Congressional Leaders Offer Reassuring Fiscal Statements

A joint press conference that concluded just before noon, featuring Repre- sentatives John Boehner, Harry Reid, Nancy Pelosi and Mitch McConnell, offered hope that a fiscal cliff compromise might be accomplished. The conference was certainly geared toward appeasing populace and market concerns regarding Congressional intent in reaching a mutually acceptable agreement. Thus, stocks should be supported by the news at least heading into the close of trading Friday and possibly through next week, barring other catalysts.

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.

Go Long Over the Short Short-Term

More than a hint of compromise was in the wind as the group congenially addressed the nation. House Speaker Boehner said that some revenues were on the table. House Minority Leader Nancy Pelosi said that some spending cuts were available. Democratic Party Senate Leader Harry Reid said the cornerstones of a deal were in place, and that they intended to close a deal rather than simply pass the buck forward. He added that the deal was a high priority focus, and that representatives were not going to wait until the last day of December, which was a concern of ours. He also noted that they might even work through a portion of the Thanksgiving Day recess, reflecting how important resolving the issue is to them. Finally, Senate Minority Leader McConnell concurred with the statements and closed, giving the public a sense of calm about the issue not previously existent.

Stocks, which had been down after heading into the press conference with low expectations, immediately broke above break-even ground. The SPDR S&P 500 (NYSE: SPY), which was down 5.1% from the election through Thursday November 15, was approaching a half point gain at noon, as was the SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ). Oil is benefiting from the news as well, with the United States Oil (NYSE: USO) security driving up over 1.3% at the hour of scribbling here. Even gold is benefiting from the clarity, and as pressure lessens from its sellers using capital to buy stocks viewed as too cheap. The SPDR Gold Shares (NYSE: GLD) has broken above break-even ground. I offer kudos to the congressional leaders for this expression, because if it is executed upon, it offers support to shares. It at least reverses the near-term downtrend, and so I advise investors to raise risk and remove hedges at least through next week, barring other factors.

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.

Ticking Fiscal Cliff Clock Costing Economy Today

The likelihood of the American economy slipping into economic recession increases with each passing day. We are not okay up until the day tax rates increase and other stimulus disappear. No, rather, because of the stifling situation brought about by Congressional gridlock, businesses have frozen discretionary capital spending plans that are supportive to the economy. In the absence of such spending, economic growth is hampered today and every day heading into January 1st.

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.

Fiscal Cliff

This article is not measuring the impact of falling off the fiscal cliff, which many experts say could drive the economy into recession and most agree will significantly hamper economic growth. Rather, I want to point out that the stifling impact on business plans is affecting the economy today and every single day in which this situation is not mitigated.

Now, let’s not ignore the philosophical differences of opinion with regard to taxes and economic drivers. Republicans and Democrats are not simply protecting constituents, at least not for the most part. They are also seeking to employ economic tactics which they believe will spur economic growth and help balance the budget at the same time. Opinions vary, and the philosophical divide is vast. Where should the threshold dividing the rich and the poor be marked, and at what point or income level does taxation stifle economic growth? What is fair and consistent with the ethos of American capitalism? These are important questions at the root of the argument and so the debate and discussion is at least somewhat just. Still, compromise is the key for our leaders to keep philosophical divide from damaging us all in their efforts to save America.

It is clear by the actions of the stock market that this fiscal cliff issue is important for tomorrow but also for today. The SPDR S&P 500 (NYSE: SPY) is down 7.4% since its September peak, and I expect it will continue downward without resolution to the fiscal cliff issue. The industrials are lower as well, with the SPDR Dow Jones Industrial Average (NYSE: DIA) down 7.1% since its fall peak, and the PowerShares QQQ (Nasdaq: QQQ) is lower 11% from its top mark. The message has been multi-fold, beginning with the realization that corporate earnings season would not support the valuations achieved by stocks on central bank fluffing. The second hit came with the reelection of President Obama, which was clearly a let down to the investment community. And now it is the lock-on focus of investors and businessmen on the critical economic change in store for the close of the year.

Small businessmen were reported to be more optimistic lately, but that was based on a survey taken before the election and likely on the expectation of a different result. Consumers, less sophisticated and sensitive to economic warnings, will react to higher taxes and deteriorated economic conditions should they dawn in 2013. The Consumer Discretionary Select Sector SPDR (NYSE: XLY) is only off its high for the year (trailing 52 weeks) by 5.6%, but retailers are bearing the cost of long-lasting soft economic conditions and tighter competition for fewer dollars. The SPDR S&P Retail (NYSE: XRT) is off by 7.1%, and there is a clear shift in spending accelerating toward discounters like Wal-Mart (NYSE: WMT) and Amazon.com (Nasdaq: AMZN) away from the traditional stores and marketplaces.

In times past, we could look overseas for support to American exports for companies like Caterpillar (NYSE: CAT) and bellwethers like General Electric (NYSE: GE), but Europe is actually deteriorating, not improving. China’s growth is volatile due to its ties to the west, and its data is questionable due to corruption and inadequate reporting. The last thing we need today is a severe disruption to domestic business activity, and so some sort of compromise must be accomplished. In addition, I believe that any support to the budget garnered from revenue generation (taxes) should be cautiously undertaken, limited in reach and focused to avoid damage. It’s not yet time to put broad belts across the waist of the economy, but rather to cure inefficiencies in capital distribution toward economic growth initiatives. I’ll continue to independently cover this critical issue and aspects of the economy for the sake of all Americans, so stay tuned.

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.

America Confident in Romney

Consumer confidence has improved over the course of the last several weeks and months, and I believe one reason for it is traceable to something other than improved employment data. Stocks have held up relatively well through a challenging earnings season as well, and I think the same factor may be at play there. Over the course of the last several months and especially after the presidential debates began, Governor Romney has made inroads and gained in polling points. I believe consumers and investors are enthused about that, based on the trend in confidence measures and also stock prices.

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.



The latest and final Gallup Election Poll shows President Obama ahead among registered voters, though Governor Romney is leading among likely voters. Most importantly, Gallup’s final allocated estimate has Governor Romney getting 50% of the vote and President Obama receiving 49%. Obviously, that does not tell us what the Electoral College will do. Still, Governor Romney has over time gained the attention of prospective voters, and I believe that the various sentiment measures discussed here are somewhat tied to his rise in popularity.

The Conference Board’s Consumer Confidence Index
The Conference Board last reported its Consumer Confidence Index last week, on November 1st. The measure of consumer views improved to 72.2, from 68.4 in September. As has often been the case lately, the index was mostly supported by expectations for the future and not so much the view of the current situation. Because of that divergence, we might say that consumers perhaps anticipate a change in store at the White House. Because of the differences in economic and other philosophy between Governor Romney and President Obama, perception of the presidential election result could influence consumer confidence. There is another perspective to consider as well. Political views could sour the survey, as political adversaries to the incumbent express discontent about the current situation simply because of who is in charge.

NFIB Small Business Optimism Index
The National Federation of Small Business (NFIB) Small Business Optimism Index has followed a similar pattern to the Consumer Confidence Index. It has recovered more recently after a dip just before. It’s been a steadily improving measure since the depths of the Great Recession were reached, but it is still far from reflecting a sanguine situation. In its latest reading for October, the index actually slipped slightly, by 0.1 points to 92.8. That said, small businessmen likely favor Governor Romney on net because of the pressure he may remove with regard to healthcare and also red tape and taxation. It’s an arguable issue as to which candidate helps small business more on a tax basis, depending on what level of income you consider the qualifier to be for a true small business. However, when all issues are taken into account, it seems to me that Governor Romney has more small business support; though I want to stress that this is an assumption on my part.

State Street Investor Confidence Index
Ironically, and certainly adding doubt about the thesis of this report, State Street’s Investor Confidence Index dipped when it was reported last week. But while State Street’s measure of the risk held by institutions dipped dramatically, it was mostly driven by a decline in European interests. In North America, the regional index also dropped, but by a lesser 2.7 points, to 79.0. I believe the index captured the realization of inadequate corporate earnings led by marquee names like Apple (Nasdaq: AAPL), Caterpillar (NYSE: CAT) and others. Even so, stocks, as represented by the SPDR S&P 500 (NYSE: SPY), are only down 3.7% since marking their September 14 closing high.

Let’s See Action
When all is said and done, confidence doesn’t mean a heck of a lot if it’s not followed up by action. We already know that stocks have taken a hit, but have still held up relatively well through the earnings season. Well, that’s as long as you don’t look at the NASDAQ. The PowerShares QQQ (Nasdaq: QQQ) is down 6.8% since September 19. So what about consumers then? Are they backing up confidence with spending?

The answer is “not really,” which is seen in the weekly chain store sales data. The reports from the International Council of Shopping Centers (ICSC) and Redbook show sales hardly edging the rate of inflation on a year-to-year basis. The last Personal Income & Outlays Report showed consumer spending up by 0.8% in September, but that was skewed by higher pricing. The PCE Price Index was up 0.4% month-to-month. The last Retail Sales Report published in mid-October showed retail sales up by a robust 0.9% excluding autos and gasoline. However, we reported that the data was apparently skewed by Apple product introductions.

Wal-Mart (NYSE: WMT) is a barometer for spending because of its important market share in the U.S., but its accuracy is distorted a bit because of the chain’s low price points for shoppers. While we have warned that the stock’s success may not mirror its market share gains, due to its expanded valuation, we understand why it has expanded. Still, we cannot say America is shopping simply because WMT is doing well, at least not yet. Americans are buying what they need at the best price, and sometimes at the sacrifice of quality.

In conclusion, the Consumer Confidence Index clearly shows a divergence between current views and expectations. In that kind of scenario, we would expect shoppers to act cautiously. But if there is a tie between expectations for Mitt Romney and American confidence, then we should expect economic conditions to benefit should Romney win. In theory, a benefit could come through self-fulfilling prophecy. As Americans spend on high expectations, future economic conditions would reflect improvement, at least over the short-term. One thing is for sure, we will know for sure how American consumers feel about Mitt Romney should he be victorious today. Though, keep in mind that how Americans feel about Romney’s impact on the economy could be different than how they vote.

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 Revs Up Stocks

Stocks are up today for little good reason. It would be a reach to say that stocks gained on Mario Draghi’s reminder of his new bond buying tool, which he has not used yet. The Middle East has not calmed on net, with Turkey’s Parliament determining to take military action in Syria. Data here at home was moderately poor at best this morning, so where’s the catalyst for the decent early gains in the SDPR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ). Well, there is that little presidential debate which took place last evening. A majority of pundits seem to be declaring Republican Mitt Romney the winner. One might argue that the ex-market insider has the favor of market participants, who may be celebrating a bit today.

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.

In my view, there wasn’t an overwhelming win by either candidate, but the GOP hopeful did seem to have it together better than the incumbent, President Obama. Surprisingly, stocks rose in Asia today, despite Romney’s calling for a test on spending to be determined by whether it’s worthwhile to owe China for it or not. European shares were mixed at best on Mario Draghi’s reminder of his big new gun, which was perhaps an attempt to refocus bond markets back on the good ECB effort and away from the bad economies of the EU and the ugly protests on the streets. Still, the iShares S&P Europe 350 (NYSE: IEV), trading on our time in the States, is up a much more important 0.8%.

International Markets

ASIA	EUROPE
S&P/ASX 200: +0.3%	EURO STOXX 50: -0.2%
Hang Seng: +0.1%	FTSE 100: +0.2%
Nikkei 225: +0.9%	German DAX: -0.1%
Shanghai Shenzhen CSI 300: +1.8%	French CAC 40: -0.1%

U.S. economic data offered nothing to celebrate. The day’s data flow produced a relatively unchanged Weekly Initial Jobless Claims data point, a soft-spoken report on announced corporate layoffs from Challenger Gray & Christmas, an improved consumer sentiment measure from Bloomberg, mostly subdued same-store sales growth from retailers for September and sharply lower factory orders. That’s hardly news worthy of sending stocks higher, in my view.

To get a better read on whether it is a Romney effect, we might want to look at the sectors that are expected to most benefit from a Romney victory. Defense, first and foremost, and a focus of the candidate’s discussion last evening, should be rising today on the news. However, the iShares Dow Jones U.S. Aerospace & Defense (NYSE: ITA) and the PowerShares Aerospace & Defense (NYSE: PPA) are only up about in line with stocks generally. Though, the shares of Northrop Grumman (NYSE: NOC) and Lockheed Martin (NYSE: LMT) are showing outsized gains of a point or more this morning. We might also inspect energy for a read on Romney’s impact, as he is seen as more supportive of the petroleum complex. The shares of Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) are up just slightly better than the market this morning.

In conclusion, it does seem to me as though a post-debate Mitt Romney rise is driving stocks higher Thursday. However, it’s also a less than confidence drive, perhaps reflecting how tight the election really is, or how confused Americans are about which candidate is best for most Americans. I’ll leave the politics to you, and continue to discern what’s driving stocks daily. Today, though, it seems the two were tied.

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.

Jobs Report Favors Romney

Last evening, after President Obama gave his speech to the Democratic Party delegates in Charlotte, pundits speculated about how long a post party high might last, and what could kill it as quickly as today. The main suspect likely to assault the electorate mood was the monthly Employment Situation Report, which was just reported this morning at 8:30 AM EDT. In my view, the jobs report reflects a deteriorating economy and thereby favors Mitt Romney.

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.

Jobs Report

Some will key on the two-tenths of a point improvement in the unemployment rate to 8.1%, from 8.3% last month, but such reports should be quickly overcome by the realization that labor participation, not job creation, played the key role there. Stock futures turned lower at the breaking of the news, but it may take some time for the real message of the report to be understood; the SPDR S&P 500 ETF (NYSE: SPY) is fractionally higher at the hour of publishing here, while the Dow Jones Industrial Average ETF (NYSE: DIA) is less enthused due to the details of the data discussed below. The NASDAQ also has the earnings warning of Intel (Nasdaq: INTC) to digest this morning, and so the PowerShares QQQ (Nasdaq: QQQ) is sinking. But what is holding up stocks generally today is the increased likelihood of Federal Reserve action later this month. What is gaining ground today is gold against the dollar, as the SPDR Gold Shares (NYSE: GLD) gains 1.6% into early trade.

Job creation, depicted by a 96,000 net increase in nonfarm payrolls, came in under July’s revised rate of 141K (from 163K) and the economists’ consensus for 125K. Within the overall figure, private nonfarm payrolls only rose by 103K, versus July’s revised figure of 162K (from 172K). Take note of the direction of the revisions as well as the disappointment produced by the figures for August.

Debunking the unemployment rate was not hard to do this morning, despite the details of the report showing the number of unemployed Americans was down by 250K in August, to 12.54 million. Rather, the Household Survey shows the civilian labor force dropped sharply by 368K in August, even as the population was estimated higher by 212K. The same survey showed the number of employed Americans was down by 119K. Clearly, a big chunk of that improvement in the unemployed (if not all of it) was due to the continued drop-off of the long-term unemployed out of the labor force, not because people got jobs. Otherwise, the number of employed Americans should have risen.

As we look deeper into the data, we see that the number of long-term unemployed Americans (27 weeks of joblessness or more) decreased by 152K in August. There is a huge segment of the American population that is simply being lost into limbo. Who knows where they go, perhaps to homelessness, to prison, hospitals of one sort or another, to other parts of the world, or into their parents’ basements to drift into deep depression. Maybe a few are starting small businesses, self-publishing books, or earning income off the books in one way or another, but it’s clear that the majority are not faring well enough.

Some are working part-time instead of full-time, as the number of part-timers for economic reasons (meaning they want more hours) decreased by 215K in August, to 8.03 million. The number of those who have chosen part-time work (some of these likely didn’t understand the survey question) rose by 130K. I say that because school just started, and I believe less young people are likely to seek part-time work when attending school, though some returning from long vacations may be seeking work. Perhaps in today’s economy, a greater number of young people are finding resources from home harder to come by, and must therefore work while earning their degree.

The number of Americans marginally attached to the labor force, meaning they did not aggressively seek work over the last four weeks, increased by 32K. Within this segment, the number of discouraged workers, or those people who believe there are no more jobs available for them any longer, decreased slightly by 8,000.

Under-Employment Rate
The calculation of the under-employment rate, which takes into account the number of Americans working part-time for economic reasons and the detached workforce, follows here. If we add back the excluded 2.561 million displaced workers to the labor market, and include the 8.031 million underemployed part-timers in the unemployed count, adjusted unemployment reaches ((12.544M + 2.561M + 8.031M) / (154.645M + 2.561M)) * 100 = 14.7%. Last month, the rate was ((12.794M + 2.529M + 8.246M) / (155.013M + 2.529M)) * 100 = 15.0%. Don’t be fooled by what looks like an improved rate of underemployment to go along with the gain in the unemployment rate, because this figure, like the other, leaves out the unexplained decrease in the civilian workforce. Where have those unaccounted for Americans gone? Please tell me if you know, because they are not in this tally.

The details of the Establishment Survey show total private (not including public sector) jobs increased by a net 103K in August. That was significantly under ADP’s estimate for 201K, which helped support the stock market Thursday. It was likewise inconsistent with the decline in Challenger’s Monthly Job-Cuts data. What it did reflect, was something I’ve been warning about, a decrease in manufacturing employment. That segment of the economy dropped 15K jobs in August, and while jobs are not being shed by Boeing (NYSE: BA) as yet, layoffs are increasingly being considered at cyclicals like General Electric (NYSE: GE), Caterpillar (NYSE: CAT) and Cummins (NYSE: CMI). The entire goods-producing segment of the economy shed 16K jobs, with most of those coming in durable goods. There was even a 7,500 drop at motor vehicle and parts makers like Ford (NYSE: F), General Motors (NYSE: GM) and Magna International (NYSE: MGA).

Private sector service providers added a net of 119K jobs in August, according to the survey. The majority of those came in Leisure & Hospitality (+34K), Professional & Business Services (+28K) and in Healthcare & Social Assistance (+21.7K). Services declines were only found in Temporary Help (-4.9K), which marked a reversal of recent months and was bad news for Kelly Services (Nasdaq: KELYA) today.

The Retail Trade industry added 6.1K jobs in August, I expect due to increases at discounters like Wal-Mart (NYSE: WMT), Target (NYSE: TGT) and Costco (Nasdaq: COST), at the cost of underperformers like J.C. Penney (NYSE: JCP) and Sears (Nasdaq: SHLD). Information only added 3,000 jobs in August; so much for the impact of the Internet newcomers like Facebook (NYSE: FB) and Yelp (Nasdaq: YELP). The public sector shed 7,000 jobs in August, down from 21K in July and 18K in June.

On net, I think there’s no doubting that this report favors Mitt Romney, because when the workforce change is understood, it reflects a deteriorating economy. I expect these reports are going to get worse in the next two months ahead of the election. The Democrats will focus on the unemployment rate today, but I expect the Republicans will not have to explain that anomaly as the months progress and the economy deteriorates further.

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.

Was Paul Ryan the Right VP Choice for Mitt Romney?

Did Mitt Romney make the right choice in Paul Ryan, when he named the Congressional Representative from Wisconsin his Vice Presidential running mate? The positives for Ryan are clearly his charisma, intellectual acuity, conservative values and financial acumen. He’s got leadership skills and even looks presidential. However, the mark against Ryan probably cost him a run at the presidency this year. When Ryan came out with his strong plan to reform the entitlement programs, he polarized himself from party favor because of the backlash from the media and America’s senior sector. Surely President Obama will use that same issue against Ryan and Romney in the coming weeks. The soon to be formalized GOP candidate, Romney, has already pre-empted the likely strike from the Democrats with a series of proactive campaign advertisements making the President look like the destroyer of senior programs. So, I ask, has Paul Ryan bettered the chances of Mitt Romney or weakened them? Would someone else have been a better choice? While we’re at it, add your insight and view about entitlement programs and what should be done to preserve America’s future and current way of life.

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Team USA Olympic Uniforms Made in China

Just a couple weeks ahead of the start of the Summer Olympics of 2012, controversy surrounds the USA Olympic Team. Team USA’s parade uniforms, produced by Ralph Lauren (NYSE: RL), were made in China. That has congressmen like Harry Reid saying they should be burned and replaced by American made clothing, even if that means they are t-shirts with painted-on graphics. He said that would be better than outsourcing the uniforms that will represent our entire nation on the world stage. The position crosses political parties of course, as “American made” is something both Republicans and Democrats can stand behind, at least on the surface. Obviously, views vary on how to handle trade with China and what to do for American manufacturing. On the patriotic topic at issue, House Speaker John Boehner sincerely commented, “You’d think they’d know better.”

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.

USA Olympic Uniforms Made in China

Still, I found myself nodding as I listened to the wisdom of an anonymous C-SPAN caller this morning. The unknown American on the line said the Congressional uproar was hypocrisy at its highest. He said most congressmen should be required to wear corporate and other logos across their sharp suits. That way we could see where they were made – those are my words. Instead of Perry Ellis (Nasdaq: PERY), we would probably find the backs of our representatives weighed down by China and a slew of companies that need a little extra support in DC to carry a heavy conscience.

You know who I’m talking about, people like big oil, insurance companies, pharmaceutical makers, the food block etc. Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) don’t need government subsidies while they rake in record profits. Neither does Aetna (NYSE: AET), CIGNA (NYSE: CI) or any of the other health insurance giants need a legal loophole to deny health insurance to needy Americans. Pfizer (NYSE: PFE) and Merck (NYSE: MRK) shouldn’t have extra support to address “national initiatives” like the fight against obesity if that means lowering FDA standards. Neither does Monsanto (NYSE: MON) have free reign to bully farmers into using their seeds, as alleged by some farmers. Food producers like Tyson Foods (NYSE: TSN), Hormel (NYSE: HRL) and Smithfield (NYSE: SFD) should not be abusing nature for the sake of productivity. There’s no excuse for unethical or immoral behavior, and neither is there for congressmen who support it because of campaign financing or even for the sake of local economies. And that’s from a capitalist, but one who cares about doing the right thing.

You know, Ralph Lauren shouldn’t be singled out. The USA Basketball Team will be wearing Nike (NYSE: NKE) gear made beyond our borders, and others will be wearing Adidas (OTC: ADDYY) products – that’s a German company. You know who else will be wearing Chinese made uniforms? The Chinese Olympic Team will. A survey of the Team USA Shop website shows that a great majority of the products for sale were not made in America. I could find only one American Olympic Team outfitted with American made uniforms. The U.S. Rowing Team will be wearing uniforms made by Philadelphia-based Boathouse Sports. Both deserve credit for that seemingly obvious decision that turned out to be admirable because of its uniqueness.

Now I have to ask you a question though. Things are made in China, India and where labor is cheaper so that American companies can provide cheaper goods to Americans who demand them. Sure, profit margins have expanded, but truth be told, the American consumer benefits. It’s clear by the growth of Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Costco (Nasdaq: COST) and the dollar stores like my favorite, Dollar Tree (Nasdaq: DLTR), that America demands these things. Would you pay more money for American made goods? In the past, you have not, and that’s why the American textile industry diminished. So maybe we have ourselves to blame for this embarrassing turn of events.

While watching a local TV news broadcast, I noted another view. A man on the street interview turned up a pure capitalist, who pointed out that these goods were still the products of American companies, not Chinese. He said that the design and the production specifics were still dictated by Americans, and that’s what we do best now. So should we be embarrassed or not that we do not manually produce goods we design and engineer? Maybe we can even be proud of our advancement, and direction of human capital toward higher level business activity. After all, made in China doesn’t necessarily mean Chinese. It can also mean made by American companies at a lower cost, with fattened profits for the companies we own in our retirement accounts and other investments. Yet, some Americans are made for manufacturing, and are left unemployed or working behind a checkout counter or stocking shelves instead of a production line. So, it turns out, there’s more than one way to look at this issue. What do you think?

Visit us at Wall Street Greek for more insight like this. This article should interest those invested in socially responsible themed funds including Legg Mason Inv Counsel Social Aware A (SSIAX), VALIC Company II Socially Responsible (VCSRX), Neuberger Berman Socially Responsible Inv (NBSRX) and Vanguard FTSE Social Index Inv (VFTSX).

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 Solution for Greece, Europe & the Global Economy

From the source that told you European change still threatened stocks the day of the confounding market rally on the election results in Greece and France, today I am advising that the next move may be higher. What’s killing stocks these last few days is the wild speak coming from the Greek Syriza Party, which is currently attempting to form a government. What may save stocks, probably only temporarily, will be the inability of Greece’s Radical Left Coalition to form a government, which means the Greeks will get a second chance at deciding their fate in June. Where that leads should be at least clearer, though the direction could be either.

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: Global X FTSE Greece 20 ETF (NYSE: GREK), SPDR S&P 500 (NYSE: SPY), 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).

Solution for Greece

Also, the ramifications of the Greek decision might not be as clear, traumatic or destructive as people, pundits and even economists describe. For instance, if the euro-zone were to fail completely, which is not as unlikely as the entrenched make it to seem, Greece’s early exit might prove helpful. On the other hand, a fascist state and/or weak leadership would find difficulty navigating the global economic environment. You see, nothing is perfectly black or white in this world, however we may attempt to simplify, and everything can be colored. Furthermore, the best solution for Greece, Europe and the global market should offer wise economic strengthening combined with sensible budget management, or the gray in between today’s two arguments.

Some might say that the premature celebration of Syriza’s Alexis Tsipras has done more to terrify global markets and perhaps even the Greeks who voted for him than to bring positive change so far. The sum I speak of would include PASOK and New Democracy leadership, who will now surely employ fear tactics to retrieve votes lost in the first election. Greece’s citizens have only to look at their stock market, with the Athens Stock Exchange General Index collapsed over the two days following the anomalous trade immediately after the election. The Global X FTSE Greece 20 ETF (NYSE: GREK) is down 13% from May 4th. The iShares S&P Europe 350 Index (NYSE: IEV), down another 1.5% into midday Wednesday, has been edging down on the omens of election polls for weeks. Though, Europe’s slipping into broad-reaching recession has certainly played a role in that.

While a secondary victory for the establishment might ease market concerns, it’s certainly not a given. On the other end of the spectrum, the disgruntled and disgusted Greek people may line up behind Syriza now. If the many tentacled monster of Greek dissatisfaction were to more perfectly unify, then it is possible Syriza could win the majority. In that case, with the extra 50 seats in Parliament given for the win and the assistance of other parties, it might also form a government. The result of that is clear, based on the emboldened braggadocio of Tsipras. He has stated he will tear up standing agreements with the troika, whose response has also clearly been laid out. It would be the end of the relationship between Greece and Europe, or at least the euro-zone. Greece would default on its debt and return to the drachma.

In my view, and reiterating yet again, neither of the two extremes needs be the fate of Greece. If the global community which makes up the IMF, and the European Union, intend for Greece’s realistic revival, they would set simpler terms for Greece to payback its debt. An extension of the timeline to payback would allow Greece to more gradually implement sensible austerity measures while also finding creative growth solutions. Instead, Greeks have had deep destructive austerity shoved down their throats. The economic feedback would not be harsh my way, and upheaval in Greece would die down. Its tourism industry would recover, and its economy would find its way toward expansion. With that result, Spain, Italy and Portugal would gain time to restore their own fiscal soundness, and the euro-zone likewise should solidify. Perhaps, then, the SPDR S&P 500 (NYSE: SPY), the SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) might be in the green instead of red like they were Wednesday.

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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.

Why Stocks Celebrated Disruptive European Elections

Based on the action of stocks Monday, it would seem investors favor the possibility that Europe might finally be rid of Greece. Or it may be that investors have seen the light, and have finally realized that the age of austerity was a dark one. Or, perhaps change of any sort would have been celebrated by a distressed market.

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: SPY, Nasdaq: QQQ, NYSE: GREK, OTC: HLTOY.PK, NYSE: IEV, NYSE: VGK, NYSE: EWG, NYSE: IEV, NYSE: EWQ, NYSE: DB, NYSE: STD, Nasdaq: ITUB, NYSE: UBS, NYSE: WBK, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: NBG, NYSE: RY, NYSE: BFR, NYSE: IRE, NYSE: BMO, NYSE: CM, NYSE: ING, NYSE: C.

It's a Celebration?

European shares were mostly higher Monday, even after Greeks unseated their socialist rulers, PASOK, the ushers of austerity. So it would seem that more than their fear of a break down in confidence in the EU (that might drive Spanish and Italian bond yields higher), investors maybe worry about keeping a lumbering Greece within the group. But with France electing a socialist, who seems intent on leveling the playing field between the rich and poor, and who does not favor austerity, it would seem maybe something more important is afoot.

Bucking the trend, the Global X FTSE Greece 20 ETF (NYSE: GREK), Hellenic Telecommunications (OTC: HLTOY.PK) and Greek shares generally tumbled, as neither did the New Democracy party gain clear control. The result was likely due to the new democrats’ role in the current catastrophe. Instead, the Radical Left Coalition, or Syriza, finished second in Parliamentary voting. Anti-austerity parties, including even an anti-immigration organization, won seats at the cost of the mainstream, as Greeks expressed their frustration with austerity clearly.

But why are European shares higher, given that Greece could theoretically now reject the austerity prerequisites of European and IMF aid. The Vanguard MSCI Europe ETF (NYSE: VGK) rose 1% Monday, and the iShares S&P Europe 350 (NYSE: IEV) was up 0.8%. The iShares MSCI Germany Index (NYSE: EWG) gained 0.5% and Deutsche Bank (NYSE: DB) rose 1.6%. The popular view seems to be that Francois Hollande, the new French leader, might listen to the reason of German Chancellor Angela Merkel and others now that the election is over. However, I say there is more to it than that.

I think the market has spoken in its efficient and infinite wisdom, and what it is saying is that the age of austerity is over and good riddance to it. The French CAC 40 Index gained 1.65% and the iShares MSCI France Index (NYSE: EWQ) added 1.3% to its stature. American investors were confused, with the SPDR S&P 500 (NYSE: SPY) and the PowerShares QQQ (Nasdaq: QQQ) erasing initial losses. Maybe it’s just hope that’s selling to investors these days; perhaps change of any sort would be celebrated by a desperate market. In that case, when the high wears off and investors find not much has changed with regard to the lagging economy, stubborn unemployment and burdensome debt load, and on top of that, pressure builds on other nations on the fringe, the celebration should prove short-lived.

It could take time for prospective growth initiatives to have effect, so patience may wear thin. However, shifting the burden from the poor to the rich could be just a vote away for the French and the Greeks. That is precisely why there’s talk today of a potential run of money, with its destination divided, but its origination now decided. Money has been leaving Greece for some time now though, given the duration of its crisis. For France, it’s a new phenomenon. For Europe, it could be the way of the future, and for the United States, it could be a trend that catches on.

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.

Enter Political Risk

Many in the media are attributing nascent softness in European and also American shares to whatever happens to be in the news that day or this week. While many of these issues are certainly important to the market, like for instance the latest Spanish bond sale or the European recession foreseen here for months now, there’s a major issue that short-sightedness has not allowed into perspective. Political risk is increasingly entering the frame, and it threatens to change the game for Europe, the United States and much of the world this year and beyond.

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: Vanguard MSCI Europe ETF (NYSE: VGK), European Equity Fund (NYSE: EEA), iShares MSCI France Index (NYSE: EWQ), Global X FTSE Greece 20 ETF (NYSE: GREK), iShares MSCI Spain Index (NYSE: EWP), iShares MSCI Germany Index (NYSE: EWG), iShares MSCI Italy Index (NYSE: EWI), SPDR S&P 500 (NYSE: SPY) and SPDR Dow Jones Industrial Average (NYSE: DIA).

Political Risk of European Fascism

In times of duress, austerity stricken citizens tend to vote with more than just boisterous protesting; you know, like the now commonplace (in Greece) burning of automobiles, breaking of storefront windows and hurling of stones at your friendly neighborhood cop. While many nations have put off long awaited elections, this year, the ballots will hit the fan.

This weekend offered the first splattering in a big, bad and potentially disgusting way for investors. The French elections could break up the French-German connection lovingly known as Merkozy. French PM Nicholas Sarkozy and German Chancellor Angela Merkel have with their concerted effort led Europe through its most difficult time since the Second World War. In fact, they have very likely kept the European Union together, though in a weakened and more fragile state. It is precisely this popular opinion that threatens to unseat the French connection, with Sarkozy expected to be overcome by Socialist Francois Hollande, who this weekend scored a first round victory over the incumbent Sarkozy. The election concludes on May 6, which is shaping up to be like a sort of doomsday for Europe.

You see, on May 6, the Greeks will also very likely unseat their leadership. The choice for Europeans continues to be represented by the same old faces from the same old political parties, which are adept at dishing out whatever the people’s palette desires on any given day. For instance, in Greece today, the New Democracy Party is talking up growth initiatives over the sour tasting austerity their socialist counterparts in PASOK have been forced to serve. Yet, it was under New Democracy that Greece forged its economic data to sneak into the euro zone. I’m not sure the Greek people are as forgetful as politicians may think.

The problem is that for Greeks, and others, there are very few alternative digestible options to choose from. Still, desperation has driven many to desperate affiliation. The communists have even found some support, but Marxism has been so effectively disproven by history that they really waste national resources by their organization. It may be a good thing, though, as their existence keeps radical opposition fragmented.

Extreme right wing radical parties have been quick to spring up across Europe with common political themes, notably anti-immigration, anti-assimilation and of course, anti-austerity. So far, these fascist parties have come up against the broadly accepted wisdom of the day, which is that globalization and common civilization lead to prosperity. However, I have to question how much longer such anchors will hold against the storm of economic recession (depression for some) that is tormenting Europeans.

More than 50% of Greece’s young adults are unemployed and tired of the old guard, which is represented for them by both of the popular parties. Youth unemployment is a common theme running across Europe, and if the young are inspired enough to assault policemen, then they’re inspired enough to vote. In France, the extreme right wing candidate Marine Le Pen received 18% of the popular vote this weekend, vividly illustrating the new found favor of fascism throughout the region. However, for France, full-blooded fascism cannot take comfort hold of the nation, due to its large immigration driven Islamic minority. Still, the fascist voice is now needed by both major parties to overcome the other, and so Madame Le Pen garners leverage which she may use to insidiously gain more power.

Those voices which would smother this argument and the threat of fascism with the usual description of the disjointed membership of the “far right,” which includes various extremists, anarchists, racists and religious conservatives, would miss the critical point. What unites these varied groups is dissatisfaction with the ruling parties, and that is a rapidly increasing commonly shared disgust throughout the streets of Europe. It will only take further strife, which is expected here, combined with sensible sounding figure heads atop these parties to drive radical change in Europe, and that is not a farfetched or distant possibility.

For now, the seemingly smartest voices continue to support the policies of the established parties. The problem is that the comfort of their seats has made these politicians too complacent. They are so sure of themselves and the ways of today, that they are likely to be overrun like deaf blind men standing before a herd of charging elephants. They are unable to clearly see that the usual lunch meetings with the usual experts providing the usual economic advice will not suffice these dynamic times.

What fascism will likely bring to Europe and eventually the world will be an undoing of civilization. The progress of the world since World War II could be undone in a decade. The European Union may hold in some form for the sake of mutual protection against the dark shadows that lurk to the east, but despite its similarly sensible economic reasoning, the euro zone would likely disintegrate.

The polar opposite direction, which I should discuss separately, could lead desperate European leaders to strike a stronger political union while they still can. Combining in such a manner, however it may make sense to the desperate, should also support the growth of the region’s cancer across now somewhat healthy states. I expect that such a unionization effort would tie the region, and drown the entire group together. That’s because I expect the European Central Bank (ECB) would then get its hands dirty, and the excessive creation of fiat currency combined with other factors I see developing geopolitically, could undo the West and the financial system entirely, and perhaps global trade as well. I will write more about this truly undesirable possibility in a dedicated article soon enough.

While economic data pointing to decline across Europe is definitely playing a key role in the day’s activity, it should have been expected by readers of my column. You read others to know what is going on today, and you read me to know what will happen tomorrow.

Today or not long from now, the realization that the people may not stand much longer behind ruling regimes, and with sloppy fascism clawing at the door, will drive concern about civilization and spread chaos across securities markets. At the hour of scribbling here, the Vanguard MSCI Europe ETF (NYSE: VGK) and the European Equity Fund (NYSE: EEA) were each down between 2% and 3%. For the nation in the news, the iShares MSCI France Index (NYSE: EWQ) was down more than 3%. The Global X FTSE Greece 20 ETF (NYSE: GREK) was off 2.6% and the iShares MSCI Spain Index (NYSE: EWP) was lower 3.2%, as bond spreads widened across Europe. The levity of the matter is even more apparent as we view the 3.6% drop in the iShares MSCI Germany Index (NYSE: EWG) and the 3.9% collapse of the iShares MSCI Italy Index (NYSE: EWI). In my opinion, well-founded contagion concerns have the SPDR S&P 500 (NYSE: SPY) and the SPDR Dow Jones Industrial Average (NYSE: DIA) lower more than 1%.

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.