Monday, November 26, 2007

Oopsie....More Mortgage troubles ahead

Lookey here E-trade was gonna be bought but then a funny thing happened. The suitor discovered that - SURPRISE SURPRISE - e-trade has a bunch of junk mortgage on its books. Aw shucks. Sorry e-trade. You almost pulled it off. Almost suckered someone into bailing out your ass. Unfortunately someone at TD Ameritrade and Schwab saw through your shenanigans.

That, almost $100 oil and the realization that retailers will eat it big time (as posted here yesterday by yours truly) lead to another big down day. S&P500 is getting dangerously close to breaking 1400 and from there look out below.

Over on the home builder front, DHI (D R Horton) was down over 6% today. This stock is at $10. It was at $45 two years ago. Does this remind everyone of something? Like say the .com collapse. The home builders were the first to fall. They stopped building. Then mortgage lenders since they stopped lending. Then the likes of Harley Davidson since they stopped selling bikes to non-HELOCed homeowners. Now the retailers will fall as nobody will be buying anything. And finally the techs will be last to fall, since when the recession hits they won't be able to sell.

And you can trace it all back to the housing collapse. The housing collapse that the so-called experts said was minor. Well yeah they were right. It will only be a severe recession instead of a depression, so in that aspect, right you were, it was minor.

No comments: