Monday 10/20 ... MBS Strength Continues, and then some

Well well well, look who's the popular kid on the block now.

Once outcast MBS Joneses just got their new hot tub and plasma HD and all of the sudden there is a line around the block.

Sellers can't keep 'em on the shelves today as the original "cool kid," Uncle Ben has posted party flyers on all the power line posts frequented by those with deep pockets.

And reaching deep they are with 5.5's (your new current coupon) up a blood-pressure-reducing 36 ticks to 99-25.

It's almost as if the "gutsy" predictions made by this blog are coming to fruition... "Where's the benefit of TARP?" Critics said. "if you're sayin we should see tightening and price improvement as a result of bailout efforts, how come we haven't seen it yet?" critics said.

"patience grasshopper" was our reply. It went something like "the tightening and bid enhancing effects of recent events will not be felt overnight, but will, without a doubt, gradually exert their benefits on MBS."

Simply, we were right. You are in the right place, getting the right analysis from the right people, and yes, we are darn proud to have 'called the ball' long before it dropped."

Truthfully, we had not expected the ball to drop quite so quickly, and it still may have a bounce or two in store, so don't let your guard down. But today is a good day. Tsy's haven't even gotten off the ground and the result is massive tightening. That uncommon circumstance of which we foretold--stocks improving in concert with MBS--is almost a predisposition in recent hours and days. The mid to late day profit taking that is always such a risk on run-ups like this has been all but pushed to the "backest" of burners. But after the market close, don't forget the ensuing 2 hours that have seen uncommonly high liquidity and activity of late.

What are we getting at please? If you have very short term deals that you need to order docs on today or tomorrow, wait for you lock cut-off today and assess pricing. We've had several up days in a row, and with each passing day, the subsequent becomes less and less likely. Overall, we are float biased, as we have correctly been since mid-July. History informs us that cashing in on a night like tonight is not a bad move, but for you risk-addicts (count us among them), the STABILITY of price gains and of the curve in general is admirable to say the least.

My fellow MBS-Warriors! Long had we sought shelter from the dragon. Long did we bide our time in the spirit of self preservation. But King Henry and Uncle Ben, upon visiting us in our cave, imbued our weapons and armor with the power that was foretold in faraway lands (think global bailout efforts). We have emerged from the cave and are presently engaged in single combat with said dragon, and the tide of battle so far is much more in favor than most expected. Tarry not in thine quest ye floaty soldiers. Those who must adjorn from battle now are pardoned, but the fight wages on. There will be losses (as in losses) ere the day is done, but we shall emerge victorious. So has it been written, so shall it be done. So say we all.

Uh..... Ok, analogy boy.... English please?

It's the same broken record: uber short term, take a look at tonight's gains and don't be too greedy. Mid to long termers, you are cleared for float off. What did you expect?