gabe borenstein

Fannie and Freddie's Effect on Changing Trends

Let's address the basic fallacy in this article.The FNM and the FRE are not dodging insolvency.The actions and the measures deployed by the treasury and the FED make one thing quite clear-neither of the agencies will be allowed to fail.On the other hand the rumors petaining to the isolvency issues are suspect given the record open short position in these agencies prior to the short covering.
On the other hands I agree that we are likely in the process of creating a major bottom.
The market paranoia had only distorted the fundamentals.The financial debacle has been discussed and correctly addressed by the insitutions involved as well as the Treasury and the FED.
The fiscal and the monetary "jolts" will contrubute to the recovery.The J-curve (weak dollar) will enhance the stimulative impact of the implemented "jolts".
For the viewers who have seen the mob breaking into Karachi stock exchange and destroying everything in sight,perhaps now they will understand the real risk.The record leverage deployed in the emerging market economies turning exchange trading activities into a gambling parlor implies a major implosion ahead.
In the European Union zone ,the ECB's rectrictive monetary policy as the zone is decelerating ,will turn the slowdown into a major recession.
In the Emerging Market economies we will witness a major economic implosion accompanied by unprecedented social unrest.
In Europe ,I will stop at a major recession.
These events will cause a major shift into dollar denominated assets propelling the DOW and the NASDAQ to record highs.
The Housing sector will follow with a major rebound as the economy heads for a major recovery.
These events are only months away.