Lehman Brothers Bankrupt - Merrill Lynch sells out to avoid probable disaster
I found myself in awe through out the day today and into the night. I was not surprised by what happened today on Wall Street but it was a feeling inside me, a feeling of "I cant believe this plague just keeps going" feeling. The plague I am referring to is the Sub Prime Plague. The one that has claimed so many banking lives this past year and the same one that just wont stop. Today it claimed to more lives Lehman Brothers and Merrill Lynch. These two institutions were not the type that I though would succumb to the Plague, they were not the New Century, Argent, Green Points. These were 2 of the BIG BOYS. Two of the rocks that have been perched over looking Wall Street for more then a century. They have weathered the biggest recession and even The Great Depression, and now one could not secure the financing it needed to stay alive, and the other sold out before most any of us new it was for sale in an attempt to keep what value it had left.
I feel like we have crossed a line today. Along the roadkill highway of what was mortgage death row there were the usual suspects those of which were mentioned above, but today we crossed the median and took out some of the Trophy animals that have avoided pitfalls, and traps of all shapes and sizes for decades. For what some might ask? To end up a name on some public Bankruptcy Papers filed in the state of New York today. Amazing really.
A Little Perspective
I think its important after days like today and times like we are experiencing to sit back, take a deep breath and look at the Big Picture. The markets are up over the last 5 years and the markets are really up over the last 20, 30 and 40 years. And it is my opinion that the markets will be back up again in the very near future. For those that have extra money to invest it is a virtual blue light special on every isle of the Stock Markets. Everything is on sale Big Time. You name the industry and you may be able to pick it up at 70% off. Back when I had time to shop for clothes I liked to go to a store called TJ Max, I like the feeling of buying a $100 pair of pants for $25 or a $50 neck tie for $6.99. Well the next few months might be the TJ Max or the Marshals (if your from the east coast) stock market clearance sale. The thing I didn't like about the discount stores is that you had to wade through piles and racks of clothes to find the diamond in the rough. I would plan on sifting through piles of less then desirable companies and earnings reports to find the diamonds in the Market that are at clearance prices right now. Call your financial planner and put together a plan, a plan to continue investing in America and in our economy. Call me if you need to review your mortgage and make sure you are in the best mortgage loan possible to help you accomplish your investment and retirement plans. The silver lining about a day like today on Wall Street is that rates are unbelievable! As stock traders flee to safer bond investments the yields drop like a lead balloon.
A Mortgage Brokers Perspective
It's all a little bit unsettling, what the Fed's reaction might be, how the markets will react, how this will affect Home Sales? The bottom line is that the show must go on. The Strong in some ways are getting stronger and the weak for the most part are systematically being thinned out. Underwriting is reverting back to (what I've been told) how it used to be. Much more thorough and complete. I'm still closing loans purchases, refinances everything but I do have to set the borrowers expectations a little more up front. Gone are the days of Fast & Easy's, here are the days of Make Me Queasies. I may need to trademark that one.
Too Easy
It was just to easy there for a while, at the end of the day the average Joe isn't ready to own 5 homes with out ever proving his income. A lot of people should rent for a year or two before jumping head first into a mortgage and not every guy with a general contractor license should be calling them self a home builder and building spec homes as fast as they can cash their draw checks. It's just not good for the long term health of our economy. We as a country showed up to the Thanksgiving Dinner of a housing boom with eyes far bigger then our stomachs. We ate and we ate and we ate and when grandpa (greenspan) asked us if we wanted seconds we took him up on it and had 2nds, 3rds, and oh yes why not 4ths. Well we are now paying the price and we are sick. Stuffed to the brim and bursting at the seems we are yakking up the housing dinner getting back to where we can function and see clearly. There are a few banks and lenders that took a small portion and chewed like their Mom taught them and they are doing just fine, Thank Goodness for them.
I prefer the couch watching football and just snacking the whole day through.
Stetson Lowe - Utah Mortgage Insider - UtahLoanTips.com
