Stress Fracture

Look around everywhere you turn is heartache
It's everywhere that you go
You try everything you can to escape
The pain of life that you know
--Madonna

Blood continues to flow on The Street related to the financials. While overall market indexes trade relatively sanguine, individual financial issues continue to get crushed. Rumors swirling around Lehman (LEH), American International Group (AIG), and Washington Mutual (WM)--among others--suggests some type of announcement perhaps this weekend.

The volatility in these financial names is breathtaking and volume is gargantuan (the 3 names mentioned above combined for over 1 billion shares traded today!). Just as a snapshot for my future reference, some select closing bell prices today:

Fannie Mae (FNM) $0.74 (-5%)
Freddie Mac (FRE) $0.46 (-22%)
Washington Mutual (WM) $2.73 (-3%)
Merrill Lynch (MER) $17.05 (-12%)
American International Group (AIG) $12.14 (-31%)
Lehman (LEH) $3.65 (-14%)

Although it seemed straightforward to articulate the plausibility of this credit crunch situation years back, my mind balks at digesting some of the prices I see on the screen as the scenario is realized.

I have to think bureaucrats will be busy whipping up a Weekend Surprise to in yet another valiant attempt to stem the red tide. Also, I wouldn't be surprised to see a Fed easing either at their confab next week or sooner (although the bond market, much to my amazement, currently isn't pricing in a cut).

no positions