Financial realities return

Dow is down is down 68 (check the graph below for today's decline), decliners over advancers more than 3-2 & NAZ declined 10. Euphoria is being replaced by reality. Oil is little changed. Keep in mind that Iran, once again, is rattling its sabers with a wimpy reply to the concept of inspections for the nuclear facilities.

Monster Rally Over

Freddie Mac (FRE) reported an ugly loss, down 1½ or 12%. Most interesting to me was a decline in revenues of 25% to $1.7B. Uggggh! All financials are being dragged down:

S&P 500 FINANCIALS INDEX

Value.....295.61........Change (6.44).........%Change (2.13%)

Yesterday this index reached 302 matching the interim high on Jul 23. Looks like it wants to head south. The FRE news is nothing new. Fannie Mae, etc. will be reporting more ugly news. Yahoo has a forecast by a professor that housing recession will drag into next year. Where housing goes so go financials. This negative mood also drags down REITs, not to mention the markets in general. The Alerian MLP index rebounded from yesterday's 52 week new low, up 3½ to the former 262 low. For the big boys, Exxon Mobil (XOM) is down slightly while Chevron (CVX) is up 1%.

I think this sell-off will carry the day & maybe the rest of the week.