Two of the main banking regulators, the OCC and the OTS, jointly released data on mortgage performance in the second quarter today, and the news was not good. The report covers 34 million individual first mortgages totaling about $6 Trillion. All types of delinquencies were up, but most distressing was the information about serious delinquencies, or mortgages that are more than 60 days past due. They reached 5.3% of all mortgages, up from 4.7% in the first quarter, an increase of 11.5%. Foreclosures-in-process reached 2.9% of all mortgages, up from 2.4% in the first quarter -- a 16.2% increase. It didn’t matter which risk category of loan you looked at, delinquencies were going up everywhere. The percentage of prime mortgages that were delinquent rose 10.5% to 3.0%, and are up 13.0% from a year ago. Alt-A delinquencies rose 11.1% from the first quarter to hit 10.3%, and ...

Investing Without Trailing Stops: Here’s Why 75% of Stocks Are a Sucker’s Bet

by Alexander Green, Advisory Panelist

A couple weeks ago, I explained why it is imperative to run trailing stops behind your individual stocks.

Sell stops ensure that your capital is protected and your profits don’t slip through your fingers.

However, one subscriber took me to task, saying that a trailing stop guarantees you won’t “sell at the top.”

Quite true.

However, “selling at the top” and its corollary, “buying at the bottom,” are not realistic investment goals. Here’s why…

The Danger of Selling High and Buying Low

For one thing, you never know the top or the bottom until you’re looking in the rear view mirror. And given enough time, all-time highs and lows are usually exceeded.

For example, you may sell a stock at its 52-week high – not a good

...

Updates on what this is going to cost you and me.

Let's start with Fannie Mae, the government-sponsored enterprise that was allowed to function as a quasi-private company from 1968 to 2008 and is currently under conservatorship of the Federal Housing Finance Agency. Prior to conservatorship, Fannie earned a profit two ways. First, it used borrowed funds to purchase mortgages that it held directly. Because investors perceived the GSE's debt to be implicitly backed by the federal government, Fannie's borrowing costs were very low, and it had an incentive to engage in arbitrage on a huge scale, borrowing cheap and buying as many mortgages as regulators would allow. As of June 2009 these assets came to $793 billion. Second, Fannie would bundle mortgages into securities on which it provided a guarantee of timely payment of principal and interest, in exchange for which it received a

...

Just how much has the U.S. government promised to pay?

Total public debt outstanding of the U.S. Federal Government is currently $11,490 billion, or $124,000 per taxpayer. But a fair chunk of that total public debt-- $4,350 B to be exact-- is money that the government owes to itself, about half to the Social Security Trust Fund, and the remainder to other government accounts such as Civil Service Retirement and Disability, Military Retirement, Medicare, and Unemployment Insurance Trust Funds. The debt actually held by the public is "only" $7,140 billion, which amounts to half of last year's GDP. The Congressional Budget Office estimates that debt held by the public will rise to 56.6% of GDP by the end of this year. That will put the number well above the peaks reached in the Revolutionary War, Civil War, World War I, or the Reagan years,

...

“This crisis resulted from government reluctance to regulate the unbridled greed of Wall Street.”

Democrats have taken this mantra and used it as an unprecidented opportunity to institue their socialist ageneda. But, was the Free Market the problem, and is bigger governement and record defecit spending the answer?

To quote Peter Schiff, a genius economist and investor:

Absent from such conclusions is the central role the government played in creating the crisis. Yes, many Wall Street leaders were irresponsible, and they should pay. But they were playing the distorted hand dealt them by government policies. Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets.

Peter makes an excellent point about moral risk. The point is clear, just as price is managed by supply and demand in free markets, financials markets are governed by the opposing forces of fear and greed.

Houston, We Have

...

This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide.

The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation.

By Robert Prechter, CMT

Now that the downward portion of the credit cycle is firmly in force, further inflation is impossible. But there is one entity left that can try to stave off deflation: the federal government.

The ultimate source of all the bad credit in the U.S. financial system is Congress. Congress created the Federal Reserve System and many privileged lending corporations: Fannie …

Never before have I learned so much so quickly from my readers as I have now — all just by reading the thousands of comments you have posted on my blog in the past week!

One of your key questions: Will the new Obama stimulus and banking bailouts succeed or fail?

What will be the immediate and ultimate consequences?

What should I do?

Today’s gala edition is my response.

But let’s not waste time digging for causes — the economic blunders of Washington, the financial greed of Wall Street, or the big debts and risky bets by almost everyone.

Let’s also not waste time pointing fingers — the Clinton administration for creating the tech bubble, the Bush administration for creating the housing bubble, or the Obama administration …

Currencies trade in a tight range…  Another new plan to help homeowners…  RBNZ and Riksbank slash interest rates! The Governorator speaks!… And Now… Today’s Pfennig! It’s going to be a Tub Thumpin’ Thursday in Europe for sure, given the Central Banks of England and the Eurozone are meeting and will probably cut interest rates to levels that haven’t been seen in a while! The automakers are in deep dookie folks, according to them, and are in need of funds / bailout money right now! The head of Ford believes his company can withstand the recession, but fears for GM and Chrysler… The UAW has made some concessions to help the automakers, but it could be a case of too little, too late…

Well… Another day of doldrums in the currencies, with the bias, what little there is, to buy dollars. The stock jockeys received some manna from heaven yesterday when

...

Expect more pain in the housing market next year, says Don Miller. Rising unemployment will keep the foreclosures coming. And as the backlog of inventories swells, Don says homebuilders still look ripe for shorting in this environment.

This from Money Morning:

The U.S. housing market is already being pounded by the “perfect storm.” And the outlook for the New Year is for the stormy weather to continue – and probably to get worse.

As if a locked-up credit market and tidal waves of foreclosures weren’t already enough, we’re now watching unemployment climb and consumer confidence plunge.

But even when the housing market is taking on water, there are ways to stay afloat. Indeed, investors nimble enough to maneuver can even make money.

The watchword on this market, though, is caution.  If an investor decides to test the waters, beware of the extraordinary financial undertow.

Here’s a look at what’s happening now, and

...

It was January 1934. The Great Depression was five years old – but still had another five years to run. The carnage was horrific: From 1929 to 1934, U.S. personal income plunged 44%, real output nosedived 30% and the unemployment rate soared to 25% of the American labor force.

With the nation’s economic landscape laid to waste, it should be no surprise that home foreclosures were soaring, too: Residential real-estate foreclosures doubled between 1926 and 1929 – before the Great Depression actually began. According to a new study by the Federal Reserve Bank of St. Louis, the foreclosure rate jumped from 3.6 per 1,000 mortgages in 1926 to 13.3 in 1933. In that year, in fact, 1,000 home mortgages were being foreclosed each day.

By Jan 1, 1934, as many as half of all residential mortgages were delinquent, putting them at risk of foreclosure.

Clearly something had to be

...