All right now...... Take a deep breath..... let it out...........relax................. Ahhhh!!!! Feel better?

I know, I know. There's blood in the streets. Everyone is waiting for the (gasp!) next Great Depression! The bailout bill won't pass! The stock market is tumbling! And you and everyone around you is in a panic. Relax......................

All right now. Let's start at the top. I am absolutely shocked at the absolute lack of faith we are seeing here in the minds of the public regarding the financial markets. I am NOT shocked at the amount of lies and downright stupid statements I'm hearing on a daily basis. Most people wouldn't know a corporate balance sheet from a biscuit. Now guys, I know I have a business degree and that means I have taken classes in economics, accounting and business management, but it don't take no GED to figure out that this isn't the fall of Western civilization as you know it. I don't even bother listening to some brain dead reporter or TV anchor when they begin to enlighten me on the economy with their wealth of economics training. (by the way, I'm being sarcastic. Most reporters have college degrees in English or journalism. How that qualifies you to have an intelligent opinion on the economy is beyond me)

Now I know that everyone thinks the government should step in and save us all (although they created the problem by choosing to ignore accounting irregularities at Fannie Mae back in 2004) ,but let's take a look at what has happened in the banking business in the last week.....

-Bank of America bought the assets of Merrill Lynch

-JP Morgan Chase bought the assets of Washington Mutual

-Citimortgage announced yesterday that it is buying the assets of Wachovia

Well, will you look at that?!?!?! The government didn't have a thing to do with those things occurring! It is a natural process of the market righting itself! Guess what? Some companies will go out of business and some other companies who are stronger and made better choices will swoop in and get a good deal. THAT'S HOW BUSINESS WORKS! It's working!

However, because everyone is screaming for the government to do something and because it is an election year; you can believe we will have some sort of "bailout" plan finalized by the end of this week. The stock market will settle down and the sales of beer and hard liquor will drop precipitously. (another bad joke) The federal reserve today committed today to boost the amount of 84-day cash loans available to U.S. banks. The Fed is increasing the amount to $75 billion, up from the current $25 billion starting on Oct. 6.  That move will triple the supply of 84-day loans to $225 billion, from $75 billion. They also committed to doubling the amount of money available to all of the central banks to $620 billion up from $290 billion. This will let everyone feel good about that fact that there will be money to lend and thereby loosen credit restrictions. (in theory)

All in all, you can't forget where we are in the middle of right now. We are in the dead center of an election cycle. Everybody is going to sling mud until election day to meet their own needs and spin it to their benefit. Don't forget that we could have prevented all of this by tightening up on Fannie Mae back in 2004 when accounting irregularities came up, but Rep. Barney Frank who was the Financial Services Committee ranking member told investigators that, "I didn't see anything in your report that raises safety and soundness problems" (of Fannie Mae) Hey, you don't have to believe me. Look it up yourself on the archives of CSPAN. It was ignored, but you won't hear Barney Frank talking about it now, in fact, he hopes you don't know about it.

Take everything you hear right now with a grain of salt. My take is this:

•1)       "Bailout" plan will be in place this week. (these guys can't go campaign for re-election until they get it ironed out or the public will kill ‘em) It won't be the one they originally intended. It will probably be for a lot less money and be contingent on a lot more oversight, but the market will feel better, because the average Joe doesn't really understand the mortgage market anyway. He just wants to know it's business as usual. It helps him sleep at night.

•2)       Markets will settle down with that news. Fed pumping money into the banking system will loosen credit restrictions beginning Oct. 6^th.

•3)       After the election November 4^th, you can expect a HUGE drop in the amount of talk about the economy. You ain't gonna believe it. It won't make political fodder any more so the majority of politicians will shut up about it and the American people will stop having it shoved down their throats, thereby reducing the panic.

•4)       Consolidation of banks will continue further stabilizing the industry eliminating the weak by pairing them with the strong.

O.K., feeling better? You should. The system is working as it should. The weak die off and the strong survive ultimately making this economy stronger. Fortunately for those of us in the Charlotte market; we live in a very stable part of the country with regards to housing, jobs and the economy as a whole. So, take heart and congratulations! You're still here! Take steps now to position yourself for the turnaround, because it is coming and when it does........... those who are still in the game are going to reap the rewards. I think I'll stick this one out! How about you?