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Obama Unveils Mortgage Plan, But Is That Good For The Market?

Summary: Equity markets rallied in the U.S. and Europe and many are hailing President ObamaEoe1/4aos mortgage plan as the reason for this bounce. But this may be quite...

Equity markets rallied in the U.S. and Europe and many are hailing President Obama's mortgage plan as the reason for this bounce. But this may be quite a fallacy. European markets rallied overnight before the plan was even unveiled. Much of this may have been due to new expectations that Chinese Premier Wen Jiabao Wen Jiabao (wĕn` jyä`bou`), 1942–, Chinese political leader, b. Tianjin. Originally a geologist, he worked for the Gansu provincial geological bureau (1968–82), where he was the head of its political section, and rose to deputy  is scheduled to add to the 4 trillion Yuan ($585 billion) stimulus package that had been announced last October. President Obama released his long-awaited mortgage plan only to see banking stocks plummet by -6.59%. This could have been because of the details the laid within the text of the document itself. It was revealed that only those whose home-loans are owned by either Fannie Mae Fannie Mae: see Federal National Mortgage Association.  or Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation.  would be eligible to receive help. However, there are many other banks that own substantial a substantial portion of the mortgage market that will not benefit from the bailout bailout

The financial rescue of a faltering business or other organization. Government guarantees for loans made to Chrysler Corporation constituted a bailout.
. Indeed, Wells Fargo Wells Fargo

armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147]

See : Protectiveness


Wells Fargo

company that handled express service to western states; often robbed. [Am. Hist.
 led the slide with its 16% market share of mortgages outstanding. As such, today's rally may only be temporary. Equities might continue seeing volatility. Currencies that are vehicles for risk-aversion may continue rallying.

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Publication:Mena Report
Date:Mar 5, 2009
Words:232
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