Is that how you get dates as well?

A certified check for $1,000?

However bad it gets, just hold. If youve already lost your shirt, it makes no difference. If you sell low and it goes back up you'll really feel bad!

I'd say the worst is yet to come, but DT has a point. I'd wait to sell but I'd also wait to buy.

The market recovered nicely in the last hour. It's still down quite a bit, but it looks like it MAY finish near 10,000.

I wouldn't make any large purchases now.... there's still too much uncertainty in the economy now. Once it takes an upturn (and it will), you'll still be able to get a bargain before the prices on big items rise again.

There's still plenty of opportunity for short/put options in the market. I don't think the market will begin settling until the election is over and the rescue dollars have had time to filter through the economy which is months away. Also, the FY 09 federal budget is stil operating on continuing resolutions, so the final appropriartions bills will help the markets also.

I'm going to take financial advice from someone who can't even manage a fantasy football team??

No, I want to BUY low so when it goes back up I'll feel really good!

I'd hope not, has JL tried giving you advice or something?

LETTERS TO THE EDITOR

Goes to show there are still some intelligent people left in New Jersey...a hopelessly BLUE State.

From the Bergen Record:

The truth of the financial "crisis" rests with the government, not Wall Street or Main Street. We, the taxpayers, the investors, the hard-working citizens, are the victims of the government playing in the mortgage market.

In 1977, the Carter administration believed that there needed to be more mortgages. With the aid of "government-sponsored" companies - the Federal National Mortgage Corp. and the Federal Home Mortgage Corp. - U.S. banks were "induced" to make more money available in the housing market through a program called the Community Investment Act. In the late 1990's, the Clinton adminisatration escalated this program, easing qualifications for mortgages that Fannie Mae and Freddie Mac would buy. In 2003, the Bush administration tried to regulate Fannie and Freddie, but was rebuked by Democratic Sens. Christopher Dodd of CT and Charles Schumer of NY - and - Democratic Rep. Barney Frank of MA.

These men are the real reasons we have a financial crisis today, not President Bush and not Republican presidential candidate Sen. John McCain.

The truth is in the facts and history of the government interfering with the capital markets and the greed and political interests not of investment firms, but of some members of Congress. I hate a bailout, but we have been left with no choice. But let us be clear. We are not bailing out companies whose investors - us - are losing value each day or out neighbors who have lost their jobs. We are bailing out the Democratic Party that brought us this mess.

William Lang
Westwood, NJ

Mr. Lang hit the nail on the head.

Okay Apple. Digest this.

The 108th Congress that you cite above was controlled by Republican: 51 Senate Republicans and 48 Democrats, and 229 House Republicans and 206 Democrats.

The Republicans gained control of the Congress in 1994. Let's take alook at its political make-up during the 105th Congress - 1997-1998: in the Senate 55 Republicans and 45 Democrats; in the House 228 Republicans and 206 Democrats.

Mr. Lang must be an idiot. If President Bush wanted to tighten regulations, and his party had the majority in the House, why didn't the Republicans just outvote those darned Democrats and do it?? Oh, because they were afraid of a rebuke!! Oh, no!! Not another rebuke!!! Puh-leeze.

First of all, it's the Community Reinvestment Act (CRA), and, yes, it was passed in 1977. If Mr. Lang is going to discredit it, at least he could get its name right.

It's purpose was to make sure that loans were available to all segments of a community and to eliminate such discriminatory credit practices as requiring borrowers of a certain race to come up with higher down payments, and redlining. Redlining is when a bank will literally draw a line around a neighborhood and refuse to lend within the "redlined" area. It works hand in hand with the Fair Housing Act, which makes sure that nobody is denied housing based on sex or race, etc.

CRA in no way, shape or form recommends sub-prime lending. If a community has a non-profit affordable housing advocacy group, and a bank sponsors and attends a seminar given by that group, that would comply with CRA. If a government agency provides low-interest loans within the community, and the bank provides support to that agency, that complies with CRA. If a housing advocacy group offers a class for first-time home buyers, and a bank underwrites the cost of everyone's tuition, that counts for CRA. In addition, a bank must show that it does not discriminate against any applicants. That's all they have to do regarding CRA, and direct lending isn't necessarily even a piece of it.

Although many would like to point a finger at such programs as the cause for the current fiscal crisis, they were put in place to make sure that the same credit was made available to everyone and that credit decisions were fair and balanced.

Very good SB. I would also add that banks and other lenders are in control of to whom they lend money.

1) The Republicans didn't need a single Democratic vote to get stricter regulations for Fannie and Freddie. You certainly can't blame the minority party for failing to enact a law that the majority allegedly favored.

2) This economic crisis is FAR MORE complicated than increased mortgage failure rates at Fannie and Freddie. Some of it is caused by our overall debt to finance a war in Iraq and other issues and secondary markets that are completely unregulated (which fault can be laid DIRECTLY at the foot of the Republicans). And Bankruptcy reform is part to blame (which Democrats do share the blame for, I'll give you that).

Blaming this enormous economic clusterf**k on Fannie and Freddie and just the Democrats is simply stupid and naive.

I previously talked about the difficulty in maintaining inflation at a managable rate and boosting the economy. It's now clear with some of the worlds central banks slashing interest rates that inflation will have to take a back seat.

I can't speak for the rest of the world but the fact that the Bank of England cut interest rates by 1/2% is massive news. As far as I was aware the Federal Reserve has made that move a few times in the last year or so, but working for a bank I've been following BOE interest rates for years and have never seen a change bigger than a 1/4%. And it was voted for a day before when they're supposed to, in line with the other major central banks. Quite unprecedented in my short adult lifetime.

The Bank of England usually pegs inflations, right Turi? I can see why you're surprised then. I wonder if rate cuts will do anything when there is an inherent problem with confidence in lending. When does it/did we go from a yield problem to one of irrational (or maybe rational) fear?

We had our sales meeting this morning. Being in a suburban real estate market, most of our clients are small-to-mid-sized companies. Those are precisely the ones that are hurting for cash. Their business is down, and the banks have dried up. We all agreed this morning that once the uncertainty of the election is over, things may improve a bit, but that it's going to be a very bumpy road for the next month.

The cut in interest rates may not affect liquidity that much and it is liquidity that we need right now.

Hey, the market closed down only 189 points today. The crisis must be over.

About the only good thing is that oil prices continues to drop too.

What's the price today Lou?

It was down to $88 and change, the last time I looked.

Thanks Lou

Halloween 2008

Hahah, that's brilliant Mignon.

And hopefully eggs will be too expensive for us to feel the repercussions of the angry kids.

Pegs inflation? I'm not entireley sure of the phrase, but the BOE have a target of 2% for inflation, which is now currently running well over 4% and will undoubtedley go over the 5% mark in the next few weeks due to the recent rate decrease.

Little over 10 years ago the then Chancellor of the Exchequor Gordon Brown decided that the BOE should be run seperately to the Government. The BOE then had an independent panel to decide on in the interest rate to keep the economy in check. There was only one real stipulation - that if inflation rises over the 2% mark, the Governer of the BOE then had to address the reasons why in writing to the Prime Minister. It doesn't sound like much, but it was serious business when inflation first topped 2%.

Until the start of this credit crisis last year, not one letter had to be drafted. Rates were incredibly stable, with only a few steady increases and decreases (never more than by 0.25%) over the 10 years. My experience is that the BOE do not like moving the rates unless absolutely necessary, they like to play it steady and generally prefer a 'wait and see' attitude.

Oh and "one more thing" (I've got my Columbo head on).

Yes, hopefully the rate cuts will increase confidence in lending. But more importantly here just yesterday, a proposal by the UK Government has been to plow £50b back to the UK banks, thus raising liquidity (I don't know if the US are doing anything similar). This is hoped to increase confidence in lending between the banks. If this happens the rate at which the banks borrow off each other (the Libor rate) should decrease. If these decreases happen, the savings are then passed onto borrowers.

The reason why this rate is more important is to do with mortgages. Tracker and Variable rates are generally determined by the BOE base rate, these customers will benefit from the recent rate decrease (so long as the banks pass on the savings). However, fixed rates are determined by the libor rate. The £50b introduced back to banks needs to decrease the libor rate, otherwise the exercise could be pointless. It's quite topical over here that the big bank executives are earning rediculously incredible bonuses (considering the climate) and the public fear that this money will just go to the fat cats pockets. However, it's a strong Government stipulation that this doesn't happen.

Fingers crossed anyway.

Turi,
I love reading your posts. First of all, you're so knowledgeable. Secondly, I love getting a different perspective of the whole mess.

What I meant by "pegs inflation" is that they target it, which it looks likes they do.

Here in the U.S., besides the rate cut, there's talk that the Fed lend directly to corporations. The fear is that the rate cut will induce borrowing by banks, but instead of passing the new funds to consumers (and each other), they just hoard the money to shore up their own liquidity.