Thoughts From Your Valuation Source

It seems like everywhere you look these days there is a new panic in the financial sector. From mortgage companies to coffee giants, it seems to be everywhere. Some are predicting another depression but not everyone is so worried, according to an article in the LA Times.

"We've gotten to that classic point in a financial crisis where it's gone on for long enough we know there are losses. We just don't know where they are," said Joseph R. Mason, a financial economist at Louisiana State University in Baton Rouge.

"The only way to find out is for investors to push every institution toward failure and see which ones keep operating," Mason said.

About the sunniest assessment that analysts will offer is that if the current crisis holds to historical patterns, it could end as unexpectedly as it began.

"Most panics are like summer storms," said David A. Moss, an economic historian at Harvard University. "They come up abruptly, are erratically intense, then suddenly dissipate."

Bears Stearns seemed to lead the pack and now even the expected "saviors" Fannie Mae and Freddie Mac are showing signs of trouble. In the midst of all this is some good news, especially for our SUV drivers.

Last week held true to the storm pattern Moss described. After another round of potentially catastrophic developments in the housing, financial and energy markets, the system pulled to the brink, caught its breath and took a turn for the better.

Oil prices not only halted their upward rush, they fell back a remarkable $16 a barrel in the space of a few days. And after a frenzy of concern about the banking system, markets suddenly calmed when three major institutions -- Citigroup Inc., Wells Fargo & Co. and JPMorgan Chase & Co. -- reported better-than-expected results.

No one is claiming that the storm is over or that this is the sign that nothing else will go wrong. No, instead they are simply referring to it as a sign that, no matter what the doomsday proclaimers are saying, there will be an end to this.