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.

Tough Primary Decisions

This morning I was swayed to support Mike Huckabee. There is now no choice based on this video.



Then I came to my senses. I am going to be voting for Ike based simply on his ad (via TruthCaucus).

Vote Ike 2008.

Financial Collapse Continued

About a week ago i wrote a post about how the subprime crisis is going to tighten capital markets. I provided a list of real estate failures that painted a stark picture. Little did I know that there would be more evidence in the coming days.

Barclays Capital - Announced write-downs totaling 2.67 billion

HSBC - $1 billion more in write-downs

As I said in the last post about this issue, the danger is not that these companies are going to go under. In fact, Barclays still turned a profit (amazingly). The problem is that capital markets are going to tighten. Lending institutions are going to make it harder to lend money. Less money means less investment. Less investment means less jobs.

Buckle in because its going to get bumpy.

Fred Thompson is the Heir Apparent to W

Fred Thompson seems to be the heir apparent to W. Why? Because Freddy has been light on the details and heavy on talking to the 'folks' its tough to know if he matches W in the policy realm, but phonetically he appears to be a perfect match. Here is an excerpt from his Meet the Press interview yesterday regarding a drug dealer friend of his (Los Angeles Times here),

"I'm not going to throw my friend under the bus for something he did, you know, 25 years ago if he's OK now," Thompson said. "On the other hand, I'm running for president. I've got, you know, to do the right thing, you know, and problems occur, and I'll just have to figure it out."

He manages to say 'you know' 3 times in 3 sentences. One word comes to mind: amateur. When a speaker feels nervous they tend to fill in the gaps with 'um' and 'you know' etc. A good speaker, when hit with a tough question as Thompson was, will pause. It is amazingly difficult to pause and collect your thoughts when eyes (and in this case cameras) are glaring, but is essential in public speaking. While it is true that he was hit with a very difficult question that he did not expect, it is also true that he normally speaks poorly. It is why he seems uninterested and bored.

At least George W. was animated when he would jump off the grammatical cliff. Maybe Thompson should take a page from W's book.

Quote of the Day

It is remarkable how many political "solutions" today are dealing with problems created by previous political "solutions."

Thomas Sowell

Party like it's 2004

Sweet