Market Talk

- “Here we are, up 70% or so from the lows of over a year ago, and there is no uniformity of thought – which is probably a good thing,” Barry Ritholtz says.

- Treasury’s Geithner insists a resolution authority will help manage a failure of a large cross-border financial institution. “It simply will not,” former IMF chief economist Simon Johnson writes. “Mr. Geithner wanted to sound tough. But is he really coming out to fight? Or did he and his colleagues already throw in the towel?”

- Palm hopes distribution deal with AT&T (T) will boost sagging smartphone sales, but analysts aren’t so sure, John Paczkowski reports.

- “The home buying tax credit expires at the end of April and time is running out,” Miller Tabak’s Peter Boockvar says. “Bottom line, the next big test for this phase of the housing recovery is just ahead.”

- February existing home sales are proof the home buyer tax credit “has run out of gas,” Karl Denninger writes at the Market Ticker.

- Year-over-year decline in housing inventory is getting smaller. “This is something to watch,” Calculated Risk says. “This slow decline in the inventory is especially concerning with 8.6 months of supple in February – well above normal.”

- “Once upon a time, you could set your watch with the Google-Goldman super-tell duopoly,” Todd Harrison says at Minyanville. “As both are pointing due south today, it’s worthy of a mention.” Google (GOOG) drops 1.5% to $549; Goldman Sachs (GS) drops 0.8% at $174.83, but the Dow Jones Industrial Average rises 103 points.

- UK authorities arrested of six men, including an employee of hedge fund Moore Capital and another from Deutsche Bank, in what’s being billed by the government as a major crackdown on insider trading, WSJ reports.

- Solar stocks, which got hit hard during the bear market, have been really struggling during the recovery, Bespoke notes. For solar stocks over the last six months, “it’s not a pretty sight,” firm says. “Is now the time to buy or will solar continue to trade lower?”

- Jeff Saut, Barry Ritholtz, Bob Doll and Mike Santoli all correctly called the bull market, Josh Brown writes at The Reformed Broker.

- Microsoft (MSFT) doesn’t want to talk about the Courier, a rumored response to Apple’s (AAPL) iPad, but it’s willing to concede the blogosphere is a great way to read about it. All Things Digital says MSFT’s JobsBlog tells those looking for a job to check out “online chatter” about, among other things, “the upcoming Courier digital journal.” The JobsBlog links to a post on Engadget that claims exclusive pictures and details.

(UPDATE: Looks like someone at Microsoft’s (MSFT) JobsBlog might be in trouble. MSFT has now deleted a reference to its rumored Courier tablet from a JobsBlog post. “Hilarious,” All Things D’s Peter Kafka tweets. The post is still on JobsBlog but no longer mentions the Courier.)

US stocks rising sharply, as the buying fever heats up on Wall Street, and all the green lights are aligned for maximum speed.

DJIA jumps 103 to 10884, its first 100-point gain since early March, and its highest close since Sept. 26, 2008. S&P 500 rises 8 to 1174 and Nasdaq Comp rises 20 to 2415. Caterpillar, IBM lead Dow gainers; those two plus Kraft contribute a third of the Dow’s rise. Only Exxon and Home Depot lose ground. Still NYSE volume is weak, a red flag.

Traders seize on existing-home sales report, which fell for a third straight month, but not as much as the Street expected. You can see elsewhere on this blog what we think of that.

Late in the session, Fed’s Yellen says now’s not the time to raise rates (she also said some less market-friendly things, but hey, why quibble over details.) Make hay while the sun’s shining, friends.

There are more than five times as many people looking for jobs as there are openings, but that problem won’t last forever, at least according to a new study from Northeastern University. Other observers aren’t as optimistic.

The study argues there will be more jobs than people to fill them by 2018, (hat tip WSJ’s Real Time Economics). Retiring Baby Boomers will leave too many jobs open, as there will be 14.6 million new jobs by 2018, and only about 9.6 million workers available to fill those positions.

“Not only will there be jobs for these experienced workers to fill, but the nation will absolutely need older workers to step up and take them,” study says.

The idea sounds nice in principle, but some aren’t ready to believe time and retirement will immediately heal the labor market’s wounds.

Economist’s Free Exchange blog says it’s not clear retiring workers will “magically solve” all the issues plaguing the labor market. Skilled workers retiring could exacerbate income inequality, blog says. And increasing retirees will boost budget strains, which eventually have to be addressed.

“If budget balancing involves spending cuts and tax increases (as it typically does) then broader economic growth may slow, leading to reduced job growth,” blog says, offsetting some job openings created by retiring Baby Boomers.

“No magic bullets waiting out there to solve these labor market issues, I’m afraid.”

If that news on the jobs front isn’t depressing enough, Credit Writedowns blogger Ed Harrison wonders where job growth will come in the future, especially since there hasn’t been any nonfarm payroll growth over the last 10 years. Financial services, construction, auto and real estate employment are all way down from 2000.

“I know these numbers are all backward looking,” he admits. “But, I don’t see any of these sectors jumping off the table right now as a job growth engine.” Only actual bright spots: healthcare and government, he adds.

Let's slap some lipstick on this pig.

So today, purportedly, the market’s up because used-home sales came in less bad than the market expected. That’s pretty typical Wall Street logic, but it’s all the more curious because stocks rose yesterday as well, after that Marxist, anti-business healthcare package passed the House.

I’m not exactly sure what’s going on here either, but it’s clear that the green signals are all aligned on Wall Street, and the buying is on. How long it stays on is another question. You know what they say, the trend is your friend, until the bend at the end.

Now, while the Street was pleased with the home-sales report, it’s hard to get too excited about the fact that sales fell for the third month in a row. The NAR reported sales in February fell 0.6%, while the Street was expecting a fall of 2%. Somehow this signals that the housing market is improving.

But what’s going on here is what’s been going on: a variety of government supports have made the housing market look stronger than it is. But those supports are slowly expiring, and a truer picture of the housing market is going to emerge this spring. It may not be pretty.

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I thought I’d get through today without writing or talking about Greece, but it just ain’t gonna happen.

Edward Harrison at Credit Writedowns thinks the Greek story will ultimately prove to be a tragedy:

So, you have Greek politicians threatening to go cap in hand to the IMF, involving the Americans and humiliating the EU, if the EU doesn’t bail the Greeks out. Then you have the Greek Prime Minister denying this and telling the other Europeans they must put the loaded gun on the table this week or the debt markets will implode. Meanwhile, the response from the Germans is ‘Nein.’  In fact, Angela Merkel wants to retroactively change the eurozone criteria so that the Greeks can be excluded from the eurozone if they continue to deficit spend. This doesn’t sound like a lovefest of Friede, Freude Eierkuchen to me. More likely, we have the makings of a more severe crisis.

I had to look up that “Friede, Freude Eierkuchen” reference. From a translated Wikipedia page:

Peace, joy, pancakes today is a phrase that describes a superficially intact, seemingly peaceful, carefree facade of a society. It is often used to express that someone does not see problems as obstacles, but that his life continues exactly as before.

Things are moving fast on this front, and while it’s hard to just imagine some disaster where the eurozone splinters and Greece sinks into the sea, it’s not impossible to imagine, and quite a few sober observers are expecting just that.

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Last month, we reported on the Equipment Leasing and Finance Associations’ monthly activity report. It was pretty ugly. The group posted their February report this morning, and while it didn’t match January’s dire numbers, it still showed regression.

“New business volume for February declined three percent when compared to the same period in 2009,” the group reports. On a monthly basis, volume was down 6%, which apparently is better than the four-year average for February to January of a drop of 17%.

But the group also reported a “noticeable” rise in delinquencies (albeit the numbers were skewed by one outlier respondent, the group says.) And credit approvals fell to 69% (still up from 65%) a year ago. “Almost half of participating organizations reported submitting fewer transactions for approval during the month,” the group said.

For anybody expecting some surge in capital spending that’s going to jump start the economy, well, it’s fine to hope that, but think twice before placing your bets on it. From the release:

“The fact that February new business volume is down compared to February 2009′s anemic numbers tells you that we still have a long way to go in the economic recovery,” said Thomas Jaschik, president, BB&T Equipment Finance located in Towson, MD.  “Businesses continue to lack the confidence to make substantial investments in capital equipment. The increase in delinquencies and charge-offs from January to February has a seasonal factor associated with it, but is not a trend you like to see given the run up in these two items in 2009.”

At some point this number will matter.

US stocks rising yet again, following yesterday’s gains, as President Obama signs new health-care legislation into law.

Positive reaction to the passing of the health bill is a bit perplexing, especially since many expected health care to act as a drag to the market’s yearlong rally.

But as we noted yesterday, it looks like there could be several benefactors from the legislation, ranging from hospital operators and pharmacy-benefit managers to drug and medical-device makers. And the final vote has added some much-needed closure to the situation, which seems to please investors.

But the ballooning federal budget deficit isn’t lost on some, and this $940 billion piece of legislation has Harvard economist Greg Mankiw worried about future implications:

In addition, I could not help but fear that the legislation will add to the fiscal burden we are leaving to future generations. Some economists (such as my Harvard colleague David Cutler) think there are great cost savings in the bill. I hope he is right, but I am skeptical. Some people say the Congressional Budget Office gave the legislation a clean bill of health regarding its fiscal impact. I believe that is completely wrong, for several reasons (click here, here, and here). My judgment is that this health bill adds significantly to our long-term fiscal problems.

Nevertheless, the stock market keeps puttering along. DJIA’s up 44 at 10830, while S&P 500′s up 2 to 1168.

“I don’t read this market rise as an endorsement of expanding federal indebtedness, but rather a vote of support for the functionality of government,” John Curran writes at Time’s Curious Capitalist blog.

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So, now that the big, noisy fight over healthcare is over, sort of, we can finally move on to focusing fully on financial reform, and not a minute too soon, either.

This Senate plan of Chris Dodd’s moved past the committee yesterday. Republicans, led by John Boehner and his punk-staffer fighters, are still bitterly griping, and the Treasury Secretary is trying to sound a rather populist note, “Listen less to those whose judgments brought us this crisis,” he said.

But we wonder if anybody in Washington has really learned any valuable lessons from our little object lesson in financial Armageddon.

For all the talk of a consumer finance protection agency and a oversight council, can we just have some rules? You know, rules, like the ones that keep the financial industry on an even keel for like 70 years or so.

The Dodd bill focuses more on councils than on rules. That’s a mistake. These bankers are clever folks; it took them decades to get around the Roosevelt-era laws, but they eventually did it. It will take them far less time to navigate around some agency or council tasked (and likely underfunded and understaffed) with watching them. Rules, while they can be and obviously have been evaded — we’re talking to you, Lehman Brothers — are still harder to get around.

It’s nice, this idea of some regulators to keep an eye on the shop, so to speak. But regulators have a horrible habit of falling asleep just as the regulated are getting frisky. What I’d much to prefer to see are concrete rules. You wouldn’t need agencies and councils if you had hard laws that governed banks’ behavior.

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US dollar bounded higher again overnight, which seems to be keeping in check any increased bets on US stocks, gold or oil. For now. Dollar showed the same friskiness ahead of yesterday’s US equity trading, only to later relinquish its gains and end lower.

Here’s a neat trick for you: Overlay yesterday’s chart of the DJIA with one tracking the US dollar index and you’ll see an almost tick-for-tick move in opposite directions.

Mixed session for stocks in Asia overnight, while European markets are currently higher. Richmond Fed’s March manufacturing survey and February existing home sales both set for 10:00 a.m. ET.

Dollar  index creeping back toward 81.00, recently at 80.89. S&P futures down 1, DJ futures down 2. Ten-year a shade higher, yield at 3.65%.