That right hand hurt Rocky

Round 1 of the financial crisis is over and the fighters have just gotten back off their stools. The most recent punches have been not so subtle and it looks like this is going to be another tough round. Lehman appears to be heading down a similar path to Bear Stearns and I predict a similar fate in the not so distant future. Housing continues to spiral downward and the next round of economic malaise will take the wind out of any false bottom feeders. The effects of $120+ oil and reduced income to states and local governments is just starting to appear in bottom lines at corporations and budgets. Commercial real estate is cracking and corporate debt is showing stress. Round 2 is not going to be a pretty sight. Consumer sentiment is already at stunning lows relative to the economic indicators. When the next round of awful news comes out, the bottom may quickly fall out from underneath the markets. Don't stray far from your basements. The sun is still poking through, but the clouds are all around.