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I'm looking at my trading screen and I see Lehman, which has been a birthday party for short term traders throwing around the July and August puts like pingpong balls, drop even further before opening. Fannie and Freddie are losing extreme amounts before the market open, after being halved over the last couple of days. My screen looks like the market is open in the US at 8 am, that's how aggressive pre-market trading is. The rest of the financials are following suit.

I have put some people on the industrial and manufacturing tract, and it is definitely time. Bank lending looks to grind to a near standstill. If and when it does, those capital intensive companies are @#$#%. You can't rasie decent money in the equity markets now, you can't borrow from banks, and those entities that have money will request that you bend over.

 For the goldilocks crew that believe that there will be a shallow recession and the housing slump will end next year or the year after, I suggest you take a look at your trading screen and study previous periods of extreme credit contraction and market crashes. It 6 to 7 years to spike house prices to this level, why would it reach equilibrium (it rarely does, it usually overshoots) in a year and a half?