 2. Note that daily stochastics are overbought at 94% and that S&P prices closed right at key resistance of 1292.

Once this move is complete, Intermediate Wave 3 down should begin. According to Elliot Wave theory, the magnitude of this wave will exceed that of Wave 1 down, which featured a 300 point drop.

I believe investors should consider taking trading profits from this recent rally to avoid the coming “stock-apocalypse.”

This article should interest investors in SPDR Dow Jones Industrial Average (NYSE: DIA), SPDR S&P 500 (NYSE: SPY), PowerShares QQQ Trust (Nasdaq: QQQ), PowerShares Short Dow 30 (NYSE: DOG), ProShares Ultra Short QQQ (NYSE: QLD), ProShares UltraShort S&P 500 (NYSE: SDS), iShares Russell 2000 (NYSE: IWM).

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 No Reason to Rally

2012-01-11T15:45:00.002-05:00

Seasonal influences are still at play in the weekly mortgage application data produced by the Mortgage Bankers Association (MBA), but soon, we should see real improvement. That said, the latest reported increase is no reason to get giddy about a real estate recovery.

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.

No Reason to Rally

Over the course of the last several weeks, we’ve continuously pointed out the seasonal noise we see in the data produced within many economic metrics. One of the data points we’ve keyed on has been the MBA’s Weekly Applications Survey. Activity dropped off significantly in the weeks of December, as Americans were too busy shopping, preparing their homes, visiting with friends, baking and cooking to spend time applying for a mortgage. Even despite the lowest mortgage rates of the year, they kept from refinancing, and certainly there were some refinancing opportunities created by those historical troughs.

However, now that we’re fully immersed in 2012, the data should begin to reflect economic value adding opportunities like those offered in the mortgage market. The latest period, reported today, still included the New Year’s Day holiday, and so is not clean of noise. For the week ended January 6, though, the MBA’s Market Composite Index (of mortgage activity) picked up 4.5% on a seasonally adjusted basis.

Besides discussing the seasonal influences on data in recent weeks, we’ve also discussed the imperfect work of seasonal adjustment, especially in dynamic periods like the current times. You can see just how hard it must be to make this adjustment based on historical data by simply looking at the unadjusted change, which this week marked a 34.4% increase against the week just prior.

We’ve noted that three-day holidays likely give adjusters a problem because they fail to fully account for the soft business activity that occurs the day before the weekend begins and the day after the holiday. There is certainly a slacking of business activity during those crossover periods as people prepare for the holiday and also return from a tiring or relaxing weekend and reenter into “work mode.”

Alas, all that noise will be going away over the weeks ahead, and the market should begin to take advantage of low mortgage rates, though depending upon weather now. Many strategists, economists and housing specialists are pointing to a true spring selling season this year, given supply rundown and employment improvement (so called). I’m a skeptic with regard to labor, again due to seasonal ringers in the data and other issues described in my labor market work.

Rounding out the most recent week’s data for financial sector and housing enthusiasts, the seasonally adjusted Purchase Index increased 8.1%. Remember, the Purchase Index measures activity tied to the purchase of a home. Homebuilder investors will likely add this news to their lists of reasons to rally the industry’s shares, but it’s not a solid data point to build on in that regard. Filling in the rest of the data, the unadjusted Purchase Index increased 41.9%. The MBA’s Refinance Index increased 3.3% from the week before.

Take note now, dear smoke and mirror crew, because what is useful here is the year-to-year comparisons. In that regard, the Purchase Index was severely lower against the prior year period, down 17.9%. That doesn’t sound like a reason to buy homebuilders to me, but you won’t find that information in the current frenzied flurry of news on the industry, except from me. I’ll have more to say on the homebuilders specifically in the near future, so stay tuned.

Homebuilders are up again today despite insight like this, with the SPDR S&P Homebuilders (NYSE: XHB) up 1.4% in late afternoon trading Wednesday. The shares of K.B. Home (NYSE: KBH) and Hovnanian (NYSE: HOV) are up near 13% on the day, with shares of Lennar (NYSE: LEN) up 6.1% partly on its own news. Financials are not missing a beat either, with big home financer Bank of America (NYSE: BAC) up 3.3% and the Financial Select Sector SPDR (NYSE: XLF) up 0.8%.

Be warned though, because the latest days' rise has been driven more by greed than by reason, in my view. Don't label me as a perennial pessimist though, because I suggested investors get into homebuilders last year. I see the latest move as indicative of subtle signs for housing, ample hope for investor profit and complete ignorance of the importance of Europe to the U.S. economy and the growth of emerging markets.

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.

How the 24-Hour Retail Cycle Skewed Labor Data

2012-01-10T08:40:00.001-05:00

On almost all accounts, December’s Employment Situation Report was interpreted as good news. However, I see a problem that was only partially broached by the popular press last week. I think a seasonal and unique to 2011 factor supported the labor market last month. This, combined with other seasonal factors I’ve been pointing out throughout December, could be exaggerating job gains. If I’m right, given the short-term nature of this impact, we’ll see some counteracting data in early 2012. Compounding this contrary view of the economic situation, the recession overcoming Europe and the economic growth decay in China are not going to pass without impact to a vulnerable American economic state.

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: XRT, NYSE: WMT, NYSE: PIR, NYSE: ETH, Nasdaq: HOFT, NYSE: HD, NYSE: LOW, Nasdaq: AAPL, NYSE: BBY, NYSE: LTD, NYSE: CHS, NYSE: ANN, NYSE: GPS, NYSE: M, NYSE: JCP, NYSE: JWN, NYSE: TJX, NYSE: KSS, Nasdaq: COST, NYSE: TGT, NYSE: WMT, Nasdaq: WTSLA, Nasdaq: HOTT, NYSE: AEO, NYSE: ARO, NYSE: ANF, NYSE: SAK, NYSE: TIF, NYSE: TLB, NYSE: LL, Nasdaq: BLDR, NYSE: FO, NYSE: LEG, NYSE: TPX, NYSE: AYI, NYSE: LZB, Nasdaq: SCSS, NYSE: ZZ, NYSE: FBN, NYSE: NTZ, Nasdaq: SHLD, NYSE: DDS, Nasdaq: BONT, Nasdaq: CPWM, Nasdaq: BKRS, Nasdaq: BEBE, NYSE: BKE, Nasdaq: CACH, Nasdaq: CMRG, Nasdaq: CATO, NYSE: CBK, Nasdaq: CTRN, NYSE: PSS, Nasdaq: DEST, Nasdaq: DBRN, NYSE: DSW, Nasdaq: FINL, NYSE: FL, Nasdaq: GYMB, NYSE: GES, NYSE: JCG, NYSE: JNY, Nasdaq: JOSB, NYSE: NWY, NYSE: JWN, NYSE: MW, Nasdaq: SYMS, Nasdaq: PLCE.

How the 24-Hour Retail Cycle Skewed Labor Data

The Labor Department reported the unemployment rate fell two-tenths of a point to 8.5%, from 8.7%. December’s report also showed an addition of 200K nonfarm payrolls. Both data points represented improvement and both reached above the expectations of economists, who were reportedly looking for an 8.7% unemployment rate and the addition of 150K jobs, based on Bloomberg’s survey. So why did economists fall short?

I think evidence of this is readily available in the report itself. What caught my eye initially was the increase in the average workweek, which was lauded by many talking heads in the popular press. Average hours worked rose to 34.4 hours, up from 34.3, marking an unexpected increase against economists’ views.

We know the retail sector added another 28,000 jobs in December, but the reason behind it was simply attributed to the holiday shopping season. However, there were dynamic factors at play that reached beyond normal seasonal trend. Many stores stayed open 24 hours or otherwise extended their hours of operation through the holiday shopping period of 2011. It was a trend that was initiated by Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) at the formal start of the shopping period, which this year even preceded Black Friday. Operating managers kept the lights on at select Macy’s (NYSE: M), Toys “R” Us and Old Navy, which is owned by The Gap (NYSE: GPS), among other stores. Clearly, doing so requires additions to the workforce count, which would boost December employment beyond the usual seasonal additions at retailers. However, those extraordinary additions would be quickly let loose post the holidays, and so do not present as strong an economic signal as perhaps some see in the December data.

A portion of the holiday’s temporary additions to the employed pool is also notable in the Transportation and Warehousing segment, where the courier and messenger industry contributed 42,000 of the segment’s 50K in workforce growth in December. UPS (NYSE: UPS) and FedEx (NYSE: FDX) each make public notice of the increase on seasonal demand. With this regular trend well understood by the market, it seems to be overlooking the dynamic change in the creative marketing and operation of the retail industry, which I believe also drove increased workforce counts.

What’s not accounted for in this argument is the 23,000 job increase in manufacturing. I suspect this growth is being driven by the increasing effort in domestic energy production, which is a secular trend and a real driver for ongoing employment. Likewise, the long-term growth in health care has been driven by secular demand on the aging demographics of America, and this would also support manufacturing. I see the mining increase driven by the rising prices of commodities, including gold, silver and rare earth metals. Again, manufacturing is indirectly aided.

Jobs have been created over the course of the year, which is reflective of the slowly improving economic environment. There’s no denying that. However, my concern is that new burden lies ahead, driven by deep recession in Europe and related slowing growth in the domestic economies of the emerging markets. Given that the late 2011/ early 2012 market has fed off what has been viewed as a healthy holiday shopping period, I worry about a different reality that could be reported by retailers for the quarter. That reality should reflect leaner profit margins and many earnings shortfalls on the stores’ deep discounting and long hours of operation, as desperate retailers sought any pull possible to lure market share. Thus, I suggest investors take the holiday-relative economic data for what it is, full of noise and distortion.

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.

Mosaic Earnings Should Prove Interesting

2012-01-04T15:46:00.008-05:00

Mosaic (NYSE: MOS) will report earnings after the close of trading Wednesday, and the report portends to be interesting. Furthermore, the forward outlook is likely to be confused by a confluence of market factors contending against one another and the company.

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.

Mosaic Study

When Mosaic reports its results at the close Wednesday, both its quarterly results and forward outlook may confound investors. The stock already took a hit on its announcement that it would cut its output by as much as 250,000 metric tons through the first quarter of 2012. That decline capped off a poor showing for 2011, with MOS shares handing shareholders a 34% loss in value, after adjustment for dividends. However, since the warning, the shares have recovered, closing Tuesday 4.3% higher. So it would appear that capital allocation and technical factors would like to support the shares if the fundamentals will hold up.

Mosaic President and CEO, Jim Prokopanko, stated within the company’s announcement that "Isolated phosphate market spot prices have become disconnected with the underlying agricultural fundamentals. As dealers and distributors focus on the macroeconomic uncertainty and delay purchases for the North American Spring Season, near term supply of phosphate barges on the Mississippi River has exceeded near-term demand. The current spot prices in this market do not reflect our outlook for the business, nor do we think they are sustainable. In response, we have decided to cut planned production by 250,000 tonnes over the next three months."

My concern is that the production cut was driven by pricing that has been short of the company’s forecasts. It’s clear to me that Mosaic has offered investors insight into the quarter it will report on Wednesday evening and/or the guidance it will provide for the forward quarter. If pricing has been short of forecasts, then Mosaic’s profit margins should also fall short and its earnings might miss the analysts’ consensus view as well. However, Mosaic did not offer new earnings guidance alongside this production warning, stating that its results would fall within its guidance range. That said, there remains risk the company might miss Wall Street’s expectation, unless they have been adjusted.

Company’s management seems to me to be engaged in a dangerous game, splitting hairs on a timeline, managing economic value it expects to create no matter, just at a later date. But in a competitive environment, this may be a game best not played. That issue is debatable, given the price parallel movement in the shares of Potash Corp. of Saskatchewan (NYSE: POT) around the Mosaic announcement. It seems the Mosaic team expects to garner the same sales it expected before announcing the production cut, but at prices it sees worthy.

It’s my view that the uncertainty introduced into the equation is not supportive of near-term stock price revival, though if management does come through and preserve and create economic value as it plans, it would later benefit. As a result of the uncertainty increase, and the technical and capital allocation factors that seem in opposition of the fundamental question, I would not enter into a new position heading into this earnings report despite my general favor of the agriculture sector.

This article should interest investors in agricultural plays Mosaic (NYSE: MOS), Monsanto (NYSE: MON), Potash Corp. of Saskatchewan (NYSE: POT), Intrepid Potash Inc. (NYSE: IPI), Deere (NYSE: DE), Caterpillar (NYSE: CAT) and others.

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 Coming Stock Apocalypse

2012-01-04T13:40:00.007-05:00

Doomsday, Dec 21st 2012, may be almost a year away according to the Mayan calendar, but catastrophic downside for stock market indices is likely more imminent. Even in this Presidential election year, a return to March 2009 Bear Market lows is a definite possibility. Perhaps the only question is... when?

A Technical View

Against a backdrop of slowing growth and looming debt crises, both in the U.S. and abroad, stock valuations appear to be suspect:

Based on current forecasts, U.S. debt will likely eclipse GDP in 2012 even as economic growth slows in the United States. Monetary and fiscal policies are unlikely to be supportive in the current environment;

Bloomberg reports that over $200B in European debt will come due in the first quarter of 2012 and that the Euro Zone will likely enter recession;

Morgan Stanley has recently revised growth forecasts in emerging markets downward from 6.1% to 5.7%. Even that growth prediction is contingent upon supportive policy decisions from the U.S. and Europe.

Technical analysis also suggests that downside will resume early in 2012. Elliot Wave Theory identifies the current S&P 500 price pattern as the onset of intermediate Wave 3 down (see Figure 1 below). By definition, Wave 3 down includes the largest price move in a five-wave pattern. This would imply a downside target of roughly 950 or less for this wave movement alone.

From the chart in Figure 1, constructed at author's submission of article on January 1st, we can also observe the following:

Key resistance for the S&P is at the October high of 1292 with key support at the December 20th low of 1242;

The 50 day moving average remains below the 200 day moving average; note that this is the so-called “death-cross,” which some treat as the defining indicator for bear market conditions;

Index closing prices are still hovering near the benchmark 200-day moving average;

Daily Stochastics show that the S&P 500 is currently overbought as a result of the recent but muted “Santa Clause” rally;

Current price formation is that of a rising bearish wedge.

Any further upside rally in early 2012 should be contained in both price and duration. If prices fall below 1242 without reaching fresh highs, wave 3 down has already begun. Instead, a definitive break above resistance at 1292 would suggest an alternate wave count and could ultimately lead prices as high as 1350 before wave 3 down begins.

Should the rally continue, this final upward move may also foster conditions for a second, confirming “Hindenburg Omen.” The first instance of the indicator was observed on December 19th 2011. A second observation within a month would provide very reliable foreboding.

In any case, Greek readers should consider taking trading profits from this recent rally to avoid the coming "stock-apocalypse."

Disclosure: I have no position currently, however, I intend to sell (short) S&P futures at 1275.50 or higher.

Article should interest investors in 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.

Stocks Gained on Data Tuesday but Questions Remain

2012-01-04T13:11:00.001-05:00

Stocks enjoyed lift Tuesday, reportedly on positive news about emerging market manufacturing, with the Dow rising 1.5% on the first trading day of 2012. Chinese and Indian Purchasing Managers Indexes improved in December. I have to raise concern here, though, because the improvement in the Chinese measure was minimal and data out of Europe proved less than enthusing.

Questions Remain for Stocks

A European manufacturing gauge surveying purchasing managers across the 17 member euro area improved in December to 46.9, from 46.4, but continued to show economic contraction while sitting below the 50 mark. The Chinese PMI measure only improved to 50.3 from 49. An Indian PMI measure added support though, as it indicated Indian activity was more significantly improved; the Indian PMI Index rose to 54.2, from 51 in November.

The international news was enough for the market to rise into the American manufacturing data release at 10:00 AM. The Institute for Supply Management (ISM) reported its Manufacturing Index for the month of December gained to 53.9, ahead of the consensus view for a reading of 53.2, according to Bloomberg’s survey. The figure also showed an improved state over November’s index reading of 52.7. I’m still not enthused though, as I look for things to get worse here in 2012, with Europe closing somewhat to U.S. exports. Still, American industrials shares were higher on the day, with the Industrial Select Sector SPDR (NYSE: XLI) up over 2%, and major manufacturers General Electric (NYSE: GE) up 2.5% and Caterpillar (NYSE: CAT) up 3.7%.

Construction Spending data only offered further support for the rally, as it was reported 1.2% higher in November, exceeding economists’ expectations for a 0.5% increase. However, this figure benefited from a revision to the prior month from an increase of 0.8% initially reported to a decrease of 0.2%. There has been an increase in multi-family home construction, which could be the main driver of activity in my view. I do not necessarily see this as a good thing, as home ownership goes by the way side. The shares of builders Hovnanian (NYSE: HOV) and PulteGroup (NYSE: PHM) were up 6.9% and 3.3%, respectively.

The business wire also offered the release of the Federal Reserve’s FOMC meeting minutes for its December 13 meeting. Financial shares reacted well on the day and held high after the 2 PM release, with Bank of America (NYSE: BAC) up 4.3%, Wells Fargo (NYSE: WFC) up 3.2% and J.P. Morgan Chase (NYSE: JPM) higher by 5.2%.

The post holiday corporate earnings wire had a handful of names reporting. Landec (Nasdaq: LNDC) posted at the close of trading and was up 6.9% through the day, and is up more than 4% after hours. Progress Software (Nasdaq: PRGS) also posted at the close, and while it was higher by 2.3% during the day, it dropped more than 8% after hours. Team Inc. (Nasdaq: TISI) posted after hours and was up fractionally during the day and 3.5% after hours.

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.

Romney's Iowa Performance Primes Stocks for Gains

2012-01-04T08:15:00.002-05:00

Wednesday’s market movement should be significantly driven by the Iowa Caucus results, and given Mitt Romney’s lead in New Hampshire, the stock market has solid support from politics over the near-term.

If the tally in Iowa were to show an electable, presidential and most importantly, a Wall Street favorite as Iowa’s winner, the market should rally. Thus, the shortfall of Ron Paul, not a likely Wall Street favorite given his views on the Federal Reserve, should find approval from the market. Furthermore, the strong performance of Mitt Romney should start stocks higher on Wednesday. That’s if investors understand the fact that Romney’s position on how to handle “Obamacare” is the one that is most likely to supplant it, given possible Supreme Court cohesion.

Rick Santorum has a chance to perform decently through the national primary process and his speech Tuesday night was moving, but it appears Romney has a better chance in the general election. Look for stocks to support the GOP direction, if the Street gets Romney’s wise health care strategy.

This article should interest investors in The New York Times (NYSE: NYT), Gannett Co. (NYSE: GCI), A.H. Belo (NYSE: AHC), Daily Journal (NYSE: DJCO), Journal Communications (NYSE: JRN), Lee Enterprises (NYSE: LEE), Media General (NYSE: MEG), E.W. Scripps (NYSE: SSP), McClatchy Co. (NYSE: MNI), The Washington Post (NYSE: WPO), Dex One (Nasdaq: DEXO), Martha Stewart Living (NYSE: MSO), Meredith (NYSE: MDP), Private Media (Nasdaq: PRVT), Reed Elsevier (NYSE: ENL), Reed Elsevier Plc (NYSE: RUK), Dolan Co. (NYSE: DN), Disney (NYSE: DIS), DreamWorks Animation (NYSE: DWA), Cinemark Holdings (NYSE: CNK), Regal Entertainment (NYSE: RGC), RealD (NYSE: RLD), Lions Gate Entertainment (NYSE: LGF), Rentrak (Nasdaq: RENT), Carmike Cinemas (Nasdaq: CKEC), LYFE Communications (OTC: LYFE.OB), New Frontier Media (Nasdaq: NOOF), Public Media Works (OTC: PUBM.OB), Independent Film Development (OTC: IFLM.OB), Point 360 (Nasdaq: PTSX), Seven Arts Pictures (Nasdaq: SAPX), Affinity Medianetworks (OTC: AFFW.OB), Time Warner (NYSE: TWX), News Corp. (Nasdaq: NWSA), Vivendi (Paris: VIV.PA), Liberty Starz Group (Nasdaq: LSTZA), McGraw-Hill (NYSE: MHP), Pearson Plc (NYSE: PSO), John Wiley & Sons (NYSE: JW-A, NYSE: JW-B), Scholastic (Nasdaq: SCHL), Courier (Nasdaq: CRRC), Noah Education (NYSE: NED), Peoples Educational Holdings (Nasdaq: PEDH), Barnes & Noble (NYSE: BKS), Amazon.com (Nasdaq: AMZN) and Books-A-Million (Nasdaq: BAMM).

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

Housing Stocks Lifted by Construction Spending Data

2012-01-04T07:30:00.002-05:00

Construction Spending data was reported Tuesday and was embraced and propagated by real estate agents and housing longs. However, your sometimes hated, typically post-profit loved, and always critically analytical blogger here finds good reason to temper enthusiasm. That said, there are interesting trends developing in housing and other construction sectors.

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.

Construction Spending Rise

Construction Spending was reported 1.2% higher in November, exceeding economists’ expectations for a 0.5% increase. “Woo hoo,” exclaimed the once high flying mortgage broker now working at Home Depot (NYSE: HD) in order to make the electric bill. “Alright,” declared the Ryland Group (NYSE: RYL) sales representative who’s hours have been cut to part-time, and who delivers pizza on the side. “Jump on it,” announced the reporter/stock-picker whose ratings climb on sensationalism.

Yours truly, however, has another view, and considering the unbiased nature of that view, it might be worth noting. Taking a closer look at the economic report produced by the U.S. Census Bureau Tuesday, we find that the growth reported for November benefited tremendously from a revision to the prior month result. Initially noted for 0.8% growth, October’s construction spending was revised significantly downward, now showing a 0.2% decrease in activity. Well, when you cut the base of your growth calculation, you are certain to get better growth than what economists based their forecasts upon.

Now, the shares of homebuilders rallied significantly on the news, with builders Hovnanian (NYSE: HOV) and PulteGroup (NYSE: PHM) jumping 6.9% and 3.3%, respectively. K.B. Home (NYSE: KBH) climbed 3%, while D.R. Horton (NYSE: DHI) and Toll Brothers (NYSE: TOL) rose 2.9% each. Beazer (NYSE: BZH) rose 2.4% and Lennar (NYSE: LEN) edged higher 1.2%.

In the past I’ve noted multi-family home growth, and have warned that it is not a good sign for the economy to generate a nation full of Pottersville renter suckers. However, this report shows good growth in single-family home construction, which was up 1.5% in November, though on a seasonally adjusted basis. In fact, looking at the trend of the past five months we see a generally improving market.

Eventually, new home construction was going to have to improve, driven by lack of supply after a period lasting so long with so little new construction. The population continues to grow, hard working immigrants enter the market on job offers, and home demand creeps higher. What has kept this natural driver from making an impact for so long has been the usual suspects: the foreclosure overhang of existing homes for sale cheaper than new homes; tight lending standards keeping once approvable buyers out of the market; plus a good number of more recent buyers sitting on underwater mortgages. Eventually, though this was going to be absorbed, and perhaps we are starting to see some of that finally. My concern of late, which has affected my view for housing, is a macroeconomic stumbling block I see ahead driving new recession and holding up a housing recovery.

Multi-family construction also increased 1.3% in November, and so Potter’s slums continue to find new suckers. The five-month trend for the multi-family segment is also one depicting increasing demand, though in a less fluid manner. On a year-to-year basis, new single family home construction was up 2.5%, while multi-family projects were up 4.1%. It’s here where you can more clearly see the damage to home ownership in this difficult economic hangover and the beneficiary, the multi-family segment.

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.

2012 Wake Up Call this Week

2012-01-03T15:35:00.001-05:00

Welcome 2012, as the first week of trading and economic data contends with important domestic political developments. We’ll finally get our first state decision on a GOP candidate, when Iowa determines who it favors Tuesday. Meanwhile, December Chain Store Sales will be reported this week by retailers, giving us a read on holiday winners and losers. Friday offers the latest monthly check of the unemployment rate, and perhaps a dose of reality for the post party atmosphere.

2012 Wake Up Call

Monday

The Monday of New Year’s weekend is a national holiday, so U.S. securities markets stayed shuttered.

Tuesday

It’s back to business Tuesday on Wall Street. Usually after a three-day holiday, trading volume tends to be mild. However, all sorts of special nuances can come to play on the turn of the calendar, possibly making the day more interesting than you might expect.

The news wire will be dedicated to politics Tuesday, as Iowans Caucus to select their Republican choice for president of the United States.

The business wire will key on the release of the Federal Reserve’s FOMC meeting minutes for its December 13 meeting at 2:00 PM. However, the most important business news of the day will come in two economic releases at 10:00 AM.

The Institute for Supply Management (ISM) will report its Manufacturing Index for the month of December. Economists surveyed by Bloomberg expect the index will have improved ever so slightly, to a mark of 53.2, up from 52.7 in November. Things look to get worse here in 2012, as Europe closes somewhat to U.S. exports.

Getting less attention due to its latest span of insignificance, Construction Spending will be reported for the month of November. Economists surveyed by Bloomberg show an expectation for a 0.5% increase, following a 0.8% increase the month before. There has been an increase in multi-family home construction, which could be the main driver in my view.

The international wire has an American diplomatic tour running across the Asia Pacific region, gauging policy changes across China, Japan and South Korea.

The post holiday corporate earnings wire has confirmed reports coming from Landec (Nasdaq: LNDC), Progress Software (Nasdaq: PRGS) and Team Inc. (Nasdaq: TISI). There are several other earnings releases proposed but not confirmed for the date, including from Commonwealth Bankshares (OTC: CWBS.PK), Defentect Group (OTC: DFTC.PK), Ener1 (OTC: HEVV.PK), General Steel Holdings (NYSE: GSI), Golden Enterprises (Nasdaq: GLDC), Harry and David Holdings (OTC: HARR.PK), MACC Private Equities (OTC: MACC.PK), Orchard Enterprises (Nasdaq: ORCD), PAB Bankshares (OTC: PABK.PK), Realty Finance (OTC: RTYFZ.PK), Rosetta Genomics (Nasdaq: ROSG), Skyline (NYSE: SKY) and Zanett (OTC: ZANE.PK).

Wednesday

This week keys on the regular monthly employment reports, the first of which is due on Wednesday. Challenger Gray & Christmas reports on Announced Job Cuts before the market opens Wednesday. I’m not expecting to see a big number in the holiday heartened period, but I would view a modest result presenting a different state of affairs than I see playing out over a longer term. November’s report showed announced layoffs were down 13% from the same month a year ago.

Monthly Motor Vehicle Sales will be reported for the month of December throughout the day Wednesday. Bloomberg’s survey of economists places the consensus view for a modest increase in the annual rate of domestic sales to 10.5 million vehicles, up from 10.3 million in November. Total motor vehicle sales are seen holding on at an annual rate of 13.6 million in December. According to Barron’s query of analysts, General Motors (NYSE: GM) might post the best monthly growth.

The U.S. government will report on Factory Orders for the month of November at 10:00 AM. A day after the ISM Manufacturing data, it will be interesting to see what this measure of real activity has to say. Already reported, durable goods orders rose 3.8% in November on civilian aircraft demand, and so forecasts for this aggregate measure are for a solid 2.0% increase on average. Factory orders decreased by 0.4% in October.

The latest Weekly Same-Store Sales data from the International Council of Shopping Center (ICSC) will cover the week ending December 31. It should mark a decrease from the pre-Christmas period, but it still includes the very busy post Christmas activity. The pre-Christmas period marked a week-over-week sales increase of 0.9%, and year-to-year increase of 4.5%. Redbook reported that sales rose 4.3% on a year-to-year basis.

On the corporate wire, look for earnings news from Mosaic (NYSE: MOS), National American University Holdings (Nasdaq: NAUH), Resources Connection (Nasdaq: RECN), Sonic (Nasdaq: SONC), UniFirst (NYSE: UNF) and WSI Industries (Nasdaq: WSCI). We may also hear from any of the companies listed as possible reporters for Tuesday (see above).

Thursday

The second of the big monthly employment reports comes due in the premarket Thursday when ADP Private Employment Services reports on Private Nonfarm Payrolls. This estimate of a portion of the government report due Friday is often off the mark, especially in dynamic times like these. Economists see this estimate of private nonfarm payrolls for December increasing 160,000. Bloomberg indicates the range of economists’ forecasts spanning 145K to 220K. In November, private nonfarm payrolls were estimated up by 206K.

Weekly Initial Jobless Claims are also due Thursday. Over recent weeks, this data has been offering enthusing information, however, we have warned investors to look past the holidays for a true trend. Economists see this week’s report covering the Christmas to New Year’s Eve period showing further improvement to 375K, down from 381K the week before.

The only other premarket report for Thursday will come from individual retailers, which report on monthly chain store sales for December Thursday. The data will be aggregated by the close of the day at organizations specializing on the sector, so the morning will only offer the media a chance to misinterpret trend. We warned recently that enthusiasm built by higher sales will likely be deflated by later warnings on earnings due to deep discounting, so buyer beware.

At 9:45 AM ET, catch the latest weekly report on the Bloomberg Consumer Comfort Index. This index got a lift along with all the other confidence data points on holiday glitter. Last week’s report actually showed deterioration to -47.5, as buyers’ remorse already started to sink in post the holidays.

ISM reports on its Non-Manufacturing Index at 10:00 AM ET. In today’s America, this report is far more important than ISM’s Manufacturing Index due to its far greater significance to the domestic economy. Bloomberg’s survey of economists shows a consensus expectation for the index to improve to 53.4, up from 52.0 in November.

Due to the holiday, several reports are pushed back. For instance, the Mortgage Bankers Association will likely report this week on Thursday, though some publishers list the report for Wednesday. We’ve been noting of late that record low mortgage rates have had no effect, partly on the continued hangover of the American economy and also on holiday distraction. Last week’s report showed a 2.6% decrease in the Market Composite Index despite the lowest rates of 2011.

The EIA reports on Petroleum Status Thursday, instead of Wednesday this week. Look for the latest oil inventory data at 11:00 AM. The Natural Gas Report will come due at its usual 10:30 report time.

Overseas, look for France’s government bond auction for a measure of confidence in the nation’s footing. The French IMF Director, Christine Lagarde, will visit South Africa Thursday.

The corporate wire has reports coming from A. Schulman (Nasdaq: SHLM), AEHR Test Systems (Nasdaq: AEHR), AngioDynamics (Nasdaq: ANGO), Apollo Group (Nasdaq: APOL), Constellation Brands (NYSE: STZ), Family Dollar Stores (NYSE: FDO), Franklin Covey (NYSE: FC), Global Payments (NYSE: GPN), Kingtone Wireless Info Solution (Nasdaq: KONE), Monsanto (NYSE: MON), MSC Industrial Direct (NYSE: MSM), RPM International (NYSE: RPM), Ruby Tuesday (NYSE: RT), Saba Software (Nasdaq: SABA), Texas Industries (NYSE: TXI), Worthington Industries (NYSE: WOR) and Xyratex (Nasdaq: XRTX).

Friday

Friday of course will be noted for its monthly Employment Situation Report. Often called the granddaddy of all economic reports, this data point, and the massaging that is done to it by a slew of critical analysts, provides a good measure of the economic situation. Bloomberg’s survey of economists shows the consensus view for slight deterioration in the unemployment rate to 8.7% in December, from the 8.6% rate measured in November. Nonfarm Payrolls are seen marking a 150K increase last month, versus the 120K increase reported in November.

Monster Worldwide (NYSE: MWW) will report its Monster Employment Index (MEI) Friday. This measures monthly online job demand, but the report is a far side note Friday, given the government data.

The American Economic Association is having its annual meeting in Chicago Friday, while Boston Fed President Eric Rosengren addresses a trade association in Hartford. Economists will have new material to discuss, given the jobs data. On Saturday, St. Louis Fed President James Bullard addresses the Korean American Economic Association in Chicago.

Autodesk (Nasdaq: ADSK) has a shareholder meeting scheduled Friday. The EPS list includes AZZ Inc. (NYSE: AZZ), Commercial Metals (NYSE: CMC), Greenbrier (NYSE: GBX), IHS Inc. (NYSE: IHS), PriceSmart (Nasdaq: PSMT) and Robbins & Myers (NYSE: RBN).

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.

Consumers Still on Suicide Watch

2011-12-29T13:52:00.002-05:00

Most of the tally-taking of the holiday shopping season is reporting a joyous occasion marked by the revival of the consumer. This may have been evidenced by the Conference Board’s December reading of its Consumer Confidence Index Tuesday, as it rose to near a post-recession peak. However, I suggest you take a closer look, because you’ll see that the situation remains bleak.

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: XRT, NYSE: WMT, NYSE: PIR, NYSE: ETH, Nasdaq: HOFT, NYSE: HD, NYSE: LOW, Nasdaq: AAPL, NYSE: BBY, NYSE: LTD, NYSE: CHS, NYSE: ANN, NYSE: GPS, NYSE: M, NYSE: JCP, NYSE: JWN, NYSE: TJX, NYSE: KSS, Nasdaq: COST, NYSE: TGT, NYSE: WMT, Nasdaq: WTSLA, Nasdaq: HOTT, NYSE: AEO, NYSE: ARO, NYSE: ANF, NYSE: SAK, NYSE: TIF, NYSE: TLB, NYSE: LL, Nasdaq: BLDR, NYSE: FO, NYSE: LEG, NYSE: TPX, NYSE: AYI, NYSE: LZB, Nasdaq: SCSS, NYSE: ZZ, NYSE: FBN, NYSE: NTZ, Nasdaq: SHLD, NYSE: DDS, Nasdaq: BONT, Nasdaq: CPWM, Nasdaq: BKRS, Nasdaq: BEBE, NYSE: BKE, Nasdaq: CACH, Nasdaq: CMRG, Nasdaq: CATO, NYSE: CBK, Nasdaq: CTRN, NYSE: PSS, Nasdaq: DEST, Nasdaq: DBRN, NYSE: DSW, Nasdaq: FINL, NYSE: FL, Nasdaq: GYMB, NYSE: GES, NYSE: JCG, NYSE: JNY, Nasdaq: JOSB, NYSE: NWY, NYSE: JWN, NYSE: MW, Nasdaq: SYMS, Nasdaq: PLCE.

Consumer Suicide Watch

At 64.5, the Consumer Confidence Index was up a bunch from November’s 55.2 mark. November, not coincidentally, saw the start of holiday shopping deals and also a 15 point surge from October’s 40.9 depressed state. So, it appears consumers’ pseudo-drunken state was the sole source of satisfaction. The same driver was likely behind the general rise in retailer shares over the last half of the year, but we have a warning about that as well, entitled, Sell Consumer Stocks Now, or something like that. Let’s be clear, an index reading 64.5 here does not mark a happy state of affairs, just a better state sadness.

Even Lynn Franco, the Director of the Conference Board Research Center, warned, ”While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes.” I still see mostly bad attitudes where I look. For instance, the Conference Board reports that the number of those surveyed who thought business conditions were good improved all the way up to 16.6%. Those who said business conditions were poor measured a far greater number, at 33.9%, but that was up from 38% the month before. Is this really good news?

Get this, those claiming jobs were plentiful improved to as high as 6.7%, way up from 5.6%. Meanwhile, those who felt like finding employment was difficult in December measured 41.8%, better than November’s 43%. Merry Christmas? Is this really a reason to spread holiday cheer by spending scarce dollars?

Most of the month’s confidence gains came in the expectations portion of the survey. In the past, I’ve warned that investing on this is like putting your money behind a hope and a prayer. Now, I’m the religious sort, but I tend to like to see some evidence of opportunity before investing on it. In the past, confidence gains driven by expectations have been proven easily deflated.

This latest measurement showed the Expectations Index rose to 76.4, up from 66.4. Take note now that the Present Situation Index measured a much lower 46.7, though up from 38.3. Those surveyed who saw business conditions improving over the next six months only increased to 16.7%, up from 13.7%. These gains from the prior month are what you are betting on if you invest on the basis of this month’s data. As you can see, the current state of affairs remains depressed. Of those surveyed, those anticipating improved job opportunities in the months ahead gained to just 13.3%, but that was up from 12.4%. Those who expected fewer jobs numbered a greater 20.2%, but that was improved from 23.8%.

The details of these reports are important, and it remains my pleasure to dissect the data and present it to you in easy reading form so that you may make informed investment decisions based on more than the porous reports of the traffic seeking popular press. The headlines of late have been preoccupied with the apparent positive shift in attitudes and lift in consumer spending, but I still see this economy on suicide watch.

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.

Recession and Strategic Real Estate

2011-12-27T13:44:00.002-05:00

No alarm goes off when the economy enters a recession; there is no bell or bright flashing red light. Rather, it is stealthy and silent; activity slows imperceptibly at first and then gathers momentum at which point it is generally too late to make portfolio changes and preparations. As a point, the “Great Recession' is believed to have started in December of 2007, two months before the Dow hit its all-time high of 14,164 on October 9th, 2007. In my opinion, a recession is coming; a deep, nasty, global recession that will affect all corners of the business globe. It may already have started.

Relative tickers: NYSE: ACC, Nasdaq: AGNC, NYSE: AIV, Nasdaq: AMTG, NYSE: ARR, NYSE: AEC, NYSE: AVB, NYSE: BRE, NYSE: CPT, NYSE: CCG, NYSE: CLP, NYSE: CYS, NYSE: EDR, NYSE: ELS, NYSE: EQR, NYSE: ESS, NYSE: HTS, NYSE: HME, OTC: MRTI.PK, NYSE: MAA, Nasdaq: NYMT, NYSE: PMT, NYSE: PPS, NYSE: SNH, NYSE: SUI, NYSE: TWO and NYSE: UDR.

Rental Property Investment Against Recession

If, as I suspect, a recession has indeed started, it will be the first in memory that was not induced and controlled by the Federal Reserve. Typically, the Federal Reserve would monitor business activity and would raise interest rates to dampen an economic expansion and prevent an outbreak of inflation; money supply was withdrawn, and eventually the combination of increasingly higher rates and reduced money supply would contract the economy; the result was a recession. When the economy had cooled, rates were lowered, liquidity restored, and the economy successfully recovered.

This time it is very different. The Federal Reserve is pouring liquidity into the system and rates have been dropped to near zero with nowhere to go; the Federal Reserve is not in control of this Recession. This will be a debt driven recession and there is no recent experience with which to compare the outcome. Further, unemployment in the beginning of a typical recession is generally low starting from an expanding business climate. This may be the first time unemployment will start into a recession as high as 9% nationally. As the slowdown progresses, more and more workers will lose their jobs and unemployment may reach as high as the mid-teens.

Recessions feed upon themselves; business activity slows, which affects incomes from employment. The stock market declines which affects income from capital gains and sometimes dividends. Prices for commodities and finished goods decline leading Master Limited Partnerships (MLP’s) to lower income. Interest rates are near zero so income from CD’s and Money Markets are inconsequential and Treasuries yield little. But rates may even decline from here, so capital gains may be achieved in fixed income investments, but with very little income.

Revenue to pay the bills becomes paramount to surviving an economic slowdown. Reserves are to be used as a last resort, as depleted savings are difficult to replenish. Even in a severe recession, most people are still working. In the Great Depression, unemployment reached as high as 25%; that meant 75% were still employed. The situation becomes dire for those out of work as jobs become more and more scarce and precious. Basic needs still exist, and so industries providing food, shelter, health care, and energy may still deliver returns. If the recession of 2008-2009 can be used as a guide, Strategic Real Estate may also be a safety net.

In the beginning of the last recession in early 2008, rental rates started to decline as unsold properties were forced into the rental pool, adding to the supply. Further, construction workers and undocumented laborers left the construction sector and searched for work elsewhere compounding the vacancy factor. The decline was limited; without additional new construction, within 6-9 months, the supply started to be absorbed and currently the inventory of available rental properties is tight. Rates declined about 15% initially, but the decline was mitigated by an offset in insurance rates, property taxes, and repair costs. Within two years, the rental rates were recovering.

Every recession is different. However, as a primary need, residential rentals may provide a consistent source of income. With rates at historic lows and prices still not recovered from the devastation of the collapse, cash flows have been excellent, with typical returns in the 5-9% range. If current policy continues prohibiting former home owners that have liquidated properties via the short sale process or through foreclosure from purchasing another home for at least 2-4 years, a constant supply of new long-term tenants is assured. Strategically purchased cash flow producing properties will benefit the investor with consistent monthly income and potential capital gains as the economy eventually transitions from recession to recovery. Rental property would also provide a shield of protection should a recession provide an opportunity for the Federal Reserve to flood the economy with unprecedented capital to move the environment from deflation to inflation, and maybe hyper-inflation. Furthermore, deflation is mitigated by the income enhancing properties of a basic needs investment.

There is still time to prepare; a prudent investor can protect his portfolio by limiting exposure to traditional risky assets, and adding to currency equivalents like gold and silver. Also, negatively correlated ETF’s can be used to mitigate a possible downturn, and income enhancers such as basic rentals can be acquired to provide monthly income streams. In our view, a portion of a diversified portfolio should benefit if it were to be allocated to Strategic Real Estate of the sort we suggest here. Any non-cash flowing or underwater property owned by the investor needs to be reviewed, and we believe any property that cannot be justified for its investment potential needs to be liquidated immediately!

Consult your licensed financial advisor of good reputation and integrity before making investment decisions, as a good advisor will learn your individual situation, needs and current exposure, and help find the best route forward for each individual as a result.

This article should interest investors in residential REIT stocks like American Campus Communities (NYSE: ACC), American Capital Agency (Nasdaq: AGNC), Apartment Investment and Management (NYSE: AIV), Apollo Residential Mortgage (Nasdaq: AMTG), ARMOUR Residential REIT (NYSE: ARR), Associated Estates Realty (NYSE: AEC), AvalonBay Communities (NYSE: AVB), BRE Properties (NYSE: BRE), Camden Property Trust (NYSE: CPT), Campus Crest Communities (NYSE: CCG), Colonial Properties Trust (NYSE: CLP), CYS Investments (NYSE: CYS), Education Realty Trust (NYSE: EDR), Equity LifeStyle Properties (NYSE: ELS), Equity Residential (NYSE: EQR), Essex Property Trust (NYSE: ESS), Hatteras Financial (NYSE: HTS), Home Properties (NYSE: HME), Maxus Realty Trust (OTC: MRTI.PK), Mid-America Apartment Communities (NYSE: MAA), New York Mortgage Trust (Nasdaq: NYMT), PennyMac Mortgage Investment Trust (NYSE: PMT), Post Properties (NYSE: PPS), Senior Housing Properties Trust (NYSE: SNH), Sun Communities (NYSE: SUI), Two Harbors Investment (NYSE: TWO) and UDR Inc. (NYSE: UDR).

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.

Ho Ho Humbug to your Labor Data Display

2011-12-22T19:07:00.002-05:00

I said it last week and I reiterate it today. Ho ho humbug on Jobless Claims! Yet again, the popular press and mainstream business channels pumped the holiday cheer for weekly unemployment benefits. Still, what I suspect my colleagues missed, probably due to too much eggnog over lunch, was that it’s the week before Christmas… and all through the house, nobody is getting fired, except for maybe the mousy little receptionist.

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: RHI, NYSE: KFY, NYSE: MAN, NYSE: MWW, Nasdaq: KELYA, Nasdaq: JOBS, NYSE: JOB, Nasdaq: CECO, Nasdaq: PAYX, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, OTC: ASRG.OB, OTC: MCTH.OB, OTC: IGEN.OB, OTC: STJO.OB, OTC: TNUS.OB, Nasdaq: TSTF, OTC: STTH.PK, OTC: PSRU.OB, OTC: CRRS.OB, NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, 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, NYSE: DE, NYSE: TIF, NYSE: CO, NYSE: FRO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Ho Ho Humbug!

Weekly Jobless Claims for the week ending December 17 were reported down another 4,000 to 364K. That was off the prior week’s revised figure, which posted marked improvement. However, we noted last week that the holiday season likely played a role in the improvement despite seasonal adjustments. And we noted then, and reiterate now, that even if the labor market were improving, the economic outlook is poised to undermine it once again.

Perhaps because we’ve been scribbling longer than many of the grunts reporting on the subject on Thursday, or maybe just because we care if we’re right or wrong, we noted that this sentimental benefit related to the holiday season existed last year as well. If you’ll recall, the labor market still languished in 2011, and that was during a period of supposed economic growth.

That said, the four-week moving average of jobless claims improved by 8,000 through the period, to 380,250. Again though, the marked improvement from the prior week period combined with the continuation of lower claims levels this week, were the driver. There’s no long-term trend here yet, and I suggest traders wait until mid-January to start buying into a labor market inflection point. Otherwise, ye merry gentlemen may find all your gifts have been lifted by wiser men than ye.

The other great farce found in this regular report is the continuing claims data. This time covering the period ending December 10 (a week lagged), insured unemployment improved by a tenth of a percent to 2.8%. That accounted for 3,546,000 people and an improvement of 79K.

Still, the most unbelievable of the data is in the reported insured unemployment under all programs line, which includes the benefits extension program. According to the DOL, for the period ending December 3, the total number of people claiming benefits in all programs improved by 299,738 and now includes 7,149,769 Americans. This figure in particular has been fluctuating wildly over recent weeks and is highly suspect in my view. If there truly is a drop-off in the number fitting into this poor souls’ pool, I expect it is more likely due to their falling out of the workforce or overrunning their 99 weeks, rather than their finding jobs.

While I probably should feel a little sorry for raining on the holiday party, I in fact do enjoy playing the role of the Grinch here this year. So to all the little Whos in Whoville, I say your joy is unfounded! As a result, any investment flurry inspired by it is confounded! Ho ho humbug to your labor data display.

Article should interest investors in 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), 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), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), 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), 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).

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

Housing Starts for the Suckers in Pottersville

2011-12-21T10:00:00.005-05:00

The popular press, radio and television media celebrated the “strong housing starts” reported for November Tuesday. The shares of homebuilders had a good time too, with the SPDR S&P Homebuilders (NYSE: XHB) up 5.3%. However, after a look at the report, I say bah humbug! That’s because while housing starts ran at a higher rate, they occurred in a specific segment of the market that I suggest offers few good tidings for the real estate market. It’s a great sign for the likes of Mr. Potter, from It’s a Wonderful Life though.

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.

Housing Starts for the Suckers in Pottersville

Housing Starts rose a strong 9.3% over October’s revised rate and an astounding 24.3% over last year’s sad affair. Building Permits ran at a 5.7% higher rate than in October and posted an impressive 20.7% increase over the prior year period. Yet, Starts at an annual rate of 685K and Permits at a rate of 681K were far less impressive after closer inspection of the data.

The reason for my lack of enthusiasm should be obvious, but is clearly not to an undiscerning majority, nor to investors in Hovnanian (NYSE: HOV), PulteGroup (NYSE: PHM) or Beazer Homes (NYSE: BZH), who all enjoyed double-digit gains Tuesday. However, I expect the gains in homebuilders will prove fleeting. You see, most of the activity occurred in multi-family housing, not in single-family homes. Single-Family Housing Starts only increased 2.3% over October’s rate, to 447K, and Single-Family Home Permits only rose by 1.6% over October’s rate, to 435K.

Multi-family projects could be intended to house renters. A housing start measures the start of construction of a project intended for residential use. The properties do not necessarily need to be presold. Therefore, the 32.2% increase in structures intended to house five or more family units may very likely be for a Pottersville-like purpose, to house the “suckers in Potter’s slums,” from the famed and seasonally appropriate film. We should not be surprised, given today’s higher credit standards, increased levels of unemployment and underemployment, and a population less likely to attain home ownership. This is not something to celebrate, though, not in my view.

Single-family starts were on the rise in the Northeast and the West though, increasing 35.7% and 10.7%, respectively. Single-family starts in the Midwest and the South fell 14.5% and 1.3%, respectively. Multi-family projects were on the sharp rise in both the Northeast and West as well, though, so there appears to perhaps be a housing shortage being filled. It makes sense that distressed property inventory would first be absorbed by the population dense Northeast and West. Generally speaking, this is a development that should be expected, given the length of the period with little construction and the continued growth and maturation of the population. However, it’s too early, and the data is too limited to make such a call.

Besides, with our economic view, and the related stumbling block we see for housing over the near-term, any green shoot that may sprout should be quickly dried out. In conclusion, I’ll hold my excitement for when single-family starts initiate a rising trend, and more importantly, when economic healing drives increased general demand for housing.

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.

magicJack Vocal Tec (Nasdaq: CALL) - The Magic is Back

2011-12-20T14:42:00.002-05:00

Shares of magicJack Vocal Tec (Nasdaq: CALL) were among the market’s leading gainers last Friday, on news of strong fourth quarter sales of the company’s latest Internet telephony device. The shares also got extra lift from a second simultaneous announcement, as the company canceled a dilutive share offering. The unexpected sales provided the needed operating capital in the offering’s stead. Shares of CALL were up 18% on the day, placing the company among the market’s leading gainers.

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: ALSK, NYSE: T, Nasdaq: ATNI, NYSE: BCE, NYSE: CTL, NYSE: CHT, NYSE: CBB, Nasdaq: CNSL, Nasdaq: EONC, Nasdaq: EQIX, Nasdaq: FRP, Nasdaq: FTR, Nasdaq: HTCO, OTC: IAGI.PK, Nasdaq: CALL, Nasdaq: SHEN, Nasdaq: SURW, Nasdaq: TWTC, Nasdaq: UNTK, NYSE: VZ, NYSE: VG, Nasdaq: WWVY, Nasdaq: WIN, Nasdaq: AMCX, Nasdaq: ASCMA, NYSE: CVC, Nasdaq: CHTR, Nasdaq: CMCSA, Nasdaq: CRWN, Nasdaq: DTV, Nasdaq: DISCA, Nasdaq: DISH, Nasdaq: LBTYA, Nasdaq: LNET, NYSE: SJR, Nasdaq: TIVO, Nasdaq: VMED.

See my review of the old magicJack

The Magic is Back

It appears the magic may in fact be back for magicJack (Nasdaq: CALL). The company announced Friday that its latest product, the magicJack Plus, is basically selling like hotcakes (whatever that means), with approximately 365K units sold in the last 30 days. The original magicJack device needed to be plugged into a computer connected to the internet to make use of it, but the magicJack Plus connects directly into the internet line. Thus, you do not have to keep your computer on 24/7 to make or receive phone calls. It’s a major upgrade in technology and utility value, and the price is likewise higher, retailing at $69.95, versus the $39.95 price for the original magicJack.

Because of the strong sales, the company expects to have a cash store of approximately $50 million by next month. Thus, it was able to kill its planned share offering. Not only did it do so, but the company will renew its share repurchase program as well. It’s an interesting shift in capital management that I find telling about the management team’s forecasting prowess. That means that both upside and downside surprises are highly possible in the future as well. Such unreliability and uncertainty likely burdens the company’s valuation a bit.

Internet telephony has been an interesting market to follow. We saw Vonage (NYSE: VG) dive after its high profile IPO in the middle of the last decade. However, Vonage’s product price point probably was not or is not far enough off the major telecoms to stick, in my view. VG shares still rose in sympathy with CALL Friday, up 7.3%, to $2.36. Likewise, Skype, now owned by Microsoft (Nasdaq: MSFT), did well enough but never caught on with the broad populace. Perhaps it was just too early or maybe the tech savvy needed to use it was too much for an older demographic of American citizens. It’s clear, though, that with the evolution of technology usage, Internet telephony will be an easy learn. Meanwhile, magicJack just made it easy enough for even non-tech savvy seniors to use.

Eventually, the Verizon’s (NYSE: VZ), AT&T’s (NYSE: T) and Sprint Nextel’s (NYSE: S) of the world will feel threatened by internet telephony and magicJack, if they aren’t already. I’ve noted that the price difference between Verizon’s independent internet service and internet and telephone service bundle is marginal, leaving me to question whether “the jack” would really offer worthwhile savings given the convenience trade-off of the first model. I suspect Verizon and other internet providers have priced this way for this very reason. You can get cheaper internet service from the big boys of the industry, but you get less bandwidth in return. Now this second product model by magicJack presents a different story, and given that the ability to port your old number has finally arrived, the game may be on.

The important question to ask is what strategy will the telecom giants employ to crush this emerging competition. Well, the big box players are well positioned to do so, given that they control the internet. However, I could see the cable providers, who are also providers of bandwidth, like Time Warner Cable (NYSE: TWC), Cablevision (NYSE: CVC) and Comcast (Nasdaq: CMCSA) having interest in acquiring a magicJack in order to provide a more competitive bundle package against the telecom players’ offerings. Thus, the new magicJack might be more than just a nifty product for a thrifty spender. Its shares and those of similar servicers might find broad appeal one way or another. Given that a recent census poll showed about half of America is poor, and given the number appears to be increasing, even the worst case scenario seems to present an expanding market opportunity.

There’s just one analyst following the company, based on Yahoo Finance data. His EPS estimate for 2012 appears to be $1.83, which puts its P/E ratio at 13.1X as of Friday. While EPS growth looks to approximate 71% in 2012, the long-term growth estimate is 17.5%, again based on Yahoo Finance and its data providers. Based on this thumbnail, the stock would appear undervalued. The question is, can Internet telephony, and more importantly, the MagicJack, really replace standard telephone service? It once seemed unlikely, but there certainly is a market of bargain seekers willing to try it out, and that market is expanding as economic difficulties continue. Meanwhile, the technology just got easier to operate.

I suspect there is untapped value in recurring revenue not currently being maximized. Today, you buy the magicJack and have telephone service all year long, and then are asked to pay the same amount the following year to continue using the service (though the company stretches that revenue across the year). I suspect that an acquirer would create value by raising the monthly charge tied to magicJack usage through the year. So, while lowering the revenue received currently through telephone service provision, they could also add value to the acquired service and position more competitively against the big three telecom providers. I see this as a clear opportunity for the cable industry, but bad news for the savvy consumer now benefiting from his "jack".

The stock’s chart seemed to show market disinterest until volume picked up in 2010. The cure for questions is earnings growth, and earnings visibility is a new development here. As earnings grow now, and with a P/E near single digits, there would be little stopping the share price following earnings per share higher. The company managed to sell 8 million of its original magicJacks® into a market of roughly 100 million households. This newest product is far superior and the economics more attractive. Its appeal can reach a broader span of Americans, in my view. So, I am a short to medium term fan of magicJack shares (Nasdaq: CALL) and recommend them for aggressive, emerging growth and micro to small cap portfolios.

Editor’s Note: This article should interest investors in Alaska Communications Systems Group (Nasdaq: ALSK), AT&T (NYSE: T), Atlantic Tele-Network (Nasdaq: ATNI), BCE Inc. (NYSE: BCE), CenturyLink (NYSE: CTL), Chunghwa Telecom (NYSE: CHT), Cincinnati Bell (NYSE: CBB), Consolidated Communications (Nasdaq: CNSL), eOn Communications (Nasdaq: EONC), Equinix (Nasdaq: EQIX), FairPoint Communications (Nasdaq: FRP), Frontier Communications (Nasdaq: FTR), Hickory Tech (Nasdaq: HTCO), IA Global (OTC: IAGI.PK), magicJack VocalTec (Nasdaq: CALL), Shenandoah Telecommunications (Nasdaq: SHEN), SureWest Communications (Nasdaq: SURW), tw telecom (Nasdaq: TWTC), UniTek Global Services (Nasdaq: UNTK), Verizon (NYSE: VZ), Vonage (NYSE: VG), Warwick Valley Telephone (Nasdaq: WWVY), Windstream Corp. (Nasdaq: WIN), AMC Networks (Nasdaq: AMCX), Ascent Media (Nasdaq: ASCMA), Cablevision (NYSE: CVC), Charter Communications (Nasdaq: CHTR), Comcast (Nasdaq: CMCSA), Crown Media (Nasdaq: CRWN), DIRECTV (Nasdaq: DTV), Discovery Communications (Nasdaq: DISCA), DISH Network (Nasdaq: DISH), Liberty Global (Nasdaq: LBTYA), LodgeNet Interactive (Nasdaq: LNET), Shaw Communications (NYSE: SJR), TiVo (Nasdaq: TIVO) and Virgin Media (Nasdaq: VMED).

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 Successor Cometh

2011-12-20T11:38:00.003-05:00

Today's hottest news links highlighted by the death of Kim Jong Il, and the advent of the Great Successor, Kim Jong Un. You'll also find news of the development of a super-virus by Dutch scientists, the most dangerous in history, and the unfathomable story of its unguarded status. Check out our hand-picked stories here below, found here daily and always interesting.

The Great Successor

Dutch Lab Develops Most Dangerous Virus World has Ever Known, Leaves it Unguarded

House Begins Debating Payroll Tax Cut

Iowa Caucus Faces Hacking Threat

The Christmas Blizzard of 2012

Monday Night Football Blackout and Bomb Threat

China Recognizes Kim Jong Un

Il Under Glass

Housing Sentiment Gains will Prove Fleeting

Housing Starts Jump in November

Wisconsin Scientist Also Develops Dangerous Virus

Euro Finds Footing on Spanish Debt Sale and German Data

Spain’s Blowout Bond Auction

Germany Posts Strong Data

Rising Ingredients Costs Grind General Mills (NYSE: GIS)

ConAgra (NYSE: CAG) Also Beaten by Costs

Japan Picks Lockheed Martin (NYSE: LMT) for Fighter Upgrade

Gold Gains Ground

Jefferies (NYSE: JEF) Profit Drops

Winn-Dixie (Nasdaq: WINN) Sold to Bi-Lo

On-Line Sales Rock the House

Sanctions on Iranian Oil will Impact Europe and Japan

Deutsche Telekom Slams US Regulators (OTC: DTEGY.PK)

Oil Climbs for Second Straight Day

Repsol Buys Back Shares from Troubled Holder (OTC: REPYY.PK)

Navistar Rises on Strong Profit (NYSE: NAV)

Activists Plotting Egypt’s Fall

Sweden Predicts Unchanged Rates

Apple’s Patent Victory Not Expected to have Major Impact (Nasdaq: AAPL)

Arab League Monitors Arriving in Syria

Barney Frank Flaunts his Man Boobs

Payroll Processors Say 2 Month Fix Impossible to Implement

Oakland Port Measures Considered

Carbon Time Bomb Ticks in Arctic

Another Billionaire Joins Space Race

Yahoo! Earnings Calendar

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.

magicJack Product Review

2011-12-19T17:33:00.004-05:00

Review of magicJack

magicJack Rating: Asto!

Ratings Range from Opa! (favorable) to O.K. - Ola Kala (neutral) to Asto! (do without)

Your favorite blogger here was enamored with the idea of a cheaper telephone service, and became a pioneering owner of the magicJack last year. The product served the purpose some of the time, but also produced weird feedback for those on the other end of the line at other times. I found ways around that, discovering that the system worked better if I plugged my phone into the magicJack instead of speaking via the microphone of my laptop. What bothered me most, though, was a broken promise made by the company.

I bought the product partly on the promise that I would be able to transfer my highly coveted 212 NYC area coded number to the system. That promise of “available soon” turned into a year of the same statement, and then a promise of notification once it would become available. I, therefore, never benefited economically speaking from my ownership of the magicJack, as I kept paying for my landline simultaneously. That was not satisfactory, considering I was really happy about the idea of a dirt cheap telephone service to replace the expensive service I hardly ever use anyway.

I won’t be buying the new version of the magicJack based on those broken promises of the past. However, if the magicJack people want to send me a sample of the new model, I will gladly review it here and be thankful for the healing of my experience.

Editor’s Note: This article should interest investors in Alaska Communications Systems Group (Nasdaq: ALSK), AT&T (NYSE: T), Atlantic Tele-Network (Nasdaq: ATNI), BCE Inc. (NYSE: BCE), CenturyLink (NYSE: CTL), Chunghwa Telecom (NYSE: CHT), Cincinnati Bell (NYSE: CBB), Consolidated Communications (Nasdaq: CNSL), eOn Communications (Nasdaq: EONC), Equinix (Nasdaq: EQIX), FairPoint Communications (Nasdaq: FRP), Frontier Communications (Nasdaq: FTR), Hickory Tech (Nasdaq: HTCO), IA Global (OTC: IAGI.PK), magicJack VocalTec (Nasdaq: CALL), Shenandoah Telecommunications (Nasdaq: SHEN), SureWest Communications (Nasdaq: SURW), tw telecom (Nasdaq: TWTC), UniTek Global Services (Nasdaq: UNTK), Verizon (NYSE: VZ), Vonage (NYSE: VG), Warwick Valley Telephone (Nasdaq: WWVY) and Windstream Corp. (Nasdaq: WIN).

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.

Stock Market Outlook Weighed by North Korea, Europe and DC

2011-12-19T06:00:00.003-05:00

The mood was set sour Monday morning in Asia, though a sketchy start still had European shares in the green. North Korean state television reported the death of its leader Kim Jong Il, and considering the age of the leader’s youngest son and expected successor, Kim Jong Un, uncertainty rules today. The NIKKEI 225 Index and Hang Seng Index were down over a full percentage point on those concerns. Last week, Fitch Ratings followed Moody’s (NYSE: MCO) downgrade of Belgium with a warning that it may downgrade the debt ratings of European nations soon. The S&P 500 Index was up 0.3% Friday despite ratings threats, and so American shares may take a different direction than Asia. Still, the North Korean uncertainty dictates a wary market at best. The dollar is stronger against the euro, as capital seeks safety.

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.

Stock Market Outlook

American trading may also take its lead from Washington D.C. Monday. House Majority Leader Boehner said his GOP colleagues would reject the bill that passed the Senate in overwhelming fashion. The bill extends tax policy for two months, allowing Congress to avoid the year-end deadline and take off for the holidays. Depending on how the bill does in the House, we may see the payroll tax and unemployment extension debate run up to Christmas Eve. The uncertainty in Washington is likely to weigh on the tone of trading Monday morning, though I suspect traders expect Congress to come to a deal before the deadline. After all, that is the precedent. However, given the fact that the rhetoric from House Republicans does not match the agreement of the Senate GOP members, there is some question as to whether the New Year will come first. If that happens and taxes rise and unemployment benefit extensions expire, the market will pay a penalty.

Just one relatively insignificant economic data point reaches the wire Monday, with the reporting of the Housing Market Index (HMI). The HMI, produced by the National Association of Home Builders, measures the mood of the home construction industry. The index improved to a mark of 20 in November, mostly on builders’ better though questionable expectations given what appeared an improving housing market. However, given that housing recovery faces new economic threat, and with continued strife around Europe, we suspect there will be little to no more positive change here. Still, builders may not yet see the economic issues we see ahead.

China reported that home prices had fallen in November in 49 of the 70 cities it monitors, compared to the 33 cities showing drops in prices in October. If the Chinese real estate market is about to collapse, global confidence could likewise be completely lost, in my view. I’ll have more to say about China later this week. Other international data reaching the wire Monday includes November unemployment for Hong Kong, November export and import data for Thailand, and October industrial production and retail sales for Colombia.

The global finance wire has a trilateral meeting of U.S., Indian and Japanese representatives in Washington D.C. Some $1.22 billion of Greek debt comes due Monday. The U.K. will respond to its banking commission’s recommendations.

The corporate wire has Russell adding 31 recent IPO offerings to its Global Index, perhaps giving lift to some as index funds add them to holdings. IPO lockup restrictions expire on Vanguard Health Systems (NYSE: VHS). The International Trade Commission will rule on Apple’s (Nasdaq: AAPL) patent case against HTC. Monday’s earnings schedule includes Red Hat (NYSE: RHT), Shiloh Industries (Nasdaq: SHLO), Park Electrochemical (NYSE: PKE), Piedmont Natural Gas (NYSE: PNY) for certain, and possibly from Brooklyn Federal Bancorp (Nasdaq: BFSB), China Direct Industries (Nasdaq: CDII), China Holdings Real Estate (Nasdaq: HGSH), Citizens Community Bancorp (Nasdaq: CZWI), CPI Corp. (NYSE: CPY), CSP Inc. (Nasdaq: CSPI), Dynasil Corp. of America (Nasdaq: DYSL), Emcore (Nasdaq: EMKR), Ennis (NYSE: EBF), Good Times Restaurants (Nasdaq: GTIM), Integrated Electrical Services (Nasdaq: IESC), Jiangbo Pharmaceuticals (OTC: JGBO.PK), MVC Capital (NYSE: MVC), Pansoft (Nasdaq: PSOF), Seanergy Maritime (Nasdaq: SHIP) and VCG Holding (Nasdaq: VCGH).

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.

Recession and the Real Estate Market

2011-12-18T16:05:00.001-05:00

On data as early as September, the Economic Cycle Research Institute (ECRI) has been warning that their Leading Indicators were signaling a new recession. Economic forecasts are notorious for predicting 15 of the last 7 recessions and are unreliable at best. However, ECRI has never issued a false warning and their pronouncement is to be taken seriously; most recently, having called both the beginning and the end of the “Great Recession”. Furthermore, in the summer and early fall of 2010, the economy had slowed dramatically and fears of an informal “double-dip recession” were rampant; ECRI called the slowdown, but refused to predict the US would tip into a recession at that time. Their proprietary forward looking indicators were still dropping as of October 21, 2011 to a minus 10.1, the lowest level since July of 2010 and they are now warning of a global recession. There is a lag from Wall Street to Main Street of about 4-6 months; if Lakshman Acuthan is correct, the stock market will turn down followed by a dramatic slowing in the general economy. At the moment, business activity is still viable and active, but according to ECRI, the US is vulnerable to an economic shock, which could result in an explosive downturn.

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.

Recession and Real Estate

Real estate cannot escape the effects of a downturn in the economy. Even though there is a diversification afforded by the nature of a distinctly different asset class, real estate and housing are still economically sensitive. The past 4 years have removed virtually all of the oversupply of new construction produced in the frantic bubble years, as well as clearing a huge volume of the distressed and lender-owned properties. A new recession will add to shadow inventory and reduce buyer demand as fewer buyers will qualify. Inevitably, this will put downward pressure on recovering real estate prices across the nation.

Nationally, it will be difficult to quantify the decline as areas such as the Dakotas, enjoying the benefits from both oil and agriculture, will feel little distress. Areas where finance and government drive the local economies, such as New York City and Washington DC, may be hard hit as payrolls shrink to adjust to lower revenues. The luxury home market will suffer both from current homeowners’ loss of income and potential buyers’ difficulty in obtaining Jumbo Loans above Fannie Mae (OTC: FMNA.OB) and Freddie Mac (OTC: FMCC.OB) limits, as risk averse lenders raise requirements to shield from potential losses.

Nick Russo of Russ Trading, www.russtrading.com, an investment adviser with an impressive record of insightful predictions including the real estate bubble and the financial meltdown of 2008, recently suggested a 10% decline annually for the next 3 years. Mr. Russo believes a debt driven event is inevitable and may be imminent, with some estimates of $300 trillion of global public debt and the possibility of $700 trillion in derivatives. Mr. Russo further believes the confluence of social fracturing, political polarization, and deteriorating financial factors have created an unsustainable debt load. The “Sand States,” which were devastated by the real estate implosion, may experience less impact, particularly in the financing favored entry level segments, as those areas have already corrected and in some instances over-corrected. Some properties are still selling at a considerable discount to insurance industry estimated replacement costs.

Mr. Nicolas Russo, who is credited with coining the phrase “The Big Rollover”, has advice for the possibility of a prolonged and deep recession:

Keep 3 months worth of expenses in cash; split 50/50 between US Dollars and Canadian Dollars and/or Swiss Francs.
1 year’s worth of expenses in a Short-Term US Treasuries or an ETF such as SHY.
1 year’s worth of expenses in physical gold and silver in 70% and 30% portions.

One’s portfolio should be proportioned:

25% Bonds in Ginnie Mae and Emerging Market Debt, not Long-Term US Treasuries which he believes may be in a bubble.
15% Gold/Silver ETF’s and stocks
25% Strategic Real Estate which would include a personal residence and a Back Door Escape where one’s family may seek refuge if there is social upheaval or chaos. Also included would be cash flow generating discounted residential real estate leveraged judiciously (70% LTV). Mr. Russo warned Real Estate is not as liquid, but represented a value play particularly in the entry level segment.
35% Foreign Commodity, Tangibles, Collectibles, and Oil (Mideast disruption), Pipelines, Natural Gas, Growth & Income Conservative Stocks, Utilities; all designed to enhance income.

One of the recurring themes for mitigating the effects of an economic downturn is cash flow enhancements to provide extra revenue streams from investments in a yield starved environment. Strategic Real Estate composed of discounted rental properties, which are still available, could yield to the passive investor a 5%-7% cash on cash net return. In an environment where 30-year Treasury Bonds are yielding under 3%, Residential Rental Real Estate and Commercial Properties tenanted by stable, long-term tenants, particularly a medical industry related tenant could be terrific investments providing income, capital gains potential, and should a conservative amount of leverage be employed, loan reduction. Although no guarantee of future performance, during the “Great Recession” of 2007-2009, the revenue stream from the Residential Rental Properties tended to hold relatively constant and produced consistent income; the value, however, did decline. This is an investment for a 10-15% allocation of the fixed income portion of a well-diversified portfolio with a time horizon of at least 5 years to allow for the potential economic storm to pass.

An economic downturn may not be inevitable, however, there is still time to take prudent precautions. Should the Federal Reserve continue to add to the monetary system, inflation could ignite, in which case, hard assets such as Real Estate will benefit. Should the economy continue to decline, fewer buyers will qualify causing greater rental demand which will result in consistent income. Badly beaten and devastated Residential Rental Real Estate may prove to be the asset class that protects wealth. Strategic Real Estate should be considered as part of a longer term cash generating investment portfolio. Conversely, properties purchased during the “bubble” years or shortly thereafter, those that are underwater and are cash flow negative, need serious consideration for immediate liquidation. These non-cash flowing properties represent a liability and drag on earnings that may jeopardize a portfolio; the short sale process should be fully utilized. Please consult with your financial advisor.

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.

The Styling News Wire 12-16-11

2011-12-16T12:30:00.001-05:00

The day's stylin news wire highlights the latest of the GOP presidential debates. In the most recent construct, Michelle Bachmann took on Ron Paul's passive stance on Iran, calling it wildly dangerous (and I agree - how about you?). Rick Perry compared himself to Tim Tebow in a bid to be Iowa's most conservative option. Speaking of Iran, Russian officials caught and seized a shipment of radioactive materials which were destined for Iran. All the day's styling news follows.

In Style

Lawmakers Agree on Budget, Work Toward Payroll Tax and Unemployment Agreement

Bachmann Calls Paul’s Passive Position on Iran Wildly Dangerous

RIM Shares Continue Tumult (Nasdaq: RIMM)

How Zynga Got to $9 Billion (Nasdaq: ZNGA)

GOP’s Perry Compares Himself to Tim Tebow

IMF Stirs Fear with 1930s Comparison

Assistant Coach Confesses to Witnessing Sandusky Molesting Boy

U.S. Mayors Note Rise in Poverty and Homelessness

Italy’s Monti Wins Gov’t Confidence Vote

Consumer Prices Up in November

French Launch War of Words Against British

Facebook’s Timeline Going Live on Desktop and Android (Nasdaq: GOOG)

Russia Added to WTO

Former Fannie (OTC: FNMA.OB) and Freddie (OTC: FMCC.OB) Execs Charged with Fraud

Fitch Downgrades Goldman (NYSE: GS), Citigroup (NYSE: C) and BofA (NYSE: BAC)

NY High School Athletes Suspended for Tebowing

Free Shipping Day Could Surpass Cyber Monday

Spanish & Italian Bonds Advance on ECB Demand, Bunds Rise

Landry’s Owner Buys Morton’s (NYSE: MRT)

United Rentals (NYSE: URI) Buys RSC (NYSE: RRR) For $1.9 Billion

Cablevision (NYSE: CVC) Down 15% on Loss of COO

Irish Comeback in Doubt

US Trade War with China over Chicken Feet

National Retail Federation Revises Forecast, Sees Record Year

Gold Prices Stabilize

Russian Customs Seize Iran Bound Custom Materials

Internet Architects Oppose US Anti Piracy Bills

Best Holiday Shopping Deals

Dollar, Yen Fall, Euro Rises

School District Bans Christmas Cookies

Florida Students Flash Rally at Governor’s Mansion

Christopher Hitchens Dead Today

Comet Lovejoy Survives its Close Pass of the Sun

Yahoo! Earnings Calendar

Ironic News 12-15-11

2011-12-15T14:12:00.002-05:00

Today's ironic news highlights our formal departure from Iraq. Ironically, what took roughly ten years might have occurred naturally during this year's Arab Spring and cost us nothing. Weekly Jobless Claims were reported the lowest since May of 2008, but Markos says beware, as the holiday season like played a role. Furthermore, European upheaval should play an important role in our future economic well-being. A census poll showed half of the American population is poor. Enjoy all the day's ironic news here below.

Ironic News

Census Data Shows Half of Americans Poor

U.S. Formally Withdrawals from Iraq

Weekly Jobless Claims at 3-Year Low

Morgan Stanley Slashing 1600 Jobs (NYSE: MS)

Retailers Raise Holiday Outlook

Draghi: Europe on Track

Howard Stern to Judge on America’s Got Talent

Michael Kors (Nasdaq: KORS) Soars in IPO

The European Crisis You’re Not Hearing About

Putin Defends Election Result

Gold Extends Decline

Republican Disconnect with America Evident in Jobs Legislation

Italy Risks Social Explosion

Factory Output Declined Sharply in November

FedEx (NYSE: FDX) Posts Strong Q2

Percentage of Married Couples Lowest in History

Former French President Chirac Found Guilty of Corruption

Bird Kill: Thousands Mistaking Parking Lots for Ponds

Mortgage Rates Touch Record Low

Gingrich Slammed by National Review

Homeless Man Uses Stolen Credit Card for Pedicure

Obama: No Need to Raise Taxes Nor Shut Down Gov’t

European Banks Downgraded (NYSE: UBS)

Brazil Sues Chevron (NYSE: CVX)

Philly Area Manufacturing Improved

Victoria’s Secret Implicated in Child Labor Suit (NYSE: LTD)

Oil Prices Drop

Swiss Franc Extends Gains Over Dollar and Euro

Producer Prices Edge Higher

Zynga IPO on Deck

Yahoo! Earnings Calendar

Today’s Republican Disconnect with America

2011-12-15T08:50:00.002-05:00

I sat up late the other night watching the C-SPAN coverage of the House of Representatives debate on the payroll tax break and unemployment benefit extensions. I was appalled by the Republican positions, and the recurring tone I keep hearing from the party I use to call my own and whose conservative values I continue to agree with. I’m now an independent due to the perversions that have eroded each party’s core message. Economically speaking, I see neither current version of the Republican nor Democratic Party as holding the perfect cure to what ails us. While another article might discuss my concern with the Democratic Party’s embrace and promotion of immoral practices for the sake of personal liberation, this article is focused on the Republican disconnect with America or the great poverty stricken segment of America. This broken rail was once again evidenced in the latest legislative lunacy.

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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Today's Republican Disconnect with America

In case you’ve been caught up in holiday shopping or catching up with work before your holiday vacation, our Congress is currently entangled in a messy legislative debate over the future of the payroll tax cut and unemployment insurance benefits. Basically, last year’s program extensions need to be renewed again this year, or those temporary benefits will expire. If that happens, Americans will face new burdens at a still vulnerable time for our economy.

The Payroll Tax break against Social Security payments would lift that rate back up to 6.2% from its current 4.2% break rate. Your shock is well-founded, as those tax cuts are shorting the same Social Security program that is already handicapped if not doomed. And yes, we are underfunding it even worse than usual today as part of an effort to stimulate spending and the economy. There is, however, a new budget-minded focus within Congress that is seeking ways to fund these cuts. For instance, the savings from the Iraq troop withdrawal have been put forth as one potential source. The Democrats would like to bank those savings against the budget deficit and instead institute a new surtax on those Americans with incomes of more than $1 million. As you may have guessed, the Republican Party opposes any tax increase, even if it be upon those who can afford to offer a helping hand now.

This legislative issue weighs for Americans who are already earning a steady income, though it is surely critical to part-timers with a shortage of fund flows. Another issue at hand could more significantly affect America, as it supports Americans who have no other source of income currently. It is what keeps people housed and from committing crimes of necessity; it is what keeps hope alive.

Unemployment benefits have proven inadequate for the massive pool of long-term unemployed Americans displaced by this deep economic recession and sluggish follow through. With the unemployment rate last listed at 8.6%, though arguably closer to 8.8%, given the drop in workforce count in November, it is clearly not yet time to cut off the unemployment benefit extension program (which takes insured unemployment to 99 weeks). The House Republicans are seeking to pass legislation that will ease coverage to 59 weeks after January 1. Of course, the percentage level of the unemployed more importantly represents about 13.3 million Americans, not including the disenchanted and desperate. Furthermore, the Republican version of aid would reportedly leave more than 3 million Americans high and dry immediately, with no other source of income to make mortgage or rent payments, or basically to survive.

Believe it or not, that’s not where the disconnect ends. You see, Republicans also want to make it harder for those people, who would still qualify, to qualify for unemployment insurance benefits. This obstacle to the critical aid that pays the rent for many who are jobless through little fault of their own would present itself via mandatory drug tests. The argument posed on the floor of the House for this was “to ensure benefit recipients are employable,” because if they are on drugs then they are likely to lose their next job. In other words, they are deemed to have a more important problem that should be addressed first, before our fellow Americans are awarded the insurance benefits they paid for through regular cuts from their weekly pay checks. Don’t forget that we pay directly for unemployment insurance; it’s not an unfunded social program. Next, I suppose, Republicans would ask seniors to pass a drug test to determine whether they should receive their hard-earned social security checks. This is obscene!

However, that’s still not where the lunacy ends. The bill passed by House Republicans, which was doomed to fail in the Senate or by the President’s pen, also calls for the building of the Keystone XL Pipeline, which, oh by the way, I support. As you might have guessed though, that was not in last year’s legislation. Rather, it’s the effort of the GOP to stick an energy action into an employment bill under the premise that it is a job creator. Clearly, the construction of a pipeline would create jobs, whether the tens of thousands or the 100K to 280K long-term total touted by some in the Republican Party, or about 20,000 or so that is more likely immediately. But it is misplaced within this bill. In fact, each particle of this legislation should be independent of one another, for the purpose of clarity and the sake of the American people.

The President and the Democrats were terrified that the House Republicans would pass this bill and then leave town (before the Senate could pass its own version), thus leaving the onus of unemployment benefits on the shoulders of the President and his party. Americans wouldn’t remember the pipeline or the drug test if the Senate voted the bill down or if the President vetoed it as promised. Rather, they would remember that “the Democrats and President Obama killed a critical bill, and thus left unemployed Americans helpless while raising taxes on the rest of us.” So, the Democrats held up the 2012 budget through political means, threatening to shut down the government and probably incite a sovereign rating downgrade, “because the Republicans went home for the holidays and left the nation’s business undone.”

One thing remains clear. The nation’s capitol is still disjointed and has not learned the lesson it should have by the hands of Standard & Poor’s (NYSE: MHP). We cannot afford to leave our fate now in the hands of Fitch or Moody’s (NYSE: MCO), who with S&P, have the power to drive paradigm shift in global confidence in American treasuries and the dollar. It’s about time the rhetoric ended in Washington and our elected representatives quit the political games and got some important work done. Break these bills apart and vote on them individually as they deserve, or at least resolve to form a best fit and get Americans what they need now. Remember, first do no harm!

Please share your opinion via the comment tab below. And let’s have some fun: please use this opportunity to guess who I favor for President in 2012.

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

Wall Street News 12-14-11

2011-12-14T12:52:00.001-05:00

The day's Wall Street news covers all the day's business, including the economic data of the day and related rumblings in Washington. The payroll tax / unemployment extension / Keystone Pipeline / all kinds of nonsense legislative effort looks to make another foolish example of our politicians in D.C., not to mention shut down our government and possibly lead to a devastating downgrade of America's sovereign rating (which should collapse our entire economy if it occurs). Enjoy!

Wall Street News

Political Brinkmanship Threatens Taxes, Benefits and Gov’t

House Defies Obama on the Bill

Time Person of the Year for 2011 is The Protester

The US Flag Burns in Fallujah

Euro Markets Collapse

Oil Prices Decline on OPEC Production Increase

Groupon (Nasdaq: GRPN) Shares Not a Bargain

Postal Service to Delay Closings

Atheists Displace Nativity Scenes in California Park

Wal-Mart Stays Open Through a Stabbing (NYSE: WMT)

Germany Rebuffs Calls for ECB Action Post Summit

Zynga, Michael Kors, Jive (Nasdaq: JIVE) Lead Parade of IPOs

IMF Warns Greece Slipping on Reforms

Is “Belly” the Next Groupon?

Silver Slumps 6% and Gold Lower

Equity Movers Include Joy Global (NYSE: JOY) and Avon (NYSE: AVP)

Another Lousy Day for the Euro

German Party Positioning for Play Against Merkel

More Americans to Travel Over the Holidays

US Economic Growth Seen Brighter in 2012

First Solar (Nasdaq: FSLR) Scaling Back Production and Targeting Unsubsidized Markets

Broadcom Shares (Nasdaq: BRCM) Rise on Upbeat Outlook

Olympus (OTC: OCPNY.PK) Reveals $1 Billion Balance Sheet Hit

Delta Air Sees Solid Profit Growth (NYSE: DAL)

China’s Easing Case Gains Support

Iowa Poll Shows Gingrich THEN Paul THEN Romney

Keep Christ in Christmas Sign Stirs Controversy

Gingrich Aide Fired After Mormon Comments

Iran and Venezuela May have Engaged in Cyber Warfare Against US

Home Sales Miscounted for Years

Petroleum Status Report

US Import and Export Prices Data

Toll Booth Worker Making $100K

Yahoo! Earnings Calendar

BREAKING: Fed's FOMC Monetary Policy Statement

2011-12-13T14:23:00.004-05:00

What follows is a verbatim copy of the Fed's FOMC Monetary Policy Statement, the last of 2011.

Fed's Monetary Policy

Release Date: December 13, 2011

For immediate release
Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but business fixed investment appears to be increasing less rapidly and the housing sector remains depressed. Inflation has moderated since earlier in the year, 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 continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee also decided 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 mid-2013.

The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools to promote a stronger economic recovery 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; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Charles L. Evans, who supported additional policy accommodation at this time.

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

The Day's News Wire 12-13-11

2011-12-13T12:21:00.003-05:00

The day's news wire highlights Iranian rumbling, with war games planned that may include practice of the shutting of the Strait of Hormuz. A high ranking Israeli official added to the day's war rhetoric, stating that Iran needs to decide between attaining a nuclear weapon and its survival. Iranian officials rebutted that if the world sought to undermine stability in the region, than Iran would undermine the stability of the world. European markets came undone for a bit today, on some cautious speak from Angela Merkel. The American markets are awaiting the 2:15 PM FOMC Monetary Policy Statment from the Federal Reserve. All the day's news wire follows, with the hottest stories hand-selected for you, including the day's market moving news.

News Wire

Saudi Arabia Executes 76th Person this Year on Sorcery Charges

Maniac Drops Grenades from Belgium Roof

Merkel Dumps on EU Enthusiasm

Federal Reserve Monetary Policy Statement

Verizon (NYSE: VZ) Alert Text Message Terrified New Jersey Residents

Iran May be Planning to Close the Strait of Hormuz During War Games

Fed May Revise its Zero Rate Policy

Demand High for Spanish Bonds

Greek Finance Minister Says No New Taxes

Baby Develops H1N2 Virus

Another US Drone Crashes

Strange Robotic Probe Surveyed Protesters in Moscow

Best Buy’s Profits Eaten into by Discounts (NYSE: BBY)

Urban Outfitters (Nasdaq: URBN) Surges on Q4 Sales

Retail Sales Growth Fell Short in November

Small Business Optimism Rose in November

Southwest Airlines (NYSE: LUV) Makes Record Boeing Order (NYSE: BA)

Illinois Lawmakers Seek to Send Tax Breaks to Lawmakers

OPEC Likely to Keep Output Steady

Google (Nasdaq: GOOG) Argues Against the Free Speech Kill Switch

DuPont’s Results are Looking Good (NYSE: DD)

Israel: Iran Must Decide Between Bomb and Survival

Morgan Stanley (NYSE: MS) Settles MBIA Suit

Lawmakers Pissed Off by MF Global Comments (OTC: MFGLQ.PK)

The Next EU Flashpoints

Jive Software (Nasdaq: JIVE) an IPO Success Story

8 Siemens (NYSE: SI) Executives Charged with Bribery

Amazon Extends Free Shipping (Nasdaq: AMZN)

Oil Surges on Iran Concern

Business Inventories Up in October

Gold Prices Falter

Europe’s Bank Meltdown will Hit Home

Euro Falls Against the Dollar

Yahoo! Earnings Calendar

Insane News 12-12-11

2011-12-12T14:06:00.004-05:00

The day's insane news wire has Russian billionaire and New Jersey (soon Brooklyn) Nets owner, Mikhail Prokhorov, risking his life to challenge Vladimir Putin for the Russian Premiership. In the States, Mitt Romney challenged Perry on a $10,000 bet on the integrity of each candidate's word. Perry said he wasn't a betting man. European shares are in turmoil today as the rating agencies pour pressure down post summit failure. All the day's insane news follows, hand-selected for your enjoyment.

Insane News 12-12-11

Romney’s Daring Challenge

Occupy Activists Shutting Down West Coast Ports

Russian Billionaire to Challenge Putin for Presidency

The European Divide

Europe Cracks

U.S. Stocks Fall on Moody’s Call (NYSE: MCO)

Intel Lowers its Outlook (Nasdaq: INTC)

Obama’s Take on Wall Street Prosecutions

Tim Tebow, Making God Cool Again

OECD Warns on Growing Global Debt Load

Woman Leaves $13 Million to Pet Cat

Dog Survives 50 Foot Fall on Upper West Side

Obama Meets with Iraqi PM

North Korea Warns Against Christmas Lights

Massacre Could Follow Deadline in Syria

Italy Starts Striking Against Monti’s Austerity

Greece Works to Halve Debt Burden

Greece’s Ill-Advised Austerity Continues to Pain Greeks

Fed Prepares for Quantitative Yakking

Fitch: EU Failed

Pfizer Lifts Dividend 10% (NYSE: PFE)

Euro Wary Investors Turn to Treasuries

Are You Better Off than your Mom and Dad?

IPO Fever

The Week Ahead on the Hill

Is Apple Vulnerable in 2012 (Nasdaq: AAPL)?

Gold Prices Off 3%

Committee Okays Sears (Nasdaq: SHLD) and CME Group (NYSE: CME) Deal

FedEx (NYSE: FDX) Sees Busiest Day in History

Diamond Foods (Nasdaq: DMND) Nuts Squeezed

Martin Marietta (NYSE: MLM) Bids on Vulcan Materials (NYSE: VMC)

Yahoo! Earnings Calendar

Greece's Ill-Advised Austerity Continues to Pain Greeks

2011-12-10T10:42:00.001-05:00

Yet more obvious alarms rang against the false wisdom of austerity this week, though sounding through the deaf ears of Greek and EU politicians. But the fat-headed false prophets will continue squeezing Greeks for as long as they’ll bear it, as creative expansionary economic ideas fail to reach their feta filled brain cavities, apparently the reserve tank for their globular bellies. Some will argue that there is no other way, given the thumb of the IMF and EU slave masters upon us. We argued otherwise in a recent article worth your notation, and an advised reading for those Greek politicians who think they have to eat whatever the troika serves them.

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

Relative tickers: NYSE: NBG, NYSE: OTE, NYSE: CCH, NYSE: TK, NYSE: NM, NYSE: NNA, NYSE: NMM, NYSE: TNP, NYSE: OSG, NYSE: ISH, NYSE: EXM, NYSE: SB, NYSE: SEA, NYSE: GNK, NYSE: DSX, NYSE: DAC, NYSE: TNP, NYSE: SFL, NYSE: NAT, NYSE: SSW, NYSE: GMR, NYSE: DHT, NYSE: MPX, Nasdaq: DRYS, Nasdaq: TOPS, Nasdaq: EGLE, Nasdaq: SINO, Nasdaq: PRGN, NYSE: KSP, Nasdaq: ESEA, Nasdaq: SBLK, Nasdaq: ONAV, Nasdaq: VLCCF, Nasdaq: TBSI, Nasdaq: GLNG, Nasdaq: XSEAX, Nasdaq: ACLI, NYSE: DB, Nasdaq: ITUB, NYSE: STD, NYSE: WBK, NYSE: UBS, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: BAC, NYSE: C, NYSE: GS, NYSE: JPM, NYSE: MS, NYSE: EEA, Nasdaq: VEURX, NYSE: PEF, NYSE: EKH, NYSE: GUR, NYSE: EPV, NYSE: VEA, NYSE: DFE, NYSE: DEB, NYSE: IEV, NYSE: RNE, Nasdaq: SERAX, Nasdaq: SERBX, Nasdaq: FEUFX, Nasdaq: FIEUX, Nasdaq: IERAX, Nasdaq: PBEUX, Nasdaq: UEPIX, Nasdaq: PEUGX, Nasdaq: RYAEX

Greece's Austerity Pains Greeks

This week, Greece reported unemployment at 17.5% for September. That was conspicuously improved from the 18.4% rate posted in August. Given that the data is not seasonally adjusted, you would expect the rate to have risen from the period more notable for tourism. Either Greeks have just got their priorities aligned differently than Americans, and chose to enjoy their time off in August (highly likely), or they’ve migrated throughout Europe in search of work. That would fit the increase in the euro zone unemployment rate for the same period, up to 10.2% in September from 10.1% in August. Perhaps Greece is exporting unemployment, something supported by data that follows here below.

Other economic data reported this week for the third quarter indicate a remarkable drop in economic activity. Obviously, the greatest driving factor for that is the loss of confidence in Greece tied to what seems an increased risk of a disorderly ejection from the euro zone. That same concern has driven long-term Greek debt yields to 32% (on 10-year bonds). The latest economic data showed Investment contracted by 15.2% from last year to 6.5 billion euros; private consumption fell by 5.5% to 33.7 billion euros; public consumption slipped 3.9% to 8.5 billion euros; wholesale turnover disintegrated by 10.9%; and imports fell by 4.3% to 14.2 billion euros. Only exports grew in the third quarter, rising 3.2% to 13.8 billion euros. Though I have to wonder whether exports included unemployed Greeks seeking work or the sales of used furniture and treasured family heirlooms across the border via eBay (Nasdaq: EBAY).

Given the latest economic destruction depicted in the third quarter data, Greece will likely fall short of its expectations for 5.5% GDP contraction this year. According to the Hellenic Statistical Authority (ELSAT), gross domestic product shrank 5% in the third quarter. For the year-to-date, Greece is short some 6.9% against the prior year. Based on a range of analysts’ expectations for 2.5% to 3.5% contraction in Q4, Greece is more likely to show GDP contraction of 6% for the year.

This, of course, means that Greece’s revenue projections are overstated, not to mention undermined by austerity. Therefore, its budget deficit is likely to again prove unsatisfactory to its troika of slave masters. Without a revelation of common sense among politicians, this event should propel the unholy death spiral that torments Greeks further with new impetus for more austerity in 2012. That is unless Greek and European politicians realize what students of the Great Depression already understand clearly, that times of economic strife are precisely wrong for budget controls including higher and/or new taxes. What Greece needs is an extended time span to achieve a better budget. Through a moderate implementation of less aggressive austerity, it could achieve a long lasting improvement that would also be digestible by its populace, and thus feasible.

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.

Crazy Sexy News 12-09-11

2011-12-09T16:00:00.002-05:00

Crazy sexy news today from Europe, as the EU came together and fell a little apart at the same time. The euro region agreed to provide a large amount of capital for its banks, but could not come to agreement on a tighter more fiscally perfect union. That was due to the disagreement of Britain, and a few others. Donald Trump keys this wire as well, given his supposed consideration of dropping the GOP debate he is scheduled to host. That's because several candidates won't participate due to concern that Trump will run in the future as an independent. Indeed, it appears so, given the story posted here. Also, more Americans are choosing pawn shops for holiday shopping, and the naked photos of Lindsay Lohan have been leaked. Enjoy!

Crazy Sexy News

Plan to Fix Europe May Split it

Britain Now Isolated

Stocks Rally on News

Trump May Kill his Debate and Run for President

Consumer Sentiment Improves

”Occupiers” Taking Back their Foreclosed Homes

Bomb Explodes at Italian Tax Office

Moody’s (NYSE: MCO) Downgrades French Banks Societe Generale (OTC: SCGLY.PK), BNP Paribas (OTC: BNPQY.PK), Credit Agricole (OTC: CRARY.PK)

Shopping at Pawn Shops Replaces the Mall

Job Seekers Believe in Santa Claus

Trade Deficit Shrinks for 4th Straight Months

Republicans Want to Cut Unemployment Insurance to Pay for Payroll Tax Cut

Scotland Lashed by 165 MPH Winds

U.S. Army Cuts Begin

Toyota Cuts its Profit View (NYSE: TM)

Lindsay Lohan’s Naked Playboy Photos Leaked

Why the Virginia Tech Shootout?

Putin Sets Trap to Round Up his Opposers

Why to Buy Amazon Shares (Nasdaq: AMZN)

Punt on DuPont (NYSE: DD)

Exxon Mobil (NYSE: XOM) Predicts Surge in Hybrids

AT&T (NYSE: T) Antitrust Case Delayed by Justice Department

Texas Instruments (NYSE: TXN) Struggling

GE (NYSE: GE) Raises its Dividend 13%

Poll Shows Germans and French Believe Euro is Costing them

Wal-Mart (NYSE: WMT) Discloses Internal Investigation

Warren Buffet Names Son as Successor

EU Summit Not Enough to Draw ECB in

Oil Prices Waver

Euro Rises Against Dollar

Conservative Host: Obama Fired the First Class Warfare Shots

S. Korean Developer Plans Skyscraper Resembling Exploding WTC

Yahoo! Earnings Calendar

Job Seekers Believe in Santa Claus

2011-12-08T15:55:00.001-05:00

The last few weeks’ jobless claims data almost had me believing in Santa Claus. The weekly applications for unemployment insurance, filed by those who have recently lost their jobs, have trailed off. It’s enough to lead an economist to recalculate, and certainly enough info to give a savvy market strategist something positive to say to disgruntled investors. But, sadly, it’s all just another fairytale – there is no Santa Claus! Sorry to bust the beginning of your bubble...

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: RHI, NYSE: KFY, NYSE: MAN, NYSE: MWW, Nasdaq: KELYA, Nasdaq: JOBS, NYSE: JOB, Nasdaq: CECO, Nasdaq: PAYX, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, OTC: ASRG.OB, OTC: MCTH.OB, OTC: IGEN.OB, OTC: STJO.OB, OTC: TNUS.OB, Nasdaq: TSTF, OTC: STTH.PK, OTC: PSRU.OB, OTC: CRRS.OB

Believers in Santa Claus

Weekly unemployment claims for the week ending December 3, 2011, declined 23,000; that’s a lot. But take note dear dreamers, as the claims count was off from a revised prior week figure of 404K. Thus, last week’s count that we all also celebrated for its positive trend, was actually up from the prior week’s 396K measurement. The four-week moving average is still short of 400K, sitting now at 393,250, but it’s close enough to be wary, especially given seasonal influences that might not be properly adjusted for these days.

What I just wrote is controversial because the numbers are seasonally adjusted. However, I argue that due to the dynamic current environment and the degree of unemployment and the state of labor, the seasonal adjustment might not be adequately accounting for what may be a larger percentage of unemployed workers suddenly finding employment in the retail sector than is usual over the historical record. Historical adjustments are not usually dynamic; they’re based on the historical trend which smoothes over the spikes and troughs. That’s fine, but where they can go wrong is when they do not account for changes and situations that do not match the historical record, like today’s unusual environment. Without getting too algorithmic on you, I think I’ve made my point without your needing an aspirin as a result.

The Employment Situation Report for November, published last week, showed that the retail sector added 50,000 new employees on net through the month. I suggest that due to the dynamic environment, retailers were likely running on short staff longer into the start of the holiday shopping season, and have hired in bunches of late. Management of inventory is not the only efficiency gained by technological innovation. Indeed, process improvements stretch to workforce control. Now these points made here are something you’ve not likely read anywhere else, but will read time and again in the future. Please take note when you hear financial gurus quote me on the radio and TV, and complain when “The Greek” gets no credit. It’s happened time and again, but it’s not the fame I want, but the following I deserve for ideas like these. Continuing with the thought, some of the folks who might have applied for unemployment benefits probably passed “Now Hiring” signs on their way there and bypassed the heartache.

Looking at the claims report details, we find the Tooth Fairy isn’t real either. The insured unemployment rate improved by two-tenths of a percentage point, to 2.8%, in the week ending November 26 (reported period). However, those of us who inspect the monthly Employment Situation data know that there have been conspicuous deductions to the workforce. In months and years past, we’ve offered some likely reasons for this trend, including depression and despair.

The unemployment pool is so large and so full of long-term jobless Joes that there’s likely an effect created to this data. As we all know, the holidays can be depressing, especially if you’re not employed. Despair can set in, and while the checks are critical to those receiving them, meeting the requirements of the Department of Labor or the Welfare Department can get tiresome for the tortured among us. Now, in case you were not aware due to a lack of a driver’s license (DMV reference for the slow), government employees aren’t always the most compassionate of people, nor efficient. Thus it’s easy to screw up within the convoluted process of collecting government aid. The workforce count cut we’ve seen recently could be due to this effect. We’ve noted it here before in years past and around this time of year as well.

The total number of Americans claiming benefits of some sort, thus including the unemployment extension program, dropped by an astounding 431,307 in the period ending November 19 (reported today). Look, it may be the anniversary of John Lennon’s passing, and while I am a dreamer, I’m still not a believer in these numbers. You can go ahead and categorize labor data with the story of Santa Claus and the Tooth Fairy. I’m a believer no more.

However, I am a fan of this Saint Nicholas.

Article should interest investors in 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), 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), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), 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), 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).

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.

Mayhem News 12-08-11

2011-12-08T13:40:00.003-05:00

Today's mayhem or news has M.F. Global's former boss, John Corzine, confessing before a Congressional panel on where millions upon millions of missing client funds have gone to. Meanwhile, in Europe we have the usual ass-Draghing going on, with the EU looking to flood capital to banks in what appears to me to be a preparation for failure. Otherwise, there would be movement on the eurobond and the financial tying of Europe together at the core of its being. However, Germany is willing to push the financial markets to their limits before committing, which could in fact commit Europe (and Germany) to its demise. Either way, it appears the same end looms.

Mayhem News

GOP Ties Pipeline Construction to Jobs Bill

Deutsche Bank (NYSE: DB) Chief Targeted by Letter Bomb

German Politician Says Downgrade is American Plot (NYSE: MCO)

Iran Shows Film of Downed Drone

Draghi Eases Credit but No Bond Move

Putin, Clinton Trade Blows

Corzine Says he Didn’t Know About the Money (OTC: MFGLQ.PK)

Oil Dips on Economic Issues

Is McDonald’s Recession Proof? (NYSE: MCD)

EU Banks Must Raise $153 Billion

EU May Employ IMF to its Aid

Alec Baldwin’s Online Rant

American Imprisoned for Insulting Thai King

Pujols Signs Blockbuster Deal with Angels

Costco (Nasdaq: COST) Shares Sink on Tighter Margins

IBM (NYSE: IBM) Pays More than SAP (NYSE: SAP) for Cloud Growth

Smithfield Foods (NYSE: SFD) Will Cease Cruel Pig Treatment

Boeing’s (NYSE: BA) Union Fix

How the GOP Got to Newt

Cuomo’s Economic Push

Jobless Claims Count Dips Again

Don’t Allow Consumer Confusion to Confound Your Investment Direction

Wholesale Inventories Rose More than Forecast

Consumer Discomfort Little Changed

MEMC Electronic (NYSE: WFR) to Cut Staff by 20%

Wells Fargo (NYSE: WFC) Settles Muni Rigging Case

Emerging Market Shares Dip on Worries

Bank of England Holds Rates

80 Year Old Jailed for Feeding Ducks

Yahoo! Earnings Calendar

Don't Buy into Consumer Confusion

2011-12-07T12:28:00.010-05:00

Based on the hype of headlines from Black Friday through the holiday weekend and Cyber week, you would think consumers had been surprisingly free-spending of late. As that superficial view stirred my stomach into an acidic storm, I was compelled to take a closer look, plus an antacid tablet.

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 Confusion

Over the course of the last few weeks, we received data on the state of the consumer mindset, on November chain store sales, including the activity through the big bargain days, and motor vehicle sales. If you perused the headlines covering Black Friday and Cyber Monday, you noted so many “records” you might have gotten your old DJ equipment spinning again. It’s my belief that the press on the subject single-handedly stirred the stock market into a reckless rally. Investors bought into a phantom American buyer, while ignoring Fitch’s downgrade of the American outlook and S&P’s cutting of U.S. banks with international exposure and its warnings to France and Germany. The market also blew off a panic-stricken economic warning from the OECD as well. Neither did it mind that the European Union and U.S. Congress look set to stay divided until the end of us all!

The week ago period brought with it the monthly chain store sales data for November. Thomson Reuters reported that same-store sales for stores open for at least a year rose 3.1% in November year-to-year (3.2% based on ICSC data). Surprisingly enough, the growth was only about in line with analysts’ expectations, based on Thomson Reuters’ data. Furthermore, when taking into account population growth, the rate itself is not so impressive. Actually, the more I think about and analyze it, the less impressed I am.

Over the course of the last several years we’ve seen a move of shoppers down the ladder of value, with an increasing portion of America’s spending occurring in discount store chains and even deep discount or “dollar” stores. Indeed, Costco (Nasdaq: COST) noted 9% same-store sales growth for November last week. Wal-Mart (NYSE: WMT) does not report monthly, but we expect that given its decision to stay open on Thanksgiving and to start sales at 10:00 PM, it appears it did relatively well. Looking for shoes, I perused a Wal-Mart store and was surprised to see a passable pair of sneakers selling for just $15. If not for my concerns about long-term mobility and osteoporosis, I may have indulged in some frugal futility. Shoes, however, are a critical tool for a motivated entrepreneur, and cannot be sacrificed for savings.

At the other extreme, the luxury retail market has been recovering since panic eased among the richest of the rich post that March 2009 scare. There was also a brief period around the time Bernie Madoff topped the headlines, in which some of the rich were especially careful not to flaunt their wealth. However, in November, Saks (NYSE: SKS) posted same-store sales growth of 9.3% and Nordstrom saw sales soar 5.6%, each exceeding analysts’ expectations. With securities and alternative investment markets stabilized and much higher off those aforementioned panic-level lows, the rich feel free to spend again.

There’s now a deeper division though between the rich and the poor, leaving the middle ground retailers scrapping for profits. You’ll find department stores sourcing more goods at lower cost and driving more sales via creative marketing. Macy’s (NYSE: M) seems to have gotten ahead, doing well in recent years after a soft patch around the aforementioned economic turmoil. In November, Macy’s, which operates its stores by the same name and upscale brand Bloomingdales, saw same-store sales growth of 4.8%, also above expectations. However, J.C. Penney (NYSE: JCP), which held to its laurels and refrained from Thanksgiving infringement, suffered because of it. Its November same-store sales declined 2.0%. Still, opening early didn’t save Target (NYSE: TGT), which posted November chain store sales growth of just 1.8%, short of expectations. Perhaps the bad publicity around its Thanksgiving Day Grinch game plan and its disgruntled petition-signing employees kept shoppers away.

November’s sales growth may only highlight that shift we’re talking about in the number of shoppers desperate for value. In other words, many shoppers may be done now. They may have filled not only their holiday needs, but may very likely have cured all their current needs. We could very well see that illustrated in a dearth of shopping that could occur through December and into 2012 as a result. The latest ICSC Weekly Same-Store Sales data supports this view, as week-to-week sales dropped a sharp 2.3% in the post Black Friday period.

Analysts are waiting to see how the discounting that drove sales may have impacted profit margins. Also, given the early starting hours at the nation’s discounter, Wal-Mart (NYSE: WMT) and its rival Target (NYSE: TGT), their sales may have actually taken a bite out of economic value, not to mention bitten into the sales of department stores and specialists.

Yet, according to the popular press, consumers are feeling better for some unexplained reason. The most recent Conference Board reporting of Consumer Confidence showed a dramatic improvement, but from dire levels in October. The Board showed its Consumer Confidence Index gained to a mark of 56.0 in November, up from an obscene 40.9 in October. Much of the gains came in future expectations, which jumped to 67.8, from 50.0 in the prior month. I’m always wary of gains that come due to the volatile expectations query, since they are based on hope and prayer. Perhaps the holiday cheer got to some foolish folks, or too much eggnog fogged the view.

The press will point to the improvement in the unemployment rate in November, but half of that superficial gain was driven by a large drop in the workforce. While some speculate that this is due to demographics, or the retirement of our aging population, I say it’s more likely due to the depression of our long-term unemployed. The strict requirements of the check circulators can easily lead a depressed fellow to fall out of favor. Once cut off, he’s out for good, yet just as unemployed as he was the day before.

But motor vehicle sales surged in November, they’ll say, as Toyota (+6.7% NYSE: TM), Chrysler (+45%), GM (+6.9% NYSE: GM), Ford (+13% NYSE: F) and Nissan (+19% OTC: NSANY) reportedly did especially better than last year. Overall, the annual rate of motor vehicle sales was 13.6 million, up just a bit from 13.3 million in October. Domestic vehicle sales ran at an annual rate of 10.3 million, up from October’s 10.1 million pace, but short of expectations for 10.4 million, based on Bloomberg’s survey of experts. Given that interest rates are incredibly low, and the aging of vehicles on the road through the economic slug, I do not see a blockbuster pace of activity here. The improvement is notable, but not so awesome.

In summary, I suggest investors temper their enthusiasm tied to the latest consumer data. Instead, money minders might look at what is unfolding economically speaking across the Atlantic, where 20%+ of U.S. exports are sold. Political gridlock, both in Europe and in the United States, threatens to test the rating agencies, who hold too great a power at this critical juncture. Their untimely threats against European bookends, and their overhanging threat clouding the American sovereign rating, are not just reflections of current reality. They are also determinants of future upheaval. While the markets may rally on appetizing actions taken in Europe, the longer term seems, at least to me, to hold an unsavory entree’ in store. Therefore, take the latest consumer data lightly, and instead look at what might kill those hopeful expectations and spending in the near enough future.

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.

Heaven's Tears

2011-12-06T21:20:00.002-05:00

"Happy name day, my son," my mother had wished me. She had called me at work on December 6th in 1990. She had gone to church on Saint Nicholas' name day. "There look like tears on the Icon of the blessed Holy Mother," she softly added.

I should have put more importance into what she had just said, but didn’t. We only talked for a little while longer. We would see each other at the annual church dance this coming Saturday. My mother was the President of the Philoptochos Society (Friends of the Poor) and I was on the Board of Trustees of the Saints Constantine and Helen Cathedral in Brooklyn Heights. I had been living in Manhattan since 1982, after moving out of my parent’s house in Brooklyn a year after my father had passed away. I had joined the Board of Trustees to keep a promise that I had made to my old Sunday school teacher, Mr. Zymaris. It was his widow, Catherine who had nominated me. I certainly enjoyed attending the majestic Byzantine church where I had received the baptismal sacrament. The board meetings were another matter. They would start late and end late. At times, I would find myself riding the subway at one o’clock in the morning during a weekday. My fellow board members were for the most part a lovable lot. They were also a typical bunch of unorganized Greek men. This next Saturday night I would have been far happier to be walking to a museum or art exhibit than traveling by train to a dance that I’m sure would have music that was too loud as the main feature. That’s why I pay an exorbitant rent for a studio apartment in Manhattan; to take advantage of the infinite cultural opportunities available on this small island. My reluctance to going was overcome by the fact that I would be seeing my mother. I was also one of the co-chairmen for the dance journal and I wanted to see how the publication was received. The community was honoring Nicholas Vassilakos a venerable son of one of the 1913 church founders.

The affair was to be held at the Hollywood Terrace Catering Hall in the Bensonhurst section of Brooklyn. It wasn’t that I was consciously aware of trying to get there late, but I did. I even took the wrong train and ended up having to walk a number of extra blocks. I reflected on the one time that I had thought I saw tears on the countenance of the Virgin Mary. Costas Sklitsis, a perennial board member had asked me to help a young girl of about twelve years old to light a large candle in front of the Holy Mother at the iconostasis. She was about to turn back after lighting the candle that I had placed in the candle stand. For some reason I uttered one word and that was “pray!” She made the sign of the cross after making her supplication. I followed her example and then I found myself transfixed by what I thought were a stream of tears. For what felt like an eternity I examined the beautiful Icon to see if the light was playing a trick on my eyes. It didn’t seem that way but I kept what I saw to myself in hopes that others would see it too. My mother’s conversation had revived the memory.

As I continued my walk, I remembered going by a main thoroughfare, and being unsettled upon noticing that all the stores had metal shutters completely blocking any chance of window viewing. Only a few homes had any light decorations for the upcoming Christmas Holiday.

It was after nine-thirty when I finally entered the floor-to-ceiling glass lobby of the Hollywood Terrace. Gus Trataros, a vice-president on the board, came out of a door and told me that my mother was looking for me. The seating chart had me assigned to table number 12. I entered the darkened dance hall. At first, I was disorientated because of the din. Somehow I managed to find my sister, Toni. She told me that my seat had been given away. I had a sip of a scotch sour given to me by the moonlighting bartender who by strange coincidence happened to have worked with my younger brother Peter at Macy’s Flatbush in the electronics department years before (NYSE: M). I muttered that, “I didn’t need this,” about losing my place.

Then it happened!

There was a commotion on the dance floor behind me and to the right. The music stopped. “Nick, it’s your mother!” I heard the voice of Betty Xanthos say clearly. Betty had also been a President of the Philoptochos Society at one time; she and my mother were best friends for many years.

There was my mother lying on the dance floor not breathing at all. Teddy Nicholoudis, one of the few young members of the church board, immediately started to give her mouth-to-mouth resuscitation. I heard somebody yell that an ambulance was called. I got on my knees and took over from Teddy, trying to breathe life into my mother. We even tore away her blouse and other things, in hopes that, that would help. I was acting by instinct only. At one point I stood up and I could see across the hall to the dais. His Grace Bishop Philotheos appeared as if he was bearing the weight of the world as he offered the most compassionate silent prayer humanly possible. When the ambulance finally came and they were preparing mom for the hospital, I turned to Peter Rogakos. I clutched his arm and I said, “We’re Greeks, we will get through this.” Peter had lost his mother at a very young age and in only a few years his younger brother, George, would die in a construction accident. I also remember that Elias Seremetis handed me a strong drink to brace for the ordeal to come.

Toni and I followed the ambulance to Maimonides Hospital. They admitted our mother in the emergency ward. She hadn’t regained consciousness. We answered the many questions from the attending doctor, letting him know that mom suffered from high blood pressure and that she was taking medication for it. I started calling my brothers and other sister to let them know what had happened. It was a long night. The diagnosis was an aneurysm.

I had been down this road before, with my father. He had a stroke while I was still living in Brooklyn. The day before I had gone fishing and the only thing I caught was a cold. I stayed home from work that day and was awakened by my mother’s cries. “Wake up Stavros, please wake up!” My father was taken to Kings County Hospital. When he came home he was confined to the hospital bed that we had put into the first floor living room. He never really recovered. He lived barely long enough to see his first grandson, Nicholas, who is also my Godson. I thank God to this day that my parents had seven children because you need that many shoulders and even more to help in times of crisis. You fall into a routine of taking turns at their bedside. When my father had his relapse he ended up in Caledonian Hospital. The afternoon of my father’s last day, I was in his room when the nurses chased me out because the monitors that he was hooked up to indicated that something was terribly wrong. He passed away in a matter of minutes. I waited outside the hospital for my mother and prevented her from going up. “Mom, now, he’s with the others, remember him as he was.”

We had many visitors to the room that she shared with two other patients; there was a petite Irish Lady in her nineties that was recovering nicely from a broken hip, and an elderly Orthodox Jewish man that had been on life support for a long time. His devoted daughter constantly attended to him. Two visitors stand out in my memory. Eva Tsikis, she could have been the younger sister that my mother never had. She was also short and feisty just like mom. Eva told me that her daughter, Maria was in a coma for many days and that she had prayed to the Holy Mother for help. Her daughter made a miraculous recovery. One night while I was in the room with Mom a woman wearing a badge entitled, Catholic Charity Visitor, approached mom’s bed. At first I had tried to shoo her away by saying that, “we are not of your faith,” but then I took a second look at her and her nametag.

“Mary Ann McCabe, is that you?”

"Is that Bertha?"

The McCabe’s were our next-door neighbors on East 23rd Street. Mary Ann’s husband Frank was a fireman. Every time I went to Brooklyn to see my mother, I would look at the tree that he had planted in front of his home. It always brought a smile to see that it was gradually growing taller. They had moved out of the neighborhood about ten years ago but somehow kept in touch with everyone. Now, all the neighbors that had left East 23rd Street found out about Mom. We had visits from the Bambara’s, Spencer’s, and Rubinate’s. The Galletes, a family from Haiti that shared a common driveway on the other side of ours was very supportive. It gave me a warm feeling to remember that Dad when he retired took their son Fritz on his first fishing trip out of Sheepshead Bay just like he did for all his seven children. Mom had treated their Daughter Paula to McDonald’s one time (NYSE: MCD). She enjoyed relating that Paula was thoughtful about her choices so as not to have mom spend too much money.

Because of my mother, my brothers had returned to the large house on East 23rd Street. There was Michael from Grand Rapids, Peter from Pennsylvania, and Jimmy from nearby Queens. At that point, only John and Toni were still living at home. My younger sister Elena also had her own apartment in Hoboken, New Jersey.

The next Saturday afternoon before going to the hospital, I first called home for an update on mom’s condition. Jimmy answered the phone and told me to get to the hospital as fast as I could. I didn’t ask for any details because in my heart I didn’t expect my mother to recover. I simply felt that she was going through the same ordeal that her husband had suffered. When I arrived at Maimonides, Peter standing outside my mother’s room met me. “Nick, sit down,” he said while pulling over a worn wooden backed wheelchair used by patients who are somewhat ambulatory, for trips to X-rays or just sitting in the hallway.

“John has also suffered an aneurysm; it happened this morning. They have him in the emergency room now.” Before Peter could finish these words, I had fallen back into the chair, in disbelief. I listened silently as my sisters explained what had happened.

“John was down in the basement bathroom, and was shaving when we heard him cry, ‘Oh no!’ He had collapsed wedging the door shut. Luckily, Jimmy and Michael were home. They almost had to break down the door to get him out. God bless those two Emergency Medical Service women. They at first wanted to transport John to Kings County Hospital because it was the closest. We begged them to bring him here because of mom, and those angels did.”

Saturday night at a city hospital is usually the worst time and place to view humanity. Many of the injuries are the result of people doing things they shouldn’t or wouldn’t normally be doing. A teenage gang member was brought in draped over the shoulder of one of his companions. Within half an hour he was kicking the walls and doors after recovering from an obvious drug overdose. I was grateful when he ran out of the hospital.

When I finally got in to see John in the emergency room bay they had him on a stretcher in the hallway. He was conscious and talking, but his replies were not making any sense. The aneurysm had affected his speech, but his vital signs were stable. I stayed with him until they had finally had a semi private room for him. Father Calivas had been our priest throughout our boyhood at Saints Constantine and Helen. He had given John and his best friend Chris Sofronis each a silver cross for their service as altar boys. Before I went over to Vietnam in 1969, John had given me his cross for protection. I placed it back into his hands before they wheeled him away to his room.

So, while the rest of the world was preparing for Christmas, we were holding a vigil for our mother on the second floor and visiting our brother John on the fourth floor at Maimonides. We were shown every kindness. Many of the Philoptochos ladies came to the hospital. Fay Anton, a long time member, arranged for Bishop Alexios to hold a service with the family members at the church. This pious hierarch led us in a prayer for God’s will.

One Sunday I went to church to light some candles before going to visit mom and John. It was comforting to breathe in the fragrance of incense and wonderful to witness the faith of two millenniums being practiced by the children and grandchildren of immigrants. My quiet reflection reached a new level of peacefulness when I noticed that standing next to Eva Tsikis was her daughter Maria. This was the young girl that I had accompanied to the Icon of the Holy Mother at the iconostasis. Then I knew that all would happen according to God’s plan not that of man.

John had a successful operation to clip the aneurysm. My mother’s condition hadn’t changed. On December the 22nd, the Irish Lady’s son was there to take him home. He gave me the saddest smile of compassion as we parted. As usual, I stood over my mother’s bed for a while to pray and to whisper to her, that I loved her before going home.

The air was crisp, and the sky was clear that early winter night as I waited on the deserted elevated subway station for the long train ride back home. Below me, I could see Hasidic men in their old world dress talking to each other. I didn’t get back to the apartment until late. I had just finished eating some supper when I started to shiver. Across the blank wall I was facing, a shadow moved. It had no form. But, If, I had to give it a description, I would have to say it made me think of a bird alighting on to a tree.

My sister Elena called within five minutes and announced in a tired voice, “mommy has passed away.”

John was progressing, though I have to admit that for the first few days after his operation he had the scars of Frankenstein across his head. We decided that it would be unfair for him not to be told about his mother. We broke the sad news to him as gently as we could. He accepted it quietly.

At that time, Jimmy had the only grandchildren of our parents. That Christmas was shared only by giving gifts to little Nicholas and Christina. We felt that mom would have wanted it that way.

Mom was waked after Christmas. The weather changed; it became windy with a coating of snow covering city streets. Demetra (Sheila) Kioskerides, the church secretary and a convert to the Orthodox Faith, offered a sweet gesture to my mother’s memory. On mom’s lavender colored blouse she had pinned a small golden medallion; World’s #1 Mom. At her funeral, Father Kile was assisted by two other Archimandrites. I am sure that his Grace Bishop Philotheos arranged for this extra expression of respect.

Despite the slippery roads and falling snow, her companions from the Philoptochos Society were very much in evidence. Quite a few ladies also risked the journey to Cypress Hills Cemetery. I remember Eleni Sofronis, Chris’s wife and Stella Nicholoudis, Teddy’s sister were kind enough to pay their respects. At the gravesite, umbrellas were needed to ward off boughs of snow, wind-shaken off the pine tree by her final resting place with her husband, Stavros. It was as if Mother Nature and mom were working together to shorten our time of grieving at the cemetery.

That New Year’s Eve, I went back to my mother’s house on East 23rd Street. John was still in the hospital. 354 East 23rd Street was the Promised Land to my parents. It was their first real home after we moved in 1967 from the railroad flat apartment that we had on Midwood Street. It had eleven rooms, stained glass windows, parquet floors, and a garden in the front and back.

I had read in the New York Times that there was supposed to be a Blue Moon this night (NYSE: NYT). It is named for the second full moon that occurs in the same calendar month. The paper also had explained that the expression, “Once in a Blue Moon,” has come to mean only on rare occasions.

As the midnight hour approached I was sitting at my mother’s favorite place; a sturdy chair with arms, at the end of the dining room table. I had a window view of the back garden. It was a crystal clear night. The full moon was very visible through the barren branches of the old chestnut tree. The stars were like tears in the heavens. I could hear the beginnings of celebrations in the distance. I was about to turn away in despair, but I also noticed something else in that night sky—it was the sky itself.

It was a particular blue, a cobalt blue just like the color of the bottle of perfume that I remember that my mother kept all by itself in the center on the top of her bureau when we lived at Midwood street. My father worked two and sometimes three restaurant jobs to put food on the table for his children. We were going through 12 quarts of milk a day then. On rare occasions, when he didn’t have to work on a Saturday night dad might take mom to a movie on Flatbush Avenue. She would splash herself with this perfume, and its fragrance would remain in the air for a while after they had left together. For the longest time I had thought that An Evening in Paris, must have been very expensive. Toni set me straight one day. “It’s the cheapest stuff at the 5 and 10.” Somehow, someway that thought brought me out of my melancholy mood.

I started to sum up my mother’s life and the intense experiences of recent days. My mom had a father who became fond of drink and an uneducated mother. They took her out of high school. “You’ll get married and will have children; you work in the restaurant until you do.” She was beaten for letting a pot of soup burn because she had become so engrossed in a Zane Grey western novel. She married Stavros when they had less than twenty-five dollars between them. They had seven children in quick succession. She had the courage to throw dirty dishwater on a group of toughs shooting craps beneath our kitchen window on Midwood Street. She had the tenderness to place my feet that were frozen from playing football in the snow to her belly until they were warm again. She loved to dance. Yes, mom was short and even chunky, especially in her later years, but she was so unbelievably graceful when dancing the Greek dances.

My mother was certainly a person in her own right. I remember her zaniness of doing bicycles on her back in her cotton pajamas to the instruction of Jack Lalane on the television. I remember the time I pretended that I didn’t know her. That is when she carried the lit Resurrection Candle in a lantern on the subway after Easter services. She had a “secret vice,” of tucking away Milky Way candy bars in the freezer as a special treat when she needed a pick-up. I can still see the glow in her eyes when she would often relate; “During the Great Depression some big Irishmen from the Democratic Party made sure that all the poor families in the neighborhood had a Thanksgiving Dinner with all the trimmings.” Mom liked to instill her principals; “people judge you by the company you keep,” I think was her favorite.

When I returned from the army in 1970, I started to go to Brooklyn College at night. I first took some liberal arts classes and told mom that I thought that there were some courses that she might enjoy. However, she needed a high school diploma to attend college. She took and passed the G.E.D. exam for high school on her first attempt. The family joke became; that when I was small she would take me to school and now that I was big, I was taking her. She started to be nicknamed “the professor,” by her husband. She kept at it though and when she was in her sixth decade; I went to her cap and gown graduation. I know in my heart that one of her proudest accomplishments was to be elected president of the Philoptochos. Now, she could help others, especially children.

I went outside to the back garden. I looked up at the cobalt blue night sky to the full moon and the stars. Something else about mom came to mind. Countless times as a little boy, as I am sure little children do, I asked her; “mom who do you love the best?” No matter how tired or preoccupied she might be, her answer never wavered.

“I love all my children equally.”

One last time I gazed up at the eternal heavens, before going back inside. God has given us many wondrous gifts, none as precious as the bond between a mother and her children.

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Daily News Articles 12-06-11

2011-12-06T15:43:00.001-05:00

Our daily news articles cover US and global news wires, economic and corporate business topics and all securities markets. Today, S&P's threatened downgrades to its ratings on Germany and France has Europe directed toward "a more perfect" fiscal union. We wonder if it will be perfect, or rather drive perfect correlation and simultaneous demise.

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Greece has More Bargaining Leverage than its Politicians Understand

2011-12-05T14:05:00.003-05:00

When former Greek Prime Minister Papandreou proposed a referendum for the Greek people to decide on whether to accept continued austerity and the “grand barter” agreed to by Greece’s new troika of slave masters, we learned something. As European bond yields went soaring from Spain across to Italy and even up to France, and as European kingpins arms went flailing up into the air in complaint, something became plainly clear. Greece has more bargaining leverage than its politicians understand.

Our founder, Markos Kaminis, 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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Greece has Bargaining Leverage

What is unclear is whether he knew what he was doing or not, but the former Greek PM was ridiculed across the American popular press and across Europe for his ignorant, if not negligent action. Though, we questioned within these pages whether it might be pure genius or simply his soft heart at work behind the untimely and completely unexpected political posture. We also wondered if the respected legend of Greek politics might even be reading our column, considering that we had suggested Greece’s politicians ask Greeks what they wanted just days before Papandreou’s so-called shocking proposal.

How the move will work out for PASOK in February remains unclear, but I would assume the sacrifice of Papandreou will save some seats in Parliament. It even gives PASOK a chance at the premiership, something that was highly improbable otherwise. But more importantly, we should take note of the reaction of Greeks, which was one of introspection; of the markets, which was catastrophic; and of the look in the eyes of European leaders, which was one of fear.

Greeks suddenly had to approach the situation from the perspective of the nation on the whole, for turning down foreign aid and turning away from austerity measures would also lead to Greece’s disorderly exit from the euro zone. That’s not something that even the hardest hit of Greeks are sure would be in Greece’s best interests. The result of this might perhaps lead an unemployed Greek to a café to think deeply about the issue, rather than to start fires at the steps of the Parliament.

The markets were shocked, with debt yields across other at-issue European states soaring just days after all seemed finally set straight. The markets anticipated an even more serious loss of confidence in the European Union and in the euro zone. After all, if the EU could not cure Greece, due to the interests of Greeks, then perhaps the same result would follow in Spain and Italy, and if Italy, then why not also France. That reality set European politicians straight, so to speak, and allowed us to see clearly that the great homeland of our ancestors did not have to just accept whatever proposals the stern troika declared at us. Indeed, Europe has a stake in Greece, and in keeping it intact in the euro zone.

Therefore, Greek politicians have been grossly underestimating their bargaining position with the troika. The constricting austerity measures shoved down the throats of Greeks do not have to be so burdensome to our economic sustenance, nor to growth. We have the power to demand a longer time-line to meet debt level goals and repayment requirements. We can experiment with creative, growth encouraging policies, and ease austerity on our nation to correct its inherent flaws in a manner less disruptive to a way of living embedded in today’s society. Therefore, social upheaval could be mitigated, and Greece could find a way out of this mess with its integrity intact and the finances of its people in existence. I suggest Greek politicians reconsider, and realize that they hold a stronger hand than they’ve been told. They should reweigh the fact that there is a consistency of Greece’s goals with those of the troika, the greatest of which is to keep Greece within the euro zone.

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).

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News Links 12-05-11

2011-12-05T13:35:00.002-05:00

The day's most important news links follow, covering U.S. & world news, and economic, investment & corporate topics of interest. The day's stories highlight the desperate measures of the U.S. Postal Service, the European Union, Vladimir Putin and Iran. Please find the hottest news links here below.

News Links

Keeping the Postal Service Afloat

Merkel, Sarkozy Agree Treaty Should be Rewritten

Fed May Fund Euro Zone through IMF

Monti Takes Austerity Plan to Italian Lawmakers

No Sign Iran Shot Down Drone

Biden Jokes About Bringing Funds with to Bail Out Greece

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Most Important News of the Day 12-02-11

2011-12-02T12:48:00.003-05:00

The most important news of the day highlights the end of a week of rally on the U.S. stock market. The monthly Employment Situation Report for November, published today, showed dramatic unemployment rate improvement. However, the driver of that numerical change is suspect, as a large number of Americans dropped out of the labor force. You'll find that story and all the day's most important news here below.