Mahatma Gandhi, as you know, walked barefoot most of the time, which produced an impressive set of calluses on his feet. He also ate very little, which made him rather frail and, with his odd diet, he suffered from bad breath. This made him... a super calloused fragile mystic hexed by halitosis.

How many people live in the United States these days? About 301 million. (There were 177 million when I was born.) California has 37 million of them gaining about 300,000 last year and clocking in as the most populous state. Nevada is the fastest growing state but only has 2.6 million people living there. Michigan and Rhode Island were the only two states that declined in population. Lastly, Louisiana, whose population declined after Katrina hit in 2005, increased by 50,000.

In between watching Jake Shimabukuro play “Let’s Dance” on the ukulele or 50 Cent’s “Candy Shop” on YouTube, you should check out Freddie Mac’s latest hit. They have launched an anti-fraud video on in an effort to warn troubled borrowers about the dangers of falling victim to con artists promising to help them avoid foreclosure through various fraudulent workout options. "With fraud reports on the rise, we are using every communication channel out there to warn borrowers about these fraudsters, and urge borrowers to call their lenders when they fall behind on their mortgage," said a Freddie Mac spokesperson. Freddie Mac's anti-fraud video can be found at http://www.youtube.com/AvoidFraud

In a good example of what can happen when states adjust their lending laws, Indymac ceased lending in Massachusetts. Indy’s notice said, “Please be advised, the Massachusetts Attorney General has instituted the Unfair and Deceptive Practice rule without the benefit of legislation, which will take effect on January 2, 2008. Under this new ruling, Indymac cannot assess its risk as a lender in a brokered transaction or its liability with respect to purchasing loans due to the lack of clarity of the rules and the Attorney General's office reticence for providing sufficient clarity. As a result, Indymac has decided to exit the loan market in Massachusetts and will no longer handle transactions through a Mortgage Broker/Seller or purchase loans.”

In another blow to brokers, Nat City sent this out Monday: “We have made the decision to exit the Wholesale lending business. As of 2:30 PM Eastern Time on Monday, December 31, 2007, we will stop taking registrations. We will stand behind our commitments and honor previously granted approvals in the pipeline, and will continue to have support staff to complete the processing of your pending registrations and locked pipeline. While this decision was not taken lightly, this business line no longer fits with National City's future mortgage business strategy. National City Mortgage will continue to offer a comprehensive suite of mortgage products that will satisfy most consumers’ needs. We will continue to originate loans through our Retail Lending channel via our retail mortgage branches as well as through National City’s retail bank branches.”

In other wholesale news, HSBC cut their maximum LTV for all Jumbo Accelerated Approval ARM loans to 80%, eliminated subordinate financing for them, raised their minimum FICO scores to 720, and will only accept manufactured housing under their FHA & VA programs.

This morning, the yield on the 10-yr is down to 3.94%, continuing their rally from yesterday. (Yesterday we had a weak ISM manufacturing index number, much worse than expected. It dropped below the key 50.0 level down to 47.7, indicating manufacturing contraction.) The MBA’s mortgage application index was released this morning and showed that application activity fell 12% last week - purchase applications fell to the lowest point in four years. We also had the weekly jobless claims data that showed a drop of 21k, partially attributed to the holidays but also reminding us that the labor picture continues to be somewhat strong. Tomorrow we will see the release of the December jobs report.

A gorilla walks into a bar and asks for a shot of bourbon and puts a twenty dollar bill on the bar. The bartender doesn't know what to do so he asks his boss. His boss says, "Take the twenty and give him a shot."

Bar tender pours the gorilla a shot and takes the twenty.

He says "We don't get many gorillas in here." 

The gorilla replies, “I'm not surprised at $20 a shot."

Rob