Toyota is developing a miniature, environmentally friendly car that is powered entirely by a rechargeable battery. Meanwhile, Detroit is still hard at work on a 6 passenger SUV that runs on rain forest trees and panda blood.

Not only are brokers out there trying grapple with their accountants over the huge fluctuations they’ve seen in income during the last two years, but they are trying to close every slam dunk deal they can. Knowing what lock period to use is critical, and investors are making it more expensive to guess wrong on lock periods. Countrywide, “a BofA Company”, has told everyone that their extension fees will be changing on the 20th. And they ain’t going down. 7 days will set one back .20 in fee, 15 days .35 in fee, and 30 days .60 in fee.

For anyone interested in the news, check out this map: http://www.newseum.org/todaysfrontpages/flash/default.asp

Citigroup Inc. posted an $8.29 billion fourth-quarter loss, completing its worst year, as the credit crisis eroded mortgage-bond prices and customers missed more loan payments. And in other news, Trammell Crow has died at age 94. He once had interests in nearly 300 million square feet of developed real estate, comprising 8,000 properties in more than 100 cities. His projects, always done with partners, included the Dallas Market Center, the Peachtree Center in Atlanta and the Embarcadero Center in San Francisco, and reached from Kansas City to Hong Kong to Brussels. Both Forbes and The Wall Street Journal had labeled him the largest landlord in the United States.

It would appear that the Fed has been the only real buyer of mortgage-backed securities recently. Will that be enough? Unfortunately, as many agents have seen, mortgages have moved “wider” this week, meaning that mortgage rates are worsening relative to Treasury rates. Nationwide origination has been strong all week at $2.5 to $3 billion per day, and although the Fed has tremendous resources, the market is not convinced that mortgages are the place to put its money. And the market is also worried about the supply of Treasury securities that will need to be sold in order to finance this effort.

I remember when PERS stood for “Public Employees Retirement System”. Now Fannie has introduced PERS: “Project Eligibility Review Service”. In support of Announcement 08-34 - Project Eligibility Review Service and Changes to Condominium and Cooperative Project Policies – Fannie has launched the new Project Eligibility Review Service (PERS) which allows lenders to submit attached condo projects to Fannie Mae to determine eligibility. Lenders are required to use PERS, submitting the information electronically, for all new and newly converted attached condo projects located in Florida.

Don’t forget that the bond market is closing early today ahead of the holiday weekend. I am sure that there are those who would disagree, but I think that early closes seldom result in rates dropping later in the morning – usually investors price defensively when there is no market in which to hedge production. When you combine that with the concerns about supply this year, it is a worry. The U.S. government agreed to invest $20 billion more in Bank of America, using TARP funds, along with guaranteeing an additional $118 billion of their assets.

This morning, the Labor Department announced that U.S. consumer prices (CPI) fell by a slightly smaller-than-expected margin in December. CPI was -.7%, and the annual pace of price increases was the slowest in more than 50 years. Core prices, which exclude food and energy items, were flat for the second month in a row in December. That compared to analysts' prediction for a 0.1 percent increase. During the last year consumer prices rose only 0.1 percent, which doesn’t help Social Security recipients and others who have fixed income payments tied to the index. After the news, and even before the news, the 10-yr is at 2.35% and mortgage prices are worse by between .125 and .250.

A preacher whose wife was expecting a baby went before the congregation and asked for a raise. After much discussion, they passed a rule that whenever the preacher's family expanded, so would his paycheck.
After 6 children, this started to get expensive and the congregation decided to hold another meeting to discuss the preacher's salary. There was much yelling and bickering about how much the clergyman's additional children were costing the church.
Finally, the Preacher got up and spoke to the crowd, "Children are a gift from God," he said. Silence fell on the congregation.
In the back pew, a little old lady stood up and in her frail voice said, "Rain is also a gift from God, but when we get too much of it we wear rubbers."
And the congregation said, "Amen".