Sub-prime woes

U.S. Fed's decision to cut interest rates by 0.5% actually can be seen as negative.
Why? It shows that Fed deems the "credit crunch" TRIGGERED by Sub-prime woes to be more serious than they earlier estimated.

Here's my prediction for the future:
1. FED will continue cutting interest rates in a bid to keep U.S. economy afloat till the Presidential Elections.
2. U.S.$ exchange rate would weaken due to the rate cuts now and in the coming months
3. Oil prices would emerge as another problem the World faces. Oil prices have already creeped up to over US$80. I remember when it first cross US$50, there was lots of concern about Oil prices, ironically, now that OTHER PROBLEMS take centrestage, Oil Prices over US$80 so far has not attracted any media attention.
4. Instability at Iran is another Potential Problem that can be very big or not so big depending on how events unfold.
5. U.S. Housing Market is set to continue its decline. Fed's curtting interest rates can try to help minimise the "blood letting" of subprime woes but it cannot tilt the Supply Demand situation of U.S. properties.
6. U.S.'s stock markets might actually go up in the next few months as interest rates are cut, Dow might break 14,000 or even 15,000....markets have to go higher so that they can Crash.
7. China's Stock Market bubble is also likely to get bigger and bigger before the eventual burst (likely after Beijing Olympics)....China's govt is trying to slow down the bubble by diverting funds to HK stock exchange. HK Stock index would break new high and new high again.
8. Singapore's stock market might break 4,000 or even go to 4,300 as predicted by Simon Sim (Author of Joseph Cycle). However, as I have mentioned many times, as markets go higher, one should invest less and less of your money rather than putting more and more money at risk. Remember, as markets move higher, risks increase, NOT decrease.
9. Singapore Property Market would continue its uptrend after the recent breather in Aug (7th month).....enbloc would start to roll again after developers digest the increase in DC charges and the changes in en-bloc rules. Lehman Brothers have predicted that property prices in Singapore would seee further upside of 26% with Landed Properties and Commercial Properties to be the "stars" in the coming months.

Above is just my personal opinion. You can definitely have a different opinion.
Remember that we must plan for the worst case scenario that what if we are wrong would we still survive financially?
It is never wrong to be better prepared than others.

Below show you extract of an article I read which shows that U.S. Fed is really concerned about U.S. economy.

Global financial losses have far exceeded even the most pessimistic estimates of the credit losses on these loans,' the Fed chairman said.
The situation, he acknowledged, 'has created significant market stress'. The meltdown in the housing and mortgage markets has shaken Wall Street and small investors alike.Sub-prime-mortgage borrowers facing foreclosure may lose their homes at a rate above 50 per cent, higher than the historical average, Mr Bernanke said.'That ratio may turn out to be higher in coming quarters because the proportion of sub-prime borrowers, who have weaker financial conditions than prime borrowers, is higher,' the chairman said