Don't think of the lackluster response to the bailout as arising from a bill that was "too little too late." Think of it more like life support: no one made any promises as to the quality of life, just that life would go on. And "going on" it is, much in the same way it was before the intervention. Let's see... What was one of the aspects that defined the life of MBS "back then?" How about wide spreads? 10 year treasuries are up 21 ticks compared to MBS 8 ticks. Sure we're still up, but spreads will need to tighten if we are to maintain a positive MBS environment going into the winter.

The equities markets as well are all pointing to lower opens. A 1 month t-bill is knocking on the door of 0% again. Oil is hovering at 90 bucks a barrel. The markets are ill to say the least.

A TIPS auction, only of significance if something drastic occurs, is the only data worth mentioning today. Beyond that, the day is sure to hold plenty of "reactions to react to."

5.5's are currently up 13 ticks at 100-20.

Stay Tuned...