Relief over financial bailout plan

After a two-week financial roller-coaster ride, many people from Wall Street to Main Street are feeling a little queasy and unsure about what’s next.

Friday brought more extraordinary actions from the federal government, as it prepared to take over billions and billions in toxic mortgage assets and placed a $50 billion safety net under money-market funds.

Those shoring-up measures fueled a rise in the Dow Jones industrials of about 370 points, giving them a two-day gain of about 780. The week also included a combined drop of more than 950 points on Monday and Wednesday.

Amid some criticism for bailing out Wall Street, Everett’s Greg Rielly said the government really had no other plausible choice.

“These are very concerning times. I think we crossed over the line to where they had to take action,” said Rielly, a mortgage planner for Mortgage Advisory Group. “Our government’s stepping in and taking some actions they should have taken awhile back. They’ve gone from being irresponsible to responsible again.”

He said the actions this week should help the mortgage industry, which has been in crisis for the better part of two years nationally.

As the future of Seattle-based Washington Mutual hovered in the air Friday, Snohomish County’s banks enjoyed some good news.

The Securities and Exchange Commission’s emergency ban on short-selling of financial stocks helped shares of Cascade Financial Corp. and Lynnwood’s City Bank. Both rose by more than 30 percent. On Thursday, Everett’s Frontier Financial saw its shares rise 50 percent.

Carol Nelson, Cascade’s president and chief executive, said all the local bank stocks had been pushed down in recent months by short-sellers, so the new crackdown helped them to suddenly rebound. Nelson added that the recent string of events was unlike anything else she’s seen in 30 years of banking.

“The factors that are colliding in the marketplace are creating an interesting situation,” she said. She had no comment on how the government’s bailout plans might strengthen the banking industry, as details weren’t available Friday.

“I think that we really need to wait and see the specifics,” she said.

Cathy Reines, president of Snohomish-based First Heritage Bank, echoed that thought. Meanwhile, her bank’s been blessedly immune from many of the problems plaguing bigger competitors.

“We didn’t hold Fannie Mae stock, we didn’t hold Freddie Mac stock, we didn’t hold Lehman Brothers,” Reines said.

Still, she and other managers at First Heritage have fielded customers’ questions about how ripples from Wall Street might affect the bank. They’ve also been opening new accounts at a brisk clip.

“Any time there’s this type of roller-coaster ride in any industry, there’s also opportunity,” Reines said, explaining that nervous customers from bigger banks are fueling the new deposits at First Heritage.

Looking for an upside in the mortgage industry, Rielly said it’s not a bad time to buy a house — if you can qualify. It’s not as hard as media headlines might lead one to think, he said.

“If you’ve got a 640 or 650 credit score, you’re going to do fine, as long as you’ve managed your debt,” he said.

Howard Bono, owner of Old West Mortgage in Everett, said he’s qualifying a lot fewer people than he could a few years ago. But for the lucky few who meet the right requirements, there still are zero percent down-­payment mortgages and other programs available. He thinks housing prices in the region may not be headed down much more, either.

“We are nearly at the bottom. At any time in the next few weeks or months, we are going to be able to say we’ve hit that and are going back up,” he said.

While financial experts decipher what the wild ride on Wall Street and the resulting bailout mean for their industries, the view from Main Street is at least as uncertain right now. With unemployment going up and retail sales flat at best, it may be a relatively quiet shopping season between now and the year’s end.

Judy Matheson of JMatheson Gifts questioned whether the bailout would trickle down to small businesses like hers on Colby Avenue in downtown Everett.

“I don’t think it’s going to help one bit,” she said. “I even feel that the tax rebate (stimulus checks) didn’t help at all.”

Matheson said her business has been doing well and has even improved recently. She credited that to customers who care about buying local, who don’t want to drive long distances because of high gas prices and who like an emphasis on service.

Just about everyone on Friday agreed that whether there’s worse to come or whether the nation’s financial markets have turned the corner, it’s not likely to be hopeless. Bono said the government’s actions may speed up the amount of time it will take until a recovery starts.

“It’s a serious situation,” he said, “but whatever happens, we’ll survive.”

Herald editor Mike Benbow and The Associated Press contributed to this story.

Reporter Eric Fetters: 425-339-3453 or

More in Herald Business Journal

Mother-in-law homes popular after cities ease restrictions

Lynnwood and Everett are seeing a spurt of growth after changing city codes to allow for this development.

3 must-try doughnuts when Top Pot opens in Edmonds

After two years of work, the popular Seattle chain is opening its second Snohomish County location.

Facebook bans Trump-affiliated data firm Cambridge Analytica

The company allegedly held onto improperly obtained user data after claiming to have deleted it.

Boeing’s newest 737 Max makes first flight over Seattle

Prospects for the new aircraft — the Max 7 — are hazy, as low-cost carriers migrated to larger models.

Boeing’s an early casualty as investors dig in for trade war

The company’s share price is headed toward its biggest weekly slump in more than two years.

A niche Bothell publisher is becoming a mortgage matchmaker

Scotsman Guide has long served lending professionals. Now it’s offering information to borrowers.

Superstore chain Fred Meyer to stop selling guns, ammunition

Guns have been sold at nearly 45 of more than 130 stores in Oregon, Washington, Idaho and Alaska.

Trump’s possible China tariffs bring loud protests — in US

A potential trade war could reverberate across the U.S. economy.

Nike president to leave as company reviews improper conduct

By Matt Townsend / Bloomberg Nike is reviewing improper conduct at the… Continue reading

Does the IRS have your money?

The agency says it has refunds worth $1.1 billion just waiting to be claimed.

Federal investigation into Wells Fargo broadens

Wells Fargo already is wrestling with the aftermath of a scandal in its retail banking unit.

LL Bean: No bonus after tough year, more jobs to be cut

CEO Steve Smith said nearly 500 workers took advantage of a voluntary early-retirement program.