Bring in the lawyers!!!!

It was only a matter of time. 

Not to get too psycho-babble here, but indulge me...I'm from California.   I've been thinking that, just like the Kubler-Ross "5 Stages of Grief" (Denial, Anger, Bargaining, Depression and Acceptance) , there are 5 stages of a stock market bubble popping and I've decided LAWSUITS are, oh, let's say Stage 3 out of 5.

We reached the beginning of that stage yesterday when BankAtlantic (BBX) of Ft. Lauderdale filed suit against banking analyst, Dick Bove of Ladenberg Thalmann for defamation and negligence involving Bove's analyst report he wrote last week entitled, "Who's Next."  Bove's report explored the idea that, among other names out there, BankAtlantic has capital (money) levels too close to a dangerous edge.  So he put together a watch-list that included BankAtlantic. In the suit, BankAtlantic charges Bove's analysis is flawed and hence, "meaningless."  BankAtlantic complains that Bove's report turned viral---meaning, it was picked up by other analysts and journalists and has caused further damage. 

Just to let you guys know how this works, news of the suit broke just after 2pm ET. Every business network ran news flashes about it but our team at Fox Business was way ahead of the pack.  Less than an hour later, we had gotten Bove in front of our cameras and our viewers first, telling me on Countdown to the Closing Bell that his firm's lawyers said he couldn't say anything yet but he was dying to tell the story.  I backed out the proverbial journalistic car and drove it in another way, asking if there was anything in his research he would do differently today. Bove stood firm and said he would change NOTHING. He fully stands by his research.  (the clip is below, check it out)

As the story and lawsuit play out over the next few months, here's why this stage is significant.  We're now in the blame game part of this "housing-credit-subprime-alt-A-oh-wait-prime-loans-are-now-starting-to-fail-too"  drama.  It's the Dot-com Implosion Pt. Deux.  The problem is, it seems to be way more widespread than the internet fizzle.  This one affects legions more investors, many of whom might have never been directly invested in the names in question.   I predict this is only the first of many lawsuits. The next 'tranche' will be different: investors angry at what I'm calling "Reverse-Bove" analysts: analysts who just months before the bubble pop were issuing "buy" ratings on brokerages, homebuilders and mortgage companies which just a few short months later are the same companies swimming in a roiling sea of foreclosures and red-ink. 

So here's what I'd love from you, readers.  I know what *I* think are the other 4 stages of this bubble popping but I'd love your ideas too.  I think we can all agree that DENIAL is the first stage, as in, "This is just a short-term pullback---a definite 'buy-on-the-dip' opportunity, I tell ya!!!"  But what about the other stages? Can't wait to hear your thoughts so, comment away and have fun with it.

Here's the clip. See you at 2pm on Fox Business!!!