In the most recent survey period, long-term mortgage rates fell as ugly economic reports and the spread of the financial crisis across the globe increased speculation of rate cuts.

Robin McGlone
Colorado Mortgage Alliance

It is clear that the Federal Reserve’s attempts to contain the financial crisis has not worked and even the Treasury’s attempts to take over from a fiscal policy standpoint are having problems of its own.  But what is also very clear is that the unintended consequences of fiscal and monetary policy will put a lot of pressure on economic variables for the foreseeable future.

Last Week in Review 

TO PASS OR NOT TO PASS? That was indeed the question of the week…and the final answer came on Friday, as the House of Representatives followed the Senate’s lead and passed the $700 Billion rescue plan.
The week began with the House initially voting against the plan on Monday, causing Stocks to plunge in their final minutes of trading to their single worst loss in the 112-year history of the Dow Jones. However, on Wednesday, the Senate passed a revised rescue plan that included some tax breaks and an increase in FDIC protection from $100,000 to $250,000. This was the version the House subsequently passed and President Bush signed into law on Friday.
Why was it important for the plan to pass? Simply put, the plan frees up some of the frozen credit that consumers and small businesses across the country need to survive. As examples, even auto loans were becoming harder for consumers to qualify for…and on the business side, many retail operations have had difficulty in financing their inventory. Credit issues like these are not good for the economy, confidence, and consumer spending, and the rescue plan was passed to help matters.
In other news from Friday, the Labor Department reported that 159,000 jobs were lost in September, which is much worse than the 105,000 lost jobs that economists were expecting. So far in 2008, we have lost 760,000 jobs. And while Bonds and home loan rates would have typically improved on this weak economic news (remember weak economic news usually causes money to flow from Stocks into Bonds, helping home loan rates improve), talk that the Fed and other Central Banks around the world may start cutting their benchmark rates kept Bonds and home loan rates from making a big improvement. Remember, a cut in the Fed Funds Rate is inflationary, and therefore bad for Bonds and home loan rates.
When all was said, done and passed during this incredibly volatile and historic week, Bonds and home loan rates ended the week only slightly improved from where they began. I will continue to monitor this situation closely in the days and weeks ahead.
JUST WHEN YOU THOUGHT YOU HAD A HANDLE ON PROTECTING YOUR IDENTITY…THERE’S A BRAND NEW KIND OF IDENTITY THEFT IN TOWN. THIS WEEK’S MORTGAGE MARKET VIEW GIVES YOU THE SCOOP, AS WELL AS TIPS TO PROTECT YOURSELF - SO DON’T LET THIS OPPORTUNITY TO STAY SAFE PASS YOU BY!
Forecast for the Week 

With a light schedule of economic reports on the calendar this week, the financial news and headlines will likely have the biggest impact on the markets this week - particularly as we see how the markets react to the newly signed rescue bill. In addition, late breaking news from last week that Wells Fargo will acquire Wachovia, undoing a prior deal that had Citigroup acquiring Wachovia, and that Citigroup may file a lawsuit, could impact the markets as well.
Another big news item will be the Meeting Minutes of the September 16 Fed meeting, which will be released on Tuesday. If these Minutes give evidence that the Fed may cut rates at its next meeting on October 28-29, Bonds and home loan rates could worsen due to the inflationary implications.
Remember when Bond prices move higher, home loan rates move lower…and vice versa. As you can see in the chart below, Bonds and home loan rates managed to remain above an important floor of support. It will be important to see if this floor of support can hold through any new news or possible hints of inflation.

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Beau Jo’s is a Colorado Pizza Restaurant. Idaho Springs was the location of the original Beau Jo’s opening in 1973. Supporters of the environment by utilizing wind and solar power in the restaurants as well as the community by supporting non-profit fundraising efforts.

The pizza has repeatedly been voted Denver’s Best by restaurant critics. The delicious Mountain Pies are mouthwatering and the left over crust can be drizzled with honey and eaten as dessert. Enjoy other items from the extensive menu such as, calzones, sourdough sandwiches, salads and much more.

Beau Jo’s is commited to their customers and strives to create the finest pizza you will ever experience.

Located in the heart of Evergreen
28186 Highway 74
Evergreen, Colorado
303-674-2744
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(1 votes, average: 4 out of 5)
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This historic log building was constructed in 1927 alongside beautiful Upper Bear Creek and the Evergreen Golf Course. Surrounded by towering pines and built around a majestic stone fireplace in the octagonal dining room, the restaurant proudly serves Harris Ranch Beef, fresh seafood, and other gourmet entrees and has Evergreens most extensive wine list. Keys on the Green has been a popular mountain retreat since opening in the early 1980’s and guests often watch meandering elk as they dine on one of the decks.

Keys on the Green

29614 Upper Bear Creek Road in Evergreen

303-674-4095

Hours

Lunch Monday to Sunday from 11am

Dinner Monday to Saturday 5pm – 9pm

            Sunday 5pm – 8:30pm

Sunday brunch 9am – 2pm

www.keysonthegreen.com

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