Twitter/Stocktwits

I'm now doing updates on Twitter/Stocktwits (via tweetdeck).

http://twitter.com/
http://stocktwits.com/
http://www.tweetdeck.com/beta/

These updates are more technical in nature. I'll try and keep the simple stuff here on the blog.

Cheers,

Stealth

The Market May Go Much Lower!

Hi everyone,

Sorry for the lack of posts. I've been busy.

Ok, I thought that I should point out that the market could go much lower from here. Today was an important breakdown level. What you should do depends on many factors.

That's it for now. I'll try to post more often and keep it simple.

Stealth

New (to me) Housing Blog

An excellent new blog on housing:

http://MRMORTGAGE.ML-IMPLODE.COM/

Mr. Mortgage picks apart housing statistics to show that the actual supply of California housing is about 4 years at the current pace of sales. This is a huge amount of housing supply. Also the banks are dumping homes on the market, which drives prices down further and puts additional stress on home owners and the financial system in general.

-Stealth

Jesse's Place

Another good blog to read:

http://jessescrossroadscafe.blogspot.com/

Jesse has some excellent commentary, news stories, and great charts.

-stealth

Mortgage Bond Insurers In Need of $200 Billion

From the UK Times via calculated risk:

http://calculatedrisk.blogspot.com/2008/01/egan-jones-monolines-need-200-billion.html

A couple hundred billion here a couple hundred there...after a while it starts to add up.

A related issue via The Big Picture:

http://bigpicture.typepad.com/comments/2008/01/quote-of-the--2.html

Bill Ackman asks if Fitch Ratings should really have a Triple AAA rating on MBIA:

Does a company deserve your highest Triple A rating whose stock price has declined 90%, has cut its dividend, is scrambling to raise capital, completed a partial financing at 14% interest (now trading at a 20% yield one week later), has incurred losses massively in excess of its promised zero-loss expectations wiping out more than half of book value, with Berkshire Hathaway as a new competitor, having lost access to its only liquidity facility, and having concealed material information from the marketplace? Can this possibly make sense?

The huge rally back in MBI from four days ago is looking spent, although the 5 day moving average is still pointing up.

-s

Jingle Mail/Homeowners Walking Away

Via calculated risk:

http://calculatedrisk.blogspot.com/2008/01/more-on-homeowners-walking-away.html

A commenter on L.A. Land this morning writes, "I am one of these people. My condo has dropped in value from $520K in 5/06 when I bought it to $350K now. My ARM payment will probably go up $900 per month in June.
...
"I have purchased a cheaper place in a nearby area now, while my credit is good, and will stop making payments on house #1 after house #2 closes. I know the foreclosure will be on my credit for 7 years, but I will have saved a lot of money.
--------------------------
[CR's Comments:]
There are other issues to consider than just a wrecked credit rating. There are possible tax consequences. And it is possible, depending on whether the loan is recourse or non-recourse - and the frame of mind of the lender - for the lender to seek a deficiency judgment against the homeowner. Also it appears the homeowner has not properly disclosed the planned foreclosure on his current home with his new lender.

I'm not a lawyer or a tax advisor, and there may be other issues too. Hopefully the homeowner mentioned above has obtained tax and legal advice.

If we see the national average home price decline 20 to 30 percent, this could be a big issue.

-s

Societe Generale Loss May Be Tied to Market Downturn/Fed Cut

Via The Big Picture:

http://bigpicture.typepad.com/comments/2008/01/feds-folly-fool.html

I don't think this invalidates the recent bear market action. It would seem to me to be just another part of the market weakness. The interesting thing is that the Fed may have been forced into a premature cut partially because of this.

-s