It means the credit crisis is worsening. It means a recession is all but guaranteed. It means, the economy won’t turn around any time soon. It means housing isn’t bottoming, or those who hold bad loans wouldn’t be seeing increasing losses. It means we still lack transparency in banking and we still have no clue how much toxic paper is out there or where it is. Having Freddie and Fannie fess up to their toxic paper probably identifies a huge portion of it, since they hold half the nation’s mortgages. But where is the rest of it? Who knows? So the credit crisis just worsens and deepens and deflation keeps spreading.
It means, it is not a good time to blow your wad, but it is a good time to get out of debt and save a little in case you are one of those caught in rapidly rising unemployment.
http://solari.com/blog/?p=1407