Power Tools Newsletter - 9-28-11

Forget Blog Traffic--Get People Coming Back!


These days, many professionals are looking to build a blog community to develop their reputation, uncover new business opportunities and grow revenues. What this comes down to is using a blog to build meaningful business relationships.


People think the best way to grow their blog is to simply focus on driving more traffic there. So they spend lots of time and effort on:

• SEO keyword research and tools
• Writing posts littered with keywords to pull in the most search visitors
• Dreaming up a promotion to make a post catch fire (a long shot at best)

Problem is, the traffic-building approach doesn't actually build your blog community over the long term. Check out the Google Analytics for your blog. Look at stats for new visitors--traffic that came from a search. How much time did they spend on your blog--seconds? And how many page views? This traffic is not a community.


But what if a post goes viral, driving big traffic to your blog for the day? Doesn't that help build your community?


Bloggers with this experience report that the spike in daily traffic usually does not create any big surge in comments--and almost never lands new subscribers.


The secret? Return visitors!


Now take a look at the stats for your blog's return visitors--people who are attracted to your blog and engaged with it. They're starting a relationship with you. They can help you grow naturally and can make a real difference to your business.
To keep visitors coming back:

• Strive for unique content with either new info or a fresh look at something they already know
• Don't worry about the popular keywords
• Engage right away with people who comment
• Connect personally with bloggers and commenters--email them, call them, meet them face to face

By focusing on return visitors, you're cultivating real relationships with devoted readers, who will then help grow your community by spreading your blog's message to their friends and acquaintances.


Slow and steady wins the race

This approach keeps track of return visitors on a daily basis and focuses on driving up that number over time. It gets you thinking about creating the better content and value-added efforts that build a stronger community.

Taking this slow and steady approach to developing your blog community eventually gets you to that "tipping point," where so many people and their friends are spreading the word about your blog that ALL your numbers begin heading up. The results can be dramatic.


To use a blog to create meaningful business relationships, make return visitors your first priority. There are no shortcuts--build your blog community just like you built your customer base---one connection, one relationship, one referral at a time.... Enjoy a great month!

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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.

Inside Lending Newsletter - For the week of 9-26-11

>> Market Update



QUOTE OF THE WEEK..."Success is the maximum utilization of the ability that you have."--Zig Ziglar, American author and motivational speaker


INFO THAT HITS US WHERE WE LIVE...To help the economy succeed, the Fed is certainly using its ability to the max. Coming out of the FOMC meeting Wednesday, the Fed announced "Operation Twist"--a strategy of selling its short-term securities to buy long-term bonds to drive down long term interest rates, especially for mortgages. This latest Fed effort to help the housing market is great news for anyone thinking of buying a home, as mortgage rates should stay very very low.

Wednesday's other great news for housing was August Existing Home Sales came in UP 7.7%, to an annual rate just the other side of 5 million units, the best reading since March. This dropped the supply of existing homes to 8.5 months. Tuesday, August Housing Starts were down 5%, to a 571,000 unit annual rate. But, hey, dealing with a hurricane and floods, builders across a good part of the East were hesitant to break ground. Better news came with building permits--UP 3.2% for the month and now UP 7.8% versus a year ago.

BUSINESS TIP OF THE WEEK...Don't avoid taking a prudent risk just because risks sometimes result in failure. Without the possibility of failure, there is no possibility of success.

>> Review of Last Week


IT'S ALL GREEK TO WALL STREET...The week before last, investors were optimistic about Greek debt and European financial problems and the stock market went up. Last week, Wall Street worried that Greece wasn't making progress with the austerity plan that would earn it a bail out from its richer neighbors. Then Moody's downgraded Italy's debt. Lastly, the Fed chimed in: "There are significant downside risks to the economic outlook, including strains in global financial markets." Stocks suffered their worst weekly loss since October 2008.


Wall Streeters were obviously ignoring the good economic signs. Same-store sales were UP 3.4% versus a year ago, as measured by the International Council of Shopping Centers. Redbook Research reported an even better 4.1% boost in same-store sales. There was the positive housing data reported above. Then, some economists said they expect consumer spending to climb at a 1.5%–2% annual rate in Q3. The economy may not be booming, but it's not double-dipping back into recession either.


For the week, the Dow ended down 6.4%, at 10771; the S&P 500 was down 6.5%, to 1136; and the Nasdaq was down 5.3%, to 2483.


It was an historic week in the bond market, as Treasury yields dropped to record lows after the Fed announced its $400 billion "twist" to sell shorter term bonds and buy longer ones. The FNMA 3.5% bond we track closed Friday at $102.27, UP 1.22 for the week. National average mortgage rates held steady, but they're already at historic levels, well below where they were a year ago. Now with the Fed's Operation Twist, some observers say rates may go even lower.


DID YOU KNOW?...The majority of real estate agents believe that the biggest reason homes don't sell is simply price.


>> This Week’s Forecast


MORE ON HOME SALES, GDP, INFLATION...Monday, August New Home Sales are expected down a tad from the prior month. Thursday's Pending Home Sales for July are predicted down a little. That day will also reveal the Q2 GDP, Third Estimate, forecast up slightly but still registering modest 1.2% growth. Friday brings a reading on August inflation in the form of Core PCE Prices, the Fed's favorite gauge, which should still be within their target range.


>> The Week’s Economic Indicator Calendar


Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.


Economic Calendar for the Week of Sep 26 – Sep 30

>> Federal Reserve Watch


Forecasting Federal Reserve policy changes in coming months...Economists don't see a hike in the Funds rate, given the Fed's latest view of the economy and its stated intention to keep rates at super low levels through summer 2013. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

Probability of change from current policy:

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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.

Inside Lending Bulletin- VA Changes - 9-23-11

VA Funding Fee Changes Effective October 1, 2011

Vets and Reserves/National Guard will get a significant benefit October 1st. Check the chart below to see how much they’ll save in fees. We hope this helps you help our military folks become homeowners!

If you have any questions about this or a specific situation, please don’t hesitate to email or call.

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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.

Inside Lending Newsletter - For the week of 9/19/11

>> Market Update


QUOTE OF THE WEEK..."Work joyfully and peacefully, knowing that right thoughts and right efforts will inevitably bring about right results."--James Allen (1864-1912), British inspirational writer


INFO THAT HITS US WHERE WE LIVE...We did see some right results for housing last week, and hopefully we've been working joyfully and peacefully to bring them about. Realtor.com reported that inventories of homes, condos, townhouses and co-ops shrank in August for the fourth month in a row. They're now down 19% from a year ago, and rest at 2.27 million units. Dropping inventories do keep home prices from falling and, supporting this, the national median list price was unchanged from June and July and up about 0.5% from a year ago, at $189,900.


National average mortgage rates continued to drift downward, again hitting new record lows. And borrowers are responding, with demand for purchase loans up 7% from the week before, according to the Mortgage Bankers Association. Refinancing applications are also up. Freddie Mac's chief economist noted the average interest rate on outstanding mortgages is 5.28% and that refinancing into a 30-year fixed mortgage at today's rates could save $1715 a year in interest on a $200,000 loan.


BUSINESS TIP OF THE WEEK...The best indicator of long term success is actually "street smarts." To develop yours, dive in, don't dawdle over decisions, learn from your mistakes and experiment continually.


>> Review of Last Week


TURNAROUND!...Stocks headed back up five days in a row, giving the S&P500 its best performance since June, though it was just the second weekly rise in eight weeks. The week began with great worry over the status of French banks, but things turned positive on news that the BRIC countries--Brazil, Russia, India and China--are in talks to buy eurozone debt. The European Central Bank also lined up other central banks to help out with loans if needed. This got Wall Streeters feeling so good, they ignored the lackluster U.S. economic reports and sent stock prices skyward.


The parade of mediocre data was led by producer inflation, flat for August but up 6.5% from a year ago. Core CPI consumer inflation was up 0.2% for August and up 2.0% versus a year ago, putting it at the top of the Fed's target range. That could make this week's Fed meeting interesting. New jobless claims inched up to 428,000. Retail was flat for August, but even in good times there are off months, and anyway Retail Sales are up 7.2% from a year ago. Finally, the industrial sector continues to lead the recovery, with August production and capacity both UP.


For the week, the Dow ended UP 4.7%, at 11509; the S&P 500 was UP 5.4%, to 1216; and the Nasdaq was UP 6.3%, to 2622.


Worries about European debt made Treasuries and mortgage bonds look like safe bets, sending prices up at first. But inflation concerns and the stock rally ultimately sent bonds the other way. The FNMA 3.5% bond we track closed Friday at $101.05, down .98 for the week. Nevertheless, as mentioned above, national average mortgage rates inched down, setting new record lows.


DID YOU KNOW?...A prepayment (or prior redemption) privilege is a clause allowing the borrower to pay off a mortgage early without penalty. When interest rates fall, this lets the borrower pay off the mortgage and refinance at a lower rate.


>> This Week’s Forecast


NEW CONSTRUCTION, EXISTING HOME SALES AND, OH YES, ANOTHER FED MEETING...It will be useful for folks with our interests to check out Tuesday's August Housing Starts, expected to be down. This will at least help clear the inventory of new homes. The annual rate for Building Permits should be down a little as well. Wednesday will give us the Existing Home Sales reading for August, predicted to be inching back toward the 5 million level.


Wednesday we'll also see the Fed's policy statement from the latest FOMC meeting. No one expects the rate to rise, but speculation surrounds Chairman Bernanke's decision to extend the confab to two days. What will they say about inflation? Will they launch Operation Twist and start buying long bonds? Will they throw more money into the system?


>> The Week’s Economic Indicator Calendar



Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.


Economic Calendar for the Week of Sep 19 – Sep 23

>> Federal Reserve Watch



Forecasting Federal Reserve policy changes in coming months...This week's Fed meeting does not have economists expecting a boost in the Funds Rate, even though last week's inflation figures could bring a hike sooner than the two years the Fed wants to keep the rate at its super low level. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.


Current Fed Funds Rate: 0%–0.25%

Probability of change from current policy:

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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.






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Home and Wealth Newsletter - 9-14-11

Most Tax Credits for Green Home Improvements to Expire Soon!

Federal tax credits for most energy-efficient home improvements are set to expire at the end of 2011. Experts say they won't be extended. Purchase and installation must be this year, so you need to start projects no later than October or November.


Products and projects that qualify for the federal tax credit may be found at:
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index
Rebates and tax credits are also offered by states and these incentives can be searched at:
http://www.dsireusa.org/


The maximum federal tax credit is $500 and the amount varies depending on the product. But tax credits are often better than deductions, which only reduce your taxable income. Tax credits reduce your total tax liability, so it's like getting money back from the IRS.


Plus, energy-efficient upgrades save you money year after year. Insulation can reduce air leakage 20% to 30%, saving about $220 a year. New windows can save up to $500 a year. A new air conditioner is typically 30% more efficient than a 10-year-old one. New ductwork, central air cooling and water heaters are also very cost-effective improvements.


For bigger green projects, federal tax breaks are available until 2016! Examples include solar energy systems, geothermal heat pumps, small wind turbines and fuel cells. These may earn a tax credit worth up to 30% of the cost, with no dollar limit. For more information, check the Energy Star website: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index


Check the websites above for eligible projects. And always consult with a tax professional before proceeding with expenditures that have tax implications.


PS Thinking of upsizing, downsizing or refinancing to take advantage of today's affordable home prices and historic low mortgage rates? Please call or email us now to discuss your situation.


We're always glad to answer any questions.... Have a great day!
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.

Inside Lending Newsletter - 9-12-11

>> Market Update



QUOTE OF THE WEEK..."The lure of the distant and the difficult is deceptive. The great opportunity is where you are."--John Burroughs, American naturalist and essayist


INFO THAT HITS US WHERE WE LIVE...The great opportunity now is for home buyers to get a mortgage at an historically low rate. Freddie Mac reported national average mortgage rates set new record lows last week. But according to most observers, buyers shouldn't expect further rate dips. Lenders are seeing plenty of loan volume, so they don't have to lower pricing to get more activity.


Opportunity was also one of the themes in Fannie Mae's August National Housing Survey, where 69% of Americans polled say now is a good time to buy a home. And in spite of all the talk about more price declines, people expect home prices to dip only 0.5% in the next year. This is why some observers feel we're at a price bottom now. A strong 46% of Americans expect rents to go up in the next year, so that should motivate purchases as well.


BUSINESS TIP OF THE WEEK...Business school researchers found that the businesses able to survive economic downturns were ones who continually changed in response to the business climate, adapted to the headwinds and constantly tried new ideas.


>> Review of Last Week


CONTINENTAL DRIFT...In four days of stock trading, the Dow drifted down for the sixth week out of the last seven, all because of financial dramas on the European continent. Europe's Central Bank President failed to offer any plan to stimulate growth following the downward revision to his GDP forecast for the region. Friday there was talk that Greece might default on its debt over the weekend. On our shores, news that weekly initial jobless claims are still above 400,000 didn't help matters either.


Even a couple of surprisingly good U.S. economic reports couldn't overcome all these bad vibes. The August ISM Services Index was UP, to a better-than-expected 53.3, showing expansion in the non-manufacturing sector responsible for about 85% of our jobs. Following this, it was reported that the July Trade Deficit shrank, thanks to a $6.2 billion INCREASE in exports, which are UP 15.1% in the last year, ahead of imports, up 13.6%.


For the week, the Dow ended down 2.2%, at 10992; the S&P 500 was down 1.7%, to 1154; and the Nasdaq was down 0.5%, at 2468.


Friday the bond market saw a huge flight to safety by investors motivated by those rumors of a weekend Greek default. A government spokesman in Athens said that wouldn't be so, but Wall Streeters opted for sleeping undisturbed until Monday. The FNMA 3.5% bond we track closed Friday at $102.03, up .81 for the week. Mortgage bond prices were up and, as mentioned above, national average mortgage rates set new record lows.


DID YOU KNOW?...The CPI inflation indicator measures the change in the cost of a fixed basket of products and services like housing, food and transportation. The Core CPI favored by the Fed excludes food and energy prices because of their monthly volatility.


>> This Week’s Forecast


This week began with the observance of the 10th anniversary of the September 11 terrorist attacks. Our thoughts are with all those who lost their lives and with their families, whose lives were forever changed.


INFLATION, RETAIL, MANUFACTURING...Wholesale inflation is expected to be well under control in Wednesday's Producer Price Index (PPI) and Core PPI readings for August. Thursday, the critical Consumer Price Index (CPI) and Core CPI inflation measures are also forecast well within the Fed's target range. August Retail Sales should still show consumers doing their part, although sales growth is predicted to be less than July's.


Manufacturing is expected to be down a tad in the August Industrial Production and Capacity Utilization readings. And the Empire Manufacturing Index for New York and the Philadelphia Fed Index should still show contraction in those regions, although less than in the prior month.


>> The Week’s Economic Indicator Calendar


Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.


Economic Calendar for the Week of Sep 12 – Sep 16

>> Federal Reserve Watch



Forecasting Federal Reserve policy changes in coming months...Economists see a hike in the Funds Rate as the farthest thing from the Fed's collective mind, clear through the first half of 2013. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

Probability of change from current policy:

 
 
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.






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Inside Lending Newsletter - 9-6-11

Please note: We all know mortgage rates are extremely low and refinance activity has increased; however, our primary focus is, and always will be, on providing professional, caring service to our partners. Thank you for trusting us to get the job done for you and your clients.


>> Market Update


QUOTE OF THE WEEK..."Believing in progress does not mean believing that any progress has yet been made."--Franz Kafka


INFO THAT HITS US WHERE WE LIVE...Major progress has yet to be made in the housing recovery, but we can keep believing in it, since the data isn't all negative. For example, Pending Homes Sales (contracts on existing homes) were down 1.3% in July, but were UP 2.4% in June, so Existing Home Sales should be up for August. In addition, July's reading was UP 14.4% over last year. The National Association of Realtors chief economist said, "rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge" bode well for real estate.


The latest Case-Shiller National Home Price Index reported home prices UP 3.6% in the second quarter compared to the first, though still down 5.9% from a year ago. This puts home prices at the level they were in early 2003. The 20-city composite index was UP 1.1% for June, but down 4.5% versus last year. Best of all, none of the 20 cities posted monthly declines in June and 19 out of 20 showed increases. Also, data aggregator and analytics firm CoreLogic reported home prices up in July for the fourth month in a row.


BUSINESS TIP OF THE WEEK...Be prepared to succeed when the chance presents itself. We can't control when an opportunity will happen, but we can control how well we're prepared for it.


>> Review of Last Week


NO JOBS...No new jobs were added to payrolls in August, according to the national Employment Report released Friday. That was all investors needed to hear to start a stock selling spree, as the Dow lost 253 points for the day and ended down a fraction for the week. Jobs are important to the health of the housing market, but real estate is local. So earlier in the week it was encouraging to see the Bureau of Labor Statistics report that unemployment rates in July fell, compared to a year ago, in 69% of the 372 metro areas they track.


A mix of good and bad news continued. The Consumer Confidence Index for August hit its lowest level since April 2009. But the August ISM Manufacturing Index came in better than expected, a tick above 50, still indicating expansion. Final Q2 Productivity was down a trifle, but Personal Income was up for July. And Core PCE inflation (excluding food and energy) was well within the Fed's target range, up only 1.6% since last year.


For the week, the Dow ended down 0.4%, at 11240; the S&P 500 was down 0.2%, to 1174; and the Nasdaq was flat, at 2480.


The weak jobs report, combined with continued concerns over European sovereign debt, had investors scurrying to the safe haven of bonds, sending prices higher. The FNMA 3.5% bond we're tracking closed Friday at $101.22, up .97 for the week. With mortgage bond prices up, rates were down, as national average mortgage rates stayed at or near historic lows.


DID YOU KNOW?...This week's Fed Beige Book is a summary of economic conditions in each Federal Reserve region around the country. It's an indicator of what the central bank may do at its meeting in two weeks.


>> This Week’s Forecast


HAPPY LABOR DAY!...All the best to you this Labor Day, as we honor the contribution that working men and women make to our country.


The financial markets are closed today and the rest of the week is light on economic news. ISM Services should stay above 50, showing modest expansion in this sector of the economy, which accounts for about 85% of our jobs. Initial Unemployment Claims are expected to hold just above 400,000, not where they should be, but well below their worst levels. The July Trade Balance is forecast to shrink a bit with more export activity from U.S. firms.


>> The Week’s Economic Indicator Calendar


Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.


Economic Calendar for the Week of Sep 5 – Sep 9

>> Federal Reserve Watch



Forecasting Federal Reserve policy changes in coming months...Since the Fed announced the Funds Rate should stay near zero through the first half of 2013, no one is predicting any hikes. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.


Current Fed Funds Rate: 0%–0.25%

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