Named "in honor" of American Home Mortgage (AHM) who Friday, at 10:00 PM (in an eerie reminiscence of their Good Friday massacre) announced they were "delaying" their dividend - after it had been credited to many investor's accounts!

And why would they do that?

Some stammering about a kind of call they didn't like... I think they're called "Margin Calls". Anyone know?

Those are bad, right?

Anyway, they were instantly woodshedded this morning, with the immediate reaction being a 25% haircut in the premarket. There were a significant number of fools who were "attracted" by their outsize dividend payout. Then again, there were people who were attracted by New Century's too, and we know how that one ended. I can understand people forgetting what happened back in 2000, but March?

Monster.Com (MNST) announced lower than expected earnings and job cuts - they of course traded up in the premarket. I guess that lower earnings are good, right? Oh wait - wasn't the job market supposed to be "very strong"?

CNA come out with poor earnings due to writedowns on bonds (someone was doing a bit of "reaching for yield" eh?) and got hammered. I used to have a commercial insurance policy with them - they were decent folks to deal with. Too bad they weren't real smart about their investments....

Oh, Subprime isn't spreading eh? Don't tell that to AHM. Rumors are swirling over what their trading halt is about (beyond what they've said - margin calls and a suspended dividend payment) and then we have this:

"Every day brings a new failure. Borrowers ranging from Manchester United Plc, the world's fourth-biggest soccer club by revenue, to billionaire Barry Diller, chairman of Internet travel agency Expedia Inc., have failed to find lenders to refinance debt or fund share buybacks."

Gee, 'ya think?

Oh, and let me give you a hint - do you know why they call 'em "Brokers"? Think.... BROKE. As in what you'll be if you listen to this!

"U.S. stocks rebounded, pacing a global advance, after Wall Street brokerages told investors to buy shares that fell during last week's $2.1 trillion global sell-off. "

Yeah, ok. What 'ya smoking there? You didn't bother telling anyone about the LBO "Put" that is now gone, did you? Why not? Oh, you don't make any money if people sell and go to cash, do you? Naw, churning is such a profitable business!

Then you have this ditty:

"The biggest losses in equity and credit markets in five years are making the U.S. stock bulls more bullish."

Well of course. But again, no mention about how the LBO "Put" has disappeared from the market and is unlikely to return any time soon - and at recent levels, never.

Guys, credit markets. Credit markets! DAMN IT, WATCH THE CREDIT MARKETS!

And there you will find nothing to suggest that this is over. Not here, not in Europe, not anywhere. In fact you continue to see deterioration! Credit default spreads hit ALL TIME RECORD HIGHS today. Margin calls among LARGE ALT-A mortgage lenders? This spells STABILITY in the credit markets?

Horsecrap!

The threat of a forced carry-unwind eased a bit, with the Yen headed back towards 119 as the day went on. This was certainly a big factor in the bounce today.

But..... does this mean its over? Oh no, I don't think so. The story here is liquidity, and only a few - including Russell Reed from Calpers (who I just heard on CNBC), seems to have it right. He sees a change in the global liquidity picture and I agree - how can you not see that when default spreads widen to the highest on record?

As for LCDX spreads, they had a horrible morning but this afternoon came back in quite a bit. That was largely responsible for the rally today in the afternoon.

The ABX mostly deteriorated - the BBB tranche on the 07s found a small bid, but not by much. The AAA, AA and A paper got murdered - again. The CMBX found a bit of a bid today - could that really have gotten worse though? (Well, yes it could..... but....)

Oh, breadth? Horrifying. Dow is up 88 points, but 52 week lows on the NYSE were 444, with only SEVENTEEN new 52-week highs. Gee, is that good?

Who won today? Broker/dealers (big financials); oversold bounce (clearly). GM was up quite a bit today - likely due to GMAC coming in with good results and an expectation (after Ford's results) that GM's would be decent.

Now let's look at some technicals:


Notice a few things here - This is the Dow Jones Industrials, and is sitting right on the 100DMA. We pinned it but didn't penetrate - now we're trading between the 50 and 100. One way or another, we have to break that line, and this will pinch off.

Now before you get all bullish (we didn't blow through the 100) take a good look at this:

Oh oh. That ain't so good. That's our buddy transports, and he's sick - he's under the 100.

The S&P is sitting under the 100 but hasn't penetrated the 200, and on the Nasdaq, the Composite is under the 50 while the NDX (Nasdaq 100) is just above the 50.

The Russell, as I noted Friday, is a mess, having lost all support, blowing through the 200DMA like a knife through butter. The EEM (emerging markets index) is sitting on the 50.

So what do we got here?

The same thing I said we had on Friday! And it appears that we're getting scenario #2 - the most dangerous for both Bulls and Bears, where we may be moving higher to clear out the "oversold" indicators on the indices - an advance which can be violently reversed by just one tiny little credit implosion!

So the bull/bear fight here is simple - who drags who and which way?

Here's the bottom line from my perspective coming off today - this is probably an oversold bounce off the break. Now that's on the technicals.

On the fundamentals, show me some good data. Good luck. It looks no better now than it did a month, two months, or three months back. Fundamentals on the economy are middling at best and deteriorating, with housing leading the way.

Tomorrow we get earnings from IMB (IndyMac Bank) and hopefully some sort of clarity on what's up with American Home Mortgage (AHM). I can't imagine the latter will be good news, but we shall see.

Until then, have a great evening!