part 2

3. The foreclosure storm is gathering but still ignored by the market as we still have a go to hell with the reality attitude by the performance driven trap the manipulators have fabricated. 1.1 mio foreclosures executed and close to 5 mio 60 days behind ( make the math 5 mio with a minimum average 1000 Dollar per month payment behind matches 5 billion per month which will explain part of the consumer purchases adding up to 60 bil per year). These are new records and add up to the losses banks will have to write down by a multiple factor of those 60 bil as the market value of the house or condo will rather be down by 4-5 times that amount plus CRE losses - hence we are talking 500 bil in losses banks have to absorb. ın Europe that will be burdened with huge sovereign bond losses with Greece just a warm up as Italy and other PIIGS are at the brink to follow swiftly.

From The Daily Capitalist

In a piece from the Wall Street Journal on Saturday, LPS Applied Analytics estimated that foreclosures would create so much market supply that it would take 103 months to liquidate it.

As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier.

Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload. That’s nearly nine years.

The HAMP (Home Affordable Modification Program) program started by the Obama Administration is trying to modify loans so that lenders will not foreclose:

According to Goldman Sachs, HAMP started less than 80,000 trial modifications in March, less than half the number in the peak month of October 2009. At the same time, a growing number of modifications are being canceled as borrowers prove unable to pay. By Goldman’s count, about 68,000 were canceled in March.

All this means that little can stop banks’ inventory of distressed homes from growing. Too many people owe too much more on their homes than they can afford. For the housing market, that could mean a long-lasting hangover.

4. One of my favorite sentiment instruments are the ISEE MAs who can max out to 150 levels for the 10 and even 20 day MA but such levels would rather mark ultimate turning points for 30-50 percent declines. which might not happen right away as the manipulators want to unload their hundreds of billions to the public which is called distribution and will take months to accomplish but for now around the 200 week MA of the SPX at 1220 we should enter a correction mode with a 1050 target max. to the downside. only an attack of Israel on Iran would alter that scenario but ı doubt they do that before the mid term elections since that would jeopardize the whole bull-campaign manipulation

Time Calls Puts Total ISEE 12:10 306599 176037 482636 174 11:50 289011 153897 442908 188 11:30 270123 136039 406162 199 11:10 245090 114191 359281 215 10:50 197054 103776 300830 190 10:30 154647 92654 247301 167 10:10 128936 78239 207175 165 09:50 74875 54266 129141 138	All Equities Only Calls Puts Total ISEE 249067 102839 351906 242 234579 91426 326005 257 218241 82234 300475 265 199359 62717 262076 318 163364 56024 219388 292 124184 47576 171760 261 103521 39515 143036 262 58045 24391 82436 238	All Indices & ETFs Only Calls Puts Total ISEE 57468 73173 130641 79 54390 62446 116836 87 51852 53781 105633 96 45701 51451 97152 89 33660 47729 81389 71 30445 45061 75506 68 25397 38707 64104 66 16817 29860 46677 56
Note: All times are 24-hour Eastern Standard Time
Historical
ISEE Date Previous Trading Day 144 04/23/2010 10-Day Moving Average 136 04/12/2010 - 04/23/2010 20-Day Moving Average 134 03/26/2010 - 04/23/2010 50-Day Moving Average 125 02/11/2010 - 04/23/2010 52-Week High 185 04/15/2010 52-Week Low 67 01/26/2010