Average rates on Treasury securities and 30-year mortgages continued to decline last week, reaching their lowest level in almost six months. U.S. 30-year mortgage rates dropped to an average of 6.26 percent from 6.33 percent last week. Thirty-year mortgage rates have not been this low since mid-May, when they averaged 6.21 percent. But mortgage price improvement has slowed, relative to other interest rates. Why? Investors and money managers cite the usual credit concerns, hesitation heading into the end of the year about changing their balance sheets, negative headlines, and so forth. This is impacting vanilla FNMA/FHLMC product, as well as jumbo product. This morning the 10-yr stands at 4.37% and mortgage prices are worse by another .125 versus yesterday afternoon.

In spite of all of the publicity, there is some thought that the markets still have not gotten the entire message that the housing recession is going to drag the entire economy lower. Lower rates could/will help slow the foreclosure numbers, but a solid portion of borrowers are simply in trouble. The economy and consumers are about to pay a heavy price for the greed that consumed W all Street firms, banks, originators, rating agencies, and even borrowers, not only in mortgages but also in other areas of the debt markets. And most believe that while the financial firms will survive, consumers who will lose their homes and have their credit damaged for years to come. In spite of solid GDP and recent employment numbers, more forward-looking indicators still point towards slower spending and a weaker labor market in coming months and therefore another rate cut in overnight Fed Funds, in spite of weakness in the value of the dollar.

• New York Attorney General Andrew Cuomo announced that his office sued First American Corp. and its eAppraisalIT unit for allegedly colluding with Washington Mutual to use a list of preferred appraisers to inflate mortgage appraisals. (Is this a shock?) New York state officials said that the scheme helped to fuel the mortgage crisis.
• Radian reported a loss of $703.9 million, the largest yet of the insurers. Radian had a third-quarter loss of $8.78 a share, compared with a year-earlier gain of $112 million, or $1.36 a share, joining larger rivals, MGIC Investment Corp. and PMI Group Inc. in reporting its first quarterly loss as a publicly traded company.

More rules for the workplace:

When the bosses talk about improving productivity, they are never talking about themselves.

You can go anywhere you want if you look serious and carry a clipboard.
Eat one live toad the first thing in the morning and nothing worse will happen to you the rest of the day.
There will always be beer cans rolling on the floor of your car when the boss asks for a ride home from the office.
Keep your boss's boss off your boss's back.
Everything can be filed under "miscellaneous."
Never delay the ending of a meeting or the beginning of a cocktail hour.