Where Do The Markets Go From Here?

Where Do The Markets Go From Here?

What Market Am I Talking About?

The answer to that question is really that it is the readers choice to decide. Whether we are talking about housing, mortgages, commodities, stocks, bonds, currencies or commercial real estate, we are at what can only be called an extremely elevated state of flux and angst in all of them.

Some good news came out of the the housing sector on Friday with a greater than expected number for existing home sales from September. While good news, the reality is that the housing sector remains stalled and borrowers that want to borrow had better have stellar credit, strong income and plenty of money to put down.

The Ted Spread, after showing signs of improvement most of the week went into a stall as LIBOR remained pretty much unchanged and there was a renewed flight to quality in T-bills.

Volatility measured by the VIX reached new record highs. This measure of fear and anxiety which has normally ranged between 15 and 25 hit a record close to 90 before settling at 79.13.

So What Is The Answer?

The bottom line is that there are an incredible amount of cross currents and events that are going to play key roles. At this point many remain unknown as to how they are going to play out, which makes making bold predictions extremely difficult at best, and insane at the worst.

Who is going to win the presidential election in the United States, as this will play a role in how we move forward? How well and successfully will the bailout plan be implemented, and what new developments will crop up (such as the plan to include some insurance companies under the TARP)? How long and how deep will the recession be in the United States, Europe, Japan and the developing countries? Will there be any extraneous events that will create even more world turmoil? Can the governments around the world continue to cooperate with each other in the implementation of fixes designed to mitigate the problems.

Can we avoid the political finger pointing and search for the "cause" of this problem, accept the fact that politicians on both sides of the aisle are complicit and move forward in a bi-partisan way to really look for solutions that benefit the people that put them in office in the first place?

These plus any others that anyone can think of. I certainly hope so. Fed meeting this week, with no reason for them not cutting rates at least 25 b.p.

An Admission Of Economic Angst From A Surprising Source

The sports industry, normally only interested in squeezing every last nickel out of the people that attend the games (which with current prices tends to be the corporate suits), has begun to put a freeze on ticket prices in many markets, and some are offering packages designed to make a game affordable to the typical family of four that is quickly getting priced out.

Score one for the true "fans" (at least in some markets).