Good morning world. Welcome to the biggest financial crisis since the Great Depression. Hey - did someone just say PANIC?!

Northern's dilemma will rock markets

Northern Rock crisis sparks banking panic

Run on the bank

Scramble to quit UK bank


So, no surprise for HP'ers. We've been predicting runs on the banks for months. And now they're here. So what should you do to get ready for the collapse? Here's Ten Ways to Prepare for the Great Crash:

1) Get to cash, NOW. Every financial mania ends with a rush to cash, and a liquidation of assets at greater and greater loss. Get to cash. Even gold is at risk as owners liquidate to raise cash.

2) Know where your cash is, and that it's protected by the "full faith and credit" of the host government. If you have more than the allowed limits in any one institution, and they go tits up, it's your own damn fault. If there's no protection, get your money out of there NOW.

3) Unless you plan on keeping your house forever, sell your house as fast as you can at whatever price you can get for it. Because you'll never get that price again in your lifetime. And then rent (for a fraction of the cost of buying)

4) Get out of all stocks and money market funds. Yes, that's right, even money market funds are not secure, and they can and will lose value

5) Get into short term US government t-bills and liquid FDIC-insured savings accounts (up to the FDIC limits). Wait for the bad storm to pass

6) Tell everyone you care about that The Great Unwinding is here. Use the "email this post" function (the little envelope by the comments link below) to send this to your friends and family. DO NOT be the last one out of the pool - be the first.

7) Get 100% out of ANY troubled bank or brokerage, and any bank exposed to the subprime cancer. If and when they go belly up, even getting your FDIC insured deposits out will be a pain.

8) Check your mutual funds and 401k. Get them to cash and T-bills if you can.

9) Watch what the central banks do. Their actions may present you with some short-term trading opportunities. Watch for currency meltdowns - don't have all your cash in one currency. Use the currency ETFs to spread your risk.

10) Get some popcorn. You're gonna witness some historic stuff these next few days, weeks and months.

From The Independent:

Panic on the streets of Britain: Northern rocked, City shocked

Yesterday something happened that I have not seen in my lifetime, a run on a major British bank. There were queues outside Northern Rock branches as depositors tried to get their money out.

This is the sort of event that happened in America after the Great Crash of 1929. For Northern Rock, this is catastrophe. For the rest of us it marks the end of an era of easy money.

SPECIAL FLASH FROM THE UK: THERE HAVE BEEN LINES OUTSIDE NORTHERN ROCK BANKS ALL OVER THE COUNTRY, RUN ON BANKS IS AMAZING TO SEE IN PERSON

Never in my life did I think I'd witness a real run on the banks. But that's exactly what's happening here in England today and is still going on tonight. PANIC is in the air, the BBC is running non-stop coverage, the papers are ablaze, and it's like a virus has just gotten loose.

There are still people queuing outside of Northern Rock locations all around the country right now. The media is reporting that branches will stay open as long as queues are still forming. Panic is everywhere, all the papers leading headlines were about the panic, creating more panic, and a classic bank run is underway.

In England, savers are only protected for 100% of the first £2000 and 90% of the next £33000 - and that's it, after that, if an English bank fails, the saver loses EVERYTHING. Thus the queues and panic. And calls by people on TV right now to "remain calm" and "don't be irrational".

A Special HousingPANIC message to Northern Rock savers: Get your money out of there tonight if you still can. And for UK homedebtors - your housing Ponzi Scheme is over. The UK housing and credit bubble have burst. Get out now, get out fast, and thank us later.

Northern Rock customers queue for cash as crisis hits high street

The credit crisis spilled onto Britain's high streets today as worried Northern Rock customers queued up to withdraw their savings.

Their fears were prompted by the revelation this morning that Britain's fifth-biggest mortgage lender had to ask the Bank of England for emergency financial assistance.

FLASH - Right on schedule, panic and the run on the banks has now commenced. No surprises for HP'ers, shock and awe for everyone else

Even I'm surprised and amazed at what a Great Unwinding and Panic looks like in real life. Theory is one thing, and damn, we nailed it there, but to see it in action is, well, quite stunning. Trillions are going to be lost over the next few months. Trillions.

Prepare for more of this run on bank stuff... And if you have more than $100,000 exposed in any FDIC account, or if your accounts aren't FDIC insured, or god forbid, if you have ANY funds with Countrywide or IndyMac (I'm short), then what are you doing reading this blog - get down to the bank and get your cash out now!

A rush to pull out cash - Worried about the stability of mortgage giant Countrywide Financial, depositors crowd branches.

Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.

At Countrywide Bank offices, in a scene rare since the U.S. savings-and-loan crisis ended in the early '90s, so many people showed up to take out some or all of their money that in some cases they had to leave their names.

In West Los Angeles, a Countrywide supervisor brought in from another office served coffee to more than 25 people waiting calmly for their turn with the one clerk who could help them.

Bill Ashmore drove his Porsche Cayenne to Countrywide's Laguna Niguel office and waited half an hour to cash out $500,000, which he then wired to an account at Bank of America.

"It's because of the fear of the bankruptcy," said Ashmore, president of Irvine's Impac Mortgage Holdings, which escaped bankruptcy itself recently by shutting down virtually all its lending and laying off hundreds of employees.

"It's got my wife totally freaked out," he said. "I just don't want to deal with it. I don't care about losing 90 days' interest, I don't care if it's FDIC-insured -- I just want it out."

And then there was panic, and a run on the banks, and right on schedule Bernanke's printing press and helicopter swooped into action

Gotta love Bernanke stepping in with billions in depreciating US dollars to rescue the depreciating housing market by bailing out the imploding banks. Man, is this really happening?

Get them printin' presses runnin' boys! Some 5's, some 10's, some 20's and tons and tons of hundys! And get my helicopter ready!

We're so screwed...

Fed Pumps Another $35B Into US Financial System Friday to Stem Credit Turmoil

WASHINGTON (AP) -- The Federal Reserve, trying to calm turmoil on Wall Street, announced Friday that it will pump as much money as needed into the U.S. financial system to help overcome the ill effects of a spreading credit crunch.

The Fed, in a short statement, said it will provide "reserves as necessary" to help the markets safely make their way. The central bank did not provide details but said it would do all it can to "facilitate the orderly functioning of financial markets."

The current meltdown in the housing and mortgage markets has caused new home foreclosures to climb to record highs and has forced some lenders out of business.

Increasingly restrictive lending conditions can put a damper on people's ability to buy big-ticket items such as homes, cars and appliances. And it can crimp businesses' capital investment and hiring. That reduced appetite by businesses and consumers would slow overall economic activity.

I cannot f*cking believe what I'm hearing. Jim Cramer now tells Americans to default on their mortgages and rent. Seriously, it's getting that bad.

(Original youtube video got pulled - go here or housingdoom for the video)

Jim "Walk Away From Your House" Cramer followed up on yesterday's shock video, and is now telling people who "made a bet and lost" to not compound the error, and to simply walk away from the mortgage and default.

He says especially in housing markets that have already fallen 20% to 30% like Phoenix, the Inland Empire, Sacramento, Las Vegas, Denver, Southern California and more, where homebuilders and REIC are hiding the extent of the price crash via the use of incentives.

Why lose money each month he asks - and answers with "you might as well rent".

Dear god I think Cramer is reading HousingPANIC. Hi Jim! Boo-yah!

HP Memo to the Banks, Hedge Funds, Lenders, China and others caught holding the bag: You are completely f*cked now. People aren't gonna be paying back the loans. It's over. The Great Housing Ponzi Scheme is over.

The Great Bank Panic of '07

Gotcha

Here's an overview of the Bank Panic of 1907. Good reading for those interested in the current Bear Stearns / Hedge Fund / Merrill Lynch / CDO / Subprime debacle now firmly underway. Those who ignore history are doomed to repeat it...

The Panic of 1907, also known as the 1907 Bankers' Panic, was a financial crisis in the United States. The stock market fell nearly 50% from its peak in 1906, the economy was in recession, and there were numerous runs on banks and trust companies.

Its primary cause was a retraction of loans by some banks that began in New York and soon spread across the nation, leading to the closings of banks and businesses. The severity of the downturn was such that it eventually pressured the United States Congress to accept the proposal by a group of bankers to pass the Glass-Owen Bill, essentially a blueprint of the Nelson W. Aldrich plan, a plan that had been defeated in congress earlier, this bill allowed a group of bankers to create, buy the shares, and own the Federal Reserve System in 1913. The 1907 panic was the fourth panic in 34 years.

In March 1907, over-expansion and poor speculation led to a stock market crash. Money became extremely tight. A second crash occurred in October 1907. This time, the crash was directly precipitated by Heinze's brothers, who had used money borrowed from Knickerbocker Trust in a failed attempt to corner United Copper.