The Fed’s move last week was predicated on meeting its mandate to assist stubbornly high unemployment levels in the US, choosing to adopt an aggressive program to buy mortgage-backed securities at a $40 billion per month clip. The plan is to assist housing markets as well, setting off a wealth effect that would also improve confidence and spending. Housing remains soft, although showing signs of stabilization. Yesterday the National Association of Home Builders confidence index rose to a six-year high at 40 in September, up from 37 previous and above forecasts of 38. Ryland Group (NYSE:RYL) said its orders for the months of July and August rose 62% from a year earlier. Before the NAHB release, Goldman Sachs (NYSE:GS) also expressed optimism on the sector, citing such positives as QEIII, rising home prices and low inventories. |