Investors hoping the government bailout will rescue the housing industry are making a risky bet, judging by analysts’ reaction to the plan.
While the plan that President Obama unveiled Wednesday certainly will help many homeowners at risk of foreclosure, the chances that the rescue will trigger a housing recovery that in turn will boost stocks are dicey.
In fact, analysts see the effects on the market as minimal.
“When you add it all up, it’s another one of those plans that has some good elements and some bad, but it isn’t a cure-all,” says Mike Larson, an analyst with Weiss Research in West Palm Beach. “It will avoid foreclosures for some borrowers, but it’s not going to stem the tide in the housing market.”
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