"BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST - THE PARACHUTE." G.B. Stern. And last week's Jobs Report had something for both optimists and pessimists, as the numbers were both good and bad...depending on which survey you looked at, and what numbers you focused on.

First, the headline numbers: The Labor Department reported that there were 20,000 jobs lost in January, which was worse than expectations of 15,000 jobs gained. However, the Unemployment Rate came in lower at 9.7%, down from last month's read of 10.0%. But what do these numbers actually tell us?

Remember that the numbers in the Jobs Report come from two separate surveys: First, the Business Survey - also called the Establishment Survey or Current Employment Statistics Survey - which surveys about 140,000 businesses and government agencies. It uses something called the "birth/death ratio" to provide an estimate of the number of jobs gained or lost each month. This survey is used to report the headline number of jobs gained or lost. Now there is also the Household Survey, also known as the Current Population Survey, which uses actual phone calls to 50 - 60,000 households to gather its data. This survey is used to report the headline Unemployment Rate.

The Business Survey is very susceptible to inaccuracy, particularly during times when the labor market is substantially worsening or improving...and you don't need to look much further than all the revisions to prior reports to see how inaccurate the report seems to be. December's report was revised to 150,000 jobs lost, nearly doubling the original report of 85,000 job losses. Although November showed 60,000 additional gains - wait a minute - October's revisions showed another 100,000 jobs lost. And if that weren't enough, the Business Survey threw in a "Benchmark Revision", which indicated that there were an additional 900,000 jobs lost from March 2008 - March 2009 from what was previously reported!

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Chart: Non-farm Payroll Change and Revisions

So what about the other report, the Household Survey? It gives us the headline Unemployment Rate, which was reported at 9.7%. That's an improvement over last month's reading of 10.0%. But this survey has its own job creation or loss number, just like the Business Survey does. The Household Survey showed that 540,000 jobs were created during January, which is really good news, and explains why the Unemployment Rate declined in the face of the Business Survey showing job losses.

There are definitely some glimmers of hope for the job market - but any way you look at it, the bottom line is that continued and significant improvements need to be seen in the labor market before the economy can be considered out of the woods.

Another important note for the week - Pending Home Sales for December were up significantly from November's reading, and up a healthy 10.9% over December 2008, as homebuyers take advantage of today's low rates and tax incentives. And speaking of low home loan rates, the Federal Reserve purchased $12 billion in Mortgage Backed Securities last week, bringing the total to $1.173 trillion since the program began in January of 2009...which leaves just $77 billion in purchases to be made over the next eight weeks until the program ends on March 31^st. While home loan rates improved very slightly during this volatile week - don't forget that when the Fed is done buying, home loan rates will be very susceptible to moving higher. Please reach out to me to discuss how you or someone you know might benefit from current low rates, or the Homebuyers Tax Credit. The clock is ticking on both these fronts - so why wait?

THE NEW MILEAGE RATES ARE HERE! THE NEW MILEAGE RATES ARE HERE! OKAY...NEWS FROM THE IRS ISN'T NECESSARILY ALL THAT EXCITING, BUT YOU DON'T WANT TO MISS OUT ON A SINGLE TAX DEDUCTION YOU MIGHT HAVE COMING. CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR THE DETAILS.

Forecast for the Week
SEE ALL BRENTWOOD TN HOMES FOR SALE HERE!

We have a quiet week ahead when it comes to economic reports, but whether that's good or bad news remains to be seen. Be sure to look for Thursday's Initial Jobless Claims Report, as last week's numbers came in at 480,000, quite a bit worse than the 455,000 expected and the highest count since mid-December. Last week's Continuing Claims increased slightly to 4.6 million, and remember this...the Continuing Claims number doesn't even account for the nearly 6 million people whose Unemployment benefits have expired, and are now receiving Extended Emergency Unemployment benefits.

Also on tap for Thursday is the Retail Sales Report for January. This report is the most-timely indicator of broad consumer spending patterns, and it is important to see in which direction the numbers are moving. And the Treasury will be auctioning $40B in 3-year Notes on Tuesday, $25B in 10-years on Wednesday and $16B in 30-year Bonds on Thursday for a total of $81B. These auctions could move the markets, especially in the face of few scheduled economic reports.

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, Bond prices have been improving of late, but there is tough technical resistance ahead. As always, I'll be watching closely - so give me a call this week if you'd like an update on the market action!

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 05, 2010)

The Mortgage Market View...
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New Mileage Rates for 2010

If you drive a car, truck or van for work, you'll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2010. And remember, these mileage rates are not just used to calculate deductible costs for driving an automobile for business, but also for charitable, medical or moving purposes.

New for 2010

As of January 1, 2010, the standard mileage rates are as follows:

• Businesses = 50 cents per mile driven
• Medical or moving = 16.5 cents per mile driven
• Charitable organizations = 14 cents per mile driven

Note: The 2010 rates are slightly lower than last year's, due to generally lower transportation costs as compared to a year ago.

Make Sure You Qualify

Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Additional Option

Although the IRS provides the standard mileage rate for ease and convenience, you're not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.

Best yet - most people find that they save money on taxes by working with a tax professional. Let me know if you need a referral!

The Week's Economic Indicator Calendar

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 February 08 - February 12

"THE NINE MOST TERRIFYING WORDS IN THE ENGLISH LANGUAGE ARE: `I'M FROM THE GOVERNMENT, AND I'M HERE TO HELP.`" Ronald Reagan. And regardless of if those words do indeed terrify you or perhaps give you confidence, the government held center stage last week, with a pivotal Federal Reserve Board Policy Statement, President Obama's first State of the Union address, and Ben Bernanke's confirmation for another term as Fed Chairman.

First, let's start with the Federal Reserve Board, who on the heels of their most recent meeting reiterated their important line, "rates will remain low for an extended period" in their Policy Statement. This tells us that the "carry trade" which has pushed Stocks, Commodities and even Bonds higher may continue, as the driving force of this trade - low interest rates - will likely provide a tailwind. This piece of the Statement was good news for Bonds and home loan rates. However, this was offset by further confirmation that the Fed's Mortgage Backed Security purchase program will indeed end March 31st, 2010. This was bad news for Bonds and home loan rates, and overrode the "extended period" statement in terms of Bond market and home loan rate action.

Then on Wednesday evening, President Obama delivered his first official State of the Union address, and just like in his initial post-election speech, a big theme was job creation. He discussed a new jobs package, but no details on how much the package would cost or where the resources would be spent have been provided yet. With lots of money already spent with this goal in mind during 2009, and the jobs picture still worsening, hopes are high that future plans will be carefully crafted and targeted to achieve this important goal.

And finally - Ben Bernanke ultimately received a hard-won Senate confirmation for his second four-year term as Chairman of the Federal Reserve, but it was a bit of a bruising confirmation fight. Bernanke has been under some criticism as he led the Fed in taking a series of extraordinary measures to protect the economy during the financial crisis, including the decision to help home loan rates stay low during 2009 and early 2010 via the aforementioned $1.25T Mortgage Backed Security purchase plan.

In other economic report news - last week's Advanced read on 4th Quarter Gross Domestic Product (GDP) showed a climb of 5.7%, and as you can see from the chart below, that was the best reading since the 3rd Quarter of 2003.

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Chart: Gross Domestic Product (By Quarter)

And while it's nice to see positive gains on this broad read on the economy, we need to take the report with a grain of salt. Last Friday's report was only the first or the Advanced reading. So we still have two more reports - the Preliminary and the Final - due out regarding the 4th Quarter GDP. And in the past, we've seen some of the gains go away when the additional reports were released. In fact, just last quarter, the GDP reading dropped 2.2% from the Advanced reading to the Final report. It wouldn't be surprising to see a similar revision lower this time, as when the economy slowed, businesses reduced their inventory rather than keeping their shelves full...and in the 4th Quarter, many businesses began to restock their shelves, with restocking accounting for 3.4 of the 5.7 percentage points in GDP growth. The problem is that sales haven't increased along with the restocking. In fact, Consumer Spending actually declined when compared to the previous quarter. This means last week's GDP report probably overstated the level of growth and, as a result, will likely be revised lower in the future.

Overall - Bonds and home loan rates experienced quite a bit of mid-week volatility while absorbing all the news, but ultimately ended up very close to where they had started.

CONSIDERING A QUICK WINTER GETAWAY, BUT WANT TO SAVE MONEY? NOW MIGHT BE A GREAT TIME TO SAVE ON A LAST-MINUTE TRIP. CHECK OUT THE VIEW ARTICLE BELOW FOR TIPS THAT CAN MAKE THAT GETAWAY MORE AFFORDABLE THAN EVER!

Forecast for the Week

SEE ALL BRENTWOOD TN HOMES FOR SALE HERE!

This will be a busy week for economic reports, starting off with the Personal Consumption Expenditures report on Monday. This report measures consumer price changes, and also gives us a look at inflation.

We'll also get a glimpse at Personal Income and Personal spending on Monday, as well as the Institute of Supply Managers Index, which is the king of all manufacturing indices, and is considered the single best snapshot of the factory sector.

By mid-week, the labor market will lead the big news. In addition to the latest Initial Jobless Claims numbers, ADP's Employment Report will also be delivered. These two data points will lead the way to Friday's official Jobs Report from the Labor Department. This report includes the latest information on job losses and the unemployment rate, as well as the average work week and hourly earnings. With all the recent talk about the job market, it will be important to get a current read on the situation.

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, Mortgage Bonds traded in a tight technical range last week between a ceiling of resistance at the 100-Day Moving Average and a floor of support at the 200-Day Moving Average - and as always, I'll be watching carefully to see which way Bonds and home loan rates are headed.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jan 29, 2010)

The Mortgage Market View...

SEE ALL FRANKLIN TN HOMES FOR SALE HERE!

Last-Minute Travel Tips

Planning ahead is a good thing, and that's definitely true when it comes to travelling. However, sometimes unforeseen circumstances - or a severe case of the winter blues - make planning far in advance almost impossible. If you ever need or decide to travel at the last minute, here are some tips to maximize savings.

Be flexible - If possible, be flexible with both your travel dates and the carrier you choose. Rigidity in either of these areas can easily translate into paying increased costs.

Know when to book - Most airlines file their Web specials on Tuesdays and Wednesdays. If possible, concentrate on flights departing from major hub airports and try to include a Saturday-night stay.

Search diligently - There is no shortage of great websites for purchasing discounted airfares and hotel rooms. In terms of airfares, don't forget to check the airlines' own websites, as some carriers do not appear on many of the discount websites.

Don't forget about travel agents - Many travel agents will purchase bulk deals, giving them access to better prices. It's definitely a good idea to make a few calls as part of your search.

Websites to know about - To save time, pay a visit to Bookingbuddy.com. Enter your search for a flight, hotel, or car rental and compare the prices offered by various sites (Expedia, Travelocity, Orbitz, etc.) with the click of one button. Another great resource is Lastminute.com, which posts some great last-minute deals, as well as options for your not-so-last-minute traveling.

When it comes to last-minute travel, the two most important things to remember are to be flexible and search hard. These tips apply whether you need - or want - to travel at the last minute!

The Week's Economic Indicator Calendar

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 February 01 - February 05

"If you are losing a tug-of-war with a tiger, give him the rope before he gets to your arm. You can always buy a new rope." Max Gunther. Such a sweet sentiment...but definitely not one that the markets adopted this week, as both Stocks and Bonds battled back and forth near key technical levels.

The markets were closed on Monday in honor of the Martin Luther King, Jr. holiday, but then the Bulls and the Bears in the Bond market spent the first part of the week pushing and pulling Bond prices above and below their 200-Day Moving Average. This level is important because it can often set the stage for price direction for an extended period of time. Bonds were finally able to break above this important level, which was good news for home loan rates.

And the war wasn't just being waged in Bonds...the Stock market was fighting some technical battles of its own. The Dow and the S&P both tumbled lower, falling beneath their own 50-day Moving Averages. This is very significant, as neither index has closed beneath their 50-day Moving Average since July of 2009. If Stocks are unable to regain their footing and move above this important Moving Average, we may see a continued slide lower in Stocks, which could benefit Bonds and home loan rates.

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Chart: Technical Look at the Dow

However, a possible uptick in inflation later this year and an end to the Fed's Mortgage Backed Security purchase program in March are two important factors that will likely cause home loan rates to worsen in the months ahead. While this week's Producer Price Index Report (which measures inflation at the wholesale level) was relatively tame, higher than expected inflation was reported in both the UK and India. Reports out of both countries say that they expect levels of inflation to continue higher, but not just in their own countries...they see it around the world as well. Remember, Bonds and inflation are mortal enemies. If Bonds were Superman...inflation would be Kryptonite. And when inflation does begin to tick higher here, it will send home loan rates higher as well.

It's also important to note that the Fed bought $12B in MBS in the latest week, bringing their purchase total to $1.149T, leaving $101B left to purchase before the end of March. If we have not talked yet about your own home loan situation, let's be sure to connect very soon as the current low home loan rate environment may soon be a thing of the past.

There was also housing news to note last week, as Housing Starts fell in December, due in part to bad weather throughout the country. However, a look down the road appears more positive, as Building Permits rose significantly in December, to the best level since October 2008.

After all the tug of war this week among traders, home loan rates were able to end the week slightly better than where they began.

IMPORTANT CHANGES ARE COMING TO A VERY POPULAR HOME LOAN PROGRAM...AND THEY COULD IMPACT YOU OR SOMEONE YOU KNOW. CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR THE DETAILS.

Forecast for the Week
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Looking ahead, there will be plenty of news and reports this week that could lead to more tug of war in the markets. There will be big news on Wednesday as the Fed releases its policy statement after its regularly scheduled meeting of the Federal Open Market Committee. What to listen for in particular is if the Fed once again comments on their Mortgage Backed Security purchase program, which is slated to end on March 31st. The Fed has previously stated they will not extend the program, despite recent speculation otherwise. I'll be listening closely to see what the Fed has to say.

There will be a double dose of housing news this week, with Monday's Existing Home Sales Report and Wednesday's New Home Sales Report. There will also be several important reads on our economy, with Tuesday's Consumer Confidence Report, Thursday's Durable Goods Report - which is a look at consumer and business buying behavior on big ticket items that last for an extended period of time - and Friday's Gross Domestic Product Report, which is the broadest measure of economic activity.

It will also be important to keep an eye on Thursday's Initial Jobless Claims Report. Last week's Initial Jobless Claims came in at 482,000, which was significantly worse than expected and reversed the trend of lower numbers we've seen. We need to see Initial Claims below 400,000 per week to see stabilization in the Unemployment Rate.

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 were able to end the week above the 200-day Moving Average. I'll be watching closely to see if this trend continues.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jan 22, 2010)

The Mortgage Market View...

New Lending Policies Announced by FHA

If you were listening to the housing news last week, you probably heard a number of reports about lending changes that were announced by the Federal Housing Administration (FHA). While many of the news reports were confusing, the truth is pretty clear, and isn't as bad as some people may have heard.

Overall the measures are intended to help the FHA better manage its risks and strengthen its capital reserves, while still providing home loans to the nation. The good news, as FHA Commissioner David Stevens stated recently, is that "by continuing to provide affordable, responsible mortgage products, FHA will support the housing market's recovery" and "remain the largest source of home purchase financing for underserved communities."

What's Changing?

If you or someone you know is considering an FHA loan, some of these changes may affect you. Here's a clear, concise rundown of the major changes and what they mean:

1. Increased mortgage insurance. The mortgage insurance premium (referred to as private mortgage insurance by many people) will be increased from 1.75% to 2.25%. This change will add some cost to purchasing a home, but will not overburden consumers since the mortgage insurance is paid over the life of the loan, rather than upfront at closing.

2. New down payment and credit score requirements. According to the new policy, homebuyers who have a credit score of at least 580 may still be able to purchase a home with 3.5% down, but those with credit scores of less than 580 will be required to put down at least 10%. This change is designed to help the FHA balance its risk, while still providing affordable down payments for consumers with a history of good credit and responsibility.

3. Reduced seller concession. Basically, this change means that the person selling the home will now only be able to offer the homebuyer 3% to help defray closing costs, as opposed to 6% under the previous policy.

In addition to these changes, the new policies contain a series of new measures aimed at increasing lender enforcement.

These changes will become effective on April 5, 2010. The bottom line is that the changes will impact some homebuyers more than others. But in the end, the FHA is still committed to providing affordable home loans.

If you're concerned about your credit score or are worried about what these changes may mean to your specific situation, please call or email to schedule an appointment. There are many different programs available for homebuyers, so finding the right plan for you just requires a short discussion about your goals and financial picture.

The Week's Economic Indicator Calendar
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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 January 25 - January 29

"WHAT DO WE LIVE FOR, IF IT IS NOT TO MAKE LIFE LESS DIFFICULT FOR EACH OTHER?" George Eliot. The current crisis in Haiti certainly puts this sentiment into perspective. For information on how you can help, see the View article below.

Last week it was reported that the inflation measuring Consumer Price Index (CPI) for December came in lower than expected. Overall, CPI for all of 2009 was fairly tame. But as you can see in the chart below, the closely watched Core CPI, which strips out volatile food and energy, rose to 1.8% year-over-year in December after hitting a multi-year low of 1.4% in August.

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Chart: Core Consumer Price Index

So what does this mean for Bonds and home loan rates?

Clearly, inflation is tame at the moment...but slowly trending higher. The Fed will be watching this data very carefully in the coming months, as they seek to time perfectly the exit from what is essentially a zero rate environment. The Fed will likely err on the side of keeping the Fed Funds Rate lower for longer than they perhaps should, in order to avoid a "double dip" recession...but that will likely lead to more inflation down the road. Remember, Bonds and home loan rates hate inflation - so home loan rates are likely to trend higher as more inflation creeps into the economy.

Speaking of the Fed, they stepped up their Mortgage Backed Security (MBS) buying in the latest week, purchasing $14B in MBS, whereas the most recent prior purchases were around $9.5B. The Fed now has $113B left of their $1.25T allotted commitment, with the buying program set to wrap up on March 31st. The Fed's purchases have helped home loan rates stay historically low - and although there has been some buzz about an extension of the program, it seems unlikely that will come to fruition. When the Fed purchases stop, home loan rates will be very susceptible to moving higher - so if we have not talked yet about your own home loan situation, or if you know of a friend, family member, neighbor or coworker who might like some advice, let's be sure to connect very soon...time is of the essence.

The next Federal Reserve Policy Statement will be coming on January 27th, and they have gone out of their way to mention in the last several statements that the MBS buying program will not continue. Count on me to be listening closely when the Fed releases this next Statement, as this will help further gauge what home loan rates have in store.

In other news, Retail Sales for December came in well below expectations and were down from the 1.8% increase seen in November. While this suggests weakness in the Retail sector, it has to be taken with a grain of salt, as it is likely that frigid temperatures and snowy conditions throughout much of the country were contributing factors to the decline. Overall, 2009 was a very tough year for retail. Retail Sales for 2009 dropped 6.2% compared with 2008, which was the biggest decline on record, dating back to 1992.

There was some good news, however, on the manufacturing front, as the Empire State Manufacturing Index was reported above estimates, indicating manufacturing expansion in New York state and parts of New Jersey and Connecticut.

For the week overall Bonds were able to break above important technical levels, and home loan rates ended the week slightly better than where they began.

Forecast for the Week
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The markets will be closed on Monday in observance of the Martin Luther King, Jr. holiday, but plenty of news will follow later in the week. Wednesday brings more news from the inflation front, with the Producer Price Index (PPI) Report, which measures inflation at the wholesale level. Wednesday will also bring a read on the housing market, with the Housing Starts and Building Permits Report.

There's also more manufacturing news ahead on Thursday with the Philadelphia Fed Report. Also in store for Thursday is another look at the weekly Initial Jobless Claims Report...so it's sure to be an interesting week, with a variety of data for the markets to absorb.

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 improved last week, largely due to tame inflation numbers and a decline in Stocks. In fact, Bonds were actually able to power through a tough technical "ceiling of resistance" at the 200-day Moving Average...but it remains to be seen if they will hold their gains. I'll be watching closely to see if Bonds and home loan rates can build on their positive momentum in the coming week.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jan 15, 2010)

The Mortgage Market View...

A Helping Hand for Haiti

The catastrophe in Haiti cries out for all of us to do whatever we can to help. But many of us aren't sure exactly how to help or which organization to entrust with a donation.

To help you make sure your donation makes as big a difference as possible, consider donating to AmeriCares, which is one of the many fine organizations helping Haiti through disaster relief. AmeriCares is in the business of disaster relief and has an extensive network on the ground in Haiti, so your money will go to get supplies directly to those stricken instead of setting up infrastructure. You can learn more about them and donate at http://www.americares.org.

Obviously, the current economy presents challenges for many of us, but if you are able to help, your donation will go a long way. Whether it is through AmeriCares, or some other organization of your choice, any assistance you provide can help ease the suffering of those in need.

The Week's Economic Indicator Calendar 
Find Homes For Sale In Franklin TN HERE

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 January 18 - January 22

"THERE ARE NO SECRETS IN LIFE, JUST HIDDEN TRUTHS THAT LIE BENEATH THE SURFACE." From the Showtime TV hit, "Dexter". The highly anticipated Jobs Report arrived last Friday morning, showing 85,000 jobs lost during December...and while this was a bit worse than expected, the report also carried some good news, in that the prior month's revisions showed that November actually had a final tabulation of job gains for the month, for the first time since December 2007. Additionally, the Unemployment Rate remained stable at 10%. While this all seems to indicate some level of improvement in the labor market - you do have to look beneath the surface to clearly understand the present realities for the labor market.

Let's start with the headline number of 85,000 jobs lost. This comes from what is called the "business survey", which uses many estimation tools, including the birth-death ratio of businesses, i.e. how many businesses were created or closed. The mechanics in coming up with the business survey allow the information to be gathered rapidly, but it also makes the information far less than accurate. On the other hand, there is also a "household survey", where a sampling of households receive actual phone calls. Although the household number is not used by the Labor Department for their headline numbers of job losses or creations, some deem it to be a bit more accurate. The household survey paints a bit of a darker - but perhaps more realistic - picture, showing a whopping 589,000 jobs lost. But let's dig deeper still.

The Labor Department does use the household survey to calculate the Unemployment Rate - and remember, it stayed stable at 10% - but the calculation is determined by how many people are presently in the workforce. And the household survey indicated that last month, 661,000 people left the workforce.

Whoa - what does "leaving the workforce" mean? And where exactly are they going? Let's take a closer look to understand.

The Labor Department's definition of this is a "discouraged worker", who has not looked for a job during the past four weeks. Based on this definition, there are a few contributing factors that would help us understand why this would indicate such a large number of people "exiting the workforce." And remember, more people exiting the workforce means less people counted as unemployed, and this number alone last month would have contributed to almost a half percent increase in the rate of unemployment from 10% to almost 10.5%.

So let's talk about these contributing factors. First, frigid temperatures and piles of snow during December played a role in keeping job seekers home. Add to that the holiday season, as well as travel for family gatherings and vacations during this time, also contributing to pushing off the job search. And perhaps most importantly playing a role are the extended unemployment benefits - up to 99 weeks worth - which could also play into the decision to not seek work. Put this all together, and it might clarify the large so-called exodus from the workforce, which masks the true Unemployment Rate.

Overall - the job picture is still weak, at best. Census hiring in the next few months - although temporary - should boost job creations, which in turn may lead to upside Job Report surprises. This could lead to some tough days ahead for Bonds and home loan rates - count on me to be watching closely, and standing by to advise.

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Chart: 2009 Job Gains or Losses (In the Thousands)

IT'S NO SECRET THAT MANY AMERICANS MAKE NEW YEARS RESOLUTIONS RELATED TO THEIR HEALTH AND FITNESS - AND THE GOOD NEWS IS THAT IT CAN BE SIMPLE. READ ON FOR A MORTGAGE MARKET GUIDE VIEW ARTICLE DESCRIBING A FEW SIMPLE TRIED AND TRUE EXERCISES THAT ARE EASY...AND WORK.

Forecast for the Week
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The major reports for this week start in earnest on Thursday when the Retail Sales Report arrives, being the most-timely indicator of broad consumer spending patterns. Initial Jobless Claims will also be released on Thursday, and will likely be a hot topic after last week's weaker-than-expected Jobs Report. Friday will bring another healthy round of economic news when we get a look at the Consumer Price Index, Industrial Production, and the Consumer Sentiment Index.

We may also see some volatility depending on how the markets receive more supply...via the Treasury Department auctions of $10 Billion in 10-yr Treasury Inflation-Protected Securities on Monday, $40 Billion in 3-year Notes on Tuesday, $21 Billion in 10-year Notes on Wednesday, and $13 Billion in 30-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 you can see in the chart below, Mortgage Bonds rallied early last week but were halted by a technical ceiling of resistance at the 200-Day Moving Average and were subsequently pushed lower, meaning home loan rates worsened.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jan 08, 2010)

The Mortgage Market View...
Find Franklin TN Homes for Sale HERE

Exercises That Don't Cost a Dime

Getting back in shape after the holidays is often tops on people's New Year's Resolution list. Here are some exercises you can do at home...and for free...to help kick start the new year.

Push-Ups
Tried and true, push-ups are perfect for toning the chest, triceps and shoulders. If you're not ready for the standard military push-up, try doing them from your knees, making sure to keep your ankles crossed.

Sit-Ups
Start by lying on your back with your knees bent and feet placed flat on the floor. Feel free to wedge your toes underneath a couch or bed frame in order to keep your feet planted. With your hands behind your head, begin your sit-up. But, instead of going all the way up to your knees, stop halfway and pause before returning to the ground. Doing so alleviates tension in the lower back, while isolating the middle and upper abdominals.

Leg Lifts
Lie flat on your back with your feet together and the palms of your hands on the ground next to you. Keeping your legs straight, raise them until they are perpendicular to the ground and your toes are pointing straight in the air. This is a great exercise for strengthening and toning the lower abdominals.

Lunges
Stand with your feet spread shoulder width apart. With your hands on your hips, step forward with your right leg and take your left knee to the ground. Return to the initial standing position and step forward with your left foot, taking your right knee to the ground. Return to standing and repeat this series of moves. Increase the difficulty by holding dumbbells during the exercise. If you don't have dumbbells, try using jugs of water or something similar from your pantry.

Dips
This is a great exercise for both your triceps and shoulders. Utilizing a sturdy chair or bench, sit at the edge of the seat with your legs straightforward, heals to the ground and toes pointing up. Your hands should firmly grasp the edge of the seat, shoulder width apart. Supporting yourself with your arms, slide your butt off the edge of the seat. Use your arms to lower yourself until your triceps are parallel to the ground. Then push yourself back up. Keep repeating this motion.

Calve Raises
On your toes, balance yourself on the edge of a bottom step. The soles of your feet, as well as your heels, should be hanging off the edge. Grab on to a banister or door jam for support and lower your heals toward the ground, as far as they'll go. Now, raise yourself up so that you are standing on your toes. Repeat this motion. This exercise works wonders for toning calve muscles.

For all of these exercises, start with one or two sets of 10 to 20 repetitions. As you get stronger, increase the number of sets and repetitions, as well as decrease the amount of time spent resting between sets.

You'll feel great and look great in plenty of time for summer!

The Week's Economic Indicator Calendar

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 January 11 - January 15

"We will open the book. Its pages are blank. We are going to put words on them ourselves. The book is called Opportunity and its first chapter is New Year's Day." Edith Lovejoy Pierce. And as we begin a New Year, fresh with opportunity - here's what you need to know about the last week of 2009.

The holiday shortened week had some fireworks, and not just those ringing in the New Year. The Treasury Department auctioned a whopping $118 Billion in T-Notes last week, and the added supply helped bring on some volatility in Bonds. And although the financial markets in general have been quite volatile of late anyways, the potential for increased volatility is typically greater during a holiday week. This is because trading volume levels decrease, and with fewer traders and investors pushing transactions, it opens the door for exacerbated market moves, as one large trade can cause prices to rise or fall more sharply.

In fact, volatility was present through a good part of 2009 - not to mention the last decade. As you can see in the chart below, Stocks experienced a roller coaster ride during 2009, hitting Bear market lows in March...only to soar 60% higher since March 9th.

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Chart: Dow Jones Industrial Average

Meanwhile, 2009 also brought some of the best home loan rates ever seen in the history of the US, but things have worsened over the last month. This is in part because the Federal Reserve is winding down their Mortgage Backed Security purchasing program...right at a time when there is an increased volume of Mortgage Backed Securities coming to market.

So why are there more coming to market right now? It takes about four months for home loan originations to become securities - and summer originations were light, allowing the decreased Fed purchases during the fall to still help handle the flow of Mortgage Backed Securities coming to market at that time. But loan origination volume increased in late summer and early fall, due to lower home loan rates as well as the perceived expiration of the Home Buyer Tax Credit, which has since been extended. This increased volume of home loans are now securitized and hitting the markets, at a time when the Fed is buying less.

As with any item, when there is lots of supply - in this case, the increased volume of Mortgage Backed Securities - and diminishing demand - i.e. the Fed buying less and less - Economics 101 tells us that the price of that item will subsequently go down. And as Mortgage Backed Security or Mortgage Bond prices go down, home loan rates go up, which is what we saw happen throughout December. While rates were able to end last week at about the same place as they began the week, they did worsen about .50% from the beginning of December to the end.

THE NEW YEAR IS THE PERFECT TIME FOR A FINANCIAL CHECK-UP, SO MAKE SURE TO GET IN TOUCH WITH ME TO SEE IF STILL LOW HOME LOAN RATES COULD BENEFIT YOU OR SOMEONE YOU KNOW. AND SPEAKING OF SMART FINANCIAL DECISIONS, CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR GREAT TIPS ON SAVING MONEY DURING THE COMING YEAR.

Forecast for the Week
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The first major economic report of the New Year will come on Friday, with the Labor Department's official Jobs Report for December. Last month's Jobs Report showed that only 11,000 jobs were lost in November, despite expectations of 125,000 jobs lost. This marked the least number of jobs lost in nearly two years, since December 2007. In addition, the Unemployment Rate improved to 10.0%, when expectations were for it to remain at the 10.2% level.

Remember, though, that we need to create an additional 125,000 jobs each month just to keep up with population growth...so there is still quite a ways to go before we're out of the woods on the employment front. And while last week's Initial Jobless Claims number showed that new Unemployment Claims were reported at the lowest weekly reading since July of 2008, the holidays and large snowfall in many parts of the country may have prevented people from getting out to the unemployment office to file their claims...so this may well have skewed the reading. The bottom line is that the labor market is a key component to our economy's recovery, so both Thursday's Initial Jobless Claims number and Friday's Jobs Report will be important to watch.

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, Bond prices have been on a worsening trend of late, meaning home loan rates have moved higher. As the New Year begins, remember you can count on me to be watching closely as always - and I look forward to hearing from you or any of your friends, family members, neighbors or coworkers with any questions you might have.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jan 01, 2010)

The Mortgage Market View...
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"Resolve" to Stop Wasting Money

The New Year is the perfect time to take a look at your spending habits and "resolve" to avoid wasting money where you don't have to. Here are some main areas that many of us waste money unnecessarily...and some simple steps to ensure a bright financial 2010.

Meals at the Workplace
Working Americans spend an average of $6 when they buy their lunch at work. The average cost drops to $2 when we bring our lunch from home. That's a difference of $4 a day, or $20 a week, or over $1,000 a year. Consider adding this savings to your savings account, and after just a few months you'll really see the difference add up.

Utilize the Public Library
By obtaining a library card, you can save on books, magazines, and especially DVD rentals. If you average 3 DVD rentals a month, you're spending approximately $144 a year. That's $144 that could be deposited into your bank account. For every book you check out, find out what it would have cost if you'd bought it. Deposit that amount into your account, too.

Don't be Afraid to Ask for Discounts
If you're paying bills or buying items such as airline tickets based solely on the price you're quoted, you could be wasting money. Many companies provide discounts on goods and services but only for those customers who request them. It never hurts to ask so start asking.

Save Gas
Consult the owner's manual of your car and learn about the manufacturer's recommendations for optimal gas mileage. Put the suggestions into action and see what happens. After a month, you should be able to see if you're spending less on fuel. Take the savings and stash it away.

Sell Your Junk
Come Springtime, go through your closets, garage, and CD collection. Figure out which items you no longer use. You can either hold a garage sale or locate stores which buy and sell used merchandise, and sell the items to them.

Do Away with Disposable
From razors and batteries to paper towels and plastic bags, your home is filled with products which are meant to be thrown away. Most of these disposable items have either a permanent or semi-disposable counterpart. Switching over to these more durable items can yield a savings of $4 a week or $200 a year.

Get the Most Out of Your Utilities
Many of us are overspending on our utility bills for no other reason than our own apathy. If you haven't already switched over to low-flow shower heads and toilets it's probably time to do so. Also, get into the habit of turning off lights when not in use. Did you know that most utility companies offer a free online energy audit? This way you can see exactly where you're wasting money.

Here's to a bright financial future in 2010!

The Week's Economic Indicator Calendar

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 January 04 - January 08

"ALL GOOD THINGS MUST COME TO AN END..." Or so the popular saying goes. And last week, the Fed reiterated once again that their Mortgage Backed Security (MBS) purchase program...the program that has helped keep home loan rates low for much of the last year...will end on March 31, 2010 as previously stated. Here's the lowdown on what this means, and all the latest news impacting home loan rates and the markets.

Last Wednesday during their regularly scheduled meeting of the Federal Open Market Committee, the Federal Reserve kept the Fed Funds Rate unchanged. But history has shown that when the Fed has left rates too low for an extended period of time, there is a price to be paid, via higher inflation. Yet if the accommodation is removed too early, it can derail an already fragile recovery. The Fed continues to walk this tightrope, trying to get it "just right."

Along with this decision, the Fed emphasized and reminded that their MBS purchase program will still end on their already revised deadline date of March 31, 2010. Why is this significant? Let's look at the numbers from last week to get an idea. The Fed purchased $16B in MBS in the latest week bringing the year-to-date total to $1.087T. This means there is $163B left to purchase before March 31, which in turn means the Fed will purchase about $11.5B on average each week through the end of the buying program. This is less than half of what the Fed was buying regularly throughout 2009 and a 1/3 less than what the Fed has been buying in recent weeks.

So why does this point to higher rates around the corner? When there is lots of supply and diminishing demand, the price of that item will subsequently go down - it's Economics 101. So, when Bond prices start to decrease from the diminishing demand of the Fed's purchases, home loan rates will naturally be likely to increase. Give me a call if you want to see how you can benefit from the current low rate environment...before it becomes too late.

In other news, there was mixed inflation data last week, as the Producer Price Index (which measures wholesale inflation) came in significantly higher than expected. However, the Consumer Price Index was reported in line with expectations, signaling that inflation remains low - at least for now. Inflation will ultimately creep back into the economy - and as the arch-enemy of Bonds and MBS - will also contribute to rising interest rates.

Housing Starts for November were in line with estimates and, as you can see in the chart below, the housing sector seems to have stabilized after bottoming out at 458,000 Housing Starts in April.

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Chart: Housing Starts

Meanwhile Building Permits, which are a leading indicator of housing construction, reached the highest level seen in the past year. This is encouraging, and the extension of the Home Buyer Tax Credit should provide an added boost for home sales over the next few months.

Bonds and rates were able to improve in the middle of the week and as a result, Bonds and rates ended the week about where they began.

THE HOLIDAY SEASON WILL EVENTUALLY COME TO AN END, BUT YOUR HOLIDAY MEMORIES DON'T HAVE TO! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR GREAT TIPS TO HELP YOU TAKE GREAT HOLIDAY PICTURES.

Forecast for the Week
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The markets will enter holiday mode later this week, with both the Stock and Bond markets closing early on Thursday and remaining closed all day Friday in observance of the Christmas holiday, but not before several important reports are released.

First, we'll get a read on the housing market with Tuesday's Existing Home Sales Report and Wednesday's New Home Sales Report. Tuesday also brings a read on the economy with the broadest measure of economic activity via the Gross Domestic Product Report.

There is still more news on Wednesday with the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) Index, found within the Personal Income Report. With last week's mixed inflation news, this will be an especially important report to watch.

And Thursday could bring some big news just before the markets close by way of 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. A look at the job market will come with the Initial Jobless Claims Report. Last week's Initial Jobless Claims and Continuing Claims numbers were higher than expected, showing that the labor market is still struggling.

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 were able to regain some ground last week. I'll be watching to see if this continues.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Dec 18, 2009)

The Mortgage Market View...
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7 Tips for Taking Perfect Holiday Pictures

Over the next week, families and friends from across the country will come together to reminisce, reconnect, and enjoy the warmth of the holiday season. When it's over, only two things will remain: the memories of those celebrations and the photographs that bring those memories to life.

Unfortunately, some holiday photos don't turn out quite as vivid or emotional as the moments they depict. But with the 7 simple tips below, you can help eliminate the disappointment of a photo gone wrong.

1. Look 'em in the eye. One of the best ways to capture the true spirit and emotion of holiday moments is to zero in on the eyes of family and friends. That means holding the camera at eye level and focusing in tightly on the twinkle in their eyes and smiles on their faces. And, when taking pictures of children or even the family pet, don't forget to lower yourself to their level.
2. Brighten up the holidays...even when you're outside. One of the most important aspects to consider in any picture is the lighting. Harsh overhead lights can cast odd shadows on a person's face. And bright lights can make a person's wrinkles or subtle flaws stand out more in the picture than they do in real life. To help reduce these negative illusions, try using as much natural light as possible. If you're indoors, ask your friends to move closer to the natural light coming in through a window and turn off your flash to capture the vibrant colors better.
   If you're outside, remember that the soft, warm light that occurs during the early morning, late afternoon, and on cloudy days is better than the overpowering mid-day sun. If you must shoot during mid-day, use your flash to help brighten faces and eliminate those unpleasant shadows from the sun.
3. Keep your distance. When you do need a flash, make sure that you know the optimal distance that your camera's flash can travel. Too often, people make the mistake of standing out of range, which can be the same as using no flash at all. For most cameras, the maximum distance between you and your subject should be approximately 15 feet (or five big steps away). But, just to be safe, you should check your camera's manual or try to stay within 10 feet to make sure your photographs don't turn out dark and dreary.
4. Don't center every image. Often, centering the subject can result in a boring or lackluster photo. Instead, try to shift your subject slightly to the left or the right. The empty space that is left in the frame will help draw the eye to the subject and add a quality of balance and interest that a centered photo cannot duplicate.
5. Don't just take photographs...direct them. Even if you're just taking a photo of a few people, take a moment to move them around to create interest and fill the frame. Also, don't hesitate to move distracting objects out of the background or to move the subjects to another part of the room altogether.
6. Get the red out. Although some cameras come with red-eye reduction features, the best way to eliminate this problem is to stop it before it starts. To do that, have your subject look toward the camera, but not directly at the lens or the flash. So, before you snap the picture, take a moment to say "look here" and point out a spot just below your camera for them to focus on.
7. Snap the picture early to capture the action. Most cameras today include a variety of features that are automatically processed before a picture is taken. That means your camera takes an extra second to process the photo and adjust its settings accordingly. So, try to snap the shot a half-a-second early.

With these tips and a little practice, your photographs will capture the vivid colors, emotions, and joy of this holiday season in a way that brings those memories to life every time you look at them.

The Week's Economic Indicator Calendar

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 December 21 - December 25

"IT'S A RECESSION WHEN YOUR NEIGHBOR LOSES HIS JOB; IT'S A DEPRESSION WHEN YOU LOSE YOURS." Harry S. Truman. Very true words indeed - and last week brought some market action when Fed Chairman Ben Bernanke discussed the recession, commenting that our economic recovery still faces "formidable headwinds." As you can see in the chart below, the current recession we have been in has been the longest in nearly half a century.

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Chart: Post World War II Recessions

And because negative economic comments or news causes money to flow out of Stocks and into Bonds, Bernanke's words helped Bonds and home loan rates to improve early last week...but these improvements were short lived.

Bond prices and home loan rates responded poorly to the Treasury auctions of last week, as the Treasury instruments being auctioned off are in direct competition with Mortgage Backed Securities...and the continual record amounts of supply hitting the market requires record amounts of buying to take place as well. And remember - the Federal Reserve is winding down their Mortgage Backed Security purchasing program, so as they stretch out and ration their remaining purchases through the first quarter of next year, the reduced amount of their buying just adds to the problem.

And as with any item, when there is lots of supply and diminishing demand - Economics 101 tells us that the price of that item will subsequently go down. So as Bond prices go down, home loan rates go up - and last week saw home loan rates increase by at least .125% across the board.

Also adding to selling pressure on Bonds in the latter part of last week were several bits of good economic news. First, the Retail Sales Report for November was better than expected, marking the third monthly increase over the past four months. It appears that lower prices and good deals are helping to spur some buying activity, though it remains to be seen how this will impact retailers' bottom lines. Consumer Sentiment was also reported quite a bit better than expected.

AND SPEAKING OF RETAIL SALES AND CONSUMER SENTIMENT - ARE YOU STILL WONDERING HOW TO WISELY SPEND YOUR HARD EARNED DOLLARS WHILE HOLIDAY SHOPPING THIS YEAR...AND STILL FEEL GREAT ABOUT HAVING GIVEN A GREAT GIFT? CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR GREAT HOLIDAY GIFT IDEAS UNDER $25.

Forecast for the Week

Last week may have been a slow one when it comes to economic reports, but the week ahead is full of action, beginning with Tuesday's Producer Price Index (PPI) Report, which measures inflation at the wholesale level. More inflation news immediately follows with Wednesday's Consumer Price Index (CPI) Report. Remember that inflation erodes the value of the fixed income that a Bond provides, so any signs of inflation can cause Bond prices and home loan rates to worsen.

Wednesday will also bring a read on the housing market with the Housing Starts and Building Permits Report, as well as the Interest Rate Decision and Policy Statement from the Fed, following the end of their regularly scheduled Federal Open Market Committee meeting. A change in rates isn't expected - but any comments about inflation in the Policy Statement could rattle Bonds and home loan rates.

Also important this week is a look at the manufacturing sector, via Tuesday's Empire State Index and Thursday's Philadelphia Fed Report. Manufacturing reports have been all over the boards lately, but a marked improvement in either of these reports could cause Stocks to move higher, and in turn, hurt Bonds and home loan rates. Also in store for Thursday is another look at the weekly Initial Jobless Claims Report. Last week's Continuing Jobless Claims fell to the lowest level since February, and while at first blush this decline would appear to be a good thing, it is likely that the numbers are reflective of people accepting part time or seasonal work that won't last after the holidays.

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 worsened after last week's Treasury auctions. I'll be watching carefully to see if Bonds and rates can muster an improving rally this week in the face of a heavy news week.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Dec 11, 2009)

The Mortgage Market View...

Best Holiday Gifts for Under $25

The holiday season can be a strain on your pocketbook. Considering the current economic climate, it may be even more apparent this year than in the recent past. But there are still plenty of inexpensive holiday gifts you can give this year - even for under $25 - that will help ring in the holiday cheer!

Godiva Chocolate - Godiva offers a number of chocolate selections for under $25. It's not only a delicious product, but receiving chocolate in a little gold box is about as iconic as receiving jewelry in a little blue box. Visit www.Godiva.com to see the various selections.

Bottle of Wine - A bottle of wine is a great gift of holiday cheer. And for $25, you can buy a nice bottle.

Christmas Tree Ornament - This gift is obviously contingent on the recipient celebrating Christmas. Nonetheless, it is a thoughtful present that can be kept forever. Depending on the ornament, some can be personalized with engraved messages, as well as the year they were purchased.

Lottery Tickets - This is another inexpensive gift you should consider. The idea of scratching off 25 lottery tickets can be a lot of fun. The gift gets even better if a number of the lottery tickets pay off. Tuck them inside a thoughtful card and you're all set.

French Press Coffee Pot - Every true coffee lover should have a French Press pot. And even if they already have one, they'll probably enjoy another one to keep in separate locations or to be used simultaneously for larger get-togethers.

A Journal and a Pen - One does not have to be a writer in order to find countless uses for a journal and a pen.

A Board Game - From single folks to families, board games provide the perfect entertainment at a gathering with friends, or even a quiet weekend night at home.

Homemade Gift Basket - Putting together a gift basket for someone allows you to tailor the gift precisely to the interests of the person who's receiving it. Gift basket themes are limitless and can fit into any budget.

Bath and Body Gifts - Everyone can use a little bit of pampering from time to time. With the variety of scented lotions and shower gels available today, you're sure to find something within your budget.

Times may be tough, but that doesn't mean you need to completely forgo the tradition of holiday gift buying. You just have to be a bit more creative. Happy shopping...and happy holidays.

The Week's Economic Indicator Calendar

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 December 14 - December 18

"HI HO, HI HO, IT'S OFF TO WORK WE GO!" And even those who have been feeling grumpy about the weak labor market found something to smile about last Friday. The official Jobs Report for November was released - and the improving numbers were a big surprise to the markets.

According to the Labor Department, only 11,000 jobs were lost in November, despite expectations of 125,000 jobs lost. As you can see from the chart below, this marks the least number of jobs lost in nearly two years - since December 2007. Adding to the favorable news, the Unemployment Rate improved to 10.0%, when expectations were for it to remain at the 10.2% level.

While the news was good for the economy and helped Stocks improve sharply, it wasn't so favorable for Bonds...and as a result, home loan rates moved slightly higher on the news, continuing their worsening trend for the week overall.

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Chart: 2009 Job Growth/Losses (In Thousands)

In other news, based on early numbers, 195 Million shoppers hit the stores and websites on Black Friday, which was up from last year's 172 Million. Cyber Monday - the online equivalent of Black Friday - also showed an increase in web shoppers, up by 6% from last year. It appears that the shopping traffic was up, but the dollars-per-shopper may be down a bit. This might be indicative of not only consumers being conservative...but also the fact that with all the deep sales taking place to incent buyers, fewer dollars may be spent to get the very same merchandise as a year ago.

SPEAKING OF THE HOLIDAYS...YOU CAN STILL DECORATE FOR THE HOLIDAYS WITHOUT BREAKING THE BANK. TAKE A LOOK AT THE MORTGAGE MARKET GUIDE VIEW ARTICLE BELOW FOR CREATIVE, COST-EFFECTIVE TIPS FOR SPRUCING UP YOUR HOME THIS SEASON.

Forecast for the Week

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The week ahead starts out a bit sleepy in terms of economic reports, with no major releases due until Thursday when the Initial Jobless Claims report and the Balance of Trade report will both arrive.

Friday will bring another shot of economic news when the Retail Sales Report - the most-timely indicator of broad consumer spending patterns - is released. We'll also get a look at the Consumer Sentiment Index for an updated snapshot of how consumers are feeling about the economy.

In addition to these reports, the markets will be watching the latest round of Treasury auctions. This week's auctions include longer-term maturities such as 10-year Notes and 30-year Bonds that compete with Mortgage Backed Securities or Mortgage Bonds. So as we've been seeing of late, the auctions could cause some volatility, depending on how well they are received.

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, Mortgage Bonds hit a high for 2009 on November 27th, but traded lower last week due to financial news and a better-than-expected Jobs Report.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Dec 04, 2009)

The Mortgage Market View...

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Budget-Friendly Decorating Tips

The holiday season is a costly time of year. There are gifts to buy, parties to prepare for, and any number of other miscellaneous expenses. One expense that can really add up is the money put toward holiday decorations. Here are some budget-friendly decorating tips that go easy on your wallet while also making your home look and feel beautiful.

The Nose Knows

We associate the holidays with certain scents. Pine, cinnamon, and cloves seem to top the list. If your family celebrates Christmas, you've most likely got the pine part covered with your fresh Christmas tree. If you don't celebrate Christmas, or if you're partial to an artificial tree, you can ask your local Christmas tree lot about the branches they've trimmed off of trees and have no use for. Freebees like these can be used to adorn mantles, decorate coffee tables, or may be tastefully strewn across a dining room table. They add a splash of color and a fresh pine scent without the presence of a tree.

Regarding the scent of either cinnamon or cloves, there are several ways to achieve it. Two of the easiest and least expensive methods are the use of potpourri and scented oils. Strategically place two or three such items around the house, and you'll be immediately transported into the holiday mode.

Lighting Is Everything

The good news is that achieving the proper holiday lighting doesn't require you to purchase any expensive fixtures. Instead, start with candles and lots of them. Candlesticks, votives, tea lights, and pillar candles all have the ability to create mood through incandescence. Candlelit dinners seem to look and taste better, and movie watching in a candlelit room adds ambience to the experience.

The bad news about candles is if you shop for them in the wrong place, you can rack up a hefty bill in no time at all. If you're thinking about burning a lot of candles this holiday season, it can easily turn into one of those unnecessary expenses. For an array of inexpensive candles, look no further than your local Ikea store. If that's not a possibility, simply log onto www.ikea.com and browse the nearly 100 different types of candles they have to offer.

Color, Color, Color

The holidays are all about color. If you celebrate Christmas, red, green, and white will serve as your color palate. If Hanukkah is your holiday, it's all about blue, silver, and white. And if Kwanzaa is your celebration, look no further than red, green, and black. If none of these options work for you, there are always fall colors like brown, orange, and yellow.

Whatever your color choice may be, it is important to incorporate it into every room. Tablecloths and cloth napkins can provide the color in your dining room. In terms of the living room, pillows and throw blankets can serve as your holiday color accents. Even holiday gifts awaiting their opening can be wrapped in the appropriate colored paper. In terms of the rest of your home, be creative. Just make sure to utilize the colors that represent whatever holiday you are celebrating.

The Sound of Music

Music is decoration for the ears. Most of us have some sort of holiday-themed music somewhere in our collection. If not, pick up 3 or 4 compilation CDs that illustrate the holiday you are celebrating or look for 24-hour holiday-themed music stations through your cable or satellite service. Play these (on a lower volume) whenever you have a gathering in your home, or simply feel like getting into the spirit of the season.

But don't stop there. Genres like soft jazz or classical music are also great to pipe into your living room during your gatherings. They add a soothing sophistication to any holiday event.

With just a little creativity, your home can look, smell, and sound just like you want it to this holiday season...without breaking the piggybank!

The Week's Economic Indicator Calendar

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 December 07 - December 11

"BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST - THE PARACHUTE." G.B. Stern. The media's recent analysis of the economy has run the gamut of late, some optimism, some pessimism...but also some confusion as they attempt to decipher recent economic reports, particularly relating to the job market. Let's look at a few of the recent reports, and get behind the headlines to decipher what they really mean. DYB8KVUW5QKJ

Last week's Initial Jobless Claims Report showed that 505,000 people filed for unemployment benefits, which was about what was expected, and represented a ten month low for the report. The Continuing Jobless Claims Report, which indicates the total number of people collecting unemployment benefits, fell by 39,000 to a total of 5.61 Million.

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Chart: Continuing Unemployment Claims

The media often spins this data as good news - but the labor market remains in exceptionally tough shape. The Continuing Claims number declining from a record high of 6.82M in June to last week's 5.61M is the result of only two potential things happening: People are finding jobs and no longer need unemployment benefits, or they have been unemployed for so long that their benefits are running out before they've been able to find a job. With a 10.2% Unemployment Rate looking like it will move higher still, it is most likely the latter. Another clear sign of a very troubled labor market was back on November 6th, when President Obama signed a bill that will extend unemployment benefits by an additional 20 weeks...there would be no reason to do this if jobs were being created.

In other news, October Retail Sales were weak overall, which is concerning for several reasons. One somewhat overlooked impact is that tax receipts from retail sales help both the individual states and the country as a whole. If the consumer doesn't spend - perhaps due to job loss or lower family income - and there are therefore less tax receipts from retailers, the government runs an ever-deeper budget deficit. The only way to get out of a deficit is to either raise other taxes or cut spending - and neither option is very popular. Many states are in poor fiscal shape because of soaring budgets and lower tax receipts.

There aren't any easy answers - but it's clear that the labor market needs to see some serious improvement for the economy to recover in a significant way.

Bonds and home loan rates were unable to hang onto improvements made in the earlier part of the week, and ended the week around the same levels as where they began.

THANKSGIVING IS THE PERFECT DAY FOR REMEMBERING ALL THE WONDERFUL THINGS YOU HAVE TO BE GRATEFUL FOR. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME FUN FACTS ABOUT HOW THANKSGIVING BECAME A NATIONAL HOLIDAY.

Forecast for the Week     Search Brentwood TN Homes for Sale HERE

It may be a shortened work week due to the Thanksgiving holiday, but there will still be plenty of action in store. Both Monday's Existing Home Sales Report and Wednesday's New Home Sales Report will give us a read on the housing market. With many homebuyers jumping into the market to take advantage of the Homebuyer's Tax Credit - which was recently extended until June 30, 2010 and expanded to include certain qualifying existing homeowners - it will be especially interesting to see what these reports reveal. Let me know if you have any questions on the Tax Credit, or if you'd like to learn how it might benefit you or someone you know.

We'll also get several reads on the economy this week, first with Tuesday's Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity. Following will be Wednesday's Durable Goods Report, which gives an update on consumer and business consumption and buying behavior via data on items that are "non-disposable", like appliances, cars, cameras, etc. Wednesday also brings the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) Index, found within the Personal Income Report.

More auction action...the Treasury will auction $118B in securities this week, starting with a record $44B in 2-Year Notes on Monday, a record $42B in 5-Years on Tuesday, and another record - $32B in 7-Years on Wednesday. This is an enormous amount of supply, and the market's ability to digest it all will be tested.

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 recently neared their best levels of the year, but were unable to make further improvements. Rates are likely to be moving higher in the coming months - so give me a call to discuss how the current rate climate might work in your favor, before these great rates slip away.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Nov 20, 2009)

The Mortgage Market View... Search Franklin TN homes for Sale HERE

A Brief History of Thanksgiving

Thanksgiving Day is now a favorite American holiday...but did you know it took awhile to catch on as an annual tradition?

According to scholars, the first known Thanksgiving took place on September 8, 1565 in Saint Augustine, Florida when Spanish settlers held a Mass of Thanksgiving after arriving safely in the New World. English settlers in the Virginia Colony held a similar day of thanks in 1619. Two years after that, the colonists at Plymouth Plantation celebrated the most famous Thanksgiving, during 1621.

It wasn't until October 3, 1789, that it actually became a holiday, when then President George Washington proclaimed a day of Thanksgiving...but just for that year. In 1795, Washington again proclaimed a day of Thanksgiving, and President John Adams also declared Thanksgivings in 1798 and 1799.

After a decade and a half without the celebration taking place at all, President James Madison renewed the tradition in 1814, and even went so far as to declare the holiday twice in 1815!

In 1863, President Abraham Lincoln finally proclaimed the last Thursday of November as a national day of Thanksgiving that should take place every year. Years later, President Franklin Roosevelt stated that Thanksgiving should always be celebrated on the fourth Thursday of the month - as opposed to landing on the occasional fifth Thursday.

In observance of the holiday, both the Stock and Bond markets will be closed on Thursday, November 26th, and on Friday the 27th, the Bond market will close early at 2:00 pm ET, while the Stock market will close at 1:00 pm ET.

I wish you and your family a safe and happy Thanksgiving holiday!

The Week's Economic Indicator Calendar

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 November 23 - November 27