Harry Rady Online – San Diego, CA

In light of the Obama administration’s apparent backing down from the sweeping reforms it originally proposed to a more moderate health care reform package Maria Bartiromo of CNBC asked Harry Rady of Rady Asset Management and Barbara Ryan of Deutsche Bank Securities to respond. Listen to the video below for the full discussion.

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In an appearance in the CNBC Video “Making Sense of the Markets” Harry Rady of Rady Asset Management, along with two other guests, give their analysis of recent market trends and advice on how to best product assets in the future economic uncertainty we are facing.

Commenting on the market’s latest showing Harry Rady of Rady Asset Management said,

“Everything is overpriced. A very long, protracted recession is still very much alive.”

This remark was reported in an article in Lubbock On-Line in response to a week of see-saw movement of the major markets including the Dow Jones industrial average. The Dow along with all the other major market indicators, finished the five days ending on May 23rd just barely in the black. The Dow, S&P and Nasdaq rose 0.10, 0.47 and 0.71 percent, respectively.

Despite a good showing on Monday, stocks sunk downward the rest of the week in response to some bad economic news. Re-running a pattern that is now only too familiar, early gains on Friday were neutralized by sustained losses in the last hour of trading.

The choppy trading waters were caused by announcements that unemployment could reach as high as 9.6 percent and that the British government could lose the Standard and Poor’s Triple-A credit rating.

Coming at the end of next week are several economic indicators that will help determine whether the markets will be sustaining their rally of early spring, or rather if they are instead a disappointing indication of more bad times to come. These barometers include reports of home sales, orders for manufactured products and consumer confidence.

Speculation that the Obama administration is considering converting some of the preferred stock which it has obtained as a result of recent bank bailouts into common stock has added to investors already overburdened accumulation of worries.

The conversion of preferred shares to common stocks will give the administration more freedom to further aid the stressed banking sector without stressing the government’s financial situation, i.e., there would be no need to allocate additional funds. However this move would simultaneously dilute the value of already existing shareholder’s common stock, thus adding to the market downturn.

Read more on this issue in the full article: “U.S. Stocks Lower As Banking Concerns Lead to Broad Sell-Off.”

Frustrating a six-week Wall Street rally, the stock market suffered a 3.5% loss last Monday, April 20, 2009. The recent decline in the Dow Jones Industrial Average on Monday will be the worst one day decline since the beginning of March when the Average reached its lowest point in 12 years.

Adding to the downturn was a 23% drop in Bank of America. Despite announcing a net income increase in the first quarter of more than triple, including the purchase of Merril Lynch recently adding more than 3 billion dollars to its bottom line, B of A still experienced a net loss due to a rise in “charge-offs” and huge losses in its credit-card business.

For more complete discussion of this issue you may follow the link to: ‘U.S. Stocks Lower as Banking Concerns Lead to Broad Sell-Off.’

Citigroup said it operated at a profit during the first two months of the year. That energized financial stocks and in turn, the entire market. Surprised investors drove the major indexes up more than 5.5 per cent to their biggest one-day rally of the year. The Dow Jones industrials shot up nearly 380 points.

In response to Wall Street’s welcome upturn at the beginning of March,  Harry Rady of Rady Assets Management, San Diego, California was quoted as saying:

A little bit of good news went a long way because there was so much pessimism,” said Harry Rady, chief executive of Rady Asset Management. “Could there be follow through tomorrow? Maybe. In the next few weeks or months I’ve got to imagine we’ll give this back. The economy is in an absolute free fall,” he said. “I’d be very surprised if this was a bottom.

On March 10th the S&P 500 index rose 43.07, or 6.4 per cent, to 719.60, while the Nasdaq composite rose 89.64, or 7.1 per cent, to 1,358.28.

Most analysts are cautiously optimistic and are waiting to see which way Wall Street is heading in the upcoming near future though there is a worry that hundreds of billions of dollars in government bailouts wouldn’t be enough to save the big banks.

This upturn was described as a brief rally in an overall bear market, meaning that we can expect more market downturns before the market begins its eventual recovery. A bear market is defined as a drop of at least 20% from a market high, which stocks passed last year in their relentless plunge downward.  Now the market is at less than half its value that it had at the highest points it reached in October of 1997.
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