The late day rumor that the Obama administration was toying with the idea of subsidizing mortgage rates... by capping fixed rate mortgages at 4% - 4.5% caused a short squeeze of epic proportions.
Notice how 'convenient' the timing of this 'leak' was. As the market hit lows and threatened to challenge 800 late in the day... POW! Instant coordinated moonshot!
No matter. We all know the banksters on Wall Street and the G-men in Washington are both dirty. Looking to add to shorts on the first sign of weakness (should we have an instant reversal) or around 850 (should the squeeze extend).
U.S. Housing Plan to Fund Interest-Rate Reductions (Update1): "The Obama administration’s housing plan will use government money to help reduce interest rates for struggling borrowers, while asking lawmakers to approve more ways to modify mortgages, according to a person briefed on the proposal.
U.S. Treasury Secretary Timothy Geithner intends to make the plan public in coming days, possibly within a week, said the person, who declined to be identified before the announcement. Some elements can begin immediately, and others must be considered by Congress.
Foreclosure filings in the U.S. surged 81 percent last year to 2.3 million, the highest on record, as home prices fell and tighter mortgage standards made it harder for homeowners to sell or refinance, according to RealtyTrac Inc. of Irvine, California, a provider of real estate data. The administration has pledged to use $50 billion to $100 billion for housing relief, taken from the $700 billion bank rescue package enacted last year.
“Our focus will begin on using the full resources of the government to help bring down mortgage payments and help reduce mortgage interest rates,” Geithner told the Senate Banking Committee yesterday."