The sub-prime debacle rolls on:

“American Home Mortgage joins more than 50 lenders in bankruptcy this year.”
~MSNBC – Aug 6, 2007
~Bloomberg, Aug 10, 2007

“Goldman Sachs Group Inc.’s $8 billion Global Alpha hedge fund has fallen 26 percent so far this year…”

Check out this piece I wrote in Money Week about Goldman Sachs
I kind of jumped the gun on it, but the fact is the big bank is in trouble over the credit crunch, something few people would have once thought possible.

Hedge funds are keeling over all over the place as well:

“Hedge fund operator Sowood Capital Management said Friday it would return $1.4 billion to investors after losing an estimated 60% of their money last month…”
~LA Times, Aug 4, 2007

Hedge funds are taking a hit for 60% in a month.

Home mortgage lenders are going belly up, 50 this year alone.

Meanwhile, the “plunge protection team” at the Federal reserve is on the job with soothing words:

On March 28th, Fed Chairman Ben Bernanke told Congress he believed that sub-prime defaults were “likely to be contained.”

On June 20th, Treasury Secretary Henry Paulsonsaid the fallout “will not affect the economy overall.”

On June 27th, Merrill Lynch CEO Stanley O’Neal claimed the defaults were “reasonably well contained.”

In August, $40 billion in credit had been pumped into the financial system over two days – more than anything the Fed has done since 9/11.

But can the economy stay on keel?

Today, Sept. 6, there are announcements of terrorist warnings as dire as any since September 11…

Are we near a crisis?

Who knows? The point is when you have a situation this large and this complex, all bets are off.