What a morning/weekend! Lehman Brothers (a 158 year old company) files for bankruptcy protection after suitors failed to cut a deal mostly due to the Federal Reserves desire not to back some of the bad debt, funny they didn't have a problem when Bear Sterns was involved. Merrill Lynch became another big part of the ever growing conglomerate called Bank of America, who agreed to purchase the company for $50 billion or $29 a share a 71% premium based on Friday's trading. To further help the markets go a rye oil has tumbled over 5% to $96.00 a barrel yet the price at the pump is still $3.39.
What does all of this mean? The Dow is down almost 300 points, treasuries have skyrocketed as a flight to quality has become apparent, and MBS's (Mortgage Backed Securities) have had a modest gain of 56 bps points. Rates should improve today and hopefully sustain throughout the week. Only time will tell but in my personal opinion we are experiencing first hand an absolute market meltdown for the ages on Wall Street.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Monday, September 15, 2008
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