A World Awash in Cash Means What for Lenders?

First the good news: it appears that mortgage profits should stay healthy for some time. How do I know that? The answer is simple: the cost of funds for mortgage lenders (depositories, that is) continues to be quite low and the yield on the 10-year Treasury is at just under 3%. Mortgage rates are at 4.5%. Do the math. Of course, with the jobs picture looking (to put it nicely) not-so-good, applicants that want to purchase new and existing homes will continue to fence sit until they see a clear sign the economy is improving and their jobs are secure. Cash is king, and based on what's been going on in the stock market the past 60 days it appears that investors are content to sit on huge wads of money. They are not putting it in stocks or real estate. It's just sitting there, a trend that may continue for two, three, four years. Of course, market conditions can change on a dime but the stock market has a significant effect on consumer confidence and most people believe the market is a leading indicator for the overall economy...