10/29/2007

Economy may get more than a Ghost of a Chance this Halloween

Hello:

The Fed may play the Great Pumpkin this Wednesday at the Federal Open Market Committee (FOMC) meeting and give our economy more than a ghost of a chance at a soft landing. The University of Michigan’s consumer sentiment index dropped to 80.9 in October from 83.4 in September. Some consumers are reported to be paying their mortgage payments using their credit cards. This is not a strategy that we recommend. So it would be helpful to see some relief from the FOMC in terms of an interest rate cut.

The domestic stock market indices are rallying today in anticipation that just such a rate cut is in the works. Certainly hopes were raised last Friday when FOMC Chairman Bernanke said, "Indeed, intuition suggests that stronger action by the central bank may be warranted to prevent particularly costly outcomes." We interpret this to indicate the strong possibility of a 1/4% cut and the outside chance of another 1/2% cut.

Either way, we believe that an interest rate cut might help change this holiday season from rather scary to more than merry!

Thank you so much for your concern about the effects of the Southern California fires. Our family is fine, and both offices are untouched. We feel very lucky. Our hearts go out to the many, many people who have been adversely affected by the recent firestorms.

Terri G. Millson, CIMA, CIMC President

Ray Dicius, CSA, GEPC LPL Branch Manager