Ladies and gentlemen, with consumer spending financed by mortgage equity withdrawals, whose mortgages have been sliced and diced into a spider web of opaque debt instruments, the extent of the contagion is still unknown despite the markets’ sense that the “Greenspan put” is alive and well. Moreover, the most financially-stressed homeowners are scheduled to see their low interest rate mortgages reset at substantially higher rates at a time when food and energy prices are soaring. Meanwhile, the political rhetoric is increasingly focused on more entitlements and higher taxes on the “rich.” Unfortunately, increased taxes on the alleged rich won’t come close to solving the debt-box we have painted ourselves into; implying taxes on EVERYBODY will be going up, including the preferred taxation of dividends and capital gains, a point that will eventually not be lost on the equity markets.He also references "The Money Game" one of the best books ever on the markets.
Monday, October 15, 2007
Jeff Saut very good this week.
Jeff Saut of Raymond James has a very good commentary this week. A key paragraph: