The economy is sinking faster than a mafia hitman wearing cement shoes in water; and, the mortgage/housing crisis is clearly to blame.

Wall Street was apparently totally shocked today when the Labor Department reported that 63, 000 nonfarm jobs were lost last month….As Reuters points out, the problem is that Wall Street experts had expected that 25,000 positions would actually be added. So much for experts!

Stocks Down

This news helped send stocks into a tailspin, closing at their lowest level in 19 months.

Reuters points out that this bad news came at the same time that “jumbo” mortgage lender Thornburg Mortgage was unable to meet demands from creditors for upfront cash. Not good.

More and more experts are now saying the U.S. is in a recession, official or not.

And, the worst is yet to come. There will be still more foreclosures this year…many more. The credit markets are getting tighter despite Fed action. And, consumer confidence continues to go down.

It is no longer accurate to refer to this as a subprime mortgage crisis. Let’s just agree that this is a financial crisis, period! Okay.

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Tags: Foreclosures, housing crisis, labor-department, recession, stocks, subprime mortgage, thornburg mortgage, Wall-Street

The Labor Department today reported that payrolls fell by 4,000 in August for the first time in 4 years. What makes matters worse is that estimates were for this number to increase by 110,000. Job losses included those in manufacturing and construction. Clearly, we can see that the housing market is starting to affect all parts of the economy now. As a result, the stock market has once again taken a beating today.

Additionally, Comments from one former Fed official — Alan Greenspan — perhaps added to Wall Street’s unease Friday. The Wall Street Journal reported the former Fed chairman on Thursday told a group of economists in Washington that the recent market turmoil is similar to that of 1987, when the Black Monday crash occurred, and of 1998, when the big hedge fund Long-Term Capital Management came close to collapsing. Greenspan’s comments come about a month ahead of the 20th anniversary of the stock market’s crash on Oct. 19, 1987.¹

I’m a huge fan of Greenspan, and if he’s concerned, so should we . . . I’m sure you all know by now that I certainly am.

Sources:
¹ - Yahoo Finance - Payrolls Drop for First Time in 4 Years

Tags: fed, federal reserve, Greenspan, housing, labor-department, mortgage, Wall-Street