Down–then up–today the equity markets are bouncing somewhat, while interest rates hold stead in the 4.51% area. Day to day we get economic data that is creating cross currents in the debate as to whether the economy is slowing or not. Some folks have commented that with student loan repayments restarting in a week or two that GDP is going to take a drubbing–while I keep seeing that there are going to be many workarounds to paying your debt. Employment has remained strong–yet we seem to have more and more strikes taking place which can’t be helpful to the overall economy–not to mention potentially inflationary. What is one to do?
Well we have earnings season starting up in the next week or so–although many of the community and regional banks won’t be reporting until the end of October or early November. I am most curious of the level of write downs in commercial real estate–this is still the talk and certainly they will be higher than a year ago–but will they be a disaster? Commercial write downs will be with us for a couple more years so it is likely there will be overhang on the bankers for this same period of time – like many things the speed of the write downs will determine the health of the smaller banks–if write downs trickle in they will be manageable, but if they come in 1 fell swoop I think we will lose a bank or two along the way. We’ll see.
No reason to even ponder any action today – just sit back and enjoy the show. Review your holdings and consider the near future–i.e. I have a number of either of treasuries or CDs maturing on the 30th–where will the money be reinvested?