With interest rates skyrocketing and the 10-year US bond in meltdown, you know what that means, right?

So many ramifications

1) buyers who got pre-approved a couple of months ago likely might not be approved today, so they won't be able to close

2) potential homedebtors will see their expected monthly payments soar, which may lead them to rethink closing

3) ARM resets will be even more painful

4) Foreigners may sell bonds even faster, making interest rates go up even faster

5) Home prices fall even faster so that the dummies who buy based on monthly payment (vs. asset price) can afford the same monthly payment

6) Renting is even cheaper today vs. buying or owning (with an ARM)

7) "Analysts" were wrong yet again

8) China finally realizes they've been playing a fools game, and sitting on $1 Trillion of worthless paper is not a good idea

What'd I miss?

Treasuries plunged on Thursday as fears of tighter monetary policy globally fueled a break in yields above 5 percent, unleashing another round of heavy selling.

Yields across all maturities rose to or above 5 percent for the first time since July and benchmark rates posted their biggest one-day spike in seven months.

"We are being overwhelmed by mortgage-related selling," said Thomas di Galoma, head of Treasury trading at Jefferies & Co. in New York.

Financial Times: Fund issues dire equities warning

We all know markets can stay irrational longer than you'd think, but some of the smart folks in the room are heading for the exits even as the market hits record highs. I think it was Buffet who said the key to investing success was to always sell early.

And since cash will be king during any unwinding, let alone The Great Unwinding (read Manias, Panics and Crashes), that means both illiquid (houses) and liquid (stocks) will be involved, not just the former.

A leading UK fund manager has sold off about half the equities in the portfolios he oversees in anticipation of an imminent and severe market correction.

Ken Murray, the founder and chief executive of Blue Planet Investment Management, has revealed he has offloaded equities and cut the gearing on the firm’s portfolios to zero in the belief a US economic recession is set to wipe more than 20 per cent from the value of global stock markets.

Blue Planet, a specialist investor in the financial sector with $350m of assets under management, operated three of the four best performing financial funds in the UK last year, according to figures from Bloomberg. Its Worldwide Financials fund was the best performing investment trust in the UK and the world over the last three years. About 25 per cent of Blue Planet’s portfolios are now in cash.

Mr Murray warned the impending market correction was likely to be considerably more severe that either of the two most recent downturns that began in February just past and in April last year.

Mr Murray, who began the share sales two weeks ago after the latest downturn, said a consumer spending slowdown was already under way in the US. Combined with rising inflation and a slowdown in corporate earnings, this would drag the world’s largest economy into recession.

“People don’t want to believe bad things will happen but the market will correct very sharply,” he said.

UK Telegraph headline: US mortgage crisis goes into meltdown

Boy, reading the paper today and seeing words like "meltdown" and "panic" I thought I was reading HP, not the MSM.

Yes, folks, the Great Unwinding is here. And now it's being reported in some quarters outside the US - while most of the US MSM sleeps. Don't wan't to upset those advertisers you know...

US mortgage crisis goes into meltdown

Panic has begun to sweep the sub-prime mortgage sector in the United States after the bankruptcy of 22 lenders over the past two months, setting off mass liquidation of housing loans packaged as securities.

Analysts say the housing bust is pulling America into recession, citing a 14.4pc drop in housing starts

The rapid deterioration could not come at a worse time for British bank HSBC, which has set aside $10.5bn (£5.4bn) to cover bad loans in the US.

The cost of insuring against default on these loans has rocketed in recent weeks, from 50 basis points over Libor to 1,200, raising fears that a credit crunch could spread to the rest of the property market.

Peter Schiff, head of Euro Pacific Capital, said the sector was in an unstoppable meltdown.

"It's a self-perpetuating spiral: as sub-prime companies tighten lending they create even more defaults," he said.

Mr Roubini said: "America faces a 'reverse cycle' where a credit crunch has hit before the slowdown, a rare pattern. Normally, recession comes first, setting off credit troubles in its wake. We have a housing recession, an auto recession, a manufacturing recession, and a real investment recession already present. If all this happening in what the consensus terms as a 'Goldilocks economy', what would happen if the economy slows down?"