MBS prices are up +14/32 (FNMA 30-yr 5.5 at 100.44), far above the initial price level at +5/32. Favorable repricing took place. No economic data came out today. A 400-point decline in the Dow lifted MBS markets. The 10-yr Treasury auction saw average demand, and foreign investors purchased 36% of the total. Oil prices fell $4 per barrel to $56 per barrel (bet you're really glad you locked in your price earlier this fall...NOT!)  Tomorrow, the Trade Balance and Jobless Claims will be released at 8:30 et, and there will be a 30-yr Treasury auction at 1:00 et.

Treasury Secretary Paulson surprised investors during an update on the $700 billion TARP rescue plan. The Treasury has scrapped the original plan to purchase troubled assets from banks and will use the funds in other ways to support the financial system. Paulson said the Treasury is exploring expanding the program to nonbank financial institutions which supply credit to consumers and businesses. According to Paulson, the financial system "remains fragile", and he thinks that market turmoil will remain until the housing market stabilizes. He also suggested that it may be time for a "pause" in new programs to let the markets digest all the programs already implemented.

 
Posted by Jeff Jensen on 11/12/2008 05:00 PM   Comments (0)  
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