" I'm goin' to Jackson. See if I care ." - Johnny Cash. Last week, Fed Chair  Ben Bernanke headed to Jackson Hole, Wyoming…and the markets certainly cared! The big news of the week was Bernanke's speech at the Federal Reserve Bank of Kansas City Economic Symposium at Jackson Hole.  Here's what happened - and, more importantly, what it means to Bonds and  home loan rates.  Bernanke Remains Optimistic. Bernanke focused on the near-term and long-term economic situation, but his message was optimistic, stating that regardless of "the crisis and the recession, the U.S. economy remains the largest in the world." He stated that the Fed expects "a  moderate recovery" to continue and even strengthen as the country goes  forward.  Easy on the talk of "Easing." Despite the market's concerns over the slowing economic recovery, Bernanke didn't discuss any details about the measures that the Fed may use to help get the recovery back on track -  which means there was no mention of a third round of Quantitative Easing (QE3). Instead, he stated that the Fed would continue to consider such  options at its upcoming September meeting. He did, however, re-iterate that "The Fed has a range of tools that could be used to provide additional monetary stimulus." Additionally, he ended his speech by saying: "The Federal Reserve will certainly do all that it can to help restore high rates of  growth and employment in a context of price stability."  Right back where we started. It's interesting to note that last year when Bernanke spoke at Jackson Hole he talked about the likelihood of QE2.  That speech sent both the Bond and Stock markets into a rally mode.  Amazingly, the Stock market is very close to levels seen last August, which means that Stocks have given up virtually all of the gains seen from the  enormous rally sparked by QE2.  Anticipation and disappointment. Stocks traded higher early last week in anticipation of Fed Chairman Ben Bernanke's big speech on Friday  at Jackson Hole, Wyoming. With the economy slumping and Stock prices falling in recent weeks, there was a growing feeling that the Fed is willing  do something that would signal to the markets that they are willing to help  more if needed.  After Bernanke's speech - and his reluctance to discuss QE3 - Stocks  dropped slightly, signaling investor's disappointment in having to wait  longer to see what steps the Fed may take. By late Friday, however,  volatility reared its head again, as Stocks attempted to rally and Bonds  gave up some of their gains.  With the Fed pushing off any meaningful discussion of its policies and options until the September meeting, this story is sure to continue impacting the markets. Until we hear exactly what the  Fed will do, the markets will be forced to speculate and anticipate… which could mean more volatility. For now, the situation looks  beneficial for people looking to purchase a home or refinance, as home loan rates remain near historic lows. But things can change quickly, so now is the time to take a look at the options available.

Forecast for the Week

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Aug 26, 2011) This week heats up again with the big topics of housing, inflation and employment taking center stage: The week starts off Monday morning with reports on Personal Spending and Personal Income, as well as Pending Home Sales. On Monday, we'll also see the Personal Consumption Expenditures (PCE) Index, which is the Fed's favorite gauge of inflation. Remember, inflation is the archenemy of Bonds and home loan rates, so this will be an important report to watch. Manufacturing reports will also hit this week. On Wednesday, we'll see the Chicago PMI, which reports on manufacturing in Chicago and is a good indicator of overall economic activity. Then on Thursday, we'll see the ISM Index, which is the king of all manufacturing indices and is considered the single best snapshot of the factory sector. The big topic of the week will be employment. First up is the ADP National Employment Report on Wednesday, which measures non-farm private employment, followed by another round of Initial Jobless Claims on Thursday. In last week's report, Initial Jobless Claims were reported higher than expected. This leading indicator of the labor market shows us that things remain weak. Finally, the busy week culminates with the highly anticipated monthly Jobs Report on Friday. This report features new data regarding job growth and the unemployment rate - needless to say, this report can be a big market mover! 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, the markets have continued their volatility. But Bonds and Home loan rates were able to finish the week strong. That means that home loan rates are still at some of the most attractive levels we've seen in history. If you know someone in considering purchasing a home or refinancing, it's an ideal time for them to review their options and see how they can benefit. All they have to do is call or email me to get started.

The Mortgage Market Guide View...

3 Tips for Increasing Intelligence Webster's Dictionary defines intelligence as the ability to learn and understand, or to deal with new or trying situations. Simply put, it's the degree of one's mental sharpness. It's easy to believe that your intelligence is set, meaning there's no way to "boost" your brainpower. However, many scientific studies have proven the exact opposite. A combination of lifestyle adjustments and mental exercises has been shown to not only increase intelligence, but also to improve general brain health and help prevent disorders associated with aging, such as Alzheimer's disease. According to most neurologists, the key is to stay mentally active, despite your age. The following five tips will help boost your mental activity and increase your intelligence. Get Some Sleep - An adequate amount of restful sleep is an important component of brain function. While scientists argue over its effect on memory and learning, restful sleep provides energy as well as the ability to focus. Both are vital factors in achieving mental stimulation. Some studies have also shown the reverse to be true. More mental stimulation during the day equals better sleep at night. Increase Your Exercise - Exercise brings oxygen-rich blood to the brain, an important component to overall brain health. Exercise also regulates blood sugar levels. Some recent studies have shown a correlation between impaired glucose tolerance and an undersized hippocampus, the portion of the brain that controls the conversion of short-term memory into long-term. In addition, forms of exercise such as aerobics, dance, and martial arts all require memorization and are great for promoting mental stimulation. They also help to develop the rhythm and timing circuitry that runs through multiple regions of the brain. Play Games - Crossword puzzles, Sudoku, certain board games, and card games are great for mental stimulation. Each of them will exercise various brain functions such as lexical recall (memory for words that name things), attention, memory, logic, and pattern recognition. They are accessible to almost everyone, and some only require one player. The key here is that as you advance in skill, you should seek out harder, more challenging versions. Economic Calendar for the Week of August 29 - September 02 Date ET Economic Report For Estimate Actual Prior Impact Mon. August 29 08:30 Personal Income Jul NA 0.1% Moderate Mon. August 29 08:30 Personal Spending Jul NA -0.2% Moderate Mon. August 29 08:30 Personal Consumption Expenditures and Core PCE Jul NA 0.1% HIGH Mon. August 29 08:30 Personal Consumption Expenditures and Core PCE Jul NA 1.3% HIGH Mon. August 29 10:00 Pending Home Sales Jun NA 2.4% Moderate Tue. August 30 10:00 Consumer Confidence Aug NA 59.5 Moderate Wed. August 31 09:45 Chicago PMI Aug NA 58.8 HIGH Wed. August 31 08:15 ADP National Employment Report Aug NA 114K Moderate Thu. September 01 08:30 Jobless Claims (Initial) 8/27 NA 417K Moderate Thu. September 01 08:30 Productivity Q2 NA -0.3% Moderate Thu. September 01 10:00 ISM Index Aug NA 50.9 HIGH Fri. September 02 08:30 Non-farm Payrolls Aug NA 117K HIGH Fri. September 02 08:30 Unemployment Rate Aug NA 9.1% HIGH Fri. September 02 08:30 Hourly Earnings Aug NA 0.4% HIGH Fri. September 02 08:30 Average Work Week Aug NA 34.3 HIGH

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