The crowd did a little shopping today. And some of us will be doing the same this weekend. I'll be dropping in from time to time. The WSE Pro Market Update will be posted this evening, and I will also post the Dollar and Yield updates either this evening or tomorrow AM. Those will be the last WSE reports until Wednesday evening when the Market Update will return.

Have a safe and happy holiday!

bulls saved it

santa rally back on

Anyone realize the 3 major averages are all less than 5% from 52 week highs.

All the bad financial news.
Funds blowing up.
Recession talks.
Liquidity drains.

All the bad news and the best the bears can do is nudge a small 3-5% correction. I wonder what will happen if the banks bottom.

well that was fun, let's do it again in Jan, when it's that time of the month again

meanwhile, the U.S. debenture akshun is foreshadowing what will happen to stocks

debentures broke down hard today after their splashbounce

stocks CONpleted their splashbounce today with the option jam climax

good time ta sell

MSM is starting to wake up.

Wall Street's Next Crisis
Dec 17 2007
Now that the subprime shakeout is nearly over, another real estate mess looms, this time in commercial property

http://www.portfolio.com/views/columns/wal...te-Crisis#page2

Sell high, buy low.

TRE lookin' good at the close

I wonder if this has been marked to market?

PAGE ONE


Chrysler Faces
Financial Pinch,
Sees Asset Sales
By JOSÉE VALCOURT and NEAL E. BOUDETTE
December 21, 2007; Page A1

Chrysler LLC has slipped into a serious financial crunch just four months after Cerberus Capital Management LP swept in to save the auto maker.

At a meeting earlier this month, Chief Executive Robert Nardelli told employees the company is headed for a substantial loss this year and is scrambling to sell assets to raise cash, according to an account by two people present that Mr. Nardelli confirmed.

"Someone asked me, 'Are we bankrupt?'" Mr. Nardelli said at the meeting. "Technically, no. Operationally, yes. The only thing that keeps us from going into bankruptcy is the $10 billion investors entrusted us with."


In an interview yesterday, Mr. Nardelli acknowledged making the comment, saying it was intended to "convey a sense of urgency" among employees.

Cerberus is often viewed as among the shrewdest of the private-equity groups reshaping America's industrial landscape. But the Chrysler acquisition is turning into a case study of how deals made during the recently ended boom are going sour.

http://online.wsj.com/article/SB119820798310144385.html

I thought the Canuck government was caring and concerned

Harper Rejects Debt Bailout, Putting Pressure on Canada Banks

By Theophilos Argitis and David Scanlan

Dec. 21 (Bloomberg) -- Canadian investors holding $33 billion in short-term debt that plunged in value will have to rely on commercial banks for support after Prime Minister Stephen Harper said he won't bail them out.

``If the government became the day-to-day underwriter of market risk in commercial securities markets, that's a bottomless pit,'' Harper said in an interview in Ottawa. A government rescue wouldn't be ``healthy for the long-term growth of the Canadian economy.''

Harper's refusal to shore up the market for asset-backed commercial paper -- 30- to 90-day securities backed by car loans, credit card debts and mortgages -- leaves holders at the mercy of the country's biggest banks. Some banks have already expressed reluctance to provide support and are resisting pressure from the central bank.

``If the Canadian chartered banks don't go along with what they are apparently being promoted to do by the Bank of Canada, then what? Then we have a potential financial and economic problem,'' said Dale Orr, managing director of Canadian research in Toronto for Global Insight, a Lexington, Massachusetts-based economic forecasting firm.

The Canadian commercial-paper crisis comes as the nation's economy is weakening. Harper said he's worried that a U.S. slowdown will exacerbate matters, leaving little room to stimulate the economy with spending or tax cuts in his next annual budget proposal, due in February or March

http://www.bloomberg.com/apps/news?pid=206...Pdgc&refer=home

What's up. Gold up in the after market.

Fed Expands Liquidity Auctions

Now open to the public, anyone may bid for $1 Million to $10 Million of short-term cash under less tight restrictions for "emergency" use, which includes travel/entertainment and even last-minute holiday shopping.

ECB $500 Billion Infusion Mocked by U.S. Fed Chairman

"It's not that big, I'm not impressed," chided Benjammin Bonarke. "It's only half a Tril.

I hereby announce an additional $2 Trillion injection into the U.S. Banking system to be issued this weekend, with more to follow after the new year.

Nobody's gonna out fiat me, I'll tell ya that much right now."

OK, now who was it that warned weeks ago that the Canadian financial system and Canadian economy were on the brink of collapse?

Doesn't seem so implausible now, does it?

By my calcs, the net add was €120 billion, and it all comes due right after new years. Gonna be muy interresante.

reading the fine print is sometimes interesting, especially what it doesn't say

e.g., FRN's are redeemable for ???

NOTHING.

Backed only by misplaced and ever-shrinking CONfidence.

Candidates Spar Over Promised Aid to Strapped Homeowners

"I'll provide up to $100 Trillion in tax-free grants during my first 30 days in office, and furthermore......"

"I'll do a $Quadrillion!"

U.S. Government Announces Holiday Surprise

Under a new policy approved today by the Bush Administration, all U.S. Post Offices will provide free 24-hour access to ATM machines with unlimited withdrawals available to anyone who needs money.

"This new program will boost our economy during these uncertain times, and I'm sure the American peoples will use the money to put food on their families. Remember, there is no limit to the amount you can withdraw. Take all you want, just be sure to spend all you take."

This should come in handy for the electronic money printing

Democrats Offer Alternative Liquidity Plan

Under the proposal now before CONgress, President Bush's postal ATM machine plan will be replaced by a more energy-efficient and environmentally-friendly approach.

"All that driving to post offices is releasing terrible amounts of greenhouse gaSSes into our atmosphere. Under our proposal, local fire departments will use high-powered hoses to blaSSt every homoaner's walls and attics full of hundred dollar bills, for easy access by all consumers in the family. We estimate the extra insulation will also cut home heating costs by up to 20% during the winter season."

it's true, click it

Southern Californians Moving Into Depression-Style Tent Cities

The unraveling of the region reads like a 21st century version of "The Grapes of Wrath," John Steinbeck's novel about families driven from their lands by the Great Depression.

The noisy, dusty camp now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis.

Steve, 50, who declined to give his last name, moved to tent city four months ago. He gets social security payments, but cannot work and said rents are too high.

"House prices are going down, but the rentals are sky-high," said Steve. "If it wasn't for here, I wouldn't have a place to go."

put/call ratio dropped sharply this afternoon

buying panic

the rally is over

it was all fake, just another scam week option jam

You make a good point, shorty...

But can the market possibly be MORE bullish?



Edit: shorty ya' beat me to it... yur sure qwik fur a fuzzy li'l critter!

2007 A GREAT YEAR OF INFORMATION ASSYMETRY

Yes it was a great year for information assymetry - as some municipalities in Norway and Australia who invested in AAA subprime bonds found out.

I give Jimbo awards for Blackstone, Fortress, Ochs Ziff , RAMS and Vonage.

Great stuff in unloading your overvalued stock at outrageous prices on complete idiot bagholders

A special mention to CENTRO for buying property like crazy at the top of the market financed completely with short term borrowings. Great strategy guys. And valuing your rights to manage the properties you actually owned at $5.5 billion - a stroke of genius - I think that the rights to manage the properties were worth more than the value of your equity stake in the properties themselves!!!!!!!!!!!! I think that is called having your cake and eating it too.

Next year will be a great year for bankruptcy.

option premiums on longer dated issues didn't really change much today.

That tent city is grim. This is how you dumb people down into a mob I guess.

All hail centrally-planned economies!!!

A 3-5% correction?! UNACCEPTALBE!!! Interest rates MUST be cut!

Speaking of which, don't look now, "There's-no-inflation" gang, but oil and gold are holding their own. I don't know WHEN the truth will come out, but every day they hold up is one day closer to the day of reckoning- whenever THAT may be....

mad this is something that i tend to watch when a stock goes up on really bad news. things are just so bad and stocks are going up. but i just trade charts

too be honset a couple the issues i held were down today. i did not have that great of a day.

nxg got the POP finally and Cne welll Ugh !

overall im not tooo bullish right now on charts.

i actually own this ... this one is for you doc.

i do this to hedge myself

jickiss is back!



jickiss is back!

and

for sure

this year, this 2007 has been Annoying.

However, if you OPEN your eyes and look around, the handwriting on the Wall is getting clearer and clearer.

Out there in Califonia, that famous GOLDen state, it looks like the State Goobermint is starting to Run Out of Money.

Of course, this has been reported here earlier, but take a moment to run your eyes over the following story. your jickiss never thought that any non-violent person should be put in gail, but where will they go upon release is the Question.

Kali is OBVIOUSLY Running out of Money....Thimk!

The major averages are disconnected from the real economy.

anywhere they want

thanks, Arnold!

Shorty, your in rare form tonight, but I have a good idea for the gooberment - blast the homeowner with cash just so they won't burn fossil fuels of any sort. They can just plug in a genuine amish electric mantle fireplace into every room, apply for energy assistance with government backing and energize the utility companies to build nuclear with all the new surge of demand. Trouble is, you can only squeeze a certain amount of BTU's from every Watt. The advertising could go something like this - "It's safer than oil, gas or wood." You know, it's like using plastic to buy things - "It's safer than cash."

Congratulations. How is this going to play out?

Here's a festering situation that we all need to keep an eye on:

Mies van der Rump posted this item yesterday ,Thursday, Dec. 20, in MTM (post 52):

[excerpt]
NEW YORK--(BUSINESS WIRE)--Concurrent with its related rating announcement earlier today on MBIA Inc. (MBIA) and its financial guaranty subsidiaries, Fitch Ratings has placed 173,022 bond issues (172,860 municipal, 162 non-municipal) insured by MBIA on Rating Watch Negative.

http://www.businesswire.com/portal/site/go...121&newsLang=en
----------------------------------------------
Jetlag posted this item this morning, Friday, Dec. 21, in IDS (post 5):

[excerpt]
"Dec. 20 (Bloomberg) -- MBIA Inc. fell the most since 1987 in New York trading after the world's biggest bond insurer disclosed that it guarantees $8.1 billion of collateralized debt obligations that investors say have a greater chance of losses.
``We are shocked management withheld this information for as long as it did,'' Ken Zerbe, an analyst with Morgan Stanley in New York, wrote in a report yesterday. ``MBIA simply did not disclose arguably the riskiest parts of its CDO portfolio to investors.''
MBIA, Ambac Financial Group Inc., and other insurers are being reviewed by credit-rating companies on concern they don't have enough capital to cover potential losses stemming from mounting downgrades of the securities they guarantee. Fitch Ratings ratcheted up the pressure on MBIA today, saying it would reassess its AAA insurance rating for a possible downgrade and gave the company four to six weeks to raise at least $1 billion.
More than $2 trillion of insured securities would lose their AAA ratings amid mass downgrades of bond guarantors."

http://www.bloomberg.com/apps/news?pid=206...D_VE&refer=news

If the insured securities (referred to above) lose their AAA ratings, won't some pension funds, insurance companies, and other institutional investors need to unload them onto the market in order to comply with a requirement that they hold only AAA paper?
When this avalanche of paper hits the credit markets, bond prices will collapse, yields will soar.
Not good for real estate, equities, current bond holders, gold or commodities.
That should pretty much put the brakes on the US (and global) economy.
Only hoarders of US dollars might benefit.
IMHO, MBIA (and other similar bond insurers) cannot be allowed to fail...
perhaps some foreign entity can be 'persuaded' to pump in some cash.

Homelessness is becoming an issue in OZ.

Almost unheard of in the past.

This time round its entire families,young and old.

and no matter how they try and spin things, the bottom line is that the money is gone,lost forever.

Now it becomes a lawyers picnic.

Council to sue underwriter

LEHMAN Brothers Holdings, the largest US underwriter of mortgage-backed bonds, faces legal action by Australian local governments after the value of their subprime-related investments dropped as much as 86%.

Wingecarribee Shire Council, in the NSW Southern Highlands, is suing Lehman for "deceptive and misleading conduct" in selling $A3 million of subprime-linked collateralised debt obligations (CDOs), council managing director Mike Hyde said.

New York-based Lehman, which manages up to $A1 billion on behalf of 35 councils in NSW and Western Australia, may face further action as the assets in its US mortgage-linked product decline amid a shake-out in global credit markets.

http://business.theage.com.au/council-to-s...71221-1ijb.html

and to think I was accused of be socialist. There will be no corporate socialism now... there may be hope yet.

sold all my margined shares bought the last couple days into this pop plus a few . still have lots though.

Just as i expected.
Right back at the bear's golden cross.

Bears need to turn this around quick. If we crack 1490 and 1510....run for your life.

Posted this 2 days back....
This action looks awfully familiar.

In keeping with their custom of staying off of the grid and eschewing electric power, it is unlikely that your scenario will ever come to pass.

I myself have long believed that in fifty years the Amish will be using punch card computing devices. And after reading and absorbing your above theory, I have amended my original thoughts to include the possibility that the Amish are our last best hope for a portable nuclear/steam power source for the home and farm.

And maybe NASCAR.

Now that's what I'm talkin' about...

In case you missed it last night, Stool house band nominee the North Mississippi All-Stars have some new tunes on their Myspace page.

It's great background music for late night bear thimkin.

find it HERE.

A piece from Bill Bonner's Daily Reckoning e-mail

THE “WOW” FACTOR
by Bill Bonner

Tacky, vulgar and trashy...say good riddance to the Great Rubbish Market of 2001-2007.

Driving down Route 4 in Southern Maryland, we passed a sign advertising a new housing development. So many are the new houses weeding up in the greater Washington, D.C. area that one hardly notices another one. But the sign caught our attention:

“The Wow Factor”, it said, in large red letters. We looked beyond the sign to see what the ‘wow’ was all about. The houses were just like all the others built in the last 10 years – with large, fraudulent fronts, laid up in brick, some with tall Tara-like columns...and front windows so large you bend down to look for a stone. You think they might be substantial, handsome houses. And then you see the vinyl siding and small, plastic windows on the side. They only look good from the front. And then only if you don’t look too hard. Charmless...soulless...hasty...slick...they are stacked hard up one against one another like Chinese TVs in a discount mall.

“The ‘wow’ has to come at the very beginning,” explained a real estate developer from Miami. “You bring someone to a house...he’s got to say ‘wow’ in the very first two minutes...or you won’t make the sale.”

A couple years ago, he was building $4 million dollar houses on a golf course in the Boca Raton area. What did you get for $4 million in America those days? A lot more than you got in the United Kingdom...but still nothing a person with a sense of dignity would want. The houses were crowded together and then covered in tropical plants so you couldn’t notice how tiny the lots were. Just as with the houses in Maryland, the facades pretended towards substance, but it was substance they most lacked. The fronts were built of stone and marble. Then, you opened the door and the entryway took your breath away. Wow. You felt as though you were in a Florentine palace...or an abandoned bank. The place had so much marble we thought we were inside a quarry. And the ceiling was a good 24 feet in the air...with wide, curved stairs winding to the upper deck; still there was something cheap about it...fake...like a Hollywood set. It was the kind of staircase Rhett Butler might have carried up a checkout girl.

“Wow,” we said. We had never seen a place so extravagantly hideous.

“Yeah...it’s all in the first impression. But so what? That’s what people want. And then it goes up in price...or, at least it used to. I made money. The buyer made money. It was a win-win situation.”

Behind the first impression was a rather pathetically extraordinary house, the kind a sports star might build. It had, for example, a huge master bedroom, with a bathroom as big as Penn Station. We looked up to see if there might be mirrors on the ceiling over the bed. No...the new owner would have to put those in himself. Off to the left was a more practical feature – a balcony; as the housing crisis deepens, a mortgage-stretched owner could throw himself off...and drown himself near the 18th hole.

“Are these places still selling?” we wanted to know.

“Nah...nobody can get financing...”

In the heyday of the credit bubble, financing houses became as fraudulent as the facades. A recent study by Fitch’s found hanky panky in practically every one of the 45 subprime files it examined. Between 2000 and 2006, the FBI’s suspicious mortgage reports rose nearly 800%. The gumshoes estimate that mortgage fraud cost lenders as much as $4.3 billion last year alone.

The homeowner lied about how much he earned or how much he had; the appraiser lied about the value of the collateral; or the mortgage company lied about the terms of the loan. Sometimes all of them lied to each other. And then, along came the Wall Street packagers who told more whoppers. Bundling up thousands of fraudulent mortgage contracts they somehow managed to get the stuff rated “investable” grade, a lie so spectacularly in-your-face it practically knocked your nose off.

First impressions were everything. Executives were paid hundreds of millions to perform cosmetic surgery – trimming a little fat here...putting in a little silicon there. Billions poured into hedge funds too – in which managers were paid enormous sums for hocus pocus investments that were no more than “heads, I win; tails, you lose’ bets with other peoples’ money. And private equity was another hot trend. But what were the private equity surgeons doing except nipping and tucking? Balance sheets and earnings were pimped up...until the old girl could be put back on the streets.

Everybody wanted a piece of the action. The gaudy, sensational, trendy, hollow, superficial – it all moved up in price – from the suburban ghettos of Calvert County, Maryland, to the A shares on the Shanghai stock market. And there was no point in arguing with the people who were buying this garbage; they were geniuses and had the money to prove it! Towards the end, you had to be a moron to make money, because it was the worst investments that moved up most.

In the art world, for example, the Great Rubbish Market swelled up prices on corrugated tin and dead animals. The idea was to make a big impression – fast. And nothing made a bigger impression than big money. Damien Hirst’s diamond encrusted skull was just a silly gimmick. But it wasn’t so much that the oeuvre itself caused the wow...it was that some numbskull had paid $100 million for it.

What did the IPO come out at? How big was his bonus this year? How much did that house down the block sell for? How much is the stock up? Wow.

What a surprise it must be when it comes to an end...and the headline numbers go down

It's amazing to read the press, or the Stool for that matter, and see just how unimportant the individual has become in the movement of all these financial events. Such and such an agency downgrades XXX and so YYY entities and issues take on a negative pale so that such and such is now threatened. A market doesn't even have to open because the predisposed result has already cast the mold of public reaction.

Its apparent that the great unwashed public is nothing more than a commodity out of whose pockets is extracted the digital dollars that are flung about the globe with reckless abandon by the captains of the financial model. The originators of these mountains of digibucks are never allowed to actually own them or manipulate them themselves, they are frightened riders like a 3 year old perched atop the brightly painted carosel horse destined to be thrown off when their 3 bucks worth of ride is over.

I have maybe 250,000 to 300,000 of digibucks out there that I am given to understand that I own although I have never seen them. They were deductions from my check or numbers in an account, but they have no substance that I have been able to touch. Some day I'd love to build a money vault like Scrooge McDuck and swim in their paper and coinage just to know its real and tangible. Would a quarter million be enough to swim in? Could I have a diving board and a deep end? I don't even know how much is enough.

At the end of the day, we who were born as true human beings have become mere commodities to be herded by the captains of the corporate city states of the global economy. Destined to play our part and say our lines as given in the morning casting call of the CNN newsroom.

Except that one day 2000 years ago the only one among us who was ultimately worthy to be called good, came in a humble setting and said, "I'll show you how to live, and what it means to love, and bring you back to what you have lost!"

Forgive me doc, for what is a financial comment and also not a financial comment. It just spilled out. As the rot of this whole thing rolls out I am overcome by the sadness of what we have lost of the sense of who we are and how we ought to move thru life

Tak

Great post, Tak.


At this point the only thing we can hope for is that a cosmic justice prevails that hurts the criminals behind this mess as much as the many sheeple victims.

But I wouldn't bet on it.



BTW, A bunch of friends, family, and I are on for the NMA ( aka The Word ) concert in Philly on Friday night. I'll try for some pix, and if anyone else happens to be going, touch base with me.

Now posted on the front page of the WSE. Thanks, Tak!

Seconded.
Great post, Tak.