For the first time since the Fannie/Freddie Bailout was announced, we ticked over 100-13... Currently, we are at 100-14+ on 5.5's. Keep in mind that we have only seen this level for the past few minutes, so our excitement must be tempered with a nominal smattering of "wait and see."

Hey! We'll take it! By all rights, we couldn't be too surprised to actually see some price losses today owing to the week follow through on the current draft of the bailout. Equities weakness is helping us to a certain extent...

An old friend returns, as the MBS Ninja has the following to offer: Take our slight price improvements with a grain of salt today as the actual "vote" among traders must always be considered in terms of how MBS are performing versus treasuries. From a trader's perspective, today is actually a WEAK day for MBS despite the fact that we are up in dollar price. As the economy continues to convulse, you'll likely see future discussion that alludes to this divergence between "dollar price" (meaning simply, the price level of MBS) and "spread" (meaning the difference between the yield of MBS and the yield of treasuries). More than any other time in recent memory, spreads vs. dollar price are very "choppy" (lots of variability) and very subject to emotion (doesn't always do what the data would suggest).

All in all, we feel that, unlike the GSE bailout, the "warm fuzzies" of this legislative action will only bring significant benefit to the MBS market in a slow-and-steady-wins-the-race sort of way. The Frannie bailout gave us an overnight shot in the arm, whereas the path before us requires sober and measured advances that can only come from the gradual lowering of investor pulses. Let's just hope that the underlying intentions of the bill do not end up like the mouse or the puppy from "Of Mice and Men"--stroked too hard by a caretaker who did not realize the harm he was doing... (I don't think we have many congresspeople on the blog, but make sure to tell your friends... Maybe if they'd been reading about MBS for the past few months, they'd see the bigger picture. Once again, it's time for us to "hurry up and wait."