Monday’s bond market has opened down slightly as investors prepare for this week’s events. The stock markets opened with gains but have since fallen into negative ground. The Dow and Nasdaq are both currently down approximately 3 points. The bond market is down 4/32, but I am not expecting to see a change in this morning’s mortgage rates.

This week is pretty light in terms of economic releases scheduled for the bond market to digest. There are only three reports scheduled to be posted, with only one of them considered to be of high importance to the bond market. However, in addition to those three reports, we also have another FOMC meeting to deal with. This makes it quite likely we will see another week of volatility in the markets and possibly mortgage pricing.

This week’s FOMC meeting is scheduled for Wednesday, not Tuesday as previously noted. It is expected to bring another quarter point increase to key short-term interest rates. As usual, the biggest concern is what the post-meeting statement may say. Analysts are actually quite confused about whether or not the Fed has indicated that the rate hikes will end soon. Fed Chairman Bernanke’s recent testimony led many to think that a “pause” in the rate hikes was coming. But he later made comments on that subject that his words were misunderstood.

This l eft many scratching their heads trying to figure out what the Fed’s plans are. Hopefully, this post-meeting statement will help clarify their stance and expected moves. Regardless of whether it indicates more hikes are coming or the end is near, I am expecting to see a fair amount of volatility Tuesday afternoon and would not be surprised to see afternoon adjustments to mortgage rates.

The week’s first important release is a big one. Early Thursday morning we will see the release of April’s Retail Sales data. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for an increase in sales of approximately 0.6%. A smaller than expected increase should push bond prices higher and mortgage rates lower. However, a larger increase could fuel bond selling and lead to higher mor tgage rates Thursday.

Overall, look for Wednesday to be the most important day of the week with the FOMC meeting, but Thursday is also of great interest with the Retail Sales report and 10 year Treasury auction. The rest of the week will likely be fairly calm unless we get some unexpected news on the geopolitical front.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Provided by a la Mode.

SAN FRANCISCO (AP) — Wachovia Corp., the nation’s fourth largest bank, is muscling into the West with a $25.5 billion deal to buy Golden West Financial Corp., a mom-and-pop shop that blossomed into a prized savings and loan.

The stock-and-cash acquisition, announced late Sunday, values Golden West at $81.07 per share - 15 percent above the company’s closing price last week on the New York Stock Exchange.

Golden West shares rose $5.37, or 7.6 percent, to $75.88 in early trading on the New York Stock Exchange. Wachovia shares fell $3.36, or 5.7 percent, to $56.03.

With the takeover, Charlotte, N.C.-based Wachovia would pick up a 285-branch network spanning 10 states that would fill a void in the company’s operations. Golden West earned $1.5 billion last year, primarily from making the adjustable rate mortgage loans that have been its bread and butter for decades.

Oakland, Calif.-based Golden West operates its branches as World Savings Bank - a brand that began to take shape 43 years ago when the husband-and-wife team of Herbert and Marion Sandler paid $4 million for a San Francisco Bay area savings and loan with just $34 million in assets and 25 employees.

Golden West now has $125 billion in assets and employs 11,600 workers under the leadership of the Sandlers, now in their mid-70s, who are still the company’s co-chief executive officers in one of corporate America’s most unique partnerships.

Wachovia has accounts established with 13.4 million households and businesses, but its 3,159 offices have been limited to 16 states concentrated in the East and South. The company acquired a small presence in California earlier this year with a $3.9 billion acquisition of auto lender Westcorp, which has 19 branches in southern California.

Buying Golden West will enable Wachovia to substantially expand its presence in California, where World Savings has 123 branches and $32 billion in deposits. The deal also will give Wachovia its first branches in Arizona, Colorado, Illinois, Kansas and Nevada.

If the deal goes through as expected late this year, Wachovia will control about $669 billion in assets and deposits of $390 billion.

There is little overlap between the two companies. Wachovia expects to close 55 branches and lay off 1,100 employees, leaving a combined payroll of 110,000 workers. The cost-cutting is expected to reduce the combined company’s expenses by $53 million annually.

“We’re very excited to partner with such strong management and with an extremely knowledgeable and diligent team of sales leaders,” Wachovia Vice Chairman Ben Jenkins said. “Customers will continue to be served by the same dedicated and passionate people who have always met their needs - only over time, they’ll have more products and services to choose from.”

A consumer rights coalition troubled by Wachovia’s lending practices already plans to ask federal regulators to block the Golden West takeover.

The Inner City Press/Community on the Move and the Fair Finance Watch asserts Wachovia unfairly imposes higher rates on home loans to African-Americans than non-Hispanic whites and finances pawn shops and payday lenders known for charging high rates for short-term loans to low-income households.

Big bank mergers commonly face objections from consumer groups, but the challenges rarely derail the deals.

The proposed sale resolves the question of what will happen to Golden West after the Sandlers retire - a question that had been dogging the company for several years. Herbert is 74 and Marion is 75.

“Wachovia is the company we selected to entrust with our legacy as one of the nation’s most admired and trusted financial institutions,” Herbert said. “We share the same values of operating with integrity, putting customers first and encouraging teamwork.”

The Sandlers own a combined 10.24 percent stake in Golden West, according to documents filed with the Securities and Exchange Commission. The sale will generate $2.6 billion for the couple.

The Sandlers and Marion’s brother, board member Bernard Osher, have agreed to vote their shares in favor of the sale, Wachovia said. Osher owns a 3.7 percent stake in Golden West.

If the marriage isn’t consummated, a $995 million breakup fee could be imposed.

The deal calls for Golden West shareholders to receive a cash payment of $18.75 per share and 1.051 shares of Wachovia stock for each of their shares. Wachovia’s shares finished last week at $59.39 on the New York Stock Exchange.

AT THE end of the 19th century, an intrepid social scientist visited Stockwell, in south London. He was involved in an ambitious project, led by the shipping magnate Charles Booth, to colour-code every street in the capital according to its social make-up. In general, the area struck him as comfortable. But just east of Stockwell Road he found a pocket of filth and squalor, with rowdy residents and broken windows. It was, he believed, “far the worst place in the division”.

Since then, the area has been transformed. Dismal two-storey cottages have been swept away and replaced by grass and the apartment blocks of the Stockwell Park Estate. But the appearance of the neighbourhood has changed more than its character. Julie Fawcett, who lives in one of the blocks, characterises her neighbours as “the mad, the bad and the sad”. Unemployment is more than double the borough average. Next to the very street that appalled the Victorian social scientist is one nicknamed Heroin Alley.

In many ways, London has changed dramatically in the past century. It has sprawled far beyond its 1898 boundaries. The network of underground transport has expanded, and cars have appeared. The city has been bombed in two world wars. The middle classes fled, then returned. Yet when Booth’s maps are updated using data from the last census, the changes are less striking than what has stayed the same. Not only do the broad patterns found in the 19th century hold—the East End is still poor, the West End still rich—but so do many local ones.

Booth’s method of judging streets was necessarily impressionistic. Researchers peered through windows and into back gardens in search of clues. A torn waistcoat on a clothes line in Kentish Town, north London, “told clearly of working-class occupants”. Police officers were asked their opinions. Of the residents of one street in the south London neighbourhood of Battersea, the local copper asserted: “People have improved their houses but not their manners.” That road was coded black, for “vicious, semi-criminal”—the lowest of seven categories.

Sadly, the 2001 census does not measure viciousness. But it does measure people’s socio-economic status. By collapsing its eight categories, and Booth’s seven, into four, it is possible to see how a neighbourhood has changed (or not changed) over a century.* The map on this page shows the results for one area that has altered more than most: north Chelsea.

In 1898, Chelsea was socially mixed, and neither especially rich nor especially poor. Booth’s researchers found some well-to-do residents in the Georgian terraces and on the main roads; before the advent of cars, busy roads were often smart. Dodgier folk crowded into the squalid courts and alleys. Worst was a now-demolished street southeast of the Fulham Road, the neighbourhood’s main drag, which featured “evil looking drink sodden old Irish women”.

Chelsea is now one of the toniest parts of London. Had they walked the same streets a century later, Booth’s researchers would no doubt have noticed designer clothes shops and a high concentration of Porches and BMWs. Managerial and professional workers are now the dominant group in the area. Many streets that were middling in Booth’s day are now wealthy, and some pockets of deep poverty have disappeared.

But poverty has not been altogether banished from this part of Chelsea, nor has it moved much. Most of the poorest areas in 2001 were also poor in 1898, and in almost exactly the same places. The reason is that the worst Victorian slums have been knocked down and replaced with tracts of social housing. Some of this housing was built by charitable trusts in the early 20th century; a nastier, post-war edifice just north of Draycott Avenue is the responsibility of the council.

When Chelsea’s mean streets escaped the wrecking ball, they invariably went up-market. The houses of Caroline Place were “poor and rather rough”, with “some Irish” inhabitants, in 1898. Two- and three-bedroom houses in the street, since renamed Donne Place, now sell for £1.5m ($2.8m), according to Nick Boden, a local estate agent. (He describes the neighbourhood as “prime, prime, prime”.)

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