Moving to Where the Market is Going

November 23, 2009: It was the great hockey player Wayne Gretzky who was once asked, “What do you attribute to being one of the greatest players in hockey?” Gretzky replied, “I go where the puck is going to be.”  Every day as the market opens, we at Fi Plan Partners are trying to look ahead and see where the markets are heading.

On Thursday, November 10th, the Wall Street Journal headlines read, “Fear of Double Dip in Housing.”  Wow! For months now, we have been saying that we saw 2010 as part of a double dip recession.  Don’t believe me?  Go back and read our previous blogs.  We still believe the banking industry has several problems ahead that are more than just housing loans.  The Journal reported that about 3.4% of U.S. households or about 1.9 million homeowners are 120 days or more overdue on their payments, but not yet in foreclosure, according to LPS Applied Analytics, a research firm in Denver.

We believe more foreclosures are in the future of the housing industry.  More banks will also close or merge.  FDIC will see it’s insurance reserves dwindle.  Keep close tabs on the dollar which if it breaks below its all time low, you will hear the Chinese demanding higher rates from the Fed.  The Wall Street Journal reported on Friday, November 20th, that one Congressional committee threatened to impose tighter controls on the Fed and the Treasury. The heat is being turned up in the kitchen as we enter an election year.  We believe unemployment will rise to 15% next year and may even include some Congressional leaders who don’t get reelected.

At Fi Plan Partners, we remain very defensive in light of so many facts showing another downturn.  As I told a client the other day, Noah didn’t start building the ark when it started raining.  We may be early, but we are prepared and moving where we think the market is headed.  Comment your thoughts below about whether you agree or not.  Debate helps us all work toward a better way!

Happy Thanksgiving!

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