A slow day on the markets turned nasty today, and it ended worse. The market fell off a cliff into the close, losing almost 300 points, with Bear Stearns doing the need on a conference call where executives said the deteriorating mortgage markets had taken us into the worst fixed income market in 22 years.
Here is the quote from Bear CFO Sam Molinaro late today:
These times are pretty significant in the fixed income market. It’s as been as bad as I’ve seen it in 22 years. The fixed income market environment we’ve seen in the last eight weeks has been pretty extreme. So, yes, we would make that comparison to market events [like the late-90s debt collapse].
As damage control (the company was responding to concerns raised in an S&P credit report earlier in the day) goes, this was horrific and ham-handed, like trying to put out a fire via an air drop of a few thousand gallons of gasoline. You don’t say that sort of thing, even if you believe it’s true. Not now. Maybe later.
Anyway, the preceding words set in a motion a chain of other commentary, including impassioned stuff about credit markets in general on CNBC from Jim Cramer during Street Signs with Erin Burnett where he called for an immediate Fed rate cut, hang the consequences.
Remarkable. Emotions are running high today, and we are going to have to wait to Monday to see just how how the markets respond. More tonight during my 4pm PST spot on CNBC.