Jun. 28, 2007: Mortgages: what is more important, paying your credit card or mortgage? And some aging jokes.

Jun. 28, 2007: Mortgages: what is more important, paying your credit card or mortgage? And some aging jokes. Rob Chrisman

“My wife and I had words. But I didn’t get to use mine.”

In a surprising survey (very surprising?) released last week, Experian showed that data indicates that many subprime borrowers are paying off their credit card bills before their mortgage payment! Do they think that they don’t have much to lose by not paying their mortgage? Are their credit cards more important? Prime borrowers, by the way, haven’t changed: they are still less likely to be late on their mortgage than on their credit cards. Check out: http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070620_271294.htm

Do you own a house in another nation? Investing in real estate once meant owning rental property downtown or buying shares in a U.S.-based real estate investment trust. These days, real estate investing is international: dozens of global real-estate mutual funds have launched in the U.S. in the past two years with almost $20 billion in assets, and some Americans buying properties abroad, especially in lower-cost countries. They then turn them over to property management firms to generate income. The trend comes as investors seek ways to sidestep the weakening U.S. housing market and diversify. Real estate is the ultimate “local” investment, since what happens in New York or London, for instance, has little effect on the real-estate market in, say, Perth, Australia. As a result, “Multi-Currency (MC) Loans” have sprung up. A Multi-Currency mortgage is a foreign currency mortgage where the borrower takes out a loan in an interest-favored foreign currency on an eligible property in the US (or other eligible countries).  I don’t have much information on them, but the offer potentially lower interest rates versus a US-based mortgage but the borrower is subject to currency fluctuations.

This morning at 8:30 weekly Jobless Claims (expected -9K, actually -11k) and the final read on GDP for the first quarter were announced, neither moving the market much. The FOMC meeting adjourns at 11:15AM PST. It is widely expected that they will not change overnight rates at this meeting. But, as we have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. IF the FOMC statement indicates that inflation seems to be less of a concern to Fed members and that the economy is expected to slow, that could cause a bond rally that easily breaks below the 5.00% (currently at 5.09%). However, if we don’t’ get favorable news, seeing the yield move back above 5.10% is a very real possibility.

Q: Why should 50+ year old people use valet parking? A: Valets don’t forget where they park your car.

Q: Is it common for 50+ year olds to have problems with short term memory storage? A: Storing memory is not a problem, retrieving it is a problem.

Q: As people age, do they sleep more soundly? A: Yes, but usually in the afternoon.

Q: What is the most common remark made by 50+ year olds when they enter antique stores? A: “I remember these.”