Tuesday’s bond market has opened in positive territory again following the release of weaker than expected economic news. The stock markets are mixed with the Dow up 9 points and the Nasdaq down 3 points. The bond market is currently up 9/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

The major report of the day was April’s Producer Price Index (PPI). It showed a 0.9% increase in the overall index, but only a 0.1% rise in the core data reading. Forecasts were expecting 0.8% and 0.2% increases respectively. This means that prices at the producer level of the economy, excluding food and energy prices, didn’t rise as much as thought. This is great news for the bond market and mortgage rates and raises hope that tomorrow’s CPI report will further ease inflation concerns.

Also posted early this morning was April’s Housing Starts. The Commerce Department reported that starts of new homes fell much more than was expected, indicating that the housing sector may continue to slow. April’s 7.4% drop was the largest since late 2004, but this is good news for bonds and mortgage rates.

During mid-morning trading, The Federal Reserve released April’s Industrial Production numbers. This data showed that output at U.S. factories, mines and utilities rose 0.8% last mon th, exceeding forecasts. This means that manufacturing activity was stronger than expected. While this is a negative for bonds, it seems to be irrelevant to today’s trading.

Tomorrow’s only report is April’s Consumer Price Index (CPI). It is similar to today’s PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its results likely will have a similar impact on the bond market and mortgage rates as this morning’s PPI release did. Current forecasts are calling for increases of 0.5% and 0.2% respectively in the overall index and core data.

Also worth noting are public appearances by Fed Chairman Bernanke and former Chairman Alan Greenspan. Mr. Bernanke makes public speeches this evening and Thursday while Mr. Greenspan will talk Thursday. If their speeches give any indication of a future Fed move, expect the markets to react accordingly.

If I were considering financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Float 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.

a la mode

By JOHN TIERNEY Published: May 16, 2006

President Bush promised tonight to regain “full control” of the border with Mexico. He won’t, but that’s beside the point.

His job last night was not to secure the border but to pretend he could. Like Ava Gardner tending to the germphobic Howard Hughes in his isolation chamber, Bush had to reassure the Minuteman Republicans that they were safely sealed from the perils outside. To Bush’s credit, he sounded as if he believed it himself. “We’re a nation of laws, and we must enforce our laws,” he said firmly, precisely the cover needed by Republicans to vote for sensible reforms.

His plan to send a few thousand National Guard troops to the border is a symbolic gesture, but symbolism is what’s needed. Immigrants will find ways to evade the proposed new ID card requirements, as well as the new high-tech sensors at the border, but the ideas sounded good enough on television. Bush’s conservative critics accused him of playing political games, but he was just responding in kind to their tactics.

The fixation on “securing the border” is a political — and psychological — problem, not a rational response to a genuine national threat. People living along the border understandably object to strangers’ sneaking through their backyard, but why are so many people in the rest of the country obsessed with keeping out foreigners?

The border hawks have two chief arguments, starting with that great debate stopper: Sept. 11. A porous southern border is supposedly no longer tolerable now that terrorists have declared war on America and are threatening even more catastrophic attacks.

But if terrorists are smart enough to plan such an attack, they’re smart enough to get into the United States, no matter how many agents and troops are on the Mexican border. If terrorists have the determination to train for years, if they can pay for flight lessons or anthrax or a nuclear bomb, then they can easily bribe or forge their way into America — or waltz in with legitimate visas.

Mohamed Atta did not have to hire a coyote or swim across the Rio Grande. He and the other hijackers all entered the country legally. The 500,000 or so people who manage to sneak in from Mexico each year are a minuscule fraction — about 1 percent — of the tourists and students and other visitors who enter America legally.

Mexico is not the preferred route of the suspected terrorists caught so far because they prefer more convenient options, like coming in from Canada.

Even if the northern border were sealed with the Great Wall of Saskatchewan, there would still be thousands of miles of unsecured coastline — and plenty of drug runners with boats and planes who would have no trouble delivering a terrorist or a suitcase bomb.

The border hawks’ other argument is that America must enforce its immigration law or succumb to “mob rule,” as one of the Minuteman leaders warned. But for most of the country’s history, America allowed essentially unlimited immigration without descending into Hobbesian chaos. The country survived just fine when immigrants were governed solely by the law of supply and demand.

Bush tried a brief dose of economic reality in last night’s speech, pointing out that the lure of America for poor Mexican workers “creates enormous pressure that walls and patrols alone will not stop.” As he explained, the best way to reduce illegal immigration is to change the law so more people can enter legally.

But that was the rational part of the speech, which Bush knew wasn’t enough.

He had to throw in the tough border talk and the new ID cards. He had to deal with the new outbreak of xenophobia, the fear that has always been easy for demagogues to arouse because it’s such a basic human instinct.

Distrusting foreigners made evolutionary sense when outside clans threatened to bring in disease and encroach on hunting grounds. It made sense during the thousands of years when towns built walls to stop invaders from plundering their wealth and enslaving their inhabitants.

But the immigrants now coming across the Mexican border do not want to sack our cities. They’re not about to pillage our granaries or march home with Americans in chains. They just want to mow our lawns and clean our offices.

They’re coming to feed us, not take our food, yet we’re demanding that our leaders keep them out. No foreign busboys! No Mexican cooks! Stop them before they grill again!