CNBC: "The Senate has approved a two-month renewal of payroll tax cuts for every worker and unemployment benefits for millions, moving President Barack Obama closer to a convincing victory over Republicans who control the House."

In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante will extend FHA’s temporary waiver of the anti-flipping regulations.

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011. The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Waiver will remain the same. The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers. The Waiver continues to be limited to sales meeting the following conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.
• The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Rather than open up the dashboard, or mobilembs.com and exclaim "What the heck?!" upon seeing current weakness in MBS (down 7 ticks at 102-03) or Treasuries (up 4bps to 1.99), we'd greatly advocate not letting it fluster you too much. Volume is just too low for any of this trading to mean anything. That said, lenders tend to fall at different places on the spectrum of this belief and some will let it affect rate sheets more than others. With volume as low as it is, and with next week not expected to be much better, we would reiterate caution about the potential lack of reprieve until the new year. AQ notes: "if you need to lock a loan any time before early January and haven't, you're playing with fire."

This is another non-event. Spending missed the +0.3 consensus, but was flat vs October. Incomes were more of a miss, but gains had ramped up in the last two reports. The most important part of the report, core PCE, is yet another indication that inflation is a non-issue.

RTRS- PERSONAL SPENDING +0.1 PCT (CONSENSUS +0.3 PCT) VS OCT +0.1 PCT (PREV +0.1 PCT)

RTRS- PERSONAL INCOME +0.1 PCT (CONS +0.2 PCT) VS OCT +0.4 PCT (PREV +0.4 PCT)

RTRS- CORE PCE PRICE INDEX +0.1 PCT (+0.0819; CONS +0.1 PCT) VS OCT +0.1 PCT (PREV +0.1 PCT)

RTRS- OVERALL PCE PRICE INDEX 0.0 PCT (-0.0384) VS OCT -0.1 PCT (PREV -0.1 PCT)

RTRS- YEAR-OVER-YEAR PCE PRICE INDEX +2.5 PCT VS OCT +2.7 PCT (PREV +2.7 PCT); CORE +1.7 PCT VS OCT +1.7 PCT (PREV +1.7 PCT)

RTRS- REAL CONSUMER SPENDING +0.2 PCT VS OCT +0.2 PCT (PREV +0.1 PCT)

RTRS- PERSONAL SAVING RATE 3.5 PCT VS OCT 3.6 PCT

RTRS- MKT-BASED PCE PRICE INDEX 0.0 PCT (OCT -0.1 PCT), CORE +0.1 PCT (OCT +0.1 PCT)

RTRS- MKT-BASED YEAR-OVER-YEAR PCE PRICE INDEX +2.7 PCT, CORE +1.7 PCT

RTRS- PERSONAL INCOME WEAKEST READING SINCE AUG (-0.1 PCT); YEAR-OVER-YEAR PCE PRICE INDEX RISE SMALLEST SINCE APRIL (+2.4 PCT)

The key takeaway from today's report is the isolated strength in a few sectors and weakness almost everywhere else. Nondefense aircraft/parts crushed last month's 14% decline and rose 73.3% this month. Transportation equipment was up 14.7% after falling -4.5% last month. Factoring out those two, the report was pretty flat.

RTRS- DURABLES ORDERS +3.8 PCT (CONS. +2.0 PCT) VS OCT 0.0 PCT (PREV -0.5 PCT)

RTRS- DURABLES EX-TRANSPORTATION +0.3 PCT (CONS +0.5 PCT) VS OCT +1.5 PCT (PREV +1.1 PCT)

RTRS- DURABLES EX-DEFENSE +3.7 PCT VS OCT +1.1 PCT (PREV +0.5 PCT)

RTRS- NONDEFENSE CAP ORDERS EX-AIRCRAFT -1.2 PCT (CONS +1.0 PCT) VS OCT -0.9 PCT (PREV -0.8 PCT)

RTRS- GEN. MACHINERY +0.9 PCT, ELECTRICAL EQUIPMENT -1.2 PCT, DEFENSE AIRCRAFT/PARTS +12.1 PCT

RTRS- DURABLE GOODS RISE LARGEST SINCE JULY (+4.2 PCT); DURABLES EX-DEFENSE RISE LARGEST SINCE JULY (+4.9 PCT)

We hit the 8am mark this morning with just under 29k 10yrs futures contracts having changed hands. That's the lowest we've seen all year, and there's some similarly themed analysis from ICAP this morning: "There may be more economic indicators on the calendar today than there will be market participants around to react to them."

We can't really say it any better than that... Even though there are a few pieces of economic data on the calendar, they'd have to be mindblowingly far from the consensus in order to rouse much of a response. Beyond that, there's always the possibility of an unexpected Euro tape-bomb, but of course, that too would need to be large and well constructed tape-bomb if it's to do any damage to domestic markets.

The low volume means that price action could be somewhat distorted. As we said yesterday, we really wouldn't draw any conclusions from trading levels until the new year. From a market-watching perspective, we're all sort-of working the metaphorical night shift, guarding a jail full of cute little puppies and sweet old grandmothers: sure, there's a tiny chance that such a combination could spell trouble, but more likely than not, we can probably just doze off.