Wary Sentiment Wells Up

For the past several days,a wary mood has been expressed by Wall Street analysts.David Greenlaw of Morgan Stanley(MS) notes a powerful flight to the safety of government bonds.Banks are still tightening credit,which will slow the economy over the next several quarters.Peak foreclosure on homes will not occur until mid-2008.Jack Ablin of Harris Private Bank thinks the world has changed now.There is the high price of oil coupled with the weak dollar.The trend has changed.As the Federal Reserve lowers interest rates,the price of commodities spikes.Fifteen of twenty commodities have gained over the past six months.Billionaire Wilbur Ross of W L Ross and Company says we are in the fourth or fifth inning of the crisis.It will be at least a few more years until foreclosures and write-downs end.More credit card and loan delinquencies are being recorded,which suggests that consumers are tapped out.Oppenheimer's Michael Metz feels we are in for a period of very slow growth.This will last for about two years,as we've been in a leveraged economy.The big growth wasn't real.Now we will see a period of 1-1.5% growth.To Joe Battipaglia of Stifel Nicolaus,we are in a contraction from housing,and consumption will be weak for some time.It will take years to work this out.Housing prices are just beginning to fall.The biggest consumer asset is losing its value.Credit is harder to get,so the market is properly going down.We've only dropped 5% in home prices so far.The clock is ticking on 600 billion of mortgages,so he is staying in a lot of cash and some multinational stocks.Cash has been pouring into money market funds,sending them to record levels.Oppenheimer offers its customers the Advantage series of funds.Other stable funds are TIAA-Cref Instit MMF/Retail and Vanguard Tax-Exempt MMF.Procter and Gamble(PG) and Johnson and Johnson(JNJ) are favored multinational stocks.