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Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.ValuEngine is a fundamentally-based quant research firm in Newtown, PA. ValuEnginecovers over 7,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks

and commentary can be found at http://www.valuengine.com/nl/mainnl

December 22, 2010 Real Esta t e Housing Asset Bank (REHAB)

In addition to my proposal for a rigorous stress test for community banks seeking bailout money, I alsopropose a new program to assist banks in clearing their balance sheets of non-performing assets.

Greed among community and regional banks on Main Street resulted in a vast quantity of distressedC&D and CRE loans on the books of community banks. These categories total about $1.43 trillion anthey include incomplete new homes, strip malls, office buildings, condos, etc.

My proposed solution is called the Real Estate Housing Asset Bank or REHAB. REHAB focuseson hard assets homes, land, and buildings. In my opinion, US taxpayers would rather own realestate as investments rather than shares of bank stocks and mortgage securities laced with toxicstructures.

REHAB would take title to other real estate owned (OREO) and buy the properties collateralized byC&D and CRE Loans. REHAB would also buy foreclosed home and rehabilitate communities laced

with vacant homes and unfinished homes, malls and office buildings.Once an unhealthy bank sheds its bad assets and OREO, it becomes a fresh Good Bank that shouldbe able to entice capital from the private sector instead of tax payer money. REHAB is not just a BadBank; it also creates jobs on Main Street USA and completes projects that will eventually be used oncthe economy recovers.

Hard assets are the collateral backing bad loans and toxic mortgage securities. Many real estateprojects have been nearly completed and thus the shovels are still warm. Through REHABthecompletion and maintenance of US owned real estate will create real jobs that were recently lost andeasily re-initiated.

This is a real and lasting economic stimulus!

Tracking the US Capital Markets US stocks are overvalued fundamentally and overboughttechnically on both daily and weekly charts. The major equity averages straddle weekly pivots andrisky levels at 11,496 Dow, 1250.3 SPX, 2670 NASDAQ, 5136 Dow Transports and 787.37 Russell2000. Fifteen of sixteen sectors are overvalued according to ValuEngine with only 38% of all stocksundervalued. At 35% the stock market tends to find a top.

The Yield on the 10-Year Note (3.332) This weeks pivot at 3.358 has been a magnet. Mysemiannual value level at 3.479 was violated at last weeks high yield of 3.568.

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Comex Gold ($1389.4) The 50-day simple moving average is $1370.7 with this weeks risky level a$1426.1.

Nymex Crude Oil ($90.17) Has been influenced by my weekly pivot at $89.61. My semiannual valulevel is $83.94 with my annual risky level at $97.29.

The Euro (1.3137) My weekly pivot is 1.3079 with quarterly pivot at 1.3318.

The Dow Industrial Average (11,533) I will not have new monthly, quarterly, semiannual and annuavalue levels, pivots and risky levels until January 3, 2011, but this weeks pivot is 11,496 and todaysrisky level is 11,587.

An example of how Buy and Trade beats Buy and Hold looking at Adobe Systems (ADBE) If you purchased Adobe at $32.20 on February 8th you would be holding a position at a loss.

Courtesy of Thomson / Reuters

Here are the Buy and Trade Strategies from my ValuTrader Model Portfolio

1. Buy at $32.30 on Feb 8, sold at $35.96 April 22 for a gain of 11.3%

2. Buy at $31.00 on May 21, sold at $33.46 on June 18 for a gain of 7.9%

3. Buy at $30.15 on June 24, sold at $29.05 on Sep 2 for a loss of 3.6%

4. Buy at $28.48 on Aug 11, sold at $29.05 on Sep 2 for a gain of 2.0%

5. Buy at $25.90 on Sep 22, sold at $27.89 on Oct 8 for a gain of 7.7%

6. Buy at $27.80 on Dec 14, sold at $30.98 on Dec 21 for a gain of 11.4%

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Thats todays Four in Four. Have a great day.

Richard Suttmeier

Chief Market StrategistValuEngine.com, (800) 381-5576

Send your comments and questions to Rsuttmeier@Gmail.com. For more information on our products and services visitwww.ValuEngine.com

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, andquarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. Mynewest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go HERE to review sample issues andfind out more about my research.

I Hold No Positions in the Stocks I Cover.