Mixed news from the housing front, in the form of new construction Housing Starts bouncing higher, yet new Building Permits moving lower. Existing Home Sales rose somewhat unexpectedly in February, marking the largest monthly gain since March 2004 and the highest pace of sales was the highest since April of 2006. Overall, not bad reports, considering how the media still wearily beats away on their housing bubble drum. But it wasn’t all great news - overall sales are off 3% from last year, the inventory of existing homes on the market rose slightly to a 6.7 month supply, and the median price of a home declined slightly to $212,800. Many experts feel it is likely the housing market saw its worst days during August of last year, but although stabilizing, the housing market still has a ways to go.

Worried about what rates did this week? Despite some frantic moves throughout the week, home loan rates ended up unchanged to only slightly worse than where the week began.

AND IF YOU’RE OVER 40…YOU MIGHT BE WORRIED ABOUT THE FACT THAT YOU’RE HAVING TO SQUINT TO READ THIS NEWSLETTER, OR EVEN REACH FOR A PAIR OF READING GLASSES. THINK IT’S JUST A PART OF AGING THAT YOU HAVE TO ACCEPT? MAYBE NOT. READ THIS WEEK’S MORTGAGE MARKET VIEW.

Remember, weak or negative economic news tends to be bad for the Stock market, but good for Bonds and home loan rates as money flows out of Stocks and into Bonds. And conversely, strong or positive economic news causes investors and traders to want to move money into Stocks, but pull it out of the Bond market, causing Bond prices to go lower and home loan rates to rise. Bonds are currently sitting right on the “floor of support”…so unless the news is quite strong for the economy, Bond prices may move higher within the range, and home loan rates may see some improvement during the week.

With that in mind, the economic calendar will deliver fresh news every single day next week, with New Home Sales on Monday, Consumer Confidence on Tuesday, Durable Goods Orders on Wednesday, Final 4th Quarter GDP on Thursday, and last but certainly not least, the highly anticipated Personal Consumption Expenditure Index on Friday. This does happen to be the Fed’s most favored measure of inflation, so investors, traders, and armchair analysts alike will be watching carefully…and attempting to guess how the Fed will read the report, and what their next move might be.

Yes, almost everyone reaches an age where the frustrating fact of failing vision means reading glasses are likely inevitable. For some, glasses can be a real fashion statement…while for others, they are a nuisance, or simply an item that only grandparents should wear. But modern medicine has come a long way in the last few years. LASIK surgery has become a billion dollar industry, and millions of people have had great success with the surgery, correcting poor vision issues like nearsightedness, farsightedness, and even astigmatism. Yet the one thing that LASIK physicians will tell any individual considering the procedure is that it cannot correct “presbyopia”, the condition that makes it difficult for aging eyes to read fine print.

But now - for those who are too vain to pull out a pair of reading glasses to read a menu, or just don’t want to deal with the hassle, there just might be something that can help. What’s the answer?

A new procedure called Conductive Keratoplasty, or “CK”. And like any medical procedure, there is good news…and bad news. The good news is the procedure only takes about fifteen minutes and is non-invasive, requiring just an eyedropper of local anesthetic. More good news, the surgeon may only need to perform the surgery on one eye. Why? Because the correction is being made to accommodate focus at near, middle, and distance ranges at the same time, so the surgeon may only need to correct the one non-dominant eye for near vision, and can leave the other eye untreated to achieve the desired result. The bad news? Well, aging eyes keep right on aging…and the results from the CK procedure will only last five to ten years. And it’s not especially cheap, costing around $1500 per eye.

About 100,000 people have already had the surgery done…so if you’ve found yourself to be squinting or reaching for your reading glasses as you’ve read this issue…you might decide to check with your eye doctor, and perhaps be next in line for this interesting new procedure!

Economic Calendar for the Week of March 26 – March 30

Although 97,000 new jobs created in February is not a scary number, it was less than expectations from the Department of Labor. The Unemployment Rate did fall to 4.5%, and Average Hourly Earnings rose more than anticipated to $17.16, but fears of inflation from these numbers spooked bonds into a Friday sell-off.

Mortgage Bonds and home loan rates had been improving earlier in the week, but the overall strong economic tone of Friday’s Jobs Report erased the gains that had been made, leaving rates at essentially the same place they started on Monday.

Bonds started the week off to the plus side due to investor fears about the economy, which caused money to be parked over in the “safe haven” of low-risk Bonds…thereby benefiting home loan rates. The fears were broader than the sub-prime headlines and Greenspan warning. They included evidence of economic slowdown in the US as well as China. Additionally, an early candidate for quote of the year came from the CEO of homebuilding giant DR Horton, Donald Tomnitz, who said that “2007 is going to suck”. Hmm…talk about telling it like it is.

BUT ONE PLACE NOT TO TELL IT AT ALL IS WHEN YOU GET A PARTICULAR KIND OF CALL FROM THE FRONT DESK OF THE HOTEL YOU’RE STAYING IN. DON’T FALL FOR THIS SNEAKY PLOY BY READING THIS WEEK’S MORTGAGE MARKET VIEW.

The chart below shows that unless the news of the week is very Bond-friendly, home loan rates may get worse before they get better. The light blue line shows the improving trend that Bond prices have enjoyed of late, which has meant an improvement in home loan rates. But Friday’s action drove Bond prices below this trendline…so Bond prices and home loan rates could now continue to worsen, unless the news goes their way this week.

Most would answer “very safe” because the card is right there with you, either tucked securely in a wallet or locked in the safe. But beware…it might not be as protected as you think. There is a new scam lurking about hotels, and it’s not coming from hotel employees - it’s from people outside the hotel altogether. Here’s how it works:

The phone in your room rings and the individual on the other end identifies themselves as someone from the front desk. They say there is a problem with your credit card and the number needs to be verified. You cooperatively pass along the information, and don’t think about it again until the monthly statement arrives with a slew of charges that are not yours.

Suddenly you realize while on vacation or caught up in an important business trip, you were scammed!

So how do these individuals get to your room if they do not know your name? They simply call the hotel and randomly ask for room numbers until they can get through to a person in the room, or they ask for a hotel guest with a common last name like “Smith” until the connection is made. One way or another, they get through and scam hotel guests.

If a call is ever made to your hotel room requesting credit card information, taking just one precautionary step will confirm whether or not the call is a legitimate one. Simply ask for the hotel employee’s name and tell them you will come down to the front desk and provide the credit card information. Asking for the name may cause the scammer to panic and hang up - but even if a name is given, take the time to go to the front desk and confirm the call. According to the American Hotel and Lodging Association, hotels never ask for credit card information over the phone. So, chances are good that receiving a call like this is a scam, and taking the time to walk down to the front desk will confirm whether there really is a problem with your card.

Be on guard for anyone asking for your credit card number over the phone, and ensure that you can enjoy your vacation or focus on that business trip with the peace of mind that you are not getting scammed.

Economic Calendar for the Week of March 12 – March 16

What happened? First, remember that the Stock and Bond markets compete for the same investment dollar. This means that when Stocks are worsening and investors are selling off their holdings, some of that money gets moved over into the Bond market, which helps home loan rates improve. And vice versa, when Stocks move higher and investors are buying into the Stock market, some of that money comes back out of Bonds, which causes home loan rates to worsen.

Last week’s volatility began with the Chinese Stock market plunging, setting off a string of worldwide stock selling. Our own Stock market was ripe for a reversal lower, and money flowed out of Stocks and into Bonds, helping home loan rates improve. The next day, Stocks began to rebound, moving money back out of Bonds and causing home loan rates to worsen. But the “see-saw” action continued for the balance of the week - and may not be done yet, causing high amounts of volatility in Stocks and Bonds - and therefore, home loan rates.

AND ALTHOUGH WEARY INVESTORS MAY NOT BE LOOKING FOR STOCKS…MAYBE THEY ARE LOOKING FOR A NICE NEW CAR THIS SPRING. IF YOU’RE IN THE MARKET FOR A NEW VEHICLE, DON’T MISS THIS WEEK’S MORTGAGE MARKET VIEW.

This week holds only one potentially major market-moving economic release, the February Jobs Report. Initial estimates are calling for the creation of 100,000 new non-farm jobs, down from January’s report of 111,000 new jobs. The chart below shows some mixed signals for Bonds, with a nice “rising pennant” formation - typically good news for Bond prices and home loan rates; but also shows that Bonds are “overbought” and ripe for a reversal lower. For now, the technicals will take a backseat at least until Friday, as Stocks seem to be driving all the action for Bonds and home loan rates.

The majority of car leases state that you will be responsible for any damage to the vehicle that is beyond “normal wear and tear.” So before turning in that leased vehicle, be sure and inspect it for damage. If damage is found, take the time to visit a few body shops and get some estimates. Why not just let the dealer figure it out and handle the damage repair? Well, the dealer may invoice you for a higher price than necessary for the repairs, and pocket the difference as profit - so doing your homework first will allow you the option of having a local body shop repair your vehicle at a lower price, before you turn the vehicle back in.

If you choose to have the vehicle repaired with a body shop not affiliated with the dealer, be sure to use a competent repair shop and check out their track record with the Better Business Bureau. If the repair shop does a lousy job with the repairs, you may end up paying for the repairs twice to get it properly fixed. For example, if the body shop repairs a fender, but does not match the paint with the rest of the vehicle - the dealer will likely hand you another invoice for the charges to match up the paint. Confirming that the body shop is reputable will ensure that you only have to foot the bill once.

Try to avoid filing a claim with your insurance company for cosmetic damages to a vehicle, and instead opt to pay for the expense out of pocket. Although it may seem less expensive to file a claim with the insurance company, they may tag your account as being high risk - even for cosmetic work done to a leased vehicle - and it may result in a jump in your insurance premiums.

And although your new car makes it tempting to always be the designated driver for road trips and outings - be careful not to exceed the mileage allowance. Each lease specifically states the amount of mileage that can be accumulated each year, and if that mileage limit has been exceeded, the bill could be costly. And no, you can’t force the mileage to turn back by putting the car up on blocks and slamming the car into reverse…this trick didn’t even work for the charmed Ferris Bueller!

But leasing can be a great choice, particularly if you tend to purchase new vehicles every few years. In fact, about 25% of Americans choose to lease rather than buy. About half of those leases are on European vehicles, about 25% are Asian, and about 20% are American. Mercedes leads the way with 60% of their sales being leases, followed by Lexus at 59%, Toyota at 34% and GM at 24%.

Economic Calendar for the Week of March 05 – March 09