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The Chicago Board Options Exchange Volatility Index <.VIX>, or VIX, rose 9.34 percent to 26.23. The VIX is thought of as a barometer of investor fear.
 
My guess is that the supposed cash and earnings of the big banks is nothing more than a bunch of debt using an even bigger bunch of over the counter derivatives, (CDSs, interest rate swaps, etc.) as collateral and the derivatives are worthless. The secondary mortgage market will not be back for years.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajsF3ojWFlJk&refer=home
 
I am literally praying yen doesn't go to 110.

http://www.bloomberg.com/apps/news?pid=20601087&sid=axT1zkHnJVm0&refer=home
 
awgee,

I don't think people realize the significance of those two articles you posted. If we thought recent events signaled a credit crunch, it was nothing compared to the carnage awaiting the end of the carry trade. If the Yen pushes much higher, many people will be forced to unwind their positions and buy Yen which will create a short squeeze of Biblical proportions. Talk about a liquidity problem. Remove the largest cash stimulus the world have ever known from the financial system, and there will be some serious problems. Do this when the market is vulnerable from our own insolvency problems, and we might have a global financial meltdown.

"Human sacrifice, dogs and cats living together - mass hysteria. "

Well, it might not be that bad. Maybe I will buy some gold.
 
Via Calculated Risk, the housing bloodbath is in full swing:

The expanding mortgage crisis and credit crunch slammed the Los Angeles housing market in August, with home sales plunging 50 percent from the same month last year and 25 percent from July.

Sales of new and existing homes in Los Angeles County slid to 4,107 units in August, just under half the 8,246 units that sold in August 2006 and well below July’s 5,458 units, according to figures compiled for the Business Journal by Melville, N.Y.-based HomeData Corp.

http://tinyurl.com/2tbo66
 
Credit Market in `Pivotal' Test as $140 Billion of Debt Matures

The amount of commercial paper coming due will peak on Sept. 17 when the equivalent of $48 billion matures, according to a report by Bank of America Corp. analysts in London led by Raja Visweswaran. The analysts said they expect credit markets to remain ``unsettled'' until then.

From Bloomberg

In markets that trade trillions of dollars each day, this is a relatively small ripple in a rather large lake. That being said, if the banks are forced to keep these debts due to their inability to resell it, which puts a major dent in their ability to make loans of any sort. This is the next big shoe and the manner in which it drops will dictate much of the near future for everyone. Let's hope it's placed gently on the floor, rather than flung out of a Manhattan high-rise.
 
I wonder when Pat Veling will have his trusty annualized seasonally adjusted number showing 10 months of inventory? I say October for it to hit his numbers but he is too sensitive and won't post them. Some needs to buy him a flame suit.
 
I just want people to know that I am not this slimy or have that many connections....

hosted.ap.org/dynamic/stories/N/NV_MORTGAGE_APPOINTMENT_NVOL-

But it's good to know that my job prospect is secure

www.cnbc.com/id/20705838

"Oh, and the silver lining? Lawyers. Wouldn’t you know it. Bankruptcy firms are adding staff, gearing up for some big corporate restructuring, from builders to banks, as trouble in the credit markets roil corporations and force them to file more chapters than the latest 'Harry Potter.' Wasn’t it Maria Von Trapp who said, whenever a door closes, a window opens?"
 
There is going to be litigation coming out of this disaster for years.

As just one small part, I think of all the people who took out liar loans. These were packaged into CDO's and sold to investors. Everyone is going to sue everyone right down the line over this issue alone.

It will be a prosperous time to be an attorney.
 
From Calculated Risk:

Fed's Yellen: Economic "risks could be significant"

From San Francisco Fed President Janet Yellen: Recent Financial Developments and the U.S. Economic Outlook.

"Even with corrections to credit underwriting standards, it still may turn out that these innovations don’t actually spread risk as transparently or effectively as once thought, and this would mean—to some extent—a more or less permanent reduction of credit flowing to risky borrowers and long-lasting shifts in patterns of financial intermediation. It also could mean an increase in risk premiums throughout the economy that persists even after this turbulent period has passed."

It is nice to be in full agreement with a FED governor.
 
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