SURVIVOR, THE APPRENTICE, FEAR FACTOR… AND THE US PRESIDENTIAL DEBATES? Not likely. This week’s first Presidential debate will bear no resemblance to “Reality TV”, as the candidates have just agreed to sign a 32 page document that dictates conduct for every move made during the debates, including precisely how the candidates will shake hands and within inches, exactly where their families will be seated. But even under this tight set of rules, the world will be watching. The state of the economy will certainly be a matter of hot discussion, and Greenspan himself will undoubtedly have the popcorn ready to go and be on the edge of his seat.

Mr. Greenspan was the one under the bright lights last week, as he and the Fed did their thing, and boosted the Fed Funds Rate by a "measured" .25% as expected. But as usual, Greenspan’s often-cryptic comments were under scrutiny. Highlights of his comments were that inflation appears to be tame, the economy looks to be gaining "traction", higher energy prices have been causing the recent "soft patch", productivity is terrific, and employment is improving. Mortgage Bonds bumped around during the week, gained just a whisker, but overall home loan rates were largely unchanged.

But there remains a lingering sense of uncertainty in the air, and the markets seem to be muddling around to find clarity and direction. Will this week’s action provide some direction for Traders with itchy trigger fingers? It just might…so read on to find out what this week holds in store.

PUMP AND DUMP”… A GREAT SLOGAN FOR A SEPTIC SYSTEM COMPANY, OR A NEW SCAM THAT MIGHT BE HEADING YOUR WAY SOON? BELIEVE IT OR NOT, THIS SUPER INGENIOUS SCHEME HAS ALREADY HIT THOUSANDS OF INNOCENT VICTIMS. DON’T BE FOOLED BY THIS ONE – READ THIS WEEK'S MORTGAGE MARKET GUIDE VIEW.

Buckle up and get ready…the road has been relatively calm of late, but the week ahead could sure be an interesting ride. Along with the first US Presidential debate between President Bush and Senator Kerry, the Economic Calendar is jam-packed with potentially market-moving reports every day this week. Traders are looking for some clarity and sense of direction, which this week might just provide. Remember that strong economic news tends to be bad for Mortgage Bonds and home loan interest rates, where weak or negative news can give Bonds a boost and help improve home loan rates.

And the Bush-Kerry scene isn’t the only showdown of the week…a confrontation is also coming on a technical level. Mortgage Bonds have not been able to muster up enough strength to convincingly break through the tough ceiling of resistance at $101.75, seen in the chart below. This monster resistance level has been in place since April of this year. But now look at the floor of support at the 25-day Moving Average, coming up fast to put Bonds in a tight squeeze. This strong floor of support has helped lift Bond prices since June, but it can clearly be seen on the chart that these two levels are fast converging…and Mortgage Bonds will soon have to make a move, either breaking up through the tough ceiling or crashing down through the floor of support.

Bottom Line: A full slate of economic news and events will be driving this week’s action. If the news is positive overall, Bonds will likely be pressured down through the 25-day Moving Average, and home loan rates could worsen.

“PUMP AND DUMP”… It’s one of the oldest stock scams on record. A group of scam “investors” spread phony hype or rumors about a stock, which causes the price to rise from frenzied buying. Once the stock is “pumped”, the scammers then begin to “dump” when the stock reaches a high water point. This then leaves the victims of the scam holding the bag, as the stock price inevitably crashes while the scammer are laughing all the way to the bank.

But check out the latest “pump and dump” scam to hit the street. This ingenious scheme is getting a lot of attention from the FBI and SEC, as this new creative scheme is fooling many investors, and causing wild swings in stock prices.

The scammers in this case reach your voice mail and leave a message, which appears to be for a friend, and they supposedly don’t “realize” that you are not that friend. The message left on your voice mail is usually from a woman, sounds very innocent, and goes something like this:

“Hey – I sure hope this is your new number, I wrote it down so fast the other day, but I’ve got big news. Remember that hot stockbroker I’ve been going out with? I know you were so mad last time I forgot to clue you in on one of his hot stock tips, which took off like a rocket. You made me promise I’d call you when I got the next one. (The caller now takes a bite of something, sounding like she’s casually eating while leaving the message) So anyways, here it is. Buy XYZQ. I don’t know anything about it, but he said this one is supposed to go up big from some announcement coming up. I told him that I’m even borrowing money from my Mom to invest, so I made sure he knew that this was guaranteed to make me lots of money. I already jumped on it earlier today. But he did say that if you’re going to do it too, you have to get in fast, because it’s going to take off within a few days. So that’s all I know, I promised I’d get you in and there you go! Oh, by the way, he’s also got a friend who is pretty cute…so give me a call and let’s get together, OK? Talk to you soon!”

Pretty ingenious. Imagine the recipient of this message, feeling like they just got a real inside scoop, just by the great fortune of someone dialing a wrong number. The SEC and FBI are investigating this seriously, because the stocks that have been involved have made huge moves, bilking victims out of significant sums of money. Use your good sense – any time something sounds too good to be true, contact a financial professional to learn more and educate yourself before you act in haste.

The calendar for this week is loaded with high impact reports, so strap in and get ready for what could be an exciting ride.

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