Meanwhile, a slowing economy and a devalued dollar signal impending recession and inflation.  Small-business owners want to know the extent and direction to which they need to adapt.

While key official indicators such as inflation, GDP, and unemployment figures remain distorted in order to disguise downward trends, instigators and beneficiaries are in a scramble mode.  The Fed finds itself between a rock and a hard spot, trying to prevent asset liquidation without adding to inflation. 

 
The problem is not insufficient liquidity but a lack of certainty and information regarding the worth of collateralized securities. 

Either the credit bubble and assets purchased will be monetized or credit and asset values will sink.  The approach appears to be to monetize by creating devalued dollars.  In a debt-laden U.S. economy dependent on asset appreciation, it's not hard to comprehend the importance of protecting collateral. 

 
However, there will be no resolution until there is price discovery tied to market value.  Confidence and commercial lending will be restored only with full disclosure.  Commercial paper must be trusted before commercial lending resumes.  And honesty is always the best policy option.

Announcements involving write-offs in mortgage derivatives in the tens of billions will continue to be made by still more banks and brokerage houses.  Reasons for the delays and spoonful approach are, first, it takes time to identify the investments, packaged in all shapes and sizes and circulated around the globe.  Second, as analysts and auditors dig deeper, these mortgage-backed securities and collateralized debt obligations surface in a variety of funds-hedge, mutual, money market, pension, etc.  To a great extent, revelation is an all or nothing endeavor, and no one acknowledges such a hit until necessary.

Announcements of billions in write-offs are unnerving but do create the perception that the problem is being addressed, even contained, as they say.  And nobody is forced out of business into insolvency or liquidation–yet.  Write-offs are limited to what can be digested without creating insolvencies.  Unfortunately, nondisclosure leaves uncertainty and results in a liquidity freeze.  Japan suffered through a decade of concealed real estate losses and a resulting deflation.

Changes in U.S. accounting rules, which come into force on Nov. 15 known as FASB 157, may force Wall Street to disclose the scale of its losses.  Specifically, it may force banks to reveal some of the hidden losses concealed through the use of off-balance sheet funds, such as structured investment vehicles (SIVs).  These are bank-sponsored financial funds that buy up mortgages using money borrowed from short-term commercial-paper markets, bundle them up, and sell them to the bond markets.  You don't need a bloodhound to know we are nearing the source of the stench of unregulated financial adventurism–free of oversight, let alone intervention. 

 
Devaluing our way to prosperity, imports will increase in price, and a $100-plus barrel of oil is a certainty along with rising gas prices.  Before the consumer slips into a debt-induced stupor, the economy needs honest information.

The vehicle parts and service industry has historically been known as relatively recession-proof.  Times and technology have changed but, thank goodness, the industry is integral, locally based, and remains recession-resistant and resilient.