Foreclosures rise as banks make huge profits. What's wrong with this picture?

Here's several related stories which should cause great concern:
• "Foreclosures rise 15 percent in first half of 2009" versus then next two stories
• "JPMorgan Chase posts 2Q profit, surpasses Street"
• "Goldman Sachs sees record profit"

You see both JP Morgan and Goldman Sachs received significant Tarp money to ease the Credit crisis in the Mortgage industry to prevent foreclosures. In this earnings report, JP Morgan also said they had paid back all $25 Billion in TARP funds to the Government. Here's more details on the Mortgage article that should cause concern.

"The data show that, despite the Obama administration's plan to encourage the lending industry to prevent foreclosures by handing out $50 billion in subsidies, the nation's housing woes continue to spread. Experts don't expect foreclosures to peak until the middle of next year.
Foreclosure filings rose more than 33 percent in June compared with the same month last year and were up nearly 5 percent from May, RealtyTrac said.
"Despite all the efforts to date, we clearly haven't got a handle on how to address the situation," said Rick Sharga, RealtyTrac's senior vice president for marketing."

So despite the earnings looking very god in the banking and financial industry, things are not getting better. Compare that to the rising tolls of the unemployed, now expected to go as high as 13% by some estimates, and you have a recipe for a calamity ahead of us. This must affect the stock market negatively if the stock market is truly free of manipulation. But we know it isn't, don't we. My friends, it used to be one could generally predict market direction based on certain outcomes in the economy and based upon data which supports future predictions. The truth is I can't any more and I doubt any one else can as well. That should be the biggest concern of all. When the stock market becomes unpredictable, it is time to consider ending the trust placed in the system and cash in. There is an expression made famous by the man who was shown by the psychologist a series of ink blot charts. Evert time the man was shown a chart and asked what he saw, the man would say, "people naked". The psychologist turned to the man and asked him, Why do you keep seeing naked women. The man replied, it's not my fault, you're the one with the pictures! I see the same thing in the stock market right now, reason to give great pause as to the integrity of the entire system. Just because we are on a slower decline than we were before, we are still in decline with much more expected over the next several years with more people losing jobs begetting more foreclosures and less disposable income to prop up corporate profits and so the cycle continues. Help me see something differently here.

Double Witching Friday: Will the stock markets hold? UPDATE

This is the question of the day and many are nervous it won't. There isn't much data to point to, to answer that question. The only data I could bring forth today, as a piece of encouragement, was that the VIX Volatility Index closed at 47.08, down 1.38, as it still stays under 50. When the Volatility Index comes down it doesn't mean that markets will go up, it just means that people aren't panicking and selling like a mob, they are much more calm about it.

This latest market drop, back to the November lows, looks well managed, in my view. The daily moves are modest and not like what it was like when we first reached the lows, back in November, when the VIX was between 70 and 80. I tend to think it is Wall Street wanting to send a message to the politicians in DC that they don't like what the Obama Administration is doing to solve the Credit crisis, the Mortgage crisis nor the Stimulus package. The problem with this point of view is all those voices have come up with no new ideas other than reducing taxes. It is the only action most right wing Republicans can come up with.

So I still believe we are going to hold around this current level. We may go as low as 7,200 on the Dow, When I first put the chart together projecting the lows of about 7,300 when no one thought we were ever going that low, I also said it could go to 7,200. The reason for the discrepancy was that the uptrend line which I constructed and analyzed started from about 1975 to the mid 1980's. I did not enter all the data in a spread sheet and use an equation to determine best fitting line. I used existing charts for the period of 1970 to September of 2008 and drew a line that while imprecise hit at around 7,200 to 7,300. So when I said we will hold, I really believe we will. We just need to get through today rightfully labeled "Double Witching" for this month's Options expiration. It will be a measured test not a panic drop but the shorts want to extract every penny they can from these lows. Keep the faith!

UPDATE: 8:45am PST.

Well we have gotten as low as 7,311 today and still appear to be holding, and the S&P 500 has gone as low as only 762, which is also good news. The VIX has risen to as high as 50.36 but went back below 50 again.

UPDATE: 10:00am PST.
I wanted my readers to know what I am currently doing. I have just purchased additional shares of the ETF Ultra Long of the S&P 500, symbol SSO for $18.48/share and also purchased additional shares of the other ETF I own, symbol TNA, for $17.49/share.

The VIX is now up over 51 and the Dow is down to 7260.