Across the board today guys and dolls.

First, we got the CPI, and it was smoking, coming in up 4.5% year/over/year. "That's hot." Core was up 0.3% monthly, which is well over The Fed's "preferred" level of 2-3%.

Let's remember that The Fed isn't really all that concerned about price changes per-se - this is why you hear Bernanke talk about inflation expectations instead of actual inflation.

Why?

Because if people expect big price shifts (either way) they change their behavior in ways that hurt the economy in the present case. Duh.

The Mortgage Bankers Association reported a huge decline in morgage interest. Naw, you think? Why? The rocketshot in the TNX, mostly, which has now broken its bearish flag in the expected upward direction and is headed for 4.20%. Just like the last time we had interest rates on a declining trend people didn't take that 5% 30/fixed for the one week they had it available, and just like the last time it is now spiking higher, and may move considerable higher still if current trends keep up.

As I pointed out previously this puts Bernanke in a horrible spot as in order to help housing (which got us into this mess) he's going to have to either jawbone in a way that tanks the market (thus provoking flight into bonds) or simply shut up when the market would otherwise tank anyway, and stop trying to prop equities. In a particularly dangerous development for him a small or slow slide in the equity markets no longer looks like it helps; he now needs a massive selloff to drive bonds. This is what happens when you try to inappropriately meddle in the markets Ben - you just coil the spring tighter! Congratulations, fool. Your proper and appropriate action to take was over a year ago when you should have clamped down on the fraud and nonsense in the market instead of the "wink-wink-nod-nod" parade with your buddies on Wall Street and in Treasury.

Putting a condom on after you have sex will not prevent pregnancy!

We've also got oil and gold rocketing on geopolitical concerns (Nigeria again, with claims of politically-related killings), and oil, of course, flows through to prices virtually everywhere. That's not so bullish.

Housing is sitting near levels last seen in 1991, which ain't so bullish either. Yet this is what passes for "journalism" in that referenced article:

"A glut of unsold homes, mounting foreclosures and falling prices signal the housing slump will continue to detract from growth, setting the stage for more interest-rate cuts. Federal Reserve Chairman Ben S. Bernanke last week said the Fed was ready to act in a 'timely' manner to keep the expansion from faltering."

We need to start revoking journalism degrees, or perhaps just rename them to "BS From The Ministry of Lies" instead.

The Fed doesn't set interest rates, which is trivially easy to prove by looking at the bond market and Fed Funds overlaid. Never mind that homeowners and buyers are going to be quite "impressed" with the fact that mortgages have gotten much cheaper since The Fed started cutting rates.

Oh wait, they haven't? You mean that mortgages are actually more expensive now, going over 6% recently, than they were when Fed Funds was at 5.25%? How the hell did that happen? I told you six months ago this was going to happen when the "rate cut" mavens were out in droves AND NOW IT HAS.

Where, oh where has journalistic integrity departed to?

"The Ministry of Truth, Light, and BenDovering"?

Hmmmmm...

Here's reality on housing - its not about mortgage rates, it is about affordability, which has been horrible for years as a consequence of the bubble and intentional mispricing of risk.

Now we're going to get the hangover from our drunken spending binge, and like a drunk who has puked his guts out, even the provision of more booze won't stop it from happening - we're entered the "acute alcohol poisoning risk" range should there be more booze poured into the gullet.

Oh, and don't pull this horsecrap about "nationalization" out of your hat. Northern Rock? Oh, you mean "Granite"? What's Granite? A very-dodgy SIV/Conduit thingy that has as its "beneficiary" some charity that likely has never heard of it (they just stole the name perhaps to put on their paperwork?) which holds some of the "assets". Or are they assets? And if so, are the liabilities there too? Oh, probably not - the "other rock" (you know, the Northern one?) has those, right?

SIV eh? Sounds like a virus...... looks like a virus...... IS A VIRUS!

This whole conduit/SIV/SPE/SPV nonsense is just another way to say "RIP OFF."

So when does it unwind?

When we figure out where the hell the COPS have been, they stop eating donuts and start doing their job!

Remember the names of the COPS:

• Paulson
• Bernanke
• Dodd .et.al. (yes, including Ron Paul)
• OCC
• OTS
• State Regulatory Agencies
• The FDIC

You'll need them when the sheepie (that'd be you, eh?) finally wake up and get*****ed off enough to do something about this mess.

What's "wake up and do something" mean? Sign the petition that's been on this site. Get off your butt and pick up the phone. Get off your butt and take a car or plane ride to Washington DC and get in your Rep's and Senators' faces?

Oh, that's too expensive eh? It takes too much time eh? Really? $500 or so is too much eh? If this whole thing blows up in all of our faces, and it is increasingly likely to do exactly that, your children will end up getting screwed out of THEIR ENTIRE FUTURE!

$500 is a lot of money eh? $1,000 is a lot of money eh?

WELL I HOPE THAT IF YOU DON'T SPEND IT RIGHT NOW YOU DON'T HAVE ANY KIDS, BECAUSE HERE'S WHAT'S GOING TO HAPPEN:

• This financial weapon of mass destruction is going to detonate.
• It will make it impossible for the government to pay your Medicare and Social Security benefits.
• It will result in double the tax burden you have now being laid on your children and grandchildren, OR MORE.
• And when that happens, if I am still alive I'm going to spend MY MONEY on a full page advertisement in The Wall Street Journal (or whatever the "mainstream media" is at that point) telling your kids (who will then be adults) that you screwed them on purpose because you were too much of a cheap jackoff to get on a plane and go raise hell in Washington DC to put a stop to this crap!

I wonder what their reaction will be to "Dear Old Dad" when they're living in poverty as a direct consequence of you fiddling while Rome burns?

This much I can tell you for certain - I've run two petitions on Market Ticker trying to get the sheepie (that's you, again) to wake the hell up and take 10 seconds out of your precious lives to bitch - loudly - and neither has resulted in any material uptake.

That's fine. I'll continue to rabble-rouse until I get tired of wasting my effort, but believe this - if you think I'm going to be one of those who will backstop your way of life when it all comes apart (and it is, right here and now guys and dolls) you're sadly mistaken.

I'll teach you how to fish, but I ain't catching 'em, cleaning 'em and cooking 'em for 'ya.

Oh, and now we have people whining about how "Wall Street" has abandoned its "neediest" clients. Get this:

"A year ago $20 million would have gotten Luminent Mortgage Capital Inc. access to $640 million in loans to buy top-rated mortgage-backed securities. Now that much cash gets the firm no more than $80 million."

With no margin supervision, over long periods of time.

Of course these people are "needy" even though us ordinary folk can only have 2:1 margin in equities and, while we can have 20:1 in the futures market, we're marked to market every single night and if we exceed it, its margin call time.

Whine whine whine moan moan moan. How about you guys have to live with mark to market every single night and if you can't get a bid it counts as a ZERO, like it does for me?

WHERE ARE THE DAMN COPS AND HOW COME THESE GUYS GET TO DO THINGS THAT NO ORDINARY PERSON CAN?

As for the how history rhymes? Try this:

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."

You've heard this on Kudlow, Cramer, CNBS generally, and everywhere else right? In fact, I just (while writing this) heard another version of the same thing on CNBS.

The cite?

- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

Any questions?

THAT IS WHAT YOU ARE CONSIGNING YOUR CHILDREN - AND YOURSELF - TO IF YOU DON'T GET OFF YOUR BUTTS PRETTY MUCH IN THE "RIGHT NOW" TIMEFRAME.

PS: KKR might be having a little trouble with their commercial paper... so says FT....

Here's your technical!