Four In Four Report

Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com. ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine covers over 5,000 stocks every day. A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks, and commentary can be found HERE. Suttmeier's Four in Four video can be watched on the web HERE.

September 11, 2009 – Fannie and Freddie, Homes, Commodities and S&P 500 An update on Fannie and Freddie, Making Home Affordable Program, Commodity Resistances and the weekly chart for the S&P 500 Fannie Mae and Freddie Mac are surviving but at a steep price to taxpayers. Private Banks are providing just 10% of mortgage loans down from 60% at the mid-2006 housing peak. Fannie and Freddie now account for 70% with the Federal Housing Administration (FHA) 20%. Foreclosures will continue to rise this year putting pressure on home prices. While home sales have improved the inventory of foreclosed homes are extremely high, and will increase. One in ten mortgages is in arrears and one in twenty-five homes are in foreclosure. Homeowners have lost 40% of their equity since mid-2006. Fannie and Freddie are “surviving” on their $400 billion lifeline from tax payers, Yet homeowners are not getting sufficient help to stay in their homes. The GSE’s are responsible for $5.2 trillion in US residential mortgage debt and have tapped their lifeline by $95.6 billion since November 2008. Decisions need to be made on the future role of Fannie and Freddie, as the Conservatorship of the GSEs calls for their portfolios to begin to unwind in 2010. This could put additional stress on the housing market and on community and regional banks, as new sources of mortgage money need to be found, and fast. If our banking regulators extend Conservatorship look for the cost to taxpayers to double from the trillion dollars already spent. Making Home Affordable Program The US Treasury reports that only 12% of homeowners eligible for loan modifications have had mortgages reworked and millions more homeowners face foreclosures. The Home Affordable Modification Program (HAMP) intended to reduce monthly payments to 31% of a borrower’s income is off to a slow start. Expected to help 3 to 4 million homeowners

the plan will be lucky to achieve 500,000 trial modifications by November 1st. If the homeowner makes three trial payments the modification becomes permanent. Keep in mind that Fannie and Freddie are the cornerstones to the Making Home Affordable Program, and that the program has not made a dent in the upward trend in foreclosures. Comex Gold stuck at a Grand. Comex Copper and Nymex Crude Oil are having trouble at their 200-week simple moving averages. Gold is above the down trend that goes back to March 2008, but resistances at 1010 to 1012 are blocking the next 100 dollars higher. A close below 991 negates the breakout. Copper has been trading back and forth around its 200-week simple moving average at 290.74 with my monthly resistance at 295.88. The risk is to my annual pivot at 240.20. Crude oil continues to find resistance at its 200-week simple moving average at $74.86 with monthly resistance at $75.53. My annual pivots remain $68.81 and $66.51. The weekly chart for the S&P 500 The S&P remains positive, but overbought on a weekly close above the five-week modified moving average at 1002. The Ascending Wedge resistance is 1060 next week. My call remains 800 before 1200. Send me your comments and questions to [email protected]. For more information on our products and services visit www.ValuEngine.com That’s today’s Four in Four. Have a great day. Richard Suttmeier Chief Market Strategist ValuEngine.com (800) 381-5576 As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sample issues of my research.

“I Hold No Positions in the Stocks I Cover.”