Morton Fox (mortonfox) wrote,
Morton Fox
mortonfox

Up in smoke

ligo0914-13

I was planning to go to East Buffet in Huntington with one or two friends on Thursday night to celebrate another trip around the Sun, but jbadger informed me that the restaurant was closed due to a kitchen fire. So I did a web search and yes indeed, they had a fire last month. I also came across a video of the fire. Well, so much for that plan. I have a Plan B, but it's not going to be easy to meet up with anyone there so I'll do that on my own.

No Plan B for the financial sector though. Monday saw the end of Lehman Brothers (With $40 billion in illiquid Level 3 assets, was anyone surprised that happened?) and Merrill Lynch, and Tuesday saw a last-minute rescue for AIG. Here, putting things in perspective actually makes it look far, far worse, but I think it's instructive to see how far the credit crisis has come and how far it could still go:

1. So far, in the financial sector, an astonishing $4 trillion in market cap has gone down the drain, and we still have a ways to go because...

2. ARM resets are scheduled through the end of 2011. In other words, we are only at the end of the first of four years of credit crunch, and that's before we consider that even good mortgages may be imperiled when people lose their jobs or businesses in the downturn.

So make sure your finances are in order and that you have an adequate savings buffer to tide you over a bad stretch, and hunker down because we're not going to see the light at the end of the tunnel for a while.
Tags: aig, arm resets, credit crunch, east buffet, financials, fire, lehman brothers, merrill lynch
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