QUOTE OF THE WEEK... "Never tell your resolution beforehand, or it'stwice as onerous a duty."--John Selden, English jurist and scholarINFO THAT HITS US WHERE WE LIVE...Our leaders in Washington aren't telling if they've truly resolved to put ourfiscal house in order, but at least last week's deal to avert thefiscal cliff left housing a winner on most issues. First, theyextended mortgage forgiveness debt relief through 2013. If they hadn't donethis, principal balances written off by lenders to help homeowners withunderwater mortgages would have been treated as ordinary taxable income. Thebill also re-established the deduction for mortgage insurance premiums for 2012and 2013 for people with adjusted gross income below $110,000.
In addition, the compromise offers tax credits to homeowners makingenergy-efficient home improvements in 2012 and 2013. Builders get a tax crediton new homes constructed in 2012 and 2013 that meet federal energystandards. U.S. manufacturers of energy efficient appliances also earn taxcredits. Best of all, tax deductions for mortgage interest andproperty taxes were left untouched, but that battle isn't over,since the politicians will soon be reforming the tax code. Alwaysconsult a tax professional for definitive answers on all these issues.
BUSINESS TIP OF THE WEEK... People buy from people. Rather than talkingbusiness or current events with prospects, bring up family, hobbies, whateverinterests you. Take the time to build a personal connection first.
All was not upbeat as stocks fell Thursday after theminutes from the Fed's December meeting revealed some officials want to see anend to the central bank's bond-buying economic stimulus program later thisyear. Economic data continued mixed, with ISM Manufacturing andinitial and continuing jobless claims missing estimates. But ISM Servicestopped forecasts and showed growth for that sector, while Friday'sDecember Employment Report added a modest 155,000 jobs, although theunemployment rate remained at 7.8%.
For the week, the Dow ended up 3.8%, to 13435; the S&P 500 wasup 4.6%, to 1466; and the Nasdaq was up 4.8%, to 3102.
Bonds got slammed as stocks soared on the cliff deal and investorsworried the Fed might slow its bond purchases. The FNMA 3.5% bond we watchended the week down .14, at $106.05. National average mortgage ratesheld near record lows last week in Freddie Mac's Primary Mortgage MarketSurvey. In the Mortgage Bankers Association weekly survey, applications forpurchase loans were finally down, after increasing five weeks in a row.
DID YOU KNOW?... At the New Year, a resolution is an expression ofintent to do something. But in the corporate world, a resolution is an officialdocument representing an action on the part of the Board of Directors.
Friday, the November Trade Balance should shrink abit, showing a little more strength in our exports. This will be followed inthe afternoon by the December Federal Deficit, forecaststill way too high, above $80 billion. Please note, that's forthe month!
Economic Calendar for the Week of Jan 7 – Jan 11
| Date | Time (ET) | Release | For | Consensus | Prior | Impact |
| W Jan 9 | 10:30 | Crude Inventories | 1/5 | NA | –11.1M | Moderate |
| Th Jan 10 | 08:30 | Initial Unemployment Claims | 1/5 | 366K | 372K | Moderate |
| Th Jan 10 | 08:30 | Continuing Unemployment Claims | 12/29 | 3.200M | 3.245M | Moderate |
| F Jan 11 | 08:30 | Trade Balance | Nov | –$41.8B | –$42.2B | Moderate |
| F Jan 11 | 14:00 | Federal Deficit | Dec | NA | –$86.0B | Moderate |
>> Federal Reserve Watch
| After FOMC meeting on: | Consensus |
| Jan 30 | 0%–0.25% |
| Mar 20 | 0%–0.25% |
| May 1 | 0%–0.25% |
Probability of change from current policy:
| After FOMC meeting on: | Consensus |
| Jan 30 | <1 o:p="o:p"> |
Mar 20
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