It Was A Dark And Stormy Week for Mortgages

This was a very difficult week.  As most of you know, I’m involved heavily in several other projects besides the Chris Jones Group, though that’s the only one that pays.  Some weeks, the Chambers of Commerce I belong to have unusually heavy demands, and some weeks it’s the American Cancer Society; this week it was the Church and the Republican Party.  Last night I was elected to a post as Legislative District Chair for District 56, so there went the last 4 free hours of my average week.

Always nice to win, though.

Looking at the markets, although there is no good economic news anywhere that I can see, the long bond has dropped substantially the last couple of days.  We’re at 4.33 on the yield, meaning that 30-year rates have risen about 1/8 since I last reported on them.  Roughly, for good credit loans with some down (or equity position), we’re looking at 5.875%, which is still very, very good, but not as good as it has been periodically for the last three years.

Another trend is turning in a positive direction, though, and that’s new construction profits in Utah.  We are working with three different builders at the moment, and each of them is reporting solid margin (15%+) on new construction in the $225-$250k range.  We have also secured an investor that opens the way to doing some 100% investor construction loans, a previous impossibility.  We’d love to work with you on one of those, and right now the market for those projects is very good and improving.

Putting the previous paragraph in English: we can take someone with good credit and a decent job, get him a loan to build a house on spec, guarantee the long-term financing for the project, build the house, and help him sell it for 10% profit (or so).  On a $250,000 house, that would be profit of $25,000.  Net.  If you’d be interested in some of that about the time your Christmas credit cards come due, you should probably email me.

Congratulations to Ray on the glorious triumph of the Colorado State Rams.  Since he does not remember his Alma Mater’s fight song, I have thoughtfully linked to it here.  I’m a nice guy.

Last week’s predictions were not so accurate, which is what tells me I have what it takes to be an economist, or perhaps a weatherman.  To keep in practice, I’ll make some more:

BYU beats SDSU 37-20
Boston and NY finish the season tied with Cleveland, and we get two one-game playoffs.
New Mexico beats TCU 31-20
Michigan beats Michigan State on a last-second field goal
No major news commentator gets any sort of clue what Bill Bennett actually said

If you get some time, please read Peggy Noonan’s excellent column on how Katrina destroyed much more than New Orleans.

Have a good weekend.  Please.

Stuck on Stupid

The bond market went up, now it’s down (hard), but we continue to trade fairly narrowly between 4.15 and 4.3.  That means 30-year rates under 6%, which is all anyone really cares about.

Sorry, but I don’t care much about any of that today.

On to other things.  

Random thoughts:

Saturday I ran a 5k in 29:34, my best time ever.  Two months ago I couldn’t run an entire 5k.  Then Tuesday I ran a mile in 7:26.57 (two months ago I broke 10 minutes and was thrilled).  I don’t seem to be able to cut that last 15 pounds off, but it’s nice to know that there have been some improvements.  Maybe next 5k I can beat my pregnant wife (29:22) or my 11-year-old son (28:15).  A guy can dream.

Best line of the new millennium: “You’re stuck on stupid.  I’m not going to answer that question.” – Gen Honore, to a reporter at a press conference in New Orleans.

Utah survived against Air Force despite absolutely quitting at the end of the game.  On one play, an Air Force receiver caught a pass over the middle and was trailed for almost 30 yards by a Ute defender who was just jogging along.  Coach Whittingham laid into the kid, who walked away down the sideline.  That, ladies and gentlemen, is a BAD sign.  Well, it is if you’re a Ute fan, but then if you are, you get what you deserve.

BYU is going to beat TCU this weekend.  It will be relatively close, say, 10-14 points, but the Cougars will win.

The Yankees are going to lose 2 of 3 this weekend and end up tied with the Red Sox going into the last week of the season.  I’ll make a new prediction then.

We’re in the process of doing a loan for a fellow that is currently in Chapter 13 bankruptcy.  And it looks like the loan will go.  We are also doing a construction loan for another client – nothing down, no income documentation, and non-owner-occupied.  Our new motto is “Remember, this is impossible, but we’ll do it anyway.”  This stuff is why.

The New Orleans refugees went from the Superdome to the Astrodome.  If Rita destroys the Astrodome, where do they go next?  The Kingdome?  The Metrodome?  Thunderdome?

Inc Magazine has a very good article on The Wisdom of Crowds, which is sitting here on my desk and which I have recommended before.

I bought a TV-tuner/video capture card for my PC the other day, and it now appears that with the addition of this $30 piece of hardware and a $30 DVD-authoring program I can use my PC as a TiVo – only I can not only record programs, I can burn them onto DVDs for permanent storage.  I can record all my old home movies and get them onto permanent media.  I can get rid of all my old VHS tapes, some of which are so old they will not last another 5 years.  Great stuff, technology.

Jen King Harris’s family is from Corpus Christi, so if you are a praying person (and I recommend it), would you please offer up a prayer for the King’s down in southern Texas?  We’ll give you updates through the weekend on how they’re doing.

Speaking of which, have a good one.

Cj

The Sound of One Hand Clapping

Well, today the market made a fool out of Greenspan and the geniuses at the Fed (with the exception of Mark Olson, bless him), and the gap between short term and long-term rates narrowed some more.  Why does this matter?  The inversion of the yield curve has never failed to predict a recession.  

Inverting the yield curve is a neat trick.  It requires the Fed, which is in charge of short-term rates, to believe that the economy is humming along and that inflation is a serious threat.  It also requires that about 46 gillion bond traders disagree, and continue to buy long bonds.

Tada!  The US bond market, circa 2005.

Yep.  The 10-year bond actually rose today, fairly strongly.  This indicates a couple of things: one, that bond traders are people, and since consumer sentiment is at its lowest level since the first 6 months of the Reagan Administration, bond traders like everyone else believe the economy is in trouble; two, that bond traders watch the news and can see that New Orleans, Gulfport, and Biloxi are missing, and that a newly-minted category 4 hurricane is about to strike the Astrodome, where all the refugees from the Superdome are living; and third, that bond traders can read the inflation reports, which at this point are about a paragraph long, and essentially say “it’s oil.  Nothin’ else here to look at.”

Further, the Fed indicates that it’s going to keep on raising rates.  That means another rate increase on November 1 (All Saints’ Day) and December 13.  As Ray points out, at that point the Prime Rate will be roughly 1.5% higher than the rate for a 30-year fixed mortgage.  Guess what?  We’ll do a 30-year fixed loan for you at 1 point below Prime!

The US has become a nation of idol worshippers.  I’m not talking here about the worship of Eva Longoria or the almighty dollar or the Ford Thunderbird.  I’m talking about the worship of Alan Greenspan and George Bush and heck, even city councilmen and mayors.  It’s as if nobody is willing to say sorry, dude, but if you want to do that you’re going to have to arrest me.  Greenspan says he wants to get “rates to a neutral point” before he retires.  Except for the sainted Mark Olson, everyone goes along.  We reached a neutral point in February.  But the Fed governors just nod and say okay to every increase.  And analysts across the country point out how smart the Fed is, so it must know what it’s doing.

Hooey.  The Fed is no smarter than any full-time bond trader.  It is galactically less smart than the entire world market of bond traders, almost all of whom are saying “what the *%#((&*&*#$%!?!?!  

I don’t trade bonds.  But I’m saying it too.

Drowning

Yeah, it's Monday.  Monday is the day I collect the 44 messages off the phone and the 141 emails and try desperately to slog through all the stuff people need me to do.  Forgive me the lack of substantive post.

 

Check out the blogroll on the right (little by little, we get this stuff figured out), and I'll see everyone tomorrow.

 

Cj

 

Mortgage Rates on the Rise - Thanks to China

The bond market has been hammered the last two days over fears that Greenspan will be raising the rate again next week and signaling that he is going to keep right on going.  Next week’s rate increase will make the Prime Rate 6.75%, or roughly 1 point higher than the 30-year fixed rate.  This is, in a word, nuts.  Greenspan is a moron.

While I realize that the plural of anecdote is not data, let me ask you out there – how many of you are suffering from a serious labor shortage in your industry?  Anyone?  No?  What evidence do you have that the economy is picking up speed?  Any?  No?  Guess what – nobody else does, either.  Consumer sentiment is at its lowest level since before the Clinton Administration.
The University of Michigan's sentiment index hit a 13-year low in September, but investors chose to focus on the fact that inflation futures have spiked in the past few sessions.
"One-year inflation expectations spiked from 3.1 percent to 4.6 percent, by far the highest reading since 1990," noted Stephen Stanley, chief economist at RBS Greenwich.
Inflation hurts bonds as it erodes the value of the fixed interest-paying investment.
-CNBC Report
Rising prices are supposed to indicate increased demand.  But in this case the demand has nothing to do with it – if you take prices exclusive of energy costs, they are flat and have been for months – since the price increases are simply crude-oil-related.  The increase in the price of crude has nothing to do with the US economy, and everything to do with the Pacific Rim, especially China, where the demand for petroleum is growing at a furious pace.

Therefore, this “inflation” has nothing to do with an increase in economic activity and in fact signals a serious threat of decrease, since the rise in energy prices is likely – certain, actually – to have a seriously depressive effect on spending.  Greenspan ought to be reacting to all this with a CUT in rates, not an increase, and I would welcome his being admitted to the hospital in a vegetative state sometime before he has a chance to completely destroy the economy by making the Prime Rate 7% in September.

Iowa Electronic Markets reads a 75% chance that the Fed will move up a quarter in September.  That’s the worst chance measured for any potential increase in two years, which ought to be comforting, but it isn’t.  The chance of a decrease in rate is forecast at zero.  IEM has a solid history of being pretty close to right about almost everything.

Sorry, folks.  I’m in a very bad mood.  Unless your name is Jim or Elizabeth or Stan, this isn’t your fault.  I have decided this is how I want to feel in response to certain negative stimuli.

Gas Prices and an Attempt at Non-traditional Thinking

So gas prices are at $3.00, essentially, and this led me to the following thought.  Premium gas is supposed to make your car run more efficiently and improve your gas mileage, no?  When regular was $1.00/gal and premium was 20¢ higher, it didn’t make much sense to buy premium, since there was no way anyone was going to get a 20% increase in gas mileage out of better octane.  But now gas is $3.00/gal, and the performance increase only has to be 7% before premium is a better deal.

So I’m trying it.  I got 374 miles on my last tank (15.28 gallons), or 24.51 mpg.  If I get 27.2 on this tank, I will have saved money by buying more expensive gas.  Try it yourself and let me know what happens.

Good News Needed

If you have good news – any kind of good news – I could use some.  

The Chris Jones Group Testifies Before State Legislature

Attached is the press release from my testimony this morning before the State Tax Reform Task Force. I grew up in Washington D.C. and politics is in the water, so to speak. It was gratifying to be asked to speak along with Mike Ostermiller, the Association Executives Committee Chair of the Utah Association of Realtors, John Butler, legal representative for the Church of Jesus Christ of Latter-Day Saints (the Mormons), and Laura Polochuk (sp?) of the AARP.

Since this state is absolutely technically avant garde, you can listen to my testimony here (you need RealPlayer). I am second in line, after David Spackman, and I start at about 5 minutes in. Following me (at 21 minutes) is Mr. Ostermiller, and I invite you to please listen to his remarks as well, especially the grilling he gets afterward from the committee, which in my opinion he thoroughly deserved. I'll have much, much more to say about this tomorrow. His testimony goes for roughly 35 minutes, and then at 55 minutes Mr. Butler speaks for the Church. His comments last about 12 minutes. He is followed at 1:08 by Laura. Other testimony follows. I can specifically recommend Mike Jerman’s testimony at 2:41 (these are NOT short meetings, folks). Mike is the Vice President of the Utah Taxpayers Association and one of the best financial minds in the state.

Na. I promised that I’d talk about the markets, Robin Hood, and a doctor on the Gulf Coast. Life has, of course, developed other things to talk about, so let’s get to it.

Markets

The markets are confused. Unemployment, which is one of the top two or three things that impacts bond rates, was up gigantically, but that was already priced into the market because of Katrina. The producer price index was also up .5%, which is a big move and indicative of inflation, but if you take out energy prices, there was no inflation at all. Quoting from CNBC:
Morning price gains made on grim jobless data were erased by a sharp increase in prices in the New York Fed's Empire State index, to 53.41 in September from 29.0 in August.
But the Philadelphia Fed survey set off a wave of selling in longer-dated debt, with the 30-year down more than a point in the afternoon, after it also showed a sharp rise in prices paid to 52.7 from 25.9.
The combined effect of the reports reaffirmed fears that spiking energy prices have filtered through to factories, offsetting the fact that actual factory activity in both regions stalled in early September.
Yeah. This is how these fellas write. Personally, I find the prose almost impenetrable. What it means is that fuel costs more so everything costs more. Why this is bad for bonds is a mystery, except that the Fed will no doubt interpret this as inflationary and raise its rate again. More evidence of the Fed driving markets instead of reacting to them. Not their job, I didn’t think, but as you already know, I have no love for the Fed.

Bottom line: prices are up on rates, and we’ve lost 1/8 on the 30-year since last week this time. We’re sitting at about 5.875%, give or take.

Robin Hood (1937)

Make no mistake: this is NOT the Kevin Costner bomb of 1991 or the sometimes-hilarious Robin Hood: Men in Tights of 1993. Both of those have underrated performances (the immortal Alan Rickman in 1991 and the immortal Man in Black himself, Cary Elwes, in Men in Tights), but little else to recommend them.

Not so the 1937 4-star classic. Starring the immortal Errol Flynn, featuring Olivia DeHavilland, Basil Rathbone, and Claude Rains (aka Captain Renault, Senator Joseph Harrison Payne, and the Phantom of the Opera), this is a tale with sharp writing, classic dialogue (“One of us? He looks like 3 of us!”) and great stunts. Ignore the swordplay (though some of it is pretty decent), and the rest of it is terrific. Absolutely terrific. It’s going to be available at any good video store, and you definitely ought to rent it and watch it with the kids or the significant other.

Note: I am partial to older films. They get much more slack than the new stuff. Just my personal bias.

Doctor Goodheart

Stan Tillinghast is a retired cardiologist who, when Hurricane Katrina hit, cashed in some miles for a plane ticket to Jackson, Mississippi, rented a car, and started driving until he came to people who needed his help. He started a blog, Dr. Goodheart (he means your heart, not his) to record his experiences. PowerLine has a great post on him, and his blog is at the link above. Many, many of my clients have expressed their wish that they could do something like this, and we’ve tried to design plans to help them get to the point where they can. It could happen to you. Let us help.

Mortgage Consultants Need Prayers Too

Ray is sick. If you pray, and I recommend it, pray for him. He prays for you, you know.

Wells’s paternal grandfather died late last week, so he’s out of the office, too. Heck, we could all use your prayers, since it looks like Jeanette is pregnant with #7. Due end of May, we think. Thanks for asking.

Bonds were up strongly today on tame inflation numbers. Quoting from CNBC:

The Producer Price Index report, a closely watched inflation indicator that measures prices at the wholesale level, rose 0.6 percent in August, compared with a 1 percent increase in July. Economists surveyed by Briefing had forecast a 0.7 percent boost in August.
The so-called core PI, which excludes food and energy costs, also came in weaker than expected, indicating that inflationary pressures are in check for now.
Bond investors fear inflation, since it erodes the value of their fixed-income investments.
But many analysts fear that inflation will jump in the aftermath of Katrina, which has driven up energy prices and may push prices on several construction materials higher to meet a jump in housing demand and infrastructure rebuilding needs.

Apparently I am one of many analysts. This would indicate, however, that there are some analysts that do not think that Katrina will increase prices and lead to inflation, and that’s really weighing on my faith in the financial profession. But of course, I lie. I never have had any faith in it. I say this in all charity, being one of the profession myself.

Bonds going up means rates coming down. In this case, coming right back down to where they were yesterday before the market opened. Since the move in the market is slight, I ought to explain again how “rates” move.

On the Docket Tomorrow

We’re going to discuss The Adventures of Robin Hood (1938), look at the market, and quote from a doctor that’s doing incredible things in the Gulf Coast region.

See you then.

Cj

Chris Jones Watch: today I am part of the media group that worked on the Sci-Fi Channel reincarnation of Battlestar Galactica. I can hardly express to you how proud I am to have done this.

Curious about the Chris Jones Watch?

See What I Mean?

I read Ms. Ochman's very excellent site every day (I have it on RSS), and lo, my first chance to trackback. This is her post from this morning. I thought it very applicable to mine of last night.

LA Power Outage Brought Down Many Sites Including This One

The LA power failure this afternoon brought down my web host and the thousands of sites they host, including my site, this blog and my email for many hours.

It sure doesn't take much to cause chaos. Not particularly re-assuring, is it.

No, I responded, it isn't very reassuring, even if you did spend two hours in the garden this morning harvesting peppers and tomatoes. I'm not kidding myself that I have left the grid, or anything. I am still terribly dependent on all sorts of things I neither construct nor understand.

Cj

What is Real?

Okay, so it's my father, but he writes great stuff. Here's his article on Labor Day.

Apropos of that - and note, please, that I am using the term correctly - when I was in the tech industry and my father was doing an affinity-marketing thing on the web on the east coast, we had a conversation about whether anything we were doing was real. By real we meant that it would continue, even for a day, if EMP destroyed the world's computer infrastructure. We concluded that we weren't, and that bothered me a lot.

I then read an article talking about The Discarded Image, and the conflict that led to the Bonfire of the Vanities and other reactions to the encroachment of escapist literature and art into the real world. I happen to be a fellow that thinks that great art and literature help us to see the real world more clearly, but that's not the point of this post. The point is that increasingly we live in a world that is lit by fluorescents, heard in .mp3 files, and seen through the 19" of a Sony, and that none of those things is real.

That was when I stopped being a man, and became a Hobbit. And like all Hobbits, I share a love of things that grow. I lost most of my use for power and money and glory and the trappings and neon of the world in America (and other places), and discovered - remembered, perhaps - that there is nothing so beautiful as a row of jambalaya peppers ripening in the sun and my family in the earth, weeding and caring for them.

Gordon's article about the real labor of Labor Day hits on a similar theme.

Of course, I blog about this. Irony, above all.

Chris Jones

Resident Magician

The Chris Jones Group

How Mortgage Rates Track Bond Markets - Unfortunately

September 12-

Holy….there’s a lot of information out there. I keep getting sucked into the blog vortex, thanks largely to Blogger.com and its ilk. And now I know all about RSS and Feedster and you name it, and frankly, I haven’t had this much fun on the internet since I learned HTML.

But that’s not why you come here. I should let you know that these articles now appear on three sites at the same time, at The Chris Jones Group main website, at The Chris Jones Group main blogsite, and at Mortgage Blog, the best mortgage blog on the ‘net, not that that is saying much. Each site has its own content as well as these posts, but they are common to all sites.

No economic news today means a flat market, except that bonds were off pretty substantially this morning on inflation fears. Well, folks, I think inflation is on its way, and there’s nothing the Fed can do about it. When you have food and water and gas and jet fuel and other shortages caused by the closing of one of the largest ports in the US, the prices of things will rise. This is Econ 101. Whether that inflation can or should have a larger impact that needs to be dealt with by raising short-term interest rates is debatable, but not very.

As we’ve stated here before, what the Gulf Coast needs to rebuild is not federal money, which will be mismanaged and wasted after being forcibly confiscated from other places, but short-term low-interest loans from the financial institutions directly connected to the community, possibly (with any luck) augmented by grants from private foundations using donated money. If Greenspan has a brain, he’ll stop raising the Fed Funds Rate until Spring at the soonest (of course, by then, he’ll be retired, and maybe the next fellow will not raise them at all. A guy can dream).

To explain again – when the Fed raises short-term rates, that makes ARMs less attractive, as the ARM rates are based on short-term bond rates. There is no one-to-one correlation, but the trends track. The fixed-rate mortgages (30 and 15 year, and increasingly often 40-year) track the 10-year bond, which is not as affected by Fed decisions. In fact, currently, as short term rates have risen long-term rates have not, and that squeezes the prices together. For instance, the 30-year rates are currently better than the 7- and 10-year ARMs, and very close to the 5-year and 3-year ARMs. This reduces financing choices in the mortgage market.

This combination of circumstances is not necessarily bad; if you like the 5-year ARM rate you can still have it, only for 30 years. But the spread between the rates is so small that one thing is certainly true – either the 30-year rate is too low or the 5-year rate is too high. Since the 30-year rate is based on the wisdom of the massed bond market, and the 5-year rate is based on Alan Greenspan’s hunch about inflation, I’d be betting on the 30 being right. This is not just because I recently finished reading the Wisdom Of Crowds, but that helped.

There Is No Good Mortgage Blog

September 9-

We’re putting the newsletter together this week (it goes out next Friday, thanks for asking), and the lead article is about blogs, what they are, and what they’re good for, and what our blog does that nobody else does.  That’s led to some research on blogs themselves and has led to some revelations.

One, there’s an incredible number of really entertaining blogs out there.  I especially like B.L. Ochman’s What’s Next Blog and Hinderaker, Johnson, and Mirengoff’s Power Line Blog, both of which I read every day, and although it isn’t really a blog in the traditional sense (it’s more of an e-newsletter) I love John English’s Jerms, which is the main source of my encyclopedic knowledge of entertainment happenings.  John happens also to be a client, and his wife Monica is one of the most talented birth coaches on earth.  I have this from a credible source.  Feel free to let me know what you like.

Two, there is no good mortgage blog.  No, now, really, there isn’t.  I have pretty high standards for material – I admit it – but boy, there’s nothing out there that does anything like what we do here, so far as I can find, and I am not new to the whole websearch thing, if you know what I mean, and I think you do.  There are lots and lots of sites that tell you what the rates are, and how You Too Can Get a Cheap Mortgage Right Now, but nobody that I can find blends the same level of financial analysis with a so-what-does-that-mean-to-me approach.  We aim to please.  We hope we do.

Speaking of financial analysis, the bond markets are going absolutely nowhere again despite evidence that Greenspan is going to continue to destroy the short-term lending market (and hey, who needs that?  You’d only need a short term loan if you were going to be having to build a couple of thousand new houses in the next six…months….oh, wait….).  

The stock market appears to be doing its patriotic thing (albeit within the same fairly narrow range that it’s been in for months), but that’s not taking a lot of money out of the bond market as far as I can tell.  That keeps rates in the high 5% range on the 30 year and about 5.25% on a 15.  ARMs are getting back in the game, but they are still not on the recommended list.  And a lot of those people who had option ARMs a year ago are now talking about getting off the train and taking a fixed rate while they still can.  The option ARM is still not a bad loan in some circumstances, but it’s not the magic bullet that it was a year or so ago.

I see that Randy Moss is not going to take the Oakland Raiders to the Super Bowl this year.  Fine by me.  I sit next to a Broncos fan.  I myself, as previously stated, am a Rams fan, and we’re not going to the Super Bowl, either.

College football.  BYU will win this weekend by 5 touchdowns.  Utah will beat Utah State.  Texas will beat Ohio State, but it will be close.  Notre Dame will lose to Michigan on a last-second touchdown.  Your prediction here.

We watched Finding Neverland a week or so ago, and it is everything they say it is.  Watch with a box of tissues.  We also watched Hitch, which was amusing, but the ending was really screwed up in a way I explain here.  And we watched Star Wars Phantom Menace (Episode 1) again last night.  As I was watching Anakin’s “tearful” farewell to his mother I turned to my friend and said “who knew that this would be the best of the tender scenes in the entire seven hours of the first three episodes?”  We went from “no reward is worth this!” to “no, it’s because I’m so in love with you”.  Frankly, my dear….

September 7

September 7 –

The financial toll from the New Orleans disaster continues to grow.  Did you know that 40% of the exported agricultural production of the United States goes out the port of New Orleans?  Did you know that there is no port of New Orleans?  Do you know when wheat gets harvested?  Corn?  Anyone that thinks this is going to be good for the economy (and someone tried to tell me that yesterday) is nuts.  Stark, raving, nuts.

The suggestion was that at least builders were going to do well from this, which is sort of like saying that farmers do well when locusts eat everything in sight.  In the past few years there have not exactly been hundreds of builders in any part of the country hurting for work.  When those same builders – who were already working to capacity – have to stop building new houses and go back and replace old houses that weren’t paid for yet and now have to be paid for twice, that’s going to necessarily put a monstrous drag on the economies of two states.  And it won’t make the builders any more money; they were already making it as fast as they could.  Now they get to do the same work and be accused of taking advantage of people if they make any kind of profit.

Bonds are down in what appears to be a post-disaster stock rally.  We saw this after 9/11 as well.  People buy stocks to show solidarity with other Americans, a kind of let’s-get-through-this-together-the-economy-is-going-to-be-fine Pollyanna-ism.  That’s fine.  The underlying economy is not going to get through this without serious shocks.  Those shocks are going to keep bonds high.  At the moment, though, we’ve lost about a quarter point in price, though not enough to change rates any.  But another day of this, and we will rise an eighth (to about 5.875% on a 30 year).

My prediction about BYU (see below) was off a little.  So sue me.  I got BC’s score right.  And anyone out there that wants to tell me that they called the TCU game….

Meanwhile, the US men’s national team qualified for the World Cup again.  Standing invitation, anyone that wants to watch the matches next year (Deutschland ’06!) can come over and set up camp.  That month, there’s soccer 24x7 on the big screen.  You’d be most welcome.

Just to see who is reading this, I have two free tickets to Friday night’s Orem Owlz baseball game – first game of the playoffs – for the first person to email me.

Greenspan and the Fed Need to Pause - Or Roll Back

September 2 –

Have to talk about the Gulf Coast.  I’ve been some pretty nasty places.  Rural Hungary was unpleasant in spots, and the gypsy areas of the big city were not places I wanted to remain for long.  I’ve never been anywhere like New Orleans even back when it was dry, and cannot imagine what those poor people are going through.

As it impacts somewhat less important things, let me say that the unbroken rise in interest rates inflicted on the economy by Greenspan and his Gang of Thieves has to be in serious jeopardy now.  We are seeing the disruption of gasoline production – this on top of already large rises in fuel prices – and that is going to have an impact on growth.  Bigger than that, we’ve lost the economic production of three large-ish cities in Gulfport, Biloxi, and New Orleans.  Remember that the several tens of billions of dollars we’re going to have to spend rebuilding those places is tens of billions we are NOT going to be spending on repairing existing infrastructure, building new homes, or investing in stocks and bonds.  There will be lots of talk about how the disaster “could restart the economies of these cities”, but that’s a complete crock.  You don’t restart the economy by dumping a hundred billion dollars of stuff into the Gulf of Mexico.  If you could, why is it that we’re not burning down other cities to “restart” their economies?  Why didn’t we think of this sooner!

The loss of production from destroyed businesses is also going to amount to billions, and this on top of an already shaky economic recovery.  I just don’t see how anyone can look at all this devastation and say that the US economy is going to overheat if we don’t keep jacking up interest rates.  It was wrongheaded before.  Now it would be deranged.

Therefore I decree that interest rates will be flat for the remainder of the yaer, and declining on short-term bonds.  There.  Now that that’s settled…

Let’s talk about college football.  I know that’s why you’re really reading this blog anyway.

Utah plays Arizona tonight, in a game that will tell us virtually nothing at all about how good either team is.  The Spewts (as we call them here in Utah County) were awfully good last year – painfully so – and they may be again this year.  But Arizona was woeful last year and has been for some time, and if they are better this year how will this game tell us?  Utah wins by 20, and we have to wait another couple weeks before we know anything about what that means as a predictor of future success.  Still, it’s always nice for the MWC to beat the Pac-10.

BYU plays Boston College – 22nd ranked Boston College – which has allegedly got the best offensive and defensive lines since the 1986 Chicago Bears.  BYU has no chance, I am told.  I take this admonition very seriously.  I therefore predict that BYU will only win by 17.  Look, I’m from the east coast.  I know how good those teams are.  I also know that BYU’s style of offense absolutely drives these teams nuts.  In Boston, maybe this wouldn’t be too big a deal.  But it’s a big deal here.  BYU 37 BC 20.

Your predictions welcome.  But don’t make them without some substance to back it up.  We don’t put up with weak opinions here, not on this subject.  Or any subject, frankly.

Happy Labor Day, all you women with child.  May it be smooth and easy for all of you.

Publishing

I was in the middle of the dotcom era once upon a time, and there were a gillion competing ways to use the 'net for information. Anyone remember Pushcast? Anyway, the prediction was then that the web would make it possible for anyone to compete with the major media for the distribution of ideas. I would say that dream has come true. It is not a level playing field in the traditional sense, where CBS and I have the same access to resources for the promulgation of ideas, but it is true that on any given day what I write can have exactly the same impact - perhaps a greater impact - than anything being churned out by the major media outlets.

Trouble with that is, you better be good. The only currency in the blogosphere is credibility. What you say you are, you better be. You don't have to be right all the time unless your shtick is that you're right all the time. You don't have to be entertaining unless your thing is that you're an entertainer. But once you lose credibility as whatever you are, you're not going to get it back. There are too many genuine people out there putting out some amazing stuff (try Not All Who Wander Are Lost, if you don't believe me) for the audience to stay with you once you prove to them that you're not always what you say you are.

Here's what I am: I'm nobody really, just a fellow that does a necessary job of finding good people money to get a home of their own. I hope to do it better than anyone else. I also am a guy that has thoughs on how the macroeconomic picture hits Joe Homeowner in the wallet, and I share some of those thoughts backed by as much of my experience as is relevant. I alos like movies and books and sports and gardening and practically everything else, so if the column is less like a roast chicken and more like jambalaya, that's just how it goes.

And this is now the third different way I've posted to this blog. Technology is living up to its hype.

Linking the Blogs

We're just getting the hang of this whole multiple blog thing, so I need to post that the blog that counts - the one with all the posts so far - is at http://www.thechrisjonesgroup.com.  Henceforth, thanks to Blogger's wonderful add-on for Word that lets me compose and post in MS Office, the blogs will match.  For the moment, though, this blog and the others on blogspot.com will be a little naked.  Not for long.