And if it hasn't been mentioned already, consumer spending came in at a robust 0% growth rate for June and both inflation measures at 0.1%.

That said, this week's chain store index looks pretty strong. That may be due to falling gas prices. Or it may be a stunning economic rebound that sends the Dow through 20,000 in the next couple of months.

Tangle of loans feeds foreclosure crisis
Each month, Stephen and Kim Martinelli sent their mortgage payment to Chase Home Finance, and when they fell behind, it was Chase that launched foreclosure proceedings, with an auction of their Lawrence home scheduled for later this week.
The Martinellis, squeezed by the cost of caring for a disabled son and carrying an adjustable-rate mortgage that boosted their monthly payments by $900 over the past year, pleaded with Chase for a break: for a new payment plan, a lower, more affordable rate, or a delay in the foreclosure, due to hardship.

They are among thousands of delinquent borrowers caught in the maze of modern mortgage financing as they desperately try to save their homes. Unlike in the last real estate bust, when local banks and credit unions wrote nearly 80 percent of mortgages in Massachusetts, most home loans issued today pass through a nationwide chain of brokers, lenders, service companies, Wall Street firms, and investors. That makes tracing ownership difficult, if not impossible.
link 

Moin from Germany,

funny that just when the credit market has spoken S&P is doing this

S&P raises Morgan Stanley debt rating to "AA-minus"

Standard & Poor's on Monday raised its debt rating for Morgan Stanley, citing strength in the bank's core investment banking and trading businesses.

S&P raised Morgan Stanley's senior unsecured debt rating to "AA-minus," the fourth highest investment grade rating, from "A-plus."

From vader's article.

The Martinellis bought their single-family home on Beaconsfield Street in 1994 for $92,000. A decade later, they refinanced for a third time, a $274,000 adjustable-rate mortgage...

It goes on to say that they did this due to medical issues with their son, but it strikes me that turning a 92k debt into a 274k debt is pretty damn stupid.

And that mess-o-metaphors broke my brain. I didn't know that people could actually think like that and put it into sentences.

For the deflation nutter crowd:

The core personal consumption price index rose 1.9% in the past year, the lowest inflation since early 2004, and just within the Federal Reserve's unofficial comfort zone of 1% to 2% for core inflation. Core inflation excludes volatile food and energy prices. Read the full government report.

Overall inflation also increased 0.1% in June, the lowest monthly inflation since November. Overall inflation is up 2.3% in the past year.

Core inflation rises moderate 0.1% in June

I would expect slowing inflation to increase stress in the credit markets -- inflation is good for borrowers since it lowers the real rates they're paying. Declining inflation is bad since it effectively increases real rates...

I think.

Looking for TXU story on news.google, I found:

Harman Deal “Hitting Resistance” $8 billion for Harmon, $44B for TXU and $28 First Data. All by KKR.

Here's one posting on TXU: TXU Lenders May Pull Out LBO, Pay Breakup Fee, Thomson Says .

Another Wall o' Worry leading to The Cliffs of Insanity?! With a short squeeze along the way methinks...

Yup. Just get used to the idea that even if the trend is down there's going to be huge volatility in part because of all the short interest and in part due to discount buying as stocks go from being monumentally overpriced to merely grossly overpriced.

If enough shorts pile in I think it's not out of the question that we could break 14,000 again.

Up. Down. Up. Down...

Somewhere between the wall of worry and the pier of pain, there is the Slope of Stupidity.

and of course, Tanta.

I am just a novice, but I read sites like this to try and learn what I can. When you mention your Short Term Fixed Income Fund it rings a bell. My mother-in-law just retired and her broker put all of her retirement into an IMG Senior Income Fund. She told me after she did it and I looked into it. It turns out the fund returns about 6% and they charge almost 4% in management. To get this 10% return they are investing in below investment grade securities and even using some leverage. I even read that IMG and other European insurance companies with these fixed retirement annuities are exposed to subprime in their products.
All of this for a supposedly ultra safe investment being sold retirees.

Thanks for this site Tanta.

Why does this site practically spend 100 % of its time on a market that is roughly 5% of our GNP. True economics?

Moose, making houses might be 5% of the GNP.

But debt creation is like, 10-20% per year, and housing is relevant there (at almost 50% of debt creation).

Moose,

Go back and review the GNP growth stats for the last cycle and parse how much of the marginal economic growth was the housing market and related industries... see how much of this 'vigorous' economic expansion is housing related.

Anyone have ready stats on that?

When they start jabbering "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn." I'm going to sell.