The Market Ticker

As in....



Inflation came in right on target.

Countrywide got cut to SELL at Merrill Lynch on liquidity concerns, and the "B" word showed up..... oops....

"Countrywide Financial Corp., the biggest U.S. mortgage lender, was downgraded to 'sell' by Merrill Lynch & Co., which raised the possibility of bankruptcy if the company loses access to short-term financing."

No, you think?

And if that's not enough, Cuyahoga County in Ohio won't take their checks any more for mortgage filings. Certified cash only please guys..... tee hee..... (you know its bad when a few hundred bucks worth of checks possibly being bad worry a government!

Then to add to that we had the coup-de-grace today when it was reported on CNBC that CFC was hit with offers at 12%+ for their commercial paper. For obvious reasons (like instant insolvency when you lend at 7% and borrow at 12%) they won't take those offers, but it tells you what sort of trouble they're in! In other words - its very bad and may get a lot worse!

What did the market think of it? Uh, here's a daily chart - what do you think?



Mortgage applications were up but finally the media is getting it (are they reading the Ticker?); we now got this:

"In particular, the industry's turmoil "may be temporarily increasing the level of retail application activity at the large lenders that participate in the MBA survey rather than representing a systemwide increase," said Doug Duncan, the MBA's chief economist and senior vice president of research and business development, in a news release."

It'd be nice if you'd tell people this when trends begin instead of after they simply can't be avoided any more. But that would require that you REPORT instead of CHEERLEAD, wouldn't it?

NAHB (home builder) sentiment came in at 22. This is significantly below last month's 24, and continues the horrific slide in home builders. Got short?

"The National Association of Home Builders said its housing market index, which tracks builders' perceptions of current market conditions and expectations for home sales over the next six months, fell two points to 22 this month, the lowest reading since January 1991 and the sixth-straight monthly decline."

Yikes. By the way, if it breaks 20? That would be an all-time low.

Here's our old buddy the SPX.


I'd call that a decisive break below support. Next stop is the February lows around 1370ish.

If that doesn't hold we're looking at this from Friday....



Remember that one? Yep. Let's see, we have a 1225ish level (last Summer), we have a 61.8% or "phi" retrace at 1075ish, and below that, well, let's just say that if Lucifer yawns a 7-handle might make an appearance.

Same deal with the Composite:


Support? What's that? Got short? Amusingly the Composite is sitting right on top of a support level, but I don't see it holding. February's lows are my short-to-intermediate-term target; 2340ish.

As for the NDX, forget it. It not only blew the critical support level that I've been watching it then blew through the support level under it, meaning that from an NDX perspective I am expecting those February numbers again too.


Booya!

Now guys I want to show you something even worse; this is the Transports:



This is kinda bad. Actually, if this is a leading indicator on "the real deal" its a lot more than kinda bad, and we're looking at an early "tell" which may say that February is a pipe dream, and we're not targeting those levels in the near term - we may be targeting the 2006 summer lows - and goddamn soon!

Take my shorts off into the close given this chart? Fuck that! You gotta be kidding me!

The assclowns on CNBS (Kudlow in particular) are now screaming for 50 bips in rate cuts on an emergency basis, Kudlow is trying to tell the Fed to take subprime mortgages as collateral on repos!

This from a guy who claims every single night to be in favor of "Free Market Capitalism." Of course like most of the rest he's a goddamn hypocrite, and only wants "free market capitalism" when the people who do stupid things don't have to suffer the just consequences of those acts.

My answer: Fuck you Kudlow!

Look guys. Every last one of these crooked institutions that sold this paper out into the market in an irrational and unsafe manner should go BANKRUPT.

All of them.

Every single last fucking one.

For those who are "merged" companies, forcibly reorganize them. Strip off the brokerage piece, for example, and combine it with a safe and sound institution. Let the mortgage side die.

I'm personally tired of this bullshit, and I hope Bernanke has the balls to set forth some "tough love" and tell these clowns to go take a red-hot poker up their ass. To put forth the idea that the Fed should bail out people who made bad loans to those who cannot pay them back, or that the Fed should reward Wall Street for creating an EPIC housing bubble that has raped raw huge percentages of the American population for their own PROFIT, not for the benefit of the consumer, is DISGUSTING.

Tomorrow's market action? Don't be surprised if it looks like this, especially if the Yen continues to crank this evening and a carry unwind gets going. Another way to look at this would be GLOBAL MARGIN CALL.



Have fun tonight and tomorrow...... the shitstorm is just beginning.

Got Umbrella?