Americans can take comfort in the likelihood that the showdown between mortgage lenders and homeowners will not resemble Greece’s battle-to-the-death with its creditors. In the U.S., the banks are slowly losing ground to a populist, election-year tide that eventually will force lenders to accept a moratorium on mortgage debt for tens of millions of homeowners. In the rapidly escalating legal battle to bring this about, last week’s $25 billion settlement between the banks and the U.S. did not settle much of anything, since the banks in theory can still be sued into oblivion by aggrieved homeowners. The plaintiffs will be claiming in effect and with a straight face that they got in over their heads because lenders forced them to borrow more than they could repay. Who would have imagined just a decade ago that an army of reckless borrowers would seek the protection of the courts under the remorseless deadbeat’s battle flag “Kick me, beat me, make me write bad checks”? That’s what it’s come down to, evidently, and woe to any bank that asks the court for help in turning a family out onto the street. The five big banks that signed onto the deal are undoubtedly running scared, since the legal latitude afforded those who could conceivably claim “questionable lending practices” has been widened to include just about anyone who lives in a home – including, presumably, tens of millions more homeowners who are not yet underwater but eventually will be. Keep in mind that the costs of the yet-to-be-unveiled Homeowner Bailout Act of 2014 have already been socialized, since the GSEs have been originating 90% of all new mortgage loans. » Read the full article
With Athens streets engulfed in flames, there is no doubting the sincerity of Greece’s austerity pledge. Nor can we underestimate how dire the country’s financial crisis will become if the bailout money does not arrive soon. We know this is so because even socialists in Greece’s parliament are supporting the deal with Europe’s bankers. Try a free trial to Rick’s Picks by clicking here.
Come tomorrow, the 1353.00 pivot will have held for a week, hinting that the short-covering that has been driving stocks from one plateau to the next is not of the rampaging variety; rather, it is of the quietly psychotic variety, premeditating each new leap on the basis of whatever the latest, fabricated GDP/payroll numbers and “good” news from Europe will allow. Absent any truly horrifying geopolitical news — and I’m not sure that even that would restrain buyers — we should expect the futures to break out shortly and head for the 1362.50 Hidden Pivot noted here earlier. Traders can test the water near that price with a tightly managed short, but camouflage is advised because of the rally pattern’s less-than-stellar pedigree. Want to learn how to nail price reversals like a pro? You can learn to do it in as little as six weeks. Click here for information about the upcoming Hidden Pivot Webinar and receive a $50 discount.
We don’t pay much attention to this vehicle other than at key turning points, but the short-term pattern shown looks like a lay-up for traders who see futures contracts as no more than bouncing dots on a chart, waiting to be exploited. There are actually two trade possibilities here: 1) a ‘camouflage’ short as USM slips below the 132^13 midpoint; 2) and a very tightly stopped long from within a tick or two of the 131^17 target. Good luck! Please report any fills in the chat room so that I can establish a tracking position for your further guidance. ______ UPDATE (3:17 p.m. ET): The short was tricky to initiate, but once aboard, your reward came quickly with a drop to a so-far low at 131^26. As noted above, the short should be covered and reversed near 131^17. ______ UPDATE (April 6, 3:57 p.m.): The low of Friday’s violent price swings was 131^21 — not quite close enough to have gotten you long easily. Although this could prove to be an important low for the short- to intermediate term, under the circumstances I’ll assume no subscribers were filled. _______ UPDATE (April 11, 1:03 a.m.): Next important stop on the way higher: 135^17.