Now What?

Okay. We got our subsidy check. We got our housing bailout. Now what?

George Bush signed the housing rescue plan into law yesterday. It provides an explicit government guarantee for Fannie and Freddie debt and provides assistance for homeowners in financial trouble and first-time homebuyers.

Apart from keeping the Agencies in business, what does this package do? It’s not like the Federal Government had a bunch of cash sitting around to put to use. Indeed, the Federal Debt ceiling was raised 800 billion dollars to $10.6 trillion just to accommodate the plan.

We should know by now that you can’t borrow your way to prosperity. Oh sure, many a start-up business was capitalized with credit cards and a second mortgage. But the US economy isn’t running out of a garage. Unless we do something to provide incentives to invest and grow, the adjustments will just continue.

I don’t think we’re headed for a recession. But we won’t solve anything by throwing tomorrow’s dollars at today’s problems.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By |2014-09-03T20:25:07+00:00July 31st, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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