This article was sent to my our wonderful lenders Sharon & David with WR Starkey:
NEW YORK (Reuters) - Fannie Mae and Freddie Mac, the two biggest U.S. home loan finance companies, on Thursday said they would suspend foreclosures of occupied homes until early 2009, as the government moves to stem the tide of home losses plaguing the economy.
Fannie Mae and Freddie Mac said the hiatus on foreclosures -- which will run from November 26 through January 9 -- will give mortgage servicers more to work out easier borrowing terms for troubled homeowners.
Regulators and lawmakers have leaned harder on the two companies to help stabilize the crumbling U.S. housing market since they own or control about half of residential mortgages outstanding.
The government effectively seized Fannie Mae and Freddie Mac in a conservatorship in September amid concern that steep mortgage losses were hurting their ability to remain viable and thus backstop the mortgage market.
"This is another news item that the government is hoping will stem the tide of foreclosures," said Walter Schmidt, head of mortgage strategy at FTN Financial Capital Markets in Chicago. "But I don't know it helps, it could put off the inevitable" because falling home prices give homeowners incentives to walk away, he said.
The move by the two government-sponsored enterprises comes a week after their regulator unveiled a plan that could cut payments for hundreds of thousands of borrowers by easing terms on their loans. Homeowners facing foreclosure who are spending more than 38 percent of their income on mortgage payments could have payments reduced by the companies, under the program.
Loan modifications by lenders have increased but so far failed to stop record increases in foreclosures.
The "streamlined modification" program of Fannie Mae and Freddie Mac is slated to begin on
December 15. Fannie Mae and Freddie Mac estimated their foreclosure suspensions may affect about 16,000 borrowers if the homes are occupied.
"We felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent a foreclosure have an opportunity to stay in their homes," Herb Allison, Fannie Mae's chief executive officer, said in a statement.
The foreclosure moratorium also appears to lend credence to speculation the government is pushing the companies to operate more in a public policy role, perhaps at the expense of profit. That has some investors concerned since the government has not defined the roles of the shareholder-owned companies after the conservatorships are lifted.
Tuesday, November 25, 2008
Events on the Marietta SquareChristmas at Sweet Apple
Date: November 18, 2008 - December 28, 2008
Time: Call for show times
Description: Warmly human yuletide yarns from the pen of beloved Celestine Sibley returns to the stage. A show that's sure to become a holiday event. A must for the whole family. Theatre in the Square Alley Stage. For more information and tickets call (770) 422-8369
Sanders Family Christmas
Date: November 18, 2008 - December 28, 2008
Time: call for show times
Description: The Sanders singers from Smoke on the Mountain and Mount Pleasant Homecoming are home on the Mainstage again for the holidays. Even though it's the somber beginning of World War II, the instruments and voices of the Sanders Family brighten up the hearts and lives of all around. Theatre in the Square Mainstage. For more information and tickets call (770) 422-8369
The Nutcracker
Date: November 20, 2008 - November 29, 2008
Time: Call for show times
Description: Presented by the Georgia Dance Conservatory. Jennie T. Anderson Theatre at the Cobb County Civic Center For tickets and more information call (770) 426-0007.
Candlelight Shopping on the Square
Date: November 21, 2008 - December 19, 2008
Time: Friday Evenings; 5pm-8pm
Description: Marietta Square shops stay open late till 8pm.
6th Annual Gobble Jog
Date: November 27, 2008
Description: Gobble Jog is a Thanksgiving Day event featuring a 10K Run, 5K Walk/Run, 1K Walk/Run, and the Tot Trot (for kids 5 and under) at the Historic Marietta Square. The Gobble Jog 10K will be certified as a qualifier for seeding in the Peachtree Road Race and the U.S. 10K Classic. All proceeds benefit MUST Ministries, a faith-based, non-profit organization ministering to the homeless and hurting in our community. For more information visit: call (678) 218-4521
Holiday Tree Lighting
Date: December 4, 2008
Time: 5-8pm
Description: Santa will arrive in Marietta around 5:30 p.m. and listen to children's holiday wishes. The giant Christmas tree will light up the night at 6 p.m. Local choruses will provide entertainment. Santa will visit in the Square until 8 p.m. Historic Marietta Square; 5pm-8pm.
Disney's Beauty and the Beast
Date: December 5, 2008 - December 21, 2008
Time: Call for times
Description: Presented by the Atlanta Lyric Theatre in their brand new venue, the restored Strand Theatre on the Marietta Square. For tickets and more information call (404) 377-9948 or visit http://www.friendsofthestrand.com/
Santa on the Square
Date: December 6, 2008 - December 25, 2008
Time: Weekends in December
Description: Experience the season in Olde Merry-etta & visit with St. Nick in his brightly decorated workshop. Photos with Santa are available. Re-live memories of Christmas past as you stroll through quaint shops filled with seasonal delights. Historic Marietta Square; (770) 794-5601.
Marietta Pilgrimage Christmas Home Tour
Date: December 6, 2008 - December 7, 2008
Time: Day Tour: Sat 9am-6pm; Sun 10am-5pm Candlelight Tour: Sat 7-9:30
Description: Celebrate the 22nd annual award winning home tour. Glimpse into six private Marietta homes located in the Whitlock Avenue historic district lovingly restored and decorated for the season.
Monday, November 24, 2008
Market Comment - Week of November 24th, 2008
Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading remained choppy with small improvements the first portion of the week. The majority of the releases showed continued economic weakness. Oil fell below $50 a barrel Thursday, jobless claims escalated, stocks generally fell, and deflation talk increased. St Louis Federal Reserve President Bullard indicated deflation was only a very remote risk with core inflation currently over two percent. For the week, interest rates on government and conventional loans fell by about 1/8 of a discount point. The consumer confidence release this week may receive more attention as we head into the holiday shopping season. The bond market closes early Wednesday, is closed Thursday, and closes early Friday in honor of Thanksgiving.
Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading remained choppy with small improvements the first portion of the week. The majority of the releases showed continued economic weakness. Oil fell below $50 a barrel Thursday, jobless claims escalated, stocks generally fell, and deflation talk increased. St Louis Federal Reserve President Bullard indicated deflation was only a very remote risk with core inflation currently over two percent. For the week, interest rates on government and conventional loans fell by about 1/8 of a discount point. The consumer confidence release this week may receive more attention as we head into the holiday shopping season. The bond market closes early Wednesday, is closed Thursday, and closes early Friday in honor of Thanksgiving.
Economic Factors this week:
Existing Home Sales
Monday, Nov. 24, 2008
Consensus Estimate: Down 2.5%
Ananlysis: Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates.
2-year Treasury Note Auction
Monday, Nov. 24, 2008
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Monday, Nov. 24, 2008
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Q3 Preliminary GDP
Tuesday, Nov. 25, 2008
Consensus Estimate: Down 0.6%
Analysis: Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Tuesday, Nov. 25, 2008
Consensus Estimate: Down 0.6%
Analysis: Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Consumer Confidence
Tuesday, Nov. 25, 2008
Consensus Estimate: 39.5
Analysis: Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
5-year Treasury Note Auction
Tuesday, Nov. 25, 2008
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Tuesday, Nov. 25, 2008
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Personal Income and Outlays
Wednesday, Nov. 26, 2008
Consensus Estimate: Income up 0.1%, Outlays down 0.7%
Analysis: Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.
Wednesday, Nov. 26, 2008
Consensus Estimate: Income up 0.1%, Outlays down 0.7%
Analysis: Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment
Wednesday, Nov. 26, 2008
Consensus Estimate: 58.0
Analysis: Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
Wednesday, Nov. 26, 2008
Consensus Estimate: 58.0
Analysis: Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
New Home Sales
Wednesday, Nov. 26, 2008
Consensus Estimate: Down 3.0%
Analysis: Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Wednesday, Nov. 26, 2008
Consensus Estimate: Down 3.0%
Analysis: Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Deflation
Deflation is generally defined as a contraction in the volume of available money or credit that results in general price declines. In inflationary periods, fixed payments buy less each year. In deflationary periods, fixed payments are worth more every year. The purchasing power of $100 in one year increases the following year in a deflationary environment. When investors think deflation is coming, they typically buy Treasuries, which we have seen recently. Other bonds such as corporate or mortgage bonds however do not usually have the same demand. Deflation makes debt payments more difficult each year. Treasuries are backed by the US government, which can print more money when needed. Companies and homeowners don't have that luxury. In severe deflationary times bankruptcies generally increase. This casts doubt over the performance of corporate and mortgage bonds. This is one reason Treasury rates have fallen significantly while mortgage rates have not been as fortunate.
Deflation is generally defined as a contraction in the volume of available money or credit that results in general price declines. In inflationary periods, fixed payments buy less each year. In deflationary periods, fixed payments are worth more every year. The purchasing power of $100 in one year increases the following year in a deflationary environment. When investors think deflation is coming, they typically buy Treasuries, which we have seen recently. Other bonds such as corporate or mortgage bonds however do not usually have the same demand. Deflation makes debt payments more difficult each year. Treasuries are backed by the US government, which can print more money when needed. Companies and homeowners don't have that luxury. In severe deflationary times bankruptcies generally increase. This casts doubt over the performance of corporate and mortgage bonds. This is one reason Treasury rates have fallen significantly while mortgage rates have not been as fortunate.
Thursday, November 20, 2008
Always & Everywhere
At a time when we are all counting our blessings I thought it was only appropriate to share this story with you all. A dear friend of mine passed on the story of a friend of hers, Laura Bowman Mc-Neil who has written and illustrated a children's book. The book was written for a friend of hers who has 2 small children and has been diagnosed with terminal cancer. The story speaks of a mother's love that is always and everywhere. The launch of the book was tonight in Atlanta. Please click on the link below to read some of the press coverage. The link to the book and charity homepage is also below. Karen & I are both mothers of two wonderful children and can't help to be touched by the LaSalle family's story.
Monday, November 17, 2008
Market Comment - Week of November 17th, 2008Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading was choppy with thin conditions surrounding the holiday. Continued global economic uncertainty remained the focus. Both stocks and bonds exhibited wild swings. The US Treasury modified the earlier $700 billion bailout plan to strengthen financial institutions that offer credit instead of purchasing troubled sub-prime mortgage assets. The change caused additional uncertainty and debate. For the week, interest rates on government and conventional loans remained nearly unchanged.The consumer price index Wednesday will be the most important event this week. Producer price index and the Fed minutes also have the potential to result in mortgage interest rate volatility.
Economic Factors for the week:
Industrial Production
Monday, Nov. 17, 2008
Consensus Estimate: Down 0.1%
Analysis: Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Capacity Utilization
Monday, Nov. 17, 2008
Consensus Estimate: 76.6%
Analysis: Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
Producer Price Index
Tuesday, Nov. 18, 2008
Consensus Estimate: Down 1.5%, Core up 0.2%
Analysis: Important. An indication of inflationary pressures at the producer level. Lower inflation may lead to lower rates.
Consumer Price Index
Wednesday, Nov. 19, 2008
Consensus Estimate: Down 0.8%, Core up 0.2%
Analysis: Important. A measure of inflation at the consumer level. Lower inflation may lead to lower rates.
Housing Starts
Wednesday, Nov. 19, 2008
Consensus Estimate: Down 4.5%
Analysis: Important. A measure of housing sector strength. Larger than expected decreases may lead to lower rates.
Fed Minutes
Wednesday, Nov. 19, 2008
Consensus Estimate: None
Analysis: Important. Details of the last Fed meeting will be thoroughly analyzed.
Leading Economic Indicators
Thursday, Nov. 20, 2008
Consensus Estimate: Down 0.6%
Analysis: Important. An indication of future economic activity. A smaller increase may lead to lower rates.
Philadelphia Fed Survey
Thursday, Nov. 20, 2008
Consensus Estimate: None
Analysis: Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Volatility Likely
The likeliness of mortgage interest rate volatility this week is very high considering the abundance of important economic releases. Each piece of data has the ability to cause volatility in the financial markets. Floating ahead of the data exposes a person to a tremendous amount of risk. It is possible for interest rates to improve if the data shows continued weakness in the economy with few price pressures. However, any surprises will likely be bad for mortgage interest rates. Governmental actions in addition to the economic data continue to weigh upon the financial markets. We are really in uncharted territory here with the wobbly underpinnings of the economy. Credit remains tight, as lending has become more stringent. However, there still remain funds available. Real estate transactions continue to take place despite perceptions to the contrary. The important thing to remember is that even the Treasury officials trying to shore the economy do not know exactly what the future holds. With this in mind, be cautious during these times of economic uncertainty and be ready to lock in the event interest rates spike higher.
Cobb County Thanks for Giving 2008
Karen and I can't help but feel incredibly blessed. As the holidays are approaching we want to do something to help those in our community who are in need. We decided to work together with the Center for Family Resources (CFR) on Cobb County's Thanks for Giving 2008.
The CFR in partnership with Cobb County Department of Family & Children's Services has been providing Thanksgiving baskets to families in need to Cobb County for more than 20 years. In 2007 CFR provided baskets to 1,000 families.
We have handed out donation bags to the neighborhood I live in and will be picking up donations this weekend. We would like to extend the offer to anyone else interested in making a contribution. Send us an email and we would be happy to pick up any canned goods.
For more information take a look at the Center for Family Resources website to learn more about the organization and what items they are requesting.
Way to go Kennesaw!
I'm a little behind on posting this, but earlier this month Forbes Magazine sited Kennesaw, GA as one of the top 4 places to sell a home. Forbes listed the top 10 suburbs to sell a home and Kennesaw ranked number 4. Here are the others:1. Berkeley, Calif. (near San Francisco)
2. Bedford, Texas (near Dallas)
3. Venice, Calif. (near Los Angeles)
4. Kennesaw (near Atlanta)
5. Sugar Land, Texas (near Houston)
6. Midvale, Utah (near Salt Lake City)
7. Matthews, N.C. (near Charlotte)
8. Encinitas, Calif. (near San Diego)
9. Waltham, Mass. (near Boston)
10. Montclair, N.J. (near New York City)
2. Bedford, Texas (near Dallas)
3. Venice, Calif. (near Los Angeles)
4. Kennesaw (near Atlanta)
5. Sugar Land, Texas (near Houston)
6. Midvale, Utah (near Salt Lake City)
7. Matthews, N.C. (near Charlotte)
8. Encinitas, Calif. (near San Diego)
9. Waltham, Mass. (near Boston)
10. Montclair, N.J. (near New York City)
Check out the full story in the AJC.com.
Monday, November 10, 2008
Market Comment - Week of November 10th, 2008
Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading the beginning of the week focused on the election and we saw equities rally in anticipation of the result. The latter portion of the week resumed focus on economic turmoil tied to rising unemployment, tight credit markets, continued housing market concerns, and global economic uncertainty. Trading was choppy with almost a full discount point up and down swing on Thursday alone. For the week, interest rates on government and conventional loans fell by about 3/4 of a discount point.The retail sales data Friday will be the most important event this week. The additional debt supply that continues to hit the market along with the shortened trading week may also lead to mortgage interest rate volatility.
Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading the beginning of the week focused on the election and we saw equities rally in anticipation of the result. The latter portion of the week resumed focus on economic turmoil tied to rising unemployment, tight credit markets, continued housing market concerns, and global economic uncertainty. Trading was choppy with almost a full discount point up and down swing on Thursday alone. For the week, interest rates on government and conventional loans fell by about 3/4 of a discount point.The retail sales data Friday will be the most important event this week. The additional debt supply that continues to hit the market along with the shortened trading week may also lead to mortgage interest rate volatility.
Economic Factors this Week:
3-year Treasury Note Auction
11.10.08
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Veterans Day
11.11.08
Consensus Estimate: None
Analysis: Important. Shortened trading week may lead to thin trading conditions and market volatility.
11.11.08
Consensus Estimate: None
Analysis: Important. Shortened trading week may lead to thin trading conditions and market volatility.
10-year Treasury Note Auction
11.12.08
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Trade Data
11.13.08
Consensus Estimate: $56.8 billion deficit
Analysis: Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
11.13.08
Consensus Estimate: $56.8 billion deficit
Analysis: Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
30-year Treasury Bond Auction
11.13.08
Consensus Estimate: None
Analysis: Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Retail Sales
11.14.08
Consensus Estimate: Down 1.2%
Analysis: Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
11.14.08
Consensus Estimate: Down 1.2%
Analysis: Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
Business Inventories
11.14.08
Consensus Estimate: Up 0.2%
Analysis: Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates.
U of Michigan Consumer Sentiment
11.14.08
Consensus Estimate: 57.0
Analysis: Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
Auctions
US Treasury bonds do not directly dictate fixed mortgage interest rate pricing however they do have an indirect impact. Both Treasuries and mortgage bonds often track in the same direction but this is not always the case. There are many times that Treasuries and mortgage bonds move inversely. Despite the overwhelming size of the US economy, foreign investors can still have an effect on moving the financial markets. When foreign economies struggle foreign investors often purchase US based investments including mortgage bonds. This demand usually causes mortgage bond prices to rise and interest rates to fall. This flight to quality buying was one of the factors that helped mortgage interest rates to remain historically low in years past. There is a real threat that continued global economic turmoil may keep foreign investors from purchasing mortgage bonds in the future. The Treasury auctions this week will be important in determining the current appetite of foreign investors for dollar denominated securities. If this week's auctions are poorly bid mortgage bond prices could fall pressuring mortgage interest rates higher.
Macy's Pink Pig
It's that time of year again! Whether you're a native of Atlanta or a transplant like us you have to make a trip to the Pink Pig. Macy's at Lenox square features Priscilla the Pink Pig. It is a fun outing with the little ones. My only advice is to try and go during the day on a week day. Here is a link for more information:
Why Invest In Real Estate?
Have you ever thought of investing in Real Estate? Here are 7 great reasons why:
Real Estate is the Most Able Investment
1. Accesible- anyone can buy real estate
2. Appreciable- increases in value over time
3. Leverageable- you can buy on margin and gain return on total value
4. Rentable- you can pay down the mortgage and earn annual cash flow
5. Deductable/Depreciable/Deferrable - great tax benefits; the most tax advantaged investment
6. Stable- Slow to rise and slow to fall
7. Managable- you can hire people to manage it for you
Real Estate is the Most Able Investment
1. Accesible- anyone can buy real estate
2. Appreciable- increases in value over time
3. Leverageable- you can buy on margin and gain return on total value
4. Rentable- you can pay down the mortgage and earn annual cash flow
5. Deductable/Depreciable/Deferrable - great tax benefits; the most tax advantaged investment
6. Stable- Slow to rise and slow to fall
7. Managable- you can hire people to manage it for you
Monday, November 3, 2008
WR Starkey Update
Market Comment - Week of November 3rd, 2008
Mortgage bond prices fell last week unfortunately pushing mortgage interest rates higher. Trading really focused on equities as stocks generally rallied. Most of the losses came as a result of an 889-point surge in the DOW on Tuesday. Traders sold bonds to buy stocks, which caused mortgage bond prices to fall, and mortgage interest rates to rise. Mortgage bonds recovered some of the earlier losses Wednesday morning but it wasn't enough to keep rates from rising considerably. For the week, interest rates on government and conventional loans rose by a full point and 5/8 of a discount point.The employment report Friday will be the most important event this week. The gross domestic product and employment cost index data will also be very important. Expect extreme market volatility again this week.
Economic Factors this week:
ISM Index
11/03/08
Consensus Estimate: 42
Analysis: Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates.
Factory Orders
11/04/08
Consensus Estimate: Down 1.5%
Anazlysis: Important. A measure of manufacturing sector strength. A larger decrease may lead to lower rates.
ADP Employment
11/05/08
Consensus Estimate: Down 80,000
Analysis: Important. A measure of employment. A larger decrease in payrolls may bring lower rates.
Preliminary Q3 Productivity
11/06/08
Consensus Estimate: Up 1.0%
Analysis: Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Employment
11/07/08
Consensus Estimate: 6.2% -115k jobs
Analysis: Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
Oil Provides Reprieve
Fed officials have been given a huge reprieve from the inflation concerns tied to rising energy prices as oil prices have dropped relative to the record high level of $147 per barrel seen in July of this year.
The Fed is continually concerned with inflation as they lower rates amid the current credit crisis. Lower energy prices generally help to alleviate inflation fears. The Organization of the Petroleum Exporting Countries (OPEC) recently cut production as the price of oil fell precipitously. These production cuts have had little effect on falling oil prices so far. The markets seemed convinced that the demand for oil will continue to decrease as economies struggle across the globe. However, these predictions are not a given. OPEC is debating additional production cuts while many analysts are warning OPEC against such moves. OPEC's position is that the price of oil is undervalued and a production cut would increase prices. The counter argument is that the world economies are already struggling and a spike in energy prices would lead to more severe economic turmoil further decreasing demand which would eventually result in not only additional price decreases but a global economic catastrophe. Remember that the future is uncertain. Just a few months ago the majority of analysts were predicting continued high energy prices. Fortunately, they were wrong. But that doesn't mean conditions can't change quickly.
Keep in mind that rates remain historically very favorable. It is possible for rates to head lower with falling inflation fears. However, now is a great time to avoid the uncertainty surrounding continued market volatility.
Mortgage bond prices fell last week unfortunately pushing mortgage interest rates higher. Trading really focused on equities as stocks generally rallied. Most of the losses came as a result of an 889-point surge in the DOW on Tuesday. Traders sold bonds to buy stocks, which caused mortgage bond prices to fall, and mortgage interest rates to rise. Mortgage bonds recovered some of the earlier losses Wednesday morning but it wasn't enough to keep rates from rising considerably. For the week, interest rates on government and conventional loans rose by a full point and 5/8 of a discount point.The employment report Friday will be the most important event this week. The gross domestic product and employment cost index data will also be very important. Expect extreme market volatility again this week.
Economic Factors this week:
ISM Index
11/03/08
Consensus Estimate: 42
Analysis: Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates.
Factory Orders
11/04/08
Consensus Estimate: Down 1.5%
Anazlysis: Important. A measure of manufacturing sector strength. A larger decrease may lead to lower rates.
ADP Employment
11/05/08
Consensus Estimate: Down 80,000
Analysis: Important. A measure of employment. A larger decrease in payrolls may bring lower rates.
Preliminary Q3 Productivity
11/06/08
Consensus Estimate: Up 1.0%
Analysis: Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Employment
11/07/08
Consensus Estimate: 6.2% -115k jobs
Analysis: Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
Oil Provides Reprieve
Fed officials have been given a huge reprieve from the inflation concerns tied to rising energy prices as oil prices have dropped relative to the record high level of $147 per barrel seen in July of this year.
The Fed is continually concerned with inflation as they lower rates amid the current credit crisis. Lower energy prices generally help to alleviate inflation fears. The Organization of the Petroleum Exporting Countries (OPEC) recently cut production as the price of oil fell precipitously. These production cuts have had little effect on falling oil prices so far. The markets seemed convinced that the demand for oil will continue to decrease as economies struggle across the globe. However, these predictions are not a given. OPEC is debating additional production cuts while many analysts are warning OPEC against such moves. OPEC's position is that the price of oil is undervalued and a production cut would increase prices. The counter argument is that the world economies are already struggling and a spike in energy prices would lead to more severe economic turmoil further decreasing demand which would eventually result in not only additional price decreases but a global economic catastrophe. Remember that the future is uncertain. Just a few months ago the majority of analysts were predicting continued high energy prices. Fortunately, they were wrong. But that doesn't mean conditions can't change quickly.
Keep in mind that rates remain historically very favorable. It is possible for rates to head lower with falling inflation fears. However, now is a great time to avoid the uncertainty surrounding continued market volatility.
The fabulous owner of my children's school, Lisa Soukup told me about an intiative started by a friend of hers called Caution- Newly Licensed. It's to promote saftey and cautious driving by teens and those with whom they share the road. Your teen may be a little hesitant to put the magnet on their car, but I think all of ua would be a bit more sympathetic and patient if we saw the Newly Licensed magnet on their car. As a parent I know I would and I would love to see it on more teens' cars. I just thought I would share this with you all!
Below is a bit more information on the organization:
The CAUTION-NEWLY LICENSED® Car Magnet was developed to reduce teen car crashes and fatalities.The magnet identifies teens with Learners Permits and First Year Licenses. Placed on the rear of the vehicle, the magnet alerts other drivers to use extreme caution, courtesy, and patience.
A proven method to reduce teen car crashes is more experience behind the wheel. The CAUTION-NEWLY LICENSED® car magnet provides a "shield of protection" from other drivers and allows the teen to concentrate on the road. The magnet protects not only the inexperienced drivers, but also surrounding drivers.
Buses, semi-trucks and drivers education vehicles clearly mark new drivers. The same concept works for teen drivers. Identifying teen drivers is already the law in many other countries including those in Europe, Asia, Canada, and Australia.
The CAUTION-NEWLY LICENSED® Car Magnet Program launched a pilot program in Cobb County, Georgia in April 2007 with a distribution of more than 3,000 magnets with tremendous success.
In October 2007, the CAUTION-NEWLY LICENSED® car magnets became available nationwide.We believe that by working together as a society, we will save teen lives. Please help us by identifying all new teen drivers.
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