Rate Watch 9/19/08: Carefully Floating

This is an incredible day at the end of a VERY incredibly volatile week! Today, there have been 3 enormous announcements which are going to have a HUGE impact on our financial markets. Yesterday there was a modern day (21st century) "Run on the Bank", with $180 Billion withdrawn from Money Market Funds. Today, the Fed and SEC have come to the rescue with the following announcements which are sure to improve the Financial Markets, Stocks and Bonds alike, over the LONG TERM. Here are the 3 announcements: 1) The US Government will Guarantee ALL Money Market Funds! 2) The Fed will create a marketplace for all of the illiquid Mortgage debt! Absolutely Brilliant! 3) There is now an SEC ban on short selling of 799 financially related stocks (this is in place until October 4th and can be extended for 30 day increments as needed). For now I recommend Carefully Floating as we ride this wave of great news. The market is going to be exceptionally volatile today, so I will watch closely and advise you if we have a turn for the worse in the Bond Market.