A couple of thoughts before tomorrows FOMC meeting.

1. Does the fed really have a handle on financial conditions? Over the past couple of meetings the chatter seems to be really conflicting. Prosser, Lacker want a hike. Bernake doesn't want to hike because he is convinced that housing is going to drag down growth and inflation. I dont know who is going to be correct, but there is scant evidence from the markets that anyone is worried about anything. However, just like in 2000 market participants can rapidly change there opinion.

2. Is the real estate bust going go to last a lot longer than everyone thinks? I say yes. Ancedontly, prices seem too high in the face of falling demand and still expanding supply. Not to mention that toxic mortgages and fraud are rampant. The problems are not going away anytime soon.

3. Where is job growth expected to come from? The entire country is based on consumption. Problems in real estate are certainly going to have an impact on Americans ability to consume

4. What the fuck is the US going to do about Iraq? I certainly support the was on terror. We have a right to defend our way of life and I have no sympathy for evil islamic fundamentalists. That being said, the war isnt going well. Changes need to made. If we leave how to do we appear to the rest of the world? I dont think we can leave without a serious blow to our credibilty. Radical islam would surely gain strength.