Supposedly from a children’s bible class: “Jesus made the Golden Rule, which says to ‘do unto others before they do one to you.’”

Got milk? How about cheese? How about a loan to buy either one? The price of cheese has practically doubled in the last year! Demand is very strong, in spite of prices, and milk production typically declines in the summer months, so don’t look for any relief in your dairy case (or at the local Round Table) in the near future. The rising cost for corn (which dairy cows eat) because of ethanol demand, the higher price of gasoline and other energy sources, high international demand, and a drought in Australia could make it one of the worst seasons for milk prices.

Shearson Financial Network will acquire Dollar Mortgage Corporation. Dollar is based in Southern California (La Mesa) and focuses on wholesale Alt-A, 100% LTV with stated income, stated income with a 660 credit score, etc. Good luck to Lehman?

If your child got a bad grade, would it be ok if they told you that their performance was “severe but contained”? That is the term that Freddie Mac’s treasurer used to describe the subprime mortgages slump. Although rising defaults on subprime loans have pushed at least 60 mortgage companies out of business and forced Bear Stearns Cos. to offer a $3.2 billion bailout for one of two money-losing hedge funds, the number of borrowers potentially affected is limited he said, especially since the holders of subprime mortgages are ``large institutional players who can withstand the loss.'' Many analysts think that the 10-year note yield is in a trading range between 5.10% and 5.25%, and that 30-yr fixed-rate mortgages should stay in the 6.75%-6.875% range for now. The markets are looking at risk differently now, especially with many of the nation’s pension funds, banks and insurance companies owning investments that may contain troubled derivatives.

May’s Existing Home Sales number yesterday reflected one of the weakest housing markets in many years. On average house prices are down 2.1% from one year ago and the months of inventory jumped a month to almost 9 months, a record. The existing sales survey covers a larger population than new home sales, with existing sales more than six times larger than the new sales. Ethan Harris, chief U.S. economist at Lehman Brothers, said that “The inventory adjustment is going to be slow and painful. This means we're in for more pressure on prices and more pressure on construction." Later this morning we’ll see May’s New Home Sales (expected to decline), the Treasury will auction $18 billion in 2-year T-Notes, and June’s Consumer Confidence (also expected to decline).