December 2011 Views You Can Use

"Should old acquaintance be forgot, and never brought to mind?" - As we head into the final month of 2011, one thing that we can't forget and that keeps coming to mind is the strength of the economy. The articles below shed some light on the economy as a whole to offer a global perspective on where we're at…and what to look for in the near future:

• A Productive Year? – Where is the US economy as we finish 2011? The article below puts the answer into perspective.
• Let's Make A Deal – Discover last-minute deals that make the season bright!
• Q&A: Lessons from Europe? – Find out what we can learn from Europe…and how it impacts home loan rates.

Best wishes to you and yours this holiday season. If you have any questions or would like to discuss your unique situation, call or email today. And please forward this newsletter to friends, family members and coworkers who may find the information helpful.

A Productive Year?

One of the best ways to look at a snapshot of the overall US economy is to look at Gross Domestic Product (GDP), which measures the total production and consumption of goods and services in the US to shed light on the economy's behavior. Recently, we saw the second of three looks at the US's Third Quarter GDP.

The bad news was that the second reading was actually lowered to 2%, compared to the first reading of 2.5%. While that may not sound like much of a difference, it's a sizeable drop in GDP. And when we factor that drop into the year-over-year reading, GDP is an anemic 1.5%.

The good news is that we're not in a recession and the Third Quarter reading is still up from the First Quarter. But this very weak growth reading is not nearly enough to put a dent in the Unemployment Rate. Additionally, any external shock to the economy - for example, a deepening Euro crisis - could apply enough pressure to hit the US economy rather hard. This is very much like a person whose immune system is weak, which makes them extra susceptible to catching an illness that they might normally be able to fight off.

That said, the US economy is still much healthier than a lot of European countries, which are more like the walking dead…meandering slowly and living on borrowed time as ever growing debt literally buries them. Right now, Germany holds all the cards - and they want to wait and see if the troubled Euro member countries can truly invoke austerity and grow their way out of deficit.

The problem is that the market may not be that patient. Yields in Italy, Spain and Portugal have risen sharply in recent weeks, and the only thing keeping them from going higher still is that the European Central Bank has been buying Bonds from those countries. So the clock is ticking in Europe. In the very near future either the European Central Bank will have to print a ton of money to continue buying those Bonds…or some of these southern European countries may leave the Euro. As this story plays out, the US Dollar and US Bonds - and home loan rates overall - continue to benefit from a safe haven trade.

Let's Make A Deal: How to Save on Last-Minute Holiday Shopping

Black Friday has come and gone. But, if you're like most people, you probably still have a little holiday shopping left to do. Whether you're looking for small items like toys and clothing, big-ticket items like electronics or maybe a car, or even a plane ticket home to see the family, the following tips can help you save on your last-minute holiday purchases.

Toys, Electronics, Jewelry, and Even Groceries: Believe it or not, you can get the best deals on a wide variety of gift ideas without ever leaving your house. So whether you're looking for toddler toys, a big screen TV, a diamond necklace or even the groceries you need for that holiday feast, you should start by shopping online. For example, websites like PriceGrabber.com allow you to compare prices at popular stores. You can also save by printing coupons on the items you want by visiting websites such as Coupons.com and CouponMom.com. Finally, consider visiting sites like RetailMeNot.com that allow people to share coupons for thousands of popular stores and items.

Clothing: If you still need to buy a gift for a teenager, then the clothing store may be a good place to start. This time of year, you'll find tons of holiday specials that make last-minute shopping easy. But you'll want to plan out and time your trip to the mall. That's because when the weekend rolls around, just about every dressing room is filled...and the best deals have been picked over already. Why? It's simple. With the large number of special promotions to be marked and shelves to be stocked, most clothing stores get started early. And savvy shoppers, like you, can get the best deals and the best selection by Thursday evenings. As an added bonus, the stores, dressing rooms, and checkout lines aren't nearly as crowded - so you save on stress, too!

Cars: Perhaps you're in the market for a big-ticket item this holiday season. Lots of automakers and dealers offer special financing or holiday specials to help increase sales near the end of the year. When it comes to buying a car, you may already know that your best chance to negotiate a better price is at the end of a month when car dealers need to make their monthly quotas. But did you know you can drive home a great deal early in the week, especially during the morning? At that time, the dealerships aren't overflowing with shoppers like they are on the weekend, so you'll get more personalized attention. Plus, salespeople are more likely to negotiate when they don't have three or four other buyers waiting in the wings to pay full price.

Airplane Tickets: Still looking for a plane ticket to see friends and family members during the holiday season? In addition to looking for cheap airfare on sites like Priceline.com, Orbitz.com, and HotWire.com, remember to shop at the right times. For example, your best chance for saving is Wednesday morning. That's because airlines introduce their savings over the weekend and during the first few days of the week, subtle price wars begin. By early Wednesday, the savings have usually hit their peak...and there are still plenty of seats left for you to capitalize on. And remember, the more flexible you can be on your travel dates, the better chance you have of grabbing a good deal.

The moral of the story is that with a little planning, you can still save big on large and small items on your holiday shopping list.

Q&A: Lessons from Europe?

QUESTION:What can we learn from Europe's financial crisis?

ANSWER: The takeaway from Europe is just how quickly things can - and probably will - change. Unless the US government does something meaningful to address our own debt problems, we will see a price adjustment in the Bond market sometime in the future. Lately, US Bonds have been benefiting from the problems in Europe…and since home loan rates are tied to Bonds, home loan rates have also benefited. But this won't last forever. Somewhere down the road, something's gotta give, which means the near historically low home loan rates may be living on borrowed time.

If you have any questions about how the US economy or crisis in Europe impacts the home loan rate you can get, please call or email today. It will only take a few moments to discuss what's going on based on your unique goals and financial situation.

The material contained in this newsletter has been prepared by an independent third-party provider. The material provided is for informational and educational purposes only and should not be construed as investment, financial, real estate and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

As your Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today!