Tuesday, November 20, 2007

Financial Collapse Continued

I hope this doesn't become a 'cry in your beer blog' but i can't ignore the bad financial news. There is almost literally a story every day about a major financial institution getting the smack down. Here are the latest and greatest.

Freddie Mac- $2 billion dollar loss for the third quarter

H&R Block - Chairman and Chief Executive Mark Ernst resigned today because of subprime exposure through Block's subsidiary Option One Mortgage Company

The Freddie Mac news may be the worse yet because investors may lose confidence in the governments will to bail out financial institutions. I don't think the government should do anything (after all they got us into this mess in the first place) but investors have held somewhat steady because the fed had already opened up the vault to be raided once. With inflation fears growing it is doubtful they will do the same again. Combine that with continued weakness in the overall housing market, retail weakness (Target's weak earnings), and weakened dollar (gold spiked about $20 an ounce today/yesterday), and you have the makings of a recession.

Buckle up.

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