In the bond pits yesterday, there were murmurs and groans of outright despair. 'The bond market has already priced in that nobody will ever be able to sell a house again in his lifetime," said Michael Davis, a CBOT trader. "It's not as if there's more bad news that we could factor in fundamentally,' he told a Wall Street Journal reporter. 'It's just that the market is taking its cue entirely from stocks.' No question, the action on the world's bourses has been bumming out a lot of investors lately. The Dow Industrials, for one, have fallen nearly 15 percent since peaking in mid-October just above 14,000. If they were to fall for just a few more days at yesterday's pace, we'd have an 'official' bear market ' a 20-percenter ' by next Wednesday. The magic number is 11358, for those of you who are keeping vigil. Just why a bear market would rear its ugly head at this time must be a mystery to the board members of the Federal Reserve. After all, it could not have been more than a week ago that the Fed chairman himself said there was no recession in the central bank's forecast, at least not yet. Sure, the banks have been racking up losses that are now pushing toward the trillion dollar threshold. But those are only ledger entries, right? It's not as though anyone but shareholders have lost real money. 'Real' Losses Are Small Actually, there is some truth to this, since the pain and suffering of mortgage bondholders has been mostly due to unrealized losses rather than actual. That's because, although quite a bit of subprime paper has been marked down by 80 percent or more, most of it has yet to mature. And although we read about huge write-offs by
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