Janet Takes 'The Stand"

Traders were noncommittal on Monday as weak oil prices and weak US housing data do nothing to inspire any confidence... Add in:

- The Janet Yellen’s Humphrey Hawkins testimony to congress that begins today at 10 am

- The BoE (Bank of England) testimony that is taking place as I write this

- And the fact that the investors and Eurozone markets are all on hold pending the "Greece solution" that was delayed for yet another day

- A decline in oil prices - that caused the rumor mill to heat up with a suggestion that OPEC had or was calling an emergency meeting - proved to be of little value....

and you can easily explain Monday's lack of direction or commitment.

With stocks just under all time highs - and no real directional driver - there was no real motivation to trade...in fact it is exactly when you try to create the trade that you end up wishing you hadn't.

The action was taking place in other mkts around the world......European stocks rallied to 7 year highs on Monday, Germany performing well - The latest business climate IFO survey for February continuing to show improvement - The 4th consecutive monthly rise and the highest level for 7 months i.e. since July 2014. 2014 4th Q GDP growth at 0.7% is well ahead of expectations of 0.3%. These are clear signs that the German export powerhouse is back on track....exciting investors and mkts.

The breaking of the Greek impasse is also causing renewed excitement for Europe and Asia - helping the FTSE100 hit an all-time intraday high and the Nikkei (Japan) pierce 18,500 for the first time in 15 years. As we have said - As the Greek issue fades investors will likely focus back on the global economy, with renewed commentary on what has been a largely positive reporting season.

With the possibility of a ‘Grexit’ a more distant option - that distraction is now marginalized for investors,..... allowing them to focus on the efforts of the ECB and other central banks. While we have seen European mkts recover recently expect to see another surge as the ECB initiates their QE program next month.
Now although we must still wait for the reform plan - we are getting word that the plan will supposedly focus on tax evasion and streamlining the civil service. The German newspaper, Bild, is also reporting that the Greek government is planning a tax “hit” on wealthy Greeks. Oh boy...here we go....TAXES? Who even pays taxes in Greece?

On Sunday Prime minister Tsipras, gave a measured speech saying that Greece had “won the battle, not the war” in its fight with European creditors warning that there is a “long and difficult road ahead” - - Won the Battle? Really? It clearly looks like he LOST the battle AND the war as the Germans clipped his wings and the jury is still out on how the Greek citizens feel...... Stay tuned as this story continues to unfold.

Today here at home - at 10 am - Janet Yellen will address Congress....and while it is clear that Investors don’t really care about her opinions on the economy or fragile geopolitical conditions around the world - they will be listening intently to figure out if she gives us any new clues on the timing of any rate increase.

Look - if you believe all the "good" data on jobs and GDP then she has every reason to start the process....but unfortunately, the US government will go broke trying to pay the interest on the existing debt – even at near zero rates, let alone higher rates. So expect that she will continue to tell us how fragile the recovery remains and how it is necessary to be “patient” before any move in rates. I do expect though that she will re-iterate the fact that any rate hike, when begun will be small and limited over a very long time as investors are trying to gauge not only the size of any hike but the pace at which they will continue.

With yesterdays release of weak existing home sales - she can easily pin ' lower for longer' on that data point. Reported sales of previously owned homes fell by 4.9% to an annualized rate of 4.82mil units in January. This was the lowest rate since April 2014. (Now this time of year is always slow - so it is important to see how it unfolds over the next 2 to 3 months)

Apparently the number of houses on the market fell for the second month....while sellers have again lost touch with reality - raising prices by some 6.2%. - So either sellers are not really interested in selling or they are trying to catch an uninformed buyer......Just because sellers offer their houses at higher prices does not mean that they will sell for those higher prices - and with the spring selling season just kicking off - it will be interesting to see how buyers really react....will they pay up or will they hold the line?

( I will tell you that the housing mkt in my community does not reflect this at all...It is still under pressure with NO lack of inventory ...- there is plenty on the mkt - but price expectations are ridiculous and with so much competition - something has to give....I am very interested to see how this one plays out this spring)

US futures are flat....Again I think we will remain in the 2090/2115 range as investors dissect the Yellen testimony.

European mkts are slightly positive....Greece is closer to getting their bailout as European finance ministers seem to be approving of the new economic plans. Highlights include - maintaining the current state owned asset sales, revamping the tax code, consolidating gov't pension plans to reduce cost. - The headline reads:

"EU Commission says that The Greek List of Economic Measures is Sufficiently Comprehensive" ....and the plot thickens.....

Beef Short Ribs

Begin with 6 / 8 beef short ribs. season with s&p and then brown in a frying pan with a bit of Olive oil. Make sure to brown all sides being careful not to burn the meat. After you have browned them - place them in a large/deep baking pan. Lining them up on their sides.

Next - large Chop - 2 lg White Spanish Onions, 1 bunch of celery stalk, 1 bag of carrots. Smash 4 /5 cloves of garlic and add to the meat - making sure you disperse the garlic all around. Next add the chopped veggies right on top.

In the frying pan that you used to brown the meat - add: 1 can beef broth, 1 can tomato paste, and 1/4 to 1/2 bottle of red wine. mix well and let the broth come to a boil for a couple of min as you steam away some of the alcohol in the wine. Bathe the short ribs in this mixture and cover tightly. Place the baking dish in the oven - preheated to 350 degrees. Let cook for 4 hours - tightly covered.

The presentation: Remove the baking dish from the oven. Puree 1/2 the veggies in the food processor. On a warmed serving platter - pour the pureed veggies down the center of the platter. Arrange the short ribs on top of the pureed veggies and then place the balance of the cooked veggies around the meat.

Complement this meal with oven roasted red new potatoes. - Rinse the potatoes - toss in baking dish....season with s&p, add a bit of olive oil to coat the potatoes. mix well. Prior to putting in oven - add 1/2 stick of butter - cut into pieces and strategically place around the potatoes. Cover and roast at 400 degrees for 40 mins. Remove cover and lower heat to 350 degrees and roast for another 15 mins or so - ....check for doneness by piercing with a fork.
Enjoy this with a large mixed green salad dressed in a Red Wine Vinaigrette and complement with a bottle of Brunello di Montalcino - it's like velvet.


Buon Appetito.