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Monday, March 18, 2024

Wild Wednesday Morning

Can we be disappointed by retail sales?

Hard to imagine them being worse than the market is already anticipating but we'll find out at 8:30 so I'll be updating then.  The WSJ did a little bit of investigation into what kind of smoke and mirrors the admininstration's homeowner aid has been so far.  To date, despite Paulson's fabulous spin yesterday, they have provided counseling to just 36,000 borrowers and have suggested loan workouts for less than 10,000 of them over two months.

10,000 sounds good until you remember that 7,000 people PER DAY are losing their homes to foreclosure.  Much like looking for Osama Bin Laden by invading Iraq, some jobs are just never going to get done if you don't actually make a real effort to solve the problem! Other callers were looking for money, which the hotline doesn't have available, or had only general questions, executives running the project say. It's not clear how many borrowers were able to stay in their homes because of the hotline's help.

Today Bush will "celebrate" tossing another $168Bn onto the inflationary fire with his pointless rebate package and it kills me that people (Congresspeople) act like it's somehow OK if we just "try" this to see if it works.  $168Bn is A LOT of money folks, it's enough to GIVE all 2M homeowners facing foreclosure $84,000 or, more importantly, it's enough to finance a reduction in mortgage rates all the way to 4% for 14M homes (15% of US homes).  We need to save housing, not Wal-Mart! 

 

Would you like a 4% home loan or $600?  Unfortunately, the average US homeowner is not good enough at math to answer that question, so it's up to government to steer our fiscal policy in the right direction.  Even more unfortunately, Congress apparently really does represent the AVERAGE American and we've chosen a very average American to lead us, so what do you expect to happen?

Most of Asia seemed to enjoy our rally yesterday with the Hang Seng picking up another 247 points, albeit after once again testing 23,000 while the Nikkei seems to be unable to resist the pull of 13,000 for more than a few hours per session.  Shanghai traded off 2.4% as that exchange finally got back to work after a week off.  Speaking of WMT, the Japanese arm of that company is doubling it's projected losses for the year.

Europe had a good day yesterday and is getting some follow-through in the morning.  TOT reported a 62% rise in Q4 profits and projects 4% annual production increases through 2012 – it's amazing what you can accomplish when you actually LOOK for oil rather than just buy back your own stock and piss off foreign dictators.  Our man Hugo is on the attack, and is halting oil supplies to XOM as they drag out their dispute.  All in all, its a very theatrical way to keep oil prices over $90, even as supply builds by millions of barrels a week while global demand forecasts get lower and lower (another 200,000 barrels a day were chopped of the IEA forecast).  It's crude inventory day today and the US alone is expected to show another 5M barrels of excess crude were placed in storage last week as Prius sales skyrocket across the country despite the fact that the alternative-fuel deduction credit is the only tax credit the Bush administration DID cut.

Jan Retail sales were up 0.3%, very surprisingly good!  See, I knew we couldn't be disappointed!  That should give us a nice boost in the morning but we expected to retest yesterday's highs because it's Wednesday, what we need to do is break and hold them at the end of the day.

We're going to need to see follow-through today and that's going to be tough to hold into the weekend with so much important data ahead of us next week.  As I keep saying though, earnings are still pretty good and I'm still pretty bullish – just a little bit cautious until we get out of this basement.  Kudos to Cramer as FSLR actually came through with good earnings and raised guidance but I still don't think it's $215 good and we're going to pick up some $210 puts, possibly higher, soon after the open as I expect at least a retest of $200.

Be careful out there!

 

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