Facts That Make A Difference
1. CHINA IS HOT - The Chinese Shanghai Class A stock index (open to both Chinese and foreign investors and priced in the local Chinese currency), has gained +24.2% YTD through last Friday’s close. The Shanghai index is an unmanaged index that is generally considered representative of the Chinese stock market. These international securities involve additional risks including currency fluctuations, differing financial accounting standards and possible political and economic volatility (source: Wall Street Journal).
2. TROUBLING - An analysis of loans (e.g., home mortgages, consumer loans, commercial real estate loans) and mortgage-backed securities held by US banks estimates that as little as 29% to as much as 43% of the assets are “troubled” (source: Barclays Capital, Financial Times).
3. HOMEOWNERS - More than twice as many families (76 million) live in homes that they own compared to the number of families (35 million) that rent a home or an apartment (source: Census Bureau).
4. BUSY FED - The Fed is buying $3-4 billion of mortgage-backed securities each trading day with a target of buying $500 billion by 6/30/09, an effort designed to keep longer-term interest rates down (source: Forbes).
5. SIGNED, SEALED, DELIVERED - President Obama signed into law the “American Recovery and Reinvestment Act of 2009” (the “Stimulus Act”). The bill was valued at $787 Billion. That is equivalent to spending $1 Million per day, every day for 2,156 YEARS.
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