Daily Intent

Extra!  Extra!  Read all about it!  30 Year Fixed Interest Rates Plummet into the 4%s!

This is one of those “tell your friends” moments in my business.  The structure of our current economy is shaky.  Corporations are being called to either shut their doors on thousands, cut some, or make all sacrifice a little / a lot.  The masses are either receiving a pay cut for 2009, not receiving a year end bonus, getting a smaller raise than expected, or even getting laid off.  Times are getting tough.

As I have been discussing in the Market Street Report since it’s inception, when times are tough, there is opportunity for those prepared.

Over the next year, my clients who have locked in these low rates, are looking at a combined savings of $50,000 in 2009!  Most will be saving a friendly $200 - $300 / month on their mortgage payment.  Can you imagine if you were renting and your landlord knocked on your door and said, “oh by the way, I’m lowering your monthly rent by $200″?  Excellent!

Might you or a friend or family member, have equity and a rate in the 5 or 6%s?  I need your help in spreading the news.  We can still qualify people.  My goal is to get all I know at or below 5%.  Please call, for I want to help!
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The Market Street Report turns 1!
The Market Street Report is celebrating its first birthday!  Thank you for your readership and passing it along to your interested friends and family.

Moreover, thank you for all those that attended the “Compounding Your Knowledge” talks over the past year.  Great news: I had coffee with Sean Mason yesterday morning and he agreed to continue his teachings on Negotiating and looks forward to touching upon the concepts of NLP, Neuro-Linguistic Programming.
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Buzzword: Ponzi Scheme

“A fraudulent investing scam that promises high rates of return at little risk to investors.  The scheme generates returns for older investors by acquiring new investors.  This scam actually yields the promised returns to earlier investors, as long as there are more new investors.

The Ponzi scam is named after Charles Ponzi, a clerk in Boston who first orchestrated such a scheme in 1919.  A Ponzi sheme is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers.  One difference between the two schemes is that the Ponzi mastermind gathers all relevant funds from new investors and then distributes them.  Pyramid schemes, on the other hand, allow each investor to directly benefit depending on how many new investors are recruited.  In this case, the person on the top of the pyramid does not at any point have access to all the money in the system.  For both schemes, however, eventually there isn’t enough money to go around and the schemes unravel. “  -Investopedia.com

This is the scheme Madoff used in swindling millions / billions.  (see below)

Six Points to Ponder:
1. Mortgage interest rates plummet to 37yr lows.  15, 20 and 30yr loans in the 4%s!  …Up to $603,750 in Santa Barbara.  Mortgage applications spike.
2. The Dow settles in at 8579.  Flat on the week.  S&P 500 flat.  Nasdaq up 26pts.  Oil is down to $33.87!  …Remember 6 months ago it was $147!
3. Madoff made off with billions while the uber wealthy compile losses of $50Bn.
4.  The Fed lowered their overnight lending rate to between .25% and 0%.  Treasury yields continue lower as investors seek shelter.
5. Auto companies receive billions in aid to ensure a stable holiday for thousands.
6. Bradford wins Heisman.  Week 16 in the NFL.  UNC stays strong in the number one position.

Positives:
* Many with ARM loans are having the opportunity to conservatively move into a better situation long term.  Fixed rate loans in the 5 and 6%s are getting to further increase their conservative approach in capitalizing on lower rates.
* Those saving the money on new lower interest rates will have a better chance at SAVING money and also stimulating the ailing economy.  Many will benefit.
* Tranquil markets is a good thing.  Flat levels are absorbed more positively than negatively when looking for a bottom in the market.
* Lower Federal Funds Rate have direct and paralleling affects on your credit card percentages, HELOCs and auto loans.

Negatives:
* One man and a few helpers can cause so many billions in losses.  European banks have been affected.  Hedge funds invested in his fund have had to shut their doors.
* The governments billions toward the auto makers, aka our tax dollars, could go to waste should the economy not turn around by April or May.  Delaying the inevitable is horrible.  The economy is the only thing that can save them.  The better alternative is to bankrupt them, dissolve the labor unions, and restructure.
* Lower Fed rates means lower CD and money market rates.

Local:
Fire Fighter / Celebrity All-Star Benefit Basketball Game
Where: Westmont College Murchison Gymnasium
When: Sunday at 4pm
Cost: $5 donation
Why: This will benefit the Tea Fire Long Term Recovery Fund.  I’m sure John Palmentari will be lacing them up.

Live and Be Well,

Jeff Bochsler