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Lanning Financial Inc.
For the week of October 24, 2011
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Lanning Financial Inc.
636 Fourth Street
San Francisco, CA 94107
415.354.5699 ph. & private fax
 
Jessica Lanning and Lanning Financial provide mortgage services and financial strategies that bring focus and perspective to your individual financial needs.
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Last Week in Review...

     When the Fed talks, people listen.      And last week, the Fed made headlines when Fed Governor Daniel Tarullo called for the Fed to engage in another round of Mortgage Bond purchases...or in other words, another round of Quantitative Easing (QE3). Read on to find out what this could mean for the housing market and home loan rates.   

 

 

     In order to really have an impact on housing, the Fed would have to announce something significant to get people to buy a home. Why? Because even now, with rates at historically low levels and incredible affordability levels, the sales pace in housing is tepid, due to structural problems in the labor market, which the Fed can't fix. 
 
     In fact, there is a lot to consider before the Fed starts expanding their balance sheet, and the biggest concern is rising inflation. Contrary to what the Fed has said about it moderating, year-over-year inflation is on the rise. The headline Producer Price Index (PPI) rose by a whopping 0.8% in the month of September, elevating year-over-year wholesale prices by a hot 6.9%. Meanwhile, the Consumer Price Index (CPI) for September rose by 0.3%, and while this was inline with estimates it pushed the year-over-year number to 3.9%. This is significant because the year-over-year figure was just 1.6% in January. 
 
     Remember, inflation is the arch enemy of Bonds and home loan rates. The concept is very simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher. 
 
     And let's not forget the ongoing drama out of Europe. French and German leaders will hold two summits in the span of four days to come up with a resolution to the European debt crisis. Whichever way this news goes could have a real effect on the markets, including Bonds and home loan rates. 
 
     With all the news to come this week, it's still important to remember that now remains a great time to purchase or refinance a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients.
Forecast For The Week...
  

     Look for some key reports on the housing market, which come after last week's better-than-expected Housing Starts and the softer numbers from Existing Home Sales.    

  • New Home Sales are set to be delivered on Wednesday. That number has been hovering near record lows, so the markets will be anxious to see if there's any indication of an improvement. Also this week, Pending Home Sales will be released Thursday.                 
     
  • Also on Thursday, Initial Jobless Claims will be released as usual. Plus, the first reading on Gross Domestic Product (GDP) for the 3rd quarter will be released. Overall, the estimates don't appear as if the economy is hitting on all cylinders yet.      
     
  • The markets will see how the American people are holding up in this economy with Consumer Confidence and Consumer Sentiment on Tuesday and Friday, respectively.     
     
  • Ending the week, Friday's Core Personal Consumption Expenditure (PCE), the Fed's favored inflation measure, is sure to garner some attention.             
          

     In addition to those reports, keep an eye on the news. One story that could gain some attention is news that the Federal Housing Finance Agency (FHFA) and the Obama administration will submit proposals to Congress to help the housing market for those homeowners who are underwater.    

 

     Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. 

 

     As you can see in the chart below, Bonds and home loan rates stayed in a tight range last week. I'll be watching closely to see how the markets react to Fed Governor Tarullo's call for QE3, the news out of Europe, and the economic reports of the week.                         

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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, October 21, 2011)  
 

The Mortgage Market View...

  

 

Don't Say Another Word!
5 Secrets to Leaving More Effective Voice Messages    
 

 

     People are busy. That means, even with the wide variety of technical products developed to keep us in touch, it's sometimes hard to get a hold of people. In those instances, we find ourselves transported back to the tried-and-true technology of the 1980s-that is, leaving a message after the beep. 

 

Same Old, Same Old

 

     While the technology has changed from tapes to megabytes, the basic concept of a voice message remains the same. You talk; it records; people listen.

 

     Sadly, that's not the only thing that's the same. Many people still don't know how to leave a message that provides information but also establishes a compelling reason for the listener to call back.

 

Use These Tips Today!

 

     The following tips can help you be more effective and get better results with voice messages: 

 

1. Don't Talk So Much. You have a limited window to make your point. That means you can't provide a lot of background information or cover multiple topics.

 

     Before you call, make sure you have a singular focus to mention if you get the person's voicemail. Then, highlight that important point, and leave the rest of your points for the actual follow-up discussion.

 

2. Focus on a Problem. To put it bluntly: People don't want to hear about you; they want to hear about themselves.

 

     So before you call, make sure you've thought about the person on the other end-including what she cares about, what she spends her time on, as well as what she wishes she could spend her time on instead. You could even try to imagine why she was busy and couldn't answer the phone. Or imagine where she's about to rush off to as soon as your message ends.

 

     Based on those ideas, craft a simple, focused message that hits on ONE major problem or issue that the listener has. 

 

3. Everyone Likes a Good Mystery. Once you've focused on a single overriding problem, resist the temptation to go into your sales pitch about solving it. For one thing, the listener probably doesn't have time (or want) to listen to your pitch. For another, if you give your pitch, what reason do they have to call you back?

 

     Instead, only allude to the idea that a solution does exist...but don't go into detail. Leave some mystery. That's your hook for getting them to actually call you back...because now they actually have a reason to!

 

     Finally, state a number the person can reach you at and say you'd like to tell/give them some information by chatting for a couple of minutes. You can even give them a time frame (such as saying they can call you back by a certain day or time) to help create a sense of urgency about solving the mystery you've established in your message. 

 

4. Energy and Enthusiasm. Nobody wants to listen to a person who's boring or sounds bored.

 

     The same is true with voice messages. After all, if you don't have energy when talking about something, why should the listener have the energy to call you back?

 

     So before you call, take a second to raise your energy level. Some experts recommend standing up when making a call or smiling while talking on the phone, as a way to subtly convey a pleasant, energetic tone. 

 

5. Phone Home. It's not enough to practice in your head. It's not even enough to practice out loud. You need to actually leave some practice messages.

 

     So here's what you do: call your home phone and leave some test messages. You can even try a few different approaches. When you get home, take notes about what worked and what you want to improve. Then, try the same process the next day or even every couple of months to make sure you're still effective.

 

     Remember: If you don't want to listen to yourself or don't feel compelled to call back, then why would anyone else? By following these tips and constantly working to improve your voice message skills, you can help increase your productivity and the number of responses you receive.

 

Recommend Your Favorite Professionals...
Jessica is looking to expand her business network and is looking for outstanding professionals in the following fields:

 

·  Tax Attorney
·  Nutritionist
·  Relocation/Moving Specialist
·  Marketing Specialist

 

If you know someone who is really great, please connect that person to me!  Thank you!

 

This Week's Economic Indicator Calendar...
     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 October 24 - October 28, 2011 
  
  
    
     The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.

     As your trusted advisor, I am sending you Lanning's LiveWire because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

     In the unlikely event that you no longer wish to receive these valuable market updates, please email: jlanning@jessicalanning.com  If you prefer to send your removal request by mail, the address is:

Jessica Lanning, CMC
Lanning Financial Inc
636 Fourth Street
San Francisco, CA 94107

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Jessica Lanning
Lanning Financial Inc.
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