Thursday, October 8, 2009

Intraday action

US shares are significantly higher today - retailers generally reported better-than-expected sales figures for September...meaning that declines were more moderate than expected. The DJIA is up just a little over 100 points, but then again it's priced in US dollars, which are hitting their lows over the past year.

Among the winners are the publicly traded homebuilders, up on expectations that congress will extend the first-time homebuyers credit. Connected to that news, the Federal Housing Administration is rumored to be in need of a $54 billion taxpayer bailout. The FHA is tasked with subsidizing 3.5% down payment loans to people with shaky credit. Soooooo, a person buying a $230,000 home (about the national average) can use the $8,000 first-time buyers credit, making it a taxpayer-subsidized zero down payment purchase, historically among the most likely to default. Haven't we been down this road before?


No comments:

Post a Comment