CAM CEO Report 09-29-08:
CAM CEO Ace Custodio reports modest gains for the week ending 09-26-08. Year-to-date gains stand at +13.848%. For the same period, the S & P 500 stands at -17.372%, while the Nasdaq 100 stands at -19.804%. Since October 2005, the CAM investment portfolio continues its upsurge and reports gains of +157.093.
New individual and institutional investors continue to have confidence in the CAM investment strategy. New client growth is at an all-time high. (See Performance Charts Below)
Additional Comments From the CEO:
The $700 Billion bailout plan failed to get the appropriate votes from Congress because the ramifications of this important piece of legislation have been misunderstood since its conception. The consequences of this bill’s failure are far reaching nationally and internationally.
The government’s failure to properly explain the bill, to stress the need for the bill and explain the consequences on financial and credit markets if the bill was not passed resulted in significant market losses exceeding more than one trillion dollars. At a time when Main Street, Wall Street and Washington needed to be on the same page, communication fell apart.
The proposed “bailout” was designed to provide the liquidity necessary to keep the economy going by purchasing distressed assets from troubled banks and investment companies. The government would then hold these assets until markets recovered. The government holding company would then liquidate their newly purchased assets. The U.S. taxpayers were asked to fund the purchase of these assets.
Main Street spoke loudly. A majority of Americans were opposed to bailing out Wall Street tycoons, appalled at executive compensation of failing companies and wondering why they were being asked to foot the bill for bad management decisions to bailout a system that lacks regulation and transparency. In response to Main Street’s concerns, a majority of politicians voted against the bill.
The reality is that a majority of Americans and even their politicians failed to understand the bailout bill. The Treasury, the President and the politicians failed to satisfactorily explain the necessity for passing the bailout bill, which was much more diverse than a plan to bailout companies that took unnecessary risks, or over leveraged their assets. In fact, the bailout bill was a footprint for the future of America and the global economy.
From a micro-economic perspective, car dealers who, as recently as two years ago, were typically able to provide auto purchasers 10 to 15 different types of lenders, today can only offer 2 and 4 lenders at best. Businesses that use a line of credit secured by future income to fund their payrolls will fail if banks can no longer lend to each other. When payroll funding is unavailable, the fallout on Main Street will be severe.
This does not only affect businesses but the education system as well. Most students in higher education rely on student loans. Liquidity for lenders is necessary to keep the nation’s education system moving forward.
These are just samplings of the financial repercussions impacted by the current credit crisis. The Dow produced its single-day biggest loss because the market was anticipating passage of the bailout bill. The impact reaches far beyond Wall Street as the value of homes, retirement funds and pension funds, that are used to determine wealth, erodes. CAM encourages its investors to support the passing of a revised bailout bill. This is not a time for Americans to be on the sidelines.
