Market Update 7/15/2008

Mortgage and Lending with CYPRESS MORTGAGE

U.S. Treasuries rose for a second day as stocks fell on concern credit-market losses

at financial companies are widening, stoking demand for the safest assets. Two-year

notes led the advance as Asian equities declined to the lowest level in almost two

years amid worsening investor confidence in Fannie Mae and Freddie Mac. The cost

of protecting corporate bonds from default rose. The yield on the two-year note fell 6

basis points to 2.39 percent by 7:23 a.m. in New York, according to bond broker

BGCantor Market Data. The 2.875 percent security due June 2010 advanced 4/32, or

$1.25 per $1,000 face amount, to 100 30/32. A basis point is 0.01 percentage point.

The 10-year note yield fell 4 basis points to 3.82 percent. The difference in yields, or

spread, between two- and 10- year notes widened to 143 basis points, near the

month's high of 147 basis points. Europe's Dow Jones Stoxx 600 Index slipped 2.6

percent, while the MSCI Asia-Pacific Index lost 2 percent, falling to the lowest level

since Oct. 13, 2006. Futures on the Standard & Poor's 500 Index declined 1.3 percent.

The market is about .25 better in discount this morning.

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