Market Update 5/13/2008

Mortgage and Lending with CYPRESS MORTGAGE

U.S. Treasuries fell, reversing an earlier gain, as a bigger-than-forecast increase in a

measure of retail sales fueled speculation the economy will gain momentum. The

benchmark 10-year Treasury yield rose 1 basis point to 3.81 percent as of 8:32 a.m. in

New York, according to BGCantor Market Data. The price of the 3 7/8 percent security

due May 2018 fell about 1/8, or $1.25 per $1,000 face amount, to 100 1/2. A basis

point is 0.01 percentage point. Excluding autos, retail sales increased 0.5 percent in

April, after a 0.4 percent climb in March, the government said. The median forecast in

a Bloomberg News survey was for an increase of 0.2 percent. Treasuries gained

earlier as stocks in Europe fell after Credit Agricole SA, France's third-largest bank by

market value, said it may raise 5.9 billion ($9.2 billion) to replenish capital. Federal

Reserve Chairman Ben S. Bernanke said today that financial markets remain

unsettled and the central bank will increase its auctions of cash to banks as needed.

He spoke in the text of a speech to an Atlanta Fed conference. The market is .25 to .5

worse in discount this morning.

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