September 8, 2008

The Worlds Reaction to the Biggest Bailout Ever

Well, the Dow is up 290 points. Thats a healthy move and it means that the consensus is overwhelmingly a two thumbs up. Of course, there is a lot of work to do, but this may begin to be the inflection point that begins to create a slow recovery in 2009. At least thats the thinking of Susan Wachter, real estate professor at the Wharton school of business. Ms. Wachter seems to think this is likely to stabilize the markets. That will go a long way towards bring some credibility back to the game.

Fannie plummeted more than $6.00 dollars as dividends on the preferred will be suspended. Freddie didnt fare much better. Not much point in owning a company whose assets are in serious trouble and now no dividend.

Lehmans's international analyst says that this will trickle down to all the stakeholders and will be a slight improvement world wide.

International Herald tribune notes that the US did look the other way when choosing a decidedly non capitalist answer to a very capitalist problem. Its not the first time we socialized a big problem and Im not sure its wqrong. Our financial credibility is at stake, and when you are a debtor nation your IOU better look good. much for the talking heads.

Whats Changed

Mortgage rates went from 6.5% to 6% quite quickly and more of that to come. Couldnt be better...

Thanks for Reading
Howard Bell
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1 comment:

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