Mr. Bernanke, Mr. Paulson and Mr. Bush...

Hey fellas, can we please get some relief?

This week has been another rough ride for all of the markets; the stock market has continued it's steep down-trend despite two up days this week and the financial market got a downside surprise when Merrill Lynch reported that they are going to write down 15 billion in mortgages - the expectation was for 10 - 12 billion.

Bernanke tried to help the markets on Thursday, and there was a temporary respite from the carnage, when he said that the Fed stands ready to do whatever is needed to keep the economy from slipping into a recession and return to sustainable growth. The other good news on Thursday was the announcement that Bank of America reached an agreement to buy Countrywide.

I don't think the FOMC meeting can get here soon enough - it is at the end of January. The growing expectation is for a 50 basis point reduction in the Fed Funds rate down to 3.75% which would mean an equal reduction in the prime rate. In the meantime, earnings season will be in full bloom over the next couple of weeks. The hope will be for good earnings and projections that aren't too severely negative. If we can get some relatively good news on the earnings front, a reduction in the price of oil, and a solid rate cut from the Fed in addition to some consumer confidence and stabilization in the credit market we might be able to turn this ship around.

It is, afterall, a great time to buy a first home or a move-up home with prices very inexpensive and rates extremely low. There are plenty of good mortgages to be had for the right people and full-documentation loans are getting approved with higher debt ratios. FHA is strong up to its loan limits and there are also some great jumbo loans with very low rates for those who want to buy or refinance homes beyond the conforming threshhold of $417,000.

Reverse mortgages are a great alternative to traditional mortgages for homeowners over the age of 62 who have equity in their home and would like to eliminate their monthly mortgage payment and possibly get some cash, monthly income, or both.

For the good of our country, its citizens, and our economy, I can only hope that we all come together and start acting financially responsible by spending within our means and investing for retirement. Have a great weekend.

Something good needs to happen

The mortgage / credit markets have been in a state of disarray since July 29th. As bad as it was then, it has only gotten much worse. The housing market is suffering mightily because of the lack of financing available for so many people. The market always over-reacts - on the good side there is irrational exuberance and on the bad side there is just flat out irrationality. Our country needs some good news on the economic front so that investors will have the confidence to invest which would allow lenders to make good loans based on reasonable guidelines which would, in turn, help to stabilize the housing markets which would bring back reasonable consumption and ultimately lead to an increase in wealth which has dwindled severely over the last couple of months.

Our country is facing major problems as an ever-increasing number of baby-boomers will be retiring over the next 15 years and very few of them are financially ready for retirement. As a nation, we need to invest and create wealth to finance our retirement rather than rely on more debt to finance our keep-up-with-the-Jones' lifestyle. While consumption is hugely important and there needs to be balance in all things, the imbalance that has occurred from too much consumption and not enough investing needs to be corrected or the government will have to do it for us and we all know how efficient the government is at fixing these king of problems - it will cost us far more than it should regardless of what party is in power.

I believe our media needs to focus on the great buying opportunities available in real estate. It needs to instill confidence in the public not paint pictures of gloom and doom that becomes a self-fulfilling prophecy. We need to be wise about our money management so that our legacy isn't one of financial ruin for the sake of our "eat, drink and be merry" and live-for-today attitudes. Choose the proper mortgage for the financing of your home by dealing with an educated Mortgage Planner; have a competent CPA handle your taxes to maximize your tax benefits. Hire a top-notch estate planning attorney to protect your assets and your legacy and invest in stocks, mutual funds, real estate, and other opportunities that will provide you with the possibility of a good return on investment while diversifying your portfolio. The environment isn't the only green thing that's important; our lives depend on good financial management in order to be able to have a stress-free retirement and a financial legacy we can pass on to our children, universities, and other beneficiaries.