July 27, 2007

Dow down another 200 points today, housing crashing, mortgage market in disarray, debt market in meltdown mode. What's next?

Right on schedule, worst week for the Dow in 5 years.

LBO deals as screwed as Vegas condo owners.

America in a full-on pissed-off negative mood.

The US Dollar getting slaughtered.

Mortgage lenders and homebuilders in total melt-down mode.

Is Monday "Black Monday"?

Will we move from housing denial to housing fear to HOUSINGPANIC in rapid-fire succession?

Are you ready? Did you prepare?

Wall Street extended its steep decline Friday, propelling the Dow Jones industrials down more than 500 points over two days after investors gave in to mounting concerns that borrowing costs would climb for both companies and homeowners. It was the Dow's worst week in nearly five years.


Anonymous said...

Cue the "Dopes" troll. Come on, it's your move.

Mark in San Diego said...

Dow down another 200. . .Keith, you forgot, Troll postings up 150%. . .guess that means desperation and anger have REALLY set in!! probably unemployed title company people, or RE agents with Too much time on their hands.

Anonymous said...

Wow it's really happening

burn baby burn said...

Is Monday "Black Monday"?

God I hope so. I have had enough of waiting.

Mark in San Diego said...

Now that the markets are closed for the weekend, let's see if that rumour of a "large money center bank" with a huge bridge-loan loss will come clean. . .had been circulating since yesterday. . .if so, Black Monday indeed. . .off for a bike ride in Coronado to count the "reduced price" for sale signs. . .and all the new "foreclosed property" signs posted all over town. . .THAT should be good for business - NOT.

Flagg707 said...

Monday will tell the tale for the short term.

The big thing will be whether the Fed can inspire enough confidence to unfreeze the bond market. That's the source of this high-octane credit serving as the foundation for all this speculation in equities and property. We shall see.

Anonymous said...

Yes, I sold most of my SM holding about 4 months ago, and yes I feel good. 5.24% MM and a piece of mind. Have a couple of houses that I can afford with renters paying them for me.

Anonymous said...

You'll start hearing about over leveredged hedge funds failing next week

Anonymous said...

Nothing to see, here move along, the market is fine...IPods are still selling...

Agent #777 said...

I think you mean iPhones...

Keeping the faith said...

U.S. stock fund outflows highest in 5 years!

Investors cash out a net $11.3 billion for the week through Thursday

As for Black Monday I'll bet my left testicle it will happen.

The feedback cycle has started.

Anonymous said...

Well, that was something.

At 2:40 pm est Jim Cramer comes on CNBC for his "Stop Trading" segment. He tells Erin Burnett, hostess, that noted bear and his friend, Doug Kass believes "we will finish up on the day." Cramer says he agrees. At that point the DOW is down 50 and the S&P is down 5 with things moving up. Things stalemate there for the next hour.

Then with about 15 minutes left in the trading day, a bunch of hoodlums come out and mug the crap out of the indecies. The technical support levels were breached and now everyone has a very long weekend to stew.

Asia starts us off Monday morning, and that Yen carry trade, as Art Cashin stated, could get interesting as it may move from voluntary covering (going on the past few days) to covering out of necessity. If that unfolds, look out below.

Did the White House have an inkling? They sure mustered all the troops this morning.

Anonymous said...

Well, the DOW is down another 200. I wonder what bogus numbers the government will release on Monday to show that everything's OK so the trolls can point to them and call us DOPES. I think it's too late though, the market doesn't seem to believe the government numbers anymore, and rightfully so. Hopefully we'll have a big crash Monday and we'll get it over with fast instead of one of those endless bear markets.

Anonymous said...

The encirclement is complete, welcome to the kessel.

Just waiting for Field Marshal von Bernecke to start the airlift. That is going to save us, Generalfieldmarshal von Paulus assured us so. I heard for Mein Fueher himself that we are the most powerful nation and that things were doing good by do gooding goodoers. The leadership would not betray us, right?

The Battle of Sprawlingrad has begun.

Anonymous said...

The S&P 500 is now down 6% from its recent record (nominal dollar) close.

Anonymous said...

Great Video!

Anonymous said...

Monday will be crazy

Anonymous said...

Everyone hold hands and pray the beloved troll doesn't become a meth addict this wknd.

Anonymous said...

anonymous 8:55, I saw that too. When Cramer was on, the DOW was down about 65. After he said that, the DOW immediately jumped such that it was down about 40.

Then came the massacre.

Anonymous said...


I have to admit that I was starting to think this was not going quite the way (the obvious way) that the numbers would suggest. I always knew the market/scam would plummet, but thought this slooow pace of declines (mostly in asking prices) was going to drag on, this being arrogant, above-the-fray Massachusetts.

Then, as if someone turned on the light switch, BAM!

Prices for homes here on Cape Cod have tumbled dramatically. I have seen $30,000 reductions in asking prices just in the last few weeks.

It's happening. It's really happening. I would say that because of the delayed reaction to the markets, there may very well be a rocket-pack, steroid filled accelerated trip to fear and panic in the abyss that is the housing market.

Keith, and I say this seriously as someone who was brought back from the brink of potential buyerdom:

Thanks, my man. You've probably saved my family tens of thousands of dollars and kept us happy and not looking over our shoulders for the bank-man because of all of your market analysis, quick wit and so forth.

Someday we'll own a house (I rent a beautiful, big house by the ocean so I'm not sweatin' ownership right now anyway), but it will be for far, far less than it would have been if I bought mid-2006 before I saw this blog

Thanks again Mon. I think we'll take a nice trip now to celebrate our freedom and monetary stability.

Anonymous said...

One minor downturn in the stock market and the hedge funds will go free falling through open space.

Anonymous said...


Anonymous said...

who the f@ck is buying CFC today?!?!



Greenscam said...

Ive always heard a BIG down on a friday means more down monday.

Its the weekend bbq/bar/dinner chit chat that spreads the bad news. Everybody rush to sell on monday am.

This isnt a fake a crash, there are VERY REAL news and its happenin folks. black monday!

Bitter Renter said...

I love these people that think they can brag that "Yes, I sold most of my SM holding about 4 months ago, and yes I feel good. 5.24% MM and a piece of mind. (sic)

Wow, what timing! You sure are a genius!


I lived through a big market downturn in 87 and a few lesser ones since. I'm GLAD I didn't liquidate my stocks or I would have missed some incredible growth.

See, like the people who want us to think they're so savvy with money, I was smart enought to consult with Bigfoot while we were having tea with Amelia Earhart.

Anonymous said...

Seeing Manipulation in Today's Carnage

By Jim Cramer

About this article:
A horrible, no-hope close. Just one of those selloffs that seemed inexorable, endless and nasty as all get out. I am no conspiracy buff, but I am a paranoid trader and I can tell you that the decline today in the face of the rally in the group that brought us down, the financials, smacked of just wholesale manipulation down. Buyers couldn't even get down there if they wanted to, and we could have been down another 100 if the bell hadn't rung. We are still up huge for the year; we can do more damage. We can go back to Dow 12,500 where this started and we will be there by Monday midday, it is that easy. In the February selloff, which was also a machine breakdown, we lost hundreds of thousands of investors and traders because people didn't realize how fragile the market is. <<<<

oh paleeze.......

the wall street insider and self admitted manipulator cries foul......

oh golly cramer, how can this incredible market be brought down....

they just don't get it do they?

Anonymous said...


Doooopey, where are thou?

The troll must be spending all the cash he made being long on TOL, CFC and KBH this week... Cramer researched it!

Or spending the weekend at one of the "luxury" townhomes in Atascadero he bought at the peak in 2005... Suzanne researched it!


Anonymous said...

Here's what I think:

The stock market meltdown will not be here until there is a BOND market meltdown. After all, we are talking about a debt/bad loan crisis, and that hasn't hit markets if bonds are still high, as they are now.

Maybe this is the big crash, but I doubt it. The bond market, not the stock market, is the thing to watch.

And, yes, I am an economist.

Anonymous said...

Yeah, rout on Monday, then in come moneybags and massive prop-up... right?

Magoo said...

OK, I'll play Devil's advocate and predict a wobbly market that ends slightly up on Monday. I don't think the masses can organize well enough for a crash; too many e-traders wouldn't know it's happening.

Prove me wrong...please.

borkafatty said...

Ladies and Gentlemen I present to you:


Anonymous said...

Gold down

Faith down

Dow down

borka down (again)

Ron said...

The dopes troll is in the bottom of a bottle right now, reality is bitch slapping him.

Anonymous said...

Great opportunity to buy gold!

Shakster said...

Did you see the hair stand up on that Broker?Hahahahhahhahhhaaaaaa!Great week this week let's do it again.
Now if the Bush,and his dingleberry Cheney want a war to cover up this shystoramma gone bad,don't give it to them.
BTW -Met another American who steered away from the big con of housing ,and banksters from an indirect account with HP.BOOOYAAA!!!

Mad Mike said...

After the markets collapsed they were nothing. They built a house of straw. The thundering machines sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men.

On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed.

Except for one man armed with an AK-47, and a Honda full of silver.

black monday 2007 said...

I see the bush cronies wheeled out some bullshitters this morning, who are totally incompetent as usual, to tell the sheeple the economy is great.

Cramer doesn't know his ass from a hole in the ground.

It will be awesome if there is another 500 point panic monday.I cashed out a few months ago and makeing my 5% while drinking sam adams tonight.

Aaron burnett is totally incompetent, calling people lemmings who were selling.Well she might be the only lemming sitting on worthless paper soon.

You called it right my brother keith.I'm reporting to you all from phoenix as people try to sell their shit boxes in scottsdale for millions.

There was massive selling into the close.Shorts are at record levels so the market could pop a little next week as bottom feeders nibble and cause a short squeeze like we had the other day.

Well time to service the realtor blow up doll.

Anonymous said...

But everything's so fine in la la land!

"Economic growth rebounds in second quarter 5:21PM EDT

WASHINGTON (Reuters) - U.S. economic growth rebounded during the second quarter to its strongest pace since the beginning of last year on a surge in business investment, more government spending and a better trade performance, the Commerce Department reported on Friday."

james said...

Anyone know what the price of gold does in a recesion/down market?

TM said...

My bet is for a knife-catcher's rally on Monday, with more down days later in the week.

Anonymous said...

Anyone else making money shorting the homebuilders and lenders? I've never had so much fun shorting such a slimy industry. This is like shorting drug dealers and child molesters and making loads of money doing it.

dopes said...

DOW is down over 500 points in two days but AMZN is up, so everything is fine for AMZN stock owners. They will buy all the $400,000 houses in Phoenix

rut roh said...

Led by an astonishing 799% rise in Los Angeles County, foreclosures in southern California jumped 725% in the second quarter, to a record 9,504, from 1,152 a year ago.”


Anonymous said...

You just know REALTWHORES were some of the biggest losers in the market the past couple of days probably long their homebuilder friends


Anonymous said...

Monday will be UGLY...all the chatter points to it.

Tipsy said...

What will a BOND market meltdown look like? I don't think I've ever seen one. Just looking to profit from this.

beth said...

Time to start figuring out again which Made in the USA brands are any good. No one else will want our dollars.

JR Junky said...

The chimp looks like Larry (The greatest story never told)Krudlow
after getting laid off from the financial Hee Haw show

Anonymous said...

Tipsy said...
What will a BOND market meltdown look like? I don't think I've ever seen one. Just looking to profit from this.

July 28, 2007 2:06 AM


It would be rising bond yields (falling bond prices). So far, it does seem like yield spreads are widening. The flight to (perceived) safety is away from corporate debt (especially shaky issues) and into Treasuries. Presumably, since the Fed can create money at will, holders of Treasury securities WILL get their dollars. Of course, the purchasing power of those dollars is far from guaranteed...

I guess if you "knew" yield spreads were going to continue to widen, you could try being long Treasuries and short "high yield" corporates...

Anonymous said...

Mad Mike said...
After the markets collapsed they were nothing. They built a house of straw. The thundering machines sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men.

On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed.

Except for one man armed with an AK-47, and a Honda full of silver.

July 28, 2007 12:13 AM

Mad Mike, Ivy League grads with mountains of debt will wait til you're asleep and then stuff your tailpipe full of rags. They'll wait until the fumes get you (or get you in your sleep) and redistribute your beloved silver.

Better think of another plan- like maybe a sailboat full of silver, living off the sea.

kitchenstove said...

I think DOPES is losing steam, lol. It's fine if you want to retire now DOPES. I think everyone will understand.

Anonymous said...

How 'bout the fight in Maria Bartaromo Thursday? She was about to through down with Steve Leisman and anyone else dwelling on a weak market. I bet she gets an offer from Fox Business Channel, but really should be put in charge of Homeland Defence.

Anonymous said...


Anonymous said...

Gold? Rises as dollar falls, on terrorism & war, if the Fed cuts interest rates (again a dollar play), and especially if a bank or multiple banks collapse (ie a societal panic.) Also on decreased supply if the miners output drops.

It falls in situations right now if hedge funds and big banks have to sell their winners to shore up leverage demands elsewhere. Also when central banks sell more than the market expects as a usual move. Or if miners bring more to market than can be absorbed. Or if terror operations are thwarted and peace fluorishes.

Now, if you want to delve into conspiracy, gold bugs have long claimed more gold has been sold than central banks really have, meaning the price is understated. It revolves around lease purchases or something about that. But the conspiratorists say the central banks won't own up to it for if they did the price would rocket higher letting gold out of the box as a competitor to fiat currency.

Silver tends to move like gold but with higher mood swings. Punch up the 2-year chart on SLV to see. SLW is a silver play: 8 employees sitting on a ton of silver with no mining operations. They just bought it cheap and sit on it.

Anonymous said...

Ask any commercial mortgage banker what conduits (for securitized commercial real estate loans) were quoting in the last two days.

The answer: THEY WEREN'T!

1031 exchange borrowers had previous quotes retracted and conduits are not quoting new deals because of the concern that CDOs secured by commercial real estate will be next and nobody wants to be left holding the bag when those kinds of securities can't be sold.

Watch for liquidity to dry up quickly

Shakster said...

Mad Mike!!! Yeah! ,Good to See your post.

morris said...

Nice correction.

common guys.... said...

Ignore all this. Just watch CNBC, FOX and the other America is Great propaganists. Don't you know its just an adjustment in the greatest economy in the world brought to you by the greatest government ever on the face of the earth. Such cynicism! U.S.A. #1. ;)

Anonymous said...

You really think the Chimp picture looks like Larry Kudlow? To me it is more the spittin image of Jim Cramer who is batting an even bigger zero than "Head up his butt" Kudlow. The thing I've learned more than anything else thru all this is that the Economic Guru's either purposefully fail to report economic news truthfully or innocently are dumber than boxes of rocks. Either is bad but the second may even be the worse of the two.

Anonymous said...

Market's dive is just the start
With the credit markets a disaster, buyouts can't continue to drive stock prices higher. That's one reason, of many, I think we're headed for an even bigger fall.
For a change, this week I'm going to delve into stock-market machinations (both on the surface and behind the scenes) because I think they suggest we have reached a critical stage in the credit-unwinding process. My focus will be on Thursday's action.

Black cat crosses bulls' path
Before the open, stock-index futures were down about 1%-plus. Why was that important? Because in the last year or so, when we have seen an ugly session (like the one Tuesday), it's typically prompted an immediate rally -- if not the following day, then the day after that.

However, Wednesday's rally was pretty punk. Which is why I (and the bulls) thought there'd be another attempt the next day. The fact that the futures fell out of bed pre-opening was thus an indication that something was potentially very different.

As I checked all of my contacts in credit land, it quickly became clear to me that this was the source of the problem. One friend who watches the high-yield market said: "Credit is an unmitigated disaster this morning. Bonds down 2% to 3% across the board." In addition, the "Lord of the Dark Matter" confirmed that structured credit was really getting thumped, ditto all the leveraged indexes and the ABX credit stack. To quote him: "Mate, there is a massive margin call in structured credit and there are no marginal buyers for it."


Anonymous said...

Thursday = UGLY!
Friday = UGLY CLOSE!

Monday = down triple digits?
Tuesday = flush*
Wednesday = down triple digits
Thursday = a rally that gets hammered at the close
Friday = down triple digits

*Bush holds press conference to say the economy has never been better.

Titanic Event said...

Monday a run for the exits!

Anonymous said...

Developments over the last 48 hours should make it clear to
anyone in his right mind that the system is finished as LaRouche
said. This was highlighted yesterday by the spectacle of Bush
meeting in the White House with the plunge protection committee
followed by his lunatic "Flash and Burn" performance denying that
the system is in the process of disintegration and insisting
instead that the U.S. economy is "large, flexible, and
resilient," which led LaRouche to say "It sounds like a limp
penis to me." As LaRouche said yesterday, the financial system is
one big Ponzi scheme, which is in the process of collapse and
what does Bush do? He says that Ponzi schemes are great, they are
wonderful, they are miraculous, they make you feel rich when you
are bankrupt. After hearing the insane comments made by the
members of the plunge protection committee at Bush's press
conference LaRouche said, they all babbled like idiots, which
leads to the suspicion that Bush had given them a blood

Anonymous said...

what's next? A buying opportunity. This has happend this year and everytime its a good time to buy. good time to buy metals too.

Paco Bell said...

Great viddy.

I just gotta say, tho, with all the comparisons being made to the Great Depression, many people still point the wagging finger at Herbert Hoover (he makes a brief appearance here, followed immediately by Roosevelt).

While it's true he's the man that was in office when it all went belly up in 1929, keep in mind that he had only been in office about 6 months when the shite hit the rotating blades.

The policy of his numb-nuts predecessor, Calvin Coolidge, who was little more than a stooge for corporate interests (ring a bell?) were, if one wants to place blame, far more likely responsible for the crash due to policies (deaf ear, blind eye) originated during his adminstration.

We need to make sure we give credit where credit is due.

Just as we surely will should those trying times be visited upon us again.

You can bet Bush and Cheney et al are counting on just that kind of oversight.

(Perhaps my memory is faulty, but IIRC didn't Ronny Raygun express admiration for Coolidge sometime during his tenure? I recall being somewhat bemused- and somewhat miffed- cos surely if any man got- and continues to get- a bum rap, it was Herbert. H.)

area 51 said...

Mad Mike, cool post, love the reference.....

And what are you all complaining about? We're all gonna get free coffee and donuts!!! Booyeah!

To all the DOPES, DOLTS and 1000 Word Douches:

I STRONGLY recommend you short the crap out of the DOW and S&P. DO IT early Monday morning before the crash commences so you can maximize your profits.

Then put all your money in precious metals since we know how well they have outperformed the S&P over the past year......

Then cover your heads with aluminum foil so the government can't read your thoughts on your next brilliant financial move.

area 51 said...

To James:

It tanks.

That's why the Depression was so painful. The US and UK stubbornly refused to float the dollar as a fiat currency, pegging instead to gold held in reserve.

(Lesson to HP DOLTS, DOPES and 1000 Word Douches)

Gold is used as a hedge against inflation. So if you disbelieve the governent's inflation numbers look to gold. It has appreciated 5% over the past year. Actually not too far off from the gub'ment's 3-4%. But well below the S&P, so here you can see the returns all the DOPES and DOLTS have been getting.

Anonymous said...

Kinda like Bush was only in office a few months before the 9-11 attacks and the tech implosion. the seed for the destruction were set in the 1990's.

The next president will get blamed for Bush's blunders much like bush was blamed for Clinton's blunders.

Anonymous said...

My stock broker says it's a stock buyer's market. There's never been a better time to buy stocks. Time2Buy stocks. Stocks always go up.

Anonymous said...

Just how bad a meltdown? How money can really evaporate from the economy? Read on...

This was posted in the that 'boring' blog earlier:

'Comment by Lenexa
2007-07-28 08:34:43

Help! My fb neighbor is having a garage sale right now where he’s selling doors, fixtures, air conditioner, etc. out of a house he owes $300k on.

Sounds to me this FB is gonna leave nothing but the FOUNDATION left for the bank to take back.


That is some hilarious sh#t!!

Anonymous said...

I exited the US market completely in Feb.

I have around ~5K in US $. Everything else gets automagically routed to term deposits, money market, and ETFs in foreign currency.

For example, I earn 7.2-7.5% in kiwis and 6.0% in pounds in secure deposits at Westpac and Barclays respectively. There are some cool tax thingies you can do as well (esp if your bank is on an island in the channel).

Anonymous said...

Treasury Secretary Nominated For Pompous Prognostication Award
Increase DecreaseJuly 28 (LPAC)--The LaRouche Political Action Committee today announced the nomination of Treasury Secretary Henry "Hjalmar" Paulson for the 2007 Irving Fisher Award for Pompous Economic Prognostication. The award is named after noted economist, eugenicist and Yale economics professor Irving Fisher, who proclaimed on Oct. 17, 1929--just days before the great Black Monday crash of Oct. 29, 1929--that the U.S. stock market had reached "a permanently high plateau." On Nov. 14, 1929, Fisher insisted that "the end of the decline in the stock market will probably not be long, only a few days at most." The Dow, contrary to Professor Fisher's authoritative projections, dropped some 90 percent by mid-1932, as the U.S. plunged into the Great Depression. It was only after President Franklin Roosevelt rammed through his New Deal over the objections of Wall Street that the U.S. economy recovered..

Sec. Paulson was nominated after his impressive performance at a White House press briefing on July 27, where he announced: "I've been looking at the global economy for a long time and I can't think of any time in my business career where I've seen such a strong global economy,"

Paulson narrowly edged out President George W. Bush, who at the same press conference explained that the economy is strong because it is strong, and he is wise. Said Mr. Bush: "I want the American people to take a good look at this economy of ours. The world is strong--the world economy is strong. I happen to believe one of the main reasons why is because we remain strong. And my pledge to the American people is we will keep your taxes low to make sure the economy continues to remain strong, and we'll be wise about how we spend your money in Washington, D.C."

Despite the President's remarkable statement, the LPAC nomination committee selected Sec. Paulson because of his credibility as a former top investment banker on Wall Street and his role as head of the Plunge Protection Team. In contrast, it is obvious that President Bush knows absolutely nothing about either finance or economics, thus lessening the impact of his bold pronouncement.

Because of the fast pace of economic developments and the almost daily emissions of Fisherian caliber comments by the punditry, nomimations for the Fisher Award will remain open through the third quarter, with a winner to be announced by LPAC at year's end.

While the prize is named after Mr. Fisher, we must point out that he was hardly alone in his analysis of the first Great Depression. Here are the valiant efforts of some of his peers:

* Noted market analyst R.W. McNeel, who announced on Oct. 30, 1929, that "this is the time to buy stocks... Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."

* Banker Bernard Baruch, who cabled Winston Churchill in mid-November, 1929, advising "Financial storm definitely passed."

* Treasury Secretary Andrew Mellon, who declared on the last day of 1929 that "I see nothing in the present situation that is either menacing or warrants pessimism."

* President Herbert Hoover, who decreed on May 1, 1930, that "I am convinced we have now passed through the worst... and shall rapidly recover." Hoover then declared in June 1930, that "the depression is over."

deepcgi said...

Area 51:

Like most stocks, gold stocks took a beating early in the route of 1929. But gold stock performance during the depression years from 1929 to 1935 was spectacular. A number of gold stocks saw better than 500 percent gains during that period.

So, we'll probably see downward movement at first, followed by some senior companies taking advantage of the low prices to acquire cheap juniors (like SLW in silver) which will jump start one of the only industries that can move upward in a depression.

Anonymous said...

One of my mutual funds is pegged to market peak.