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Financials, a week in history. Where we will go from here.

By
Mortgage and Lending with First Assured Mortgage

A week in History

 

There are three huge announcements that are changing the financial markets around the world. 

First, fear over the safety of money in savings for many Americans. Banks are either folding or on the brink of collapse, bonds are losing some or all of their value, and stocks are dropping at an alarming rate, all causing fears and anxiety for investors.

Second, Today Treasury Secretary Hank Paulson announced that the government will guarantee money market funds. This action is helping settle the markets and as a result stocks around the world have responded very favorably to this.

Third, The SEC has placed a ban on short selling. The amount of greed is incredible.  Many short sellers have used currently illegal tactics such as "naked short selling.  This means they are shorting a stock without the required step of first borrowing it.  This has exacerbated the problem in financial stocks as they beaten down in value. This in turn hurts their balance sheets which also limits their ability to take on credit.  This is the vicious cycle we have been witnessing.  There are some politicians and other who are commenting on what a negative move this is as well as saying there are legitimate short sellers.  The problem is that they have failed to Police this problem for a long time... they should take a long look in the mirror before casting stones.  The SEC did the right thing here and hopefully this will add another level of calm to the current financial crisis.

 

This is only the beginning, and the above will not fix everything, but it sure looks like a step in the right direction.  Short term rates will have a short bump upward, but with you look at the alternative, who cares.  The health of our financial system and confidence that out savings will not be wiped out is far more important.

 

Rate will continue to ride the VOLATILE roller coaster.

Bob Buchanan | Co Founder

First Assured Mortgage

4830 Bob Billings Pkwy., Ste. 100-A

Lawrence, KS  66049

 

P. 785-856-LOAN (5626)

C. 785-766-3788

F. 785-856-RATE (7283)

E. bobb@firstassuredmortgage.com

W. www.firstassuredmortgage.com

P G
Charlottesville Solutions - Charlottesville, VA

I see that you are new to Active Rain and I just wanted to welcome you. I hope that you enjoy it as much as I do and that you find it a great resource.

Sep 19, 2008 08:34 AM
Sneads Ferry
Coldwell Banker Sea Coast Realty, The Burchfield Group - Surf City, NC
Topsail Island,Wilmington, Hampstead, Holly Ridge,Jacksonville

Bob, thanks for your comments on my post "Lions and Gazelles". Welcome to the AC community!

Sep 20, 2008 02:32 AM