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Nashville, Franklin and Brentwood TN Homes For Sale: Brentwood TN Real Estate
Your Nashville, Franklin and Brentwood Tennessee homes and real estate expert!
Brentwood TN Real Estate: Finance Market Update October 19th, 2009

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"THE HEAT IS ON." Glenn Frey. While cooler temperatures are beginning to descend on many parts of the country, Bonds and home loan rates are feeling the heat and pressure from several fronts. Here are some details...along with why it's important to act soon to take advantage of current home loan rates, as they may never be seen again.

Last week, the Core Consumer Price Index (CPI) was reported higher than expected, indicating that inflationary forces may already be underway. Remember, inflation erodes the value of the fixed return that a Bond provides - therefore, inflation is harmful to Bonds and home loan rates. Just the hint of inflation can cause home loan rates to worsen, which is what we saw last week.

-----------------------

 Chart: Core Consumer Price Index (CPI)

 

And here's a very interesting and important note - when looking at these CPI numbers, it is important to understand the effect that the "Cash for Clunkers" program had on this index. The Cash for Clunkers program was very "creatively" accounted for as a reduction in the sales price of automobiles, which had to have a dramatic effect on lowering the CPI that was reported. Imagine how much higher CPI would have been had this "creativity" not been used. As even more inflationary fears creep into the economy, home loan rates will continue to rise.

Also adding pressure to Bonds and home loan rates is the Fed's plan to ration out their remaining purchases of Mortgage Backed Securities. The Fed has purchased around $950B year-to-date out of the $1.25T allotted for the program, which is now set to expire March 31, 2010. This means the Fed will be averaging about $14B a week in purchases, a lot less than $25B or so they had been doing up until recently. And anytime demand for an item slows down...including Mortgage Backed Securities...the price goes down. And in this case, it means that home loan rates will move higher.

The bottom line is that the heat is on...and home loan rates are starting to rise already. While home loan rates are still incredibly low, it is clear this won't last much longer - and we may not see rates at these levels again in our lifetimes. Give me a call if you want to discuss your own situation, or if you have a friend, family member, neighbor or coworker who might benefit from some information.

In other news, Retail Sales for September fell by 1.5% - and while the numbers were better than expected, they are still dismal at best. In addition, the flood of pre-holiday sales and layaway options that are already hitting - remember, it's still mid-October - also suggests a lack of pricing power for retailers. Stock earnings season continued with some mixed news: There were reasonably strong earnings reports from Intel and JPMorgan Chase, while there were weaker than expected reports from Johnson & Johnson, General Electric and IBM. Bank of America also posted its first loss for the year.

After all the week's heat and pressure, Bonds and home loan rates ended the week slightly worse than where they began.

FINDING OUT THAT YOUR EMAIL OR ONLINE ACCOUNTS HAVE BEEN COMPROMISED IS ONE PRESSURE-FILLED SITUATION! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT TIPS FOR CREATING STRONG PASSWORDS.

Forecast for the Week

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More inflation news is ahead this week, with Tuesday's Producer Price Index (PPI) Report, which measures inflation at the wholesale level. Also this week, we'll get a double dose of housing news, first with Tuesday's Housing Starts and Building Permits Report and second with Friday's Existing Home Sales numbers for September. Some of the numbers have been looking better in recent months, as buyers move quickly to take advantage of the combination of low home loan rates, discounted home prices, and for first time home buyers, a juicy tax credit that is set to expire soon.

Given the state of the job market, Thursday's Initial Jobless Claims Report continues to be an important report to watch. Last week's Jobless Claims fell by 10,000 to 514,000 - and while this was lower than the 520,000 that was expected, it was still an enormous number of people applying for unemployment benefits, which highlights a weak labor market. Also, earnings season continues for Stocks, which could have a big impact on both Stocks and Bonds. The Dow had cracked the psychologically tough level of 10,000...but was unable to hold its ground, and was pressured back lower.

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

As you can see in the chart below, Bond prices moved lower last week, meaning home loan rates moved higher. As discussed above - home loan rates are headed higher and are unlikely to return to similar levels anytime soon...and perhaps they never will again. Don't miss your opportunity to improve your own home loan situation, or make a suggestion to someone you know that might be in need of some solid advice.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Oct 16, 2009)

Japanese Candlestick Chart

The Mortgage Market View...

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Stolen Hotmail Passwords Demonstrate Need for Stronger Passwords

By now, you've probably heard that 30,000 passwords for Hotmail and Gmail accounts were stolen earlier this month

But did you know that a security group analyzed those passwords and found that the most commonly used password was 123456? If that wasn't bad enough, the second most common password that was used...yep, you guessed it...123456789.

In today's electronic environment, that's unbelievable. We no longer live in a world where we can use a simple string of numbers or a child's name as a password. They're just too easy to hack...and the results can be much more devastating than merely finding your emails made public.

The problem is that we all have so many passwords. So how do we make strong passwords that we can actually remember for every account?

The tips below can help you avoid the most common password pitfalls and even implement a few new ideas that will make your passwords easy to remember...and hard to break!

Don't Use a Password that's Easy to Guess

There's no way around it...a well-protected password is hard for other people to guess. How do you do that? It's pretty simple really. Just follow this advice:

  • Use a random string of characters. That means no sequential letters or numbers, like those Hotmail accounts that used 123456!
  • Make it looooong. The longer the better--even up to as many as 10 to 14 characters if space allows.
  • Switch things up. Use a combination of upper and lower case letters, along with a few numbers mixed in the middle or end.
  • Don't use substitute symbols in common words. Using "@" for "a" or "1" for "I" may look good to you, but most hackers are smart enough to break those substitutes rather quickly when the password consists of a common word.
  • For that matter, avoid easy targets like words straight out of the dictionary or things like family names and birthdays.

Don't Use the Same Password for All Accounts!

Most of us cheat when it comes to passwords. We have trouble remembering our passwords, so we come up with two or three that we can remember and use them everywhere.

But...you should avoid the temptation! That's because all of your accounts will be vulnerable if even one account is compromised. The reality is, you need to create and remember multiple passwords--a different one for each account! Fortunately, it's easier than you think. Just follow the steps below.

4 Simple Steps to Memorable, Yet Unique Passwords

Good passwords come down to two things: (1) they're easy for you to remember and (2) they're hard for others to break. Here's a sure-fire tip that can help you achieve both!

  1. Think up a phrase. Instead of a common word or family member's name, think up a unique phrase that only you know. For example, you may think up something off the wall such as "I Like Short Hair Too."
  2. Make it an acronym. In our example, "I Like Short Hair Too" would become ILSHT.
  3. Add Complexity. Remember those substitutes you're not supposed to use with common dictionary words? Well, you CAN use them with your acronym. For example, "I Like Short Hair Too" can become "1 Like $hort Hair 2" which makes: 1L$H2. You can also use upper and lower letters to make it 1L$h2. The point is to be creative, but in a way that you can easily remember it.
  4. Make it unique. A password is only really unique if you use it for one account and one account only. So you can't just use 1L$h2 for every account. And, in reality it's still too short. Here's the key to the whole process: Mix in additional letters and numbers that are unique to each account. For example, if you're logging into a "gmail account" you can use the "gm" and "@cct" (for acct) to make: 1L$h2gM@cct. Then, for a Netflix account, you may use: 1L$h2Nf@cct. That way, you're passwords will be hard for others to guess and unique to each account, but also easy for you to remember!

Of course, these are just examples. You'll want to be creative and think up your own acronym and ways to add unique characters for each account. And then keep that little secret to yourself so no one will be able to guess your account passwords.

Follow these simple steps and you'll have passwords that are tough to break, unique to every account, and easy to remember. And if you have children in your house who are starting to use passwords for email and IM accounts, teach them these steps to help educate them on the importance of strong passwords - they'll thank you later in life!

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 October 19 - October 23

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Tue. October 20

08:30

Building Permits

Sept

590K

579K

Moderate

Tue. October 20

08:30

Housing Starts

Sept

607K

598K

Moderate

Tue. October 20

08:30

Producer Price Index (PPI)

Sept

0.1%

1.7%

Moderate

Tue. October 20

08:30

Core Producer Price Index (PPI)

Sept

0.1%

0.2%

Moderate

Wed. October 21

10:30

Crude Inventories

10/16

NA

.334M

Moderate

Wed. October 21

02:00

Beige Book

HIGH

Thu. October 22

08:30

Jobless Claims (Initial)

10/17

517K

514K

Moderate

Thu. October 22

10:00

Index of Leading Econ Ind (LEI)

Sept

0.8%

0.6%

Low

Fri. October 23

10:00

Existing Home Sales

Sept

5.38M

5.10M

Moderate

 

 

Courtesy Billy Winfree Pinnacle Financial Partners  615-743-8397

Permission to re-publish

 

 

 

Vanessa Stalets

615-957-6333

RE/MAX Elite

615-661-4400

Your Nashville Brentwood and Franklin TN homes and Real Estate for Sale Source!

Published Monday, October 19, 2009 11:50 AM by Vanessa Stalets

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