"The jump in 30-year mortgage rates by more than a half a percentage point to 6.74 percent in the past five weeks is putting a crimp on borrowers with the best credit just as a crackdown in subprime lending standards limits the pool of qualified buyers. The national median home price is poised for its first annual decline since the Great Depression, and the supply of unsold homes is at a record 4.2 million, according to the National Association of Realtors. "
"NEW YORK (AP) -- A surge in Treasury yields rattled Wall Street Wednesday, forcing stocks to give up early gains and drive down the Dow Jones industrial average more than 140 points."God I hate liars.
"June 20 (Bloomberg) -- Financial shares tripped over higher bond yields, sending the Standard & Poor's 500 Index to its steepest drop in two weeks.
Growing concern that losses in mortgage securities will spread helped drive down shares of JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. Moody's Corp., the inventor of credit ratings, fell to its lowest in two months on speculation bond issuance will slow.
Rising borrowing costs may intensify a slump in the housing market that helped spur losses in two Bear Stearns Cos. hedge funds this year. Merrill Lynch & Co.'s decision today to seize and sell $800 million of bonds held as collateral for loans to the funds added to worries that the fallout from the subprime crisis may worsen. "
"An auction by Merrill, one of several investment banks that lent money to the funds, was completed late Wednesday, but more sales are planned on Thursday, theAs for our friend the ABX, it did not have a good day today, and tomorrow may be worse. Much worse. Ominously, the CMBX BB index, which recovered some yesterday, went parabolic again today. Who is out there in the commercial space that is in trouble? I am still trying to find out and still have no answer. But this much I am quite certain of - someone is!
person added. The assets for sale include mortgage-backed securities, collateralized debt obligations and credit default swaps. "
So far we are not there, but if this subprime mortgage stuff spreads, we will get there and in a big hurry. With the exception of China, we could hit all the other triggers within the next two or three days. If the triggering events are all, save China, satisfied Friday, we are at risk of a really nasty Monday morning - one that could come absolutely without warning - and I will be taking my "Hail Mary" trades Friday afternoon!
Now on a chartist's viewpoint, we've got some important things going on that I want to illustrate.
Here's the Russell. Head and shoulders, verrrry bearish. As I mentioned, a break above 855ish would invalidate the pattern. We didn't get there, truncated and headed down. Thus, the pattern is still in effect. The target is thus at least 790 on the downside.
Now here's our 10 year chart, with another trendline shown there. You can't see the whole thing but it dates back to early March, and is ascending.
I had this brought to my attention a few days back, but wasn't buying it at the time, because I want to see some sort of chart support first. But, this scenario may be playing out. If so, then the trend upward is not over, it has just resumed at the longer-term rate, which is slower than the hyper-ascent that was previously in force.
If true this means "its not over" on rates. I am still not sold, because we have only two data points in the current period on-line - but we held today and yesterday, so here you have it.
We're back to "two possibilities".
Here we are as I see it.
The next couple of days will be tremendously important.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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