Yesterday, the DOW was just hovering around 13,375 or so, a level it had been to previously, and the market was undecided, whether it would head down... or wait for the Fed. And waiting for Mr Bernanke's announcement put the life back into the stocks. His announcement of a mortgage-backed securities buy-up to the tune of $40 billion a month for the foreseable future came as a tonic. You know what, that's virtually half-a-trillion over the next twelve months.
As housing gets rescued from being toxic assets into very useful very liveable in assets with the help of the U.S.Federal Reserve, via perhaps Bank of America and Chase Manhattan and Wells Fargo and others, this blessing will put much needed housing back into use. Those vacant houses will soon have builders refurbishing them, painting them, getting them ready for hard-working families to live in, and that will breathe life back into many neighbourhoods. Real wealth of the nation are the children laughing and screaming and riding their bikes or skipping on the shared lawns, realizing that when it says 'In God we trust' on the coins or the banknotes, that is profoundly so in reality. As jobs are created, wealth will be created, breathing life into neighbourhood businesses and the shopping malls. It will have a snowballing effect, we just have to all pray for it.
Could we see the DOW Jones reaching for 15,000 by the end of the year, or the S&P for the 1500? There is a quiet optimism that that may be so.
Caveat, anyone investing on the markets does so at their own risk. I am just expressing the optimism and praying that it should be so, with the interest rates being at a record low. Hopefully, the OPEC and traders will check the Oil price at affordable levels ($85 WTI or $100 BRENT) for a sustainable Recovery and into Prosperity.
Let me know your views.