We're back in 1999 now. Read why and why people are turning to hard assets.

We're back to 1999. Remember that year? Bill Clinton was President. All the wealth in the Dow Jones Industrial Average has been wiped out since then. As of 1 PM ET, the Dow had dropped nearly 300 points to the 9600 level. What will happen next? My bet: investors will head back to hard assets like gold...and real estate! Just watch as money begins to flow again as investors bargain shop among the short sales, REOs, and distressed properties available for purchase. And what if lenders reduce rates even more? Read on...

Fed Chairman Ben Bernanke hinted that a rate cut might be in the cards now that oil and commodity prices have eased (because of fears of recession, which would reduce demand). "In light of these developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate," Bernanke said. The Fed Chief further stated that economic recovery is likely to be prolonged given the recent turmoil and that the Fed planned to use the "tools at its disposal to improve market functioning and liquidity."

In other real estate related news, Bank of America announced just plain awful earnings yesterday and also slashed its dividend in half to shareholders. Net income slid by 68% to $1.18 billion from the $3.7 billion a year ago. Kenneth Lewis, the CEO and a veteran of the banking industry, summed it up: "These are the most difficult times for financial institutions that I have experienced in my 39 years in banking." Investors believed him, with the stock down over 20% after lunchtime today.

So what bank will go belly up next? Some are wondering whether National City can make it as the stock has taken an absolute beating recently as many believe it could become the next Indy Mac and fell over 25% Monday. Fitch Ratings led the drumbeat against the bank, saying that the Cleveland-based bank "has been battling asset-quality issues in its mortgage and home-equity portfolios for over a year."

Of course one silver lining in this for Realtors and investors is that gas will be a little cheaper when you drive around and look at properties--nationwide gas is just under $3.50/gallon.