KEEP YOUR FEET ON THE GROUND.

I am sure that you have been watching the Dow go through violent gyrations lately: minus 221 Monday, plus 215 yesterday and plus 315 today. The reasons for this roller coaster ride vary: on Monday, it was Citi Bank, on Tuesday it was Citi Bank getting $7.5 Billion from Abu Dhabi and today is was for the anticipation of interest rates cut by the Fed; who knows what reasons will be given tomorrow.

All the fundamentals seem to point to the opposite: eight strait months of housing sales declines, increase in the number of foreclosures, declining property values. Consumer confidence is low and now Wells Fargo joins the ranks of companies reporting mortgage related losses and more job cuts are announced. What is there to cheer? Are we celebrating the 6 billion dollars that Fannie is looking for?

May be we we forgot that almost 2 million households are expecting their sub prime mortgages rates to reset within the next twelve months and that we have not figured out what to do to prevent more foreclosures. No new initiatives have been found that will give some protection to those poor souls. The weakness of our currency will only increase and drive foreign deposits back to the opposite side of the pond. Another scenario is that those who have accumulated our currency will come back and buy out businesses on the cheap.

While all this is taking place, the average American has no idea what is going on except when he is told that he can not refinance his mortgage because of the credit crunch.
May be there is a silver lining to all this, in the meantime I suggest that we keep our feet on the ground and take advantage of the low rates that we are enjoying now before they disappear.

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