I've heard and taken part in a few discussions this week about how this October is shaping up to be just like last October where we had the lowest rates of all time and they quickly evaporated leaving scores of originators wishing they'd locked first and asked questions later.  I can appreciate that the first part of October has been scary and uncomfortable in terms of all time low rates quickly evaporating, and while there remains a chance that rates will continue to worsen, I do at least know that history is not repeating itself.  I feel like the following chart tells a lot of that story:

What are the main differences between now and then?  in the interest of time, we'll do this in list format for now, but I'm happy to continue the discussion and add to the charts.

1. THEN = Almost 5 months of prices in their "high range" between 99 and 102. vs NOW = Just over 2 months of prices in a high range of roughly 101-103.

2. THEN= Gradual build up.  limited volatility.  vs NOW= Climbed the Cliffs of Insanity in record time.

3. THEN= Underlying Benchmarks rallied more stably, only got to 2.3's.  NOW = 10's plummetted to 1.69+ and we're freaked out that we might see them get as high as "2.3's"

4. THEN = We thought there was a lot of uncertainty vs NOW = 2010 looks like the Capitol of Certaintonia

Bottom lines... Things are a lot crazier now.  Swings are bigger.  Changes in direction and sentiment happen faster.  Primary/Secondary Spreads are a lot wider due to the craziness, among other things.  The best thing to hope for at these MBS levels IS NOT "green days" and rallies galore, but rather for some damn stability in benchmarks and MBS prices.   That would do us a lot more good on rate sheets than gains gains gains. 

So yeah, the first day of gains since 10/3 is a little bittersweet for 'ol MG due to the volatility.  It's always been a challenge for me to detach my mood from the strength of MBS prices, but for right now, I think we should all be benchmarking our winning days by how narrow the trading range was or how rate sheets performed.