We've heard from a lot of observers that the most critical flaw in the "reset button diplomacy" proposal from the Barack Obama administration was the shaky assumption that the Russian counterparts hold any interest whatsoever in improving relations.  Today, however, at least in preliminary terms, we have seen Mr. Obama and President Dmitry Medvedev appear to be willing to sign a wide raft of deals.  This may come as a surprise to Clifford Gaddy of Brookings, who commented to Der Spiegel that the Russians never really warmed up to the reset button idea.  Naturally "resetting" relations is not mutually exclusive from the achievement of positive agreements.

SPIEGEL ONLINE: So the Russians instead see in Obama's visit an opportunity for ...

By Peter D. Schiff
Guest Columnist
Money Morning

[Editor’s Note: Peter D. Schiff, Euro Pacific Capital Inc.’s president and chief global strategist, is a well-known author and commentator, and is a periodic contributor to Money Morning. Schiff is the author of two New York Times best sellers: “The Little Book of Bull Moves in Bear Markets,” and “How to Profit from the Coming Economic Collapse.” For a more-detailed analysis of the nation’s financial problems, and the inherent dangers that these problems pose for both the U.S. economy and for dollar-denominated investments, click here to download Euro Pacific’s new financial-research report, “The Collapsing Dollar: The Powerful Case for Investing in Foreign Securities.”

In the midst of an ongoing financial crisis that’s eradicated trillions of dollars in shareholder wealth, the profit search facing U.S. investors is tougher than ever. The uncertainty surrounding the economic-stimulus and …

Barring some dramatic – and unforeseen – news this week, expect investors to tread water until Thursday, when the government is expected to release the results of the bank stress tests it conducted on the 19 largest U.S. banks.

The stress-test results are expected to show that the 19 banks may have to raise between $100 billion to $150 billion – or even more – in new capital. Investors will cause the shares of the strong players to zoom northward, and will likely savage the shares of the weakest players.

“I can’t think of a time since I’ve been watching banks when there’s been so much uncertainty about the true value of a key set of assets,” Douglas Elliott, a fellow at the Brookings Institution, a Washington think tank, told Reuters.

The U.S. bank stress tests have transfixed the world financial markets for weeks, exacerbating the ongoing financial crisis – worsening the U.S.

...

After a two-day “holiday” to start the week–Martin Luther King Day today (Monday) and Inauguration Day tomorrow (Tuesday)–it’ll be back to business on Wednesday as Congress begins to grill U.S. Treasury Secretary nominee Timothy Geithner – the appointment many observers believe to be the most important of the new Barack Obama administration.

Geithner, currently the president of the Federal Reserve Bank of New York, is viewed by Democrats and Republicans alike as probably the most qualified candidate to succeed current Treasury Secretary Henry M. “Hank” Paulson Jr., since whoever fills this post will have to be able to step right in and make whatever moves are needed to fix a financial system that seems to get worse by the week. Geithner is actually viewed as perhaps the one candidate with the qualifications, personality and personality needed for success.

But there’s a problem.  The man chosen by President-elect Obama

...

The U.S. Treasury Department has done nothing to make sure $700 billion in taxpayer-provided bailout money is used to buttress the weak U.S. mortgage market, which was the catalyst for the growing global financial crisis, congressional watchdog Elizabeth Warren said Friday.

Warren, who heads a congressionally appointed oversight panel, told ABC News there was no evidence the Treasury had used money from the Troubled Assets Relief Program (TARP) to put a floor under the falling U.S. housing market by avoiding preventable foreclosures. “There’s just no money that’s gone in that direction,” Warren said. “This one’s not even arguable. The TARP funds themselves have not been used in this way despite congressional statutes requiring them to do so.”

The government has spent the first half ($350 billion) of the bailout money. U.S. Treasury Secretary Henry M. “Hank” Paulson Jr. set aside the second half to be

...

President-elect Barack Obama yesterday (Thursday) named Mary L. Schapiro – a strong proponent of protections for individual investors – to head the U.S. Securities and Exchange Commission when his administration takes office next month, the biggest of three nominations with potential financial crisis implications.

And in the latest addition to his Obamanomics plan, the president-elect has also proposed a massive stimulus package of as much as $775 billion over the next two years as part of a historic infusion that’s aimed at overhauling America’s infrastructure, schools, broadband networks and energy use, a Congressional source told MarketWatch.com yesterday.

But making the Schapiro nomination official was considered a key move. In its Thursday morning issue, Money Morning reported that Schapiro had been chosen and that an official announcement would be made later in the day. And that’s just what happened.

Obama named

...

Hewlett-Packard Co. (NYSE:HPQ) is making big strides even as the economy falls deeper into recession. HP’s superior products and exemplary execution are key factors behind this trend, says Horacio Marquez. And with the stock beaten down by broad market panic, Horacio says the company is a steal. He recommends building up a position in increments over the coming four months.

This from Money Morning:

There is no doubt that the global economic environment presents a very bleak outlook.  The National Bureau of Economic Research (NBER) last week announced that the U.S. economy has been in a recession since last December – a situation that appears to be getting worse, given that the economy lost half a million jobs lost half a million jobs in November. Interestingly, the market traded up both those announcements.

On Nov. 24, Hewlett-Packard Co. (NYSE:HPQ) reported a quarterly profit of $1.03 a

...

Expect more pain in the housing market next year, says Don Miller. Rising unemployment will keep the foreclosures coming. And as the backlog of inventories swells, Don says homebuilders still look ripe for shorting in this environment.

This from Money Morning:

The U.S. housing market is already being pounded by the “perfect storm.” And the outlook for the New Year is for the stormy weather to continue – and probably to get worse.

As if a locked-up credit market and tidal waves of foreclosures weren’t already enough, we’re now watching unemployment climb and consumer confidence plunge.

But even when the housing market is taking on water, there are ways to stay afloat. Indeed, investors nimble enough to maneuver can even make money.

The watchword on this market, though, is caution.  If an investor decides to test the waters, beware of the extraordinary financial undertow.

Here’s a look at what’s happening now, and

...

Several Money Morning readers have written to ask about steel-sector stocks, which have taken investors on a roller-coaster ride in the past year. After analyzing the sector, I came to one very strong conclusion: With its terrific fundamentals, Nucor Corp. (NYSE: NUE) is poised for significant gains. Steel stocks, which had seen a 36% climb this year, have sold off dramatically and are now down about 16% for the year.  That’s a 42% drop from their peak. Wow! Shares of the Charlotte, N.C.-based Nucor could not escape the carnage and have endured an even bigger swing: From their low of $50.30 a share in early January, the shares of the No. 1 U.S. steelmaker soared 66% to a trade at a high of $83.56. From their peak, Nucor’s shares have declined 42%, closing Friday at $48.45. They’re down 18% for the ...