Oh boy did we lead with a good one.....

"H&R Block Inc., the biggest U.S. tax- preparer, said first-quarter losses more than doubled on costs to finance its money-losing subprime mortgage unit."

But its all "contained", right?

Well, sure - to the Planet Earth:

"U.K. lenders responsible for 12 percent of the nation's mortgages are tightening standards for loans on house purchases, withdrawing offers and raising the cost for borrowers with less than perfect credit."

Wow, they have subslime over there too! Cool!

Thornburg may be doing the "death rattle".....

"Thornburg Mortgage Inc., the jumbo- mortgage specialist whose shares have lost more than half their value this year, said it plans to raise as much as $500 million by selling convertible preferred stock."

Not another one?

And where are people fleeing to? Treasuries:

"U.S. Treasury notes advanced on speculation demand will rise at a five-year auction today, after a two-year sale garnered the most orders since at least 1992."

Translation: Treasuries kind of suck in terms of yield, but at least we know what they are. In short, at least you're not ****ing making it all up!

The commerical paper market? You know, where the money is coming from that's going into Treasuries (among other places)? Yeah, that:

"The U.S. commercial paper market shrank for a third week, extending the biggest slump in at least seven years, as investors balked at buying short-term debt backed by mortgage assets."

No kidding.

The hedge fund implosions continue - overnight we had another one (Australian this time.) How many more are being hidden?

Sears Holdings (SHLD) reported disappointing results. They're getting pummelled a bit in the premarket - 3% or so. We'll see how they trade during the day.

Freddie Mac (FRE) reported much lower earnings due to losses on mortgage sales.

"Freddie Mac, the home-mortgage financier which is recovering from a massive accounting scandal, posted a 45% plunge in second-quarter net income as it took a $320 million loss on new mortgages."

Gee, is that good?

Finally, we are starting to get some purchase from people believing that Bernanke has the balls to hold interest rates stable. Will he? That's impossible to know at this point, and let's not forget that Bernanke is "jawboner in chief", not "mover of markets in chief". And let's not forget - Bernanke has only one knob, and only a few bullets in that gun. When he runs out of firepower, that's that. What if he cuts rates - and then the market takes a 20% ****? Now what does he do?

Last night I identified a pattern in the futures and S&P cash that might portend that we "hit the wall" with that rally yesterday and put up a video "Tick" on it. This morning it appeared that indeed that pattern is confirming, but now, the pump monkeys are out trying to run the indices.

How come?

Tech - specifically, people think this "non-announcement announcement" from Apple means something. Oh Horse****, for one, and second, anyone remember what happened to Apple during the tech wreck? Better pay attention kids!

The 2Q preliminary GDP number came in at 4%; personal consumption dipped only modestly. The prices side came in with expectation up 2.7% (Ed: anyone think Bernanke is cutting rates with inflation above target by 40%?) Jobless claims ticked up a bit, up 9,000. The futures totally ignored all three, flopping around less than two points, in one of the more muted reactions to a major economic release I've seen in a while.

Dell reported after the Bell and beat by a penny; the market didn't seem to like it much on the instant reaction, hitting the shares a bit after the market closed. Not much movement all-in.

The market and CEOs are basically throwing a tantrum right now demanding rate cuts, along with Larry Crudlow. This is a total crock of ****; reality here is that the Fed is not here to bail out people who got into a credit crunch because they inappropriately stuffed the commercial markets with derivatives.

Let's be straight on this one - before Alan Green****up cut interest rates whenever the market whined, there were no mortgages written to strawberry pickers who claimed to make $200,000 a year, and there were no businesses issuing one commerical paper tranche backed by their building and a second one backed by their ****ing coffee machine and an unregulated OTC swap that some hedge fund sold them for a thousand dollars.

One would hope that Bernanke is smarter than Green****. One never knows. But this much is certain - this mess is not a liquidity problem - it is an insolvency problem and the only fix for it is for those who got their***** in a wringer by playing fast and loose with sound lending principles to face the music - and perhaps go out of business.

Late in the afternoon a news flash came across that a judge has denied Bear Stearns' attempt to gain bankruptcy protection in the US. Good for him. I like "no" when it applies to someone who has been jacking people around.

Ok, technicals.... here's the video!