NOVEMBER 20, 2008 (Dow 7552, down 445) - The Second Great Dpression is on the table. The government can't let the large financial institutioins fail; must make sure the annuities and life insurance are there for beneficiaries; stabilize housing prices through tax credits for buying new homes; use TARP money to buy toxic mortgage securities from the banks; must back Fannie and Freddie bonds with an explicit guarantee to lower mortgage interest rates; modify existing mortgages so they are affordable; set up tax credits for hiring people to stabilize unemployment; provide debtor in possession (DIP) financing for the auto companies and guarantee their warranties; start a trillion dollar infrastructure program to put people to work and push the European Central Bank (ECB) and the Bank of China (BOC) to lower rates to 2.00% to reignite growth in their economies. THese actions may remove systemic risk and cause some of the money on the sidelines to buy riskier assets. Still like the quality high yielders (see recent recommendations). The SEC chairman is in the pocket of the short sellers.
reports before the bell Wed - think the qtr will be good - new tighter emissions standards coming in 2010 will drive growth - co's engines are 6% more fuel efficient than those made by Caterpillar (CAT) and they are taking significant market share - stock trades at just 10x earnings vs 21% growth - much lower than historically - could see a double over time
56.06
0.00%
04/28/08
next day close
58.02
+3.50%
07/10/08
still like it but it's not as attractive with global growth slowing
66.10
+17.91%
08/27/08
will have a good 2009 & a better 2010 - want to own it - has best technology in group
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