THE HITS JUST KEEP ONNN COMIN’! And we’re not talking baseball, not even the latest top 40 radio station...it’s the Bond market and home loan rates, taking hit after hit, right on the chin. As rates inched another .125% higher across the board last week , everyone seems to be singing the same tune. What is happening to cause the increases...and more importantly, when will it end? Let’s take a closer look at the interesting events of last week.

The Fed came out swinging and hiked another .25%, bringing the Fed Funds Rate up to 4.00%. The highly anticipated Policy Statement was basically status quo, and suggested that the Fed is not done hiking just yet, in order to combat inflation. This should have been good news for home loan rates, as inflation is the arch enemy of Bonds. But then Chairman Greenspan delivered his final Congressional testimony, where he painted an upbeat picture of the US economy, and further, gave a warning about even more inflation on the horizon. Bonds began to sell off on the heightened concerns, causing home loan rates to worsen.

Then another big hitter arrived on Friday, the monthly Jobs Report. Interestingly enough, the headline number of job creations was weaker than expected, showing 56,000 new jobs created when 100,000 had been anticipated. Once again, an expectations miss would normally be good news for Bonds and home loan rates, so what happened? Although the headline number was a miss - a closer look at the Report revealed that last months job creation numbers were revised upwards, and the unemployment rate dropped to 5.0%. Additionally, there was a hint of wage based inflation in the Report, as average hourly earnings improved to their highest level in years. All in all, not a bad smelling report...so Bonds took the cue and declined even further, pressuring home loan rates to worsen again.

DID YOU KNOW...THAT THE SOLDIERS WHO ARE PRIVELEGED ENOUGH TO GUARD THE “TOMB OF THE UNKNOWN SOLDIER” IN ARLINGTON CEMETERY TAKE AN OATH TO GIVE UP DRINKING AND SWEARING...FOR LIFE? AS WE OBSERVE VETERANS DAY THIS WEEK, TAKE A MOMENT TO READ THIS WEEK’S MORTGAGE MARKET VIEW, AND LEARN MORE ABOUT THIS INTERESTING MEMORIAL.

Take a deep breath...whew...it appears a quiet economic news week is finally in store. But with the lack of economic reports to drive Bond and home loan rate movement, trading will be based on technical factors. And the technicals look rough! When Bond prices are worsening, home loan rates are rising – and the chart below clearly shows that the trend has been ugly of late. On a technical level, Bonds seem to be powerless to escape the vacuum of the brutal “Down Escalator”, and it is unlikely that the picture will improve in the coming week.

Bottom line – in the absence of any surprise news hitting the wires, it is most likely that Bonds and home loan rates will settle and remain relatively stable this week, catching a breather from the recent wild ride lower.

This Friday, we will observe Veterans Day...but did you know this whole week has been designated National Veterans Awareness Week? What a wonderful opportunity to honor America's veterans for their patriotism, love of the country, and commitment to serve and sacrifice for the common good of the USA.

Veterans Day dates back to November 11, 1918 when the Germans signed the Armistice, an order to cease fire, and World War I ended. Originally Veterans Day was known as “Armistice Day”, but in 1953, the name was changed to Veterans Day, so that the many other military veterans could be honored and acknowledged as well.

The most recognized Veterans Day ceremony is held at the Arlington National Cemetery, which draws hundreds, if not thousands of visitors. Most visitors to the cemetery make a point to stop and visit the "Tomb of the Unknown Soldier." This shrine is in honor of the many thousands of veterans who gave their lives in defense of our nation.

The Tomb of the Unknown Soldier is one of the most visited sites by Americans, prominent dignitaries, and individuals visiting from foreign lands. The site is guarded 24 hours a day, 365 days a year by Tomb Guard Sentinels. All Sentinels are volunteers and are considered to be the best of the 3rd US Infantry - the “Old Guard”. And becoming a Sentinel is not just about volunteering time. Each soldier has to meet very specific qualifications. The soldier must be in superb physical condition, possess an exemplary military record, and meet certain height, weight, and build requirements. The soldier must also commit to giving up drinking and swearing...for life!

Once the basic requirements have been met, the training is broken down into three stages; temporary duty, low-visibility walks, and high-visibility walks. To earn a “walk” the guards must memorize a seven page document about the history of the Arlington National Cemetery, and be able to recite the document verbatim. A “walk” occurs between guard changes.

And when a soldier becomes a Sentinel and earns a “walk” it certainly is not an average walk. Each step, hesitation, and placement of firearm is precisely calculated and has a specific symbolic reference. Each guard takes 21 steps across the Tomb, stops on the 21st step, turns and faces the tomb for 21 seconds, then steps off for another 21 step walk down the mat. Both the 21 steps and the 21 second hesitation symbolize the “twenty-one gun salute”, the highest honor given any military or foreign dignitary. After each about face, the Sentinel changes the placement of the rifle to the shoulder closest to the visitors to signify that the Sentinel stands between the Tomb and any possible threat. The Sentinel then repeats this until the guard change.

The changing of the guard occurs every hour on the hour from October 1 to March 31 and every half hour from April 1 to September 30. The tomb has been guarded every minute of every day since 1937, even during the recent Hurricane that swept through South Texas. Each Sentinel commits two years of his life to guard the tomb, and is given a wreath pin signifying they served as a Sentinel. Presently, there are only 400 wreath pins worn.

As we pause and pay tribute to America’s veterans this week, we must honor them with our gratitude, knowing that they served and sacrificed to protect and preserve the values of this great nation...and continue to do so today.

The economic calendar takes a breather this week with just a handful of moderate-impact releases on Wednesday and Thursday.

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

Economic Calendar for the Week of November 7 – November 11