Refinancing Models Beginning A New Boom?

Richard Bove, a Ladenburg Thalmann analyst, states that “U.S. government programs will work and the negative assumptions concerning the weakening of the economy may be excessive.” He bases his analysis on data from the Federal Deposit Insurance Corp for the third quarter of 2008. Bove goes on to say that “To this point investors in bank stocks have paid little attention to the new programs believing them to be inadequate to reverse the economic decline underway. Therefore, bank stocks are falling to levels not experienced since the late 1980s and early 1990s.” If that is the case, wouldn’t a wise investor be interested in buying into financial stock right now?I look for refi to open up in 2009 to the point where people can see some growth in the economy. I also believe that we are a long ways from being out of the woods just yet. Smart investors are not going to jump on every recommendation from an industry expert. We need to remember that billions have been lost, and fortunes wiped out. To jump right back into the fray is foolhardy right now. And that, I believe, is what is going to hamper the jump start of the economy. Tonight’s NBC news predicts that 26% of retail stores will be closing shop next year because of the dismal turnout during the holiday season, when retailers depend on 50% of their income to stay afloat. We see Mervyn’s, Linens & Things, KB Toys and many others going belly up. I am sure a lot more are to follow. Certainly, the playing field is beginning to level.