At "A Dash" we try to stick to what we know. On some occasions our approach provides information that has been neglected by a large amount market pundits. We highlight arenas of opportunity.
The Housing Problem
Every person is now focused on housing, mortgage resets, losses at financial companies, and potential effects on the consumer. There seems to be some competition to claim who was first in pointing out these problems. Before the days of this blog, we warned our clients on the subject of over-investment in real estate. The difference between us and others is that we did not propose some imminent market collapse. There was opportunity in equities, on a relative valuation basis, and there still is.
Economic News of The Market Perspective
Most market pundits see this as a black-and-white, light switch kind of trouble. There is an economic trouble. It is up to the Fed to act. They should cut rates aggressively. The Fed does not see what we do, therefore they are slow in acting. (We should offer a prize for any article that makes this point without using the phrase "behind the curve.") It is all about the Fed and how fast rates are cut.
Then we see trading like last Friday's, after Bernanke does signal aggressive action is in prospect, the markets start to worry about what that means. There is a reason for this: It is not a simple trouble of interest rates.
Economic News of A Multi-Faceted Problem
One of the things that distinguishes our approach is a public policy perspective. We look at all aspects of troubles and consider the possible role of various government institutions in reacting. This is essential for our readers and investors, because it represents how the Fed sees issues. An investor can pretend to instruct the Fed or can know the Fed. To us, the choice is obvious.
A public policy analyst would see the housing problem as having various dimensions, including the following: Read More
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