Bank of England, ECB Cut Inteest Rates

Britain slashed borrowing costs by a surprising 1.5% points on Thursday and the European Central Bank (ECB) also cut rates as part of concerted efforts to revive world commerce.

The ECB met market expectations by reducing its interest rate by 0.5%, a move political leaders hope will limit any move into recession and curb job losses. The ECB move took its benchmark rate to 3.25 percent.

The Bank of England, faced with a slumping housing market, a decline in manufacturing and increased unemployment, astonished analysts by announcing a hefty 1.5 percentage point cut, the biggest since the Bank gained independence to set rates 11 years ago and a mark of the gravity of concern over the economy.

Matthew Sharratt, UK economist at Bank of America, echoed widespread sentiment in calling the British cut "astonishing." Jonathan Loynes of Capital Economics called it "spectacular."

"There is still more to do," Loynes said. "At 3%, UK interest rates are still well above U.S. ones when economic conditions suggest they should be as low if not lower ...Our view remains that UK rates will fall to 1% or below."

Last month, the Bank of England joined forces with the U.S. Federal Reserve and European Central Bank to make an emergency half-point cut in interest rates. Politicians in the 15-country euro zone hope a rate cut from the ECB, possibly half a point, will help stave off recession and limit unemployment.

The 15-nation euro zone's economy, which had grown steadily since the bloc's creation in 1999, contracted by 0.2% in the second quarter this year and most economists expect further shrinkage in third quarter GDP figures on November 14.

Banks infected by a collapse of confidence within the financial system are still wary of extending loans and are reluctant to pass cuts on to borrowers. But the sheer scale of Thursday's cut will put pressure on British banks to conform and back smaller businesses.

The Swiss national bank also cut its rates by 50 basis points.

Markets looked to U.S. President-elect Barack Obama to name key members of an economic team that must tackle a crisis that originated in the U.S. housing market 15 months ago before enveloping the banking system of the global economy.

"After the world rally on the day of the presidential election, investors have now shifted their focus to how fast, and how well the new administration will address the current economic issues," said Yoo Soo-min, analyst at Hyundai Securities.

U.S. crude oil lost 2% to $63.96 a barrel, against a record high above $147 set in July. The fall will reduce inflationary pressure on national economies and ease rate cuts.

Falling world oil prices and ebbing economic activity have effectively banished fears of inflation that dominated policy thinking only a year ago.

The first black U.S. president has to wait until January 20 to move into the White House. In the meantime, though, he must decide on a successor for Treasury Secretary Henry Paulson, one of the architects of a $700 billion state rescue package inconceivable before the crisis broke.

Timothy Geithner, president of the Federal Reserve Bank of New York, former Treasury Secretary Lawrence Summers and former Fed Chairman Paul Volcker are among those mooted for the Treasury post. Obama may announce his pick on Thursday.

A Swedish central bank official said the shape of a Nordic aid package to crisis-hit Iceland had been decided. Norway said earlier this week it would provide Iceland with a 500 million euro ($643 million) loan to help the country rebuild an economy in tatters following the collapse of its biggest banks.

Source: Reuters

"Obama's challenge: fix economy, save world"

For weeks there have been articles written in major newspapers and websites about what Senator Obama or Senator McCain would need to once they were elected President to help the economy. With the news of the election of Barack Obama as the next President of the United States being made Tuesday night, I thought it was important to get a different view about what this means to the nation and the economy.

Below is an article written by David Callaway, editor-in-chief of MarketWatch, late Tuesday night.

Obama's challenge: fix economy, save world
Commentary: But fix the economy first, voters demand
By David Callaway, MarketWatch
Last update: 11:28 p.m. EST Nov. 4, 2008

SAN FRANCISCO (MarketWatch) -- Has it really been eight years? Eight years since that fateful Election Night when we all stayed up as long as we could through the dark hours without a president, only to wake up to some of the darkest years in our American history.

If we've learned one collective lesson, it's to never again say "How bad could it be?"

That's why the sense of hope that swept Barack Obama into the White House on Tuesday night could be felt around the world, from the celebrations in Kenya about how one of its descendents could be the first black man elected U.S. President to the parties in Europe, Asia, and around America herself.

At a time when everything looks so grim, the temptation to grasp at any hope is too good to resist. Obama offered that hope, and largely because of the economic crisis of the past several weeks, he was rewarded with an electoral landslide.

A furious rally on Wall Street helped kick off the Obama victory Tuesday, but as the President-elect will soon learn, Wall Street is a fickle mistress. He inherits a set of challenges not seen since FDR: a broken financial system, an ailing infrastructure, a growing environmental crisis, an economically-thrashed public, and two wars.

No president, even with an overwhelming majority in Congress like Obama will have, can ever hope to solve all of this. But progress can be made on all fronts. Indeed, just turning in the right direction on some of them would be a success.

On the economy, though, voters expect results.

• Obama must solve a financial calamity that requires billions of dollars in spending that the U.S. doesn't have.


• He must address a nation that feels overtaxed, yet is in desperate need of funds to save companies, jobs and homes.


• The President-elect must realign a broken financial regulatory system without adding a crippling new set of regulations.


• He must restore confidence in America's economy in a world that just got sucker-punched by an exported credit crisis.


• He must pick a Treasury Secretary under the greatest global scrutiny a President has ever seen, not to mention cabinet posts for Defense, Environment, and even Trade that will take on strategic importance far beyond their historical legacies.


• Most importantly, he must enact as many of the vital social programs as he can while also cutting the national debt and budget deficit.

All of this is a high-wire act to be sure. Obama will face wealthy and powerful opponents who will make beating John McCain seem like an Election Day basketball lay up. Inaction is what Washington thrives on. It's no coincidence that the stock market does best when the government is split between the political parties. This is exactly what Obama can't afford in his first 100 days, or even his first year in office.

After eight years of fighting as the loyal opposition and two years of campaigning for this historic win, Obama and the Democrats will finally get their chance to prove their case. That they will benefit from an economic recovery at some point in the next four years is a given.

And the stock market has fallen so much that it no doubt will also recover at some point in a first Obama term. So will commodities, and even the recently resuscitated dollar.

As he faces the nation in January on Inauguration Day, 76 days from now, Obama will carry the hopes of several previously overlooked constituencies -- blacks, Latinos, youths, foreigners, the jobless and homeless and health-care-less -- along with Wall Street, the rich and comfortable, and even the opposition. The one thing that unites all of these constituencies is economic progress.

No doubt his speech will be soaring and inspiring. But once he has made it to the White House, his actions will be measured far more than his words. This historic election will be a milestone in American politics. But Obama's real place in history will measured by whether he actually has the chops to reform and rebuild an economy -- the largest in the world -- gone horribly and irrevocably awry.

Yahoo and Google Rework Deal to Pass Antitrust

Yahoo and Google have drastically scaled back the scope of their search advertising deal, a person close to the discussions said on Monday, in a last-ditch effort to win U.S. antitrust approval.

The move comes after Google appeared to be on the verge of walking away from the partnership, which was announced in June to foil Microsoft's takeover attempt of Yahoo. The deal has since drawn scrutiny from U.S. regulators amid a growing chorus of criticism from advertisers.

The two Internet companies have submitted a reworked proposal to the U.S. Department of Justice that shortens their partnership to just two years from 10 years, the source said.

The revised deal also caps the percentage of search revenue that Yahoo can collect from Google at no more than 25%, and lets Google advertisers opt out of being placed on Yahoo, the source said.

Yahoo spokeswoman Tracy Schmaler said in an emailed statement the company continues to work with the Justice Department and discussions are ongoing.

Google spokesman Adam Kovacevich declined to discuss the details of the process.

Analysts said the new terms could help the deal get past regulators, but questioned whether such a limited partnership would be financially lucrative to Yahoo, which is a distant No. 2 to Google in the web search market.

Mukul Krishna, digital media global director at consulting firm Frost and Sullivan, described the revised terms as "more of a Band-Aid than the extensive surgery that is needed" for Yahoo. "This sweetens the deal to go through antitrust red flags and gives (Yahoo CEO) Jerry (Yang) some breathing space, but how much money it would add to Yahoo's top line would be very crucial," Krishna said. "And it doesn't answer the question, what after two years?"

Mark May, an analyst with Needham & Co, said Yahoo's willingness to limit the scope of the deal "tells us that other alternatives are either not available or not attractive at all."

Yahoo has been trying to build an independent growth strategy after fending off Microsoft's hostile bid, even as its stock price has plunged to under $13, well below the $31-a-share the software company offered in February.

The first piece of its alternative strategy was to strike a deal with Google, once its archrival. Yahoo also continues to hold talks with Time Warner about buying the advertising and content assets of its AOL division, sources have told Reuters.

In the meantime, several executives have also left Yahoo in recent months amid uncertainty about its future. Yahoo said on Monday it will appoint Jeff Dossett, a former Microsoft manager, to lead its U.S. media business replacing Scott Moore, who is leaving the company to pursue other opportunities. Yahoo also said that Alan Warms, the general manager of Yahoo News, is quitting and will be replaced by Neeraj Khemlani, Yahoo's vice president of programing.

The search ad deal, which would let Google place ads alongside Yahoo's search results, was expected to boost Yahoo's cash flow by up to $450 million in the first year, the companies had said in June.

Needham & Co's May said the benefit to Yahoo might be far less -- between $80 million and $100 million -- than the original target, bumping up the web company's share price by only a couple of dollars if regulators let the deal through.

The deal has run afoul of advertisers who fear high prices because Google and Yahoo dominate the U.S. Web search market. Google's market share widened to 63% in August, while Yahoo dropped to 19.6% and Microsoft slipped to 8.3%, according to comScore Inc.

The revised deal terms were first reported by The Wall Street Journal.

While the Justice Department does not comment on pending merger matters, there had been hints that it planned to challenge the partnership -- particularly by hiring veteran litigator Sandy Litvack to work on the probe. Litvack was the department's antitrust chief under President Jimmy Carter and was Walt Disney's former vice chairman.

Shares of Google and Yahoo were little changed in extended trading after news of the modified proposal broke. Google edged up $1.51 to $348 from its $346.49 close, while Yahoo slipped 7 cents to $12.68 from its $12.75 close.

Sources: Reuters, Marketwatch

Bernanke - U.S. Must Continue to Back GSE Debt

Federal Reserve Chairman Ben Bernanke said on Friday that U.S. backing for the debt issued by home mortgage finance firms Fannie Mae and Freddie Mac in their current form must stand firm, even though it is appropriate to debate their future.

Uncertainty about how the U.S. government might treat debt issued by the two government-sponsored enterprises (GSE) in the future has depressed investor appetite, keeping U.S. mortgage rates elevated. Speaking to a public policy symposium at the University of California at Berkeley by videoconference, Bernanke appeared to address those concerns.

"Even if alternative organizational structures are considered for the future, the U.S. government's strong and effective guarantee of the obligations issued under the current GSE structure must be maintained," he said.

The U.S. government took over Fannie Mae and Freddie Mac in September as the companies' finances foundered.

Bernanke said that some form of government backing for bundling mortgages together as securities is probably still needed in times of financial strain.

"Experience suggests that, at least under the most stressed conditions, some form of government backstop may be necessary to ensure continued securitization of mortgages," he said.

Fannie and Freddie, which own or guarantee about half the $12 trillion U.S. mortgage market, purchase home loans from mortgage originators and then bundle them into securities that are sold, with a guarantee of payment, to investors worldwide.

Analysts said Bernanke's confirmation of government backing for debt the GSEs have issued and are issuing under government control should help calm mortgage markets.

Bernanke said that if lenders can sell the loans they make into broader markets, a wide array of funding sources is available to them, and they also reduce their exposure to risk. The cost of mortgage lending is lower as a result, he said.

Bernanke said it would be useful to consider the future structures of the companies while they are under government operation.

Letting Fannie Mae and Freddie Mac eventually go back to business under their old charters might encourage the companies again to expand their mortgage portfolios in a risky way to boost profits, he said.

Recent legislation strengthens oversight of the firms but fails to clarify the public purpose of the GSEs' portfolios, he said.

"Systemic risks will remain as long as the portfolios remain large," he said.

Fannie and Freddie were seized by the government as write-downs on their loans held for sale and payouts on guaranteed mortgages that default depleted their capital.

If Fannie Mae and Freddie Mac remain in government hands, Bernanke said the government might create a company to offer mortgage insurance.

"One approach would be to structure a quasi-public corporation without shareholders that would engage in the provision of mortgage insurance generally," he said.

Companies such as Genworth Financial, MGIC Investment and PMI Group offer to insure monthly payments for some borrowers who cannot make a substantial downpayment on a home.

"Private mortgage insurers could still participate in this framework, though the role of the government in supporting mortgage insurance and securitization would be more explicit than it is today."

On the other hand, full privatization of the companies might reduce risks that the companies could destabilize the financial system if they ran into trouble, Bernanke said.

But if the firms were private, there would be no guarantee that mortgages would continue to be bundled into securities during periods of market stress, which could remove an important underpinning for housing markets, he said.

Yet another approach might be to draw the mortgage enterprises even more fully under the government's wing, perhaps by consolidating the GSEs and the Department of Housing and Urban Development's Federal Housing Administration into a "quasi-public corporation without shareholders," Bernanke added.

In summary, Bernanke's speech was geared towards calming the mortgage debt markets and trying to both stabilize and reassure it. If mortgage rates will come down, it will help the housing market, which will filter down to the credit markets, which will benefit the equity markets. At least, Bernanke is out being proactive.

Source: Reuters

Boeing Strike Looks to Be Over; Panasonic to Buy Sanyo?

Reuters is reporting that Boeing's 27,000 assembly workers voted to approve the company's four-year contract offer on Saturday, ending a strike that has stopped production at the plane maker's Seattle area plants for 57 days.

The International Association of Machinists and Aerospace Workers walked off the job on September 6 after rejecting Boeing's initial offer, demanding better pay and limits on outsourcing. It was the fourth strike in 20 years by Boeing's biggest union.

Industry analysts have estimated that Boeing has been losing approximately $100 million for each day of the strike. This is due to revenue that will be have been deferred until customers received planes. Customers pay most of the price of a new jet upon delivery.

Panasonic Looking to Buy Sanyo Electronics

Japanese electronics maker Panasonic is in talks with Goldman Sachs and two other major shareholders of Sanyo Electric Co to buy a controlling stake in its smaller rival, company and financial sources said on Saturday.

Talks with Daiwa Securities SMBC, Sumitomo Mitsui Banking Corp and Goldman are at a preliminary stage and the firms have not entered into price negotiations, the sources said.

The three major shareholders combined hold nearly 430 million Sanyo preferred shares, each of which can be exchanged for 10 common shares. That would value them at about 621 billion yen ($6.31 billion) based on Friday's closing price for the common shares.

If a deal is reached to buy all their holdings, Panasonic, already the world's largest plasma TV maker, could become Japan's top electronics firm by sales.

Panasonic and Sanyo combined are expected to post 11.22 trillion yen ($114 billion) in revenue, according to their forecasts for the year ending March 2009, surpassing projected 10.9 trillion yen at Hitachi Ltd, the country's current sales leader.

Acquiring Sanyo would put Panasonic in a leading position in the global market for rechargeable batteries, which is expected to grow strongly as the use of portable electronic devices and hybrid or electric vehicles expands.

"This appears to be the kind of deal where you add one and one and get three, instead of two. Their battery operations would truly be world-class," said Masayoshi Okamoto, head of trading at Jujiya Securities. "Some Japanese companies are buying overseas firms to expand their operations abroad. But buying Japanese peers with strong products and consolidate the domestic industry, like what Panasonic is doing here, could be a short cut to profit and expansion."

The move would also allow Panasonic, sitting on cash and cash equivalents of about $10 billion, to gain a foothold in the fast growing solar energy market.

Panasonic spokesman Akira Kadota said nothing has been decided on the matter of Sanyo acquisition, and declined to comment on whether the company was in talks with the three Sanyo shareholders.

Daiwa Securities SMBC is a joint venture between Daiwa Securities Group and Sumitomo Mitsui Financial Group (SMFG), while Sumitomo Mitsui Banking is Sanyo's main bank and an SMFG unit.

Sanyo's shares closed Friday at 145 yen, giving the company a market value of about 271 billion yen, not including the value of the preferred shares.

Sanyo issued 300 billion yen in preferred shares to the three companies in 2006 to help it restructure after it suffered a sharp downturn in earnings, hit by fierce competition and earthquake damage to a key microchip plant.

Restrictions on converting them to common stock and selling them will be lifted next March, making it easier for the three main shareholders to make an exit on their investments. If converted into common stock, the holdings would give the them a stake of about 70% in the company.

Sanyo spokesman Hiroyuki Okamoto said the company has been looking into a variety of potential steps concerning preferred shares, but that nothing has been decided.

Sanyo is the world's No.1 supplier of lithium-ion batteries competing with Sony and Panasonic. It is also the seventh-largest solar cell producer behind such rivals as Germany's Q-Cells and Japan's Sharp.

Sanyo President Seiichiro Sano told Reuters last month the three major shareholders were unlikely to sell their stakes in it by March 2011 despite the global financial crisis.

Sources: Reuters, MarketWatch, Seattle Post-Intelligencer

"Double, Double Toil and Trouble; Fire Burn and Cauldron Bubble"

From the Desk of Joe Rollins

Here I sit writing this post on Halloween day, which is coincidentally the last day of what will undoubtedly become a legendary month in the financial world. October is now on-track to end as one of the worst performing months in the history of the financial markets.

It hardly seems likely that the market will close at break-even today, but if it does, the major market indices will have suffered through the 11th worst month in history (as measured by the Dow Jones Industrial Average). This is the worst monthly loss in 21 years (the last devastating loss occurred in October of 1987). I remember that Black Monday as if it were yesterday. In October of 1987, the Dow Industrial Average lost a whopping 22% in one day. This loss was indisputably traumatic, although it didn’t seem as bad back then as the water torture that we endured this past month. It’s remarkable that the Dow wasn’t up two straight days at any time during the month of October, 2008.

As the indexes were dramatically down during the month, the daily news managed to get worse and worse. The average daily range from the high to the low for the entire month of October was 606 points. There were even a few days where the range exceeded 1,000 points in a given day. The Dow was down 16 (inconsecutive) days during the month of October, which is the most down days in any given month since August of 1973.

During 1973, we were dealing with the Middle East oil embargo. Relatively speaking the price of gasoline was high; but worse than that was that gas was not really even available. Due to the restrictions of imported oil out of the Middle East and the gross inefficiency of our government in distributing what oil we did have, there was just very little available at the pump. The country was in a severe economic depression and corporate profits were plunging. Inflation was running at about 12% and interest rates were exceedingly high. All of the negatives that were present in 1973 are not present in 2008, yet the performance this past October was just as bad.

Each of the major market indices – the Dow, the S&P 500, and the NASDAQ Composite – will end the month down approximately 15%. Each will also be down in excess of 30% for 2008. As incredible as it may seem, there have been 10 worse monthly performances for the Dow Jones Industrial Average. Nine of the 10 occurred during the Great Depression, from 1929 through 1940. It’s confusing that the month of October, 2008 would have a performance that would rival the carnage and economic destruction that occurred during the Great Depression.

The purpose of this post is to see if we can make some sense of this performance. Last weekend, I attended an investment conference in New York City just to make sure that great city is still in existence – it is. I can further report that I had a difficult time finding a hotel reservation due to the overbooking of hotels. Moreover, all of the flights were oversold and changing a flight reservation was impossible. It was difficult to walk the streets of Times Square because there were so many tourists on the sidewalks. And forget about making a reservation at one of the famous restaurants – that was nearly impossible! Tickets to many of the Broadway plays were also sold out. So, what’s my point? There are gross inconsistencies between reality and the volatility of the financial markets.

One of the biggest misconceptions of the investing public is that stock prices have something to do with a company’s performance. It’s presumed by many that when a stock price goes down, it affects the company itself. While there’s clearly a correlation between excellent performance and stock valuation, a decrease in a stock price doesn’t mean that the company is performing poorly. During this extremely volatile month, even some of the most profitable companies traded with wild, unreasonable ranges.

On Thursday, Exxon Mobil reported the highest corporate profits ever recorded by a U.S. corporation. At the beginning of October, 2008, Exxon Mobil’s stock price was $78.58. Twice during the month the stock dipped to around $56 before closing the month at approximately $75. This is just one example of how the most profitable corporation in American industrial history could trade in a market range of over 30% for one month alone.

The terrible performances of the indices during the month of October belie the actual progress that’s been made. I suppose Wall Street traders trade first and think second. The GDP was announced yesterday with a minor loss of 0.3%, which isn’t nearly as bad as the so-called experts expected. In fact, a loss this small could easily be argued to be an incredibly small rounding error in an economy that will top $14 trillion in 2008. The critics in the financial news argue that the amount could not be correct since things seem so much worse. We will know soon enough whether that number is right or wrong, but regardless, with the Fed’s actions we’re clearly closer to a turnaround than we were only a short 30 days ago.

While the U.S. indices were terrible during October, the indexes overseas were much worse. Many of the Emerging Market currencies came totally unglued during the month. It is always astonishing to me to hear the rest of the world criticize the United States for virtually every act, but when things become difficult for the rest of the world, they want to be in U.S. currency. Only the Japanese yen and the U.S. dollar receive this confidence from the world; all other currencies, including the Euro and the U.K.’s pound sterling, suffered major declines during the month. In fact, the currencies in parts of Asia and South America almost collapsed. If the U.S. Federal Reserve System hadn’t entered into currency exchange arrangements with Brazil, Mexico, South Korea and Singapore, those countries’ currencies would likely have failed. It’s a good thing the rest of the world hates us – except when they need us.

The freezing of the money funds enjoyed a spring thaw towards the end of the month. It’s true that banks decided not to lend each other money, and therefore, interbank credit seized up. On October 10, 2008, the very important three-month LIBOR interbank loan rate was an astonishing 4.82%. At this rate, virtually no bank would have been willing to borrow from another for overnight activities. Due to the intervention of the U.S. Federal Reserve and the British and European commissions, interbank lending was guaranteed. Only two and a half weeks later, this very important rate has fallen to 3.05% today. While this rate continues to be too high, it is a significant indication that bank lending is returning to normal.

It was also noted that the ability of major corporations to borrow money in normal bond refinancing had ceased. On Thursday, MGM Mirage was able to borrow $750 million in high-yield junk bonds. When speculative companies can make major bond sales, it tells you that investors’ appetite for risk has returned.

Commercial paper rose by $100 billion this past week. There is currently $1.5 trillion available in commercial paper. This is the first time in seven weeks that the amount of commercial paper has actually expanded.

Today, Ford Motor Company announced that they’re calling back 1,000 workers in order to build enough Ford 150 trucks to meet demand. For all we have heard this month regarding the incredible poor financial performance of the automobile industry, seemingly there seems to be ongoing improvement.

I’m not implying that the economy won’t be bad for a few quarters. I expect that we will see negative GDP growth in the 4th quarter of 2008 and in the 1st quarter of 2009. However, as I have written many times before, the cavalry has arrived.

All last week, I kept hearing in the financial press that whatever the government was doing to ease credit and push money into the economy just wasn’t working! I really believe a lot of the negative press being provided is from professional investors trying to influence the direction of the markets. The truth of the matter is that the major funding of the banks in the United States did not occur until Wednesday, October 29th, and the funding of the British and European banks has yet to occur. It is really hard for the actions of the Treasury to improve liquidity until something actually occurs.

Worldwide equity injections that are approximating $2 trillion have now been approved. Never in the history of U.S. and world finance has so much money been pumped into an economy over a short period of time. For those who are preaching the sermon of an upcoming Great Depression II, they will need to postpone the benediction. The U.S. economy will rebound quickly as this money makes it through the system in the coming six months.

I know these are difficult concepts for people to understand since no one has lived through it before. However, economic textbooks have long addressed these issues and the repercussions. Given the incredible influx of liquidity, this money will work its way through the system and will create jobs, construction and a better economy by spring.

As we end the earnings season for the third quarter of 2008, there was very little publicity about the earnings actually being quite good. Aside from the financial companies, the vast majority of the S&P 500 major companies beat their projected earnings. While earnings will undoubtedly come down, they certainly do not justify the incredible devaluation that has occurred in the equity markets.

It was interesting that the markets sold off last week when the U.S. consumer confidence was reported at one of the lowest all-time readings. These indexes reported to be a major destabilizing influence in the U.S. economy as well as around the world. However, I doubt few actually read the report and understood its significance.

A major component of the negative consumer confidence relates to the anticipated belief by consumers of future inflation. During the month of September, consumer outlook on future inflation was at 6.9%. I’m not implying that consumers are unaware of what’s going on, I just don’t think they’re very timely. With the price of energy falling close to 50% in the last 90 days and commodities literally falling off a cliff, you may rest assured that inflation for the next 12 months will be non-existent.

I simply wanted to provide you with a reality check regarding the ridiculous volatility and hyperbole of the financial press. While things are certainly not fabulous, they are clearly not desperate. The market should move up between now and the end of the year, but it will be volatile. Since my last post, "Let's Talk Turkey", the market has moved up, and hopefully volatility will be reduced, reality will be reintroduced and positive financial wealth will once again resume in the coming months.