Back On Track and Moving Forward – Market Update
Well, What have we missed?
The past few weeks have seemed to fly by up here in beautiful Portland Oregon, but here is a quick update on the market to get you by until we can put up something a bit meatier.
Bernanke gave his Monetary Policy Report before congress today – he is "unusually uncertain" about the economic outlook, and not terribly optimistic about jobs either. Question, do you think that he meant that he is more uncertain than usual, or that he is usually certain about the economy? I’m guessing that he was trying to imply one, but that the other is the truth.
The FinReg bill was signed into law today, most people agree that the changes wouldn’t have stopped the last collapse and are thus unlikely to prevent another one. One interesting change is that Ratings Firms can now be held liable for the accuracy of their ratings.
In response, the 3 major ratings agencies have cut off new bond offerings from publishing their ratings. They have sky-scrapers worth of lawyers working on loopholes, I’m sure, but for now, the ratings agencies do not want to put their name on anything. This is surprising considering how recently they were touting their overall accuracy and exacting standards for quality.
There is, once again, a large amount of speculation around the federal reserve bank. Rumor holds that they may stop paying interest on excess reserves, that they may start buying up fixed return securities, and that Ben Bernanke has been replaced by an aliens! (I may have made one of those up).
I do find it odd how many people get paid to speculate and offer "expert opinions" on the actions of large corporations, government entities and public figures; they are rarely correct, and when they are, it is because they were betting on a sure thing – I’ve never been one to miss jumping on the gravy train, so here are my first three predictions. All future predictions will require a personal appearance on a major cable news program and a per-diem for travel, food and boarding.
Prediction #1: Barack Obama will continue to be president, Michelle Obama will continue to be Glamorous.
Prediction #2: When it comes to (enter issue here), the GOP will disagree with the Democrats, and will be summarily ignored. Fox will make a big deal about it.
Prediction #3: Thomas Hoenig (voting member of the Federal Reserve) will want to raise the federal funds rate, and will be the only one who votes that way.
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Geoff Boyd – PrimeLending – Clackamas, OR