Lennar (NYSE: LEN), whose colleagues include Toll Brothers (NYSE: TOL) and D.R. Horton (NYSE: DHI), reported earnings for the second quarter on Thursday. Since it is a homebuilder, you can expect that it would be a tough one to look at in many respects. There was a revenue decline of over 20%. And there was no profit. Lennar said it lost 76 cents per diluted share.

According to Michael Fowlkes and his earnings preview, Lennar did not satisfy Wall Street's outlook. Analysts were expecting a loss somewhere closer to 63 cents per share. That didn't stop the stock from going up, though. Lennar closed higher yesterday by over 17%. Volume was likewise incredible. Apparently, the market was focusing on the revenue beat.

Last week, Bank of Montreal (NYSE: BMO), one of Canada's oldest and largest banks, reported growth in its fiscal fourth-quarter earnings. But it may be the only one that does, as at least two of the Canadian banks scheduled to report fourth-quarter numbers this week have already released preliminary results that warn of lower earnings due to debt write-downs and trading losses.

Analysts surveyed by Thomson Reuters expect Toronto-based Canadian Imperial Bank of Commerce (NYSE: CM) to post earnings 42.6% lower than a year ago, or $1.28 per share. CIBC beat estimates by a penny in the third quarter, but missed by a penny in the period before that. The bank faces a class-action lawsuit related to investments in collateralized debt obligations consisting of U.S. subprime mortgages. Shares have climbed 20.7% from a recent 52-week low of $39.52, but are down 37.8% in the past three months.

Toronto Dominion Bank (NYSE: TD), Bank of Nova Scotia (NYSE: BNS), and Royal Bank of Canada (NYSE: RY) are expected to report more modest earnings declines of $1.01 per share, $0.73 per share, and $0.83 per share, respectively. All three Toronto-based banks topped estimates in the third quarter. Toronto Dominion and RBC have recently announced plans to offer shares in order to raise capital. Toronto Dominion and Scotiabank have been trading near 52-week lows, and their share prices are down around 39% in the past three months. But only Toronto Dominion has a consensus buy recommendation from analysts.

Economists differ regarding whether the U.S. economy has officially fallen into a recession, but for investor Mario Gabelli, the debate is the esoteric stuff of academicians and analysts.

Gabelli has his own reading on the U.S. economy and he isn't opaque about it.

"The consumer has been in a recession since November 2007," Gabelli told Bloomberg News Friday. "The economy has been bolstered by exports and a few other things."

Further, Gabelli, who oversees $28.3 billion as chief executive officer of Gamco Investors, Inc., said the U.S. Congress may have to boost the economy with additional tax rebates, Bloomberg News reported Friday. Congress passed and President Bush signed a $117 billion tax rebate package earlier this year.

Gabelli's comments occurred before the U.S. Labor Department announced Friday that the U.S. economy lost another 84,000 jobs in August, with the unemployment rate rising to 6.1% -- a 5-year high. The U.S. economy has now lost 605,000 jobs in 2008 after creating just 1.1 million in 2007.

Gabelli says takeover of Fannie, Freddie needed

Further, Gabelli said the federal government must take over Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), the U.S.'s largest mortgage financiers, as a prerequisite for housing sector recovery, Bloomberg News reported.

While the earnings crunch for this quarter is all but over, there is still plenty of action in the earnings arena this coming week. For instance, analysts surveyed by Thomson Financial are expecting America's Car Mart Inc. (NASDAQ: CRMT) and Campbell Soup Co. (NYSE: CPB) to be among this week's top earnings gainers.

Bentonville, Ark.-based America's Car Mart is expected to post net income of 38 cents per share (up 52.6% from the same period a year ago) on revenue of $73.8 million (up 25.8%). The used car dealer chain has tended in recent quarters toward positive surprises -- by 21 cents per share, or 73.5%, in the previous quarter. The long-term EPS growth forecast is 15%, about the same as the S&P 500. The consensus recommendation of analysts is to buy CRMT.

Campell is tentatively scheduled to report this week, and the world's biggest soup maker is expected to post net income of 25 cents per share (up 44.0% from a year ago) on revenue of $1.7 billion (up 7.5%). The Camden, N.J.-based company has just missed earnings estimates in the past three quarters. Its long-term EPS growth forecast is 7.5%, which is less than the industry average, but about the same as rivals Kraft Foods (NYSE: KFT) and Heinz (NYSE: HNZ). The analysts' consensus recommendation is currently to buy Campbell.

Other anticipated double-digit earnings gainers scheduled to report this week include brand name apparel maker Guess Inc. (NYSE: GES), mining equipment maker Joy Global (NASDAQ: JOYG), and chip maker National Semiconductor (NYSE: NSM). And Take-Two Interactive Software (NASDAQ: TTWO) is expected to swing to a profit.

On Thursday, home builder Lennar Corp. (NYSE: LEN) said that its fiscal second-quarter loss narrowed, as Wall Street had expected. KB Home (NYSE: KBH), on the other hand, reported Friday a larger-than-expected second-quarter loss due to weak sales and falling home prices, as well as write downs.

For the quarter ended May 31, Los Angeles-based KB Home reported a loss of $255.9 million, or $3.30 per share, compared to a loss of $148.7 million, or $1.93 per share, in the same period of the previous year. This includes a charge of $176.5 million against unsold homes and to abandon some land option contracts.

Revenue tumbled 55% to $639.1 million, driven by lower housing and land sales. Analysts polled by Thomson Financial had expected a loss of 94 cents per share on revenue of $691.3 million.

As of May 31, KB Home's backlog of homes yet to be delivered was 6,233 units, down 54% percent from the same quarter last year. Unit deliveries, meanwhile, fell 41% to 2,810 as the company attempted to scale back its inventory of homes on the market.

KB Home said its cancellation rate was 27%, down from 34% in the year-ago period and 53% in the first quarter, but new orders during the quarter fell 42% from a year ago to 4,200.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Applied Materials Inc. (NASDAQ: AMAT) Q2 profits declined on a glut of flash memory chips.
• Bally Technologies Inc. (NYSE: BYI) beat Q3 expectations and offered full-year guidance.
• Barclay's (NYSE: BCS) reported a big Q1 loss on credit-related write-downs.
• Constant Contact Inc. (NASDAQ: CTCT) saw big increases in Q1 revenues and in its customer base.
• Deere & Co. (NYSE: DE) Q2 profits rose on international demand, but results just missed estimates.
• Fluor Corp.'s (NYSE: FLR) strong Q1 results are a signal for the energy sector, says Jim Cramer.
• Freddie Mac (NYSE: FRE) Q1 loss widened on the housing slump, but not as much as forecast.
• IndyMac Bancorp Inc. (NYSE: IMB) narrowed its loss but predicted it wouldn't see a profit in 2008.
• LDK Solar Co. Ltd. (NYSE: LDK) Q1 earnings topped forecasts and it raised its outlook.
• MBIA Inc. (NYSE: MBI) reported a larger-than-expected Q1 loss due to write-downs.
• Mindray Medical International Ltd. (NYSE: MR) beat Q1 expectations and raised its full-year guidance.
• Nuance Communications Inc. (NASDAQ: NUAN) Q2 earnings were in line with analysts' expectations.
• ON Semiconductor Corp. (NASDAQ: ONNN) beat Q1 expectations and raised its Q2 revenue forecast.
• RealNetworks Inc. (NASDAQ: RNWK) beat Q1 estimates and announced share buybacks and a spin off.
• Salary.com Inc. (NASDAQ: SLRY) missed Q1 forecasts, leading to analysts' downgrades.
• Sykes Enterprises Inc. (NASDAQ: SYKE) beat Q1 estimates and raised its Q2 and full-year forecast.
• Syniverse Holdings Inc. (NYSE: SVR) beat Q1 expectations on strength in "messaging and mobil data."
• Toll Brothers Inc. (NYSE: TOL) warned of lower Q2 profits and more "challenging times" ahead.
• Website Pros Inc. (NASDAQ: WSPI) reported flat earnings despite soaring revenues and operating income.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American International Group Inc. (NYE: AIG) reported a loss of $7.8 billion but raised its dividend.
• Barr Pharmaceuticals Inc. (NYSE: BRL) missed earnings estimates and lowered its guidance.
• D.R. Horton Inc. (NYSE: DHI) posted a larger-than-expected Q2 loss on further write-downs.
• Fannie Mae (NYSE: FNM) posted its third straight quarterly loss on the continuing housing slump.
• Hansen Natural Corp. (NASDAQ: HANS) lower-than-estimated Q1 profit led shares to a 52-week low.
• Lazard Ltd. (NYSE: LAZ) net income dropped 71% on a fall-off of M&A activity and a write-down.
• MGM Mirage Inc. NYSE: MGM) Q1 profits were dragged down by decreased consumer spending.
• Pilgrims Pride Corp. (NYSE: PPC) widened its Q2 loss due to the rising cost of feed.
• Playboy Enterprises Inc. (NYSE: PLA) swung to a Q1 loss as revenue declined in all units.
• Qwest Communications (NYSE: Q) net income and revenue fell in the first quarter.
• Scotts Miracle Gro Co. (NYSE: SMG) blamed a slow start to spring for its Q2 profit decline.
• Teva Pharmaceutical Industries Inc. (NASDAQ: TEVA) posted a Q1 loss due to a charge.
• THQ Inc. (NASDAQ: THQI) posted a loss for its fourth quarter and revenues flat for the year.
• Toyota Motor Corp. (NYSE: TM) posted lower-than-expected Q4 results due to the U.S. economic slump.
• Warner Music Group Corp. (NYSE: WMG) Q2 loss widened and it suspended its quarterly dividend.

When one travels in economists' circles, one tends to tap into the issues, controversies and policy ideas 'dismal science' practitioners are debating.

And one issue economists have rattled around concerns the speed of fiscal policy stimulus, or more accurately, the lack thereof. In the digital age, the internet has propelled a host of speed-enhancing changes, and it occurred to this group of economists that U.S. Government policy is decidedly behind the curve in this area.

Here's why: economist David H. Wang noted that the U.S., in an attempt to jump-start its economy stalled by the nation's worst housing slump in more than 15 years, has implemented a host of monetary policy changes to provide monetary stimulus quicker. The U.S. Federal Reserve cut key, short-term interests multiple times during a 10-week span (and later implemented additional rate cuts), and devised two, new, Fed-administered institutions to address the credit crisis, provide liquidity, and ensure the orderly operation of financial markets.

AP reports that Countrywide Financial Corp (NYSE: CFC) lost $893 million in the first quarter. That $1.60 a share loss was not exactly what analysts had forecast -- they were looking for a profit of two cents a share.

Meanwhile the LA Times reports that Countrywide CEO Angelo Mozilo took in $10.8 million and cashed out $121.5 million in stock gains as his company got hammered by losses on sub-prime loans in 2007. Mozilo also enjoyed perks worth $176,513, including $44,454 in rides on the company's jet; $23,755 in automobile use; $8,581 in country club dues; and $31,238 in company-paid tax and investment advice. Mozilo faces an informal U.S. inquiry into his stock sales.

And Countrywide's financial condition is deteriorating fast. It set aside a $1.5 billion reserve to cover loan up 62% from $925 million in the fourth quarter of 2007. Moreover charge-offs totaled $606 million during the first quarter. Fortunately, Countrywide has an exit strategy. In January, Countrywide agreed to sell itself to Bank of America (NYSE: BAC) for about $4 billion in stock. The question is whether Bank of America will pull out of the deal now that it sees the rising costs it will incur if it moves forward. Since Countrywide trades 15% below that takeout price, the market has its doubts.

Investors don't seem happy with today's announcement -- the stock was down 5% in premarket trading.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

The Boston Globe interviews Warren Group CEO Timothy Warren whose firm tracks housing in Massachusetts. He suggests that it could take about 10 years before housing prices return to where they were at the peak in 2005.

Warren is a breath of fresh air when it comes to analyzing the housing market. Unlike industry-sponsored studies -- such as this bubbly comment from the National Association of Realtors -- Warren carefully tracks and analyzes data and his observations are not filtered by the need to use public pronouncements to spur real estate transactions.

But Warren's loyalty appears to lie with objective data gathering and analysis, rather than having an ulterior motive. He thinks that the declining number of home sales is worse than the previous housing slump of the early 1990s. He notes that "In the 1990s, we had just two years when the number of sales declined. We are in the fourth year of declining sales in the current slump."

On Saturday, President Bush warned that the government must guard against going too far in trying to fix the troubled economy. "If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse -- and end up hurting far more homeowners than we help."

"Democrats know that wait-and-see is not a responsible strategy for an economy that is teetering on the brink of recession," said Senate Majority Leader Harry Reid. "The president continues to convince himself that inaction is the cure-all for the economic problems hurting hardworking Americans." Democrats intend to strengthen the economy with measures dealing with housing, energy efficiency, and renewable energy.

President Bush said the recently passed program of tax rebates should begin to lift the economy in the second quarter of the year and have an even stronger impact in the third quarter. But he urged caution about doing more, particularly about the crisis in the housing market.

Here are a few highlights from this past week's earnings coverage from BloggingStocks:

• Axsys Technologies Inc. (NASDAQ: AXYS) beat estimates for the fourth quarter and raised its guidance.
• Deli Inc. (NASDAQ: DELL) missed expectations for the fourth quarter despite its move into retail outlets.
• Goldman Sachs Group Inc. (NYSE: GS) is lowering expectations for the quarter just ended.
• Home Depot Inc. (NYSE: HD) missed expectations, dragged down by the housing slump.
• Lowe's Cos. Inc. (NYSE: LOW) beat low expectations though profit fell due to the housing slump.
• Nordstrom Inc. (NYSE: JWN) beat estimates, though earnings and revenue fell.
• Office Depot Inc. (NYSE: ODP) fourth-quarter profits sank, falling short of Wall Street expectations.
• RadioShack Corp. (NYSE: RSH) beat expectations as lower operating costs offset lower same-store sales.
• Sears Holdings Corp. (NASDAQ: SHLD) missed estimates as both earnings and revenue fell.
• Sprint Nextel Corp. (NYSE: S) posted a fourth-quarter loss on acquistions-related write-downs.
• Toll Brothers Inc. (NYSE: TOL) swung to a $96 million loss, another victim of the housing slump.

Also, analysts predict that bank losses will be the highest in 20 years. See Jim Cramer's take on Lowe's and Nordstrom results. Timothy Sykes recommends investors not become starstruck by superstar companies such as Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG).

Upcoming results to watch for include Staples Inc. (NASDAQ: SPLS), Costco Wholesale (NASDAQ: COST), and Blockbuster Inc. (NYSE: BBI).

Visit AOL Money & Finance for more earnings coverage.

America's largest home improvement superstores, Lowe's Companies Inc. (NYSE: LOW) and Home Depot Inc. (NYSE: HD) are scheduled to report earnings this coming week. Here's a quick peek at them ahead of results.

Lowe's has missed earnings expectations only once in the past five quarters. When the company reported third-quarter fiscal 2008 results back in November, earnings came to 43 cents per share, beating the consensus forecast of analysts polled by Thomson Financial by two cents. For the current quarter, analysts expect only 25 cents per share, compared to 40 cents in the year-ago quarter.

The company's earnings per share growth forecast for the next three to five years is 19.1%, less than the industry average of 31.6%. The analysts' consensus recommendation is to buy Lowe's, though 10 of 21 analysts rate it a hold. Shares are up from the 52-week low of $19.94 in January, and closed Friday at $23.59.

For news on Lowe's and its rivals that could influence the earnings results, see BloggingStocks' Lowe's coverage.

Which is the better investment, Apple Inc. (NASDAQ: AAPL) or Bank of America Corp. (NYSE: BAC)? Most investors would take Apple's side. Even though there is some concern about the softness of iPod sales, almost no company has been more innovative over the last year in producing hot-selling new products. Unit growth prospects for the Mac and iPhone are the envy of the computer and handset industries.

Bank of America, on the other hand, is part of an industry where write-offs cannot seem to find a bottom. With housing and consumer credit getting worse, it is hard to predict how much more money center banks may have to show as losses in 2008.

But among the 20 most widely held stocks, so far this year, Bank of America has done the best, up 2.2%. Apple has done the worst, down 36.7 %.

The lesson here may be that the companies with the best commercial prospects may not aways do the best in the market, especially when they sport high valuations. A look at Apple's shares over the last year shows that they peaked in late December, up over 130% for the period. It did not take much in terms of a modestly weak forecast for the current quarter to start a bloody sell-off. Expectation had simply become too great.

At Bank of America, a look at the last year showed the stock had dropped almost 35% in mid-January. The shares are still way down for the period but the percentage drop is only 20% now. Wall Street seems willing to believe that most of the big write-offs are behind the bank and that bad news this year will be modest.

Apple may be asking itself if its actually good to be the company everyone thinks will do well.

Douglas A. McIntyre is an editor at 247wallst.com.

The New York Times reports that Japan's decade-long economic slump following the bursting of its 1980s economic bubble offers important lessons for the U.S. Of these, the most important one seems to be that banks and others exposed to bad loans should write them off fast and move on. It was Japan's unwillingness to bite the bullet that kept it stuck for a decade.

Last month, I compared Japan's negative interest rates to the ones we have now. But what caused the predicament that led Japan to cut its rates so much? In Japan, housing prices in the major metropolitan regions nearly tripled from 1985 to 1991, then proceeded to lose two-thirds of their value over the next 14 years. In the U.S., the price run up was less extreme: house prices rose 82% from November 2001 to their peak in June 2006. Since the peak, house prices have fallen 10% with 10% to 15% further to go.

Japan was slow to write-down its bad loans. That's because its industrial groups, or keiretsu, had tight links with banks, so when a bank got in trouble it was often quietly bailed out temporarily with loans or investments from other members of the corporate group. In the U.S., banks are quicker to take write-downs and so far we've used Sovereign Wealth Funds (SWFs) to recapitalize the banks.

The lesson we should learn from Japan is that the sooner we face reality, the sooner we can solve our problems and move on to the next period of growth. A larger question is whether we can grow without creating another bubble.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.