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"Houston, we have a problem."

Really? DJIA, Nasdaq, S&P all trending up today. I wouldn't exactly call a 3% drop in US markets "Black Friday" - but from your viewpoint, every day is Black __day. Black Monday, Black Tuesday, Black Wednesday... you name it, it's Black!

Housing will have to work out the bad debt taken on by the "subprime" lenders - the outfits that loaned to people that would have gotten laughed out of the lobbies of traditional lenders. And the stuff they marketed to these people: no-money-down loans, interest-only loans (no equity there!) etc., is just... breathtaking.

D. F. Facti

I heard this am that it was a program trading glitch - - - same excuse they used in '87 - - but '87 was a real - um - correction - - - the beginning of Fed interference with the markets - so say the Canadians - - - I hope they continue to interfere a bit more, so I can sell some stock. I can't even read the press reports on this stuff - - - definitely you don't want mom and pop to panic - - - give the fat cats time to move more of their assets offshore.


The problem with these sub-prime loans is that most of them have been repackaged and sold as "mortgage backed securities" to hedge funds and others who did not know what they were really buying. The sub-prime loans are mixed together with prime loans in order to spread the risk far and wide.

How will defaults in the sub-prime market not spread to the main market? How will they be confined to just the criminals who started them?

Ordinary investors now own many of these sub-prime loans and have no idea they bought them. They are part of their 401k plan which is managed by a faceless hedge fund manager or perhaps even a computer.


Glitch only explains weird afternoon negative slope event:

Glitch Article

Elaine Meinel Supkis

Yes, the famous hidden surge protection team is at work today. They run the Treasury. They have to keep this game going but my posting of past graphs and cartoons clearly show this whole business is totally unsustainable.

Travel Guy

"This reminds me of the many put options that were set against United Airlines and American Airlines three days before 9/11 and how this was being investigated and has now disappeared off the radar screens..."

What DID ever end up happening with that???

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