To Our Clients, Colleagues and Friends:   

· Now we know what mortgage banking guys are really thinking about.  Last week we mistakenly noted that Pam Anderson had turned 51.  Well, we got dozens of e-mails from readers correcting us that she was only 41.  Aren’t you guys supposed to be out selling loans or something?  Hey, 41 or 51, she’s still great looking.  

· Charles Schumer, how about pontificating on things you know something about?

· This week was the 45^th anniversary of, depending on your point of view, (a) the world’s greatest pitching duel or (b)  the world’s most boring game.  Juan Marichal of the S.F. Giants and Warren Spahn of the Milwaukee Braves dueled each other for 16 scoreless innings the first week of July in 1963. In the bottom of the 16^th the Great One, Willie Mays, ended the game with a walk off homer.  Interestingly both pitchers tossed complete games four days later.

· With Countrywide no longer in the S&P 500 index, guess who took their place?  A steel company.  AK Steel Holding Co. to be exact.  As George Bernard Shaw once said, great things often end with a whimper and not a bang.

· Weird Bank Name Dept: Organizers applied with the FDIC to open a state-chartered de novo bank in Mankato , Minnesota .  The proposed bank, “Bank 182”, plans to set itself apart as “2 degrees more than completely different,” according to its Web site.  Sure sounds like a weird name to us.

· What are scratched and dented loans going for?  The best bids we have seen lately are around 70, and that’s assuming it’s a performing 1^st lien loan that just has a flaw or two in the documentation. HELOCS or 2nds?  Lots of packages get no bids, some have gotten as low as 4-5, and we’ve heard of some getting as high as 20.

· One Less Thing To Worry About Dept: A year ago Prime was 8.25% - today it’s 5%.  A year ago the 30-day LIBOR was 5.32%, and today it’s 2.46%.  At least you’re making few dollars on your warehouse spread as opposed to losing money.

· What a difference a day makes:  Moody’s upgraded Countrywide Bank’s financial strength rating from D to B+ yesterday. It was all based on Bank of America’s plan to combine its and Countrywide’s mortgage banking divisions and to manage the mortgage operations as a single business unit.

· Happy birthday, USA .  What happened in 1776  was truly revolutionary, forever sending the message that men should not be ruled by tyrants but that self-rule was the best form of government. And in all these past 232 years, nothing has changed.  America led the way, and today, more people are free than has been the case in the previous 2,000 years. When we have met people who threw off the clock of totalitarian regimes in East Europe, each and every one of them told us that America was their inspiration.  God bless America and happy birthday to all Americans, whether they’ve been here for 232 years or 2 years.

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There was an era when time and motion studies were all the rage.  Management experts studied people on the factory floor to see exactly how many minutes and seconds it took to perform each function. It might be 38 seconds to tighten a hubcap, 2 minutes and three seconds to install a windshield wiper and so on. Our thought of the day is that senior managers either do this on themselves, or actually have someone follow them around and do it for them. 

What do we suspect you’ll find?  First, we bet the most senior people (i.e. owners) are spending way too much time trying to solve problems on individual loans.  Second, we bet they spend a lot of time putting out fires.  And finally, we suspect they’ll find that they spend a whole less time than they need to on recruiting and working with people to implement their strategic plan & vision for the company.  Figure out first where you need to be spending time to grow your company, and then figure out where you’re actually spending your time. You’re probably going to see the need for some changes in your daily behavior.

Garrett, Watts & Co. -  Joe Garrett and Corky Watts