That's how the market looks to me right now.
We have gotten pretty choppy in the markets here as of late. 875 on the S&P is becoming an area of serious resistance for the bulls. We have seen several failures at this level. Stocks closed pretty flat today as investor's digested the Chrysler BK news. The S&P ended the day at 872.
Treasuries continue to sell off as the bond market continues to pressure the Fed. Yields were up slightly. Futures are down pretty sharply after hours. Tonight should be interesting to watch.
It was a pretty quiet day so I will keep it pretty short.
I wanted to share a couple pieces of news that could be potentially significant. Mortgage insurer MBIA sued Merrill Lynch over subprime debt protection:
"April 30 (Bloomberg) -- MBIA Inc., the largest bond insurer, said that two of its units sued two Merrill Lynch & Co. businesses now owned by Bank of America Corp. over protection sold against mortgage-debt defaults.
The suit, filed in New York State Supreme Court, seeks to unwind $5.7 billion of credit-default swaps and related insurance sold against collateralized debt obligations, as well as recover damages, Armonk, New York-based MBIA said today in a statement.
Merrill Lynch misrepresented the nature of the debt being protected as part of a “deliberate strategy to offload” billions of dollars of “deteriorating” subprime mortgages, the insurer said in the statement."
It appears the tan man is one step closer from being forced into court in Florida according to the WSJ:
"The Florida Attorney General's office moved one step closer in its effort toput the former Countrywide Financial Corp. chief executive on trial.On Thursday, a U.S. District Court judge remanded a lawsuit filed by the stateof Florida against Angelo Mozilo back to Broward County Civil Court.
The action came in a case filed by Florida Attorney General Bill McCollum,alleging that Mozilo and Countrywide, violated the state's deceptive tradepractices act by placing consumers in loans they could not afford or with ratesthat were false or misleading.After the complaint was filed, Mozilo and Countrywide sought to have the caseremoved to federal court. Bank of America Corp. (BAC), which acquiredCountrywide last year, settled the Florida case without admitting or denyingguilt."
Let the lawsuits begin!
Its time to start the blame game now that the financial system has lost trillions of dollars.
The above lawsuits are significant because they could potentially expose the blatant fraud that occurred during the housing bubble. Its about damn time!
The Merrill story could potentially have huge ramifications. The leeches on Wall St are in deep trouble if the lawyers can prove that Merrill knowingly securitized loan products that they knew would not perform. Everyone played the same game so expect a flood of new lawsuits to hit every major bank if Merrill is found guilty of selling giant piles of dog doo.
Lets see if the judge has the guts to make the right call and expose the crooks. A win by MBIA could be the trigger that takes down the banks and forces them to become nationalized. The flood of lawsuits that would follow such a victory would be too costly for any of the banks to handle.
This lawsuit has the potential to expose the housing boom for what it was: a multi trillion dollar Ponzi scheme.
Lets hope that the "rule of law" swoops over Wall St and starts prosecuting the banksters that blew up the whole financial system.
This is the only way that confidence and trust can be restored on Wall St. The bankers must be removed and jailed. Period!
These are the "green shoots" that I have been looking for. Its time to life up the curtian and expose the thieves that created this mess.