RJ and Makay

With mortgage rates at their lowest since the end of January, mortgage applications were up last week as borrowers looked to refinance. The Mortgage Bankers Association (MBA) index of loan applications rose 13% in the week ended February 18 after dropping the prior week to its lowest point since November 2008. Meanwhile, the association's refinancing measure jumped 18% and its purchase gauge rose 5.1%.

“Refinancing is more sensitive [than purchases] to fluctuations in rates,” observes Paul Dales, a senior economist at Capital Economics Ltd. However, Dales says he expects refinancing to remain soft, with sales at historically depressed levels, for two or three years.

Investors across the globe have been favoring America lately. In November, worldwide demand for U.S. government bonds and other financial assets rose from October's levels as purchases by private investors offset record sales by foreign governments, the U.S. Treasury reports.

Indeed, net purchases of U.S. financial assets totaled more than $85 billion in November, the highest level since last August and far more than the net purchases of $28.9 billion in October. Net purchases by foreigners reached $39 billion compared with about $15 billion in October, the Treasury adds.

A couple years ago, most Americans probably thought this day would never come. But it's just about here.

American International Group (AIG) confirmed yesterday that, on Friday, it would finally repay the massive bailout it received in 2008. It'll cover the debt via complete recapitalization involving the issue of 75 million warrants. The warrants will allow current shareholders to buy AIG common stock at $45 per share, a 23% discount from the $58.40 the stock closed at yesterday.