TGIF? WTF, Feds take over Fannie Mae and Freddie Mac

Well the good news about our economy just keeps right on rolling in.  First came word that unemployment rose to a 5 year high today at 6.1% (and for the first time I know security and IT people in that group who are finding it hard to find a job).  At the end of the day word came out that the Federal Government will announce a bailout/take over of the two mortgage giants, Fannie Mae and Freddie Mac.  This will result in just about all shareholders of these companies being wiped out and more importantly, you, me and the rest of US citizens are now guaranteeing and on the hook for all of those trillions of dollars of mortgages out there!

Fred Wilson says that this is the new MO of the fed.  Wait until after the markets close on Fridays to announce the really bad news. Ever the optimist, Fred thinks that this could be the beginning of the end for the bad news and may represent the bottom.  I say, things will get worse before they get better.

Brad Feld wrote today about cycles in the business world. Certainly the pendulum swings and what goes up, must come down.  But Brad says he is 42 and thinks he has seen it all when it comes to cycles.  I am 47 and realize that is not true either.  Yes, there are cycles but each one is different enough.  Yes things will get better some time, but the pain and damage being done is going to take a long, long time to recover from. 

Try owning a house in Florida, Michigan or some parts of California. Politicians talk of change, but I am not sure what fundamentally is going happen that will change our present predicament. The sheer numbers are just scary. 

I along with many others I am sure will be looking for signs that we are starting to pull out of this mess.  But like in cycles past, by the time it is obvious that we are, the smart money will already betting on the next cycle.