Last Tuesday, the market could not find its bearings and the result was a sharp sell off. Seems like it was one of those days were all news were interpreted as bad news. Even Fed chairman Bernanke’s words on inflation couldn’t calm the Wall Street crowd.
One of the big news items of the day was Standard & Poor’s announcement that they might be downgrading some 2.1% of the $565 billion of subprime bonds because of the housing slump being worse than anticipated.
No surprise to me, but Michael Shedlock explains the ins and outs of this debacle with a great sense of humor in his article titled “Stress Test.” This is in reference to S & P’s report that it will implement a ‘stress test’ of subprime mortgages.
Hmm, I wonder if that is just another useless phrase that would fit well into the theme of my recent Sunday post “Why business people speak like idiots,” or if they actually have a valid plan. My guess is, it’s the former but I’m sure, as time goes on, we’ll hear more about it.