Nashville, Franklin and Brentwood TN Real Estate

More housing and job news follows this week, but will there be change in an improving direction? We’ll find out with Tuesday’s Existing Home Sales Report, Wednesday’s New Home Sales Report, and Thursday’s Initial and Continuing Jobless Claims Report.

Also, on Wednesday we'll get a read on the health of the economy with the Durable Goods Report, which gives us an update on consumer and business buying behavior on big-ticket items that last for an extended period of time. Meanwhile, Friday will bring another read on the economy with the Gross Domestic Product Report, which is the broadest measure of economic activity.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, last week’s weak economic news helped home loan rates hit record lows again, but volatility was rampant. I’ll be watching closely to see what this week brings.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday, August 20, 2010)

Credit Reports: One May Not Be Enough

This summer, Fannie Mae instructed lenders that they should adopt a new policy that would include a second review of an applicant's credit report just prior to closing. Why? The answer is simple: the credit profile of a borrower may have changed between the time of the initial review of the credit report and the time of closing.

How will this impact the home loan?

The potential impact to a borrower who has utilized credit to make significant purchases after the initial credit report could include:

• A delay in closing
• Increase of closing costs and/or interest rate
• A decreased loan amount
• Denial of the loan

That’s right, in the worst-case scenario, a change in credit could even result in a loan being denied - even after an original approval had been granted.

What should homebuyers do (or not do)?

In order to eliminate any possibility of potential problems before closing, anyone in the application process should use credit sparingly and make sure they adhere to the tips provided below by credit expert Linda Ferrari of Credit Resource Corp:

• Don't do anything that causes a red flag to be raised by the scoring system.
• Don't apply for new credit of any kind.
• Don't pay off collections or charge offs.
• Don't max out or over charge on your credit accounts.
• Don't consolidate debt onto one or two credit cards.

This list is not comprehensive, but it does give you a peek into situations that could create issues and could also be contrary to some ideas you have read previously.

Economic Calendar for the Week of August 23-27, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of August 23 - August 27

This week, we’ll see a number of reports that have the potential to move the markets. We’ll start off with a dose of manufacturing news right away Monday morning with the Empire State Index, which looks at New York State’s manufacturing sector, including how busy it is and where things are headed. On Thursday, we’ll also see the Philadelphia Fed Index, which is one of the most important regional manufacturing indices. These two reports will provide an early look at the manufacturing sector for the month of August.

Things kick into full swing on Tuesday with a number of important reports, including the Producer Price Index (PPI), which measures inflation at the wholesale level. Remember, inflation is the archenemy of Bonds and home loan rates, so it will be important to see what this report reveals. The PPI report comes just after the Consumer Price Index was released last week showing the highest headline reading in a year, so the markets will definitely be paying attention to this report. We’ll also see reports on Industrial Production and on Capacity Utilization, which is considered a telling inflation indicator.

Tuesday also brings another dose of news on the health of the housing industry with reports on the number of Housing Starts and Building Permits in July. Housing Starts for June came in below expectations and at the lowest level in 8 months. And even though Building Permits showed an uptick, it was primarily in the multi-family area rather than in the more important and widely watched single-family area, which showed the lowest permits since April 2009. I’ll be watching to see if those numbers improve for July.

Finally, the week of reports caps off on Thursday with the weekly Initial Jobless Claims report. As discussed above, last week’s report was disappointing to say the least.

In addition to those reports, the Treasury Department and White House will be hosting a "Conference on the Future of Housing Finance" next Tuesday where the future of Fannie Mae and Freddie Mac will be discussed. You may recall a couple weeks ago, rumors were swirling of a major bailout to help millions of homeowners who are upside down on their mortgages - and some pointed to this conference as the venue to release such a big announcement. So I’ll be keeping a close eye on this conference and how it impacts homeowners.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see from the chart below, Mortgage Bonds have continued to climb a staircase higher. Overall, Bonds and home loan rates ended last week where they began - which is at historically good levels.

If you or someone you know has been thinking about purchasing or refinancing a home, now is an ideal time. Even if you’re not sure what you want to do, a brief conversation can provide you with the information you need to make an informed decision.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday, August 13, 2010)

5 Financial Lessons for College Students:

Follow These Tips So Your Kids will Score Well When it Comes to Managing Money While Away at School.

By Janet Bodnar, Kiplinger.com

Forget tuition. Once that bill is taken care of, the biggest financial challenge you face when sending kids off to college is making sure they don’t overdraw their checking account or run up a credit-card bill they can’t pay off. Here’s how to help boost their financial GPA (and save big bucks on fees).

Open a low-cost checking account in your child’s college town, especially if his current bank doesn’t have branches there. Pay close attention to the bank pitches you’ve been getting in the mail so that you can spot the best combination of low balance requirements and low (or no) fees. With a host of new regulations squeezing bank revenues, totally free checking will be harder to come by and may come with strings attached, such as a minimum number of required debit-card transactions. For help in searching for an account, go to www.checkingfinder.com. Extra credit: Choose a bank with a network of ATMs that’s convenient to your child’s dorm or favorite hangouts. College kids are notorious for running up ATM fees by going to the closest machine, even if it’s not in their bank’s network.

Set up an overdraft strategy. Students are also prime candidates for racking up charges by overdrawing their accounts with small purchases at the drugstore or coffee shop. As a result, they’re particularly affected by new rules that prohibit banks from automatically enrolling customers in pricey overdraft-protection programs. Now you have to actively select such a program or choose a less-expensive option, such as linking your child’s checking account to a savings account - or letting him suffer the embarrassment of having his purchase declined (see Closing the Door on Overdrafts). Extra credit: Have your child sign up to get balance alerts via e-mail or text when his balance is low.

Downplay credit cards. New rules require that young people under 21 have a co-signer when they apply for a credit card. Don’t be too quick to sign, or even to make your child an authorized user on your card (see Debit vs. Credit Cards for Kids). Your student should first be responsible enough to manage a checking account. If he doesn’t overdraw his account, he may be mature enough to handle a credit card. But don’t rush it. Extra credit: Regardless of whether your child uses a debit or credit card, he shouldn’t get in the habit of picking up the check for group pizza or beer and expecting to collect from everyone else. That’s another big money pit for college students; even with the best of intentions, their buddies will never pay up.

Guard personal information. This is the Facebook generation, who will tell the world "everything but their underwear size," as a friend of mine puts it. Better they should reveal the size of their skivvies than disclose their PIN or credit-card number, even to a friend (see How to Fix Your Facebook Settings). Extra credit: Remind your kids that when they’re shopping online, they should look for secure transaction symbols, such as a lock in the lower right corner of the browser window and a Web address that begins with "https." See 5 Tips for Safe Online Shopping for more advice.

Keep track of expenses at least for the first semester. Student services should be able to estimate how much the average student will shell out for entertainment, travel, food outside the dorm and other miscellaneous expenses. But your kid may not be average. He can monitor his own transactions via online banking. PNC offers a Virtual Wallet budgeting site for students (www.pnc.com). Or you can just buy your kid some bright green Post-its on which to jot down what he spends. Even if he doesn’t tally them, they provide a visual cue that his spending is mounting up. Extra credit: Before your child leaves home, make it clear which expenses you’ll cover and which are his responsibility. Hint: He gets to pay $300 for a football season ticket.

Reprinted with permission. All Contents © 2010 The Kiplinger Washington Editors. www.kiplinger.com

Economic Calendar for the Week of August 16-20, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of August 16 - August 20

WORKIN' NINE TO FIVE... WHAT A WAY TO MAKE A LIVIN'..." Dolly Parton. But unfortunately, last week's Jobs Report was worse than expected, showing more and more people aren't workin' nine to five or any other kind of full time job. So what does this mean for our economy and home loan rates? Read on to find out.

In addition, something to keep in mind is that the State governments are now under major pressure because of growing budget deficits. With tax revenues declining and budget cuts needed, States are finally having to make cuts like the private sector already has. As they start to catch up in making cut-backs to headcount, this could cause the unemployment rate to worsen. Not very good news, as an improvement in the labor market is needed to fuel the economic recovery... and especially disappointing, considering the money that has been injected to try and remedy this situation.

Also in the news, the Commerce Department reported last week that Personal Spending and Incomes were unchanged in June, due to a slowing of the economic recovery in the spring. In addition, the Savings Rate increased as consumers cut back on spending.

Why is all this significant... and what does it have to do with interest rates? It has to do with something called the velocity of money. Even though the government keeps pumping money into the system, nothing happens until that money is spent or lent, and passes from one hand to another, or one business to another. The speed at which this money passes between parties is called the velocity of money. With the job market still very sluggish, consumers aren't spending much money these days... and businesses are still reluctant to spend money making investments in their business. With present velocity at low levels, inflation remains subdued... however, once velocity increases, the excess money in the system will cause inflation.

And remember, inflation is the arch enemy of Bonds and home loan rates... which means that even the scent of inflation can cause home loan rates to worsen.

While we certainly want to see better Jobs Report numbers in the future, Bonds and home loan rates were able to benefit from the poor report. Remember, weak economic news often causes money to flow from Stocks to Bonds as traders seek to protect their investments in the safer haven of Bonds. As a result, Bonds and home loan rates ended the week slightly better than where they began.

If you or anyone you know would like to learn more about taking advantage of historically low home loan rates, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I'd be happy to talk to them free of charge.

ACING A JOB INTERVIEW IS ESPECIALLY IMPORTANT IN TODAY’S TOUGH JOB MARKET. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR SOME TIPS ON HAVING A GREAT WEB CAM INTERVIEW.

Also this week, Thursday brings another Initial and Continuing Jobless Claims Report, while on Friday we will see both the Retail Sales and Consumer Price Index (CPI) Reports. Remember, last week it was reported that Personal Savings increased, so it will be important to see how this impacts Retail Sales. And, as mentioned above, any hint of inflation can hurt Bonds and home loan rates, which is why the CPI Report - which measures inflation at the consumer level - is also an important one to watch.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, Bonds and home loan rates continue to improve, most recently aided by the weak Jobs Report.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday, August 6, 2010)

How to Succeed on Webcam Interviews

Webcams have steadily grown in popularity in households across the country. Now, companies are embracing the technology as a cost-effective, timesaving way to conduct interviews. And businesses aren’t the only ones turning to this technology. Colleges and universities - such as the University of Georgia, Pennsylvania State University, Arizona State University, and Wake Forest - are also using the technology to interview applicants before admitting them.

If you or someone you know is in the process of applying for a new job or to a university, the following information can help you put your best foot forward if you’re asked to participate in a webcam interview.

Eliminate distractions. When you’re on a webcam at your house, you can be interrupted by the phone ringing, the kids playing, or the doorbell ringing. To make sure that doesn’t happen, find a quiet place where you can avoid any distractions that may compromise your interview.

Remove the clutter. A webcam interview doesn’t just allow the company to see you; they can also see into your home. If the background setting looks messy, cluttered, or less than professional, it may taint the company’s perception of you. So, clean up everything that will be in the background, including those things that are off in the distance. The best advice is to have a clean, simple background setting for the interview where only one or two major pieces of furniture can be seen.

Dress for success from top to toe. While it may be tempting to dress professionally from the waist up while wearing shorts or pajamas below, don’t do it. There are too many stories of people who found themselves reaching for a book or retrieving an object during the interview, only to be embarrassed by the lack of professional attire on their legs. And while the situation may sound laughable, the company interviewing you may take it as a sign that you’re either trying to get away with something or that you’re the type of person who does things halfway.

Check the lighting. Anyone who’s ever used a webcam realizes that you can sometimes appear pale or tired in an online video. To overcome this problem, you can take a few simple steps. First, make sure you are well rested before the interview. Second, check the lighting. You’ll want the room to be bright, but not so bright that your face is washed out. If you need additional lighting, bring a lamp or two into the room.

Maintain eye contact. To make sure you maintain eye contact, look directly at your webcam - rather than at the person’s image on your monitor. It may feel awkward at first, but it will appear natural and professional to the person on the other end.

Test your equipment. No matter how familiar you are with a webcam, you should arrive at your desk well before the interview and test your equipment. You may even want to consider video chatting with a friend for a few minutes.

Send the right body language. Like a face-to-face interview, your posture and body language are important online. So sit up straight, use simple hand gestures as you talk, and resist the urge to fidget or make a lot of unnecessary movements (like scratching your head or constantly readjusting your seating position).

Be specific, yet concise. Provide concise answers that convey specific details. Prepare specific talking points and details about your accomplishments, and then practice saying them succinctly. But don’t memorize a script like you would a speech. Instead, focus on working some talking points into different types of answers.

Finally, don’t be put off by a short silence after you finish speaking, which is likely due to the time delay. Remain confident and stick to your concise statements.

Economic Calendar for the Week of August 9-13, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of August 09 - August 13

THEY SAY IT TAKES TWO TO TANGO... And the relationship we see in the markets between Stocks and Bonds is a dance of its own, as one often improves at the expense of the other... while one kicks higher, the other often dips lower. But why... and how does this impact home loan rates? Here’s what you need to know.

Weak economic news normally causes money to flow out of Stocks and into Bonds, because investors see Bonds as a safer haven when the economy appears weak. An increased demand for Bonds means that Bond prices move higher, as with any item when there is heavy demand for it. And when Bond prices move higher, it means that Bond yields - and consequently home loan rates - move lower. So any movement of money into Bonds typically helps home loan rates improve. Conversely, strong economic news normally has the opposite result. When the economy appears strong, investors move their money to Stocks in the hopes of taking advantage of any gains... and often this money is being pulled back out of Bonds. In turn, this often causes Bonds and home loan rates to worsen as a result.

Last week, we saw this dance in several instances. Through the week, Stocks danced higher as strong earnings reports continued, with more than three-quarters of the S&P 500 companies who've reported second quarter earning beating expectations. In addition, conditions in Europe look to be improving... and this is quite the turnaround from just a few weeks ago when things looked to be horrible. The bank stress tests - whether they are to be believed or not - appear to have helped conditions overall, and brought some strength to the Euro and also to our Stocks, which improved on the news. This is important to note, as part of the big rally we have seen in the Bond market and the big improvement in home loan rates came from the rush of funds from Europe to the US, and in particular to our Bond market, as protection from a precipitously declining Euro. If conditions in Europe continue to improve, money might just flow back over to Europe, and Bonds and therefore home loan rates could worsen.

However, not all of our economic news has been positive lately, and some of this weaker economic date helped Bonds and home loan rates maintain their historic levels last week. Durable Goods Orders, manufactured goods lasting at least three years, fell 1.0% for June. This was the biggest decline in nearly a year, signaling that economic growth was stagnant in the second quarter. In addition, the Advanced or first reading for 2nd Quarter GDP showed the US economy slowed to a 2.4% annual growth rate, which represents the lowest number in a year. These readings show that consumers and businesses remain cautious and reluctant to spend money. And that's understandable... concerns remain about the labor market, the housing market, and the economy overall. All in all, the news from last week helped Bonds and home loan rates improve, and they ended the week slightly improved from where they began.

If you or anyone you know would like to learn more about taking advantage of historically low home loan rates, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit, and I'd be happy to talk to them free of charge.

EVEN THOUGH SCHOOL'S OUT FOR THE SUMMER, LEARNING TO MAKE SMART MONEY CHOICES IS IMPORTANT AT EVERY AGE. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR SOME TIPS ON HELPING YOUR KIDS USE MONEY WISELY.

This week's news could cause a little more twist and shout between Stocks and Bonds, beginning with Tuesday's Personal Income and Personal Spending Reports, which will give us a look at the Core Personal Consumption Expenditure (PCE) Index. PCE is the Fed's favorite gauge of inflation, and they will most certainly be watching this number closely in advance of their August 10 meeting of the Federal Open Market Committee (FOMC).

And there will be plenty of labor market news ahead this week. After Thursday's weekly Initial and Continuing Jobless Claims Report, Friday will bring the Labor Department's Official Jobs Report for July. Last month's report showed that 125,000 jobs were lost during the month of June, and remember, we need to create 125,000 to 150,000 jobs each month - via both private and government jobs - just to keep up with the pace of population growth. With 3.25M people claiming EUC (Emergency Unemployment Compensation) benefits according to last week's Jobless Claims Report, it doesn't appear that this week's official Jobs Report for July will paint a rosy picture.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, bonds improved above important resistance, allowing home loan rates to continue to improve. I’ll be watching to see if this continues.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 30, 2010)

7 Ways to Teach Financial Responsibility to Children

If the current economic climate has taught us anything, it’s that financial education and responsibility are critical in today's fast-paced, wired world. All too often, however, children grow up immune to the financial world around them. As a result, they're often ill equipped to manage their own finances when they become adults and leave home.

With the economy in the news almost daily, now’s a perfect time to start educating your children about how to manage money more responsibly. The tips below can help you get started.

1. Pay an Allowance

If your children don't have money of their own, it's hard for them to really grasp the value of it. So if you don't pay your children allowance, consider starting. You don’t need to pay a lot - a little goes a long way. The most important thing is that your children learn the value of completing even small chores around the house to earn their own money.

2. Make a Plan and Set Guidelines

Before you actually start paying the allowance, sit down with your children and set some expectations. Discuss the specific chores and timelines for completing those chores, as well as the amount of money they’ll earn for each chore and when they’ll be paid. This helps instill a strong work ethic in children as well as drive home the message that money is earned, not given.

3. Save for the Future

As part of your financial discussion, consider implementing a savings rule for your children. For example, make a rule to save half or one-third of their allowance. You can go with them to the bank to establish a savings account in their name and then take them to make their deposits. Or, if your children are still young, you can decorate a jar to use as a special savings bank at home.

4. Educate on Interest

Once a month, sit down with your kids and count how much they have deposited, how much interest they have earned, and how much they have as a result. Compare the amounts each month, so your children can see the benefits not only of saving, but also the benefits of compounding interest.

5. Take Your Children Shopping

Take your children grocery shopping with you. As you go down your shopping list, have your children help you compare the prices of the different brands, sales, and quantities per package. You can also have you children try to keep a running tally and make a guess of what the total cost will be.

6. Set Them Free to Shop

Once your children have a sense of money matters, you may want to take the lesson up a notch. For instance, when your children need new school clothes, you try giving them the money and putting them in charge of what to buy. Then, as they shop, help them compare the prices and number of items they can purchase within their budget. You could even purchase a gift card with a specific dollar value on it. That will help your children not only learn about the value of a dollar and making smart purchases, but it’ll also introduce them to the credit card system, in which money may not seem real because it’s unseen. In today’s electronic financial world, this lesson will become more and more important as your children get older.

7. Teach by Example

Remember, children are always watching. So if you educate them on saving for purchases and budgeting but make rash decisions on big-ticket items yourself, you may find them learning a different lesson than you intend. So make sure you follow your own rules when it comes to spending, saving, and fiscal responsibility.

At times your children may beg for an exception. But by being consistent, your children will be much better prepared to deal with the real financial world that they’ll face when they grow up.

Economic Calendar for the Week of August 2-6, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of August 02 - August 06

"UNCERTAINTY AND MYSTERY ARE THE ENERGIES OF LIFE." And while the Bond market may agree with R.I. Fitzhenry's words about uncertainty, most investors in the Stock market don't... just ask Fed Chairman Ben Bernanke. Last week, Mr. Bernanke testified before the Senate and House Banking Committees, making several cautious comments on the state of the labor market and inflation, as well as stating that the Fed would be ready to take action should economic conditions worsen. But the comment that spooked Stocks and helped Bonds was when Mr. Bernanke said the economic outlook is "unusually uncertain." Stocks hate uncertainty but Bonds usually perform well as a safe haven, so Bonds and home loan rates improved upon the utterance of these words.

Mr. Bernanke also stated that one way to normalize the size and composition of the Federal Reserve's securities portfolio would be to sell some holdings of agency debt and Mortgage Backed Securities. And an article in the New York Times concurred, stating that the Fed’s MBS holdings are already problematic and put the Fed in a tough position where it may find itself having a conflict of interest - and here’s why.

While inflation is subdued for now, it’s only a matter of time before the Fed will need to hikes rates in order to keep inflation controlled. But any hike in rates would cause the Fed to lose significant value on their Mortgage Backed Security holdings. So the tough question is... how will the Fed act, in light of this conflict?

Remember, the Fed purchased $1.25 Trillion worth of Mortgage Bonds, as well as several hundred Billion in Treasuries. Those purchases helped drive rates down towards historic low levels - and yet the housing market is still not entirely healthy. So this also begs the question, what would cause a different result? One perspective is that the Fed - like many in Washington - missed the point. The problem is not that rates need to be lower. Many individuals already want to purchase or refinance at today’s low rates, but are unable to do so because of tighter underwriting guidelines, as well as low valuations. A perfect example is the "no income verification" loan - which has been cast in a negative spotlight as a "liar loan" and virtually eliminated. But there has been a good track record for those loans in the past when underwritten properly. If the government were to direct some resources towards reestablishing some of these more reasonable lending tools, the results might be better.

Instead - the sweeping Financial Reform Bill was signed into law last week, and the implications of this 2,300-page legislation are sure to be broad. Former Fed Chairman Alan Greenspan himself said that every page appeared to be loaded with unintended consequences... so as this legislation is analyzed and dissected, you can be assured I’ll be keeping a close eye on the impacts it may have and will keep you informed.

Fed Chair Bernanke Calls the Outlook "Unusually Uncertain"

But the Federal Reserve and Financial Reform are only part of the picture. Mortgage Bonds and home loan rates are also impacted by global financial news.

In fact, just last week the Bank of Canada raised rates by .25%, up to .75%... and this could have a major implication on our Bonds. Part of the reason home loan rates have dropped so much has been the currency trade, where the Euro has weakened against the Dollar. Europeans have been taking advantage of the currency trade, and parking money in the US - much of which is in our Bonds. But now, with Canada’s improving economy and slightly higher rate environment, their yields might not only be more attractive for Europeans, but their currency may provide a more lucrative option as well. And the sell-off in our Bonds early last week could have been somewhat due to traders anticipating this move by the Bank of Canada.

Another story of uncertainty is developing in China. China's reserves, which are held mostly in US Treasuries as well as Mortgage Backed Securities, stand at $2.5 Trillion. But last quarter marked the first time in a long time that these holdings did not increase. Does this mean that China is slowing their US debt purchases? I will be keeping close tabs on this because a slowdown in US debt purchases from China could adversely impact the Bond market, as their purchases have also contributed to the low rate environment in the US.

THESE BIG-PICTURE DEVELOPMENTS IMPACT THE MARKETS AND, IN TURN, YOUR FINANCIAL SITUATION. BUT EVERYDAY PURCHASES CAN ALSO DRAIN YOUR HOUSEHOLD BUDGET. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW TO LEARN HOW YOU CAN STOP OVERPAYING... STARTING RIGHT NOW.

A number of reports which have the potential to move the markets are coming this week, and we’ll start off with a dose of housing news right away Monday morning with the New Home Sales report. This report comes after last week’s worse-than-expected report on Housing Starts, so the markets will be paying close attention to this report.

The manufacturing sector of the economy will also be in the spotlight this week. On Wednesday, Durable Goods Orders will be released. Then Friday brings the Chicago PMI, which surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity.

On Thursday, we’ll see another weekly read on Initial Jobless Claims. Last week, Initial Jobless Claims rose by 37,000 to 464,000, which was above the 445,000 that was expected. Overall, unemployment is still disappointingly high.

The news heats up on Friday when we get a look at the Gross Domestic Product (GDP) and GDP Chain Deflator for the second quarter. The Chain Deflator is a key inflation measure included in the GDP Report. And since inflation is the archenemy of Bonds and home loan rates, this report could be a market mover.

Finally, there are two reports on tap this week regarding how consumers feel about the economy with the Consumer Confidence report on Tuesday and the Consumer Sentiment Index on Friday. In addition, the Treasury Department will auction $38 Billion in 2-Year Notes on Tuesday, $37 Billion in 5-Year Notes on Wednesday, and $29 Billion in 7-Year Notes on Thursday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As stated above, uncertainty in the US and abroad has been impacting the markets, which has helped Mortgage Bond prices climb steadily higher since April, as you can see in the chart below. And this means that home loan rates have moved steadily lower.

This presents an unbelievable opportunity for people looking to purchase or refinance a home. It only takes a few minutes to see how you or someone you know can benefit from today’s low rates. Even if you’re not sure you can refinance, it doesn’t hurt to conduct a quick review. Please call me today before this opportunity passes by.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 23, 2010)

10 Things We Overpay For:

You Can Save Big by Buying Cheap Alternatives Instead

By Joan Goldwasser, Kiplinger.com

Does the avalanche of news about layoffs, business losses and a declining stock market have you looking for ways to cut your spending so you can beef up your savings? We're here to help, with suggestions for less-expensive alternatives to ten everyday purchases (for more ideas, go to www.BillShrink.com, which tracks cell-phone plans and credit cards).

Afternoon snacks. Do you munch protein bars as a healthier alternative to a chocolate pick-me-up? You could easily be paying more than $2 per bar and consuming just as much sugar as you would with your favorite candy bar. Stock up on fruit for a fraction of the cost when you do your grocery shopping. You'll be fitter and save a bundle.

Bottled water. Yes, it's important to drink water every day. But picking up the bottled variety with your lunch is an expensive way to stay hydrated. Rather than spend $2 a day for water, buy a pitcher and a filter for about $20 and drink as much as you want for pennies a glass.

A caffeine fix. Can't get through the day without at least one cuppa Joe? Stopping at Starbucks or Dunkin' Donuts can set you back as much as $1.65 per cup. Splurge on a pound of gourmet coffee for $8 to $13 and you can make 40 cups for about 20 cents to 33 cents each.

Favorite tunes. Do you rush out to buy the latest CD by your favorite group even though there are only one or two songs you really like? Instead of paying up to $18 for the CD, download those cuts you want from iTunes for 99 cents each, or from Amazon for as little as 79 cents.

A night at the movies. An evening for two at your local theater costs an average of about $20, including the popcorn - and closer to $30 in major cities. And that doesn't even count the babysitter. For just $5 a month, you can watch two movies from Netflix or pay $9 for unlimited viewing. If you're willing to wait a little longer for new releases, borrow them free from your local library. (See Cut the Cable Cord for other inexpensive entertainment options.)

Fresh flowers. A bouquet of spring blooms brightens up a room and your mood. But purchasing it from a florist at $25 and up can quickly put a dent in your budget. Check out your local grocery store, which offers a selection of seasonal bouquets for $5 to $10.

Fruits and veggies. Sure, precut vegetables and salad mixes that are washed and bagged save a little time. But you'll pay for the convenience. Broccoli florets and sliced peppers cost $6 per pound, compared with one-third to one-half the price for the uncut versions. Lettuce varieties that are pre-washed and bagged sell for $5.98 a pound. But it takes just minutes to wash and spin dry enough arugula for your evening salad, and you'll pay one-third as much. Buying whole strawberries rather than sliced ones that are prepackaged cuts the price by 75%.

Credit-card fees. Every month, millions of credit-card customers pay their bills late, and they're assessed as much as $39 each time. Set up an automatic debit and you'll never incur another late fee.

ATM fees. Each time you use an out-of-network ATM you pay an average of $3.43. Do that once a week and you'll rack up almost $180 in ATM fees every year. Avoid those charges by selecting a bank with a large ATM network or an online account that reimburses your ATM fees - such as the eOne no-fee account from Salem Five Direct bank. Another alternative: Get cash back at the grocery store.

Fax and mail services. Instead of paying FedEx $1.49 to fax one page, sign up to send free faxes from a provider such as faxZero or K7.net. Save on shipping with the U.S. Postal Service's priority mail service. You'll pay just $4.95 to mail an envelope or small box anywhere in the U.S., and your parcel is likely to arrive within two days. Larger packages cost $10.35. That saves at least 50% compared with UPS's two-day service, the cost of which varies by weight and distance.

Reprinted with permission. All Contents © 2010 The Kiplinger Washington Editors. www.kiplinger.com

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of July 26 - July 30

What all this will mean for our economy and home loan rates remains to be seen... which is why now is the perfect time to act, while home loan rates continue to be some of the best they have ever been! If you or anyone you know would like to learn more about this exceptional opportunity, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I'd be happy to talk to them free of charge.

In other news, there hasn't been much change on the inflation front, which is good news for Bonds and home loan rates. Remember: inflation erodes the return of an asset like a Bond... so inflation is the arch enemy of Bonds and home loan rates. Both the Producer Price Index - which measures inflation at the wholesale level - and the Consumer Price Index for June showed that inflation continues to remain tame.

However, two changes that would be welcome are in the retail sales and manufacturing areas. Retail Sales for June came in lower than expected for the second month in a row. Although details of the report were mixed, the overall indication is that consumers and businesses remain cautious on purchasing big-ticket items. In addition, the Empire State Manufacturing Index and Philly Fed Index showed that factories and manufacturing still look very sluggish overall. Changes for the better in both of these areas will be reflective of our economy growing stronger, and these are things to watch for moving forward.

All in all, the news from last week helped Bonds and home loan rates reach record levels again, and they ended the week about .125 percent better than where they began.

GROWING YOUR BUSINESS IS ALWAYS CHANGE IN THE RIGHT DIRECTION. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR AN ARTICLE FROM KIPLINGER.COM ON "TWEETING" YOUR WAY TO SUCCESS.

There's a double dose of housing news this week. Tuesday's Housing Starts and Building Permits Reports will give us an update on the health of the new construction sector of the housing market, while Thursday we will get a read on Existing Home Sales.

Thursday also brings another Initial Jobless Claims Report, and any changes for the better in this area will be welcome! In fact, last week, the National Federation of Independent Businesses (NFIB) reported that its monthly "Small Business Optimism" index turned weaker in June. This is important to follow, because small businesses represent an important job creation engine - and the NFIB said the decrease was "a very disappointing outcome."

In addition, earnings season continues this week and some reports to look for include IBM after the markets close Monday, Goldman Sachs before the markets open on Tuesday, and Coca Cola and Morgan Stanley before the markets open on Wednesday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, Bonds and rates ended the week on an improving trend though they were unable to improve beyond a tough ceiling reflective of their best levels. I'll be watching closely to see what happens this week.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 16, 2010)

"Tweets" Can Help Grow Your Business

Twitter is spreading like wildfire and companies are using it to boost sales. By Michael Doan, Kiplinger.com

You know Twitter - the social networking and microblogging service that allows people to keep in touch through "tweets" - short snippets of text sent to cell phones, BlackBerrys and PCs.

Businesses are making use of the Web format for marketing, research and customer services. Computer maker Dell sends coupons to its Twitter users. Whole Foods Market offers $25 gift cards as prizes for people who submit the catchiest messages promoting Whole Foods. Other companies send messages to foster community and build loyalty to stores and products. Uncle Sam is a player, too. The Food and Drug Administration uses Twitter to help get out the word about product recalls.

Because most Twitter messages are searchable on the Web, businesses can also use it to track customer comments and answer complaints - even offer immediate help or advice. Among firms closely tuned in to what customers are saying are Southwest Airlines, JetBlue, Comcast and Boingo, which provides Wi-Fi service at airports.

Jeremy Pepper, public relations manager of Boingo, receives and tracks all Twitter messages, blogs and other Web comments that mention the company. If, for example, someone complains to a friend about a weak Wi-Fi signal at Washington Dulles International Airport, he may get an immediate message from Pepper.

In such a case, Pepper says he'll ask: "'Where you are sitting...have you thought of moving? Which terminal are you in? Let me check to see if there are problems at the airport,'" he says. Once a problem is resolved, he'll send a tweet saying he was happy to help and "have a safe flight."

Quick, helpful responses via Twitter can go a long way to changing customers' opinions about a firm, even turning detractors into company promoters.

Keep messages informal and conversational. "Being boring is the worst thing you can do," says Jeffrey Mann, vice president of research at Gartner Group, an information technology research firm. Business tweets should be personalized; you may want to designate one or more employees to twitter on behalf of the company. Keep in mind that Twitter messages - limited to 140 characters each - are seen by people who choose to become "followers" of a business or an individual.

Twitter is a good tool to use at trade shows, helping to draw attendees to exhibitors' booths as well as press conferences and receptions hosted by a company or trade group. The Oklahoma City Chamber of Commerce, for example, puts out messages about its Schmooza Palooza networking party and trade show before, during and after the event in hopes of spreading buzz about it. Results are good; attendance has grown dramatically.

Twitter is great for small businesses, too, because it's easy and doesn't add any expense. The only cost is the employee time it takes to write and follow others' messages.

Consider registering your company's name with Twitter, even if you don't expect to use it. It'll help prevent misuse by someone else. Go to www.twitter.com.

Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.

Economic Calendar for the Week of July 19-23, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for July 19-23, 2010

Economic Calendar for the Week of July 19 - July 23

"Over there... over there..." The old patriotic song hit it on the head, in terms of what has been driving market action lately... news from overseas. In the absence of US economic reports last week, Stocks received some help from headlines "over there." Late last week, the European Central Bank (ECB) left interest rates at a record low - which wasn’t really a surprise, given the sharp economic slowdown and uncertainty in Europe.

But in a separate briefing, ECB Executive Board member Juergen Stark stated that "the worst of the sovereign debt crisis seems to be over." He went on to say that tensions within the financial markets have "calmed down" as the enormous $442 Billion collection of one-year loans by the ECB went without any problems. Although the Stock market may benefit from such calming commentary, the reality is the worst may not be over yet. In fact, rumors are surfacing that Italy may be the next country to reveal debt problems - making this a story to continue watching.

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European Central Bank and Stress Test News Helped Stocks

There was also a lot of talk overseas last week about bank stress tests - and the positive buzz helped Stocks around the globe move higher. Similar to what took place in the US a couple of years ago, these stress tests may provide some transparency and help differentiate which financial institutions are strong - so they're not lumped in with some of the more troubled ones.

Although the official reports will not be released until July 23rd, French Finance Minister Christine Lagarde indicated last week that the final results will show that European banks are "solid and healthy." When stress tests were conducted on the US banks, the positive results helped boost financial Stocks nearly 40% over the following several months. It is possible that favorable results from the European stress tests could bolster confidence in the Eurozone, which would unwind some of the trading activity that has taken place during the past two months - that being the flood of money out of Europe into the US and purchasing our debt securities and Bond instruments, including Mortgage Bonds. If this starts to reverse, home loan rates will worsen... and this can happen very quickly. I’ll be watching this closely - but if you have been waiting to get in touch regarding taking advantage of still-historic low home loan rates... don’t wait!

ECONOMIC NEWS FROM EUROPE ISN'T THE ONLY HOT STORY THAT DESERVES YOUR ATTENTION. THE TEMPATURE HAS SOARED LATELY ACROSS THE US, SCORCHING THE NATION AND PROMPTING MANY PEOPLE TO REVIEW THEIR ENERGY USE - AND ITS IMPACT ON THEIR BUDGET. CHECK OUT THE SPECIAL MORTGAGE MARKET GUIDE VIDEO VIEW BELOW TO LEARN HOW YOU CAN PERFORM A HOME ENERGY AUDIT.

Last week's economic calendar was very light; but this week, we’ll see the exact opposite as reports flood the headlines near the end of the week. Along with more news coming from overseas... the week's action could cause home loan rates to change trend. Bond prices have been rocketing higher with home loan rates moving lower... but history tells us that a reversal is in store - it's just a matter of when.

On Wednesday, we’ll see the Retail Sales figures for June, as well as the Meeting Minutes from the past Fed meeting. Although the Fed hasn't made any major policy changes as of late, the meeting minutes are still closely watched by the markets for any stray comments or discussion on matters such as inflation or the "extended period" language regarding rates.

Things heat up on Thursday with a number of reports on manufacturing and inflation. The Philadelphia Fed Index and the Empire State Index will both be released Thursday morning - giving us a detailed look at the manufacturing sector. We'll also see the latest reports on Capacity Utilization and Industrial Production, as well as the Producer Price Index (PPI), which measures inflation at the wholesale level. The day after the PPI is reported, we’ll see the Consumer Price Index (CPI), which measures inflation at the consumer level. Remember, inflation is the archenemy of Bonds and home loan rates, so it will be important to see what these reports reveal.

We'll also see the weekly Initial Jobless Claims report on Thursday morning. Last week's number came in better than expected and showed an improvement over the previous report, which gave the financial markets a glimmer of hope. It also gave Bond investors an excuse to take a little profit off the table - since Bonds have been priced for perfection, and any blip in the economic data is providing reason to preserve profits.

In addition to those reports, the Treasury Department will auction $69 Billion this week. The auctions will consist of $35 Billion in 3-year Notes on Monday, $21 Billion in 10-year Notes on Tuesday and $13 Billion in 30-Years on Wednesday. The good news is, the $69 Billion total represents the lowest offering in a year - and when this "low" figure was announced last week, it helped Bond prices improve.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. And as you can see in the chart below, Mortgage Bonds have been inching higher - helping home loan rates move lower - and making this an ideal time to review your current loan or purchase a new home!

If you or someone you know wants to see how these rates might help your situation, please call me today. Even if you aren't sure if you can refinance or buy - get in touch, and let's discuss the possibilities. Such unbelievable low rates will not last forever.

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Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 9, 2010)

Home Energy Audit
With 100-degree temperatures scorching the nation lately, staying cool and comfortable has been especially important this month. At the same time, no one wants to pay more than they have to for their gas and electric bills. Check out this video from Kiplinger.com to learn how you can perform a home energy audit

Economic Calendar for the Week of July 12 - July 16