"buy on rumor, sell on news". and it's usually the correct strategy. but not always.

the foreclosure freeze is a major deal. but ultimately clear title will be DECLARED by executive order. my prime leading indicator signaled last week that the second major downleg in the housing market has begun.

QE has been ongoing. it never stopped.

vote out all incumbents.

pete:

1. at some point either the president by executive order or the congress by law will arbitrarily choose a point at which a title is assumed, and by law is, clear. they can't let this go on for very long. the link below your post gives a very good explanation of clear title. the problem arose when the title  companies started refusing to insure the title for the banks in a foreclosure sale. in the process of securitizing mortgages the original note (agreement to repay) was either lost or (more likely) discarded/destroyed, when the document was scanned or the information on the document entered into a computer and the new security document created. the new law will simply make that entry the point at which the title is clear. you won't have to go back as far as you used to go.  they started securitizing mortgages in 1977 and the guy to blame is Lewis S. Ranieri. i very highly recommend the book "liar's poker" by michael lewis to everybody here. it's a very fun read and gives you huge insight  into trading and wall street. i first read it about 25 years ago and it talks about the birth of the mortgage backed security under ranieri's hand, which at the time seemed like a great idea. any way, no politician is going to allow himself to be known as the guy who drove the last nail into the coffin of the american dream of homeownership by closing down the real estate industry on a technicality. not going to happen.

2. if i told you what my 'prime leading indicator' was you'd start laughing hysterically. but it's been amazingly accurate over the years. let's just say it's a little quirky and eccentric and would never be used by..oh, say a brokerage firm. and it's a contrary indicator. whichever way this indicator goes, i go the opposite direction. if it buys, i sell, and vice versa.

3. everybody in the commercial property sector is just holding their breath right now. they all know the dog is dead but nobody wants to tell the kids. commercial real estate is in so much trouble that nothing is being done because any action would be catastrophic. the loans are bigger and the lending terms shorter. the city center project in las vegas is emblematic of today's commercial real estate situation. it is the largest privately built project in the history of the u.s. and it opened in december 2009, right into the teeth of the worst real estate collapse since the 30's. it couldn't be completely built because of mistakes in tying the rebar and design flaws, so it's 20 stories short of it's blueprints (personally i would have been tipped off that something was amiss when i first looked at the plans and noticed two of the towers were leaning toward each other at about 15 degrees). it went bankrupt twice before it was "completed", they had to refund money to the people (all 88 of them) who had pre-purchased condo units, and the whole development is essentially nevada's burj dubai, a hopelessly failed concept. yes, commercial real estate is going to be a large problem when the first suicidal banker decides it's time to say something and foreclose. the fed isn't buying the "assets" yet because all the lien holders have both hands over their mouths and are soiling their trousers, hoping that by some miracle it just all goes away.

if congress allows the bush tax cuts to expire, the capital gains tax will go from 15% to 39.6% on january 1. that's more than double.  it would seem to me that if you have gains you would sell before the end of the year to capture that much lower tax rate. i'm going to. you can always buy everything back in february. so there might be some extra risk in the market for the next 3 months.

netflix has been a rock star over the past 8 months. i like all your picks, twine. i would add GDXJ. right now might be a good time to write covered calls.

i don't think our experience is going to be similar to the weimar republic because of the fact that post WWI  germany was starving to death due to the onerous reparations imposed in the treaty of versailles and was not much of a factor in the world economy at that time. prices of all things that constitute an expense will go up, but there is going to be no increase in wages. so the treasury has leeway to print quite a bit of money. and almost every country in the world would be damaged by a run on the dollar. i still can't figure out the sequence of events that will lead to such a run. it's got to happen at some point.

the u.s., however, is the lynchpin  of the world economy, although diminishingly so.  it may be a drip, drip, drip thing for another year or two as asia decouples from our market. but right now it's in everybody's interest to prop up the dollar.

come february 2011, i'm completely bullish on the DOW. but with stops, of course.