I've decided to implement a few changes, but first, let's do the nooz.....

Home Sales continued to go in the ditch, while inventory continues to build dramatically. The headline is down 0.4% on rate, but that's not the important story - the important story here is inventory. With inventory exploding higher price declines will accelerate.

The market spiked all over on this release - but - why? Higher? I guess this means that the short bus riders think we'll get more "rate cuts". Ooook.

Let's talk about this Ambac/MBI/et.al. stuff for a minute. Its one giant circle jerk. You buy insurance from someone and then you buy some of their stock so they can pay off your insurance if you need them to. Huh?

Oh, and then S&P "affirms" MBIA's AAA rating. Uh huh. What is their capital-to-written-book ratio again? AAA means "can pay through anything but nuclear holocaust."

Go pull their 10Q or 10K and then you tell me - does that accurately reflect reality?

Here's reality - if we had any hint of truth in our financial markets, and any sort of honest regulation in our banking industry this sort of nonsense would result in an immediate audit of the institutions involved with forced write-downs of the allegedly-insured instruments - whether the people who had the valuation issues like it or not.

Expecting the Cops to actually do their jobs? Yeah, ok.

I think we should sprinkle some cocaine in with the annual reports - then we'd get interest in locking people up for a consensual adult act, where ripping people off for hundreds of billions doesn't even garner a solid look.

Who, me cynical? Naw....

Next up we have the fact that the GAO's chief - a little-known title of the "Comptroller General" - one David Walker - has resigned. Why is this important? Well, he's been one of the biggest loudmouths out there, with a multi-billion dollar megaphone, hollering about the funded mandates and just plain old-fashioned unaffordability of our government's long-term view of spending, particularly when it comes to entitlements.

Simply put, Social Security and especially Medicare will not exist in their present form for very much longer, and if you are counting on that happening, you are in major financial trouble in the years to come.

MarketWatch put it more succinctly:

"This sounds to me like the ultimate sell signal on America. As the next president is just under a year away from having the operational authority and consensus to take any definitive action, the Bush administration will have to act. In a highly charged election year such as this, controversial new economic proposals are unlikely to even be discussed."

An interesting - and pretty tough to argue with - perspective.

Your 'tell' for what's going on "for real" remains in the bond market. The TNX is still in a troublesome breakout north from a potential bullish flag, and should that potential be fulfilled 4.20% on the TNX is the target. This will bring much wailing and gnashing of teeth among the housing market, because 30 year mortgages are largely influenced by the TNX. This means we could easily see 30 year money in the 7% range - still below historical averages (which are right around 8%) but the difference between a 5% and 7% rate on buying power is quite severe - it results in a roughly 25% reduction in purchasing power!

People call this the "Greenspan Conundrum" yet it really shouldn't be a conundrum at all. Anyone who believes that The Fed controls interest rates needs to have their head examined.

The truth is that we've been in an artificially low rate environment for the better part of a decade. Chindia, to be blunt. We have exported much of our workforce and come to rely on inexpensive imports and labor. This has produced huge amounts of profit in those nations which, of course, are denominated in dollars since they are exporting to the United States and we, of course, pay in dollars.

Those dollars have to go somewhere, and the obvious place is a nice safe Treasury Bond. Safe in that the principal is "known good", of course.

Well, yields are the inverse of price, so if you have strong demand for these bonds, prices rise and yields fall.

This allows the government to fund its spending binge cheaply and also was a large part of the fuel for the housing bubble.

Unfortunately the virtuous cycle can (and now has) turned vicious. Rising expectations in these overseas nations has forced them to spend their money at home instead of plowing it back into foreign nations. This is a serious problem for us, because now the demand for those bonds drops off and..... rates go up! That of course causes budget deficits to go higher as federal borrowing costs increase, which puts even more pressure on the bond market, which causes deficits to go higher, which..........

Now add onto that wage pressure - as wage pressure appears in Chindia wave demands increase and that increases COGS (cost of goods sold.) We've avoided the price portion of our inflationary binge for years due to the import/export model, but no more! Now all that pent-up price pressure we exported is headed right back here, precisely at a time when our economy is slowing. This looks like inflation but its not - the inflation already happened but we "put off the price impact" on foreign nations!

Oh, and both of these pressures are likely to continue too.

Not that banks have learned a damn thing. What did I see on CNBS today? An ad for Wachovia - selling Option Loans! The same toxic exploding debt-bomb monsters that can land you straight into negative-equity hell.

Time to consider moving my account out of there.....

Short term we're doing about what I expected after Friday. Up. No big surprise there. We're going to continue to get BS and games for quite some time. Its called a bear market folks, and if you're not prepared for it, well, the long-term sell signal you got a couple of weeks ago should have put you in a nice safe treasury money market - or an insured CD (if under $100k!) If you're trading this, you either are prepared for this sort of garbage or your portfolio will come under relentless attack. That's just reality.

This is not going to go away any time soon, if you wan to look at the historical precedent for this go have a look at the S&P 500 from 2000-2003!

Ok, administrative stuff.

The Ticker is only going to be accessible to people who have logins on The Forum and are "gold" contributors. If you look to the left of this pane you will see a link for "Ticker Classics"; that will continue to be open access, and some of the Tickers will be posted there as well.

And guys, let me be clear here - if you donate to the Ticker Forum, its a donation. You're not subscribing to anything. The text at the bottom of the page makes this clear - what I'm doing here and elsewhere is 100% voluntary. You're not buying a subscription nor am I incurring an obligation. If you want that sort of relationship with someone there are dozens if not hundreds of places where you can find what you're looking for. This ain't it and I ain't interested in that sort of thing.

The obvious question in all this, however, is "why do it at all then"?

The answer is simple - 1000 signatures on the petition. I have done the ticker as an open, public resource because I like to, but there comes a point when you must decide - do you take time off from your trading to help educate other people for nothing and find that they attach not only no value to it but are happy to swill beer and whine for more government bailouts and handouts, or do you put your efforts out there for people who give a damn?

Well, I'm in the second camp. Nine months of doing it the other way has failed to produce a significant number of educated people who will get off their ass. It may have produced people who were saved from the downdraft (good) but we're still looking at a potential economic depression (bad).

Now let's look at the second-order problem. The Video server is getting severely loaded. It is receiving several thousand viewers per day. Unique viewers. As these video files are huge, this is turning into a real problem - one that is threatening to force me into a dedicated server environment in a colocation facility. If you've shopped those with "unlimited" bandwidth (many terabytes) you have some idea of the cost. Hint: It ain't cheap, and while I'm willing to do this stuff, obviously people are finding it of value (and hopefully profiting from it) or they wouldn't keep coming back.

Therefore, "the market" has decided that either I'm being robbed or there's nothing of value here and this is all for giggles.

I guess we'll find out which it is.

http://market-ticker.denninger.net/ will forward over to the Ticker Classics site when this change goes into effect, unless you're coming from one of the "approved" places - in which case you'll get what you're expecting!

If I can figure a way to keep the Tickers more available, I will - but what I can't reasonably do is be forced off my existing infrastructure environment into one that comes with 10x the operating costs - and eat it. That, basically, is where the rubber hits the road.