Market commentary

U.S. stock and bond markets have almost completely diverged from positive economic data releases and earnings announcements, in favor of focusing on developments in Europe. Tuesday’s late afternoon selling in US stocks and buying of treasuries was driven by Germany’s unilateral ban on naked short selling of German bunds and certain company stocks. This move left investors wondering if German and other European banks were facing struggles.

In addition to the European problems, the US Senate is debating the new financial regulatory bill, which is creating significant uncertainty on how this will affect US financial institutions. You folks need to pay attention to this, because this bill will make it even more difficult for consumers to obtain credit, especially mortgage financing. And it creates another mammoth government entity to regulate non-bank financial institutions. So how does one pay for a new government entity? Well, by imposing fees and new taxes, of course. So, between the state governments and the federal government, you can expect the mortgage lending landscape to change significantly---unless you contact your Senators and declare your views.