The market came in like a lion and out like a lamb this week. What's in store for us?

Check out the declines in July/Aug with the one in Oct/Nov. Very similar type of action. Will the move up be the same too? If that's the case, wait for uptrend to break?

I might have to take a month off after the fed meeting. It's been one hell of a quarter already.

This guy gets it.

And all I can add is that the collapse in OZ will make the US subprime problem look like a Teddy bears picnic..

When California quakes, Beaumaris shudders

Americans, like Australians, are raised with a dream of home ownership. There was money to be made as that dream became distant.

With jargon eerily similar to that being adopted in Australia's own housing affordability debate, lenders began developing "affordability products" to help people buy into property before they were priced out.

Low-doc loans, which charge a higher interest rate in exchange for a lower burden of proof of income, led to no-doc loans. Interest-only loans, 40-year mortgages and adjustable reset mortgages (ARMs) were pitched as products to bring home ownership into reach for those priced out of the boom.

http://business.theage.com.au/when-califor...71207-1fqo.html

Madness, I'm no seasoned ewoofer, but that second decline looks textbook impulsive, a clean 5 waves down with price & time symmetry. And the latest rally looks like a textbook 61.8% corrective. Suppose it'd be too perfect for 3 of 5 down to start when the Fed 'disappoints'. BTW someone clout me with something if I'm taking ewave liberties.

Personally I was expecting the decline to last until next week. Maybe it'll actually fall closer to the Bradley turn just before Xmas. Or maybe my tin phoil hat is busted. I'll have to get it checked before it starts spewing nonsense and bilge like a drunken Sorting Hat.

from the same article.

Some new terms to get used to.

Das compares the process to fairy floss; a tiny bit of sugar spun into something big and impressive but, inevitably, no more substantial than it began.

Like fairy floss, the structure can take a lot of compacting. A lot of money can be lost on paper before "real" losses are incurred. After all, there is always the property at the end of the trail to fall back on.

now its a virus??

"The best analogy I can give you is that of a virus," Das says. "There's one person who's infected, but he knows four people. He infects four and those four people infect four people each. So the next thing you know you've got 16 and then you've got 64 and it's an exponential spread of losses. That's exactly what's happened."

no wonder folks had no idea what they were getting into.

You would need the intelligence of a nuclear technician like Homer Simpson to understand this stuff...

The best way to think about it is, it's nuclear fission," says Satyajit Das, a financial author and former derivatives trader. "The loan has just encountered nuclear fission and been split into its particles, releasing toxic energy."



what the fornicate we dealing with here,fairy floss? A virus? a three mile island nuclear leak?

We are the govt dudes in the white space suits?

I don't know where these closet bears have been hiding but this guy sounds like a stoolie..


Hope is bleak as subprime hurricane leaves a disaster trail


This is a financial Katrina and when the markets realise its implications — the US dollar already is putting the euro under stress and no doubt forcing the rich Arab nations to rethink the folly of sticking with the dollar peg earlier this week — the latest bubble based partly on this foolish and destructive scheme, will collapse. And the Dow will commence a descent that will characterise this President's last year at the helm.

http://business.theage.com.au/hope-is-blea...71207-1fqu.html

Someone stole my doormat yesterday. Who steals a doormat? It was brown and said "Welcome". I live in San Jose and we saw some pretty good rain yesterday. That plus the "entitled" attitude you see here every day must have tipped the scales.

I guess someone managed to squeeze in to the last subprime option ARM in Cali, and could not cover both a welcome mat and a new Chebby 4WD Turbodiesel at the same time.

this is the point of no return.

This is where the vicious cycle starts to feed on itself and accelerates.

I remember way back in the 80s when a very well known racehorse trainer(of all people)stated that this negativity and pessimism feeds on itself.

He said its like a disease and once it starts to spread ,you can't stop it.

I well remember people saying things like 'stop talking the economy down' or 'stop being negative' as if it was a choice.

People thought that if you stopped talking about how bad things were it would make a difference.

The markets may well rally here as the 'news' gets worse,but the economy will likely fall apart as people are frozen with fear and indecision.

The gloom will spread like a disease and blanket the whole world.

People wont spend in this environment.

People wont buy houses or big ticket items until they see how things pan out.

It will be especially fugly in OZ.

They had a dude on CNBS today put up a chart of the Wilshire index ($wlsh) showing how the uptrend is intact and therefore the market is going higher. I'm here to confirm what you guys already know....It ain't. That chart too, like the other index charts, have crossed thier 250 day MA. The Wilshire, which represents the broader market, has done so a few times, causing that average to start to roll over.
The 250 day MA, I was always taught, is a more powerful and more significant average than the 200. It will be right again.
The crossing of that average, couple with the lower high we are about to put in, will be the 1-2 punch to start the new secular bear.

the caveat here....didn't you know there would be one of those.......is that if we actually do make a new high; this could offset the 250 bearish cross, as index charts can over come these some of the time.
With the confluence of events these days, I doubt this is one of those times it will overcome it.

...just my bearish stoolie take......

Hey Brisbane,
I'm a big racing fan. Who was the trainer and what was the context he was saying it in? Just curious.

Some news about Hindoo temporary workers in the Trucial states going on strike because they resent being paid in diminishing US Dollars....

Where the ralllying cry is :Our families want to eat, not wipe their a***.

beardrech When the lowest on the food chain begin a radical distinction betweeen $US and the rest of world currencies: I ask you-Where ae we???

I continue to follow buy/sell signals as defined by PnF criteria....more buys than sells continue...this process gave an intermediate term buy on Nov 28th. This signal measures whether the market is in a demand or supply driven state...Currently DEMAND is in control....These signals are multiple weekly signals - meaning I've never seen one shorter than 5 weeks in duration...We've been on one for a week and a half...so I'd expect that Ms. Market will continue to look good for some time..

[attachmentid=93493]

Everyone...best wishes on your trading...

Well they're probably trying to dump their stucco crapbox.....oops......I mean they're probably "entertaining offers in the range of $899,999 to $1,000,001 for their one-of-a-kind must-see HURRY-BEFORE-IT'S-GONE designer Home with the finest crown moulding and custom window treatments throughout."

So of course they needed a doormat to put out front to increase the value by $50,000.

And a couple flower pots to add another $80,000.

And I'm sure they'll bake some fresh cookies, that's worth about $100,000.

wow PVX has taken a big slide, is it cheap, or oil headed lower?

"Fairy floss" (Australian English) is the same as "candy floss" (British English) is the same as "cotton candy" (American English).

Oh I almost forgot:

RED ALERT!

It's Over.

The stockfraud rally is over.

Finished. Kaput.

Why?

Because the bond market broke today.

All along I've been saying yes the market has choppy toppied and is rolling over but we will have no crash because the bond market is holding up.

Well, not no more.

It's so freakin' over now.

Now I expect a stock market crash.

"Oh, Shorty, c'mon, you're overeacting!"

Now

I

expect

a

stock

market

crash.

If you want, I'll repeat it one mo time slowly.

"Oh, Shorty, it's just a lil' healthy yield curve akshun!"

"G

I

T


O

U

T

!"

jrosie,

The horse trainer in question is Bart Cummings.

He is an Australian legend.

He has won 11 Melbourne Cups amongst his many,many big race wins.

He is universally loved and admired in my country.

I have always been a huge fan of Bart.

Back in the 80s towards the end of the boom, racehorses were selling for outrageous amounts of money and people like Bart & other top trainers were making headlines for fierce bidding duels at horse auctions.

They would then syndicate the horses amongst stable clients.

They were very heady days until the bubble burst and Bart and Tommy Smith(another racing legend) got stuck with all these horses that nobody wanted all of a sudden and they both went bankrupt.

They both conducted themselves very well during these very difficult times and both came thru with reputations intact.

It was during these times that he made those observations about negativity.

It appears that we are at a point where our traditional analysis techniques are not giving clear signals about future market direction. I think it's time to evaluate our position in the light of another mathematical school of thought that has received little regard in the financial community.

It's Friday, let's talk about Moleeds

the long term outlook is a bit iffy right now

i agree that some indexes like WLSH look like crap, but on the other hand, COMPQ and NYA are holding up ok

in the meantime, we have an intermediate bottom with no sign of a top yet

whether or not we actually get a lower high remains to be seen

all sorts of 'new' terms being bandied about these days.

Remember when 'Goldilocks' was a good thing.I like 'Hope and a prayer'....

The lasting impact on the housing markets is debatable since the current proposal may exclude more people than it helps, even as the plan takes a step toward slowing defaults.

"This is a hope and prayer plan," said Elizabeth Warren, a professor at Harvard Law School.

The "Goldilocks" plan filters out borrowers who are too poor to afford their mortgage now, and those who can meet their payments even at a higher rate, giving it a "smallness" that won't provide a long-term fix, she said.

http://www.reuters.com/article/reutersEdge...664866720071207

in the 'be careful what you wish for' department.

Global property slowdown? Bring it on, say analysts


LONDON (Reuters) - The risks are growing but the U.S. subprime crisis was just what the booming global real estate market needed to avoid a bigger and more damaging bubble further ahead, leading property investors and analysts said on Friday.

http://www.reuters.com/article/reutersEdge...748919820071207

and on a planet in a galaxy far,far away a country called Australia continues on blissfully unaware that a huge meteor called 'Sub primicus' is hurtling towards her at warp speed.



Our million-dollar suburbs

BRISBANE'S property prices continue to hit record highs, with nearly half of its suburbs boasting million-dollar homes.

http://www.news.com.au/couriermail/story/0...855-952,00.html

I definitely agree there will be some super deals on RE at some point in the future, and I don't doubt that there are already some big players lining up to take advantage, but when we look at the timelines of the US Great Depression and the continuing Japanese malaise, you have to think those playa's are optimistic at best.

This one's going to be a doozie.

Sounds like revisionist history to me. Or as the National Association of Realtors president always says, "now is a great time to buy."

The need "to avoid a bigger and more damaging bubble further ahead" is ironic to say the best.

barbe a papa in Quebecois

I can see "big players" buying large apartment complexes, but not single family homes. Second, if the credit markets implode, the playas are going to have to bring alot of cash to the table, because Other People's Money might not be available at favorable terms.

individuals looking at buying large numbers of single family homes will likely face the same constraints. They won't be able to get the easy money, will be forced to bring cash to the table, and banks will likely look alot harder at their ability to repay. That is going to put a damper on property investors.

just a lil' 1,100-pernt pullback here

no worries

looks healthy

2007 seems to be a significant long wave year. Doc, I think the wipsaw back to sell that you present may play out.

here is a long wave cycle analysis that I came across today

http://www.thelongwaveanalyst.ca/pdf/07_12_04_News.pdf

this is very lengthly and most people here likely know about these long cycles but who knows, maybe someone - a relative or friend who has rose glasses will read it and wake up. Most people I know see in tech-rose-nicolor.

anyone have the bradley charts handy?

no worries here either

certainly no chance of a bear market

just a safe, mild, teensie-tiny 20% one-month "correction"

fair warning was given on this one, no quarter now

second, and laSSt, chance ta git outta this one

The Plan is boiled down by CR and reposted on Mish site today, worth a repost here:

"Mish, those eligible have to have a LTV higher than 97%.

Many of these people have negative equity. They can't refi - they can't sell - and when their loan resets, they probably can't make the payment. They are stuck, and foreclosure is the only way out.

This is a plan for investors!"

The idea is to get people to keep making mortgage payments on a loan that is worth more than the collateral. A neat trick! If these "homeowners" really crunched the numbers, they would realize it's better to walk away, and rent for less money, rather than to keep making the mortgage payment.

The plan is sold as helping homeowners. It is designed to help investors"

http://globaleconomicanalysis.blogspot.com/

The subprime suckers who paid on time

I predict a rising backlash by on-time subprime borrowers against the Bush administration’s Teaser Freezer bailout plan. As far as I can tell, on-time borrowers wouldn’t be helped, even if they are severely stressed. The aid would go only to people who had missed payments.

So if you scraped up every last dime to make every mortgage payment, you’re stuck in your lousy loan. Your next-door neighbor who spent the mortgage payment at Disney World gets the bailout. Infuriating, huh?

Compounding the problem is that subprime borrowers with frozen payments on loans that exceed the values of their homes will likely chose not to pay property taxes, condo or homeowners fee, or maintain the condition of their properties. Upside-down subprime borrowers will have no incentive to throw money down a rat hole, making additional payments on properties in which they have no equity and which will they will likely lose to foreclosure anyway.

Lost in current discussion is the fact that few subprime borrowers have any skin in the game in the first place. Having put nothing down or having extracted equity in previous refinances, most subprime borrowers will lose nothing if their homes go into foreclosure. In some cases the teaser rates were so low that borrowers actually paid less then what they might otherwise have paid in rent. In fact, those who have already extracted equity have received huge windfalls from their homes and will leave their lenders holding the bag.

Bernard Ducalion's piece on the rate freeze is also of interest.

http://wallstreetexaminer.com/blogs/ducalion/?p=129

Those Who Avoided Risk Call Plan A Raw Deal

The agreement has sparked bitterness and anger among those who either sat out the housing boom or endured friends' snickers when they stuck with a traditional mortgage and a smaller house. To some who watched prices rise out of their reach or who moved to cheaper cities, the agreement looks like a penalty for those who didn't gamble.

"I think we shouldn't be bailing out the homeowners that got greedy buying homes they couldn't afford."

"What about those of us who played by the rules? Can we get six months of free gasoline? Isn't there something for the rest of us?"

"It seems almost like you are rewarded for being less responsible."

let the jumping begin!

Top CDO Classes May Lose 80 Percent, Barclays Says

Dec. 6 (Bloomberg) -- U.S. mortgage assets in collateralized debt obligations have lost so much value that the top classes of the securities may be worth as little as 20 cents on the dollar in a liquidation, Barclays Plc analysts said in a report.

"We believe our methodology is analytically rigorous and represents a good jumping off point,'' they wrote.

Piece by piece, some gave away their homes by tapping equity to take cash out to pay for cars, weddings and vacations. Others never owned one brick. During the country's most recent housing boom, the term "homeowner" became a misnomer as lenders offered 100 percent or more home financing to some buyers.

"Although homes increased hugely in value, homeowners were borrowing against them as fast if not faster than the appreciation," said Dean Baker, co-director for the Center for Economic and Policy Research.

a little late no??

Recession-Proof Your Finances Before the Downturn

Time to get defensive.

As we head into the new year, a volatile cocktail of economic factors is raising concerns about inflation and a possible recession. They include turmoil in the housing and stock markets, a tightening credit outlook, higher fuel and food prices, a weak dollar, declining consumer sentiment, and a gloomy retail outlook. Here are some strategies to help position your finances ahead of a downturn.

http://finance.yahoo.com/expert/article/mo...uShUAylhMhO7sMF

The Final Calls of a Gold Rush

‘John Doe’ was in his mid-20s and broke in the summer months of 2004, living at home with his mom in Ohio. Then he heard a clarion call: a trusted friend living on the West Coast called him and said he was onto something – a new Gold Rush of sorts.

Doe, granted anonymity for this story, was introduced by his friend to the world of home mortgage refinance and sub-prime lending late in 2004. He had heard of it before.

Mr. Doe’s formal introduction to the industry came towards the tail-end of a massive boom in home refinancing and mortgage loans that had proceeded for years, riding the coat tails of a now-recognized housing bubble with inflated home values in many parts of the country and ever laxer and riskier (and more distant) lending and borrowing practices.

Those same practices are now shaking hundreds of thousands of people a month out of their homes in real estate markets around the country, including parts of Ohio, and the sub-prime lending industry is now in an advanced state of implosion in many regions.

“A friend tracked me down and told me how much money he was making as a loan officer, between $5-6 thousand a month,” Doe said.

Doe moved out to the West Coast and started working for a rising star mortgage brokerage that had already brokered millions of dollars worth of home mortgages.

Doe discovered a brokerage primarily staffed by 18 to 25-year-olds – with an atmosphere dedicated to making money and having a good time. The brokerage was founded years earlier by a young ex-jock, who came to build his own facility – complete with front lobby waterfall and posh offices for the higher-ups.

Party on and rack up the fraud

Time to get defensive.

I am adding this gem to my signature.

Hey honey, its time to get defensive,should we sell our 4 investment properties??

aye curumba!!!

The Federal Reserve reported Friday that consumer credit increased at an annual rate of 2.3 percent in October, faster than the 1.6 percent growth rate for September.

The gain reflected an acceleration in the growth of credit card debt which offset a second straight month of declines in the category of debt that includes auto loans.

Revolving credit, which includes credit card debt, increased at a rate of 8.3 percent in October following a gain of 6 percent in September and an even stronger pace of 10.6 percent in August.

Credit card debt has been surging in recent months as consumers have started borrowing more heavily on their credit cards now that home refinancings have slowed. That slowdown has reflected tighter bank lending conditions as a serious slump in housing has sent home prices falling and increased the level of mortgage defaults.

"Consumers' ability and willingness to extract equity from their homes is waning and thus they will have to increasingly turn to other forms of credit, namely credit cards," said Ryan Sweet, an economist at Moody's Economy.com. "Elevated gasoline prices will also provide additional support to revolving credit as consumers typically use credit cards at the pump."



http://money.cnn.com/2007/12/07/news/econo...sion=2007120716

The United States of Fraud, if ya ain't gettin' any, yer payin' for it

The Bush administration now acknowledges it is trying to recover nearly $500 million from people who improperly received federal aid money intended to help victims of two deadly hurricanes, Katrina and Rita, along the Gulf Coast two years ago. It said the amount may increase further.

The government's newest estimate of improper aid represents $494 million FEMA paid to 134,000 people who were ineligible for the aid they received.

People claiming to live in as many as 162,750 homes that did not exist before the storms may have improperly received as much as $1 billion in tax money, the AP's analysis found.

Instead of bailing out the failed housing gamblers shouldn't the government be investigating them for mortgage fraud first?

Instead of the government/banker plan to bail out failed housing gamblers, shouldn't our government be investigating these homedebtors and their mortgage brokers for mortgage fraud first?

I've gotta believe 90% of 'em filed fraudulent loan docs in the first place...

Retired boxing great Sonny Liston to lead failed housing gamblers in MARCH ON WALL STREET MONDAY DECEMBER 10TH

Joe Q Sheeple is going to get a big surprise if he can't refi that CC debt into his house. Mortgage ARM resets higher, and the credit cards go to 30% in a heartbeat.