You didn’t think the Ed McMahon foreclosure story was just going to go away, did you?

Ed and his wife Pamela were on Larry King Live last night. Of course! They’ll be on The View next.

Here’s some of what he had to say from ET Online:

“It’s like a perfect storm. The economy problems … selling the house right now is a tremendous operation,” Ed said, admitting also: “If you spend more money that you make, this can happen.”

“I think that because you’re a celebrity, people think you have a lot more than you have,” Pamela added, attributing their troubles to “a combination of Ed working so hard and [our] not looking at proper management.”

Um….”proper management” Pamela?

Why didn’t Larry ask the REAL questions that are on everyone’s mind like:

1. “Ed, where’d all the money go?”

2. “Ed, why didn’t you save for a rainy day?”

3. “Ed, what are you going to do if you DO sell the house before foreclosure, because with that loan amount, it’s not like you have much to live on.”

I’m pleased to see that at least Ed took some of the blame for his predicament. It’s NOT about the economy and a slow housing market. It’s that he MUST sell because he has no money to make his payment.

He apparently went public with the news of pending foreclosure because, well, that’s public information (ha! ha!) and also because:

“I figured I want to speak for [them],” he said. “I want give them hope and some kind of guidance.”

He wants to give others facing foreclosure some kind of “guidance”???

I, for one, am glad he’s gone “public” and is speaking out. Look in the mirror and repeat after me:

“I will not be Ed McMahon someday. I will prepare for my retirement. I will save some money for a rainy day. I will not be Ed McMahon someday.”

But Ed is forever the optimist because some publicity is better than NO publicity (even Ed knows that):

“Now there’s all kinds of interest. I’m optimistic,” he said, adding that his experiences landing fighter jets on battleships during WWII have given him a practical life-outlook: “Once you’ve done that a couple times, this is easy.”

Stay tuned. I doubt this is the last we’re going to hear of this story.

I just heard on CNBC this morning that the credit crisis is over. All of the bad news is behind us. Good times will be here again.

Heck- look at the housing numbers. They went UP for the first time in five months. Housing starts were up 8.2% in April- which means builders are building MORE houses than they did last month.

Isn’t that great?

They’re apparently doing this even though there are a record number of homes sitting empty around the country. That “inventory” is massive.

But hey- what’s not to like? So a few more are now being built.

What’s “supply v. demand” anyway- when the housing bottom has been reached?
Yes- that’s also what I heard on CNBC this morning. This is the bottom of the housing market. We all should be buying in now because it only has one place to go- and that is up.

I’m all for being optimistic. And yes, someday housing WILL rise again. But the bust only started about two years ago- after over a 10 year bull run. Historically, that would mean we’re not even close to the bottom of the market.

Additionally, the bottom of busts happen when no one is paying attention and when no one is buying the asset. Take the bottom of the Nasdaq bubble. You couldn’t get anyone to buy shares of Yahoo or Cisco. In fact, you couldn’t get people to buy much of any stocks (and still- many people don’t “believe” they can make money in the stock market.)

In Chicago, I still hear stories of flippers, investors, and speculators in the housing market. That doesn’t seem to indicate a bottom to me.

But maybe I’m just wrong and CNBC is right. Maybe housing will rise from the dust this summer- despite the banks tightening credit and actually requiring a downpayment.

Maybe…or maybe not.

The stock market, however, is making quite a few people money right now. Housing will too- someday. But that day is not right now.

General Electric reported first quarter earnings this morning and missed estimates by seven cents. GE reported 44 cents compared to the estimates that were at 51 cents.

This wasn’t a small miss.

It was also the largest miss by GE in years (maybe decades- but maybe someone can fill me in on the last big miss by the company.) General Electric, you see, is always pretty stable and dependable.

What was the problem?

It wasn’t the economy. Nope. Several of the company’s divisions are doing quite well- especially the global infrastructure division as the emerging market countries are still going gangbusters.

No surprise, the problem was in GE Capital Services- the company’s financial arm. GE doesn’t just build airplane engines. It is basically the country’s seventh largest bank.

The company has subprime loan problems and therefore credit problems.

But the scarier thing about this earnings announcement wasn’t that their financial segment was bad. That could be understood given what is going on in that sector.

The scariest thing was that GE is acting like it DIDN’T EVEN KNOW ABOUT THE PROBLEMS.

GE’s CEO was on CNBC this morning saying that March was awful and that in the last two weeks it has really looked into the businesses to see what was going wrong.

In the last two weeks?

The credit crisis began last August with the implosion of a Bear Stearns hedge fund. It continued in January when the Fed was doing emergency rate cuts.

Why did it take until March for GE to figure out that things were rotten in its financial division?

What it tells me is that NONE of these banks or financial companies knows what is going on in their businesses. They have no idea what their exposure is, how deep they’re in the doo-doo, what kind of money they owe, what loans will go bad.

They have no idea about anything.

And the credit crisis is supposed to be over?

I don’t think so.

Beware of the financials. What you don’t know as an investor CAN hurt you.

GE lowered its 2008 estimates today. Imagine that.

Who’s next?

One of my friends told me about an interesting phenomena that took place in his office yesterday.

Apparently, a bunch of the 20-something employees were all speculating in Bear Stearns stock. during the day. These employees were not stock brokers or traders. No, these are regular Chicago professionals that thought they could make quick money by, essentially, day trading in Bear Stearns stock while it “collapsed.”

The “deal” with JP Morgan was for them to buy Bear Stearns for $2 a share. Only, if you watched Bear Stearns stock during the day, you would have noticed it never got down as low as $2.

The stock traded between $2.84 and actually closed at $4.81.

Some people were making quite a bit of money today trading in that range, including a few of my friends’ colleagues who claim they made $1000 just by trading in the speculation in the stock.

Remember, the JP Morgan deal is just an offer. It hasn’t been accepted by the shareholders yet. Therefore, the stock can really trade at anything it wants until further notice. Normal supply and demand and short covering pressures will be on the shares.

There is a remote possibility, just remote, that the deal may never get approved by shareholders.

The Telegraph is reporting that British Billionaire Joseph Lewis, who owns a 9.4% stake in the company, may try to block a sale at the current price - wherein he is on the hook to lose a billion dollars. From Bloomberg:

Lewis is speaking with potential rival bidders and is considering a number of strategies, including voting against the deal at the scheduled shareholder’s meeting, the newspaper said, without saying where it obtained the information.

Easy come, easy go for the billion dollars?

There are others that have big stakes, including a former Chairman and several mutual funds.

Maybe it’s not so crazy to be trading in the stock after all?

Nah…it’s still crazy.

Leave the day trading stuff to the professionals. They always have more info about what is really going on than any of us do. They’ll eat your shirt for lunch on these kinds of trades.

Stay tuned.