What Capital Markets employee hasn’t dreamed of being a rodeo clown? “They put themselves in the line of danger every time they go to work. With names like Shane, Flint, Cody, Scooter, and Tex, they evoke the nostalgia of the old west. Rodeo clowns make perhaps $100 to $225 for a show, usually setting their own price based on travel expenses. Rodeo clowns apprentice at local, small rodeos and at youth rodeo events, and attend clown training schools, which hold training camps across the southwest and in Colorado, Montana, and Kansas - big rodeo states. Or they may start out as cowboys first, and become bullfighters later. Coors sponsors a “Man in the Can Award”, a great honor to have on your clown resume.” Or a Secondary Marketing resume.

Bank stocks got slammed yesterday as investors and analysts worried that worsening housing and credit problems could claim more banks after the failure of IndyMac. Suntrust, National City, Zions Bancorp, Washington Mutual, Sovereign Bancorp, and KeyCorp grabbed the headlines. Trading in National City shares was briefly halted Monday amid a panic-driven plunge before the company tried to quell what it called market rumors, and fell 25%. WaMu shares were also down over 25% in one day. M&T Bank Corp., of Buffalo, N.Y., shares fell 16% yesterday. SunTrust sank 8.6% Monday, and is down 55% this year.

Speaking of banks in the news, two of Canada's biggest banks are following in the footsteps of ING Direct Canada by immediately purging 40-year mortgages from their product line-ups in the wake of the federal government's decision to toughen mortgage rules. Bank of Montreal was first to make that announcement, noting the maximum amortization will be 35 years, and Canadian Imperial Bank of Commerce issued a similar statement a short time later.

HUD has issued Mortgagee Letter 2008-16 which implements risk-based pricing for upfront and annual mortgage insurance premiums (MIP) on FHA loans.

The Fed approved a plan Monday that would crack down on dubious lending practices. The Fed’s plan would bar lenders from making loans without proof of a borrower's income, require lenders to make sure risky borrowers set aside money to pay for taxes and insurance, restrict lenders from penalizing risky borrowers who pay loans off early (prepayment penalties are banned if the payment can change during the initial four years of the mortgage, or a penalty can't be imposed in the first two years of the mortgage), prohibit lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value. Other practices also would be clamped down on. Lenders, for instance, have to credit a mortgage payment to the homeowner's account on the day it is received. And, brokers and others are forbidden from "coercing or encouraging" an appraiser to misrepresent the value of a home. Much will hinge on effective enforcement. The plan would apply to new loans made by thousands of lenders, including banks and brokers, not current loans. Those different lenders fall under a patchwork of regulators at the federal and state levels. So it will be up to each of these authorities to enforce the new provisions.

Doing any business in Connecticut? The State of Connecticut enacted HB 5577 - Nonprime Home Loan Restrictions, Foreclosure Restrictions, Lender/Broker/Originator Licensing Requirements, Revisions to Anti-Predatory Lending Law, and Appraiser Influence. HB5577 includes, among other things, the establishment of a new category of “nonprime home loans” and places restrictions on their origination, including ability to repay requirements. It establishes several new foreclosure requirements, including a foreclosure mediation process. Licensing requirements for mortgage lenders, mortgage correspondent lenders, mortgage brokers, and loan originators are amended, including consumer protection provisions for licensees and combining first and second mortgage licenses.

We had some important economic news out today. The Producer Price Index, expected to increase +1.3%, was +1.8%. The core PPI, useful for folks that don’t eat or drive, was expected +0.3% and came out at +.2% - slightly better. Producer Prices for the last year are +9.2%, the largest increase since 1981! June Retail Sales, expected +0.4% overall, were only +.1%, so analysts believe that the Fed stimulus checks didn’t have quite the impact previously thought. Auto sales were -3.3%, the biggest drop in over two years, and are down almost 10% versus a year ago when loan agents were out buying Navigators and Expeditions. The July Empire manufacturing index, expected +0.7 points, went from -4.9 from -8.7, better than consensus expected. The components generally back up the headline as orders and shipments both improved. Employment, however, deteriorated. Ahead we have May business inventories, which are expected to show another +0.5% increase.  Fed Chairman Ben Bernanke will testify before the Senate Banking Committee on monetary policy and the economy at 10AM EST. After the news mortgage prices are a tad better, and the 10-yr is at 3.84%.

A man’s wife had been slipping in and out of a coma for several months, yet he had stayed by her bedside every single day.  One day, when she came to, she motioned for him to come nearer. As he sat by her she whispered, eyes full of tears, "You know what? You have been with me all through the bad times. When I got fired, you were there to support me. When my business failed, you were there to support me. When my business failed, you were there. When I got in a car wreck, you were by my side. When we lost the house, you stayed right there. When my health started failing, you were still by my side. You know what?"
What dear?" he gently asked, smiling as his heart began to fill with warmth.
"I think you're bad luck, get the heck away from me....."

Rob