What a great question. Last week Retail Sales was surprisingly strong, up 0.6%, but the University of Michigan Consumer Confidence Index Fell to 82 - the lowest since August 2006 as the outlook for housing worsened. The Producer Price Index was stronger than expected, indicating inflation is still a concern, yet house prices continue to slide in many areas. Unemployment is low, and many companies are looking for workers (I can’t walk by a Starbucks without thinking about turning in an application!), yet foreclosure rates are climbing because borrowers can’t afford their payments. Tomorrow we get another clue with the Consumer Price Index, but given that unleaded gas is once again above $3/gallon has led me to tell the kids that Christmas will be slim this year… It hasn’t helped, and this could point to lower rates eventually, that there has been positive overall job growth but all of that growth attributable to three employment categories: education and health services, food service and drinking places, and government (Federal, State, and Local).

Continuing on, mortgage prices have improved a little this morning (and the 10-yr is at 4.66%) but were slightly worse yesterday after a report showed manufacturing in New York reached the highest level in three years (aren’t we a service economy?). The factory report adds to expectations that the Fed will stay on hold. We also saw an $80 billion plan over the weekend to revive the credit markets: Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. agreed to start a fund to help revive the asset-backed commercial paper market. The high-stakes plan to rescue banks from losses on mortgage securities amounts to a big bet that this group can persuade investors to pour more money into the credit market. Companies depend on commercial paper to finance day-to-day expenses like payroll and rent, although we’re already seeing the jumbo market improve slightly. Pessimists thought that the “super-SIV story is a bit much for the market to handle...we have some risk that needs to find a home; none of the existing firms want that risk...so we will create a new ‘firm’ to become the buyer of last resort, capitalized from the firms that created the products, but don't want them at current prices.” Are they trying to create a buyer out of thin air?

LION, Inc. announced that it is selling TRMS (Tuttle Risk Management) to Compass Analytics for slightly over $1 million. It is believed that the name of the new firm will not be a combination of company names (“Tut-a**”) but instead Tuttle will assume the Compass name in maintaining the client base.

Sierra Pacific, known primarily of their wholesale lending, is closing their Marin County branch, “due to the current market conditions”, and will be transferring operations to another site at the end of October.

Ginnie Mae announced last night that starting December 1, 2007, all FHASecure loans will fall into the GNMA II program but they will be pooled separately as “specifieds” and will not be TBA deliverable. But what is an “FHASecure” loan? President Bush, on August 31st, announced that HUD's Federal Housing Administration (FHA) will help families avoid foreclosure by enhancing its refinancing program. Under the new FHASecure plan, FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing. In addition, FHA will implement risk-based premiums that match the borrower's credit profile with the insurance premium they pay - i.e., riskier borrowers pay more. The press release can be found at http://www.fha.gov/press/2007-08-31release.cfm The FHASecure program was conceived as a way for borrowers that are having trouble making their post-ARM reset payments to refinance into a fixed-rate FHA loan. You can also visit http://www.fha.gov/about/fhasfact.cfm. Eligible homeowners must have a non-FHA insured ARM that has reset, sufficient income to make the mortgage payment, and a history of on-time mortgage payments before the loan reset.

Every now and then, in one of those lists of factoids you never knew, you'll read that Leonardo da Vinci invented scissors. Not true. Scissors - or something darn close to them - have been around for thousands of years. Scissors were used in ancient Rome, and ancient Egyptians are shown in hieroglyphics using scissor-like objects. It wasn't until 1761, however, that Robert Hinchliffe of Sheffield, England first used cast steel to make scissors, and that's when their popularity really took off.