We have been getting lots of questions regarding the sale of investment bank Bear Stearns and what it may mean for the mortgage market and Maui Real Estate. Our judgement is that it doesn't mean much. Since 1987, EF Hutton, Drexel Burnham Lambert, First Boston, Salomon Brothers and Kidder Peabody have all disappeared and the lasting impact has been nil. What happened to Bear is directly analagous to a "run on a bank." Their counterparties simply lost confidence in them and they could not survive. While their initial problems were mortgage backed securities related, ultimately that is NOT  what did them in.

In other news, mortgage rates fell 50 basis points today!