In This Issue:
Feds Ease The Mortgage Threat, But Create New Problems
Housing Is Now More Political Than Ever
Top-Yielding CDs Blast Treasury Returns
India's Outsourcing Stocks Are Again Attractive
The Bottom Line This Week
weeks ago, investors were inclined to ignore moderately bad news because they
were focused on what looked like a coming economic recovery. Last Thursday,
however, the optimism evaporated when the unemployment rate jumped
unexpectedly. Rumors of additional problems with insolvent hedge funds added to
the angst, as did growing worries about the king-sized problems at Fannie Mae
and Freddie Mac.
put it all together and decided the outlook wasn't as encouraging as they first
thought. In fact, it was starting to look as if a further economic slowdown
could be in the works.
the new forecast made the rounds, the market dropped 345 points. We had a tepid
33 point rebound on Friday, but it fell into the faint praise category which
actually deepened the gloom. When the final bell rang for the week, the Dow and
the Nasdaq were down 2.8% and 4.7% respectively.
the weekend, however, the outlook went from dead black to positively upbeat
when Treasury Secretary Paulson announced his benevolent agency would rescue
Fannie and Freddie. On Monday, jubilant investors pushed the market back up 290