Posted by David Gaffen

* Sure, stocks put together a rally, but it wasn’t much. Equities could not maintain the day’s highs, which it threatened on three occasions during the session, and the action was middling, as if investors didn’t have the confidence to rebuild positions after Tuesday’s selloff. The reasons? Those assets that can’t be valued, the securities that can’t be sold, and all the other “things that we can’t do right now.” One could say this has a broken-record quality to it, but by now, all of the records have been broken, and the market is moving on to the cassettes and the eight-tracks. “What they need to focus on is housing – that’s the key to solving this problem,” says William Rutherford, president of Rutherford Investment Management in Portland, Ore. “They [bankers] don’t know where the bottom is, so they’re being defensive.right now, there’s no plan, so it leaves us bewildered, befuddled.” Word that the economic stimulus package looked on track to circumnavigate the halls of Congress helped boost sentiment in the latter part of the session, in both stocks and bonds, but the market remains decidedly range-bound. Action in gold and Treasurys supports the view that […]

Secretary of the Treasury Timothy Geithner took to the podium today to announce the long awaited and oft delayed Obama bank rescue plan. He laid an egg. The market dropped nearly 5% with the Dow Industrials down 385 points.

Not only did Geithner seem out of his element and in over his head, the “plan itself lacked detail”. Well, it did have a few details, there is going to be more regulation, always a popular item with business, and the government is going to “stress test” banks. Since no one knows what “stress testing banks” will mean, banks sold off sharply.

At some point the administration must recognize that the problem is housing. Until they fix the housing problem, bank balance sheets will continue to erode, along with business and consumer confidence; banks will refuse to lend and the downward spiral will continue. Geithner did not address housing until well into his comments, and then only tangentially. It appears that the administration does not have a plan after all.

With three months to prepare for this juncture, the Obama administration is off to a poor start. They need to do much better, and they need to do so soon. […]

Rutherford Investment Management LLC is pleased to announce that we have been notified by Morningstar that Rutherford has again been rated five stars, the highest rating Morningstar gives. The rating came in the Large Cap Growth category and is for the last five years. At the same time we were notified that we were rated in the sixth percentile of large cap growth managers in the nation in the Morningstar database.

“We are obviously pleased to have received the highest rating that Morningstar can give for the trailing five year period. This means that we have now been rated five stars in both the Large Cap and Mid Cap categories” said Bill Rutherford, President of Rutherford Investment Management. “We are especially proud that this rating has come in the midst of the worst market since the Great Depression”, Rutherford continued.

For further information call us toll-free at 1-888-755-6546.

Today the Federal Reserve released the attached statement at the conclusion of their regularly scheduled meeting.

Basically policy is unchanged and the Fed stands ready to take such action as indicated to support the economy and housing market.

The Obama administration is still quiet on their solution for the financial sector, but is said to be working on a plan. In addition to financial sector solution they are working on a nearly $1 trillion stimulus plan.

In coming days, as the administration plan becomes more visible, I will be writing more.

In spite of a spate of bad news, equity markets seem to be stabilizing. Much of the bad news was anticipated and the markets are beginning to look forward to improving conditions. More on that later.

If you have any questions, do not hesitate to call. 503.452.1210

Best Bill

Fed-Statement-01-28-2009

By Mary Ellen Lloyd of DOW JONES NEWSWIRES
(c) 2009 Dow Jones & Company, Inc.

It’s still too early to buy home-improvement retailing stocks, even though shares of the biggest players have built up some nice gains since hitting five-year lows in October.

The U.S. housing market troubles and recession are likely to pressure sales and earnings growth at Home Depot Inc. (HD) and Lowe’s Cos. (LOW) at least through 2009 and probably through 2010, say some money managers and industry analysts. They argue home-improvement sales have lost wallet share as Americans cope with concerns about falling home values, shrinking retirement accounts and job security. Home equity withdrawals have fallen to an all-time low, and other credit for big renovation projects is harder to secure.

“Even though the valuations on those stocks probably look really, really attractive, we can’t see any earnings growth” anytime soon, said Thomas Nyheim, a large-cap growth manager at Christiana Bank & Trust Co. “It’s probably too early.”

“I don’t think the stocks are outperformers in either the short term or the long term,” said Jon Fisher, a portfolio manager at Fifth Third Asset Management.

Nevertheless, as they did in late 2007 and early 2008, shares of Home Depot and Lowe’s from […]