“SOME PEOPLE ARE BORN ON THIRD BASE…AND GO THROUGH LIFE THINKING THEY HIT A TRIPLE.” (Barry Switzer) And last week, Mortgage Bonds were the glad beneficiaries of a “Triple Lindy”, leading to home loan rates improving by about .125% across the board. So what was the trifecta behind this nice move? First, the Federal Reserve’s “minutes” or commentary from the last meeting were released last Tuesday, and despite concerns to the contrary, did not expand on inflationary comments made in the official Policy Statement itself. Next, news from the manufacturing sector continues to be weak, as the Empire State Manufacturing Index came in far below expectations. Finally, the stock market got hammered as some important earnings numbers were missed, including bellwether IBM, “Big Blue”. In fact, last week was the worst week of stock trading so far this year - the Dow Jones Industrial Average recorded i ts first three consecutive day triple-digit loss in over two years while the S&P 500 and the NASDAQ indices also closed at new lows for the year.

Remember that money tends to flow back and forth between stocks and bonds like a “see saw”. One often benefits at the expense of the other, depending on the flavor of the news. Bonds and home loan rates were the beneficiary of the recent rough week for stocks. Take a look at the grid below, showing the drop in stocks as compared to the gain in bonds.

DO YOU KNOW WHAT THE MOST COMMONLY USED COMPUTER PASSWORD IS? AND IF IT TURNS OUT TO BE YOURS – CHANGE IT. YOU MIGHT BE SURPRISED TO LEARN HOW EASILY HACKERS CAN FIND OUT YOUR PASSWORD, SO DON’T MISS THIS WEEK’S MORTGAGE MARKET VIEW.

So…where do we go from here? Traders will be closely watching the economic reports of the week, particularly the Fed’s favorite measures of inflation, the Producer Price Index (PPI) and Consumer Price Index (CPI). Remember that inflation erodes the value of a Bond, so signs of inflation are bad for Bonds and therefore home loan rates as well. There have been mixed reports on inflation of late…and Federal Reserve Governor Kohn even recently stated there is “substantial uncertainty” in the inflation outlook…so these weighty reports will be extra heavy duty in the current market climate.

If the Reports show that inflation on the producer and consumer level appear to be contained, Bonds will get happy on the news and continue their upward momentum, helping home loan rates to improve. On the flip side, if the Reports are less than “sparkling, clear and lovely” on inflation, Bonds will quickly reverse direction and home loan rates will worsen.

Bottom line: The news of the week will dictate the trend for home loan rates – but as that news breaks, a cautious stance is advisable. Bonds and home loan rates enjoyed a nice improvement last week that may not hold.

PSSSST…CAN YOU KEEP A SECRET? If it’s your password, maybe not.

Passwords - most everyone has at least one, and it seems that most would easily share it with you. In a recent survey, 71% of those polled offered up their password to those that simply asked, with no further proof required. Once the password was given, it seems other information was fair game.

Is it easy to hack a password?

• Most passwords come from what we love; family, pets and sports teams.
• The most common password is presently ADMIN. ADMIN replaced the ultra creative selection PASSWORD from the year before. ADMIN is shipped as the default password on a lot of equipment and many users never change it.
• As hackers abound and are looking for creative ways to gain access to your data, make it a little tougher on them. If you’re at a loss for something creative for a new password, try mixing up the initials of family members or friends with their birth dates backwards.

One, two, three or more…just how many do you have?

• Fully two thirds of all surveyed had only one password, the same being used for personal and business functions.
• Of the remaining third, an average of four passwords are used.

Do you ever change that thing?

• 20 percent of all polled never changed their password and 13 percent rarely did so. Of those that changed them more frequently, 51 percent changed them monthly, 3 percent weekly and 2 percent daily.
• Changed passwords don’t stray far. Many workers keep their passwords either stored in a document on their computer or written on paper in their desk.

You gave it to whom?

• 37% percent of those polled gave up their password without a thought.
• When prodded by asking if the password was a pet or child’s name, another 34% gave it up.
• 47% said they would give up their password to a caller saying they worked in their company’s IT department.
• 40% knew their co-workers password.
• 55% said their boss could have their password.

Now you know what the hackers know. So don’t make it easy on them…consider changing things up with your passwords…and then keep ‘em to yourself!

This week’s economic calendar features the latest and greatest measures of inflation, the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Wednesday. The extra “juice” or “frosting” for the week will be on the health of the housing market, reported with Tuesday’s release of Housing Starts and Building Permits.

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

For the week of April 18 – April 22