K_D:

Thanks as usual.

You're the BEST!

Re: HD haircut. In interest of full disclosure, they took a $1.7 reduction in price, Guaranteed $1 bn of the debt and retained 12.5% of the company. Already had a glass of wine so I won't try to crunch the numbers, but probably closer to $1 billion than two $bn.

Depends on how you count it.

The guarantee of the debt and retention are more-or-less a wash.

Unfortunately those likely also mean more debt downgrades if they keep buying back shares.

re-test of old highs... sigh... well, I still observe extreme bullish sentiment out there; it actually amazes me that in face of all the negative indicators investors continue to ignore market dislocations... I would suspect from a psychological point of view that would pose a great deal of resistance to any market down-moves... it would seem that the bull wants to resume the upward trend established back in 2003 even if it's only running on 1/2 a tank of gas... but, the fundamentals are just not there... from a purely common sense point of view... if the bull is alive and well, then why is it that the market pundits feel that it is an absolute necessity to have the Feds cut rates ??? and, to inject liquidity into the market... did not seem like we needed that "help" when home values were increasing at parabolic rates... one little hiccup and we need an injection like a heroin junky... gotta get that old high back at whatever cost... the boys on WallStreet need it bad...

don't fight the market... just go with the flow... but, I just hate that type of sentiment...

luci... the cut is for saving the housing market and the economy, not for bailing out the market... which will just send the dollar to about 50 cents and only prolong the inevitable market crash, as well as recession.

Also, how about a chance at a quick little double top at about the 1505 mark?... That may be the target to watch closely once reached... its where the last little short lived attempt at a rebound sold back off.

LucianiJ I am in agreement. I am seeing reports of an inverse H&S in Dow calling for 865 pts off the bottom with soem upside left, COT reports indicating bills & bonds up, indices also up this week. Little to no earthmoving news/events. Absent any economic bombs dropping It appears we could well have another up week topping Friday. Its good to remember that "belief creates its own reality" and that is nowhere more evident than the stock markets. So many want to believe, despite the pig in the python. If this holds, Friday might be a good day to take advantage of lower IVs and reinvest in puts on HBs, lenders, BKX; maybe calls on VIX. Good luck to all this week. It is what it is.

The scenario over the next few months as I see it:

1) Investment Banks report bad #s in a few weeks
2) More downgrades of MBS
3) One of the major credit insurers(FRE,FNM,ABK,MBI,PMI,RDN,MTG) gets downgraded

If one or more of the these events happen(very likely)the market breaks to new lows for 2007. If this happens, the Fed panics and cuts Fed Fund Rates by 75 bps in an emergency cut. The dollar then plunges and gold takes off. Incidently, the two most favorable months for gold are Sept and Oct. This creates a flight out of US dollar based assets including bonds,real estate, and stocks. This brings down one or more big wall street firms which causes the Fed to really start printing money.

As a result, we have a horrendous preannouncement season for Sept Q, a global recession is confirmed, and we get the final puke which puts in a bottom for the market. Where is that bottom??? Can't say but keep in mind the dow/gold ratio of 1.