Check out the homebuilder stocks over the last year. They've been absolutely crushed. The market started selling long before the companies started disappointing. What will happen when the inventory glut starts to hit cash flow which in turn could result in the builders slashing prices.

The drop in refi numbers should set off alarm bells on consumer consumption. With ARMs falling off a lot, many potetial buyers are thinking twice about over-extending to get that house out of their price range. It's going to get ugly, rents will rise and the governemnt will probably once again change how it defines CPI.

lloyd,

Check out the top for Toll Brothers, et al, vs the top in new home sales. The market wasn't exactly ahead of reality (looks just about perfectly coincident to me), but it certainly was ahead of the eventual reports of canceled orders and the like, and of many stock touts.

CR,

Flow of funds data are out, and I have forgetten your trick for estimating mortgage cash outs. Help??

CR,

I now firmly believe the real Y2K crisis wasn't the ginned-up meadia goofyness of computer date glitches, but the stock market peak of January 2000. The "rally" (suckers' rally, actually) from the tough of 2002/2003 was a correction of a major bear market that began at the start of the millenium. If you're looking for another correction against the bear market trend, consider this: it will be but another suckers' rally, a blip up for shorting/putting at the peaks.

With 30 years of easy money/debt to work off, expect this bear to wreck the greatest havoc since 1929-1932. Actually, I'm anticipating far worse.

We can begin by ignoring the posturing about inflation concerns vis-a-vis monetary policy. The FED's first and foremost task is to prevent the FEAR of inflation as it goes about what it has done for 90 years: inflate the currency and reduce it's purchasing power approximately 95% in that period of time. It's tought (perhaps impossible?) to balance the opposing forces of real economic growth/employment and corrosive inflation over the long, long term. It looks like time is almost up.

Every central banker on the planet is cranking out money/debt at a previously unimaginable rate. The USA is doing it to prop up asset bubbles, the foreigners to prop up the dollar in a temporizing measure to foster exports. Sadly, this is both a game of chicken and musical chairs. Eventually all debts are extinguished.

When productivity exceeds consumption debt is retired with orderly P&I payments. When reversed for any extended length of time, debt is discounted or written off. I suggest preparing for the write-offs, and the acute reluctance of willing lenders and creditors. Confidence to borrow and lend will cramp severly and thus usher in further asset-price deflation and eventually global economic depression.

Have you noticed how all the jibbering pie holes on CNBC are flumoxed by the confusion, irritation, concern, nervousness, anxiety, (have I missed some of the discriptors they have been using since the May 10th peak?) troubling the waters in the pits on the exchanges? I repeat, "When concern turns to worry, and worry turns to fear, then panic selling ensues." The fuse has been lit and some are smelling the smoke. Yeah, I'm mixing metaphors here, but every cautious triangulation puts palpable fear squarely in the sights.

When you eliminate the sheeple trades from the first half hour of each day's trading, the impetus for the plunge becomes eye-poppingly clear. I recommend buying a little insurance: S&P puts with market strikes have been fattening up the accounts of the smart money traders.

Crazy? Like a fox. The best offense in a bear market is a great defense.

Best,

Yes I think we are near a top.

And I see panic selling looming

Watch out...be cagey