Let’s recap on a few of these events since the Fannie Mae and Freddie Mac debacles roughly two months ago, although that wasn’t really the beginning was it? (More of an aftershock from deeper rooted decisions).

Bear Stearns, Lehman Brothers Holdings bankruptcy, Merrill Lynch, and the government takeover of American International Group, Inc. followed — we thought that was shocking at the time, now,

JP Morgan Chase bailed out the largest bank failure in U.S. history with Washington Mutual even after the $700 billion bailout was rejected by the House,

Wachovia Corporation was sold overnight to Citigroup Inc after a roughly $200 million win in their competitive bid against Wells Fargo,

Yesterday, the stock market fell over 400 points in less than five minutes; quotes from this day included “worst decline since 1987” and “the sum of all fears,”

There are now only four national banks (Citigroup Inc., Bank of America, JP Morgan Chase, and Wells Fargo… or would that be six with the other two changing their charters last week).

And, it’s not over yet…

The auto industry just received a $25 billion bailout of their own,

The government is still pumping in billions of dollars into the financial system and housing market, 

Congress has been in the midst of marathon sessions.

And, let’s not gloss over the other sideline headlines, further evidence that the buck didn’t stop there.

National City stock plunged yesterday and was downgraded begging questions relating to their future (…not going to go there but I will note their stock was trading less than Wachovia Corporation at the close of business). There are many others lingering in the sidelines; just a matter of time (or days as the events of the last few weeks have shown). Some experts anticipate up to another 1,000 bank failures over the next six months. Not all of these can be ‘rescued’ by the Fed. And, we haven’t even touched on the global market effects. 

Someone asked me yesterday, “What does all of this mean?” Honestly, how do you even keep track, or explain the fact that it would be like cutting everyone’s credit cards in half… all at once. And, that assumes they have jobs and will still have an income. Unemployment is expected to be over seven percent by 2009, the highest it’s been since the 1990-1991 recession.  The Secured Lender referenced an article that equated this ‘crisis’ to “depriving a body of oxygen.”

Of the banks left, there are some that are now implementing floors on pricing and even escalating pricing on already sent proposal letters for new commercial loan transactions, including for asset based lending deals. I guess this is better than the alternative… dare I say it… not making loans.

Even in this market, that may seem like a drastic measure, until you take a deeper look. One reason may be that LIBOR jumped to over three percent and may still rise; Prime may drop below this. Can you imagine? 

Stop — think about what I just said. Doesn’t that mean that some companies with low interest commercial loans would actually pay less than some banks or financial groups pay for their money? It is a Mad, Mad, Mad, Mad World (as Mark Sunshine’s First Capital blog noted).  

And, for factors, it will not be any easier. Yes, factoring companies may see a rise in business and in new fundings during this time period. But, what’s underneath? Take a careful look: What is in your existing portfolio… your existing client base? Can your portfolio handle the ride? 

Bailout, no bailout, we all have differing and apparently passionate opinions on this matter. However, we will all be affected. Who’s to blame, who should be held accountable, who comes out ahead, who suffers the most, who should correct it, and who should pay… the list of questions continues. At the end of the day, no one knows for sure. I just wanted to highlight what we should already know. It will be a long road until we get there. We will make mistakes. We will have to live with them. It will be slow. It will be painful. And, hopefully, the market will correct itself over time. Until then, stay the course, plan accordingly and hold on tight. Because, those headlines are right: We are all in for a bumpy ride.