TAKE ME HOME FROM THE BALLGAME… It was a week of Visine drops and extra coffee for millions who stayed up late to watch the baseball playoffs. Two rare Game 7 extravaganzas capped off some terrific late night excitement with the Red Sox and Cardinals emerging victorious. Also grabbing a fair share of the headlines is the race for the Presidency...and the mud-slinging continues to fly faster than a Pedro Martinez fastball.

But the Fox Sports Network ratings weren’t the only things moving up last week – oil prices continued their relentless climb, hitting new record highs and pushing the price per gallon of gasoline above $2.

The Yankees might be the only ones who had a worse week than the stock market, which was battered for huge losses. Historically, October is a bad month for stocks. True to form, the Dow is indeed having a very bad October, with the index falling an ugly 315 points. The weakness in stocks helped Mortgage Bonds reach their best levels in almost seven months, which in turn helped home loan rates improve slightly.

SO WE KNOW THAT BASEBALL PLAYERS ARE AMONG THE HIGHEST PAID PEOPLE IN THE COUNTRY… BUT SPEAKING OF TOP EARNERS – DO YOU KNOW HOW MUCH OF OVERALL TAXES THE TOP 1% OF INCOME EARNERS PAY? THE RESULTS MAY SHOCK YOU. DON’T MISS THIS WEEK’S MORTGAGE MARKET VIEW.

Let’s take a look at what we can expect for home loan rates this week. Now although Mortgage Bonds and home loan rates have some negative forces working against them – such as Bonds being very “overbought” and running into tough technical resistance – there are also several factors in play that should help Mortgage Bonds and home loan rates. As stocks do poorly, bonds typically improve, causing home loan rates to improve. Stocks loathe uncertainty, and there has been plenty of uncertainty of late… the Presidential race is up for grabs, as well as oil continuing to trade near all-time highs. This uncertain enviroment will not likely be lifted until after the Presidential Election… so home loan rates should be steady to slightly improved in the near-term.

On a technical level, Mortgage Bonds currently have many underlying “floors of support”. Seen in the chart below, these numerous floors of support should help Bonds retain their current levels unless some surprisingly strong economic or inflationary news hits the wire this week.

“THE HARDEST THING IN THE WORLD TO UNDERSTAND IS THE INCOME TAX”. Who said it? Albert Einstein. And beyond being often tougher to decipher than quantum physics… and a heated topic this election season… is the Tax system really fair?

Take a look at the latest numbers:

The economic calendar expands this week with a nice assortment of mid and higher-level reports, including Existing and New Home Sales.

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 October 25 – October 29, 2004