Mr. Bernanke and Mr. Paulson both spoke this morning about their plans to utilize the tools empowered unto them to avert our financial meltdown from further damage.
Both speakers spoke with a confidence that we have not seen in quite some time from either of them. The markets appear to also gain confidence from their speach. The short of it is that they do indeed intend to buy commercial paper as backstop for banks as well as invest taxpayers money in shares of banks. Bernanke still feels that the root of the problems are confidence on the part of investors. Mr. Paulson agrees and feels that lack of confidence in mortgage backed securities is the biggest concern. All of their efforst are meant to restore confidence to the market and get lenders back to lending again.
We have seen EXTREME tightening from lenders with regard to conditions and hanging up loans trying to find ways not to fund them. These are not risky loans we are talking about my friends. These are poeople ranging from 700-800 FICO's that are having problems getting simple refinances done.
Rates remain fairly unchanged with some slow progress toward dropping. This is extroardinary when stocks are rallying and a good sign we feel for short terms rate watchers. Most lenders have not released rates this morning yet be we suspect 6.25% or so to be par on a 30 year fixed. Stay tuned and we'll keep you up to date.