Historic Fed Move? - One For The Ages!
Posted September 19, 2008 8:28 a.m. EDT
Updated September 19, 2008 8:30 a.m. EDT
Talk about a seal of approval. The latest Fed move – unprecedented in recent history, may have them buying all of the illiquid (distressed) mortgage assets off of the books of lenders and institutional investors from across the country. Seemingly Mr. Paulson and Co feels that this is one of the remaining roadblocks in the return of health to not just housing, but overall market and consumer confidence.
This is being validated by the market’s reaction yesterday afternoon – the Dow jumping 400 points by the end of the day. Dow futures this morning are already looking to the positive, which indicates (obviously) that the markets are in favor of the potential move by the Feds…
So… here’s the answer to your next question – how is this going to impact consumers here in the triangle? I believe in a VERY GOOD WAY!! As we’ve been talking about for months, the markets have been missing one of the most important ingredients… Confidence, Confidence, Confidence!! Without it – both on the institutional and consumer sides – it has been impossible for the economy to gain traction in its bid to get back on track – this goes for housing as well! So if this move by the Fed begins to return confidence to the markets - both wall street and main street - then we’ll remove the potential of systemic risk and allow consumers to return to the buying markets which will help the supply/demand issue, impact the consumer psyche in a positive way and get the housing train moving again down the tracks.
Stay tuned for further details on this potentially incredible government plan. Just as importantly, keep an eye on interest rates to see how they react to this historic jockeying from Washington.
Have a great weekend!
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.