2011Aug15 Dramamine Anyone?Pardon me, this way is a very nice way. It's pleasant down that way, too. Of course, some people do go both ways. ~ The Scarecrow MARKETS:
Last week, depending on the day, investors were clearly going both ways. 600 points down, 400 points up, 500 points down, and we still don't know who the man behind the curtain is. We are not sure even the "Great and Powerful Oz" could explain what is going on in this global munchkin land.
There has been another change in our asset class rankings. International Equities fell to a rank of 4 as currencies moved up into the 3rd slot. However, within the asset class we have seen the relative strength emphasis change. While still emphasizing Emerging markets the emphasized region has change to Asia Pacific from Europe. Europe had been emphasized since June of 2009.
None of these asset classes has shown a sustainable trend long enough to support a decision to reenter the market. We know that at some point the time will be right to put some money back on the table but that time is not here yet. The market will let us know when the prospects for success outweigh the tremendous risk currently lurking around the globe.
Of the forty sectors that we track every one of them is in a negative trend. Over the last four years, this is the fifth time that this has happened. This serves as just one more sign that the market is in an oversold posture. Again, this does not signal a time to buy, but markets will not stay oversold forever.
Interview with Mr. Markets:
We found this Forbes column to be both informative and very entertaining.
Excerpt from Forbes: UL: Thank you for taking the time to speak with us today. What do your friends call you? Can I just call you "World" for short?
WFM: I'm nobody's friend, and you can call me "Mr. Markets".
UL: Yes. Right. Well. Moving right along, Mr. Markets, there are a lot of pretty anxious people out there wondering just what on earth is going on. The Dow went down 635 points one day, and up 430 the next. We were hoping that you could shed some light on this.
WFM: Look, I tell you everything I know every second of every trading day. The answers to all of your questions are in the numbers I give you. What is going on should be obvious.
UL: Well, Mr. Markets, it's not obvious to all of us. I was hoping that you could explain things for our readers. Was the scary 635-point plunge in the Dow on Monday the result of the Standard & Poors downgrade on Friday night? And please don't roll your eyes like that.
To read the balance of the interview click here.
Real estate:
The Obama administration may turn thousands of government-owned foreclosures into rental properties to help boost falling home prices. The Federal Housing Finance Agency said Wednesday it is seeking input from investors on how to rent homes owned by government-controlled mortgage companies Fannie Mae and Freddie Mac. The U.S. government rescued Fannie and Freddie in September 2008 to the tune of over 150 billion dollars, and climbing. At the end of last month, the government owned roughly 248,000 foreclosed homes but officials expect the number of foreclosures to soar in the coming months.
Many foreclosures have been stalled so state and federal regulators can investigate whether lenders cut corners and improperly handled thousands of cases. Once a settlement is finalized, foreclosures are expected to pick up again and further depress home prices.
Converting the homes into rentals may reduce "credit losses and help stabilize neighborhoods and home values," said Edward DeMarco, acting director of the Federal Housing Finance Agency, which oversees Fannie and Freddie.
Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices of surrounding homes.
It also might meet the growing demand for rentals. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press.
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