March 2, 2009
March 2, 2009 by admin
The stock market moved to a ten year low following grim news out of insurance giant AIG. The worlds largest insurance company posted a loss in excess of sixty billion dollars during the last quarter. The historic loss required the federal government to again pump additional funds into the company to keep their ratings in stable position as they need pledge additional capital. The government agreed to rework an earlier agreed upon loan and offer up an additional thirty billion dollars. AIG is losing billions of dollars for being on the negative side of guarantees primarily on derivatives and CDO’s related to the mortgage industry. The stock market has now lost over 20% in 2009 and there appears to be little optimism left for a rally prior to this Fridays report on the job market when the labor department reports numbers related to the February jobs report.
Mortgage rates remain relatively flat, even with the sharp drop in the stock market. The yield on the ten year bond was flat at 2.88% on Monday and fixed rates on thirty year loans remained in the mid five percent range.