Obama’s new mortgage plan is suppose to help the honest homeowner down on their luck and not reward the irresponsible speculators by throwing good taxpayer money after bad loans. $275 billion is structured to help around 8 million homeowners. We’ve heard all along, that in order to get the economy out of this rut we need to fix the housing market. Even though $275 billion is a drop in the bucket compared to the size of the the US housing market, it is definitely a start in the right direction.
The UK is the first country to admit that it has nationalized some banks. It will start including the liabilities of Royal Bank of Scotland and Lloyds on the government balance sheet. Are we slowly shifting from states of capitalism to communism? Socialism?
We are definitely in a restructuring process, and it is evident that we are no where near the end. With stocks near their lows, there isn’t any positive news being released to entice confidence in traders. With Gold near all time highs it is evident that a flight to quality/safety is the only play individuals and institutions are making.
The Fed has revised forecasts down so that this year may not see a year-end recovery and will contract between 0.5% and 1.3%. Also, we have to keep in mind that the unemployment numbers undercount considerably and unemployment is really already at 10-12%. Bad news all across the board, and the only way to profit in light of bad news is to invest in various derivatives.
The futures market allows you to either buy or sell any investment vehicle, and with the ongoing changes in our government policy we must all become traders for the most part rather than investors. As of late, a long term trade in my mind is considered to be 6 hours. With the given volatility you cannot be trigger shy, and must be quick to react. Add to winners, and amputate the losers.
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