After an ugly opening (see chart below), market bellwether IBM valiantly clawed its way back to a small gain at the close, helping the Dow Industrials pare earlier losses by nearly two-thirds. Yesterday's comeback was so very impressive, in fact, that we can only surmise that bulls are about to get their teeth kicked in. To paraphrase Oscar Wilde, a stockbroker would need to have a heart of stone to watch yesterday's rally unfold without feeling the sadistic urge to coax a few clients out onto the ledge. The proximal cause of yesterday's dispiriting first hour was a report from mega-lender HSBC Holdings that its subprime portfolio had taken a serious turn for the worse. It's one thing when some minor-league mortgage player that no one's heard of reports trouble. But when a biggie like HSBC says it's about to increase its bad-loan reserves by 20% more than analysts had recently estimated, investors tend to take notice. Housing Trumps Shopping And boy did they ever! The Indoos were down about 80 points in the early going, even though retailers had reported strong post-holiday sales before the opening bell. It would appear that bad news from an all-important housing sector has come to overshadow whatever good news the retailers have to report. Does that mean the rank imbeciles who have asserted that the housing market has bottomed are likely to change their minds or even throw in the towel? My guess is no, not until the homes they live in have shed 50% of their peak appraisal values. But that day might not be so far off, especially if they live in the overbuilt exurbs, or in 'starter' luxury homes priced in the $800,000-$1.2 million range. Real estate values in those two categories in particular have dropped steeply in recent months,
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