Friday, 10 April 2009

Market timing advice from President Obama

As reported yesterday President Obama urged American families to seize the advantage of the lowest mortgage rates in decades to re-finance their homes.
AP reported him as saying "The main message we want to send today is there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates...That is money in their pocket."

Perfectly sensible advice and taken at face value it would undoubtedly be to the benefit of the families involved and for the US economy as a whole.

The President's choice of the term "right now" suggests that perhaps his team of advisers were trying to instill just a little urgency into the briefings that they are providing to Mr. Obama which was then reflected in the advice he was giving to homeowners yesterday.

If the tide is turning as many equity investors seem to believe then the downturn in both long and short rates and the degree of quantitative easing being contemplated could be undergoing some re-thinking.

On one interpretation it is possible to see that the old adage about the train leaving the station and for stock-market investors not get left behind, is now being morphed into new market timing advice for doing a "refi" from no less than the President himself.

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