[hytem]

I think the market is proceeding cautiously--reflecting mixed demand for investing. It doesn't take much for a pullback, as we have seen recently. Fear is always the major factor in pullbacks--anything that generates fear. And, unfortunately, the media is good at hyping fear, which somehow figures into its ratings game.

Low interest rates will continue to spur the market, because that's a good investment climate. I believe the Iraq war drain and the deficit spending have hurt the market and investors' confidence. That big push upward a few years back when Clinton balanced the budget reflected a very bullish attitude about the future. The demand for stocks climbed out of sight. Then, Greenspan lowered the boom on interest rates, and the "irrationally exuberant" market deflated. It recovered again when he dropped interest rates sharply when Bush took office. But the bullish attitude that prevailed prior to 2000, when the budget was balanced, has not returned because of 9/11, Iraq and big budget deficits.

With the need to reduce carbon emissions and foreign oil dependency, I believe the handwriting is on the wall for oil and the Middle East. Big changes are coming soon, no matter who becomes President. It will be recognized as a national security issue. Right now, Iraq is preventing the politicians from focussing on more important issues, but it will happen eventually. It is probably already happening in corporate boardrooms and higher political circles.