Florida Housing Market

                       Market Update

The FNMA 30 yr 6.0% Bond tested support at it's low's for the year and bounced off and moved into positive territory today the 15th of Oct. A lot of this move is from money coming out of the stock market (which closed down 733 points for the day) moving into the safer haven of bonds.

The corresponding 30 year fixed interest rates have gotten worse to the tune of about 6.5%. The good news is they seem to be staying in the range of 5.75% and 6.75%. The bond is over sold so as the bond goes up on the above chart, interest rates go down.

Wednesday the Fed in a coordinated effort with foreign central banks lowered interest rates by 50 bases points to help ease the global economic concerns. This coordinated effort allowed the Fed to cut rates without the inflationary concerns of our Dollar dropping in value against the other currencies since they lowered their interest rates also.

Even with the Fed cutting the short term interest rates they have been unable to get the longer term rates to come down. This may be the market saying it's concerned that with all the liquidity being injected into the world financial markets, inflation is bound to be a problem some time down the road.

Stay Tuned,
Todd Dawkins

========================================

          Recessions and Depressions

Recessions come and go; they are a natural part of the business cycle. Depressions on the other hand are caused by Government's policy mistakes and or inability to promptly respond to a market crisis. 

Allowing investment banks to increase their leverage up to 40 to 1 and failure to oversee the rating agencies is shaping up to be the biggest policy mistake our government may have ever made in regards to our economy.

This has not only put our economy in a recession but also the economies of most developed countries as well. The severity of the problem has our economy gripping the side of a cliff like a fallen rock climber desperately awaiting the hand of a fellow climber (in this case foreign central banks) to keep us from falling into a major depression.

This truly is a global economy and only a collective effort will keep us from a deep and long recession.

I have read that the import and export of goods are now having a problem of functioning properly due to concerns that the purchasers "letter of credit" from the buyers bank may not be good enough for the seller to ship the goods thus leaving the goods to back up on the docks. If this part of the credit crisis is left to fester then we could see the only bright spot in our economy follow the rest of our economy down the drain.

The good news is that the Fed and the G7 nations are going to throw everything they have at the international banking system. This should help avoid a depression that other wise could be much worse than the Great depression of the 30's.

 To Your Financial Health,
Todd Dawkins

========================================

             Funny Bone                       

A little girl asked  her mother, 'How did the human race appear?'

The mother  answered, 'God made Adam and Eve and they had children and then all mankind was made.'

Two days later the girl asked her father the same question.

The father answered , 'Many  years ago there were monkeys from which the human  race  evolved.'

The confused girl returned to her mother and said, 'Mom, how is it possible that you told me the human race was created by God, and Dad said they developed from  monkeys?'

The mother answered, 'Well, dear, it is very  simple. I told you about my side of the family and your father told you about his.'

  -----------------------------------------------------------------------


                                   Politics

A little boy goes to his dad and asks, 'What is Politics?'

Dad says, 'Well son, let me try to explain it this way: I am the head of the family , so call me  The President. 

Your mother is the administrator of the money, so we call her The Government.

We are here to take care of your needs, so we will call you The People.

The nanny, we will consider her the Working Class.

And your baby brother, we will call him The Future. 
Now think about that and see if it makes sense.'
So the little boy Goes off to bed thinking about what Dad has said.

Later that night, he hears his baby brother crying, so he gets up to check on him.

He finds that the baby has severely soiled his diaper.
 
So the little boy goes to his parents' room and finds his mother asleep.

Not wanting to wake her, he goes to the nanny's room Finding the door locked, he peeks in the keyhole and sees his father in bed with the nanny.

He gives up and goes back to bed.

The next morning , the little boy says to his father, 'Dad, I think I understand the concept of politics now.'

The father says, 'Good, son, tell me in your own words what you think politics is all about.' 
                                  
The little boy replies, 

'The President is screwing the Working Class while the Government is sound asleep.
 
The People are being ignored and the Future is in deep shit !!