Same Old Song

Stocks fall, while oil rises. It seems like the stock is beginning to mirror the housing market: buy NOW, prices are low. This is a buyers’ market. From the opening bell stock prices headed down, not far into the red, but just outside of the black. Most of this can be blamed on Fed anxiety; every market expert is speculating on what the Federal Reserve will do in their Board Meeting tomorrow. For the casual investor - WHO CARES - the only thing that matters now is looking at P/E ratios and trying to find some last minute bargains.

The market is betting on a rate cut from the Fed when the central bank meets Tuesday; but investors are not completely sure what it will do and what it will say in its accompanying economic statement. Furthermore, with the major brokerages' third-quarter results yet to be released, investors are uncertain about how badly the summer's stock downturn, souring home loans, and credit squeeze will hit the banking industry.

Making matters worse, the mortgage crisis seem to be spreading across the Pond. Northern Rock PLC, Britain's fifth-largest mortgage lender, saw its stock plunge and customers withdrew billions of dollars after it issued a profit warning after hours on Friday and drew from emergency funds held in reserve by the Bank of England. That gave U.S. investors an added impetus to pare their stock holdings, particularly in the financial sector. The good news for us is that financials almost always bounce back; like car manufacturers and airlines.

60 Minutes
The former Federal Reserve Boss Alan Greenspan did his first interview, since leaving as the Chairman of the Fed, on 60 Minutes and he warned of a possible recession. The couples with job cuts from First Franklin and Merrill have investors jumpy.

The good news is that while looking at the bigger picture one will discover that the job rate is steady, and this may help contain the credit crisis to the "sub prime" market. However, be careful when asking your credit card company for a limit increase, and check for new terms as well. The lenders of last resort will begin to tighten their belts' as well.