Bill, please do as she says and look after your health.

ALOHA !!

By all means Bill a two month cough is not good ... Get that taken care of!

As an FYI ... My brother is an architectual consultant and works around the World for major department stores like Neiman Marcus, Federated and JC Penny. Lately he has been travelling around the country(now in Miami)surveying JC Penny stores for renovations. That means more debt for JC Penny at a time when consumers aren't the bright star they once were! Unless the FED creates another "bubble" to take the heat off real estate it will only get worse for certain retailers. He told me about the Neiman Marcus buyout way before it ever was announced! BUD FOX ... BUD FOX ... Where are you? I did not act on it and neither did he. It got me thinking about funds for renovations. I wonder if these corporations have the ability to stop spending on a dime or are they like the US government where each department has to spend their budget down to the last dime no matter what or run the risk of a lesser budget the next year! What a very dangerous mentality and quite a "cause and effect" for higher inflation and debt. Obviously the US government has nobody to hold it accountable for anything really, otherwise we would not be in this situation with debt and Iraq! Bankers are sitting on top! THE WORLD IS YOUR OYSTER ... TONY!!!

Important news last night from two of the biggest sub-prime lenders in the U.S.. New Century (NEW) was supposed to report earnings today, but after the close yesterday announced a delay, and further, that it would be restating earnings for the past 3 quarters. The stock is down 30% in pre-market. And HSBC warned that its 2006 bad debt charge had jumped 20% to over $10 bln.

And then an online mortgage broker, NetBank, announced it would report a steeper than expected loss.

What do all of these developments have in common? Answer: a sub-prime lending market that has turned sour swiftly and dramatically. And this is by no means one-time development. I'm afraid that this story will only get worse.

Disclosure: short NEW.

I posted this on "The Big Picture", and regular readers will remember that I've said the same here before:

We are only now seeing the homebuilders write down their assets because they were "surprised" by the business conditions in the builder market. It was a surprise to me to hear folks calling for a bottom PRIOR to having any of these writedowns, and I believe that there will be more to come for the homebuilders.

Bank loan loss ratios are at historic lows. Even 50% increases in the percentage still has that metric at historic lows. Take a visit to FRED to see for yourself this trend.
http://research.stlouisfed.org/fred2/series/USLLRTL?&cid=23

There will be no bottom in the housing/credit markets until we see alot more balance sheet pain for the homebuilders and the "regular" lenders who have subprime stuff lurking in their portfolios. Calculated risk has done a good job of bird-dogging this story.

get well Bill!!

thurs daytrader:

usually our index gap at 8ET will be what europe is doing, and dax futures are -56 now after ecb hawkish talk...

best premkt volume LVLT MAMA BRLC NXTM EMC UN ALU...

homies TOL OHB weak results and wsj neg lender article...

AAPL removed from Goldman buy list...GOOG will see some selling by insiders...earnings reports tonite BRCM BMC

copper nickel zinc very weak overnite and p.m.'s were down with them, but now p.m.'s are bouncing into euro strength, crude oil o.k. for p.m.'s at 57.82

ALOHA !!

Number Two ... Batta Bing !!!

You would think US banks would have learned from the Japanese banks mistakes in the 1980's. BAD LOANS = BAD BET !!! Why would not Bush learn from the British of the 1920's and the Russians of the 1980's? Yet here we are repeating the same foreign policy mistakes ...

Given the CBs in Europe are not raising the rates and major banks are coming clean with "debt troubles" that should spell "U-P" for gold and silver!

Ya think?

gold silver and crude oil in similar condition:

crude and p.m.'s have been moving 'in lockstep' lately and they all hit a downtrend line and backed off into what bulls call a 'flag'

if they don't make any progress from here into mid next week it will look like a 'top' is in

some items for a 'top':
1. sure it's cold here now, but it's late in the season, and eia says opec spare capacity is above 2 billion barrels a day now and will stay that way into 2008, awash with oil
2. G7 this weekend not normally favorable to gold, as the world wants to have a strong dollar that they can export into, that's just the way it's always been and why would it change
3. silver an exact top on the last full moon, when that happens historically it's normally a significant top

Bill, Hope you feel better.Todays WSJ shows YTD for SLV at 5.6% increase while DBS YTD is 11.3%.The GLD YTD is 2.3% whereas DGL is 2.3%.Is there a reason for the differences?
Thank you. Mort

Bill, the DGL YTD is NOT 2.3%, The correct YTD is 7.2% Mort

Bill,

Please take care of yourself. "Listen to your wife" is not something that is in my vocabulary, but in your honour, it will make a proud addition. Please listen to your wife Bill.
Now I have a question for anyone that is willing to give me some feedback. I am currently accumulating shares in NUS (tsx-v) They have made numerous private placements. They usually go less than the SP with a warrant for half a share attached as well. I asked a broker and was told it is not available to ordinary investors. Something about being credited or experienced? It does not take a brain surgeon to figure out that getting shares at a 10% discount and a warrant for additional half share within 24 months, when it is estimated to be worth minimum five times the price by then to figure out it is a good deal. Phew! long sentence... Is there anything Bill or maybe a group of us can do to get in on such deals? Much thanks in advance, yaba

Mort - believe the % differences are because the PowerShares (DBS and DGL) didn't list/start trading until 5 Jan.

Take a look at DBS vs SLV on a one Month basis (http://finance.yahoo.com/charts#chart3:symbol=dbs;range=1m;compare=slv;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined),
and you'll see that SLV is actually up about 1% on DBS. Doing the same for GLD vs. DGL, shows that GLD is "slightly" higher in return.

Learn2Invest

Bill, the DGL YTD is NOT 2.3%, The correct YTD is 7.2% Mort

Yaba -

I am a NUS shareholder too. The big boys seem to think it is a good investment too. Can't help you with the warrants though. If you find info on it let me know.

In a related development to the sub-prime lending market collapse, Toll Bros (TOL) announced today that both revenues and new orders for Q1 are well below expectations. I respect that Bill has this company in the Cara 100, but Bob Toll (of "dancing on the bottom" fame) has been consistently wrong about both the speed, the magnitude and now, the duration, of the housing downturn.

The news regarding the cracks in the mortgage portfolios of the sub prime lenders are beginning to be too large to ignore. Clearly there is a wide swath of the American economy that cannot meet their basic financial obligations. The stocks of Fieldstone, New Century, Accredited Homes and even HSBC are getting whacked. Not good.

What we will need to watch is exactly how far this trouble reverberates, and it could do so in a number of important directions. First credit could tighten in the home asset arena. Whether by function of higher rates or tougher standards - the home will likely cease to be the predominant ATM machine. That will likely have at least some impact on the US GDP. Consumer related activity comprises approximately 70+% of total US GDP so any housing induced slowdown could potentially have an outsized impact.

Second, there could be real trouble brewing in the structured credit markets. I and many others have mentioned this point previously but it bears repeating. These markets are largely unregulated and therefore operate outside any watchful eyes. In the case of the sub prime market, these mortgages have been packaged up and sliced and diced and re-diced and sold to investors. The announcements this mornning would seem to indicate that the overall underlying collateral pools ain't quite what everybody might have thought. Hope the strcutured credit folks have stress tested the models and provided for adequate collateral reserves. Remember these securities are highly leveraged and then get releveraged by hedge funds and other buyers seeking to maximize returns.

Finally, it remains to be seen whether any of these cracks reverberate and lead to a fundamental repricing of risk - the impact of which would be to reduce asset values across the board.

We will look for our clues in the health of the global high yield markets and the pricing for CDS "insurance". So far all appears to be well. Who knows however whether we are all whistling passed the graveyard. Hope not. But time will tell.

Cheers.

[The news regarding the cracks in the mortgage portfolios of the sub prime lenders are beginning to be too large to ignore.]

Even Fanny and Freddie are in deep...

From a September 06 article:

Fannie and Freddie bought 25.2% of the record $272.81 billion in subprime MBS sold in the first half of 2006, according to Inside Mortgage Finance Publications, a Bethesda, Md.-based publisher that covers the home loan industry.

In 2005, Fannie and Freddie purchased 35.3% of all subprime MBS, the publication estimated. The year before, the two purchased almost 44% of all subprime MBS sold.

Three big lenders, NovaStar Financial, Deutsche Bank and BNC Mortgage, part of Lehman Brothers, sold more than half of their subprime MBS to Fannie and Freddie this year, said Andrew Analore, editor at Inside Mortgage Finance.

http://tinyurl.com/qp79k

GSS gapped up over 3.40 again, now +4%

volume low again across the p.m.'s, but picked up a bit as NEM did 1mil in the last hour

strongest along with NEM are AUY KGC

Ditto Leisa/noodle. I put my two cents in in August after the Fed paused that a) there would be a snapback rally in the homies and b) the writedowns were coming and not public knowledge yet. As Bill knows, I know a thing or two about the national commercial real estate market.

Regarding non-residential, I am hearing from contacts that the discount retailers are already pulling in their horns on 2007 projects and I am beginning to hear chatter about former clients canceling large scale mixed use projects. S and SE appear to be the exceptions geographically.

Anecdotal info folks to be sure but you can verify if you wish.

Cheers all.

Get well Bill!

Thanks for your item on Fraser Papers and BAM. Having almost bled out over holding 24K shares of Stelco until they became worthless, I will be following this closely. Fraser was a $12 stock a year ago, before Peter Gordon ( a BAM exec ) was put in as President. I suppose we can see Hap Stephen arrive on the scene sometime soon to start the CCRA process, with his pal, James Farley ( ex-Judge, now McCarthy Tetrault partner ), acting as a paid advisor. Same accounting firm here, too( Ernst ). Nice bit of dirty business they seem to have going. I weep for any minority share and bond holders where BAM has a large position.

The malaise in PM shares is driving me batty. Everytime the PMs get ready to breakout they get pulled back again. Perhaps today will be different. AUY acting well today, much better than slw and aem.

very nice strength in p.m's, GG AU up over +2% along with earlier mentions GSS NEM AUY KGC
volumes are only ave., except GSS

HUI.X if we have put 336(the 50% of 270-402) below us, then the twin highs of last nov/dec 341.60 is next resistance

crude oil hanging around 58 is supportive

bubblin' crude blasts up to 59.45, gold and silver regaining in access what they lost late in the pit session

HUI.x now up +2%

Gold is thru 660.00

Last trade 660.5 Change +8.0 (+1.23%)

Open 652.5 Previous Close 652.5

High 660.7 Low 647.3

Bid 660.5 Ask 661.3

Brian

2007-02-08 15:49:12, 0 min delay

Bill please review if TOL should remain a carra 100 company. I feel they are not being realistic (is thiis the right word) on the homebuliding situation,

Regards

Re: Gold

Gold found support on the neckline of the inverted h&s that I have pointed out before. Target is over $730 high.

Now gold needs a few closes over the 61.8% retracement of the $730 - > $542 move. That level is here, $660 or so. This will be the make or break price imo.

Bill
Did you happen to scroll down and read the comments on the Information Clearing House blog that you posted earlier today?

One blogger posted a very interesting link to a two part video that have many eye openers in it. I was going to just email the link to you private, but I didn't see your email posted.
It does have money/stocks/gold, so I hope you don't find it to political for your blog.

When I started watching the video there were 30,000 views, by the time I copied the url there was 60,000 views. I would say it sure has generated an audience in a short period of time.

No comments on the films other then they are rather long!

http://video.google.com/videoplay?docid=-8753934454816686947&q=Money+Masters

Inflation at our backdoor (USA's):
Average price increases in Mexico City for various staples, from January 2006 to last month:

46% Eggs

40% Tortillas

26% Sugar

15% Rice

Source: Mexican Department of Agriculture

Check out the link below for the whole story:

http://www.latimes.com/news/nationworld/world/la-fg-mexprices9feb09,1,890359,full.story?coll=la-headlines-world