What a week!

From CAR:
To recap what’s happened -- so far -- this week:

U.S. Dept. of the Treasury Secretary Paulson today announced that Congress and the administration intend to take poorly performing assets, primarily mortgage-backed securities, off the books of financial institutions. These assets have been a prime impediment to the ability of financial institutions to lend money.

The government also prohibited the short sale of nearly 800 financial institutions for 10 days, and may extend this prohibition to 30 days.

The U.S. Dept. of the Treasury also plans to increase the amount of mortgage-backed securities bought from government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, in an effort to increase the GSEs’ role in the housing market.

The Federal Reserve and other major financial institutions worldwide also made hundreds of billions of dollars in loans available to commercial banks in an effort to improve liquidity.

Our expectation is that Congress and the administration will work together to craft legislation as early as next week addressing these critical issues. We expect to have a good sense of what the legislation will contain by this weekend, prior to financial markets opening Monday morning.

Who is Fannie & Freddie?

We've all been hearing about the US government (aka you and me) taking over the two of our largest financial institutions. But what we haven't been hearing is what the impact will be. It seems that there are some initial positive impacts, but what is to come seems to be in debate. For now, if you're not familiar with who Fannie Mae and Freddie Mac are, check out this short video explanation from Joel Singer of the California Association of Realtors.