Here's the past two days of price action for you on 5.5's:

With the exception of the post 9/11 financial trauma, The dow is below 10,000 for the first time in nearly 10 years. 9/11 notwithstanding, for the first time in nearly five years.

Stocks and treasuries are doing quite the tango, with the latter taking the lead.

The MBS-Ninja has this to offer: All of the "givens" we have historically counted on are out the window. Coming into what is generally considered a supportive time of month carries only a modicum of its normal weight, instead taking a back seat to various global and macroeconomic catastrophes. Our many years of tracking spreads versus treasuries or swaps suddenly appear to be moot as the market is carving out new reality daily. This paradoxical behavior pervades multiple sectors.

That the ninja's nice way of saying the market is in unprecedentedly way. But we don't just mean in that "no duh" kind of way that you get just turning on the TV. The complex back-room paper trade, the leverage and hedge structures are no longer viable models in this market. It doesn't make for a friendly MBS environment in terms of spread. The solace is that as long as the market stays this weak, rates stay good. But when the rebound occurs, spread must tighten for us to stay in positive rate territory. Whereas this was somewhat of a safe bet (safer anyway) a few months back, given the past month of headlines and tape-bombs, it's as the Ninja said. We could be in the process of carving out a completely new reality of "what to expect" concerning historical models and market fundamentals.

Don't back down when the float club calls, but be ready to run if we see trouble.