We don’t even have to wait until the markets open. We now have "futures" that predict what will happen in Wall Street 24 hours in advance. The markets are poised to drop 500 points this AM. Will it really happen? Probably.
The market makers are people. They react to emotion and fear. They also have, by their nature, a heard mentality. So they will, as Don Ameche screamed at his "man" in the pit "SELL SELL SELL." But it was too late.
It’s always too late — if you are caught in the slide, you have already lost money in the short term, so what to do, minimize your losses. As you sell on the way down, you can hope to have some bucks left to buy at the "bottom". But where is the bottom?
What has caused all this. I believe its perception. First of all — The Holiday Sales. They were DOWN. No they weren’t. They were up 3 percent over the previous year. That’s a gain, not a loss. OK its not 5 percent, but its in positive territory. It, in the face of the housing bubble and talk of complete financial meltdown, was UP, not down. Doomsayers, have to find a problem with everything.
The housing bubble — Well, how many people do you know that have actually "lost" their house. OK, perhaps the house you live in now is worth less than it was six months ago, but its still worth more than you paid for it. And its price is probably more reasonable.
There are hundreds of thousands of people who now live happily in their first time houses, paying their mortgages, and are part of the American Dream because lenders provided sub prime mortgages. They took a risk and they (the homeowners) came out winners. The lenders did, too. The problem is, that they expected to "turn" the mortgages quickly and make a fast buck but a tightening credit market stopped that they were stuck with the paper. It happens when you are greedy. And Banks can certainly get greedy.
My solution for all this is sit tight. Stay in your home. Make your payments, save your money, work the best you can and live your life. In a few months (no more than 15) all this will be history, and we will growing at a flaming rate (which, by the way, we are now, but no one wants to talk about those numbers). and all with be right with the world.
The first words in the "Hitchhikers Guide to the Universe" are "Don’t Panic". We would do well to follow them.
jhv
