Friday 6/27/08 ....... Can it Be?

By: Matthew Graham •
(due to responses to your feedback, let's try a new caption "at a glance."  The goal will be to condense all the relevant data into this top section so if you are pressed for time  or are one of those 3 people that don't want to wade through the prose, you can get what you need with a shorter read.  Additionally, in order to get you the data faster, we'll post this section as soon as it's written and then follow with the meaty content shortly thereafter.  So how about a quick trial run?)
 
At A Glance:
 
  • MBS BETTER by 4/32nds, but still showing predisposition towards weakness  versus treasuries
  • Stocks currently down about 60 (DJIA) in mixed trading, Worst June since great depression
  • Fed's preferred inflation indicator, Core PCE 3 at +.1%,  3 month average lowest in 10 months!
  • Consumer Sentiment 56.4, 28 year low, expectation was 56.9, previous month was 59.8
  • That PCE "deflator" and weak stocks are the only things that could have saved MBS today, so far so good.
  • QUICK LOCK GUIDE: Floating for now, DoD look good, MDPC+ possible, but stock rally = dark horse
    • Vigilance: Moderate...  Watch stocks for turn around...
(the vigilance meter will either be moderate, high, or extreme (no such thing as low!  The price of YSP is eternal vigilance!) this is meant to indicate how closely you should watch to avoid price changes for the worse. Finally, if we're going to make a good run at this "at a glance" section and really try to chain the Promethean fire of the verbosity to the ground, we'll need to introduce some abbreviations.  Eventually, they'll just appear as links, so if it's not registering with you, you'll be able to click on it and get a definition.  Until then, and for today, here's what we have so far (I'll keep this running list included in the At a Glance section in case you can't find the original post or for new readers):
 
abbreviations guide:
MBS -                  Mortgage Backed Security
MDPC-                 Mid Day Price Change (plus means for the better, minus for the worse)
DOW or DJIA -     Dow Jones Industrial Average
Ticks-                    1/32nds of bond pricing.  8 ticks=8/32nds=.25 in cost (YSP or discount)
DoD, YoY, MoM-   Day over day, year over year, month over month, etc..
O/N-                    Overnight
Coupon-                The "interest rate' of the MBS
6.0's, 5.5's            this will always mean FNMA 30yr Fixed MBS with a coupon of that number.  6.0's = 6.0% coupon rate MBS
PCE-                     Personal Consumption Expenditures