More Loan Losses In Financial Sector Weigh On Stocks

Two bits of news didn't help the market much at the open. QCOM reported disappointing guidance, which hurt an already weak tech sector. and Wachovia announced a $1.1 billion decline in its CDOs.

The Lehman Chief Global Bond Strategist said this credit crunch is worse than Long-Term Capital Management, and that it is the "deepest correction" ever in structured finance. But remember, historically financial crises turn out to good buying opportunities for investors in hindsight.

I see the big culprit this morning as the Yen. You know I have been focused on this currency, and it is spiking higher tomorrow. It is no coincidence that the 3-day surge in the Yen correlates to the 3-day drubbing in US stocks.

Oil is higher this morning, trading just north of $96. And the yield on the 10-year is down to 4.23%, reaching a 2-year low. The bond market continues to signal that the Fed is too tight here, and I hope they step up to add more liquidity to this credit crunch.