The first phase of the Troubled Asset Relief Program is being put in place.  The first $250 billion will be used to provide a voluntary capital purchase program to rebuild bank capital. Citibank, JP Morgan, Bank of America and Wells Fargo will all receive $25 billion.
Second the treasury announced plans to guaranty commercial paper and inter-bank funding. Banks that participate will be charged 0.75% to protect their debt issuances.  (this means that the banks should start lending to one another again but the rates will be more expensive, which ultimately means loan rates will go up, but at least the markets will start lending again.)
Third, deposit institutions can now offer full deposit insurance coverage on non-interest bearing deposit transaction accounts.  Regardless of the deposit amount.  The FDIC had recently increased coverage to $250,000 but institutions that participate will be charged an additional 0.10% on top of their current FDIC insurance.  (what this means is that 100% of the deposits in checking are covered.  This is very good for businesses since they do not get paid interest on their checking accounts.  Not so good for consumers because they would have to move their funds to a non-interest bearing account to get the 100% insurance coverage.)

Housing starts fell to 817,000 annualized units.  September starts were well below expectations. They are well below their lowest level since 1991. Housing permits are also falling off more than 8% nationally.

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

 www.midwesthomecenter.com