Bookkeeping: Adding to Blackrock (BLK) Slowly - as Wall Street Wakes up to Regional Bank Problems

You know a financial selloff is getting hot and heavy when they get around to beating down the best and brightest - namely the Blackrock-s (BLK) of the world. So this is when we want to take advantage of the sale prices and begin to rebuild a position. I'm in no rush but since the regional banks are finally taking serious damage, we are seeing some widespread damage in the financials. First we had the investment banks, and large money center banks hit the worst in the first stage of the credit crisis last summer/fall/winter, and now we are on the next stage - major damage in the regional banks. Remember as I wrote in this week's summary I felt the Federal Reserve will allow some of these to go under because they are smaller and they want to put up a front that they are allowing free markets to work. That's a lie - they are basically supporting a series of banks that should of gone under by now.

• But today Fifth Third and other regional banks across the nation are being shaken to the core by a 21st century financial crisis. For many of them, things are going from bad to worse.
• Home mortgages and other loans that the banks made in good times are souring so fast that many of the lenders are scrambling to prop themselves up. If the pain worsens — and many analysts say it will — some of these banks, like Fifth Third’s predecessors, may eventually seek out suitors, most likely large national rivals.
• “Everybody is trying to figure out where the bottom is,” said Jennifer Thompson, a regional bank analyst for Portales Partners in New York. “Every time a bank reports another capital raise or reports that things are worse than they anticipated, there is another round of selling.”
• But Wednesday was just one more bad day in what has been a horrible year for small and midsize banks. Their descent in the stock market has been remorseless, reflecting the economic pain in their own backyards. Weakening housing and construction markets in regions like the Midwest, Southeast and Southwest have hit lenders in those areas hard.
• But the breadth and depth of the current troubles have caught bank executives by surprise. Federal regulators are particularly concerned about the exposure of smaller banks to the commercial real estate market, which has softened in some parts of the country.
• But more than anything, the problems confronting regional banks underscore the extent to which the housing crisis has spread throughout the country. In the Southeast, Regions and SunTrust are reeling from loosely underwritten mortgages now that real estate values are plummeting in the region. (wait, everyone tells me the problems in housing are only in CA, FL, MI, NV, AZ, and OH?)