Will we avoid a recession?

The big "recession" word is being thrown around once again. Ben Bernanke and the federal reserve are under deep pressure to lower interest rates to help the economy bounce back and avoid another recession that's hurt the consumer and taken the stock market lower by over 15%.

Wall street in my opinion won't be happy with less than a 75 basis point rate cut and there are expectations it may happen before the fed meets again in late January.

The drudge report had a headline yesterday quoting sources including Abby Joseph Cohen who is bullish currently, that we might see the market head to 6,000 or higher to 14k as Mrs. Cohen at Goldman Sachs is predicting by the end of the year.

The white house and congress are currently debating a 150 billion dollar stimulus package to get the economy back on track. The package that's in discussion currently would give tax payers a one time 800 dollar tax rebate.

Will the economy avoid recession? Should the fed just let this economy work it's self out on it's own? I am interested to hear what you may think!

Subprime mortgage mess hits Citibank

Is it me or does Citibank seem like a bum asking for handouts on a street corner? This is after Countrywide was purchased by Bank Of America last week for just over 4 billion dollars.

Wow what a free fall and a huge mess. The only one happy with this deal is Bank of America (eventually)(maybe) and the US government who absolutely dreaded the idea of a major lender going bankrupt and having to figure out who would service these loans after the dust settled.

Note: You still have to pay your mortgage even if your bank goes bankrupt. Sorry!

Back to Citibank, the government of Abu Dahbi gives them a cash infusion of $7.5 billion cash for convertible bonds with a 11% coupon! Seems like an act of desperation, something that scares the living crap out of me, especially with the Chinese, Kuiwati's and other foreign governments helping other banks such as Morgan Stanley and others out of this mess. Isn't this a threat to our national security?

I'm not sure, I don't work for the CIA or the White House.

Bottom Line: We are officially in a full mortgage meltdown, credit crunch, Housing mega-crash, Sub-prime crisis.

Real Estate Crash

The real estate market is in such a malaise. Yesterday Bank of America agreed to purchase Country wide financial for 4 billion dollars in stock. Will this be the bottom for mortgage delinquencies, the real estate crash? There are now rumors that JP Morgan Chase might look to acquire Washington Mutual. Consolidation in the mortgage industry in my opinion will be good. It must be painful for a homeowner to lose his or her home to auction or to the bank. Hoping for better days ahead in the mess that these bank's have created. Angelo Mozilla was saved, will we be? Stay Tuned!