What started last summer with news of credit problems and uncertainty in the mortgage industry has now claimed its first major bank. The FDIC took control of IndyMac Bancorp on July 13, in what is the third-largest bank failure in U.S. history. 

I remember reading numerous articles last summer about how the damage would be limited to the financial sector and would not bleed over into the rest of the economy. I also remember writing an article for Investor’s Daily Edge disagreeing with that general consensus.

How can a tightening credit environment not affect the entire economy when, as a nation, we rely on credit so heavily? 

Until the housing market stabilizes, the financial sector will continue with its struggles. And I don’t look for the housing market to turn around until later this year or early next year.

IndyMac may have been the first bank to fail during this financial crisis, but it won’t be the last. My advice is to steer clear of financial stocks for the foreseeable future.

[Ed. Note: There's so much turmoil in the economy right now, it's hard to believe you can ever make money again. But you certainly can - especially when you discover investment expert Rick Pendergraft's "embarrassing" secret. Learn the details here.]

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