Archive for July, 2010

Introducing Brass Tack

Today’s post is directly inspired by a fantastic post on the Brass Tack blog, run by Tamsen McMahon (@tamadear – and do you not LOVE her name?) and Amber Naslund (@ambercadabra, one of the best handles on Twitter, and one of the smartest people I’ve ever read).  The post is here, and you may not continue reading the below until you have read Tamsen’s post there.

I lived for twelve years in one town down the road. Met a few people. Caused some trouble. Ended up not wanting to stay because of the reaction some had to that trouble. I had a few friends, knew a couple of people, but on the whole, I was nobody.

Then I moved up the road. The first week I was here, I went to the Chamber of Commerce meeting. And instead of sitting at the back, getting my bearings, I sat up front and introduced myself to the Chairman before the meeting. I was invited to stay after. Then to sit on the Board. Then I was the Chairman myself after a couple years. The same thing happened in Rotary, and over and over in other organizations. Shockingly, in just a couple of years I knew everyone in town, where in the other town I knew only a handful of people. The difference was exactly what Tamsen brilliantly outlined in her post.

People drop out of those organizations all the time, and the main reason they give is “it just doesn’t work for me”, which, being that I was in a position to observe, meant “I don’t do anything, so nobody can tell how awesome I am. Guess I’ll quit.” Those of us that have been there, and worked, some of us for years, know that these organizations can be fantastic networking tools, but they respond with a multiple of the force we put into them, after we demonstrate that we’re in it for the long haul. Put in zero, and no multiple will help. Put it huge effort for one project, then disappear, and a similar thing happens.  But stick around and push, and pretty soon the other workers want to know who you are, and what you can do to make their lives better.  That’s business.

Tamsen put this all so well. And do we ever need the reminder.

RateWatch 29 July 2010 – Carnac Speaks!

Welcome to RateWatch for Thursday July 29, I’m your host, Chris Jones, and here’s what’s happening:

Today’s market: The benchmark bond is up 12bps today.  We’re trading in a very narrow channel.  Economic news today was all about employment, as in, there isn’t much of it.  Unemployment benefits have been extended, so continuing claims were up, which did not surprise anyone.  New claims were down, but not very much.  The recovery continues to fail to do the one thing that would really get the economy moving again – create jobs.

What that means to you: rates are holding steady.  It’s generally acknowledged that banks would like to raise rates, but competition is making that very difficult.  Remember, they don’t make money unless they lend it out to people.  Rates are therefore critical to attracting business.  There’s no central rate-making authority in mortgages.  The banks take their cues from the bond market and from each other.  So today’s rates are in the 4.5% range on conventional and FHA, with 15-year rates in the 4% range.

At some point, obviously, this is going to change.  We’ll have a terrorist attack (which would be mixed for bonds) or we’ll have IBM invent cold fusion (which would be very, very bad for bonds), and the market will break out of this channel and start moving, almost certainly upward.  We are trading right now at the bottom of the historical range, as in, it’s never been this good.  Ever.  So it isn’t as if there is a lot farther down we can go.

How long will it last? That’s the billion-dollar question.  Here’s the answer: NO ONE KNOWS.  Only one thing is certain: rates in this range will go away.  Do not wait to talk to a professional.  You can call us.  That’s what we’re here for.

That’s RateWatch for July 29, I’m your host, Chris Jones.  You can find us at or text us at 801-850-378.

The Crystal Ball – 29 July 2010

Welcome to the first edition of the Crystal Ball, where I tell you definitively what will be happening in the world over the coming days.  You have been warned.

The Los Angeles Dodgers will not be able to catch San Diego, and will fail to make the playoffs.  Again.

My class on the History of Money will attract more students than my Thomas Jefferson Youth Certification class this fall.  The Leadership Education Academy will be a resounding success, mostly because Janette Wagner, the organizer, is one of those hyper-capable people you hope to have as your friend.

The new Wall Street Reform Act will increase the fees you pay for credit cards, restrict credit for small businesses, and raise mortgage interest rates.  This will happen gradually over the next several months to two years, so that it will be possible to blame the banks for the increases.

The Obama Administration will blame the banks for the increases.

Mortgage brokerage firms will close in record numbers in 2011, and the number of active loan officers in the US will decline by another 50% from current numbers.  In case you were unaware of this, the new financial regulations make it almost impossible for brokers to survive, due to the nature of the restrictions on loan officer compensation.  In one example, the requirement that a loan officer be compensated only from one source – either the borrower or the lender, but not both – means that either your mortgage will carry a lower interest rate and huge closing costs, or a huge rate and low closing costs, but nothing in between.  And oh, that compensation cannot be based on the interest rate, although that’s how the BANK is compensated.

Mortgage lending will continue to increase in difficulty.  Credit will be further restricted, especially to marginal borrowers.  Loan costs will rise further.  Incidences of mortgage fraud will skyrocket.  The correlation will equal causation, but no one in any major publication or network will understand that.  It goes without saying that no one in the government will.

The Republican Party will take control of the House of Representatives in November.  The Senate will remain in Democrat hands.  Harry Reid will survive.

I will become Foursquare Mayor of Emmett’s and Ethel’s.

Mortgage interest rates will remain below 5% until November.  The GOP victory will cause them to rise, because a GOP win will be viewed as good for business – the stock market – and bad for government – the bond market.  Money will move from bonds into stocks and rates will rise.  The rise will be seen as a bad thing by most people, and will make possible charges that the Republicans have screwed up the only good part of the economy before they even take office.

The Obama Administration will charge the Republicans with screwing up the economy before they’ve even taken office.

My book, The Six Channels of Marketing, will be completed, and over 100 people will have enrolled in the PerfectHome program, by Hallowe’en.

The Utah Jazz will fail to sign another free agent.  Mehmet Okur will report to camp but be physically unable to perform until midseason.  The lack of a long-range shooter will restrict the effectiveness of the Jazz low-post players.  By December the Jazz will nonetheless be second behind Oklahoma City in the Midwest Division.

My sister Diana’s children will both sleep through the night – the same night – by Labor Day.

The final book of the Hunger Games Trilogy, Mockingjay, will deservedly become a New York Times bestseller, despite (because of?) its highly anarchic political bent.  Someone will be smart enough to see a gigantic business opportunity in the production of mockingjay pins.  An entire generation of young adults will be un-indoctrinated, and dedicate their lives to the preservation of individual liberty.  And the world will be saved.  So you see, there’s nothing to worry about.

Your predictions are welcome in the comments, and you may also submit additional topics for me to answer with a gaze into the Crystal Ball.  Which I predict the next edition of in 30 days.

Are you all in?

There’s a film I like called Gattaca.  It’s a morality play about how each of us has inside us someone better and someone worse than the person we are right now.

There’s a particular scene where Vincent, our hero, who has been told all his life that he is inferior, is swimming in a raging storm, racing his perfect older brother, and beating him.  Here’s the relevant exchange:

Anton Freeman: Vincent! How are you doing this Vincent? How have you done any of this? We have to go back.
Vincent: It’s too late for that. We’re closer to the other side.
Anton Freeman: What other side? You wanna drown us both?
Vincent: You wanna know how I did it? This is how I did it Anton. I never saved anything for the swim back.

I won’t ruin the film for you by telling you anything else.  But to me, the message of that was that if you’re going to become the best possible you, you have to use up your reserves.  You have to leave nothing for the swim back.  Vincent was Anton’s superior, because Vincent, though genetically inferior, was the best possible Vincent, and Anton, like most of those told they were genetically superior, never risked enough to become anything more than a pale shadow of what he could have been.

A few posts back I wrote about potential, and how all my life I was told that I had this immense potential, and how I was sure that I was a disappointment to most of the people that said that.  I’ve also written about aging, and how with age comes the realization that there are a larger and larger number of things I will never get better at than I am right now.  None of that is false.

But there was something buried in those posts that I am only now coming to understand.  I am 42 years old now.  I am, by most any measure, middle-aged.  And what image does that call up for you?  Yeah, me too.  Consolidation.  Conservation.  Rationing of strength and resource.  I finally hit an age where people don’t really expect me to do bigger things that those I have already done.  I have become Vincent, after all my life as Anton.

All of us are Vincent.  All of us have the potential to defy our limitations.  But we cannot do it without doing what he did, and playing flat out.  All the way.  Pushing the chips to the center of the table and risking everything on the river card.  Yes, we can certainly make a good life for ourselves without that.  We can be happy.  We can be safe.

But we cannot be extraordinary.  In the last analysis, I believe that the greatest enemy of the amazing is not the terrible, but the pretty cool.  The good enough.  The decent.  It is far harder to go from respected and competent to mind-blowing than it is to go there from awful.  At awful, what do you have to lose?  You don’t go back.  You keep swimming to the farther shore, because you know you aren’t saving anything for the swim back.

We are meant to be extraordinary.  We are meant to shine, not to glow faintly.  Bet big.  Risk.  Try for something astonishing.  Go all in.

If you do, my money’s on you.

RateWatch Videocast 22 July

Welcome to RateWatch for Thursday July 22, and here’s what’s happening:

Today’s market: The benchmark bond is down 15bps today.  We’re trading in a narrow channel.  It’s a huge day for economic news, with jobless claims coming out worse than expected – at least, worse than the experts expected – and existing home sales numbers showing the housing market still weak but not as weak as expected. All that bad economic news is bad for stocks and good for bonds.

What that means to you is worse mortgage rates, but not very much worse.  We’d need to be down 30-40 bps before banks would react with worse rates.  There’s a certain fatigue on the part of banks, who don’t really want to make loans in the low 4% range, so they’re not going lower on rates unless we have a huge move in the market.  That’s not happening.  Moves higher are very possible, however, so stay tuned.  To you all this means that rates are holding steady in the 4.5% range on most loans, down in the 4% range on 15-year terms.  Those rates are truly ridiculous, by the way.  At 4.5%, you can buy 20% more house than you can at 6% for the same payment.  An example:

6%, $200,000 loan, payment $1200/mo

4.5%, $240,000 loan, payment $1216/mo

So let’s all be grateful.

What’s in it for you? Money.  It’s going to take you 60-90 days to be able to complete a sale, so start the process right now.  For many of you it will take as much as six months.  Sound like a lot?  It isn’t.  And January is traditionally one of the cheapest times of the year to pull the trigger.  Do not wait to talk to a professional.  You can call us.  That’s what we’re here for.

That’s RateWatch for July 22, I’m your host, Chris Jones.  You can find us at or text us at 801-850-3781. ‘Til next time, we’ll be watching the rates.