The skyrocketing mortgage defaults with sub prime problems have created the scenario for a stock market crash – time to buy some puts for your portfolio
Peter Oberois
Jul. 11, 2007

The mortgage defaults, high gas prices, and evaporating consumer confidence have created the scenario for a major stock market crash. The future contracts on the shorter end of the yield curve are telling us that Fed is scared at this moment. As the stock market tumbles in the next few days or weeks, Fed will surprise all by sharply lowering the rates in an effort to avoid a nasty recession.

It is time to buy some puts. If you do not control your portfolio, you should think about part of full redemption. There is no guarantee that the stock market will slide 20% or more. But the risk is very high. From probability and quantitative analysis stand point this is not a great time to own stocks in any part of the world.

Recession in retail sector has started – WalMart starts catching shop lifters to survive the nasty slowdown
Thomas Gomez
The retailers are all coming out with lower guidance. The car sells are in real trouble. Many dealerships will close in the next two years. The car prices will also tumble as people refuse to buy new cars with higher insurance and gasoline costs.
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Finally Federal thrift regulators are working on a proposal that could lead to a ban on ‘unfair and deceptive’ lending practices – it may be too late
Joe Weinman
The refinancing and easy money mortages were fueling the economy and no one understood the bubble was being created. We shouted in India Daily for the last three yaers in article after article. None one really cared.
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$800 billion market for mortgage securities backed by subprime loans in danger of getting extinct as Moodys and S&P say enough is enough
Karen Zuba
No one has any clue to the amount of losses that have accrued in the books from the mortgage securities backed by subprime loans? The S&P and Moodys finally said enough is enough.
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It is time to go long on Eurodollar futures contracts and short on stocks
Sam Adelton
Now after all this time the Wall Street gurus have finally started to doubt the Federal Reserves real capabilities in controlling inflation while maintaining real growth in the economy.
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The skyrocketing mortgage defaults with sub prime problems have created the scenario for a stock market crash – time to buy some puts for your portfolio
Peter Oberois
The mortgage defaults, high gas prices, and evaporating consumer confidence have created the scenario for a major stock market crash. The future contracts on the shorter end of the yield curve are telling us that Fed is scared at this moment.
READ MORE>>

Yen jumps as carry traders run for cover in the middle of Asian stock market slide
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The Yen has jumped against all major currencies in the last twenty-four hours. We predicted it in India Daily.
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Worsening Trade Balance is a major concern for dollar but the US currency may be bottoming against euro and other European currencies
Marla Guthrie
The US trade deficit has worsened last month. Most likely, the Trade Balance last month was $-60B from the previous data of $-58.5B. The overall effect on the US dollar is negative.
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Decline in the rate of increase in wholesales and rise in inventories confirm stagnation in the economy while Asia exports wage and commodity inflation
Sam Adelton
In this week’s report the Wholesale Inventories most likely increased by 0.5% up from last month’s 0.3%. At the same time the wholesales figure has come down from 1.3% to 1.0%.
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