My foggy crystal ball......

I think we are in for very interesting times ahead for the Global Markets. There's quite a few factors that might make for continued choppiness.

1) As everyone knows there's the sub-prime mess that started in the US markets and spread to some extent globally. At this point, we still dont know how much more bad news there is - a couple more billions in write-downs maybe? Have all the banks truly assessed the damage and been honest with their projected losses?

2) The sub-prime fiasco above is aggravating the already slowing housing market in the US. Here too, we dont really know the extent of the damage - it may take another year to really figure out where we stand as far as housing goes.

3) The Fed reserve is trying to put band-aids in place by cutting interest rates in the US. This causes certain dead cat bounces in the market (like the one we are having today), but its not a long term solution. The fed cutting rates also weakens the dollar, thereby spiking commodity prices and inturn increasing inflation (which is already rampant). Dont believe the official 3% crap that the Govt dishes out from time to time. Real inflation is way way higher than that. The falling dollar also increases the flow of money to emerging markets. I think the Fed finds itself between a rock and a hard place at this point. Do they raise rates to curb inflation, or decrease rates to bring liquidity into the markets that are suffering from the sub-prime fallout? I think they have chose the latter since its tied into the housing market. They would rather have a soft landing in the housing market rather than a crash which would be catastrophic.

4) Looks like Hillary is going to take the White House next year - hmmmmm wonder what that will do to the healthcare industry (with her plans for state run healthcare). She is also going to increase taxes that will cut into consumer spending.

So, my crystal ball is extremely foggy (like it always is). I can only say - diversify and stay the course and hope for the best.

Doesnt look like the majority of shoppers in the US really care about all this uncertainty. One look at the shopping malls on the day after Thanksgiving will lead you to believe that the American consumer hasnt cut back on any holiday spending. Jam packed parking lots at the malls and lines in the middle of the night for the early bird specials are the oder of the day during the holidays. But I guess thats what keeps this economy going.

Happy Holidays everyone!