Too many proposals are impractical, or worse. Is there anything that can cushion the economy from the hit of the subprime crisis?
What Will Fix the Mortgage Mess?

The credit squeeze that has been going on is effecting the Jumbo Loan Market, Sub-Prime Market, Commercial Loan Market, and even Mergers & Aquisitions.   The effect on the Jumbo Loan Market, could effect million dollar plus properties in Hawaii.  Jumbo Loans jumped nearly an entire percentage point recently from the mortgage fiasco.  In doing so, it is costing buyers more to borrow the money to purchase that million dollar home (loan amount above $625,000 in Hawaii).  The following is feedback I received on one of my listings that is priced very well at the moment:

I checked with my lender and jumbos are so bad right now. I have a super FICO score and any one who is looking at this house would be having the same problems I am having regarding the mortgage payments.  They are so high due to the rates. They are almost $1,000 a month more compared to this other property that was higher in price a couple of months ago. The sub prime market problems sure did affect the jumbo market.

Yahoo Seeks To Dismiss China Case, was an interesting read as it deals with the fact that as more and more companies become global companies in this new technological age, they face differing rules and regulations in every country.  We see companies such as IBM, HP, Intel, etc. that are global not only in the sense that they sell products globally, but they have different divisions of their companies and employees in different parts of the world.  Try calling Citigroup about your mortgage and you are calling someone in India.   So, when companies truly become global, trying to follow the right rules and regulations can be blury and difficult.  Corporate ethics are going to be different from country to country.

As you have probably seen in the recent weeks, the news out of China (at least the news of products made in China) hasn’t been so great.  As we see the rapid expansion of their economy into a global player and their entrance into the global marketplace, we see that all will not be smooth sailing.   Expect problems, and a lot of them along the way, but I will bet that the pressures of governments and more importantly consumers will force the necessary changes in how China’s economy operates in the global marketplace.

I read a couple of articles this past week that I thought I would pass on. 

Expect Lots More Embarassment is an article from BusinessWeek that outlines Bruce Wasserstein’s explaination of the recent market troubles and what to expect in the near future.

B of A Sends Cash To Countrywide Bank stocks have been hit hard along with mortgage lending companies.  This article shows that banks are sitting in a better position due to income diversity and the fact that banks deal almost solely in “conforming” loans.   We also see:

In a regulatory filing, Countrywide said Bank of America has the right to match any offer for Countrywide put forward by a third party. Mozilo, however, dismissed talk that the deal could be a prelude to an eventual sale of Countrywide to the banking giant.

Countrywide’s smooth talking Mazillo answers to the markets questions and will probably annouce the next expected item, layoffs.

Another One Bites The Dust California-based Accredited Home Lenders says that it would stop writing new loans and lay off more than half its workforce.

We also see a different perspective on the effectiveness of the Fed Reserves lowering of the Discount Rate in It’s Out Of Bernanke’s Reach

The mortgage slide of late is now effecting other areas of borrowing, not just the home loan sector.  Credit Crunch Hits Commercial Sector. 

The Federal Reserve cut its discount rate to banks, injecting more than $17 billion into the banking system. The Fed’s actions were meant to offset damage caused by the subprime mortgage crisis. 

Will this help?  Click on the Listen button under the title of Can Cut in Discount Rate Restore Order?

As reported by the Pacific Business News, Sean Penn purchased a lot on the North Shore.  Will we see him in the line-up?

Yesterday, four major US banks stepped up to the Fed’s “Discount Window” and each borrowed $500 Million. Analysts believe the Discount Window borrowing by these huge banks was largely symbolic, and designed to help calm all the nervousness in the credit and financial markets.

Now remember that the Fed just cut the Discount Window Rate last week, and many expect them in turn to cut the Fed Funds Rate at the upcoming September 18th Fed Meeting.

Here’s an interesting tie-in…today’s Initial Jobless Claims number showed a little softening in the labor market, and since Fed Chairman Ben Bernanke has been so concerned about a strong labor market leading to wage based inflation, this is another indicator that the Fed will more than likely make a cut to the Fed Funds Rate at that next meeting on September 18th.

For now, Mortgage Bonds remain above a floor of support at the 100-day Moving Average. I am continuing to advise floating, but should prices turn lower and move beneath the 100-day Moving Average, I will recommend locking. 

We also have seen mortgage rates ease slightly. 

Mortgage company Freddie Mac reported yesterday that 30-year, fixed-rate mortgages averaged 6.52 percent. That was down from 6.62 percent last week and the lowest since the week ending May 31, when rates stood at 6.42 percent.

I just read;

For six years, it’s been Paige Altonn’s dream to have Fourth of July fireworks in her own community. Now, with the support of a newly formed Hawai’i Kai Chamber of Commerce, the Hawai’i Kai Neighborhood Board, a few community groups and several area businesses, she’s hoping to launch a fireworks display off Maunalua Bay by July 4, 2008. Hawai’i Kai is a flourishing, thriving community, but it’s not personable. I think it will be a great day, but we know we have a long way to go.  A side benefit, Altonn said, is the feeling of community that the fireworks will bring to Hawai’i Kai. With a thousand new homes built over the past five years and several hundred more in the pipeline, Altonn feels the community needs to be drawn together.

There has been quite a bit of news regarding the Hawaii Superferry recently.  Here is an update on the Hawaii Superferry situation:

The Hawai’i Supreme Court heard an appealtoday that could sink the Hawaii Superferry. Environmentalists argued that the Superferry, which would transport passengers between the Islands, should have been required to study how it could create traffic jams, collide with humpback whales or spread invasive species.

The Hawai’i Supreme Court sided with environmentalists yesterday in a ruling that could delay Tuesday’s much anticipated launch of the Hawai’i Superferry’s interisland passenger and vehicle service. The high court ruled that the state must conduct an environmental assessment related to the ferry service. Armed with the ruling, three Maui environmental groups will seek an order to stop the Superferry. The environmental groups hope the Supreme Court ruling will force Superferry operations to be put on hold while the study is conducted, which could take at least six months and as long as three years. Maui lawyer Isaac Hall, who represents the three environmental groups that brought the suit, said he will ask a Maui circuit judge to issue an injunction “as quickly as possible” halting the Superferry’s use of state harbor lands and the improvements until the study is completed.

Flying in the face of possible legal action, the Hawaii Superferry will launch two days ahead of schedule tomorrow with $5 one-way tickets for passengers and $5 one-way tickets for vehicles, the company announced yesterday. Opponents, who plan to seek an injunction against Superferry operations on Monday, reacted angrily, saying the company is defying state laws and acting in bad faith.

These were some pretty good articles that really cover most of the questions at hand.