Don't be surprised if secondary marketing is a little under the weather today. You will likely experience modest delays as lock desks are now sorting through the mess of new locks that entered the pipeline yesterday.

Comments from loan traders include:

• "I doubled my pipeline in three hours"
• "Mortgages are hotter than Betty White since the Super Bowl"
• "Anyone who wasn't locked is now locked"
• "I sold it all forward in a matter of minutes"
• "Fall out is officially an issue. Rates moved more than anyone expected."
• "I'm drowning in renegotiation requests"
• "I need a drink"
• "What you got? AQ watch out you might get run over by my flows"

Based on the influx of loan supply that hit screens as MBS prices rapidly backed away from record highs yesterday, liquidity in 4.0 MBS coupons has probably peaked. This doesn't mean 4.50 note rates won't still pay 101.500 but it does imply you should be extra defensive of lenders with an itchy trigger finger. To be honest I'm not sure that observation even matters at this point. I'd imagine most originators are now market spectators as opposed to active passengers of the float boat. YOUR PIPELINE IS LOCKED RIGHT?

If you didn't lock yesterday, you're gonna kick yourself in the junk when you see pricing this morning. Call it pipeline control, say it's managing fall-out, blame it on upside down hedges...no matter the explantion, lenders are cushioning rate sheets and rebate is worse this morning.

This is the case even though rate sheet influential MBS coupons are recovering from the low prints seen yesterday afternoon. The August FN 4.5 is +0-05 at 102-28. Remember lenders are now working on August delivery so reprices are based off of August coupons.