Not exactly a big blogging day here.  Since the market is up BIG, I need take care of some business. 

How do you feel about the market?  Is this just a blip, or the start of a longer rebound? 

Personally, I'm skeptical, for a bunch of reasons.  Here’s just a few:

-- Consumers (you, me, neighbors) still aren't running out and spending money.  No new furniture, carpeting, cars, anywhere in this middle-class, white-and-blue-collar young-family-retirees neighborhood.  Only big splurges around here are for additions for which a new lower rate mortgage would work well.

-- Companies like General Motors aren’t seeing you spending the money, either; they’re trying to entice you to come back with 0% financing.  (A not-so-good practice, I might add – cuts into future sales, gluts the used car market, and adds deflationary pressure on the entire market.) 

-- Housing sales are slowing – there are three 3-bedroom homes sitting vacant in my neighborhood, available for over 4 months.   (Over the last 12 years, these kinds of homes didn’t stay on the market more than 3 months; in some cases, these were snapped up as soon as they listed.)  This means two things to me: 1) people are using record low interest rates to build much larger homes at the end of their able-to-afford range; 2) there’s a housing glut and a possible real estate bubble about to burst.

-- Businesses spent a heckuva lot on infrastructure in 1999 to prepare for Y2K; if they expect ROI in 3 to 5 years before they replace it, spending won’t start in earnest for another 6 to 12 months.

-- Continuing uncertainty abounds about action against Iraq and potential terrorist attacks.

-- Holiday season spending may continue on the same downward trend as spending over the last couple of months, for all the reasons above.

Don’t know about you, but I’m going to hang back a bit, continue to watch my asset allocations carefully.