Roy Ho’s Blog

It seems like a match can finally begin.  Hu may not be able concentrate on too many items.  He is more inclined to deal with a positive opening (Taiwan) than a hot spot for now (Tibet).Important press releases by both US and China, below.  Read the question started by the keyword “Olympics”.  And follow all the subsequent questions by the keyword “China”.  http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080327005800&newsLang=en

Nothing looks good.  Today’s data are weak.  US dollar falls against yen, reports CNN.  In real time, US is bouncing up against Yen and Euro.  GDP grew very little.  Durable orders are down.   

http://edition.cnn.com/2008/BUSINESS/03/27/asia.dollar.ap/index.html

Essentially, everything depends on this mortgage crisis.  And politicians are offering all kinds of things.  What for? To occupy your TV box so that you forget about the other ones. 

Depending on your time horizon, all the political fuss about the mortgage crisis may or may not have an impact on you.  This is the newest round of talk, from Wall Street Journal:

http://online.wsj.com/article/SB120658212569867477.html?mod=hpp_us_whats_news

The most visible talks related to mortgage crisis come from the presidential candidates.  They make get you excited.  However, you need to start align this temporal emotional development to TIME.  It’s election year!  All bets off!

The new president will take office next January.  It takes a month of 2 to transition the administration.  So, any work for such an important topic will be some time in Feb, almost a year for anything to be put on the table.  So, don’t let Clinton’s auction talk, Obama’s credit card solution or McCain’s inaction be a factor on your today’s decision.  If your horizon spans > 18 months, then I would say you need to pay attention to their talks.  For instance, you are about to buy an existing internet foreclosure auction site, due diligence is about to complete and on to develop a term sheet.

What is really relevant is about what Treasury Secretary Paulson says.  Below is not exactly news any more since it is almost 2 weeks old.  However, it is relevant:

http://www.nytimes.com/2008/03/13/business/13cnd-paulson.html?em&ex=1205553600&en=5ceef68e75d21e48&ei=5087%0A

It may look inconsistent to this:

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-24037412.htm

They are not inconsistent of each other.  Paulson does not want a quick fix.  He wants a “solution”.  That translates to regulatory risk (not compliance risk.  A lot of people mistake regulatory risk as compliance risk.).  And if one looks at the Feb 7 press release of the Undersecretary Robert Steel, Paulson will definite create new regulations in a very short term.  

 Related industries will not only be FIs or mortgage insurance companies, but from suppliers to appraisal firms to ABC Papers packaging shops.  Paulson seems to be undeterred by the election politics.  Or Bush is not? Paulson is the real deal.