I am newbie here, and not sure how the debt sales relate to the movement of MBS, can any one give me some advice or reason here? Thanks in advance

You might be referring to the US selling more treasuries to raise money for the economic stimulus, reported to be around $850b.  How this relates to mortgage backed securities is the phrase birds of a feather flock together.  MBS and treasuries are both fixed income investments and the do trend in the same direction.  With the treasury selling more treasuries, that will flood the market with more supply.  With more supply comes lower prices, and lower prices leads to higher yields.  Law of supply and demand.  higher yields leads to higher interest rates. 

You're referring to increased supply of treasuries - no argument there.  More treasuries being sold to fund the endless bailouts does not necessarily increase the supply of MBS.  The supply of MBS is determined by completely different market forces, such as origination volume. 

The Fed is artificially creating demand for MBS (by buying them), thus creating a completely different price/yield scenario than treasuries.  Since only about 10% of the promised $500 billion has been spent so far, it appears that the disconnect between MBS and treasuries should continue.  So despite what appears to be logic for this continuing, today reverted to the old days of crushed treasuries begetting somewhat beat-up MBS.  Did the Fed take a holiday today or did they soften what could have been 'face-melter' (sorry Matt) of an MBS sell-off?