SHOW TIMES
Weeknights 7p ET
CNBC Asia:
Saturday 06:00 SIN/HK
Sunday 04:00 SIN/HK
CNBC Europe:
Monday - Friday 10:00 CET
Saturday 06:00 CET
Sunday 04:00 CET
RSS FEED
MOST SHARED
- The Executive Job Search
- Chinese Overcapacity is Worsening, EU Chamber Warns
- Where Do Pardoned Turkeys Go?
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Salvation Army's Kettles Now Credit Card-Ready
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- Trader Talk
- Topless Business Is Taking Off
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
CONTACT US
We want To hear from you!
E-mail:
Text Size 
The market is rallying big on news reports that Bush will support some kind of Frank–Dodd bill to bailout as much as $400 billion in sub-prime mortgages. CNBC is talking about the ISM, but I doubt that’s much of a factor. The economy is basically flat right now. Profits are soft. Exports and foreign earnings are bright spots.
The bigger theme is the Fed’s move to reduce risk through its earlier actions with investment-bank discount-window operations. And now comes the likely FHA move to guarantee refinanced mortgages on a grand, unprecedented scale. It was in the Washington Post over the weekend and it’s front-page IBD this morning. My contacts confirm the White House movement.
Stocks and the dollar are up; Treasury prices and gold are down. There’s a slight improvement in risk-taking. Swap spreads are narrowing. Treasury man Henry Paulson’s regulatory stuff is not a factor, except to highlight that the Fed is operating on its own judgment to backstop the financial system and take bad collateral.
Wall Street wants this government assistance. They want the bailout. I prefer markets to bailouts, but there's no stopping the Frank-Dodd locomotive.
However, the GOP should demand a partial or full repeal of the Community Redevelopment Act (CRA) that was responsible for the substandard subprime loan creation in the first place, going back ten years ago. So far, however, no one wants to touch this hot potato.
Data is a real-time snapshot *Data is delayed at least 15 minutes