Weekly Update - All about the FLU

In This Issue

Last Week in Review: The Bond markets may have been closed Friday for Veterans Day, but there was plenty of news before then to keep the volatility churning. Forecast for the Week: A slew of reports are ahead, with news on inflation, manufacturing, retail sales and more. View: The flu is nothing to sneeze at. Learn how you can stay up-to-date on  outbreaks near you.

Last Week in Review

"Should I stay or should I go now?" The Clash. And last week, Greece's Prime Minister George Papandreou announced his resignation, a move seen as a way for new government to step in and implement the Euro  rescue plan, thereby securing the financing necessary for Greece to avoid default. But that's not the only news story making headlines last week. Read on for the details...and what they could mean for home loan rates.  The European crisis that has been lingering for 18 months continues to  develop…and it's not over yet. Lucas Papademos was named as interim  Prime Minister of Greece. During his eight years with Greece's Central Bank, he helped the country achieve very strong economic growth rates. But  let's not cue the sunset, happy music, and production credits just yet.  Greece continues to be a very volatile situation, and continued uncertainty could once again push investors back into the US Dollar and US  Bonds...helping home loan rates in the process.  In addition, as the soap opera in Greece continues, eyes have turned  squarely towards Italy, whose Bonds yields have spiked on growing concern  it is the next Greece. Italy is not in the same dire situation as Greece yet, but their economy is far larger--the world's 7th largest, in fact--and a debt  crisis in that region will be much more difficult to contain. To add to the Italian uncertainty, Italy's Prime Minister Silvio Berlusconi is under heavy pressure to resign for a variety of scandalous reasons.  Here at home, another story to watch came on the words from Fed Chairman Ben Bernanke, who stated that the Fed has "considerable latitude" to choose its long-term inflation goal. Although Bernanke didn't elaborate on  specifics, the gist of his comment is that the Fed may tolerate higher inflation for a period of time in an attempt to help the economy recover and improve the employment sector.  Remember, the Fed is charged with a dual mandate of (1) controlling inflation as well as (2) supporting job creation. While inflation remains close to the  Fed's target range, unemployment is nowhere near where the Fed would  want to see it, which is between 5% and 6%. So it appears the Fed may make  decisions in the future to improve employment, possibly at the slight expense to inflation.  This is important because inflation is the archenemy of Bonds and home loan  rates. So any increase in inflation could negatively impact home loan rates.  The bottom line is that now remains a great time to purchase or refinance  a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Nov 11, 2011) The economic calendar was extremely light last week, but look out this week! The markets are set for a slew of reports that will give us a look at the economy across many sectors. Manufacturing news from the Empire State Index (on Tuesday) and Industrial Production (on Wednesday) will be closely watched this week for any signs of a pickup. After his comment last week, Fed Chairman Bernanke will be listening with both ears for any increase in inflation when the Consumer Price Index (CPI) and Producer Price Index (PPI) are released. Look for the PPI report to be released Tuesday, followed by the CPI report on Wednesday. Also on Tuesday, we will see how the consumer is holding up when the Retail Sales report is released. Rounding out the week, Initial Jobless Claims will be delivered on Thursday. Last week's report fell below the 400,000 level, which is a good sign but one week doesn't make a pattern. 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 continue to be volatile, though home loan rates are still near historic lows. As always, I'll be monitoring this situation closely.

The Mortgage Market Guide View...

A Flu Outbreak Near You? It's that time of year when we turn our attention to the winter season. While there are many things to look forward to such as the holidays, many of us--including you, your clients, or your friends--may also start to worry about the flu. And the cost of the season is nothing to sneeze at! Did you know that Americans spend approximately $4 Billion on over-the-counter cold and flu remedies? That's not even factoring in how much time and productivity is lost on sick-time in the workplace, or co-pays for doctor visits and prescriptions. But now there's a way you can stay up-to-date on the latest flu information in your area. The "Flu Near You" Website The Children's Hospital Boston has partnered with the American Public Health Association and the Skoll Global Threats Fund to bring you the "Flu Near You" website. On this site, any individual living in the United States who is 13 years of age or older can register to complete brief weekly surveys that may help all of us learn more about the flu. When a case is reported, the map registers a "pin" in the map-and you can even click on that pin to learn more about the symptoms or severity of the case! Now You Can: See flu activity in your area at the regional or state level Explore flu trends around the world with Google Flu trends Use the "Flu Vaccine Finder" to locate nearby locations offering flu shots or nasal spray flu vaccine Receive customized email disease alerts at your location Learn more about flu news, information, and resources at flu.gov Check out local public health links Browse the Disease Daily to discover summaries of important outbreaks and expanded coverage through the Outbreaks 101 news section The site is completely free to use. And the information on the site will be available to public health officials, researchers, disaster planning organizations and anyone else who may find this information useful. So consider registering and using this site today Want More Local Health Information? In addition to the Flu Near You map, the Children's Hospital Boston also administers a Healthmap that features information about other health concerns or outbreaks in your community and around the world. So if you're concerned about the upcoming flu season or other health concerns, take a few minutes to check out the Flu Near You map and the Healthmap. You may even want to consider passing the information on to your friends, family members, or even your clients. Economic Calendar for the Week of November 14 - November 18 Date ET Economic Report For Estimate Actual Prior Impact Tue. November 15 08:30 Core Producer Price Index (PPI) Oct NA 0.2% Moderate Tue. November 15 08:30 Producer Price Index (PPI) Oct NA 0.8% Moderate Tue. November 15 08:30 Retail Sales Oct NA 1.1% HIGH Tue. November 15 08:30 Retail Sales ex-auto Oct NA 0.6% HIGH Tue. November 15 08:30 Empire State Index Nov NA -8.48 HIGH Wed. November 16 08:30 Consumer Price Index (CPI) Oct NA 0.3% HIGH Wed. November 16 08:30 Core Consumer Price Index (CPI) Oct NA 0.1% HIGH Wed. November 16 09:15 Industrial Production Oct NA 0.2% Moderate Wed. November 16 09:15 Capacity Utilization Oct NA 77.4% Moderate

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