Nasty rumors on Lehman and a few other juicy pieces of info-gossip lead me to believe the market will drop significantly in the next few weeks. Fortunately, my mini-account is currently in cash and I’m well positioned with DXD (double short Dow) to protect myself and profit from the coming slaughter but anything can happen…

Interestingly enough, remedies like the one below are going to exacerbate the housing problem.

By Jon Hurdle

PHILADELPHIA (Reuters) – Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments — potential relief for tens of thousands of struggling debtors.

Sheriff John Green said on Friday he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period.

His action follows a nonbinding resolution passed unanimously by the Philadelphia City Council on Thursday calling on Green to stop the sales to give borrowers more time to seek a settlement that would prevent them from losing their homes.

Philadelphia becomes the first U.S. city to halt foreclosure sales in the current crisis, although Cleveland and Baltimore are considering similar measures, said ACORN, an advocacy group for low-income families.

The group said 45,470 subprime foreclosures are expected in Pennsylvania between the third quarter of 2007 and the end of 2009.

So the city of Philadelphia has suspended foreclosures which means people that can’t afford their homes will get to live in them for free or at the very least, give those people more opportunity to trash those homes before they leave. I’d hate to be an investor told that any type of investment recovery (e.g. foreclosure) has been frozen so who’d want to lend money out now? Who’d want to invest in banks? It’s a vicious cycle of cascading deflation and the tax payer will no doubt be left holding the bag.

I find the number of homes positioned for foreclosure staggering: 45,000! Assume that an average home is $150,000 and assume a 20% loss after foreclosure and you’re talking about a 1.3 billion dollar loss in one city alone! Think of the property tax revenue losses! Think of the Home Depot or Lowe’s losses! Think of the mortgage insurers losses!

Do you see the theme? Losses! Losses! Losses!