Week Aug 27 - 31

S&P 500: 1473.99

The market is flat for the week, however, there are still a lot of volatility - it dropped by more than 2% on Tuesday and then gained everything back and more on Wednesday. Looks like investors don't really know how bad the subprime crisis is, and they just followed the herd buying or selling securities. The economic data (orders to factory, personal income and spending, and purchase manager index) all show signs that the US economy is still strong. Bush and Bernanke also said that "It's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.'' This solidifies my point that Bernanke would disappoint Wall Street about lowering rate. If the Fed keeps bailing out mortgage companies, those companies would keep making risky loans knowing that the government will bail them out. The mortgage business went out of hand in the last few years, and the tightening rules enforced were just a regression to the mean.