The Market Ticker

4Q GDP up 0.6% (anemic, but as expected)

The internals, however, were not bad and deteriorating. Real disposable incomes falling 0.3%, with core price inflation rising at 2.7%, out of the Fed's "comfort zone" by 40%.

Initial claims were moderate but the killer is continuing claims - they continue to increase, and this is bad news. Has the feedback loop been initiated? I've been saying that we're either on the cusp of this or its already over the edge - looks like we're finally starting to get recognition of that in the media.

Next up, we have a funny situation - MF Global, one of the largest clearing firms in the futures and commodity markets, announces a $141 million bad debt provision - for alleged "bad trading" by one of its registered reps who (they claim) exceeded "authorized limits." I am chuckling on this one because there are a number of "players" in the futures business (and some of their more-rabid customers, including a few on the forum) who believe these guys walk on water while everyone else shucks their oysters for 'em.

Looks like the water had a bit less viscosity than they thought and indeed that emporer has no clothes! Heh guys, that was limp!

Next up we have Thornberg Mortgage (TMA). Bastidges. You know the old saying about being "early", right? Well guess who had February PUTs (that'd be me) which went out worthless - and now they disclose margin calls on Jumbo A Paper, cratering instantly in the premarket, down about $3 - and for an $11.50 stock, that's a LOT - about 20%! You know what they call someone who's early on an investment call? Wrong. Heh, I get to chuckle even if their "hide the sausage" game was maintained just long enough to eat my PUTs.

Sprint/Nextel lost reported a huge loss and is getting shellacked. Naw, you think? You guys have all gone too far. 2-year contracts, surly customer service, hidden fees disguised as claimed taxes and ramping prices - into a slowing economy. Push too hard and you get push BACK, in this case right into your so-called 'earnings', which are better stated this time for what they are - losses. Congratulations cellcos - its about damn time you got yours, and I'll bet that we get some more headed towards the rest in the future. Will we see them start to recognize that in fact a text message costs far less than a phone call to carry and route, and instead of ramping their cost to try to force people into "prepaid packages" the right move is to make them almost free? Probably not, but we should. Oh, and how about we cut the contract crap and let us bring our own equipment (or buy it at retail)? Why that would make too much sense!

Pimco is back on CNBC this morning again asking for The Government to "halt home price deflation." Gee Pimco, were you asking for them to halt home price inflation? Of course not - that was good!

How about some truth here out of you Pimco - you and everyone else passed 4th grade math.

Home prices cannot appreciate over long periods of time faster than incomes; it is mathematically impossible.

So now YOU - yes YOU Pimco - along with everyone else who were all for the outsize profits you got from a huge ponzi-like asset bubble - are in for some losses as some of that profit (which no doubt you spent) comes back out, and instead of admitting that you were supporting an unsustainable and fraudulent ponzi scheme you go crying to the government to bail your sorry ass out!

Life doesn't work this way guys. A "bailout" will not only fail it risks turning a recession into a depression, and I, along with a few others who are HONEST, are going to hold your feet to the fire on this point at every opportunity.

There is no such thing as a free lunch. Home prices WILL contract so that the median house is 2.5-3x the median income. The only point of disagreement is whether we will do this via the market, and those who did not speculate or undertaken unsafe and unsound actions (e.g. grabbing "home equity" to spend on plasma TVs and boats) will be left whole and "ok", or whether we will instead take what is a ramp in cost for mortgage money and spread it to everyone else, taking what is a recession and turning it into a DEPRESSION.

That is the choice here folks. It is one that policymakers and you need to contemplate, very carefully, before you start clamoring for "help" from Uncle Sugar.

The only action here that will work is to force all those who are hiding losses and avoiding transparency into the open whether they like it or not.

Once this occurs the market will clear. Further, it will happen whether those market participants like it or not - it can either happen "voluntarily" via regulatory jackboot application (if verbal arm-twisting doesn't work) or it will happen as capital flow is choked off and bankruptcy results. Those who are currently sitting on these illiquid securities and playing games - you will not get away with this, although you think you are smart enough to "wait it out" - instead, all you are doing is provoking capital aversion and ramping spreads.

Its time for The Government to do its true job - to prosecute fraud and abuse.

'Nuff said.

Oh, you think Bernanke doesn't know this? The hell he doesn't. Today, he said "there will probably be some bank failures" in his testimony on The Hill. No kidding? Gee, what a shock; was I not predicting this back in April of last year?

Ben yammers about how the current price inflation is due in large part to commodity prices which are set in global markets. No kidding? Gee Ben, why are commodities which are produced on a global basis spiking in terms of dollars?

Might that be because the dollar is cratering as a direct consequence of the refusal of the Federal Reserve, along with the other regulators, to force people to take their marks and recognize the losses they are now attempting to hide? In short, the dollar is falling because of a lack of trust and you are in no small part responsible for that!

People say "we have no market there we can't mark to it." I say to that "then the current, today, value is ZERO and that's what you mark it at for today."

If the market reappears for that paper tomorrow then you are perfectly welcome to mark it up tomorrow. But for today, they are valued at zero.

The Fed and Congress have set up a system that does not mandate that all such securities trade on a public exchange which creates this problem in the first place, as there is then no margin supervision nor any way to get an HONEST value!

There is a simple solution to this BEN and CHUCK SCHUMER:

No regulated financial institution is permitted to buy, sell or hold any instrument that is not traded on a public exchange with published bids and asks, and all such instruments are marked every night at the last trade if available, or the bid if no trades had taken place during that trading day, and no "off balance sheet" vehicles are permitted under any circumstances.

You do this and the entire problem disappears immediately. Yes, there will be some firms that are rendered instantly insolvent by this change. However, we will know immediately WHO is insolvent and who is not.

I, and every other "ordinary investor", is required to use exactly this method of valuing our portfolios every single night!

THERE IS NO JUSTIFICATION FOR EXEMPTING INVESTMENT BANKS AND OTHER INSTITUTIONS FROM THE RULES THAT THE REST OF US MUST FOLLOW.

Congress has clearly read The Petition and I suspect some of them are reading The Ticker. GOOD. Its about damn time. You folks are our elected representatives and paying attention and questioning what you are told in an effort to discover THE TRUTH is why we elect and send you to Washington! YOU HAVE BEEN LIED TO REPEATEDLY!

The Dollar doesn't like this chatter one bit. Neither do the equity markets. And frankly, Ben looks like he is about to have a stroke right here and now.

I don't know how this story ends but I do know this:

Trust will not return until the intentional hiding of risks and losses stops; you only get to screw people "for free" once. We used our "once" - now we either stop it or we find ourselves with continuing destruction of trust, our currency and our economy, and at some point, the rush to the exits by the very foreign governments and holders that we rely on to finance our profligate spending will initiate.

IF AND WHEN THAT HAPPENS IT WILL BE TOO LATE TO FIX IT.

PS: Looks like Dell missed on both revs and profits, about a nickel light on earnings. Booya.