Saturday, August 25, 2007

Is the sky really falling? Sequel No. 2

Although the housing market and issues related to subprime credit and subprime mortgage-backed securities could well continue to be challenges in the coming months, the "contagion" affecting the rest of the financial markets really is mostly behind us. Sure, we will continue to see an occasional pothole or speed bump that will cause the gloomsters to remind us of their core belief that the sky is falling, but the overall economy and stock market will continue to plug along, neither booming nor busting.

Some weeks will be good and some weeks will be bad, but the overall trend really is likely to be incrementally upwards.

For the next six months each and every financial or economic pothole will be treated by the cynics as if it were a sign that the economy and stock market were rolling over and heading downwards into a deep recession. My advice is that every time we do hit one of these potholes, simply calm down and wait two or three weeks and see how things really look once the dust has settled.

-- Jack Krupansky


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