Well the 4:00 AM 5-alarm fire was cancelled.

What fire? The dollar. Last night after the Bear Stearns mess it appeared that 80 on the dollar index might fall. I stuck on some currency trades, put stops under 'em, and set the alarm for 4:00, intending to get up and perhaps find that the snowball had started smashing houses.

Nope - at 4:00 all the stops had fired and I was back out clean with a small profit. Good enough. We bounced off 80.23, which is dangerously close to a breakthrough - but didn't get there. So back to bed I went to get a bit more sleep.....

JP Morgan reported decent numbers, but didn't get much help in the premarket. Pfizer and Altria (God, its Phillip-Morris guys; Altria - sheesh - you make cancer sticks!) reported declines in profits, with Pfizer missing big.

Downey (DSL) got their head cut off. Now THAT'S a bad earnings report. Down 32% on profits. The shape of things to come in the mortgage lending sector? The bad? This stock has been "un-shortable" for a long time (no shares) but recently it became shortable again - and I missed it! ARGH! But.... I got PUTS! :) They ought to trade "interesting" today. Seeing as I'm sitting on 50 long-dated 65s, I'm smiling a bit this morning.

Also, CIT Group (CIT) missed as well with a nice red 70 cents; another consumer and commercial finance company falls. They're exiting the home lending market (gee, you think that's a good idea?)

Bloomberg is reporting that the Chrylser LBO is running into some trouble. Naw, you think?

"Chrysler increased the interest rates on $12 billion of loans it is seeking to fund a buyout by Cerberus Capital Management LP after investors balked at the money-losing carmaker's original terms, lenders said. "

I know, I banged this drum before, but its important - if this deal goes "boom" the fallout will be ugly.

CPI came in at headline 0.2%, core up 2.2 YOY (up 0.2%). The big movers here were food (up strongly) offsetting a decline in gas (down a fair bit.) Overall "inline" but nothing to get excited about on the good side.

Housing starts revised down last month but housing starts up 2.3% for June. Building more inventory into a down market with a big supply overhang eh? How smart is that?

The futures didn't like either number much, although the reaction was fairly muted. Of course when you start as weak as we did this morning........

Gonna stick this one up here as the afternoon deserves its own post with WaMu reporting today. That one ought to be interesting.

Have a profitable day!