A Market-Changing Event
OOPS! No sooner do I put hedge positions on in RHR and RGS earlier this week, to protect from a potential steeper market downturn, than President Bush decides to step in and bail out the subprime market.
Bush to Outline Aid to Mortgage Holders Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.
Or as Bloomberg explains: Bush will let the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, guarantee loans for delinquent borrowers, allowing them to avoid foreclosure and refinance at more favorable rates.
This is a market changing event. We'll be stopped out of the hedge in RHR at the open, for sure. I'm tempted to take other hedges off today. On the one hand, Bush's fix won't solve the underlying problems that started this fiasco. On the other hand, the market probably won't care -- it's going up.
President Bush still opposes Sentator Dodd's plan to let Fannie Mae and Freddie Mac, the two largest U.S. mortgage finance companies, boost purchases of mortgages as a way to ease lending constraints. I guess he's against it because it's a Democratic plan. It's the one idea that made sense to me, but obviously, I'm not arguing with the guy who can make new laws as he sees fit.
Gold is up, too, because easy money is back. We'll see how uranium stocks do. It could be an interesting day.
Bush to Outline Aid to Mortgage Holders Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.
Or as Bloomberg explains: Bush will let the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, guarantee loans for delinquent borrowers, allowing them to avoid foreclosure and refinance at more favorable rates.
This is a market changing event. We'll be stopped out of the hedge in RHR at the open, for sure. I'm tempted to take other hedges off today. On the one hand, Bush's fix won't solve the underlying problems that started this fiasco. On the other hand, the market probably won't care -- it's going up.
President Bush still opposes Sentator Dodd's plan to let Fannie Mae and Freddie Mac, the two largest U.S. mortgage finance companies, boost purchases of mortgages as a way to ease lending constraints. I guess he's against it because it's a Democratic plan. It's the one idea that made sense to me, but obviously, I'm not arguing with the guy who can make new laws as he sees fit.
Gold is up, too, because easy money is back. We'll see how uranium stocks do. It could be an interesting day.
Check out my new gold and energy blog at MoneyAndMarkets.com
posted by Sean Brodrick @ 7:21 AM
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