I feel cheated. My United States Government teachers did a huge disservice to myself and my fellow classmates in our formative years. They told us how government works, but they left out one important part. Government is a reactionary mechanism of the people and thus very flawed. When something catastrophic happens, the primary solution is to create a new law to deal with the situation. It passes through Congress, then the President signs off on it. Everyone pats each other on the back for a job well done. We have one more layer of bureaucratic nonsense draped over our society that does almost nothing to fix the root cause of the problem but does have the effect of costing more money.
This weekend Congress approved the 700 page Housing and Economic Recovery Act of 2008. I have very little sympathy for all the mortgage companies that handed out sketchy loans. I have some sympathy for the people that extended themselves beyond their means. Unfortunately, this bill will do very little to help anyone while expanding government involvement through FHA refinancing and a free ride for Freddie Mac and Fannie Mae.
Thomas Atteberry of First Pacific Advisors believes the FHA refinance of foreclosures will actually delay the inevitable for 35% of those homes. Furthermore, rising prices of consumer goods is creating more pressure on the housing market as most consumers are dealing with double-digit growth in oil, gas, food, debt service, and health care. Roll in the unlimited lifeline to Fannie Mae and Freddie Mac and it is hard to understand what these guys think will happen going forward. The fact of the matter is that the bailout will be funded by the non-speculative, risk-adverse people of this country.
The Thoroughbred Folio remained fairly stable this week. GE distributed another solid dividend while Fifth Third Bank trickled in a tiny dividend. Fifth Third cut its dividend last quarter and as we all know, it will not be a Dividend Aristocrat much longer.
There was no change at the top this week. Our three buyout candidates are all doing well. I watched a CNBC special on Anheuser-Busch last night. It was very informative and interesting. Did you know Anheuser-Busch was able to survive prohibition from 1920 to 1933 by making other types of drinks like ginger ale?
KeyCorp hopped right back into the fray at the bottom this week. Regions remains the big loser and I am still trying to determine why a regional bank that is still profitable is taking it on the chin so hard. Regions did announce a dividend cut which will take them out of the dividend aristocrats along with many of their banking brethren later this year. Gannett still can’t gain any traction as profits continue to slide at the news giant.
Thoroughbred Performance (Week 32 of 52): $-371.59 (-12.39%) Dividends To Date: $57.40
Top 3 Stocks
- Rohm and Haas $27.61 (36.81%)
- WM Wrigley $23.84 (31.79%)
- Anheuser-Busch $21.77 (29.02%)
Bottom 3 Stocks
- Regions Financial $-45.68 (-60.90%)
- KeyCorp $-37.56 (-50.08%)
- Gannett $-37.51 (-50.02%)
Stocks used in this post:
- (BUD: 0.00, N/A, Yield: N/A%)
- (FITB: 7.71, 0.00%, Yield: 15.30%)
- (FNM: 0.33, 0.00%, Yield: 227.27%)
- (FRE: 0.49, 0.00%, Yield: 153.06%)
- (GCI: 6.09, 0.00%, Yield: 26.27%)
- (GE: 12.84, 0.00%, Yield: 9.66%)
- (KEY: 6.91, 0.00%, Yield: 18.86%)
- (RF: 7.66, 0.00%, Yield: 16.19%)
- (ROH: 71.25, 0.00%, Yield: 2.25%)
- (WWY: 0.00, N/A, Yield: N/A%)
Recent Comments