In a rare press conference yesterday President Bush tried to assure Americans that their banking system was “sound.”

Bush’s comments didn’t do much for investors confidence. Shares in troubled mortgage outfits Fannie Mae and Freddie Mac tumbled, along with most other financial stocks.

The bottom line is the U.S. financial system is now beyond credibility, as James Howard Kunstler puts it. And Dubya and his Republican party will be remembered as the party that broke America.

Home prices in Manhattan have remained largely immune from the housing crisis gripping the US… until now.

According to Reuters, the New York real-estate market is showing a significant reduction in new deals as Wall Street sheds staff to reduce costs.

“For the most part, the subprime crisis is past its inflection point,” says Eric Roseman in the Offshore A-Letter. “What matters now is how and when other credit indicators normalize.”

What will happen when there is less oil? U.S. oil demand will fall, whether anybody likes it or not.

Wall Street firms may have to eliminate as much as 35% of employees, reports Bloomberg.

The culprit? The end of the boom in leveraged lending and the dwindling pace of mergers and acquisitions.

Wall Street has already axed more than 34,000 jobs since the credit crisis kicked off last July, the most jobs lost on the Street since the dot-com bubble popped in 2001.