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The New Foreclosure Quagmire

Lots of talk on trading desks about this new foreclosure quagmire for banks, where officials at several banks appear to have not read the documents as required by law. More important is the allegation that many are unable to prove they own the note.

Financial traders note that short term this may be a positive by slowing down the foreclosure process: 1) it decreases the amount of supply coming to the market, and 2) it pushes out the potential losses on foreclosure sales allowing the bank to continue to earn through the cycle.

Elsewhere:

1) U.S. markets clearly do not like a stronger dollar; futures weakenedas the dollar showed modest strength overnight.

Commodities are also down.

2) China strength continues: Hong Kong's Hang Seng Index is at the highest level since November 2009.

3) Europe a bit weaker on word that Swiss authorities will require more capital from UBS and Credit Suisse

4) Sara Lee

up 13 percent pre-open, reportedly rebbufing a poposal from Henry Kravis and KKR for a leveraged buyout that could be worth $12 billion; company may want to sell its bakery business.

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