Hi Everyone!

What a weekend! I just returned from a family wedding in Austin, TX. I have to say that is one great town! We also traveled to San Antonio for "Fiesta"...overall the trip allowed for some quality "recharge" time. Matt provided an ample amount of heavy content while I was away ...so you should be feeling "well aware" of your surroundings.

After looking at my charts and reading Matt's morning commentary it appears that trading has been slooooow today. Equities continue to exhibit their bias that the "bear market rally" is over. In the eyes of stock traders the big question remains.... "have we hit bottom???". The answer is a wildcard given the upcoming release of government mandated bank stress tests....either way most market participants are enjoying the volatility...swing trade away!

Mortgages have managed to remain quite stable while TSYs also trade in a tight range. MBS/TA few lenders are passing along improved rate sheets late in the afternoon.

SEE THE TIGHT RANGE?

The tight stable range leads us to believe that these spotty lender pricing improvments are not a factor of intraday/sessions MBS uptick/appreciations. Instead a better explanation: the random "reprices for the better" manifest themselves from the MBS richening that has occured in the pasprevious trading sessions when prices were at the highs of the broader range.

Remember last week when we told you originators were dumping supply of MBS? This "supply dumping" is how mortgage bankers lock in YSP(income) of their own. This process is made possible by the "selling forward" mechanism within the in TBA MBS market. By locking in last week lenders protected their pipeline from interest rate risk, in the process they also determined when and how to offer competitive primary pricing, This way lenders have the option to offer tighter pricing based on factors other than MBS day over day pricing fluctuations...like supply/demand of borrowers and the competitive actions of competitors.

I know you love green....

Since 5pm "Going Out" Marks....

FN30_______________________________

FN 4.0 -------->>>> +0-08  to 100-01  from 99-25

FN 4.5 -------->>>> +0-06  to 101-28  from 101-22

FN 5.0 -------->>>> +0-03  to 103-00  from 102-29

FN 5.5 -------->>>> +0-02  to 103-24 from 103-22

FN 6.0 -------->>>> +0-00  to 104-18  from 104-18

GN30________________________________        

GN 4.0 -------->>>> +0-08  to 100-07  from 99-31

GN 4.5 -------->>>> +0-07 to 102-05 from 101-30

GN 5.0 -------->>>> +0-03  to 103-17  from 103-14

GN 5.5 -------->>>> +0-02  to 102-31 from 103-29

GN 6.0 -------->>>> +0-01  to 104-12 from 104-13