So in the last several days there have been the following major developments:

• The Treasury crafted a plan in which it would buy $700 billion worth of mortgage backed securities from financial institutions;
• The SEC has placed a temporary ban on short-selling 800 financial institutions;
• The Fed has approved Morgan Stanley and Goldman Sachs becoming bank holding companies; and

• Morgan Stanley is selling a 20% stake to Mitsubishi for $8.4 billion;

So what does this all mean in general? Here are our thoughts:

• The Treasury will pay more than market value for the securities they buy and the taxpayers will take a bath. But there is no going back at this point without a collapse of the system;
• The short-selling ban is necessarily distorting prices and will not last long;
• Goldman and Morgan will buy other banks, become much less leveraged and begin to mimic BofA and JP Morgan Chase;
• The Mitsubishi purchase does NOT mean we will see a huge resurgence from Japan.

What does this all mean for Maui real estate?

• The mortgage business will steady out and look the way it did ten years ago;
• The stock market will stop seeing the jarring volatility that has been spooking buyers; and
• Thankfully, this has all happened during the slowest part of our season in any case.