Futures! Cracks? Reality Bites.

Asian futures are down BIG across the board! http://bloomberg.com. I don't know what is triggering this. Perhaps the news that Iranians have been enriching Uranium in secret under ground facility and that they may be closer than previously thought in making wepons grade plutonium? http://www.nytimes.com/2007/04/19/world/middleeast/19nukes.html?_r=1&oref=slogin Or is it that the Yen continues strengthen carrying with it the lucrative Yen Carry trades?

Or perhaps it is because the time has come to pay the piper. I have been mentioning how irrational the market has become. But the liquid crack that the market has been consuming might be wearing off and withdrawl may be showing its effect. I have outlined that there will not be any rate cuts in the near future and if anything, we can expect a rate hike. Additionally, the market is currently in a denial mode where even minute news is spun positively or ignored. But that game can only go on for so long.

This is most evident in the home builders and mortgage lenders. They have some how taken positively to Washington Mutual's (WM) earnings which showed a terrible gut wrenching signs of serious deterioration in the company's fundamentals. Please see another blog: http://market-ticker.denninger.net/. The earnings report was nothing but stuff of horror movies. Yet the market rewards this company. I have even postulated, out of frustration, that perhaps that the market has factored these events in, which I didn't think so, but the markets can frustrate even the best of us. This frustration might have crescendoed today.

Pulte also reported bad numbers stating that housing orders decreased by 24%. In the mean time, Countrywide insiders are at their old games again, selling with abandon. So what could all this mean? Are the cracks finally showing up? Possibly. I have bet enough money on April $35 puts which at this point are worthless, that CFC will unravel. Stupid? Probably. But I have also done some hedging today as a day trade and made 1/2 of that position back. Only time can tell. This market has me frustrated but undeterred.

At any rate, it should be interesting tomorrow. It will really hurt when Reality Bites.