Great Tips for Networking and Bonds Improve!

In This Issue

Last Week in Review: Key inflation data was released, while negotiations began regarding the "Fiscal Cliff." Forecast for the Week: Look for important housing reports and news on consumer sentiment before the markets close Thursday for the Thanksgiving holiday. View: Want to improve your business and help people in the process? See the great tips below.

Last Week in Review

Talk is cheap. And while it is important that negotiations are beginning between President Obama and Congressional leaders regarding the looming "Fiscal Cliff" our country is facing, action is needed as well. Read on to learn more details, and what all of this means for home loan rates.  If you've been wondering what the Fiscal Cliff is about, here are the main issues. As we head into 2013, tax cuts for individuals and various tax breaks for businesses are due to expire, taxes pertaining to President Obama's health care law will begin, spending cuts enacted by Congress as part of the debt ceiling deal of 2011 will go into effect, and long-term jobless benefits will expire.  The Congressional Budget Office (CBO) estimates that if all of these items occur, it could take an estimated $600 billion out of the U.S. economy in 2013, pushing the country into a recession. Given that Europe is officially in a recession for the second time in four years, it's especially important that our leaders take action now before our economy follows suit. Heading into 2013, another important issue to monitor is inflation. Remember that one of the goals of the Fed's latest round of Bond buying (known as Quantitative Easing or QE3) is actually to create inflation. While the latest Producer Price Index and Consumer Price Index reports showed that inflation remained tame at the wholesale and consumer levels in October, inflation can manifest and get out of hand quickly. This is significant because inflation is the arch enemy of Bonds (and therefore home loan rates, which are tied Mortgage Bonds) as it reduces the value of fixed investments like Bonds.  So what does this mean for home loan rates? Bonds and home loan rates should continue to benefit from the continued uncertainty in Europe, and the uncertainty here regarding the Fiscal Cliff, as investors will likely continue to see our Bond market as a safe haven for their money. But inflation is a very real threat to home loan rates, and we need to keep a close eye on it in the weeks and months ahead. The bottom line is that home loan rates remain near historic lows, making now a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Nov 16, 2012) Several important reports will be released the first half of the week, before the capital markets close on Thursday for the Thanksgiving holiday. We'll get a triple dose of housing information with the Existing Home Sales Report on Monday and Housing Starts/Building Permits on Tuesday. Weekly Initial Jobless Claims will be reported on Wednesday this week due to the holiday on Thursday. The data comes after last week's surging numbers due to the effects from Superstorm Sandy. Also on Wednesday, Consumer Sentiment will be released. In addition, Friday will mark a short day of trading, as the Bond markets will be open until 2:00pm ET while Stocks will close for trading at 1:00pm ET. 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. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on. When you see these Bond prices moving higher, it means home loan rates are improving – and when they are moving lower, home loan rates are getting worse. To go one step further – a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. As you can see in the chart below, Bonds and home loan rates remain near record best levels. I'll be watching closely to see what happens as we head into the holiday season. And speaking of holidays, wishing you and your family a safe and happy Thanksgiving.

The Mortgage Market Guide View...

3 Mindset Fixes (And A Script) For More Effective Networking If you're not meeting enough of the right people or getting as much referral business from your networking as you should then Scott Gerber, founder of the Young Entrepreneurs Council, has some solid mindset fixes for young entrepreneurs and entrepreneurs young at heart:  Don't jump the gun. Doing things for others before you start doing things for yourself is the first step to a stronger networking position. Don't look at your contacts as means to an end–look at them as people with desires. People can sense when you only want to use them to get business just for yourself. But getting to know them, finding out their goals, plans, and dreams not only makes you appear more caring but arms you with intelligence to help make their life or business more successful.  Figure out your specialty. You can't be Master of Everything in your industry and you'd be foolish to try. In every industry specialists are usually at the top; there are those who specialize in market niches, client types, family situations, and even parts of anatomy. When you specialize, you have an incredible power over prospects–access! You become the gateway, the access, to a solution. In most cases, specialists make more money and have less trouble getting new business than their generalist counterparts. Plan to create value. The formula here is: Meet, Connect, Repeat. Whenever you attend a networking event, go with the intention of connecting at least one person with something they want: it could be a solution, it could be a relationship, it could be anything you can help make possible. Repeat this plan each event you attend. It's easy to do.  Have a great script ready. When you meet someone for the first time just ask: "Who are the two or three people you'd like to meet that can help you in your business?" Then, all you have to do is start connecting the dots. Being known as a connector for others will soon reward you with new contacts and new business from places you never dreamed possible. It's easy to treat networking events like social occasions, but if you arrive with the intention of being a connector, you'll be more productive and enjoy yourself even more. Share these tips with the other professionals in your network and feel free to call if I can help connect you to someone you need to know! Economic Calendar for the Week of November 19 - November 23 Date ET Economic Report For Estimate Actual Prior Impact Mon. November 19 10:00 Existing Home Sales Oct NA 4.75M Moderate Tue. November 20 10:00 Housing Starts Oct NA 872K Moderate Tue. November 20 10:00 Building Permits Oct NA 894K Moderate Wed. November 21 08:30 Jobless Claims (Initial) 11/17 NA NA Moderate Wed. November 21 10:00 Consumer Sentiment Index (UoM) Nov NA 84.9 Moderate

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