Tuesday 10/14 ... All Unfolding As Expected for MBS

Yesterday, we suggested the probability that while actual prices of MBS might face an uphill battle today, that we would see a dramatic tightening in spread. Indeed, this is exactly the case this morning.

6.0 MBS are currently unchanged at 100-05+, whereas both 5 and 10 year treasuries are roughly 30-40 ticks worse.

In case you were in a deep deep hibernation over the weekend, it's hard to miss the global bailout over the weekend and the fact that the US followed suit. You're not too far behind the curve however as the final details of what many are calling "Bailout 2.0" will not be released until today.

We'll bring you relevant details and their concomitant effect on the MBS market as they occur. We'll follow up this post with some more details, but so far all is unfolding as expected for MBS. Considering the thousand point gain in the dow yesterday and the 227 point uptick indicated by futures this morning, MBS look to be regaining their footing due to the massive global stabilization measures. It's a long, slow hike back to the summit, but for the first time in a few weeks, the path forward is clear. Stay tuned...