Papademos on a Stick

It seems Greeks are coming to grips with the reality that their new leader, Lucas Papademos, may offer a different face to watch on television, but he comes with even stauncher support of the troika’s austerity medicine than the embattled George Papandreou. Indeed, the European Union’s man and once #2 at the European Central Bank (ECB) has openly stated that exit from the euro zone is not an option. Well, Greeks are learning that this means the austerity forced down their throats is also not clearing out. So, it seems, it may not be long before the popular support for Papademos turns out to actually be a sort of marinade.

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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A Political Sacrificial Lamb

Political jockeying ahead of a likely February election has Greece’s new Prime Minister, Lucas Papademos, being held out on a stick like a souvlaki cooking over the fires of Greek rioters, the IMF and Greece’s European brothers. Papandreou’s referendum concession was either a show of pure stupidity, unequivocal ethical heart or political genius. From the political perspective, Papandreou’s calling on the Greek people to decide whether to go forth with the European plan, and thus accept austerity and also ongoing euro zone membership, forced Greeks to take a second look at the situation and also at the PASOK Party. His stepping back has placed PASOK into a position that allows for potential reconciliation come election time.

New Democracy, not missing a beat and with its eye on February, has been publicly promoting an idea to ditch the digging austerity plan and to instead take a sort of American Republican approach to promote economic growth and trust in trickle-down economics; though the Greek version might look more like Chios mastic’s slow and painful ooze down a dry bark. The other, more radical parties are of course offering more radical solutions.

Needless to say, the political commotion has the troika terrified that tranches of capital dished out to Greece between now and February might end up wasted, sort of like how Zorbas spent his boss’ supply money on drink and women. So the IMF is refusing to dole out any more funds before a pledge is signed by the major political parties, if not all of them, to keep on the path outlined. That path, for Greeks, has been relayed as including the implementation of all already passed austerity measures, but the introduction of no new burden upon them.

So, it would seem Papademos is cooking like a souvlaki on a stick, and it would appear Greeks will have their kabob well done by February. The current popular support of him is thus near certain to turn to a lynching party, with the technocrat set to burn at the stake. Both New Democracy and PASOK are more than willing to step away now to allow the Greeks to pepper up Papademos, get their fill of him, and offer sweet dessert to them in February. But the sugar for that dessert must be acquired now from German and French patisseries.

The lesson long forgotten but to be learned anew is for governments across the globe. The lost wisdom is that the mismanagement of the people’s money results in uprising. The people will turn everything upside down and start all over again before they will bear the pain for the mistakes of faulty leadership.

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.

Critical News 11-21-11

Today's most critical news follows via links to the most popular stories on the internet, published by the most reputable of organizations. The stories leading the wire include the apparently imminent failure of the Congressional "Super Committee" assigned to design a bipartisan budget, or else. Failure to do so will lead to a default budget being adopted, which includes some tough cuts to defense spending.

Critical News

• Super Committee Set to Fail


• Earlier Store Hours Threatening Thanksgiving


• Yet Another Would be Terrorist Set Up and Stopped


• Spanish Vote Fails to Help Bond Yields


• Warren Buffet is Buying


• Big Cyber Monday Sales Expected: Amazon (Nasdaq: AMZN), eBay (Nasdaq: EBAY)


• Gingrich Tells OWS to Get a Job After Getting a Bath


• Greek PM Papademos Pushed to get Written Pledge of Bailout Backing


• Jefferies (NYSE: JEF) Cut its European Debt Exposure Further


• GM (NYSE: GM) Reopening Saturn Plant, 700 Jobs


• American Spies Captured in Lebanon


• Major League Baseball Player Killed in Amsterdam


• Israel Says it’s Time to Act on Iran


• Russian Warships Enter Syrian Waters


• Pope Finishes Africa Tour with Massive Mass in Voodoo Country


• eBay (Nasdaq: EBAY) Buys Hunch to Focus Shoppers’ Attention


• Gilead Sciences (Nasdaq: GILD) Buys Drug Developer Pharmasset (Nasdaq: VRUS)


• Greenberg Sues Over AIG (NYSE: AIG) Takeover


• China Vice Premier Sees Chronic Global Recession


• Focus Media (Nasdaq: FMCN) Drops on Short Report


• Chevron (NYSE: CVX) Estimates Brazil Spill at 2400 Barrels


• Oil Down on Growth Fears


• European Stocks Sinking


• LinkedIn (Nasdaq: LNKD) Tanks on Lockup Curb Expiration


• Gold Prices Slaughtered


• Existing Home Sales Grew in October


• Economic Activity Up in October


• Biggs Revises Opinion on Economy


• 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.

Week Ahead: Something to be Thankful For?

The shortened holiday week includes a slew of economic data points, including Existing Home Sales, GDP, Personal Income and Outlays, Consumer Sentiment, Durable Goods Orders and Weekly Jobless Claims. Overseas, the IMF and European Union will want an answer from Greece’s political parties as to their will to push through with austerity into and after their elections in February. Of course, it also includes the Thanksgiving Day holiday for Americans and that tasty turkey we hope you will be enjoying with friends and family. We suggest that even in today's tough times, each of us still has something to be thankful for.

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.

Week Ahead: Something to be Thankful For?

Monday

Markets welcome in yet another new government, this time in Spain, where voters kicked out socialists, choosing instead to support change and the center-right People’s Party. Meanwhile, the IMF meets to review Greece and determine whether to disburse the sixth tranche of aid funds. This move has hinged on Greek political parties pledging to maintain austerity through Greece’s February elections.

American interests will be keying on the so-called supercommittee or congressional deficit reduction committee. The bipartisan group of planners is supposed to have drafted up legislation by the close of Monday, for vote Wednesday, or else mandated cuts will go into effect. While those cuts should help the U.S. avoid a devastating sovereign debt rating cut, some say heavy reductions to defense spending included in that default budget will put at risk the nation’s security.

The first economic report on the American slate this week is the 8:30 AM release of the Chicago Fed National Activity Index. This report covers the month of October. In September, the index improved, but only to -0.22, from -0.59 in August. This means that economic growth was less than the historical mean, and is not an indicator of economic contraction.

Existing Home Sales will be reported at 10:00 AM ET for the month of October. In September, the annual pace of existing home sales decreased 3.0% to a rate of 4.91 million. For the month of October, economists surveyed by Bloomberg see the annual pace slipping further to a rate of 4.8 million (range covers 4.69 million to 5.15 million).

Jefferson County, Alabama, is seeking bankruptcy court approval to take back its sewer system from a receiver.

Atlanta Federal Reserve Bank President Dennis Lockhart will offer his thoughts at a business school in Brazil.

Mexican markets are closed Monday. In the U.S., IPO lockup curbs expire for Active Network (Nasdaq: ACTV), Freescale Semiconductor (NYSE: FSL) and Spirit Airlines (Nasdaq: SAVE). Advanced Energy Industries (Nasdaq: AEIS) holds an analyst meeting. The EPS schedule highlights news from Hewlett-Packard (NYSE: HPQ), Analog Devices (NYSE: ADI), Tyson Foods (NYSE: TSN), Brown Shoe (NYSE: BWS), Brocade Communications (Nasdaq: BRCD), China Mass Media (NYSE: CMM), China Techfaith Wireless (Nasdaq: CNTF), Chinacache International (Nasdaq: CCIH), Chinaedu (Nasdaq: CEDU), CNinsure (Nasdaq: CISG), Collective Brands (NYSE: PSS), Dycom (NYSE: DY), Globus Maritime (Nasdaq: GLBS), Hastings Entertainment (Nasdaq: HAST), IGI Laboratories (AMEX: IG), Jack in the Box (Nasdaq: JACK), JinkoSolar (NYSE: JKS), Mobile Telesystems (NYSE: MBT), Perfect World (Nasdaq: PWRD), Phoenix New Media (Nasdaq: FENG), ShangPharma (NYSE: SHP), Tech Data (Nasdaq: TECD), THT Heat Transfer (Nasdaq: THTI), Trina Solar (NYSE: TSL) and Zale (NYSE: ZLC).

Tuesday

The second estimate and first revision to third quarter GDP is due at 8:30 AM ET. At first check, GDP growth was measured at 2.5% in Q3. Economists see the revision only trimming growth to 2.4%, though the individual forecasts range from 2.0% to 2.9%. GDP was up 1.3% in Q2.

The other big report Tuesday is the 2:00 PM ET release of the Federal Open Market Committee Meeting Minutes, which cover the Fed meeting of November 2.

There may be some interest in the weekly same-store sales results, though with it covering a period just ahead of the start of holiday shopping season, it would seem futile. In their latest reporting for the week ending November 12, the ICSC data showed only a 0.3% week-over-week sales increase. On a year-to-year basis, sales rose 3.1%. Redbook reported year-to-year sales up 3.3%.

The busy new Greek Prime Minister is scheduled to meet with the President of the Euro Group, Jean-Claude Juncker. The Euro Group is the political control arm of the euro currency.

Minneapolis Federal Reserve Bank President Narayana Kocherlakota discusses the last three years of Fed action at an event.

The Republican Presidential candidates will hold yet another debate Tuesday.

MF Global’s (NYSE: MF) post bankruptcy trustee requests New York bankruptcy court approval to speed the claims process. The court will also review the details regarding the $600 million in missing funds at MF Global. IPO lockup curbs expire on Solazyme (Nasdaq: SZYM). Jacobs Engineering (NYSE: JEC) has an analyst meeting scheduled.

The earnings schedule highlights news from Medtronic (NYSE: MDT), Campbell Soup (NYSE: CPB), Hormel Foods (NYSE: HRL), Canadian Solar (Nasdaq: CSIQ), Chicos FAS (NYSE: CHS), China Digital TV (NYSE: STV), Patterson Companies (Nasdaq: PDCO), Acorn Int’l (NYSE: ATV), American Woodmark (Nasdaq: AMWD), Astro Med (Nasdaq: ALOT), Books a Million (Nasdaq: BAMM), China Real Estate Info (Nasdaq: CRIC), China Xiniya Fashion (NYSE: XNY), Citi Trends (Nasdaq: CTRN), Cracker Barrel Old Country Store (Nasdaq: CBRL), Daktronics (Nasdaq: DAKT), dELi’s (Nasdaq: DLIA), Diana Containerships (Nasdaq: DCIX), DSW (NYSE: DSW), Eaton Vance (NYSE: EV), E-House (China) Holdings (NYSE: EJ), Fred’s (Nasdaq: FRED), Genesco (NYSE: GCO), Gymboree (Nasdaq: GYMB), Hanwha Solarone (Nasdaq: HSOL), JA Solar (Nasdaq: JASO), Le Gaga (Nasdaq: GAGA), LTX-Credence (Nasdaq: LTXC), Nuance Communications (Nasdaq: NUAN), Pandora Media (NYSE: P), QAD Inc. (Nasdaq: QADB), Raven Industries (Nasdaq: RAVN), School Specialty (Nasdaq: SCHS), Signet Jewelers (NYSE: SIG), Suntech Power (NYSE: STP), Symbion (Nasdaq: SMBI), TiVo (Nasdaq: TIVO), Tri-Valley (AMEX: TIV) and Valspar (NYSE: VAL).

Wednesday

With the holiday pending, Wednesday will be jam-packed with economic reports. Four reports are due in the premarket alone.

At 8:30 AM ET, the most likely report to move the market will be the Durable Goods Orders data for the month of October. The big-ticket nature of durables allows for great volatility in the data, and so we find the reason for our highlighting of it. In September, durable goods orders declined by 0.6% after revision. For October, the consensus of economists’ forecasts sees durable goods orders falling 1.0%. The range of views varies from -2.1% to +1.2%.

Personal Income and Outlays data is also due at 8:30 AM ET, this time for October. In September, Personal Income was measured 0.1% higher, while Personal Spending increased 0.6%. The Core PCE Price Index, or the Federal Reserve’s favored measure of inflation, was unchanged in September. For October, economists see personal income and spending rising 0.3%, based on Bloomberg’s survey. The Core PCE Price Index is seen increasing by 0.1%.

Weekly Initial Jobless Claims have decreased three weeks in a row, and so the market will curiously watch for another improvement. Last week’s report for the period ending November 12 had claims running 5,000 lower, at 388K. The four-week moving average was down 4,000, to 396,750. For the week ahead, economists see weekly jobless claims up slightly to 390K. Because this measurement is so regularly taken, there’s less likelihood for significant change, and so economists rarely venture far from the prior week result in their forecasting.

The final premarket release of the day will be the Mortgage Bankers Association reporting of its Weekly Applications Survey. The weekly measure of mortgage applications saw a 10% decrease in the period ending November 11. The advent of a bank holiday, Veteran’s Day, played into this drastic change no doubt. We’ve written in the past about the imperfect adjustments for holidays by economic data reporters, and this group in particular. Changes in activity will typically be less dramatic in periods that do not include significant interest rate changes.

At 9:45 AM ET, look for the Bloomberg Consumer Comfort Index. This weekly measure of consumer confidence has hovered near a historical bottom for weeks now. The index improved a bit last week, but only to minus 50.0, from minus 51.6.

At 9:55 AM ET, we’ll receive the Reuters/University of Michigan Consumer Sentiment Index. At last report in mid-November, the consumer confidence measure held at a mark of 64.2, which is about where this index stood at the close of October. Bloomberg’s survey of economists forecasts Consumer Sentiment will show an improvement Wednesday, to a level of 64.6.

Both energy reports are due from the Energy Information Administration (EIA) on Wednesday this week due to the holiday. The Natural Gas Report will be first, published at 10:30 AM ET. Last week’s report covering the period ending November 11 showed natural gas in storage increased 19 Bcf. It stood at a level 224 Bcf above the five-year average. The Petroleum Status Report, due at 11:00 AM ET, last week showed a 1.1 million barrel decrease in crude oil stocks. Oil storage levels were in the upper limit of the average range for this time of year. Total motor gasoline inventory increased by 1.0 million barrels, and were in the middle of the average range for this time of year.

Wednesday marks the deadline for Congress to pass deficit cutting measures, but the supercommittee should have identified its cuts by Monday.

Markets are closed in Japan Wednesday. In the U.S. equity markets, look for EPS news from Deere (NYSE: DE), Diana Shipping (NYSE: DSX), New Jersey Resources (NYSE: NJR), RenSola (OTC: RESLF.PK) and Yingli Green Energy (NYSE: YGE).

Thursday

All markets are closed in the U.S. It’s Thanksgiving, and believe it or not, we still have plenty to be thankful for here in America, though those things are increasingly noted as the basics which we may have forgotten on our individual quests to the top of capital hill. I hope those things include for you, family, friends, health and happiness.

Breaking with tradition, Wal-Mart (NYSE: WMT) will open its doors at 10:00 PM ET on Thanksgiving Day. Shame on you Wal-Mart for leading people to trade away family values for the shopping pits.

While they won’t be trading on it Thursday, lockup curbs expire on the IPO of Glencore International (OTC: GLNCY.PK).

Markets are not closed overseas, where a general strike is set for Portugal. Greek Prime Minister Papademos is slated to meet with European kingpins, Nicolas Sarkozy and Angela Merkel. I expect they will want to know if Greece’s political parties have agreed to pledge to see through austerity past the February elections in Greece.

Friday

For the life of me, I still cannot figure out why the markets open a day after the great American holiday. U.S. equity markets will open and then close at 1:00 PM, after a half day’s worth of likely light trading volume.

It is Black Friday, so retail stock stakeholders will be very interested in the performance of stores in the tight and competitive retail marketplace.

Overseas, all eyes will be on Italy and the cost of capital in its treasury bill and zero coupon bond offerings.

The EPS schedule has Natuzzi (NYSE: NTZ) only reporting in the U.S. at our latest check.

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.