Something is definitely brewing in the financial background and the market for US financials has spotted the smoke signals and is getting out of Dodge. Although I am deeply concerned at the market valuing US financials as bankrupt, what I am most worried about is the spillover effect into other major global financials. These guys are all tied together at the hip like a bunch of mountain climbers and if enough of them come undone, they take the whole lot of them over the cliff.

In short the risk of catastrophic cascading defaults in the banking system is greater than at any time in history, and conversely the opportunity for an uncontainable explosion in Precious Metals presents itself. Are you prepared for one Monday morning when global markets and banks seize up completely & close by executive order because the problems have become too big to contain and can't be worked out by Paulson & friends over the span of one weekend meeting?

ESL

http://mrmortgage.ml-implode.com/200...

‘The IndyMac / Pay Option ARM Effect’ in Full Force

Posted on July 14th, 2008 in Uncategorized

12pm EST.

Spill over to other banks is why the IMB seizure was likely covered up for so long. We heard two weeks prior it was a seizure and not a voluntary closing of their mortgage unit. Look at what’s happening today to other community bank’s stock prices with heavy Pay Option ARMexposure. This looks like an entire string of banks will fail simultaneously.

After a huge gap up, the stocks are all near day and all-time lows. Pay Option ARMs are more toxic than subprime for sure. The street finally ‘gets it’ this time. -Best Mortgage

Current Price Prev Close Day High 52-week high

DSL $1.52 $1.69 $2.06 $65.67

FED $3.40 $4.91 $5.32 $59.10

WM $3.45 $4.95 $5.22 $42.93

WB $10.30 $11.54 $12.08 $53.10

BKUNA $0.63 $0.77 $0.70 $19.95