02.13.09

02.13.09

            It was more about politics than the market in the week just past. The market seldom does well when there are bad vibes coming out of Washington. And true to form, the major Indices were all down for the week. The Dow was the worst of the bunch, down 5.2 %, and the best of the bunch, the Nasdaq, was down 3.6%.  The S&P 500 and the R2K were down 4.8% and 4.7% respectively. No bragging rights anywhere. The long awaited speech by Sec. Geither was long on verbiage but short on details, and this disappointed trader. A report that the Obama administration was working on a plan to subsidize mortgages in order to help homeowners avoid foreclosures seemed to help somewhat. The plan is said to earmark $50 Billion for that process. When you do the math however, you see that is only 0.5% of all household mortgage debt outstanding. It is only a small fraction of the 7% of the total residential loans that are delinquent. To cover them all would take $700 Billion. Obama is going to release the details on Wednesday. It is a significant move, but the devil is in the details.

            The Financial Sector was again the “bad boy”, down a hefty 10.2% for the week.  The Stimulus package was worked out and should be a big help in starting some much needed impetus in some sectors of the economy.

            This week will be an options expiration week, and they have a tendency to be down weeks. Monday is a market holiday, so we again will have a four day work week.

            We are still staying in cash 100% and taking that wait and see attitude.

Till next time

The MTA Staff