19 May 2009 – We are recommending that you cautiously float as mortgage interest rates test a definite strong level of support. Today, housing starts were reported significantly lower than expected, down 12.8% to 458,000 units from the expected level of 520,000! This is the lowest number of housing starts since January 1959, over 50 years ago. While the number is significantly lower than expected, it can actually benefit us in that it will give us an opportunity to deplete some of the existing inventory. On another note, three month LIBOR fell to 0.75%, down from a high of 4.81% back in October 2008. This can definitely be seen as a reflection of increased liquidity in the financial sector. We’ve also seen banks like JP Morgan, Morgan Stanley, and Goldman Sachs have recently applied to repay approximately $45 billion in TARP funds. All of these indicators point to perhaps a long-awaited turn in our economic forecasts. So for now we recommend a floating position.