New and existing home sales rose from August to September, with new home sales up 2.7% to a 464k annual rate last month. The August rate was 452k (the lowest since January 1991) instead of 460k previously reported. This prolongs a pattern of downward revisions as the leading indicator includes homes under contract, whereas the trailing indicator shows us the actual closings. Perhaps "something" is going on with consumers' ability to close and qualify for loans? Nah...

But when will that increased stringency in the lend-o-sphere make it's way to the green-visor misers with their fingers on the "Buy MBS" button? WHY haven't we seen some gosh-darn tighenting!? And WHEN will we? Patience cohai...

The more important interogative at this point is "HOW?" Rest assured, there are plenty an interested buyer of MBS, but not a one of them with funding to realize their dreams of cashing in on these historical values. To make matters worse, "redemptions" are a but of a problem these past few days as an uncommonly high--to say the least--amount of market participants with levered money in managed funds and even banks "want it back." Couches on the other hand are flying off the shelves at furniture stores as they are running out of creative places to stashes the cash.

All is relatively calm today as the price curve languishes range-bound near the lows of Friday's session. Hey! If we were knocked down already, no sense in getting back up until we find out if we're going to get knocked down again with a data-ridden Tuesday!

There are other problems...

• Those Sneaky Insurance Co's are Stealing Our Tarp Money!
• More for them, although good in some ways, is not quite as good as a direct buy of MBS or even of MBS-heavy banks would be.
• BUT WAIT! Speaking of MBS-Heavy Banks...
• The Original "Buyer Of Size" Might Not Be Much Of A Buyer At All
  
• JP Morgan's CEO quoted on conference call saying his freshly prepared TARP Smoothie will give him the vital energy not so much to buy MBS, but rather to buy something entirely different.
• Despite better funding (see: lower libor), MBS haven't gotten the bid yet
• Billy G had this to say.
• He was correct as swap spreads are in a bit this AM, but the fact that MBS haven't seen any of that love from increased funding is disconcerting. Spreads are out a few vs. tsy's and a few more vs. swaps.

Why oh Why!? Where or Where?! When oh When?!

All questions we are loathe to be exclaiming concerning our precious MBS.

Answers? Not here pal...

Get in line with everyone else...

If market participants like JP Morgan keep eating Tarp $$ like Sally Struthers eating the cake on South Park, it ain't good. Continuing to operate in the low range of Friday, 5.5's are flirting with 99-00 (at 99-01+ right now).

Take solace though that we are not more soundly violating that firm psychological floor. If we do later today, that could be bad. More likely though, the market is in "wait and see" mode. The Godot of an immediate Tarpy boost might never show, but Benny and the Jets could do a thing or to to hearken his arrival (late though it is turning out to be).

Delevering and de-risking is a heck of combo... Chin Up MBS Warriors... We'll see some gains ere the week is through.