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VIX Wakes Up, Is The Bottom In?

January 18, 2008

6:25amEST Fear Has Finally Crept Into the Market, Stocks Get Sold Despite Ben Bernanke Testimony

When the Path of Least Resistance is in one direction you can only imagine how easily price movement moves along that path. Today, this path is clearly down and Thursday’s session only proves that swimming against the current only loses you money.

More fallout from the housing/mortgage market has MER reported pre-market. It comes no surprise to me that we continue to see write-down after write-down. LEH and GS followed suit with MER closing the day on its lows hinting at lower lows to come. The question that everyone seems to think they have the answer to is when this subprime mess is going to be over with? It is a shame, not for a while. The peak of the “teaser” “subprime” mortgage issuance was in the summer of 2005. Just looking at what the consumer opted for, the 3 year teaser we know that in 2008 will be the peak. You can not honestly say that MER, LEH, GS and others have completely removed all subprime loans off their balance sheets! Look for more of it to continue.

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