Growing Number of Cities Face Bankruptcy

http://video.foxbusiness.com/g4472539/growing-number-of-cities-face-bankruptcy?playlist_id=87185

Recipe of the week

http://allrecipes.com/Recipes/Desserts/Cookies/Christmas-Cookies/Main.aspx

Quote(s) of the day.

"Once again we find ourselves enmeshed in the Holiday Season, that very special time of year when we join with our loved ones in sharing centuries-old traditions such as trying to find a parking space at the mall. We traditionally do this in my family by driving around the parking lot until we see a shopper emerge from the mall, then we follow her, in very much the same spirit as the Three Wise Men, who 2,000 years ago followed a star, week after week, until it led them to a parking space."
Dave Barry 

"In the old days, it was not called the Holiday Season; the Christians called it 'Christmas' and went to church; the Jews called it 'Hanukka' and went to synagogue; the atheists went to parties and drank. People passing each other on the street would say 'Merry Christmas!' or 'Happy Hanukka!' or (to the atheists) 'Look out for the wall!'"
Dave Barry 

"Christmas is a time when everybody wants his past forgotten and his present remembered. What I don't like about office Christmas parties is looking for a job the next day."
Phyllis Diller 

"Christmas at my house is always at least six or seven times more pleasant than anywhere else. We start drinking early. And while everyone else is seeing only one Santa Claus, we'll be seeing six or seven."
W.C. Fields 

Pic of the day

Realtor Christmas Video

<object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/aAGq1u5R9mw?fs=1&amp;hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/aAGq1u5R9mw?fs=1&amp;hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>

Note from Ashley @ Starkey

Last Week in Review: The Fed met, and Congress passed the Tax Cut Bill. But what do both of these mean for home loan rates? Forecast for the Week: Housing, inflation, and jobs news - all in a holiday shortened week. View: As you unwrap gifts this holiday season, don’t throw the wrapping paper in with your Yule Log... find out why, and other tips on keeping your holiday season safe and fun.

Last Week in Review

"All good things must come to an end..." or so the popular saying goes. And right now, many people are wondering if this sentiment holds true for the historic low rates we’ve seen this year. Here’s what last week’s news suggests. First, it’s important to understand that home loan rates are based on Mortgage Backed Securities, which is a type of Bond. Bonds typically help provide some built in "assistance" when the nation is suffering economic headwinds. For example, negative economic news serves to help Bond prices improve and rates decline, including home loan rates. This is helpful to have when the economy is struggling, as buyers of all products - including homes - need the extra incentive of low rates to be encouraged to buy. But now, the sharply higher expectations for future economic growth has caused rates to climb - particularly including home loan rates, since the Fed announced its second round of "Quantitative Easing" or QE2 on November 3rd. With QE2, the Fed will purchase $600 Billion in Treasury Securities through mid-2011 to keep our economic recovery on track. But is there any likelihood rates can rebound? Many experts expect that home loan rates will continue to move higher over time because: At its meeting last week, the Fed left the door open for further QE programs if our economic recovery requires which, like QE2, could hurt Bonds and home loan rates.. Congress passed the $858 Billion Tax Cut Bill, and while this is a good economic stimulus, in the short run it adds to the ever-growing deficit - also bad for Bonds and home loan rates. Last week’s Producer Price Index and Consumer Price Index Reports showed that the Fed appears to be on track with their goal of stimulating a bit more inflation.. Inflation erodes the value of the fixed return provided by a Bond, which causes home loan rates to rise. It’s important to understand that rates don’t simply rise in a straight line. In fact, Bonds and home loan rates did have a late-week rally last week, and that trend of rates worsening with improving dips here and there like we saw last week may be what’s in store for us in the weeks and months ahead. At the end of the day, the ongoing and potential addition of further stimulus from the Fed, combined with the stimulus from the tax cuts, will make it tough for Bonds and home loan rates to return to the levels seen earlier this year. But the good news is that home loan rates are still extremely attractive right now. If you have been thinking about purchasing or refinancing a home, call or email me now to get started. Or forward this newsletter on to someone you know who may benefit from today’s historically low rates.

Forecast for the Week

It will be a holiday shortened week, with the Bond Market closing at 2:00pm ET Thursday and both the Stock and Bond Markets closed Friday in honor of the Christmas holiday. But there will be plenty of action first, including: A double dose of housing news with Wednesday’s Existing Home Sales Report and Thursday’s New Home Sales Report. Wednesday also brings a read on the economy with the Gross Domestic Product Report, which is the broadest measure of economic activity. Big inflation news comes on Thursday with the Personal Consumption Expenditure (PCE) Index, which is the Fed's favorite gauge of inflation, plus there’s also the Personal Income and Personal Spending Reports, which give us some information on the consumer perspective of the economy. Thursday’s Initial and Continuing Jobless Claims Reports will also tell us if the good trend continues - last week’s Initial Claims was the second lowest number seen during 2010, and also the third decline in four weeks. 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, Bonds and home loan rates rallied at the end of last week. Now would be a great time to call or email me if you have any questions about your situation! ----------------------- Chart: Fannie Mae 4.0% Mortgage Bond (Friday, December 17, 2010)

The Mortgage Market Guide View...

Make Your Holiday as Safe as it is Happy The holiday season is a special time of year, but the Consumer Product Safety Commission (CPSC) wants to remind everyone that it can also be dangerous. So the CPSC has issued a number of safety tips for the holidays and a holiday safety video to help keep families healthy, safe, and happy this season. Here are just three of the important tips that the CPSC posted on its website: 1. Choose Age-Appropriate Toys. Look at the age recommendation on the toys you are choosing and match that recommendation to your child. Avoid toys with small parts for children younger than three-years-old. Those small parts can cause a child to choke. For children under six-years-old, avoid play sets or building toys with small magnets. A child can swallow those magnets, which can result in a serious injury or even death. Starting at a young age, teach your children not to put toys in their mouths. 2. Gear Up. If sports-related gifts such as ride-on toys, bicycles, skates or scooters are on your gift list or around your house, make sure to include helmets that are sized to your child’s head and other appropriate safety gear. And then, make sure your child wears the gear properly EVERY time he or she uses the toy or sports equipment. 3. Plastic Wrap. Keep a trash bag at your fingertips while your kids are opening presents. That way, you can immediately throw away plastic wrappings and other toy packaging before they become dangerous playthings. As an added bonus, it makes your cleanup faster, too. Plus... Here are two bonus tips from the CPSC’s Twitter account: "Heated rooms rapidly dry out live trees. Be sure to monitor water levels and keep the tree stand filled with water." "Never put wrapping paper in the fireplace. It can result in a chimney fire." If you ever have questions about the safety of a toy or product, visit the CPSC’s website at http://www.cpsc.gov/onsafety/. You can also follow the CPSC on Twitter at http://twitter..com/OnSafety and even watch safety videos on YouTube at http://www.youtube.com/USCPSC.

Quote(s) of the day.

A peace is of the nature of a conquest; for then both parties nobly are subdued, and neither party loser.
William Shakespeare 

A people free to choose will always choose peace.
Ronald Reagan 

An eye for an eye only ends up making the whole world blind.
Mohandas Gandhi 

Complete peace equally reigns between two mental waves.
Swami Sivananda 

Even peace may be purchased at too high a price.
Benjamin Franklin