Thursday 10/23 ... Jobless Claims in

Today we got the release of weekly jobless numbers. Economists were expecting 465,000 after last months 461,000, but the number came in worse at 478,000. The more closely watched continuing claims remains at a 5 year high. Higher unemployment keeps wage based inflation down which is good for the mortgage backed security and other fixed income markets. The markets seemed to pay no attention to this today; however.

There has been selling pressure today on our 5.5 mbs but relatively at the same levels as yesterday. It appears mbs are taking a breather after the huge rally they were on over the last few days.

Tomorrow we will get the release of existing home sales, but this report will not have much impact as it is backwards looking. In other news, foreclosure filings are up 70% from last year and this headline item could be causing the sell off we saw this morning.

If you did not lock yesterday, then by default you are in float club today. Evaluate your position later in the day to determine whether you should lock. Longer term, we still believe rates are heading lower but we could be taking a step back over the next couple days. We will get back to you if the selling continues.