I have to give a shout out to all the folks that came down to Orange Coast College for KFI 640AM's "Mind Your Own Business." The event was a great success and I met many fantastic people, including subscribers and investors looking for answers. The mood was cautious as most people can't get a handle on what's happening in Washington, where a lack of cohesiveness and leadership play a role in what has also become a rudderless stock market. But, most people are looking for ways to make money, ways to catch up and make up for lost opportunities and lost wealth. At this stage it's clear that real estate will not generate the kind of returns many feel they need over the next decade. I admire the people that came out, they are seeking answers and they are facing fears and trends that suggest it's better to stay in their foxholes.

On that note, I must say the market held up nicely last week. There were so many reasons for it to collapse. This is very important to note as we pay as much attention to how the market reacts to news as the news itself. Well, this week, it's back to the most important news and that's the latest on the jobs picture. Before we get to that report on Friday there are other potential market moving reports out as well. The Greek drama continues to play out, too. Apparently, there is a $34.0 billion package coming to aid the Greeks, sort of like the "God from the Machine" plot, which routinely saved the day in Greek tragedies. It's still touch and go, as that country will also try to raise $10.0 billion in the open market. Still that may not be enough as the nation needs €53.0 billion this year in addition to meeting €20.0 billion in bond redemptions by the end of May.

The Greek drama could possibly doom the euro according to George Soros, and I think that the Greek government knows this and knows how much the euro means to Germany and France.

Big news over the weekend also included the possibility of Prudential PLC (PRU) buying the Asian AIG unit, which appears to be a done deal according to news out this morning.

In the meantime, the market is nearing a point where it will make a dramatic move. The major indices are all in ascending triangles and are on the verge of breaking. For the DJIA, key resistance numbers include 10,450 and then 10,750. Key support is 9,900.

For the S&P 500, the breakout comes with a move through 1,150, especially on stronger volume. Because we are nearing a key point in the formation key support is 1,050, not far from the upside test.

Mixed Signals

These days everyone is a fiscal conservative in chat but in real life it just is happening too slowly or not at all. The latest to wade into the pool of hypocrisy is Hillary Clinton. In the same week she attempted to get bona fide as a responsible politician and a typical member of the current crop of power players that can't stop spending money. "We have to address this deficit...as a matter of national security not only a matter of economics."- Hillary Clinton

While the Secretary of State was uttering those words we learned that the U.S. embassy in London will cost $1.0 billion. Wow! I'm not sure how much of that will go to Americans but it got me thinking. I don't recall any single project in the stimulus plan that was remotely a $1.0 billion project. I read part of the reasons for building the monstrosity is that U.S. diplomats owe $50.0 million in unpaid parking citations associated with troubles parking at the current embassy. It's a beautiful building, although an all glass structure in a foreign country may prove to be irresistible to terrorists. The bigger issue, however, with construction unemployment at 24% in America it sure took chutzpah to make this announcement.

The guy who drove me to the airport yesterday told me the road we were on, route 405 north, gets so clogged you could walk to your destination faster. The good news is that this project made the list, although I saw no signs of any work. Here is the list of biggest stimulus projects in 2009.

www.Propublica.com

Economic Data

Personal Income and Spending

Broadly speaking, this report was in line with consensus expectations. However, the decline in disposable income was concerning, and suggestive of employers holding the line on pay while continuing to push workers to increase their productivity. The savings rate falling to 3.3% in January from a 4.9% rate in 2Q09, is largely in line with trends we are seeing at retailers, where consumers are purchasing non-discretionary merchandise. As long as income growth remains sluggish, in order to propel GDP consumers will have to continue to wind down the savings built up in 2009. Whether this happens is an unknown variable given uncertain prospects on jobs and the overall direction of the U.S. economy. We hope that consumers do not re-leverage their balance sheets, and in the meantime push the savings rate close to the 1.2% cycle low hit in 1Q08.

Key Line Items
* Personal spending: 0.5% (consensus: 0.4%)
* Personal income: +0.1% (consensus: +0.4%)
* Disposable personal income: -0.6%