I am in a really goofy mood this morning. Unfortunately this state of mind is making its way onto paper via sarcasm. Please see the Mortgage Apps story for more on that...

At 1am the Treasury announced the terms of month-end debt supply. 

• $44,000,000,000 in 2s go off on MONDAY December 28
• $42,000,000,000 in 5s to be auctioned on TUESDAY December 29
• $32,000,000,000 in 7s will be auctioned on  WEDNESDAY December 30

That totals $118bn ($95bn in new cash). Pretty much "as expected" in terms of auction amounts.

Oh...and by the way. "Rate sheet influential" MBS prices are FALLING FAST!

The FN 4.0 is now +0-06 at 97-04 yielding 4.273% and the FN 4.5 is +0-06 at 100-06 yielding 4.489%. (My speeds are slower than the street's assumptions). The secondary market current coupon is 4.485%. The CC yield is 76bps over the 10yr TSY yield and 60bps over the 10yr swap rate.

REPRICES FOR THE WORSE ARE POSSIBLE...

I decided not to issue an alert on this one. My rate sheets would have been prepared for this because I wouldn't be watching the market too closely. So while some lenders may still re-issue rates, others wont care. READ MORE