money-shadowTreasury Secretary Geithner announced his Financial Stability Program of 500 billion in government financing with the possibility to roll it up to 1 billion.

  • The “public-private” investment fund, comprised of the Fed, FDIC, the Treasury, and private capital will determine the prices for troubled, illiquid assets. 
  • Another part of the plan, TALF (troubled assets relief facility) will look to buy up to 1 trillion of collateralized debt, including mortgage backed securities. 
  • The plan also includes housing and foreclosure prevention along with a “stress” test on the banks. Many have already seen Alan White jogging on his lunch hour in preparation for this test. 

All said, nothing changed on mortgage pricing but stocks took a beating (now down 307 on the Dow). Just across the wire, the stimulus plan passed 60 something to 30 something, and Fed Chief Bernanke has just finished his chicken, veggies, and roll, preparing to testify on the financial world as we know it.

Given the heavy loan of treasury supply coming this week (103 billion), investor indifference to Capitol Hill, and a host of other cross currents moving the market, best bet is to take the money and run (good pricing), at least for February and early March mortgages.