GOIH Economic Analysis: Fed Speech: No Certainty.

The Federal Reserve today delivered a speech that to our analysis, was not enough to get the economy moving. Even if the Fed does cut the interest rates, the cut will not have any effect on the housing sector. A 25 basis point cut or even a 50 basis point cut is not going to aid a consumer whose ARM is resetting from 2% to 8%.

We think the market's reaction to the announcement was symbolic and orchestrated to appear as if all is calm. However, several major players are holding defaulted subprime paper, and until their identity is revealed, the financial sector is a ticking time bomb and the general market will experience increased volatility.