Bear Mountain Bull

It’s time again for a little BMB R&R, especially with the market behaving as bizarrely as it’s been. Maybe if we stop watching it start to behave a little better…

Posting will be very light and variable over the course of this week, but we’ll put up an open thread each market day for our readers to comment on the day’s market activity or to post any interesting links they might run across.

Check the space below for whatever the latest might be during this ‘off’ time, and please visit the various sites in the ‘Links’ and ‘Regular Stops’ for up-to-date market news and analysis.

BMB will be back in full swing by next weekend.

Gretchen Morgenson is one of the straightest shooters out there when it comes to financial writers. Today she takes a look at the rumblings in the mortgage credit business:

Investors, chasing the buzz of ever higher yields, have flocked into the mortgage-backed market in recent years. Nobody wants to think that the possibility of a wide-ranging subprime debacle is also a harbinger of looming problems for investments tied to those loans. But the reality is that these vehicles — and the collateralized debt obligations that hold them — are not as secure as many believe. And that has broad implications for the capital markets.

***

So far, the pain from subprime defaults has been muted. Market participants are cheered that lenders are finally tightening their loan standards, albeit a bit late. Unfortunately, the damage of the mortgage mania has been done and its effects will be felt. It is only a matter of when.

Read the whole thing, just so you have some sort of idea what’s going on behind the curtain. Because if the curtain ever falls, it could fall fast and hard - and you’ll want to have some clue as to what all the fuss is about.

Hat tip to Calculated Risk.

Notes on the latest moves in the industry groups:

• Some of the more industrial areas are still looking pretty good - commodities, chemicals, paper, steel, etc.
• In health care, the HMOs and hospitals have been on a roll.
• Other groups looking pretty good include the banks, defense, internet, retail, transportation, utilities, gold and silver, and telecom.
• Housing and the REITs are holding up, but have been a bit shakier in recent days.
• Much of tech is still underperforming the rest of the market, and the disk drives are easily the worst of that bunch. Friday’s news out of SanDisk probably isn’t going to help matters any.
• For a more detailed breakdown of group movement over various time periods, try Prophet.net’s Industry Rankings page.