MARKET COMMENT
March 13, 2007
We thought Goldman Sachs earnings would be the major focus
today and they were briefly, but mortgage market problems took center stage,
and problems there blew-up the stock market today.
Further, delinquent payments on mortgages reached their
highest level [4.95%] in three and half years while foreclosures continued to
increase.
Federal Housing Authority loan
delinquencies reached 13.46% and subprime reached
13.33%.
Since the rout two weeks ago there hasn’t been a rational
way to position yourself in this market unless you were a day trader or been
willing to assume great risks.
Since we’re
not interested in either, standing aside has been the best strategy at least
for the time being.
By market sector you really need to stay focused on the consumer
[“Chucky”] and financials.
I wonder why current data has yet to be posted?
Could it be they can’t figure out what
happened two weeks ago?
Or find it embarrassing?
In
the meantime, the Fed has been busy conducting repurchase agreements as $12
billion expired, while $8.25 billion was added, for a net total of $32.25
billion outstanding.
But it seems not to
be having the usual affect “yet”.
As stated previously, the market is almost too hot to
handle.
One day you can look like a
genius and the next a dope.
In these types
of conditions it may be best to just stand aside and let others beat themselves
up.
It can be a frustrating spectator
sport but then sometimes it’s the best thing to do.
We’ll start hearing plenty of soothing talk from officialdom
and Wall Street hierarchy probably as early as tonight and tomorrow.
They’ll be minimizing mortgage difficulties
and suggesting you remain in the game [paying them
fees] and focused on the long-term.
Have a pleasant evening.
Disclaimer:
Among other
issues, the ETF Digest maintains positions in:
MDY, GLD and IEF.