U.K. home repossession claims by mortgage lenders increased 16% from a year ago to their highest level since the early 1990s, Bloomberg News reported Friday.

The U.K.'s Ministry of Justice said possession claims, the first step in the foreclosure process, increased to 38,688 in Q1 2008, from 27,530 in Q1 2007, Bloomberg News reported.

Anglo-American housing slump

London-based economist Mark Chandler told BloggingStocks Friday the large foreclosure rise indicates that the air is easing out of the housing balloon, and that the housing correction that began in the United States, is "clearly washing shore in the U.K."

InterContinental Exchange (NYSE: ICE) shares are falling today after the company released a statement in response to Congressional proposals to modify the operation of regulated global energy exchanges. The company called the proposals arbitrary controls that would adversely affect consumers, market prices, and the competitiveness of the U.S. markets. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ICE.

After hitting a one-year high of $194.92 in December, the stock hit a one-year low of $110.25 in March. This morning, ICE opened at $159.37. So far today the stock has hit a low of $156.07 and a high of $159.90. As of 12:00, ICE is trading at $156.57, down $3.15 (-2.0%). The chart for ICE looks bullish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $200 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in four and a half months as long as ICE is below $200 at September expiration. ICE would have to rise by more than 24% before we would start to lose money. Learn more about this type of trade here.

ICE hasn't been above $195 at all in the past year and has shown resistance around $167 recently. This trade could be risky if the company's earnings (due out in late July) are a positive surprise, but even if that happens, this position could be protected by resistance ICE might find around $195, where it topped out back in January.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in ICE.

Exxon Mobil (NYSE: XOM) shares are falling today even though crude oil prices continue to make record highs as proponents of separating the chief executive and chairman roles at the company announced they will take their case to institutional investors and proxy voters. The group of dissidents includes descendants of John D. Rockefeller, the founder of Exxon's corporate ancestor Standard Oil.. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on XOM.

After hitting a one-year high of $95.27 in October, the stock hit a one-year low of $77.55 in January. This morning, XOM opened at $89.37. So far today the stock has hit a low of $87.97 and a high of $89.59. As of 11:45, XOM is trading at $88.65, down 0.72 (-0.8%). The chart for XOM looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $100 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.0% return in ten weeks as long as XOM is below $100 at July expiration. Exxon would have to rise by more than 13% before we would start to lose money. Learn more about this type of trade here.

XOM hasn't been above $96 at all in the past year and has shown resistance around $95 recently. This trade could be risky if crude oil prices continue to skyrocket, but even if that happens, this position could be protected by resistance XOM might find at $95, where it has topped out four times in the past year.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in XOM.

Shares of French drug maker Sanofi-Aventis (NYSE: SNY) have been tumbling more than 5% in morning trading on news that a Swiss drug maker said it expects to receive approval to sell a generic version of Sanofi's anti-clotting agent Plavix.

History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland's Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be bought for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.

Sanofi-Aventis's fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.

Credit cards ... the little plastic cards in your wallet that are so convenient to rely on when you are strapped for cash. While the convenience of having cards definitely makes it easier to buy items when you are running low on cash, the flip side is that credit card debt can drown the typical household, and statistics are showing that Americans are pulling out their cards more than before.

One of the reasons why credit card usage has been on the rise is the fact that homeowners are having a harder time using home equity to get a cash infusion into their accounts. As a result, they are looking to borrow money from somewhere, and more times than not, they are turning to credit cards.

The evil with credit cards is that once you start to use them to pay for your basic necessities like food and gas, you find that in the months to come you still can't afford your basic needs but in addition, your monthly bills are racking up like crazy due to your credit card expenses. It's a scary cycle that many families find themselves trapped in.

The Boeing (NYSE: BA) 787 Dreamliner has been delayed three times, mostly because of problems with suppliers.The situation has gotten so bad that some of the company's customers, large airlines, say they will ask Boeing for compensation. That could cost Boeing a lot of money.

Boeing management has promised that there will be no more delays and that everyone who wants a plane will get one, on time. But, the best laid plans...

The company's large unions may stage work slowdowns. They argue that the work given to suppliers should have gone to them. They claim that delays could have been cut. Of course, now they want to delay the program further all on their own.

"Unions have the upper hand now,'' said Richard Aboulafia, an analyst with Teal Group, an aviation consulting firm in Fairfax, Virginia, told Bloomberg. "They're determined to get their share of the good times."

Boeing management now faces more criticism because its own labor force can't be held in line. The company's stock has already dropped due to the delays. First suppliers, now its own people.

The news shows that incompetent management usually stays incompetent. Boeing did not control its supply chain, and did not know it had component problems until too late. Now it will be accused of not even keeping tabs on its own unions.

Douglas A. McIntyre is an editor at 247wallst.com.

AIG (NYE: AIG) was the most respected insurance firm in the world when it was run by Hank Greenberg. But he is gone, along with the respect.

AIG managed to lose $7.8 billion in the last quarter, an impressive amount even by the standards of current bank and brokerage deficits. According to The Wall Street Journal, "The giant insurer also announced that it would raise $12.5 billion in capital to replenish its balance sheet."

Of course, the reason for the losses was, among other things, investment in instruments based on mortgages.

One odd piece of news that came out of the awful quarter from the insurance firm was that it would raise its dividend. It is hard to imagine where that cash will come from.

The smoke signal sent up by AIG is that the crisis involving US financial firms is not over. AIG did not say that the future was bright and the sun was coming out from behind dark clouds. Pessimism was the emotion of the day.

Watch for more big losses from banks and brokerage in the second quarter. AIG is a canary in a coal mine.

Douglas A. McIntyre is an editor at 247wallst.com.

In reaction to surging fuel costs, several major airlines announced today that they were raising their fares in order to recoup some of their rapidly increasing flying costs.

The increase this time around is $20 and effects passengers traveling on UAL Corporation (NASDAQ: UAUA), Delta Air Lines, Inc. (NYSE: DAL), and AMR Corporation (NYSE: AMR)'s American Airlines. The $20 jump in prices will be added to the airline's fuel surcharges, and consequently, these charges are now running at $130 round trip on most flights that you will book through the airlines.

The current rate hike was first initiated by Delta, and marks the second time in just over a week that the airline has been forced to raise fares in order to combat record high fuel costs. Times are definitely tough for airlines, and they are doing everything they can to combat fuel prices, but regardless of the rate increases most analysts are still expecting to see huge losses this year from most, if not all, airline carriers.

Lehman Brothers (NYSE: LEH) shares are falling today as an SEC official has warned that future investment banks that get into trouble may not get the same bailout that Bear Stearns (NYSE: BSC) did. Director of Trading and Markets at the SEC Eric Sirri told the House Investment and Insurance Subcommittee that the liquidity help given to BSC may not necessarily be repeated if another bank has trouble. These words have dragged down LEH in trading yesterday afternoon and so far today. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on LEH.

After hitting a one-year high of $82.05 in June, the stock hit a one-year low of $20.25 in March. This morning, LEH opened at $44.19. So far today the stock has hit a low of $41.67 and a high of $44.19. As of 12:40, LEH is trading at $42.67, down 0.97 (-2.2%). The chart for LEH looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 14.2% return in six weeks as long as LEH is below $50 at June expiration. LEH would have to rise by more than 17% before we would start to lose money. Learn more about this type of trade here.

LEH hasn't been above $50 since mid-February and has shown resistance around $47 recently. This trade could be risky if the company's earnings (due out in mid-June) are a positive surprise, but even if that happens, this position could be protected by resistance HSY might find from its 50-day moving average, which is currently around $45.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in LEH or BSC.

The world's third largest music company, Warner Music Group Corp. (NYSE: WMG), reported this morning a wider second quarter loss and suspended a quarterly dividend to strengthen its balance sheet.

Warner Music posted a quarterly loss of $37 million, dragged down by higher costs and lower compact disc sales. Analysts had expected a loss of 12 cents per share, and were disappointed to see the company report a loss of 25 cents per share.

Warner's quarterly revenue rose only 2% to $800 million compared with $784 million a year ago. The company attributed the revenue decline to its recorded-music segment whose sales climbed only 0.6% due to consumers' preferences for digital music. However, the drop in revenue could have been even worse if the recording company hadn't benefited from the weak dollar, Warner stated. Analysts expected revenue of $780 million, according to Thomson Reuters.

Bloomberg News reports that consumer borrowing -- as measured by credit card receivables -- grew much faster than expected in March. Specifically, the 9% growth to $2.56 trillion was twice the rate of increase that economists had expected (the actual increase was $15.3 billion vs. 34 economists who expected $6 billion). The March figures brought U.S. consumer borrowing in the first quarter to $34 billion, the most since the first three months of 2001, when the economy entered its last official recession.

And as consumers are increasing their indebtedness, they are also having more trouble paying it back. Overdue payments at the six largest U.S. credit-card lenders reached the highest level since November 2004, according to data compiled by Bloomberg. It found an average of 4.11% of loans were at least 30 days late in February and March.

Bloomberg quotes Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York who says it all: "incomes are not keeping up with inflation and this is leading them to rely increasingly on credit to see them through the worst housing downturn since the Great Depression. The days of extracting cash from one's home to spend on goods and services are long gone."

With consumer spending accounting for 70% of GDP growth, that's why I suggested selling into the sucker's rally that peaked last week.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Initial jobless claims decreased 18,000 to 365,000 for the week ended May 3, below the consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised up 3,000 to 383,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 370,000.

Also, the 4-week moving average increased 2,500 to 367,000. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

Economist Peter Dawson said this week's job report "shows that soft labor conditions are an enduring feature of the sluggish U.S. economy. Hiring in both small and large companies has to turn up before we can say this economy is gaining some traction."

The largest increases in initial claims for the week ending April 26 were in: Massachusetts, +5,591, New York, +4,648, Kentucky, +3,776, New Jersey, +3,521, and Michigan, +3,238. The largest decreases were in: Texas, -3,373, Rhode Island, -1,835, California, -1,689, Pennsylvania, -1,597, and, Connecticut, -1,423.

Meanwhile, the number of continuing claims decreased by 10,000 to 3.020 million from a revised 3.030 million for the week ended April 26, the latest period for which figures were available.

Economic Analysis: Another poor weekly jobless report. Weekly claims were above the consensus estimate, and the 4-week moving average remains at an elevated level. Further, the continuing claims total remains over 3 million -- an indication of a soft job market. That statistic, combined with a elevated 4-week average, indicates that labor market conditions are not improving -- a decided negative for the U.S. economy.

Even a global company like Toyota (NYSE:TM) cannot escape the slowdown in the US market. The Japanese auto company reported it Q4 profits dropped 27%, more than expected.

Bloomberg reports, "The slowdown in the U.S. really hit Toyota,'' said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, which oversees $28 billion in assets. "The market has yet to hit bottom.'' Indeed, for most car companies, US sales fell by double digits in April. Toyota did somewhat better, but "somewhat" is not enough.

The news reflects how difficult it is for multinationals to do well when the world's largest consumer market is doing poorly. It raises the question about what the financial results from large companies in Europe and Asia will look like as the year goes on.

The Toyota earnings are a sign that the US slowdown could move to export companies in places such as China and Vietnam, which rely heavily on selling goods into the American market. The bad news from America is starting to send waves to foreign shores.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

The stock market was down without much conviction in the early going with the DJIA off 40 to 50 points. But someone must have pulled the plug somewhere as it has been dropping fast from about 2 p.m. and the Dow was down over 180 points as I pecked away at the keyboard.

What the heck changed overall market sentiment so suddenly? Some say it's oil prices drifting higher. That's always a good scapegoat and probably has something to do with it. It might also be a connected issue with the raging conflicts in the middle east and Africa.

There is always the negative sentiment about housing, employment, last night's democratic primaries in Indiana and North Carolina just muddling on. It might also be our current president just muddling on, or it might just be that all of these things just prompted some profit taking after weeks of appreciation.

Maybe it is my pal Warren's negative sentiment about the financial sector and the years of pain that may still need to be worked out of the system. Whatever it is you can be sure that after the market closes the Wall Street pundits will discuss all their presumptions as if they were facts...

UPDATE: The DJIA closed at 12,814.35 down -206.48, or -1.59%

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

Verizon Communications (NYSE: VZ) shares are falling after competitor Sprint Nextel (NYSE: S) announced it will collaborate with Clearwire (NASDAQ: CLWR) to form a $14.55 billion communications company. The new company will be named Clearwire, and will establish a mobile network based on the emerging WiMAX standard, which VZ has declined to adopt. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on VZ.

After hitting a one-year high of $46.24 in October, the stock hit a one-year low of $33.00 in March. This morning, VZ opened at $38.47. So far today the stock has hit a low of $38.09 and a high of $38.72. As of 12:10, VZ is trading at $38.67, down $0.22 (-0.6%). The chart for VZlooks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $42.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in ten weeks as long as VZ is below $42.50 at July expiration. Verizon would have to rise by more than 9% before we would start to lose money. Learn more about this type of trade here.