Not Worried About the Fiscal Cliff
I continue to hold the minority position that fears over the fiscal cliff are becoming way overblown as each day passes. If the so called fiscal cliff is triggered, yes, the stock market will probably plunge and consumers and CEOs may decide they want to curtail spending. But those occurrences don't frighten me because I've found that it's impossible to make sound investment decisions against a backdrop of "what if" scenarios. One of my investment mandates is that I do pay attention to the economy and its trends.
I am seeing a shrinking pool of attractive equity valuations, unsustainable low interest rates, a bond bubble, and an unemployment rate that we would like to see go down. But I also see an improving housing market, financial institutions that are in significantly better shape today than they were in 2007 and 2008, and healthier consumer balance sheets. Last week, I met with my banker to refinance my home and I qualify for the fast track approval for the Home Affordable Refinance Program (HARP) option. My banker tells me it will take up to 90 days to wrap this up because they are refinancing like crazy. In most cases, he's seeing monthly payments decline by 15% to 25%. In some cases, household mortgage payments are declining by more than 30%. ...422 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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