I am now Scared! Really Scared!

This morning Treasury Secretary Henry Paulson goes on TV and states, "We are going to work through this problem just fine," Paulson said. He urged patience as investors reassess their appetite for risk, saying there isn't a "quick solution" to the matter. "These things take a while to play out," the secretary said. This is pure bull crap! We are in trouble.

Then we get this this morning, "Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Georgia, Nevada and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday".

In all, 179,599 foreclosure filings were reported during July, up from 92,845 in the year-ago month, according to Irvine-based RealtyTrac Inc. A total of 164,644 foreclosure filings were reported in June.

"While 43 states experienced year-over-year increases in foreclosure activity, just five states — California, Florida, Michigan, Ohio and Georgia — accounted for more than half of the nation's total foreclosure filings," said RealtyTrac Chief Executive James J. Saccacio.

Oh Snap! And let's not forget these little tidbits:

• Countrywide Financial Corp., the nation's largest mortgage lender, said Monday it has eliminated about 500 jobs as it tries to ride out problems from a credit crunch that has rocked the home loan industry.

• In yet another casualty of the fallout in the mortgage industry, the Capital One Financial Corp. said on Monday that it would stop making residential mortgages and close GreenPoint Mortgage, its wholesale mortgage banking unit. They will lay off 1,900.

• HomeBanc, in a statement on its Web site, said it is unable to borrow on its credit facilities and was unable to meet its mortgage loan funding obligations as of Monday. HomeBanc is closed. Countrywide bought the debt and hired the employees. Wait a minute! Isn't Countywide laying off?
  

• After weeks of troubling news and near-silence from official spokesmen, American Home Mortgage Investment Corp. announced Thursday night that it would shutter most of its operations and lay off more than 6,250 workers, including almost all of its 1,460-person Melville staff.

Ya'll think we are OK? What about those safe Money Market Funds? Read on my friends:

• From the online Wall Street Journal: Shares were already lower, but selling in all three indexes picked up after CNBC reported that Sentinel Management Group, a money market fund manager, had asked to halt investor redemption's, suggesting its investors were in a "panic."Sentinel's action "was a pretty drastic thing," said Stephen Carl, head trader at Williams Capital. The news stirred up the fears about the spreading impact of trouble in the credit markets and alternative investments that have dogged Wall Street for weeks. "It's just more of the same," Mr. Carl said.

• Today alone, the 3-month T-bill rate was down by over one full percentage point before recovering a bit.

• The 1-month T-bill rate has plunged from 4.52% last Tuesday to as low as 1.25% today. That's not a typo! It was actually down by more than THREE full percentage points in just four trading days!

Do you think we are safe in our MMF's? How about Vanguard or Fidelity's MMF's?

Sorry ya'll I am scared. If you have been following my post I have stated the last thing we need is the Fed's to ride in and save the day. Ya'll the only thing that will fix and save this market is the capital market process. We have to let it ride out. Our banks and credit lenders have made terrible and even criminal mistakes. Many have made millions on this credit scam. We now have to pay the price.

I am terrible worried that we are only at the tip of the iceberg right now. I predict a huge plunge of up to 100 points soon. How soon? We will see a fall out in the next few weeks. We are starting to see the signs today. Have you been watching the Gold market while all of this is going on?

Seems gold is not moving, yet. Why? Well were about to open the bank window to the world with T-bills at a super low yield rate this week. Guess who will be buying? Yes our friends the Chinese. God this scares me even more. The Chinese are buying up our debt at almost any rate we give them. This is not a good sign for the US market. Debt is going to kill us and it will be a slow painful death of the consumer market. After the sell of the T-bills this week watch the gold market. When you see gold starting to jump $3 to $4 dollars up get ready for the market fall.

What do you and I do in this market? If your long like me just ride it out and watch those MMF's very closely. Are there any good buys right now? I think Starbucks is looking good. Apple looks good but let's see how much of a pullback we get this week.

Stay the course!