Owwwww, it really hurts

Sales of new single-family homes are down 47.6% from their peak in July 2005. Nobody knows how bad this is going to get but it will get worse. On the other hand gold gave a double sell signal today with a downside target in the $700-$725 range.

Lower rates will save us. Oh yeah. Think Japan with near zero rates for ten years AFTER their housing bubble burst. It ain't the answer folks. Stand aside. The charts show a real danger of the stock market breaking the old March, August and November lows (November broke today) and if that happens deep doo doo is next. The rally of the past few days is what they call a reflex rally. Watch out. In recent months, major banks have reported losses of around $45 bln on their investments. Up to $1 trln of assets are also on their way back onto bank balance sheets. Is socialism for Wall Street the answer? Let's hope not. Many of us fear that the "solution" will be to inflate our way out of this---cheapen the dollar to God knows where and pay the bad paper back with cheap money. Tough call here.