GET OUT THE RAINGEAR…What a difference a week makes! Just two weeks ago Mortgage Bonds and home loan rates were on a wild and crazy roller coaster ride, but this past week was one of the very calmest on record. Bond traders could just as well have taken the week off, as Bond prices traded in remarkably shallow ranges. The narrow trading range was due in part to the lack of economic news that was scheduled, with nothing earth shattering or of market-moving impact on the calendar. Traders stretched and yawned their way through the week, and seemed to “catch their breath back” from the all the volatile activity seen previously. Overall, home loan rates were unchanged for the entire week.

Even John Kerry’s announcement that John Edwards would be his running mate, or Initial Jobless Claims coming in at a four year low did nothing to impact Bond prices or interest rates. But is this just the calm before the storm? Very likely. Read on to find out what’s brewing for the week ahead.

ALWAYS THOUGHT A HEALTH CARE POWER OF ATTORNEY WAS JUST FOR SPECIAL CIRCUMSTANCES OR THE ELDERLY? THINK AGAIN…BE SURE TO READ THIS WEEK’S SPECIAL MORTGAGE MARKET VIEW, WHERE NATIONALLY KNOWN SPEAKER, AUTHOR AND TELEVISION HOST SUZE ORMAN OFFERS HER VALUABLE INSIGHT ON HOW TO USE A HEALTH CARE POWER OF ATTORNEY TO PROTECT YOURSELF AND YOUR FAMILY, EXCLUSIVELY FOR MORTGAGE MARKET GUIDE WEEKLY READERS.

The week ahead will thunder in with lots of high impact economic news for Traders to absorb. Additionally, the chart below very clearly illustrates the current tug of war over the 100-day Moving Average. Mortgage Bonds appear to have danced right along this line for the entire week, and are due for a breakout. The contained trading last week acts much like winding a spring tightly, and means that when the Bond does make a move, it will probably be dramatic.

Bottom Line: this week promises to be marked by much greater volatility in home loan rates. Stay tuned and fasten your seat belts.

THIS WEEKS SPECIAL MORTGAGE MARKET VIEW FEATURES SUZE ORMAN, WRITING TO MMG WEEKLY READERS ABOUT THE IMPORTANCE OF HAVING A HEALTH CARE POWER OF ATTORNEY…WHAT IT MEANS, AND WHY YOU SHOULD CONSIDER IT RIGHT NOW!

Dear MMG Weekly Reader:

About 20 years ago the US Supreme Court recognized, for the first time, the concept we all know as “the right to die”. In other words, the right to choose not to be hooked up to a machine if it is the only thing keeping you alive. However, this right is totally dependent upon you making your wishes known in a clear and convincing fashion. In legal terms this means "put it in writing". A Power of Attorney for Health Care, an Advance Directive and a Living Will are the key documents that can ensure your wishes are carried out.

The Power of Attorney (POA) appoints a person, known as “an agent”, to make health care decisions for you, as if they were you. The Advance Directive is a way of instructing your doctors in advance about your wishes. Some of the basic issues addressed in an Advance Directive are:

I do not want my life to be prolonged if:

1. I have an incurable and irreversible condition that will result in my death within a relatively short time,
2. I become unconscious and, to a reasonable degree of medical certainty, I will not regain consciousness, or
3. The likely risks and burdens, including costs, of treatment would outweigh the expected benefits.

If you have the Power of Attorney for Health Care and the Advance Directive you can bypass creating a Living Will. You can get sample forms for these documents at Partnership for Caring.

The importance of these documents cannot be overemphasized. Most health insurance policies run out after $1,000,000 of coverage and then your family is responsible for all the additional costs. By making your wishes known to your family you can remove undue financial and emotional stress.

There's also another twist to think about given the recent changes in health care privacy rules (known as HIPAA). I recommend making it clear in your document when you want your agent's authority to become effective. If you make it immediate then your agent can make decisions on your behalf without getting permission from anyone else. But – if you don't make this clear, then your agent may need to wait until the doctor informs the agent of your condition. Additionally, with the new HIPAA rules, doctors are struggling to determine when and what they can communicate to a patient's family or agent. A solution is to state in your POA or Living Will that you waive the HIPAA privacy protections in advance, so your agent can easily get medical information or a second opinion about your condition.

Most importantly, your appointed agent should be someone you trust to make these tough decisions in a way that best carries out your wishes.

The economic calendar rrrreeeally heats up this week with a significant number of reports that are sure to attract Bond Traders’ attentions. The action begins on Wednesday with the release of the high impact Retail Sales Report. This is followed on Thursday by a virtual buffet of economic reports. Friday brings another round of economic news, highlighted by the Consumer Price Index. Additionally, stock earnings season kicks into high gear with more than 100 major companies reporting. This could have a large effect on both the stock and bond markets.

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

For the week of July 12 – July 16, 2004