HO-HO-HOLD on to your hat, what a week to review! Just like a holiday package, last week was loaded with nice surprises, starting with the capture of Saddam Hussein outside of his hometown of Tikrit, Iraq. The former dictator was found hiding out in a farmhouse cellar with assault rifles, a pistol, a taxi and $750,000 in $100 US bills. The leader of the Iraqi National Congress, Ahmad Chalabi, indicated Saddam would be handed over to the Iraqi people for trial in the very near future. Stocks roared higher on the news, and despite choppy trading midweek, the Dow ended the week at its highest point since May of 2002.

And interestingly enough, mortgage bonds and interest rates didn’t get left out in the cold. Although bonds and stocks tend to move in opposite directions, bonds also enjoyed a surprising run up as well. Even in the face of strong economic news, bonds surged ahead. The reason for the nice move in bonds was due to the reported low levels of inflation. This helped mortgage interest rates decline by about .125% last week.

A SPECIAL HOLIDAY TREAT: DON'T MISS THIS WEEKS EXCLUSIVE MORTGAGE MARKET VIEW, WHERE NATIONALLY KNOWN SPEAKER, AUTHOR AND TELEVISION HOST SUZE ORMAN OFFERS SPECIAL INFORMATION JUST FOR MORTGAGE MARKET GUIDE WEEKLY READERS. THIS WEEK, SUZE OFFERS HER THOUGHTS ON UNDERSTANDING YOUR RELATIONSHIP WITH MONEY AND DEFINING “TRUE WEALTH”.

NOTE: Your next issue of the Mortgage Market Guide Weekly will arrive on January 5th. Happy Holidays and Best Wishes for a Happy and Healthy New Year!

This coming week will be a busy time for shoppers, but for stock and bond market participants, it will be a different story. Barring any sensational news events, trading on Wall Street will likely pale in comparison to the happenings on Main Street, as traders will be rightfully preoccupied with home and holiday festivities associated with Christmas and Hanukkah. Stock and bond trading at this time of year typically takes place with far less volume, so while some movement may appear exaggerated based on very light trading, the markets as a whole do not generally make any large moves during the end-of-the-year holidays. As a result of this seasonal trading pattern, mortgage bond prices and mortgage interest rates should hold relatively steady for the remainder of this year.

One important note of interest…Bonds currently appear to be “defying gravity” and have even closed above the important 200-day Moving Average. But note the unusual candlesticks shown on Wednesday and Friday of last week in the chart below. In Japanese Candlestick trading analysis, these cross-shaped candles are called “Doji Stars” as they resemble a star. The “Doji Star” typically indicates impending volatility. Economic reports of late have been strong, which typically are bad for bonds – so at their current high levels, it sure appears that bonds are somewhat overbought. These factors would seem to indicate that the impending movement these Doji Stars may be predicting could be a movement downward in mortgage bonds, resulting in higher mortgage interest rates.

THIS WEEKS SPECIAL MORTGAGE MARKET VIEW FEATURES SUZE ORMAN, WRITING TO MMG WEEKLY READERS ON THE IMPORTANCE OF UNDERSTANDING YOUR RELATIONSHIP TO MONEY AND TRUE WEALTH.

Dear MMG Weekly Reader:

One of the first steps to building your net worth is to understand your relationship with money. Money is not simply money. It is a physical manifestation of who you are. I call it the “currency of your life”. You are the one who earns the money, you are the one who gets a paycheck and decides if you will spend it, save it, or invest it. Money cannot do anything without you. So when your money is not doing well, this means that you are not doing well with your money. And that’s because you are making choices that are not for your own good!

Let’s look at our relationship with credit card debt. When you have credit card debt, you are overspending, and when you overspend, you are often expressing some emotion that causes you to act irrationally with your money. Usually those emotions are fear, shame or anger. And in my opinion those are the three main internal obstacles to wealth.

These three emotions lead you to spend more money in an unconscious attempt to temporarily feel better. I say “temporarily” because the holes in your heart cannot be filled by what you buy. The same way a cup full of holes and cracks cannot hold the water that is poured into it, you cannot deal with money responsibly if you are broken inside. Just like a broken cup, money will come in and flow out of you, with no control.

You see, when it comes to money, this is what I have learned over the past 23 years. I used to think that once someone had money, they would be happy. But no, that is not how it works. Money does not determine your emotional state of being. It is your emotional state of being that determines how much money you have and get to keep.

Read that line again, for that is the greatest piece of advice I will ever have to give you.

What is so funny—or perhaps tragic—is that all of us have learned to define ourselves by the things we have around us. For some reason we think that the things we purchase are what give us our value. That has never been true, nor will it ever be true. True wealth comes with the understanding that we define the things we have around us and not the other way around.

When who you are is more important to you than what you have…when your self worth is equally as important to you as your net worth…then you truly are on the road to wealth.

All the Best to you –

Suze Orman

Because trading will be quite light this week with the holiday, any significant market moves based on economic data will have to be taken with a grain of salt. The Economic Reports being released this week are of only moderate importance to mortgage interest rates, and wouldn't typically prompt significant moves, even in a normal trading environment.

Remember, as a general rule, weaker than expected economic data would indicate the economy is not improving as quickly as expected, and could cause mortgage interest rates to improve. Positive data would indicate a strengthening economic climate, and could cause mortgage interest rates to gradually climb higher.

For the week of December 22nd - December 26th, 2003