So it goes. There is no Treasury/Federal Govt backstop this time.
The ripple effect from this will have all sorts of consequences downstream, but the immediate impact on main street will be lower mortgage rates, as money runs to the safe haven of (now Govt guaranteed!) mortgage bonds and other securities (treasuries also are rallying today) to wait out the storm.
For real time updates to the mortgage market, don’t forget to pull our Twitter Feed (on the sidebar to the right.)
It might interest you to know that back in the heyday of the Mortgage/Real Estate boom, Lehman Brothers was one of, if not the biggest buyers of "Alt-A" mortgages through an outfit called Aurora Loan Services, or ALS. I am sure few thought then that their foray into mortgage securitization would eventually cause their demise.
More on Lehman worth reading:
· Paul Kedrosky: "Take a very deep breath. It looks almost certain that this week will be the one where we see the financial implosion in U.S. banking and brokerage that many have been expecting for some time."
· Barry Ritholtz: An awesome roundup of all the Lehman and related links.
· Floyd Norris at the NYT will be liveblogging the day’s Lehman related developments.