Hi. From an interested bystanders perspective MBS trading was quite boring and uneventful today. sideways open. stable morning. slow lunch. steady close.....felt like a stalemate after yesterday.

3pm Closing Marks...

FN30_____________________________________

FN 4.0 -------->>>> +0-02 to 98-11 from 98-09

FN 4.5 -------->>>> +0-00 to 100-11  from 100-11

FN 5.0 -------->>>> +0-01 to 101-24 from 101-23

FN 5.5 -------->>>> +0-02 to 102-14 from 102-12

FN 6.0 -------->>>> +0-02 to 103-09 from 103-07

GN30_____________________________________

GN 4.0 -------->>>> +0-01 to 98-13  from 98-12

GN 4.5 -------->>>> +0-00 to 100-14  from 100-14

GN 5.0 -------->>>> +0-01 to 102-00 from 101-31

GN 5.5 -------->>>> +0-03 to 102-21 from 102-18

GN 6.0 -------->>>> +0-02 to 103-10 from 103-08

The MBS stack outperformed TSYs today. While prices in the TSY market fell MBS remained stable and made up some ground on their benchmark big brother US Treasuries. Spreads were 4-8 ticks tighter at the close.  To oversimplify...MBS improved more than the bid prices indicate.

Yesterday most non-public MBS buyers had moved/were moving "up in coupon"... today a few market participants showed interest in the now cheaper (after yesterday) prepay protected "down in coupon" MBS. Short term discussions feel kinda pointless when you consider the big picture headline news/headline details that we are current patiently waiting upon...and when I say "we" I am referring to every person participating in the mortgage market.  The general perception of the entire mortgage market (all markets really) is riding on TIMMMAAAY and the DEEETAIIILLLLLLS. (perception matters in MBS...remember MBS value is based off of predictions and statistics)

I know I have been harping on this over and over again but I dont believe I can stress it enough. It's pretty simple...the "it that shall not be named" depends on the perceived effectiveness of the Housing Affordability and Stability Plan. The effectiveness of the Housing and Recovery Plan depends on cheaper borrower costs, home equity, and loan guidelines.

So...In the next few days leading up to March 4 I decided to dedicate some focused discussion time to issue "numero uno" ...

IS THE PLAN GOING TO BE EFFECTIVE OR NOT???

Lets shred the issue to pieces and see what comes of it....after all aren't we the best group to determine how "effective" the plan will be?

I have already written a brief analysis on the Executive Summary of "The Plan". If you have not read it yet and would like to add your insights to the discussion please read THIS POST<---LINK.

To help start off the discussion here a few screen shots of seemingly senseless Fannie Mae Loan Level Price Adjustments...

HERE IS A LINK TO A FORUM POST WHERE A DISCUSSION CAN BE HAD...CLICK TO ADD YOUR INSIGHT

NOTE: PLEASE KEEP THE DISCUSSION CENTERED AROUND  LLPAs on this forum...tomorrow another blog will be posted with a link to a new forum and a new issue...