No more home mortgages for the time being. The former number two originator of home mortgages in the United States, IndyMac Bancorp (NYSE: IMB), is shutting down its operations and laying off 3800 workers, more than half of its employees.

By halting its prime business, IMB might as well have announced they have turned to stone, as it seems its financial situation is frozen for now. Last quarter it announced continued losses and changed its outlook from being profitable in the fourth quarter to seeing nothing but losses through 2008.

It is always difficult to discuss one's failings, but nothing has been worse than my suggestion that IndyMac might be a screaming buy last year. The stock is down 97%. The sad truth is it was a screaming sell and my worst call since I have been writing for BloggingStocks.com. That will be a separate story.

Today, IndyMac is trading down 47% to $0.37. It will have to restructure once again and will be submitting a survival plan to the FDIC. The current market cap is about $37 million, while its losses over the last twelve months exceed $600 million.

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IndyMac Bancorp Inc. (NYSE: IMB) is continuing to see problems with raising enough money to stay in business. In fact, the bank has ceased taking loan applications. In addition to not taking new lending business, the company will lay off more than half of its workforce, about 3,800 employees.

The problem is that IndyMac hasn't lined up any new financing or capital investment and doesn't expect to recover until the mortgage market begins recovering. In other words, the rest of 2008 is going to be pretty harsh for the once high-flying mortgage lender. CEO Michael Perry said that U.S. banking regulators have asked IndyMac to submit a business plan that will show how the struggling lender will get back on its feet.

The retail and wholesale loan divisions will be closed to new business as the company tries to build its reverse mortgage business while maintaining the existing loans in its portfolio. Perry went on to say that "These are the largest and most difficult staff reductions we have ever had to make" in reference to IndyMac's looming layoffs. He also requested that IndyMac's board cut his $1 million annual salary in half (no word on bonus cuts). At least one banking CEO has a conscience, right?

U.S. stock futures were lower early Tuesday morning, the day when one of the worst earnings season in decades is about to kick off. Financials, credit market and economy jitters only compound the bearish sentiment out there.

TheStreet.com's Jim Cramer says both oil futures and equity futures can move these hot issues.

Will the futures pull down the oil and gas stocks today? No, I don't mean the oil futures, I mean the equity futur

Last week when oil exploded, we caught two days of trading that dropped the stocks hard. We caught a bit of a bid in the nat gases like Chesapeake (NYSE:CHK) and Devon (NYSE:DVN) but at the end of the day, but the stocks were truly overwhelmed by the simple fact that they are in the indices.

This pattern has really held down the integrateds: last week Conoco (NYSE:COP) should have exploded, but it couldn't because it is such a big part of the S&P. Chevron (NYSE:CVX) and Exxon (NYSE: XOM) are no different.

The natural gas stocks are not as big a factor, but they can be rocked down without a problem.

I am not saying to avoid looking at the oil futures. They can control the stocks. I am saying that the equity futures tide can take down anything, even when the oil futures spike hard.

As I wrote a few weeks ago, traders and fans of low priced stocks should ignore fallen blue chips like Ford Motor Co (NYSE: F) and Sirius Satellite Radio (NASDAQ: SIRI) and focus more on smaller volatile stocks like China Precisions Steel Inc (NASDAQ: CPSL) and Solarfun Power Holdings (NASDAQ: SOLF). Not just because fallen blue chip stocks are all about guessing major business trends and the time lags involved with pricing those into their stocks -- good luck with that -- but because these lesser known plays offer much more predictability due to their speculative nature.

Earnings, profit margins, product potential is all well and good for long-term investors in higher-priced names, but here in the gutter of the stock market (also known as penny stock land), those variables are highly irrelevant to predicting hourly, daily and even weekly price swings. Down here it's all about self fulfilling prophecies, pumping and message board hype.

Take for example, Middlebrook Pharmaceuticals (NASDAQ: MBRK), mercilessly pumped by TheStreet.com's Adam Feuerstein for the past several months as a takeover candidate, as his sources indicate bidders in the $6 to $8 range. Now he might be right -- not that it's going to matter to the SEC -- and while he certainly can't compete with CNBC, in terms of effectiveness, his credibility and frequent teasing have predictably pumped this stock up a solid 20-30% so far.

TheStreet.com's Jim Cramer says there are problems, but nothing looks dire.

The setup is pretty good here. We've got a mildly oversold market with lots of June money expected to come in as CDs roll over and people realize that the cash rates are so bad. We have no earnings news, which is good, given that unless you do a lot of business overseas without a lot of raw cost escalation (think everything from Emerson (NYSE: EMR) (Cramer's Take) to Heinz (NYSE: HNZ) (Cramer's Take)) or you transport or mine oil, minerals and agricultural goodies, you aren't doing all that well.

We have the possibility of some stability in energy, as $130 has been difficult to punch through, even though we have not been able to build any inventories yet despite all we hear about how people are driving less. And the expectations for the employment number are so weak that if we get any job creation we are going to begin to hear that maybe the economy is on the mend.

Again, that's considered antithetical given the sinking home price/escalating food and oil price one-two punch. But, as I said last week, there is a finite nature to the bad loans.

Today IndyMac Bancorp, Inc. (NYSE: IMB) reported that its quarterly loss was cut by 64% leaving investors with a small glimmer of hope... although the company has done a small about face. Previously IndyMac had suggested it might be possible to get back to profitability by the fourth quarter. They now are reporting that they probably will not report a positive quarter in 2008.

It was only ten days ago that CEO says IndyMac has 'turned a corner' but the story continues to evolve. The stock closed down today at $3.06, losing 37 cents or almost 11% of it's value.

Disclosure: I own shares of IMB.

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.

The earnings party of last week was full of fun and frolic. For the most part, if you followed my list of recommendations, you would have had your very own "Fiesta de Finance." (See Week in Preview – May 5)

The earnings season is still in full swing and should provide a great deal of action for the companies that will be reporting. But these companies will have to fight through a few new economic barriers. With oil pushing past historic levels and questions beginning to surface concerning the ability of the investor to continue to support a market that has so many headwinds, the mood is likely to shift moving forward. It is time for discipline, short and simple. Now, more than ever investors need a plan. I cover this strategy in my book, The Disciplined Investor.

In the last installment of The Week in Preview, I was looking for party opportunities in honor of Cinco de Mayo. This week, Misery is the theme. That is the only word that comes to mind with oil at a level that you would have never expected, a massive and unrelenting credit and housing crisis and a banking system that is defunct.

Monday - May 12

We start the week with a report from IndyMac Bancorp (NYSE: IMB). This bank is smack in the middle of the housing problem. It is primarily a lending company that facilitates loans for single-family homes. It's also involved in the origination and trading of mortgages. How does that sound to you as an investment? Shares have slid from $23 in October 2007 to an unbelievable level of $3.50 recently. Ouch... If you are a shareholder still holding on with hope and a prayer for something...anything, keep on dreaming. The good news is that the stock is sporting a yield of 29%. But, if you think that yield is going to be maintained, I have a bridge for sale. Estimates are for a loss of $1.92 per share for the quarter.

As one who was greatly embarrassed by making a premature recommendation (being kind) that investors give consideration to acquiring shares in IndyMac Bancorp (NYSE: IMB) prior to its dramatic collapse; I can ill afford to suggest that folks jump in now. However, I might just do that.

Yesterday IndyMac jumped about 20% as it was reported that CEO says IndyMac has 'turned a corner' finishing the day at $3.97 a share -- still a long way from its 52-week high of $37.50. "Given the decline in our stock price, some people have questioned IndyMac's survivability in the current environment," Chief Executive Michael Perry said. "I am here to tell you that I believe we have turned a corner and that our business is improving. We are now achieving profitability with this new production model, with all of our nine regional wholesale centers and 104 of our 152 retail lending branches being profitable in March," Perry said.

The message is clear from the top, with negative earnings and corresponding negative P/E ratio just about any turnaround would make this stock cheap. Perry is correct that the stock is priced for failure. What should the price be if Perry gets IMB back to profitability by the end of the year? A lot more than it is now.

The stock moved way up at the opening bell this morning trading to $4.20, so there are a lot of investors who share my view ... and then it traded down, so then again...

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. Disclosure: I own shares of IMB.

TheStreet.com's Jim Cramer says the bad news should make sure the Fed keeps cutting.

We haven't broken the spiral yet. The waves off of homes just keep fighting new areas to hurt, new municipal projects to ding, new large jobs numbers lost, new margin calls for places like Thornburg (NYSE: TMA) (Cramer's Take), which I thought was out of the woods.

Then I saw the TMA news and the verbiage that there was another problem in the markets in February that will require margin calls. This is the Alt-A culprit, the hard-to-value loans given to people who look likely to return the money because they have good solo jobs but on paper haven't been performing. TMA has a ton of jumbo loans to these people. Only back-from-the-grave Indymac (NYSE: IMB) (Cramer's Take) is worse.

Truth be told, we know these are all momentary issues. No bank seems willing to let anyone fail here, and neither TMA nor IMB will be so hurt by these new issues that they can crush the market. Same as Fannie Mae (NYSE: FNM) (Cramer's Take) yesterday -- staggering losses, but so what?

Indymac Bancorp (NYSE: IMB), a savings & loan and mortgage originator, announced the suspension of quarterly dividend payments indefinitely as it reported a Q4 loss of $509M or $6.43 per share.

IMB increased credit reserves to $2.4 billion from $619 million in Q4-06.

IMB says: "Expected to "Raise" an additional $400 Million of capital in 2008. Near record $6 billion in operating liquidity and no capital markets funding."

IMB over all option implied volatility of 119 is above its 26-week average of 100 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

GMH Communities Trust (NYSE: GCT) is up 61% on a buy-out offer from American Campus Communities (NYSE:ACC).

DepoMed (NASDAQ: DEPO) is up 26% on positive drug trial news for one of its menopausal drugs.

IndyMac ((NYSE: IMB) is down 17% on weak earnings and a dividend cut.

Vertex Pharmaceuticals (NASDAQ: VRTX) is down 9% on poor earnings.

Stocks may trade differently in the pre-market than they do in the regular session.

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

• Dow Jones Industrial Average: 12,501.52 is Up to 13,359.61 (+6.86%)
• NASDAQ Composite Index: 2,425.57 is Up to 2,676.79 (+10.36%)
• Standard & Poor's 500 Index: 1,424.73 is Up to 1,476.37 (+3.62%)

TheStreet.com's Jim Cramer says the fresh troubles for IndyMac make it more imperative for the Fed to act.

We keep coming close to losing these companies that are fighting for their lives.

Yesterday we had First Marblehead (NYSE: FMD) (Cramer's Take) on student loans.

Is CIT (NYSE: CIT) (Cramer's Take) next with its student loan portfolio (as opposed to its mobile home portfolio and its subprime portfolio...sheesh!)?

We obviously had a giant problem with MBIA (NYSE: MBI) (Cramer's Take) over the amount of capital it needs to raise. Will it have to raise capital and cut the dividend?