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| Tuesday, Jan 06, 2009 |
| HERE WE GO AGAIN |
| By John S. Hopkins, Jr. |
| Tuesday, Jan 06, 2009 04:52 |
Just when I thought the Fed was heading in the right direction, I read a press release about the New York Fed announcing it plans to buy up to $500 billion in mortgage securities. On the surface, it seems like a good move, with the goal of stimulating the mortgage market, but as I read a bit deeper, all I see is some of the same behavior that ignores the root of the problem. You see, what the NY Fed is proposing to buy is high rated securities, not any of the existing securities that linger and continue to be the biggest impediment to a true housing recovery. To top it off, the NY Fed is working with four entities - BlackRock Inc., Goldman Sachs Asset Management, PIMCO and Wellington Management Co - to help oversee the purchases. Once again, its like putting the hen in the fox coup, especially with Goldman Sachs, where Henry Paulson came from and where billions of taxpayer dollars have been deployed to try to make Goldman healthy. What makes it even more curious, is the NY Fed is headed by Timothy Geithner, who will soon be sworn in as President-Elect Barack Obama's Treasury Secretary. So, you've got the New York Fed guy, teaming with a former Goldman Sachs guy, who are teaming with Goldman Sachs to buy high grade mortgage securities, while ignoring the existing mortgage securities that caused the bulk of the credit problem in the first place. I know I can be thick skulled, but just for once I would like to see efforts aimed at helping the guy on the street, rather than THE STREET itself. And, can't the Fed at least turn to someone who is not at the root cause of the problem, bring in some fresh blood and cut ties that should no longer exist? Maybe I'm naive here, but something doesn't smell right, and just when I thought the new Administration might actually do something different, it doesn't seem much different to me. |
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| Monday, Jan 05, 2009 |
| AN OPPORTUNITY TO ACT |
| By John S. Hopkins, Jr. |
| Monday, Jan 05, 2009 05:43 |
The government has pulled out all the stops in trying to deal with the current malaise gripping the economy. Interest rates have been slashed to the bone, financial institutions have been shored up, the auto companies have been thrown a life line, and the incoming Administration has made it clear they intend to do all that is necessary to get the economy back on track. The focus now needs to be fully turned to the consumer, who so far has shouldered most of the burden of this current recession. This means that any future TARP funds and other initiatives need to be directed towards those who are struggling to make ends meet, and banks now need to do their part by putting some of the TARP dollars they got in the hands of borrowers. It is true that the Fed has succeeded in getting interest rates lower, but it won't make any difference unless the banks are lending and borrowers are borrowing. Let's be honest, both lenders and borrowers are nervous, with the banks wanting to take on less risk and borrowers wanting to take on less debt. So, there needs to be a happy medium, with both lenders and borrowers feeling they are taking on appropriate risks. It all starts by getting the real estate market back on track, so we need to get a handle on the foreclosure situation, and to restore confidence and value in the housing market. Until that happens, you can forget about any major economic recovery. With Congress reconvening for the new year, it is imperative that they turn their full attention towards consumers. If they continue to favor corporations over consumers, you can forget about a recovery anytime soon. |
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| Here are just a few of the stock's/ETF's profiled in today's Members only chat room:
AMZN
DXO
USD
SEE THE FULL LIST |
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