I guess you can say we had our own hurricane blow through Wall street this weekend, given the news this morning about Lehman Brothers filing for bankruptcy and Merrill Lynch being acquired by BofA.  Added to this we have AIG, a large insurance company asking for a federal loan in excess of 40 billion.   AIG, is the world's largest insurer, does business in 130 countries and territories around the world, selling insurance to 74 million customers worldwide. It has also an aircraft leasing arm, an asset management business and a financial products unit. The latter holds a credit default swap portfolio that has triggered the large mortgage losses.

U.S. stocks declined, erasing more than $300 billion in market value, as Lehman Brothers Holdings Inc.'s bankruptcy and tumbling commodities prices showed the American economy is sinking. Lehman plunged 95 percent and American International Group Inc. retreated 60 percent after the companies loaded up on sub prime-related investments with borrowed money. Economic concerns pushed down oil, prompting a retreat in energy stocks, and sent General Electric Co. to a 6.6 percent slump. Dow Jones is currently off 250 points.  10 year yield is down to 3.54% and 30 year mortgage pricing has improved .75% from Friday's close.  Oil has officially broken the $100 a barrel price.

The economic calendar for the week begins with today with Empire Manufacturing at 8:30 am, followed by U.S. Industrial Production (output tumbled a bigger-than-expected 1.1% in August due to a big drop in auto production, and was the largest drop in 3 years) and Capacity Utilization (which slipped to a smaller-than-expected 78.7%, the lowest in almost 4 years). Tomorrow, the FOMC meets for a one day meeting on interest rate policy. We also have the Consumer Price Index (CPI) tomorrow. Wednesday we'll see Housing Starts, Thursday Initial Jobless Claims and Leading Economic Indicators. (There is nothing on Friday.)

Pimco's Bill Gross told CNBC that the global credit crunch is worsening after Lehman Brothers' filed for bankruptcy protection stemming from mortgage-related losses. "It continues to get worse," Gross told CNBC.Gross is chief investment officer of Pacific Investment Management Co, which oversees more than $812 billion in assets. He said what is missing from a rescue plan for the banking system is capital rather than liquidity. If you want to take several minutes you can click on this link to view his interview.

http://www.cnbc.com/id/26719710
Experts originally expected the Federal Reserve to hold the federal-funds rate steady at 2 percent when it meets on Sept. 16, but Lehman Brothers' financial troubles and the belief that economic growth will brake by year's end has led some to anticipate calls for a rate cut. However, observers point out that the central bank must contend with improvements in inflation at a time when the labor, housing and financial markets remain weak. They predict the Fed will hold off on raising rates until the housing market shows signs of recovery and officials are confident that the credit sector will not be negatively impacted by tightening policy.  Given how the treasury yield has fallen, and mortgage rates finally following as well, it is going to bring customers into a rate range for refinance opportunities, assuming they can qualify with the current guidelines.  Start checking your customer lists for potential prospects.