1) The big development today was the Euro which finally blasted through $1.50, which had capped it for the last three months. Short covering took it all the way up to $1.51. All of the other weak dollar plays, like gold and silver, soared to new highs. Next stop $1.55.
2) The EU hit Microsoft with a $1.35 billion fine. MSFT is the most fined company in history. The stock was unchanged. This amount is only two weeks of free cash flow for Mr. Softy. It’s just another cost of doing business for them. I think the stock is a strong buy here at $28.
3) Fannie Mae and Freddie Mac said they would eliminate caps on jumbo loans on March 1. This means that these loans can be securitized for the first time. It will be helpful when people start buying securitized mortgages again, which may be by year end. This will be big news for sellers of luxury homes in New York, California and Florida.
4) The Hang Seng soared 769 points last night. It is up 15% since I showed you that chart and is on its way back to HK$31,000.
5) With Google stock plummeting from $750 to $449 Sergei Brin and Larry Page have each lost $8 billion in net worth since November. Their holdings have dropped from $21 billion to $13 billion each, some 40%. This is the sector you want to be in when the market recovers.
6) Toll Brother announced a record loss and said they see no recovery on the horizon. The stock was unchanged. These stocks are totally sold out, and in fact are the best performing sector of the market this year.
9) New home sales in January came in at an annual rate of 533,000, a 13 year low. At least 1.2 million homes a year are needed to meet the demands for population growth.