"I DON'T MEASURE A MAN'S SUCCESS BY HOW HIGH HE CLIMBS...BUT HOW HIGH HE BOUNCES WHEN HE HITS BOTTOM."
General George S. Patton And the General himself would certainly consider Bonds to be a success last week, as they moved lower to hit a technical "bottom" at the 200-day Moving Average, but then bounced significantly higher throughout the course of the week, helping fixed home loan rates improve by about .25 to .375%.
What caused all the activity? Remember that weak economic news tends to be bad for Stocks, but good for Bonds and home loan rates, as money flows out of Stocks and into Bonds.
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The news included higher wholesale inflation with the Producer Price Index (PPI) jumping to its highest level since October 2004 on surging energy and food prices. But price inflation on the producer or wholesale side can't always get passed directly on to the consumer on the retail side. Friday's Personal Consumption Expenditure (PCE) reading showed consumer inflation to be higher, but just slightly, as expected. The PCE is the Federal Reserve's most highly watched measure of inflation, and the current overall rate of year-over-year inflation at 2.2% does remain just above the Federal Reserve's comfort zone for consumer inflation.
And speaking of the Fed, Chairman Ben Bernanke testified before Congress last week, making comments that prompted Stock investors to sell off and move money over into Bonds. The Bond market also enjoyed "dovish" comments made by Gentle Ben about inflation and the recent aggressive cuts made by the Fed, and his testimony was largely responsible for the improvement in Bonds and home loan rates. But read on, and learn how the next official Fed Meeting and Rate Decision on March 18th could impact home loan rates...it might surprise you.
THE ECONOMIC STIMULUS PLAN HAS BEEN ALL OVER THE HEADLINES...BUT DO YOU KNOW HOW IT WILL IMPACT YOU? LEARN ABOUT REBATE CHECKS AND MORE IN THIS WEEK'S MORTGAGE MARKET VIEW!
Forecast for the Week
Here we go again...another action packed week in store, with the main event being Friday's monthly official Jobs Report. This report is always of high interest, as it gives a good read on the health of the economy. Boiled down simply — if businesses are hiring, it means their outlook is good for the future growth of their business and the economy overall. Additionally, the more employed workers there are, the more dollars being earned that can be used to buy goods and services - also good for keeping the economy thriving.
But the headline number often comes with "revisions" of past numbers — which is often the wildcard within the report. Some past revisions have actually added more jobs to the count than the current month's number in total. And for added excitement, in advance of Friday's official Jobs Report, gigantic payroll company ADP will release their own count on job growth on Wednesday. And while the numbers are not "official" and are sometimes seen as unreliable — the markets won't be able to help but take notice of their findings, and may react to their release.
Bottom line — volatility remains in vogue. The chart below shows how Bonds improved significantly over the past week, helping home loan rates improve as well. But remember — another Fed Cut is likely in the cards, just a few short weeks away. As we've discussed in the past, a Fed Rate Cut can often result in a move higher for home loan rates, as a Fed Rate Cut often spurs on spending and therefore inflation, the arch-enemy of Bonds and home loan rates. So while Bonds and home loan rates have seen nice improvement of late, they are heading towards both a technical "ceiling of resistance", as well as a March 18th Fed meeting that could cause rates to worsen. If you - or one of your friends, family members, neighbors or coworkers - have been considering a refinance or purchase, feel free to reach out to me to discuss taking advantage of current low rates.
Chart: Fannie Mae 5.5% Mortgage Bond (Friday Feb 29, 2008)
The Mortgage Market View...
TAX REBATES: SHOULD YOU SAVE OR SPEND?
The government's Economic Stimulus Plan has been in the news a lot lately, and the $168 Billion package is intended to jumpstart the economy by distributing tax rebates that should be arriving in your mailbox as early as spring. The question is: what should you do with your rebate check? The info below can help you estimate how much you'll receive, consider your options, and start planning now so you're prepared.
HOW MUCH MONEY WILL YOU RECEIVE?
The amount you receive ultimately depends on how much you make. For instance, individuals with adjusted gross incomes up to $75,000 will receive a rebate check of $600. If you're married filing jointly and earn up to $150,000, you can expect to receive $1,200. Those who earn at least $3,000 but don't pay taxes will receive about half as much—$300 for individuals or $600 for married couples filing jointly.
If you make more than $75,000 as an individual or $150,000 as a married couple, your rebate check starts to shrink. That doesn't mean you're out of luck... most high-income taxpayers will still receive a check. But you can plan on receiving $50 LESS for every $1,000 you earn over those limits.
Finally, if you have children, you can expect to receive a $300 credit for each child.
SO...WHAT SHOULD YOU DO WITH YOUR REBATE?
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Do Nothing...At Least for Now — Don't start mentally spending those dollars just yet. At the minimum, you should hold off until you file your 2007 tax return. That's because the gross income listed on your 2007 return will actually determine how much you'll receive. And unless you absolutely need to, try not to spend the money at all until you have it in hand. Too often, we make purchases on the credit card or with money from savings with the intention of paying it back...only to have some other expense come up in the meantime. To avoid falling into this trap, make a commitment to yourself to wait for the check to arrive before you spend it.
Don't Overspend — Regardless of how much you receive, make a budget and stick to it. We all know how easy it is to go to the store with a specific amount in mind, only to walk out over budget. In this case, not only could you end up spending your entire rebate check, but may actually come out negative by spending additional money that could be budgeted for your regular bills.
Consider NOT Spending At All —The government is issuing these tax rebates with the hope that Americans will help bolster the economy by spending it. However, "spending" isn't always the best plan. If you have high-interest credit cards or other loans, use the rebate to help pay down the debt...and get out from underneath those payments sooner! If your debt load isn't very high, consider saving the rebate check in an interest-bearing account, funding or starting a college savings plan, or even putting the money in a retirement account that will earn you more and more money as time goes on.
The Economic Stimulus Plan features a number of benefits you may not be aware of. In addition to rebate checks, it includes new conforming loan limits that may allow you to refinance and save money every month, or purchase a home more affordably. If you have any questions about your overall financial picture and how you can make the most of this opportunity, please call today. Remember... a little planning goes a long way!
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Expect Success
Billy Alvaro
P.S Do you currently have a 1st or second mortgage? If so getting an economic Problem prevention audit is the smartest step you can take to save money and build wealth for your future & family.
Here is why.
1st most Americans have been “SOLD" into the wrong type of mortgage. (It’s all over the news and in the papers that’s 1 reason they are living paycheck to paycheck)
2nd Over 89.6% of you that have purchased and or refinanced in the past 10 years have done so in a myopic manner, meaning you took on the largest debt of your life without consideration for the other important financial areas of your life.
3rd Because you were not given a "Plan to stay out of Debt & Acquire Wealth" when SOLD your mortgage, it is costing you tens of thousands of dollars in unwarranted interest payments and hundreds of dollars in future wealth. The audit will undoubtedly reveal this to you.
4th You have been manipulated ( by a sweet talking mortgage broker or banker) into using your home as a ‘COOKIE JAR” reaching in and eating up your equity. In essence consuming it rather than investing it. A properly created plan will reverse this.
You will be shown how to eliminate that mortgage in 7-11 years. Using 1 of 5 different mortgage reduction strategies, you’ll save hundreds of thousands of dollars in interest payments…(This newly found money will be used to create a significant nest egg for retirement. The economic problem prevention audit findings will visually prove this )
5th The economic Audit is free of charge
($1,000.00 value) Why Free? First it’s only free to 8 homeowners each month, so that’s 8 -10 hours a month pro-bono time, sorry cant be free for all, all the time, I have to earn a living to.:)
Second Because I believe you will get so much value out of seeing these benefits that you’ll want to engage me as your Mortgage planner and wealth coach to implement these strategies and transform your life from debt to wealth. I believe in giving first, proving my worth and value. It’s how I built up a 1.3 billion dollar company in less than 6 years.
To get started click here and fill out the first step to freedom form.
www.savemonthly.com/firststep
P.P.S Step 1 of the audit is simple.
You fill out the first step to freedom form.
After we receive your completed forms, well contact you to get started. Remember the audit is FREE to 8 families each month. If we are booked you will have the option of being placed on a priority waiting list or you can invest the $1000.00 to have the audit and plan created for you this month without having to wait.
We’ll review your income- assets- credit and home financing, looking for opportunities for you to save money, reduce your debt, increase cash for your investment strategy, create a significant nest egg for retirement and eliminate your home mortgage in 7-11 years. It may include
A Refinance strategy (without using your equity as a cookie jar!)
A debt stacking strategy
A debt roll down strategy
The MAAX strategy (mortgage and asset x-cceleration)
Dollar cost averaging strategy
The x out your expense reduction strategy
An automatic investment
A credit restoration strategy
A Money Merge Account
There are others as well but you’re getting the point of what goes into it. After we have a complete financial snapshot, well ask you about your future plans. Your needs wants and desires. We’ll than present the findings to you and your spouse/partner, along with a blueprint to transform your debt into wealth.
How do I get paid if we decide to move forward?
Good question. 1 of several ways.
1. It could be a no upfront - out of pocket investment if you choose to refinance your home with me. I can be paid for your savings out of the proceeds of the new loan.
2. It could be a small $497-$997 upfront investment to create the debt free by design- debt stacking strategy
3. It could include a 1 x upfront investment from $497 to $8,997 (the difference depends on how many strategies we implement .
4. It could include a small $39.97 fee for membership into my From Middle class to Millionaire Club
5. It could be a combination of the above
So what should you do now? Click here. Fill out the first step to freedom forms. Then we’ll schedule your EPPA. There is no good reason to wait. Do it now when it’s fresh on your mind.
P.P.P.S Special Bonus for the month of March 2008. Fill out the first step to freedom forms by March 7th, do the audit (at no cost) and utilize my services for a refinance you will receive free access to my From Middle class to millionaire tele-seminar series.
Bonus 1 ( $4,997.00 value)
· The fundamentals. Why you need to get your estate in order now. What areas do you need to protect and what to look for in an estate planner.
· You’ll learn how to use your newly created savings to buy and sell real-estate below market value… The time to make a fortune in real-estate is when the market is tanking. You’ll discover why and how to do this.
· How to use a simple automatic investment strategy to catapult your retirement savings
· How to use a little known insurance policy to fund your retirement
· Little known secrets to save you thousands of dollars on all loans, cars and credit cards…
· How to use the same strategies the “RICH” use to protect your families wealth from lawsuits
· A systematic way to build wealth slowly over time. (The only get rich quick is on late night info-mercials that don’t work!)
· How to use a government backed programs to invest in real-estate tax free
· 3 strategies to minimize taxes
You will get a schedule of the calls including dates and times.
A VIP secret telephone number and pass code to call into
Bonus 2 ($197.00 value)
· A recording of the calls so you can replay it incase you missed anything
· A transcription of the call for those that prefer to read
Bonus 3 ( $97.00 value)
Bonus 4 ($2000.00 value )
So act now, Fill out the first step to freedom form, engage me as you mortgage planner and wealth coach for the refinance and you’ll get $7,291.00 worth of bonuses. But you must fill out the form before March 7th.
All the best
Billy Alvaro
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