The stock market is down today as credit ratings remain in doubt over losses related to the subprime mortgage crash. Additionally, Alan Greenspan is warning of a possible recession, and that isn’t helping the stock market, either.

MarketWatch reports on the stock market:

U.S. stocks on Monday extended losses into a second day as Moody’s Investors Services warned it could lower bond insurer credit ratings because of subprime losses and Alan Greenspan warned of a possible U.S. recession.

The subprime mortgage crash continues to affect the economy, even as Congress works to change FHA mortgage loan rules and the Bush Administration tries to stem the tide of expected foreclosures with a five year mortgage freeze.

Most of these fixes, however, are only band-aids. The new FHA mortgage loan rules will mainly benefit first time homebuyers and will do virtually nothing for those faced with foreclosure. Additionally, attempts to fix the economy with increased liquidity, bailout plans and mortgage rate freezes will not hold up in the long term.

Right now, real estate investing should be something to be wary of, as well as investments in real estate related industries like mortgage lending and building. Some stock investments are available at bargain prices, but it is important to choose carefully; while some stocks will recover and you could see great returns by investing now, others will not recover.

And it is worth noting that many do not feel that U.S. housing prices have bottomed yet, so real estate flipping is not the best idea right now, and waiting until next year to buy real estate may be a better idea. Bloomberg reports on the housing market and the economy:

“We’re only halfway through the housing shock,” said Ethan Harris, chief U.S. economist at New York-based Lehman, the fourth- biggest U.S. securities firm by market value. “It’s just a matter of time before the weakness spreads to the rest of the economy.”

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