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Like everyone else I am eyeballing the bottom of the tea cup for insight. If you tune into the experts all they ever say is "buy" - which is of little help, and if they get introspective and let their gaurd down they might say, "buy less of this and more of that."
In every case these market pundits all urge "buy" - never a whisper about selling, even if they're chugging Maalox and Tums prior to purging in the employee wash room.
With the "experts" serving their own interests it's incumbent on us to figure out what the future holds.
A quote from one of John Markham's articles finally entered my thick skull and settled some of the outstanding issues I was contemplating - make that we as all of us are in the same miserable circumstance.
Because the administration in Washington knows that if all those loans are called in and consumers can't make good on them, there will be hell to pay. And a nasty recession just won't do in an election year.
So the government is in the process of twisting the arms of Federal Reserve Board members to lower interest rates by as much as 2 percentage points over the next year, including potentially a whopping half-point cut next week .
I had clean forgotten that next year was an election year, and no sitting president will allow his party to suffer no matter how ill conceived his economic policies have been...
In true political fashion, they'll mortgage anything to keep the economy on an even keel, allowing whomever wins the election to take the brunt of any imprudent fiscal policy they hatched to keep the worst of it at bay.
In light of the short duration of this contest, this would imply that we can expect a fairly agressive response from the Fed, and any other tools the administration can bring to bear. That won't proof us against suffering or market dips, but it's likely going to assist us for the duration.
No, I don't know what the Fed will do next week, or any week, but based on the above my instinct suggests it may lower rates. While this alone will not drive any choices in my portfolio, I will keep this in the forefront while agonizing over what's coming next.
As always, Luck to thee.
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