Yesterday the Conference Board announced that Consumer Confidence dropped to 49.3 in June from 54.8 in May. Based on that alone, you would believe that the economy is not out of the woods yet – which is probably true. The S&P/Case-Shiller Home Price Index of 20 U.S. Cities decreased 18.1% in April from a year earlier following an 18.7 percent drop in March. But the measure was down 0.6 percent in April from the prior month, the best performance since June 2008, and eight of the 20 cities showed an increase in prices from March. In the last 12 months the worst performers were Phoenix (-35%), Las Vegas (-32%) and San Francisco (-28%). In more news, the Chicago Purchasing Managers Manufacturing Activity index rose to 39.9% in June from 34.9% in May, although a reading below 50 indicates a continued contraction.

Although the 10-yr yield is at a 1-month low, why aren’t rates lower? Well, as has been mentioned, not only is the government selling lots of bonds (supply goes up, so unless demand goes up prices will go down, and thus rates move higher) but there are also fears that a big increase in debt-fueled government spending will push up inflation. Tomorrow we have the Employment report, which is predicted to show Non-farm Payrolls down 363,000, with the unemployment rate hitting 9.6%, already at the highest level in more than 25 years. Today we have Construction Spending and Institute of Supply Manager's Survey, and ahead of those numbers the yield on the 10-yr is at 3.58% and mortgages are worse by .250 in price.

Things slow at your lock desk? With these higher rates, mortgage applications fell last week by the most since February. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan was -19%, with the refinancing gauge down 30 percent, and purchases down 4.5 percent.

In other business/moral news, Russia closed down its casinos overnight as gambling was banned nationwide, which may impact over 300,000 workers. According to the Reuters story, “Vladimir Putin, now prime minister, came up with the idea in 2006 when he was president after the Interior Ministry linked several gaming operations in Moscow to Georgian organized crime. The Kremlin plans to restrict gambling to Las Vegas-style gaming zones in four rarely visited regions deemed to need investment, including one near the North Korea border, but nothing has been built and critics say the zones will fail. Though gaming establishments knew the shutdown date for at least a year, few thought the government would go through with it, but officials moved in overnight to close them down.”

Starting today, Wells Fargo wholesale is offering the Freddie Mac Relief Refinance Mortgage and DU Refi Plus programs in combination with the High Balance Conforming Loan programs.

How is the mortgage relief program going? The Treasury Department has approved three more firms for its mortgage relief program: National City Bank of Miamisburg, Ohio; Technology Credit Union of San Jose, Calif., and Citizens First Wholesale Mortgage Co. of The Villages, Fla. This brings the number of companies participating in the mortgage effort to 23 with the total amount authorized for all of the firms rising to $17.98 billion out of a maximum of $50 billion the government has said it could spend on this program. The money is being provided to support the government's effort to combat a wave of mortgage foreclosures by giving incentives for homeowners to modify their existing mortgages.

Finally, this from the latest issue of “Women's Health”:
“Do you have feelings of inadequacy? Do you suffer from shyness? Do you sometimes wish you were more assertive?
If you answered yes to ANY of these questions, ask your doctor or pharmacist about Margaritas.
Margaritas are the safe, natural way to feel better and more confident, about yourself and your actions.
Margaritas can help ease you out of, your shyness and let you tell the world that you're ready and willing to, do just about anything.
You will notice the benefits of Margaritas almost immediately and with a, regimen of regular doses you can overcome any obstacles that prevent you, from living the life you want to live.
Shyness and awkwardness will be a thing of the past and you will discover many talents you never knew you had. Stop hiding and start living with Margaritas.
Margaritas may not be right for everyone. Women who are pregnant or, nursing should not use Margaritas. However, women who wouldn't mind nursing or becoming pregnant are encouraged to try it.
Side effects may include: Dizziness,  nausea,  vomiting,  incarceration, loss of motor control, loss of clothing, loss of money, loss of virginity, table dancing, headache, dehydration, dry mouth, and a desire to sing Karaoke,
The FINE PRINT on bottles says: WARNING: The consumption of Margaritas may make you think you are, whispering when you are not. The consumption of Margaritas may cause you to tell your friends over and over again that you love them. The consumption of Margaritas may cause you to think you can sing.
WARNING: The consumption of Margaritas may make you think you can, logically converse with members of the opposite sex without spitting.”

Rob

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