Crystal Kilpatrick

Hi Crystal,

Great question you asked about the stability of the market. The news media has a tendency to sensationalize the facts of the current market to their liking. Remember, their job is to sell newspapers so the more hyped a story the more papers they sell. Now, there are “some” truths to what they are saying. Here is an up to the minute update on the market and what is going on.

In a bid to ease the credit crunch and restore a sense of calm in the financial markets, the Federal Reserve authorized a $180 billion expansion of its swap line with other world central banks. The funds, which will be provided by the Federal Reserve, can be injected into money markets through overnight and term loans. Stocks like this news so far and this is putting pressure on Bonds/Mortgage rates.

Something to think about – The Fed is attempting to be savvy and creative in its ways to help the financial system get back on track. However, there is simply no one who can draw upon past experience to find the answer here. This situation is historic… and we are living through it.

There is a lot of panic out there. People are very worried about their life savings. Is money in the bank safe? How about if it is in a life insurance policy? How about in bonds? Unfortunately the answer is no, no, no. Yesterday, the panic reached a level that caused such a demand on Treasuries, that the total return of some short-term paper went negative. That’s right… the premium paid was higher than the return provided by the yield. So keeping your cash under the mattress is better than an investment in some Treasuries, and apparently safer than the financial market. Suddenly, guess what may become the most attractive way to protect your money? Think about it… you can touch it, get a tax break and live in it too. Yes, Real Estate is starting to look pretty good, especially since it has become more reasonably prices. Prices are down nationally and rates are still low at 6.0% compared to the last 85 year average of 7.5%. So, should you buy or wait to see what happens? That is the question most buyers are asking. Buying low and selling high is how the wealthy keep getting wealthy. My advice to anyone looking to buy… Buy now before the market starts to turn… and it will turn… For additional information please call me at 512.637.9119 to bounce any ideas off me or continue with market conditions.

Sincerely,