I just noticed that the Treasury announced another stunning long term CMB today. The market topped out around the time of the announcement. This week will almost certainly be the biggest week of short term Treasury issuance ever. I will have more in the WSE Pro Fed report to be posted shortly. Take that risk free trial RIGHT NOW and be ready to start reading all the gory details. Click the link below to get started.

Must explain that juicy 2.5% return on today's 28 day bills.

Well that's up 45 basis points from last week. That's a 22% increase in a week. At that rate we'll be at 10% by Easter.

Up 75 bp from just four weeks ago....

As KW and Foxie have mentioned the 900 day or200wk ma usually are good support areas. But will they hold?

*DJ Failed Auction-Rate Sales Tue Reach $6B, Mostly Citi - Source

What does this mean?

Nice gold takedown today.

More action at the 900.

Wienermobile alert!!!

Here are a couple of charts to chew on.

The first is the WLI growth rate (Weekly Leading Index) from ECRI (Economic Cycle Research Institute). It leads business cycles by 10 months for peaks and 3 months for troughs. The second is the monthly SP500 with annotated WLI peaks and troughs.

In 7/99 the WLI peaked. Roughly 9 months later the markets topped in March 2000 (anticipating/coinciding roughly with the Q1 earnings in April). I don’t have the reports to tell when exactly they “called” the recession, but the WLI lead time coincides with the markets interpretation of the business cycle. The last bottom in the WLI came in 11/02 and the markets began rallying in 3/03 (about when they claim the business cycle should have turned up). So, during the last recession, the WLI peaks and troughs jibe rather nicely with the stock markets.

Currently, the WLI peaked in June of last year which would imply a peak in business growth in March-April of 2008. Judging by the turn in corporate profits in Q4, I’d say the WLI missed.

What I think is most interesting is to look at the points when the WLI started falling hard into negative territory. In 10/00, the WLI and the markets really broke down. It’s the same thing here in 11/07. This could be useful and is worth watching.

But as of yet, ECRI has not called the recession. The WLI growth rate is -7.9% and on the chart is at levels coinciding with the last recession. In fact, it’s very close to the bottom of the last recession! I just wonder how much longer they are going to mix words before they actually acknowledge this recession? And if/when they do figure it out, what good is their forecast when everyone is alreading figuring it out on their own? I thought these guys were supposed to be the best.

source: http://www.businesscycle.com/
(subscription required)

Blue Nile (NILE) is getting plunked for -20% while Buffalo Wild Wings (BWLD) is up 10% AH. I guess guys are buying hot wings rather than jewlery this valentine's day.

Here's another I will be watching for clues tomorrow...

Brazil has been a strong leader the whole way up, and this bounce has been no exception so far.

But...we may have put in a C wave top today...

If we get back below 74, an all out crash wave into March is a distinct possibility....above today's high and the bullz will be running in the streets.

Pivotal area here...

As I said last week, GS 4K tick chart was lining up for synchronous rollover...so far so good....the is the area where a large break could occur..we hangin' off the edge of the cliff here..

If GS does indeed break, seems likely the indexes would also....again, pivotal area...

Incoming Email.....

Official Announcement:


The federal government today announced that it is changing its emblem from an Eagle to a CONDOM because it more accurately reflects the government's political stance.. A condom allows for inflation, halts production, destroys the next generation, protects a bunch of pricks, and gives you a sense of security while you're actually being screwed!

Damn, it just doesn't get more accurate than that.

Thanks

I have noticed several articles in financial media recently, warning of a Great Depression scenario. Apologies if this is a repost.

Depression risk might force U.S. to buy assets
Tue Feb 12, 2008 4:19pm EST

By John Parry

NEW YORK (Reuters) - Fear that a hobbled banking sector may set off another Great Depression could force the U.S. government and Federal Reserve to take the unprecedented step of buying a broad range of assets, including stocks, according to one of the most bearish market analysts.

http://www.reuters.com/article/ousiv/idUSGOR27660220080212


-Pegasus

its seems like the consensus in OZ is that earnings have peaked.

A number of companies have had great results yet their shareprices has been pummeled.

Our biggest bank just reported a big profit,it will be interesting to see what happens to their shareprice.

As I recall one of the biggest components of the WLI is stock prices. The others are weekly monetary indicators. So to a large extent the index does simply reflect stock prices.

"We're in so deep that it doesn't seem like anything will help," said Rebekah Ao, 33, a pregnant homemaker who lives in a new four-bedroom home in Avondale with her husband, Otto, a truck driver.

The Aos, with $50,000 in income, owe a total of $607,000 on mrotgouges for two houses they bought since they moved to the Phoenix area about two years ago.

"It is tough," said Joann Hauger, executive director of the Conmunity Housing Reamsources of Arizona. She sees 20 to 30 people a month in need of housing counseling because they can no longer afford their mrotgouge payments. "I don't know if Bush's $300 or $600 will make a difference," she said. "Why can't he just send us each $300,000 or $600,000?"

Seems like the game down under is fer biznesses is to take big cash deposits from folks up-front, fer water tanks, houses, whatever, then never deliver anything.

Hey, wait a minute......that's exactly how most common stock works.

CBA hit for 3.5%.

It actually looks cheap at these prices.

It is 20% off its highs.

Utterly, completely and abjectly false statement.

http://wallstreetexaminer.com/?p=2280

talking of truck drivers.

I had a call last night from my former employee who is up to his eyeballs in debt.

First thing he asked was whether I had any work I could throw his way.

Then he offered me his truck and trailer for $85k.

Or his whole business for $110k

He just wants out.

He still hasn't sold any of his assets.

He said he was expecting an offer on his house last night.

If it didn't come thru he said he was going to walk away.

He was hoping for $545k.

He would be paying 11% interest on his mortgage.

I suspect he is literally drowning in debt.

"The worst isn't over, the worst is just beginning,'' Treasury Secretary sHank Paulson said today at a news CONference in Washington with Housing and Urbane Development Secretary Alphonzo Jackson.

The Treasury Secretary and banks representing half the U.S. mrotgouge market agreed to offer 30-day freezes on foreclosures. The program would start with a letter to homoaners more than 90 days delinquent that lays out procedures to qualify for a pause in the reaming process. The homoaner has 10 days to respond.

"The Hope Now alliance is an evolving effort," said the Treasury Secretary. He called on all mrotgouge lenders to adopt today's initiative, known as Project Lifeline .

It's like some sort of game show. (hilarious video)

Seems like that Connelly guy is the only one singin' that tune.

I can't recall one episode in history where the PPT/US government used its resources to become the final bagholder of a collapsing stock market.

Close female friend of mine at work just called me. I've been intermittently warning her of goings on for the past 12 months or so. Her initial reply, joking around, was: "my husband handles all the money, i just spend it...when you tell me these things i just hear Charlie Brown's teacher...mwanh, mwanh, mwanh, mwanh"

Anyways, she lives in a development of 25 homes in far South Suburb of Minneapolis and she asked "What the hell is going on, you follow these things? There are five houses for sale in our place and a sixth just went up today...and they've been for sale for months!"

Recognition wave hitting the masses?

Banks being spanked in OZ.

Com bank down nearly 5%

Rally has fizzled,Ords down 20 after being up 65.

I dont know whether this women is a honest victim of the building company that just collapsed or whether she is trying to connect her difficulties to the mess.

RPC leaves Debbie treading water
12:00a.m. 13 February 2008
| By Kathy Sundstrom

Alexandra Headland’s Debbie Archibald has every reason to feel like she’s drowning.

Her bedroom and en-suite are flooded from yesterday’s deluge and she has until Friday to persuade the banks not to foreclose on her duplex which Real Property Constructions built last year.

Ms Archibald has been trying to get RPC to finish the duplex and provide final certification since she moved in in April – more than a year after she carefully selected RPC from five other builders to to build a duplex for herself and daughter, Renee.

http://www.thedaily.com.au/news/2008/feb/1...treading-water/

Jack Bogle: I think the rating agencies have an awful lot to answer for here. You could say they're in cooperation with the issuers. I would say they're in collusion with the issuers.

Warren Buffett: Well, when a company issues a 14 percent bond when U.S. Treasuries are below 4 percent and it's rated triple-A, we've now seen the cow jumping over the moon.

Part One: http://www.Crapvision.com/id/23126179/site/14081545/

Part Two: http://www.Crapvision.com/id/23129487/site/14081545/

(C N B C for crapvision, of course)

for clues where we are going it can be worthfull to watch EUR/JPY or GBP/JPY. These are currency crossrates and the stand for the "carry trade". This means you borrow money in Japan for 0.5% or so and then buy stuff in other parts of the world. Since a long time now there is an ultra strong correlation between EUR/JPY and the indeces like DAX, Footsie, Dow and so on. Means: When EUR/JPY is strong the indeces are strong too and vice versa. Last July the pair crashed, then recovered rapidly, but it didnt reach the july high again in November. But the indeces did, although only slightly. This was a negative divergence.

Today EUR/JPY was strong. In fact the movements of EUR/USD or GBP/USD were not really dollar movements, those pairs moved because of EUR/JPY and GBP/JPY. It is all about the carry trade these days. EUR/USD will NOT go significantly lower without EUR/JPY going lower too.

But i have good news for you: Today EUR/JPY hit exactly its downtrendline at 157.00 and made a pull back. Right now 50 pips. When this trendline breaks, we will also go higher in indeces, but if it holds.... APRES MOI LA DELUGE!

WHY IS THIS PERSON NOT IN ASS-POUNDING PRISON FOR FRAUD?

Lying Failed Housing Gambler Blames Others

How could a Windsor man who supervises trash truck drivers afford a million-dollar Healdsburg home?

In this case, by tripling his income on the loan application.

Roberto Gomez would not have qualified for the loan had he put down his actual earnings, $6,000 a month, rather than the $19,500 income he stated.

Gomez said he gambled, with assistance from his mortgage broker, that the 3,400-square-foot, five-bedroom, four-bath house would continue gaining value so he could refinance into a less-risky loan.

"They kept telling me the values would go up."

Gomez’s dream home became a nightmare of debt. He owed more than the home was worth and his mortgage payment more than tripled to $6,200.

“She never told me it could happen where one day you don’t have enough money for the payments,” he said.

It is not so good to pay too much attention to USD/JPY, cause it is heavily manipulated by the BoJ and the japanese finance ministry. Just think Toyota and you know why. The crosses are a bit affected by this manipulation too, but not so much. So, if you wanna look how the carry trade is doing just watch EUR/JPY.

you can do this here: dailyfx. Very nice, easy to use, stable and reliable charts. I prefer the Netdania ones. This site also offers good information about FX and has a good economic calendar.

before there are any questions:

No, i never sleep. I WAIT.

Booyah!

WHen you start talking about the carry trade and how currency pairs correlate with US stock prices, you need to draw me little line diagrams with little stick figures explaining everything.

And not more than 2 lines per diagram.

Chuck Norris Terlet Paper

For all of you 11th hour Romeos...


My family and I were watching the NASCAR race on Saturday night

*( imagine your own visual here )

One of the commercials was a promo from SEARS. They're running a special from Feb 10 to 14th that "When you spend $25 or more on intimate apparel, fine jewelry, or fragrances you will get a T-shirt"

It's TRUE, and it's LOVE!

* watch the commercial, it's a hoot.


OH NO, NOT THE BUNNIES!

simply amazing how just a little over a year ago i had a nice position in RICK at 5.45 a share. Now one year later the stock is trading at $25 a share and had a 405% increase in revenue. simply amazing.

a friend of mine who lives in miami says thier club down there is the size of a wal-mart.

can we say strip clubs are recession free?

SOINTENLY! But I canna no speak with only 2 lines.

Red verticals are euro tops and bucky bottoms. Grey verticals are Yen bottoms and bucky tops. I have no idea what those other lines mean.

now the State govt is getting in on my 'oxymoran' line..

Real linked to 'wealth creation firms'

Mr Schwarten on Wednesday told state parliament that wealth creation companies could be better called "wealth destroying companies".

http://news.theage.com.au/real-linked-to-w...80213-1rz2.html

More than 2 lines...but pretty much shows exactly what the Fox is talking about....

Of course there is always the chicken/egg argument to be considered....

Oh, I get that part. It's the currency crosses that make my head hurt.

the party is over in Cali according to Mish.

The old ambit claims are a thing of the past from the sound of things.

Two options available.

Wage freeze or Job cuts.

Take it or leave it.


I bet the big car companies would love a strike about now.

http://globaleconomicanalysis.blogspot.com/

Shorty- Hilarious video. You wanna bet that the dude in the video took out an ARM
on a house he couldn't afford and is probably in the middle of foreclosure right now?

Bay Area residents accustomed to treating their homes like piggy banks could be in for unpleasant surprises as home prices decline in many areas. Not only are banks less willing to issue popular home equity lines of credit, but some of the nation's biggest lenders are freezing existing loans.

Morgan Hill homeowner Kelly Urbina received a letter from Countrywide two weeks ago telling her she can no longer access the credit line that she says the lender encouraged her to get when she bought her three-bedroom home in 2006.

"I still have a substantial amount of equity in my property, so I was surprised to get a letter that just said 'we're going to suspend your line,' " said Urbina, who works as an underwriter for Opes Advisors, a mortgage banking and wealth management firm in Palo Alto. She knows the value of her property has dropped somewhat, but not "significantly," as Countrywide claimed in the letter.

source

Also note that Kelly Urbina drives over 50 miles one way to get to her job. She's getting a triple whammy. Home ATM cut off, a long commute, and she works for a mortgage company. Not a good position.

Anyone interested in a great economic analysis should read this. It's from Paul Kasriel and Northern Trust. Lots of great charts, analysis, and forecasts.

Read it for yourself and I'll spare you all from my long-winded commentary.

http://www.northerntrust.com/pws/jsp/displ...l&TYPE=interior

edit: click on the link and then choose the "Jan/Feb 2008" post

There is absolutely no point in buying stocks. If they buy bonds and mortgages that will help stocks as well. But they have no money, so what's the point?

http://www.marketwatch.com/news/story/phon...6CE57B7393DB%7D

What time is it?

It Bear season. Or Bear time?

That's what makes markets. Fear and Greed.

That is absolutely not true, IMHO. It has been proven that high stock prices create a euphoria for those who partake in investing in the market. A good consumer is a Happy ( or confused) consumer.

"They" have PlentyO'Cash.