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The Latest Fed Gaffe

Written By Brian Hicks

Posted May 22, 2010

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.


Hell opened up and swallowed the market this week… But the Fed seems to think all is well.

The Fed believes our economy is picking up speed, forecasting GDP growth of 3% and believing unemployment will drop to just over 9% by year’s close.

But with housing still in the toilet and homeowners continuing to walk away, the Fed may be getting ahead of itself…

The simple truth: Housing is in trouble; foreclosures will mount; and people will continue to walk from their homes.

The mortgage crisis will continue to drag on the economic recovery so long as homeowners fall behind on payments.

I don’t care how bullish the Fed is — they’re wrong.

According to the AP, more than four million homeowners — or 8% of all Americans with a mortgage — are at risk of losing their homes. And many analysts, including yours truly and my fellow editors at Wealth Daily, are forecasting another dip in home prices as more glut hits the market.

Things are going to get worse because government plans aren’t helpful. Banks aren’t doing much to prevent foreclosure. Regulators failed in their oversight. Politicians walked away from protecting Americans and would up opening the floodgates to predatory lending and over-leveraged derivatives… And Obama’s plan to help the unemployed will most likely fail.

Even 60 Minutes and JP Morgan Understand this

60 Minutes found that at least a million Americans who can afford to stay in their homes just walked away. And JP Morgan is out warning investors that underwater homeowners may walk away from mortgages.

In fact, CoreLogic recently pinned underwater homeowners as making up about a quarter of all homeowners with a mortgage — or about 11.3 million homeowners. And about 29% of all homeowners with a mortgage are either underwater or very close to it.

So how do you profit from crumbling real estate and mounting foreclosures?

You buy the companies that process the foreclosures.

That’s one profit opportunity this messy situation has hand delivered investors.

But it isn’t the only opportunity to make money in this chaotic market.

Below you’ll find a few more investment ideas from the pages of this week’s top-read articles in Wealth Daily and our sister publications, Energy & Capital and Green Chip Stocks.

Stay Ahead of the Curve,

Ian L. Cooper
Wealth Daily

EU Joins Currency Race to the Bottom: Faith in the Euro falters as Gold Shines
Wealth Daily Analyst Adam Sharp reports on gold’s run as faith in currency falters, and why coin sellers are running out of metal coins even as you read this.

Gold, the Dollar, and the Euro: The Monetary Maginot Line
Wealth Daily Editor Steve Christ explains why caution is in order as the euro tanks, the dollar screams higher, and gold reaches new highs.

Israel’s Desalination Boom: Money in the Mediterranean
Green Chip Editor Nick Hodge discusses new desalination plants – including the world’s largest in Israel – and how to profit from the tech behind them.

Gold’s Doubling Effect: The Coming Super-Spike
Gold expert Greg McCoach reveals “gold’s doubling effect” — a new money-making phenomenon taking shape as gold makes an epic run that could eclipse 5000/oz.

Henry Groppe Says Time to Go Long Natural Gas: The Ultimate Contrarian Bet
Editor Ian Cooper discusses why it may pay to place the ultimate contrarian natural gas bet shortly.

Investing in Rhodium, the World’s Most Expensive Metal: The World’s Most Exotic Precious Metal
Wealth Daily Editor Luke Burgess explores the global market and investment highlights of the world’s rarest and most expensive precious metal: rhodium.

Cardium Oil: The Man Leading North America’s Oil Comeback
The last domestic oil driller he led grew 1,333% from 2005-2009… Here’s how his $4-a-share start-up will score you 1,239% profits by 2012.


Profit from the UK’s New Green Government: Cameron’s Gov’t Touts Cleantech
Green Chip Publisher Jeff Siegel discusses the new green government in the United Kingdom, and how you can profit from the country’s latest low carbon energy projects.

Israeli Stocks Upgraded from ‘Emerging’ to ‘Developed’: Why a MSCI Rerating is a Buying Opportunity
Wealth Daily Editor Christian DeHaemer tells you why a rerating of Israel to a “developed market” on May 26 equals a buying opportunity.

DoD: We’ve Seen the Future of Light: The Future of Light Starts at the Pentagon
Energy and Capital Publisher Brian Hicks reveals to readers inside information from the Department of Defense and the profit opportunity brewing around the future of the light bulb.