We have been forecasting a massive bailout of the mortgage market by the government for a while now and it appears that we will not be disappointed. It is becoming increasingly likely that congress or the Federal Reserve will create a holding company that will be mandated to purchase up to five hundred billion worth of mortgage backed securities over the coming months. We are not a big believer in bailouts but in this case the mess is simply to large to ignore. That being said our fourth quarter forecast remains unchanged with a continued correction in crude oil to $78-$82 per barrel range. A US dollar rally driven in part by the optimistic expectations that will come with a new presidential administration. A global rally in equities driven by all of the above and the fact that global equities are getting very attractive at this price range. While we do not expect the fed to raise rates at their next meeting we also do not believe the fed will cut rates. Longer term we believe that the credit crisis may drive a fundamental change in the US economy fostering a shift from consumption to a savings based economy. Credit will no longer be easy to come by and we certainly expect a wave of new regulations for the financial industry. These two points will serve to reward savings and punish consumption. For the big Emerging markets we expect that India will continue to follow a consumption based growth model and that China will soon follow India’s approach as China will no longer be able to depend on the US for an export driven growth model. In both cases the opportunities for investors will be signficant!