We all know the catch-22 situation facing the Federal Reserve… stagflation . A stagnant economy coupled with rocketing inflation. At the rate oil is increasing, we can expect our daily products to double in prices within the next 2-3 years.

Finance ministers at the G8 summit in Osaka, Japan, have warned that stagflation — recession coupled with high inflation – is now a more serious challenge to global growth than the credit crisis.

William Patalon III in Money Morning sees a universal theme emerging: Inflation, Inflation, Inflation…

As the financial services giants get cut down to size, metals are now the biggest source of mergers and acquisitions on Wall Street, according to a report on Bloomberg.

Countrywide shot up over 10% in early morning trading as the cost of protecting their debt against default fell for a second day in a row on growing confidence that Bank of America will proceed with its acquisition. The market was also glad to hear that David Sambol will retire as president of Countrywide after its acquisition by Bank of America.

The end to the credit crunch is still not in sight, European Central Bank President, Jean-Claude Trichet and Warren Buffett warned on Monday.

"These are demanding times, challenging times... It is an ongoing, very significant market correction," Trichet told BBC radio in Britain.

It looks like earnings are really driving this market over the last few weeks as investors are looking for signs of stability. Last week Google helped drive the markets higher. The week before GE helped to drive the market into the ground. Looks like it is Bank of America's turn.

Rice prices have hit new records for a fourth consecutive day after the world’s biggest importer of the grain, the Philippines, said it would be forced to buy 1 million tons of the grain to feed its population. “Forget the credit crunch for a moment.

It is fascinating to see how Leucadia is boosting its stake in Americredit. One just has to conclude that Leucadia believes that some of the stocks impacted by the credit sector issues are now beaten down enough to start preying on them

MBIA Inc. reported write-downs of $3.5 billion on souring credit markets Thursday, exacerbating concerns that rising costs could squeeze local governments as well as slow any recovery for big banks.

The Federal Bureau of Investigations has opened criminal inquiries into 14 companies as part of a wide-ranging investigation of the troubled mortgage industry.

The blowup of two Bear Stearns Hedge Funds in the second half of June was the tipping point for the stock market in 2007. Those two blowups and their announcement that there would be little or no money left to return to their investors had a direct impact on credit crunch of 2007. That event, more than any other triggered the drying up of LBO's, M&A's, and liquidity in the credit markets.