New Home Sales? What Sales?

Down 4.7% last month.

No, you think?

Given that December is usually a crap month to start with, this is even worse than one might think.

And last month was down 9%, but is also revised downward this month.

Hmmmmm...... a bottom eh?

9.6 months inventory, also up from last month.

Prices down 10.9%, but inventory continues to increase, and the reported "price" doesn't include the "freebie incentives"!

So let's see.... we have prices down severely, we have inventory continuing to increase (the builders have yet to stop building into a downturn!) and yet we have the "bottom crooners" continuing to claim that "all will be ok" and "the bottom is in!"

Yeah, right. I've yet to see the bankruptcies in the builder sector, and until we see several the bottom not only isn't in you can't even see the damn thing!

CapEx will be next along with jobs. Of course many of the jobs in this industry have been illegal aliens and thus do not show up in the statistics.

But they do show up in the retail sales numbers, as they still spend money, legal or not!

People still talking about "avoiding recession" - like Dennis Kneale?

Give me a break - whatever KoolAid he's drinking, its got something illegal in it.

The recession has already begun.

I don't know why we keep having this "debate" with idiots like Dennis. Frankly, its disgusting that CNBS continues to allow that clown on the air. This is a guy who couldn't analyze a paper bag parade, say much less equities or the economy.

But I guess "The Pigmen" need their "useful idiot" to cajole people to "buy buy buy" - after all, without someone on the other side of the trade who would take the shares I - and others - want to short?

As for the currency and bond markets, they appear to be schizoid today. The currency market is clearly expecting more crack for the whore in a couple of days, pounding the dollar fairly significantly. The bond market, on the other hand, is selling off a slightly bit to flat. Hmmmm.

I'm not sure what to make of any of it, as the divergences are here as well as in the equity markets. In the equity markets we have wedges which should resolve upwards - at least for a little while - in more "relief rally" from the severe oversold condition we got to, while on the other hand I see all sorts of technical indicators (engulfing bearish patterns at the close Friday) which say "nothing doing buster; we're headed south and now!"

Pretty typical bear market behavior, to be up front, and very difficult to successfully trade. You're virtually guaranteed to churn lots of commissions, which doesn't help you a bit (but it sure as hell helps your broker, who HAS TO love this sort of market!)

Then you have this from a Fed Speaker:

""Our job is not to bail out imprudent decisionmakers or errant bankers, nor is it to directly support the stock market or to somehow make whole those money managers, financial engineers and real estate speculators who got it wrong. And it most definitely is not to err on the side of Wall Street at the expense of Main Street," he (Fisher) said."

Pull my finger.

You won't hear him speak about the truth of the matter, which is that The Fed follows the market, it does not make the market, even though just a couple of days ago this was actually said on Kudlow's show - and widely agreed with!

Why not?

Because if the truth gets out there, then The Fed loses the ability to "jawbone" its way around Wall Street, and the street stops listening and pandering to errant - or just plain irrelevant - Fed Chairmen!

We can't have the truth out there, can we? Why that would be a travesty! Never mind that BenDover is partially responsible for the bubble, as is his predecessor - either or both could have clamped down on the outrageous leverage being deployed with absolutely no margin supervision within the banking system, but neither did.

Never mind that said regulation is part of The Fed's charter.

IMHO there needs to be (and might eventually be) a Congressional investigation of official misconduct within The Fed. WHEN (not if) there is a massive counterparty collapse in the CDS space (particularly the insurance of CDOs) and the financial damage actually forces some banks underwater, you might see CONgress grow a pair and start doing ITS job.

My answer to this? THE PETITION.

Oh, and don't look at the Effective Fed Funds rate or the Slosh today. Not only was the EFF up over the target but in addition the slosh has been rising at a fairly rapid pace since last Tuesday. This is a major problem as BenDover keeps having to inject money to defend his target and the string is limp - he ain't pulling, he's pushing!

What this means is that come Wednesday, if the data is as it was today there would be no change in rates at all, or even a 25 bips INCREASE!

Of course the nasty reality is that The Fed gets to look at the data for the day before we do, so who knows what Wednesday will bring. All you can do as a trader is be on your toes and be prepared for anything that may come......

Reality is that it is probably time to start scaling into some pretty significant short-side bets. Not all at once, but there's a smell of brimstone in the air and I think I caught a glimpse of someone's red face......

There's a major rollover in the CP market coming and I'm willing to bet that "no mas!" will be heard more and more often; as this continues you will see more and more "quiet panic" rise on The Street until it finally spills over out into the open - and provokes "Giant Selloff #2."

Here's your technical!