Sometimes I need to list the events going on so my perspective is clear as I try to encompass the most current, complete worldview. 

• US consumer confidence plummets
• US dollar weak and getting weaker
• Oil, Gasoline, Heating Oil hitting all time highs
• Gold approaching all time record high
• Banks, investors refuse to lend money – ratings and pricing questioned, quality suspect
• AIG and Merrill Lynch’s write offs and King County, Washington losses in Commercial Paper
  
• Housing in turmoil – owners and investors are nervous with no end it sight - ATM is closed
• Technology companies are reporting good earnings, financial companies not so good and the rest are experiencing rising costs and more competition.
• Congress is going to “fix” taxes
• We are at war with no end it sight.  It is hard to determine who is tanking our global image faster, Congress or the Administration.
• Weather is not behaving which is creating economic dislocations, large earthquakes 7.0 and higher seem to be more frequent
• Warren Buffet dumps PetroChina and deems Chinese stocks in a bubble

So, a recession seems likely for the US, and everyone thinks the Federal Reserve will cut rates 25 basis points next Wednesday – so that is already reflected in currency, stock and bond prices.    

Here is the question – if the Fed cuts the discount and Fed Fund interest rates, will the housing situation change?  Will oil and other commodities price decline?  Will transparency return to the bond and Commercial Paper market?  Will trust return to the rating agencies?  Will the US dollar rally?

The markets have had a good run the past couple of years and you might want to consider rebalancing to your policy guidelines.  You might even think about underweighting risky assets including the US dollar.