Oh, a couple of things to be aware of.

When my wife and I bought our first house in 1992, we set aside 20k for a down payment. The bank refused the mortgage to me for the 5% down we were willing to spend so we walked.

WE THEM WENT OUT AND SPENT HALF OUR DOWN PAYMENT ON TOYS!

What if this months retail pop was just Back-To-School and people spending their down payments when their mortgages got declined.

Just a thought.

Lots of sales shifting this year - this helped retailers this last month, but is going to kill them in September.

Watch this one play out.... its gonna be fun.

This retail thing may take a little longer to play out then we expect. The reason being that these "walkers"(people walking away from their mortgages) are actually getting a boost in their spendable dollars. Know of two people walking from mortgages, they are pocketing the monthly payment and some home equity money until they are kicked out. This certainly is not going to curtail their spending habits... if anything it will boost it. Yes lenders, homebuilders, risky banks will suffer, but these people won't. Could take a while to show up in retail. Thats why I 'm holding off on puts for a while on the retailers. Now when credit cards finally get pinched off, that will be the time.

Gumption? Tomfoolery?

Why, professor you're really Jimmy Stewart in disguise, aren'tchya?



Excellent as always. Let's hope the BLS does it's usual historic fudge and has a big jobs number for August.

ad the 4 Feds counted out read this:
http://biz.yahoo.com/ap/070906/wall_stre....

AP
Stocks Gain on Fed Speeches, Data
.............
But investors gleaned some reason for optimism from comments from Dallas Federal Reserve President Richard Fisher, who said inflationary pressures are "increasingly well behaved," and that the central bank is "listening carefully" to business conditions. St. Louis Fed President William Poole made similar comments earlier in the day.

"They didn't explicitly say they were going to cut rates, but some of the talk from the day gave reason to believe they may be leaning that way," said Todd Salamone, director of trading at Schaeffer's Investment Research. "The market is driven by words from the Fed that reinforces the idea they'll step up if necessary, and it is also very much data driven."
..................

I mean I have difficulties with English, I admit it, its not my 1st language.
But how does "declined to endorse a cut" mean they are leaning that way (to a cut).
I looked it up in my dictionary, either I got everything wrong or Todd Salamone is living in a different Universe.

I'm willing to bet that the market will 'roach' if it doesn't get its expected 1/4 point Fed Funds rate cut on September 18th.

If we break to new yearly lows, Fed will be cutting rates.

If we break to new yearly lows, the money will be in my pocket as they cut rates and I will short anew into the spike!

And as I had my dictionary at hand i looked up a word to describe those analysts. It came up with assclowns.

Pensico,

I've been leaning to that theory as well, that folks will walk away with whatever equity they have and just wait to get kicked out. In the short term they will still be spending like in the past, but in the intermediate term it will catch up with them.

My neighbor has an Equity Line of Credit for 100K over what his house is worth. He will never pay that back. I think he is just making his payments until he's ready to leave. And politicians want to talk about a bail out. Jeez.

there's a retirement principal here that states that once you have moved up in SES level, it's very difficult to move back down.

I am not short any retail currently, but if you are a home-run put buyer, you might want to do that before the volatility occurs that makes them more expensive. Just go for LEAPS. IMO, as a less risky direct short, wait for the trend to be established.

If we play "Who's holding the Bag" though, it isn't quite the consumer yet. Not because they aren't, but because they don't quite know it yet.

KD - great post/vids as always. Thanks.

gold can up if govt bails out homeowners

<<I'm willing to bet that the market will 'roach' if it doesn't get its expected 1/4 point Fed Funds rate cut on September 18th.>>


18th ?? Seems like that is 10 years away. So are we gonna go up 50 points everyday while we're waiting? (Don't answer).

Do these "professionals" actually think that a little rate cut is gonna help this problem? I don't see the thinking ... I mean, if they need a manufactured uptick to steal some more short cash they can easily cook something up and not have to wait for the Fed to announce this ... or not; no? They've completely lost the element of "surprise" here - which what pulled their bacon out of the fire on in August ... even though too was largely symbolic - at least the publically announced portions.

Just confused.

Does anyone know if the Fed has access to BLS reports prior to release?
Perhaps that may explain why 4 Fed presidents indicating no rate cut.

KD - just had a thought worthy of mention: the jobless claims doesn't concern illegals, who are usually the first to be laid off. Sure you already know that, but I thought that it would have been worthy of mention in your text... To digress and extrapolate: the "unheard" jobless might not get noticed, but they do spend (and send money home). If CA and AZ are places where the bubble will burst the hardest, and they are illegal havens, then that could hurt Southwest based retailers more than others.

Anyone have any regional plays on this? Thoughts?

KD, I don't post much on higher traffic threads, as they tend to get pretty plugged up as it is, but I haven't yet commented on your new video presentations.

The ticker is great as usual, but the video's are awesomely helpful. Today's pair was the best.

Just had to offer a continued thank you for providing us with your opinions, wisdom and general efforts in this fashion.

SBDW

Well yeah, but we already knew that. This is why unemployment hasn't gone past 500,000!

Further confirmation that the commercial paper market is working as it should. Bloomberg Taking Stock has a bulk dry shipper on - missed the name. At the end, Pim Fox threw in a question about whether they were seeing any problems with commercial paper. He said no. They had just placed a largish deal at a reasonable rate. The market was fine for them - a real business with a real credit rating.

the monetary fallout from illegals being laid off would appear to fall mainly inside mexico; i believe mexico's main source of foreign investment is monies sent home by workers in the u.s. between the decline of oil production from cantarell and builder layoffs here you might just want to short mexico, period.

Do you think the change of the uptick rule for shorting has created more one day reversals in the market rather than follow through to the down side?

No.

Nor has it really done much for downside volatility, despite the "smart money" guys saying otherwise.

You've always been able to do that with the futures. If "the boys" want to add momo to a down move, they can just sell the **** out of the spoos, uptick rule or no.

I hope the Fed cuts. I have some worthless calls I put on before the most recent collapse. I'd like to cash them out in the spike with as little loss as possible so I can use the money to short the End of Western Civilization.