Paul Kasriel: "The household debt-service burden hit a new record high of 13.93% in Q1:2006... This ratio has been trending higher since 2000, the beginning of the housing boom. Low financing rates mitigated the debt-service burden for a while even as household borrowing exploded. But with the Fed having raised the funds rate by 425 basis points in a 25-month span - the largest 25-month funds rate increase since the Volcker era - the combination of rapid borrowing and rising financing rates is pushing up the debt-service burden at a faster rate. With employment growth slowing, which will retard growth in disposable personal income, and a massive amount of mortgage debt subject to interest rate resets this year and next, the household debt-service ratio is destined to reach even higher levels as we go forward."
Robert McHugh: "The Dow Industrials completed their third triple-digit loss in a row, and are down over 4 percent over the past three days. This is what happens with wave threes, which is why we spend so much time watching for them. This one isn't over. The first sub-wave down within it may be close to completing, but there are five waves to an impulse, and we are just finishing the first one."
Dow Jones Industrial Average 4.4%
S&P 500 (SPX) 3.4%
NASDAQ composite (OTC) 7.0%
S&P Mid cap 5.6%
Russell 2000 (R2K) 6.8%
Wilshire 5000 4.0%
Unfortunately there is no divergence in the indicators or anything I can see that would suggest a change of trend. Most of the indices are slightly above their mid-June lows and those levels might offer a little support, however, there is no reason to be optimistic about that support holding... Last week was, on average, the best week of the month.
Next week is, on average, the worst week of the month... There is no evidence of a bottom."
Dan Basch: "In my last essay, "Bernanke's Test Has Arrived", I predicted a severe decline had just begun and luckily nailed it. Since the essay was published, the NASDAQ index declined from 2272 to today's close at 2037, or just over 10%. This essay is to serve as a brief update: I expect this may be the beginning of what will soon become an outright market meltdown. This is partially indicated by a Bearish Diamond formation which has formed on the NASDAQ and broke down this week. "
Volkmar Hable: "In every issue of this Investment Commentary since January I have warned to get out of stocks and prepare for a serious decline. Here we are in the middle of the second leg down, and there are still people owning stocks and hoping for a reversal. This rally into mid-July was the last chance (very likely for this year) to get out of long positions. Remember: managing risk and avoiding losses is key for long-term success. Don't risk your capital and forget risk management for some short term gains. In a sideways market traders and investors should focus on opportunistic strategies!"
George MacDonald: "Attitudes are more important than facts."
Toyota Motor Corp. is considering making a bid to link with General Motors, according to a report in BusinessWeek magazine. The move would be aimed at trumping a proposed alliance between GM and Renault-Nissan.The magazine reported Saturday that Toyota "is considering its options and looking at different opportunities that they could propose to GM." It said Toyota executives have "war gamed" possible scenarios by which it could help GM with its turnaround.BusinessWeek quoted an unnamed Toyota executive who said, "Toyota has no interest in seeing an alliance like this [involving Renault, Nissan and GM] take place."(GM denied this report on Sunday). Maybe this report is accurate and maybe it is not. The point is Chrysler is hooked up with Daimler, Renault/Nissan is eyeing GM, and Ford will not be left out in the cold.
Brett Steenbarger: "Go with the odds, but make sure you can survive the odds you're wrong. Better advice than that I cannot give."
According to the Financial Times, Ford Motor will on Monday announce it is to spend £1bn ($1.8bn) over the next six years on British research and development projects designed to improve the fuel efficiency of its vehicles, as the European arm of the US carmaker realigns investment priorities.
Freud: "Thought is action in rehearsal."