One would be hard pressed to find any good economic news today. So what are we to do other than to wring our hands. The safest place to be at the present seems to be in cash. The next choice would be value stocks of companies with little or no debt. In the near future companies are going to go belly up simply because they cannot find financing for their debt. The problem is that the banks either won't have the money or they won't want to lend it if they do.

So, companies that have little or no debt who pay a dividend and whose price is already beat down by the last few weeks of market attrition are the best bets. Add into that companies who cannot be held ransomed by increasing oil prices. I have most of my money that I have in the market parked in utility stocks. With depressed prices some of them are paying almost 7% return on the dividend. So as long as it looks likely that they can continue to pay the dividend, this might be a good place to park your money until the carnage on Wallstreet is over.

Cash is really the only safe option. The good news, you can look for better interest rates in the coming months due to greater competition for the decreasing amount of money in the lending pool. Interest rates will go up regardless of what the Fed does.

This is still a good company and I will look at it again if/when price levels ebb to lower levels and it begins to look more like a value stock again.

I believe it is time to re-enter the market for this stock. All of the things that I love about Imperial Sugar are still true. They have no debt. Their book value is now higher than the current share price. The price could continue south a bit more, but I do not expect that to happen. I believe that their next quarter figures will show that they are adjusting to the situation and that they will do a better job of meeting their supply committments as a result.

This is a solid proven company which has produced consistent cash flow and returned value to their investors over the years.

They took a left hook on the chin with the explosion and subsequent damage to their business, but like a good fighter they will begin to recover from the blow and get back into the fight. Sugar prices are stable though not really setting any price records. I have added a small monitoring position to my personal portfolio.

Due to the continuing bank liquidity problems, mortgage money, and money to borrow for any reason is becoming more and more scarce. Some might face the scenario of needing to move to another city due to their employment, and unable to sell because of the difficulty of a buyer finding mortgage money, and being upside down on their own mortgage, will simply walk away and make their career move without bothering to sell.

The shakeout in the home/mortgage area will continue for some time. The good news is that those banks that do survive will return to more prudent policies in lending money. The easy money days are over. People will have to make significant down payments in order to buy a home. The banking industry is good at learning from their mistakes, and it will be a long time before they will be able to forget the nightmare(s) that they are going through right now and will be going through for the next couple of years.

More good news is that before this is over housing will become more affordable to many more of those who seek the dream of home ownership. Home Construction will continue to suffer due to all of the cheap foreclosed homes that will be on the market competing for buyer dollars. I expect that we will see some large builders go bankrupt before the dust settles and business returns to usual.

Personally I plan to avoid any stock associated with home construction and banking for the next few years. Some of these stocks will seem like once in a lifetime bargains, but in my mind the risk is too great at any cost. Some people with more nerve than me will make alot of money gambling on them, but I prefer to think of myself as an investor and not a gambler. The housing and banking stocks are for the high risk takers who are willing to bet it all on a roll of the dice.

My Credit Union offered me 3.6% interest rate if I renewed one of my CDs for another year. Last year the rate I received was 5.25%. I told them no thank you and pulled the money out and paid down some principal on my own mortgage loan. I plan to do the same with another CD coming due next month. I refuse to accept 3.6% when inflation is higher. It is time for the savers in this country, the prudent, to tell the Fed and their bank where to get off.

So the dollar has to go lower (esp. since we are also funding two wars). The one bright side is that companies in this country exporting to other countries are finding their goods much more competitive, so exports will be up. Also Europeans will flock to the U.S. for vacations where their own currency will buy much more than in their own countries. It also helps that we are safer here from terrorist attack than in many other places in the world.

The stock market continues to levitate to higher levels regardless of the news. With earnings season having begun, there is much potential for bad news. Those who do not make the numbers will get pummeled and those who do will be rewarded with a higher share price. I have a saying, "never underestimate the optimism of the bulls." This saying is once again proving itself true. With rose colored glasses the bulls are encourging one another that "everything is going to be alright." Is it? Will all of our problems evaporate by the sheer will of positive thinking? I think we have replaced the credit bubble with a new bubble. I dubb it "The Fed Bailout Bubble". The train is off the track and the fed is carrying the train on its' back by the shear force of turning up the printing presses full speed ahead. I do not see how we will avoid double digit inflation. The Fed is replacing the ponzi scheme liquidity of leverage to bail out the unwinding of that leverage. I believe that it will only end in tears. One day we are going to have to pay the fiddler. The longer we put it off, by replacing bubble with bubble, the worse the payoff will be.

I really fear for all of us at this point. Where is the Fed getting the money to bail everyone out? Since we have been spending more than our income as individuals and as a nation (due to the our system rewarding debt and punishing savings) it is obvious that the money is being borrowed. How much more can we borrow before the world comes to the conclusion that we are too high risk to do business with (just as they did with Bear Stearns)?

What are the consequences for the dollar? Will we be like Germany of the 1930s where people brought wheelbarrows of money to buy a loaf of bread? Unlike many people, I have been responsible and have been squirreling away money in my 401-k plan and other places to prepare for retirement. Runaway inflation can render my nest egg worthless in a very short time. So where do you and I put our money? Housing prices are still going south in a big way.

One thing that is going up is commodities. Some have suggested that the new commodities bubble might be the cure for the other now deflated credit and housing bubbles. I read this morning that the price of wheat and soybeans has tripled since 2006. The government says that inflation is "contained", but they omit food and energy from their figures. Good thing since at my grocery store eggs have doubled in price from six months ago. Some believe that we could face real food shortages in a short time.

So my suggestion. Put your money in silver, gold, and potatoes. My mom was a poor country girl who always told me, "as long as you have potatoes you will never go hungry." Then when our currency collapses we can sell potatos for wheelbarrows full of money. People will come to you and say, "My kingdom for a potato."

I know that Imperial will no doubt recieve insurance payments to cover their losses from the explosion. I assume that there will be lawsuits against the company as a result of the 12 employee deaths and the employee injuries. I also believe that they will be able to make up some of the production shortfall by increasing production in existing facilities. They will save on labor costs from this plant no longer operating. It opens up options for them regarding whether and where to rebuild. My fear is that increasing production at other facilities will not be able to make up the production shortfalls as a result of the loss of this plant. I believe that they will take a large hit on revenues, and lose market share as a result of not being able to deliver the necessary product to meet their committments. These are my fears.

In my mind there are now too many variables operating and the stock has become too risky for my tastes. In the long run, I have confidence that Imperial will continue to generate solid income as they have in the past, but I am expecting a shortterm downside hit after their next earnings statements are released.

In my opinion, due to the collapse of our finanicial system funding methods, money is going to become extremely scarce. Liquidity is drying up and companies are going to have a hard time finding money to fund their daily operations. Some fortunate companies have their money supply already locked in, but those who don't are going to be scrambling for survival. It is not just the mortgage loan and construction industries that will suffer, but all kinds of industries are going to be hit by the ripple effect.

I would avoid investing in companies with high debt (as I always do). Some industries are heavy in debt by the nature of their business (eg. auto manufacturers and airlines). If the financial connundrum is not solved, we could finally see some decent interest rates being paid on cash. It might even become sensible to save again in this country. No fixed income retiree should be forced to settle for a 4% return on their savings so we can bail out the reckless when true inflation is probably at least double that (check the current price on a dozen eggs compared to a year ago). I wouldn't be surprised to see 8% rates being paid on CDs by the end of the year.

Hey we have dug ourselves a hole and as the first law of holes says, "if you find yourself in a hole, stop digging!" In our case we need to stop spending and learn to save again.

My favorite stock right now is Imperial Sugar (IPSU). They deal in a commodity that will be in demand even in a recession. Sugar also has a possible future in the creation of biofuel. This company has a high cash position and almost no debt. Their dividend does not look like much at the surface, but they have paid a special dividend of $2.50 or $3.00 per share at the end of each year to distribute their excess cash. This added to the stated dividend amounts to a 14.4% total dividend. There is no guarantee that they will continue this, but then again there are no guarantees in life. This is not a growth company but one the has produced solid results year after year.