Shinji

Contrary to general market expectations. I expect the Fed to hold the Fed rate at the next FOMC meeting. Why?

*Injecting cash into the economy to save the group of companies/individuals who overexposed themselves in the credit market is not Bernanke's goal, however maintaining price stability during turbulent times is. Reducing the Fed rate will risk further devaluing the dollar and stoking inflation, which is what he's been trying to tame since he took helm.

*GDP and unemployment numbers are good thus far, however I expect GDP to be much lower in the 3rd quarter. Even though the US economy may not look as promising as before, I am very optimistic going forward because I expect the market to rise after this credit crunch is all done with and taking care of. In addition, the global economy has been expanding at a healthy rate over the past several years.

*Lastly, I just don't see this credit crunch severely damaging the overall economy.

This is purely my speculation and I can be absolutely wrong, but I'm just interested to hear what you guys have to say.

sahtt

I don't know what Ben is going to do but I would bet Ben himself doesn't know what he's going to do yet.

*There isn't much to guess what the fed is going to do because you are trying to guess what people are going to do on changing variables and emotions. He is taking what you mentioned in to consideration and will probably do the least necessary to avoid a depression.

*It's not where we are, it's where we are going that counts. Even then it's unclear, job numbers are not science and can and often are adjusted substantially. The US economy is sitting on ice, that isn't arguable based on my data. It's been here before and it'll be here again. The global economy is strong and there is more reason to believe it will continue that way than it won't. *Remember, it's when the economy looks strongest when it's actually the weakest.*

*That's just a general meaningless statement, but an opinion nevertheless. The housing market is in for quite possibly the harshest correction in U.S. history. To the degree in which this will spill over in to the "rest" of the economy is unclear but a few things need to be straightened out before the ship can set sail without anchors holding it down.

-consumer debt is out of control and needs to be addressed.
-predatory loans and the evaluation systems/ratings for bonds and other assets must be restored and have renewed credibility.
-the housing market needs to adjust to the huge amount of forclosures that WILL occur in the next year-year and a half. Government bail outs may be a factor but I doubt it. A fed cut is a drop in a bucket here no matter what anyone tells you.

Be realistic and make sure you have substantial international exposure. Don't sell when the market bottoms (there is no if, it will fall sooner or later maybe years from now) and know which companies you will need to buy when the time comes. My favorite part of the investing process is when $hit hits the fan and p/e's I've been studying all beg to be purchased.