Incredible.

Well, I arrived back from DC only to be turned around and issued a ticket to New York yesterday. Now I'll be in NYC all week monitoring fallout from financial crisis. It's an eerie mood here in lower Manhattan; you can definitely tell most people had a horrendous weekend/start to the week. The market absolutely plunged today and folks around here don't think its hit the floor. I ran into a guy that buys investments that payout based on failed bonds. I think he was the only happy person I've seen all day.

Anyways, given this financial massacre, it's important to explore the underlying cause. I'll keep it on a macro level: The government sponsored two companies (fannie and freddie) to give out mortgage loans to people that normally wouldn't qualify in order to boost home ownership. The private industry, unable to compete with fannie and freddie (offering mortgages at unprofitable rates) distorted market risk and pushed financial institutions into making bets on more lucrative, albeit riskier mortgage investments. When the housing market declined, mortgages backed by freddie and fannie (to people that never should have had them) failed and subprime mortgages (to people that never should have had them) failed. This is causing the enormous devastation that's seen in the housing and financial markets. If you get the flu, you don't just want to mask the symptoms, you want to get rid of the flu. In similar fashion, while it might be easy to blame people now (such as the leaders of Lehman) its important to drill down to the cause.

Well, I've got to get back to scouring the floor for buying opportunities. If you're an individual with some free cash, I might advise you to do the same...
We'll see how tomorrow shakes out. Definitely empty tables and full bars in and around NYC tonight. Until then!