As negative as we have been on the economy and the time it will take to recover, I admit this morning that markets are becoming even more concerned. We were expecting the equity markets to have more confidence in the stimulus plan and the mortgage work out plan. While we don't believe either is the answer to turning the economy, we thought markets would, at least for a few months. Not so; markets have adjusted to the reality more rapidly than I thought they would. Yesterday the DJIA ended on a new low from the Nov lows, but by fractions; overnight the US equity market trading blew through the Nov lows and are opening substantially lower into new low territory this morning. The government is tossing trillions at the economy, markets however are uniformly believing it won't succeed in the manner the administration and markets had expected. The bearishness is increasing much more rapidly than we expected, unfortunately the markets are correct. What we have now is an almost universal belief that all we'll get from the government as a result of all the efforts to stem the tide will be a huge federal deficit but no quick end to the economic decline and increasing unemployment. Please go to www.johntuggle.edicypages.com for complete story. ________________________________________ PRICES @ 10:00 AM 10 yr note 99.26 +22/32 2.78% -7 BP * Mar 10 yr note contract 123.18 +33/32 5 yr note 99.25 +13/32 1.79% -7 BP 2 Yr note 99.28 +3/32 0.93% -5 BP 30 yr bond 98.12 +50/32 3.59% -8 BP * Mar 30 yr bond contract 128.15 +70/32 Libor Rates 1 mo 0.472%; 3 mo 1.248%; 6 mo 1.761%; 1 yr 2.075% 30 yr FNMA 4.5 Apr 100.23 +9/32 (+9/32 frm 10:00 yesterday) 15 yr FNMA 4.5 Apr 101.21 +5/32 (+7/32 frm 10:00 yesterday) 30 yr GNMA 4.5 Apr 100.22 +7/32 (+9/32 frm 10:00 yesterday) 15 yr GNMA 4.5 Apr 102.16 +6/32 (+8/32 frm 10:00 yesterday) Dollar/Yen 94.12 +0.14 yen Dollar/Euro $1.2601 -$0.0055 (dollar better) Gold Apr $995.70 +$19.20 Crude Oil Mar $37.64 -$1.84 Goldman-Sachs Commodity Index 307.42 -10.49 DJIA 7380.96 -84.99 NASDAQ 1436.82 -6.00 S&P 500 770.01 -8.93 Friday, 2/20/09 10:30am
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