Good morning!
I hope that you had a great weekend! This week has started off well in the markets, which hopefully will hold for a bit. I wanted to share some encouraging news and other bits of info.
First off, it looks like we may see some action by both the FASB and the SEC to deal with "Mark-to-Market". As I have mentioned before, mark to market is considered one of the main culprits in driving our markets (equities, housing, etc) into this current mess. For a better definition than I can offer (in 20 words or less), I have attached a link to one from the folks at Motley Fool. Warning: it's a lot more than 20 words, but does a good job of explaining MTM.
The stock market reacted well to the news about MTM last week, as well as to word that Citigroup will not need more TARP money from the government. We'll have to wait and see if this holds true. Locally, the U of O Index of Economic Indicators showed the health of Oregon's economy improved in January. Our local recession is expected to continue through 2009, but is expected to recover more quickly than in other areas of the country. To cap things off, Fed Chair Bernanke stated that he feels that the recession would be over by year-end if the banking situation is stabilized. Again, some very "market friendly" news.
OK, now for some other stuff.
Rates have been in a "holding pattern" for the last 5-6 weeks and are expected to stay fairly low for a while longer. That being said, the Fed is planning to cease their purchases of MBS (Mortgage Backed Securities) in June. Once this happens, rates will most likely begin to climb. Also, during an interview this weekend, Mr. Bernanke indicated that once the economy begins to recover, the Fed will have to raise rates to fight off inflation. So, the moral of this story is that rates are low, but won't stay that way forever.
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