To the relief of many, the Obama administration has unveiled a plan to reduce the number of foreclosures after months of criticism. Meanwhile, fourth quarter GDP numbers were once again revised and exchange traded funds (ETFs) are heading higher.
Banks and President Barack Obama have both been subject to harsh criticism for months as millions perceived that enough wasn’t being done to deal with the rising foreclosure rate. To that end, the administration unveiled a plan to let people who are underwater on their mortgages obtain a new loan from the Federal Housing Administration. It will be funded by $14 billion from the $75 billion foreclosure-prevention program.
Fourth-quarter GDP was still up by 5.6%, but it was downwardly revised from 5.9% as a result of slowdowns in business and consumer spending. Before you break out the confetti, economists issued a warning: this growth isn’t likely to be repeated anytime soon. But don’t feel too bad; a growth rate of 2.5% to 3% is still anticipated for this quarter, and we’ll take it as a step in the right direction.
Finally, an aid agreement is in place for Greece. The Franco-German proposal suggests a combination of cash from the International Monetary Fund (IMF) and bilateral loans for Greece. The news sent both the price of gold and the euro higher. SPDR Gold Shares (NYSEArca: GLD) is up 0.5% so far, while Currency Shares Euro Trust (NYSEArca: FXE) is up 0.9%.
China’s major industrial enterprises are raking in the cash. Profits have nearly doubled by 119% in the first two months of 2010 from a year ago and profitability is now where it was pre-crisis, according to the National Bureau of Statistics. iShares FTSE/Xinhua China 25 (NYSEArca: FXI) is up more than 2% this morning.
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.
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