Just When You Think the Panic is Over...

The last few weeks, the sub-prime loan problems have rattled around and shaken the confidence of investors, taking them on a valuation roller coaster ride . Supposedly to ease market fears, central bankers sent word that they would provide liquidity to the markets to allow them to calm down. Instead, they only convinced the markets that the problem was larger than was originally thought. After all, the doctor never supplies medicine unless you are sick.

The fog of this marketplace skirmish should cause one to seek real data. It's clear that the financial experts were caught...again...and some hedge funds simply outsmarted themselves. Mortgages with no credit checks, no income verification, and no money down? That should sound risky to anyone. The real data reflect that that the economy is growing, slowly, but growing, and non-US economies are growing faster. Corporate profits are actually good. Employment is good. Wealth, health, and educational attainment are growing around the world. Some commodity prices are actually falling because there is more supply than anticipated. Despite all of this turmoil, there has been no run to precious metals.