Two events sparked a rally in the equity markets yesterday - an announcement from the US Treasury Department of a plan to invest in "toxic assets" in a public/private venture. This will, they claim, remove these loans from the banks that now hold them and free up credit. Will the plan work? The answer may never be known, and like the TARP funds of last year, it may be too little, too late. The other positive indicator came from the housing sector, which reported an increase in sales of existing homes last month.
All of the moves by the White House, including a media blitz to help sell the proposed budget package, are designed to prop up falling asset prices which are the main reason we are experiencing the worst recessionary period since The Great Depression. Click here for my prior post on this subject, and a link to great commentary by Bill Gross, of PIMCO. As it turns out, PIMCO plans to invest in the proposed public/private fund. This is a good sign, since we as taxpayers need to see this succeed so that we recoup SOME of the Trillions it will ultimately cost us to get out of this mess. Click here for PIMCO's Bill Gross latest take on what is happening in credit markets, and the outlook for the future.
What matters most during this widely cycling market, is that you stay focused on your individual plan of action, and your broader social biography. Let the "gamblers" continue to go after the quick money. Women of Wealth are NOT gamblers. They invest in their future and the future of their children. And that is the best news of all.
Until next post, continue to believe, achieve, receive. SDG-JBHIV