December 7th Mortgage Market Wrap-up

Mortgage backed securities (MBS) closed down 134 basis points today in one of the worst blood baths ever seen in the mortgage market.  MBS bonds crashed through the 200 day moving average and continued falling all the way down to the low of December 2nd before bouncing up slightly above that new support level.  Bonds will have to climb 63 points just to test the new resistance.  The word on the continued tax cuts precipitated the Pearl Harbor Day attack and had traders thinking about inflation the arch enemy of mortgage bonds.