Did you find yourself wishing "I wish Fannie and Freddie MBS were more like Ginnie."

Well, as we've discussed time and time again on this blog, the moment it is confirmed that the GSE's get something more than the implicit backing of the government, oh, I don't know, say the EXPLICIT backing of the government, that spreads would tighten ridiculously and dollar price would rise to mimic GNMA MBS.

My friends, at least FOR NOW, that is what we are seeing. It is too early to cash in any bets, but there was a lot of uncertainty as to whether or not Fannie and Freddie could hang onto their MBS gains in the face of skyrocketing treasury yields. We're looking at a massive tightener right now, UP ALMOST 60 TICKS ON THE BASIS SINCE FRIDAY AFTERNOON! For those of you who are not MBS blog illuminati, let me translate, via some quick math, into something more meaningful for you.

Grab some coffee, have a seat, and prepare ye. Before I blow your mind, remember that we are at 430 Pacific time right now, 730 Eastern. We are still pre-open and as promised, trade will be very choppy today, so take the following with the grain of salt that anything can happen today, but as of RIGHT NOW, I'm pleased to announce that 5.5% coupons are up 26 ticks to 100-09. 5.0's are up a full point to 97-28. 6.0's a scant half point as "down in coupon" buying would be expected as the government more than explicitly said one of the purposes of this move was to lower mortgage rates.

As far as "up 60 ticks on the basis," that merely means that while treasuries are down about a point and 4 ticks, that MBS are up 26 ticks. In other words, price spread (basis) has tightened right about 60 ticks. That's good for MBS long term, short term, any kind of term. If MBS can but hold their current levels, you'll be looking at .625 better in YSP this AM give or take. Well, perhaps not this AM as most lenders will likely be hesitant to price the gains in just quite yet.

Whatever the case, if you are still in the float club (as is 80% of my personal pipeline), you'll likely have reason to celebrate this morning. Expect more frequent than normal updates today in the hopes that we can continually be confirming that these price levels hold. Once the sugar high that stocks will experience today wears off, it will leave room for further gains (assuming the gains indeed hold). Any way you slice it, it will be an exciting day to come (not to mention, week and month!) I can't think of anywhere else I'd rather be.