Hindenburg Omen Tripped. Does this mean Stock Market Crash?

This is my first taste of the Hindenburg Omen. According to the article below, it's a technical indicator which foreshadows a stock market crash. Whether it works in actual fact, I think I'm very tempted to be out of the market for the moment.


  . . . June

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Yes Folks, Hindenburg Omen Tripped Again - MarketBeat - WSJ
"By Steven Russolillo

The Hindenburg Omen reared its ugly head late last week, signaling more doom and gloom as stocks plod along amid the dog days of summer.

The Omen, a technical indicator which uses a plethora of data to foreshadow a stock-market crash, was tripped again on Friday, marking the second time since Aug. 12 it has occurred. (It also came close on Thursday, but one of its criteria fell short.)"

The latest trigger has prompted the Omen’s creator, Jim Miekka, to exit the market. “I’m taking it seriously and I’m fully out of the market now,” Miekka, a blind mathematician, said in a telephone interview from his home in Surry, Maine. “I would’ve probably stayed in until the beginning of September,” depending on how the indicators varied. “That was my basic plan, until the Hindenburg came along.”

The Omen has been behind every market crash since 1987, but significant stock-market declines have followed only 25% of the time. So there’s a high likelihood that the Omen could be nothing more than a false signal.

But that isn’t stopping Miekka from taking any chances, especially as September, typically the market’s worst-performing month, sits only one week away.

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Fees Levied On The Mortgage Industry Could Cost You More

According to the article below, the government may levy fees on the mortgage industry which will likely be passed along to the borrower in return for federal backing of mortgage loans. Sounds like business as usual.

   ... June


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Reform of Fannie and Freddie Could Translate to Higher Costs For Borrowers

By Michael Kraus on August 24, 2010

Fairly interesting article by Deborah Solomon and Nick Timiraos in the Wall Street Journal today that says the government may levy fees upon the mortgage industry (which will likely be passed along to the consumer) in return for federal backing of mortgage loans.

Under the current system, mortgages are originated by mortgage companies, brokers, loan officers, etc.  These mortgage are then sold to investors or securitized and sold to investors.  Right now, Fannie Mae and Freddie Mac are pretty much the only investors who are purchasing mortgages.  Together they back more than 90 percent of single family mortgages in the United States.

Fannie Mae and Freddie Mac were seized by the government in 2008 in order to avoid their financial collapse.  Since that time the Obama Administration has dumped $150 billion into the GSEs, and has pledged an unlimited amount of capital to backstop their losses.  The Congressional Budget Office estimates the total bailout could cost around $400 billion, and many analysts estimate the bailout could cost more, with a worse case scenario of almost $1 trillion.  In a nutshell, U.S. taxpayers back almost all of the mortgages in the country (congratulations, you’re an investor in the housing market!).

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What Effect Will Credit Card Restrictions Have?

 It's finally the turn of the consumer to have some say in how their credit cards are managed - Or is it?  It seems to me that the credit card company have already implemented lots of changes in their favor while they waited for the changes to take place. It's for sure, the credit card companies aren't planning to suffer.
   . . . June


New credit card restrictions take effect - CNN.com 

"Washington (CNN) -- New rules designed to protect credit card users from 'unreasonable late payment and other penalty fees' come into force Sunday as a result of the Wall Street reform bill.

The rules block credit card companies from charging more than $25 for late payments except in extreme circumstances, prevent them from charging customers for not using their cards, and requires them to reconsider rate increases imposed since January 1, 2009, according to the Federal Reserve, which approved the regulations.

They are the final provisions of federal legislation that placed new restrictions on credit card interest rates and fees, completing the most comprehensive overhaul of the credit card industry in history.

The banking industry has already made changes in response to the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, a spokesman said Sunday."

"The industry has moved swiftly to implement all of these changes and the final piece of the puzzle is now in place," said Kenneth Clayton of the American Bankers Association.
"It will still take some time before we can really see how the landscape has changed, but it is clear that consumer choice and control will ultimately drive further changes in the marketplace," he said in a statement.

The Fed's rules could result in lower interest rates for consumers
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