I’m not an economist (thank goodness!), but it’s just my opinion that episodes like what happened in 1998 (and even in 2001 and in 2002) — when the Fed stepped in and changed interest rates — were more situations of market “liquidity” issues.
What’s happening now seems to be more an issue of “solvency” — who is going bust, and who will be sticking around. It doesn’t matter how high — or how low — interest rates are, if you’re a mortgage company, bank, or lender, on the brink of insolvency.
This may be a much bigger issue. We’ll see.
Again, one thing we’re NOT going to do is “anticipate” things turning around. I’ve learned to accept the approach of “what is, is.” If the indicators start turning up, we’ll start investing money. If not, we sit tight.
If you are curious if you’re OK, don’t sit and wonder. Pick up the phone and call us at 732-223-9000.
Tom
Thomas Mullooly
Mullooly Asset Management LLC
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