MBS Live: MBS Afternoon Market Summary
A big haul of economic reports had little lasting impact on trading levels this morning, but the stronger Philly Fed Index at 10am was enough to suggest the bullish correction in bond markets take a breather.  Surprisingly, the rest of the day was spent trading between those 10am levels and the weaker levels from earlier in the morning without much, if any attention paid to Fiscal Cliff headlines.  This is likely due to the reappearance of completely meaningless political posturing to the Cliff debate with both sides butting heads in as unproductive a manner as ever.  Each side of the aisle fired volleys that had nothing to do with working toward compromise on a deal, so markets are left to assume that politicians are very very stupid, playing some sort of political game (not a very entertaining one), or something in between.  Rather than try to decide where reality falls on that spectrum, it's easier just to tune out and drift sideways at defensive enough levels to be prepared for any eventuality.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
104-14 : +0-02
FNMA 3.5
106-10 : +0-02
FNMA 4.0
106-31 : +0-01
FNMA 4.5
107-25 : +0-01
GNMA 3.0
105-30 : +0-02
GNMA 3.5
108-11 : +0-01
GNMA 4.0
109-13 : +0-01
GNMA 4.5
109-08 : +0-01
104-05 : +0-02
105-32 : +0-02
106-16 : +0-02
107-01 : +0-01
Pricing as of 4:05 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.

3:11PM  :  MBS On The Edge Of Riskier Territory. Treasury Close Helps
Just a heads up (as far as most lenders will be concerned) that Fannie 3.0s spent the better part of the past hour trading near their lowest levels since 9am, but seem to have caught some support aver the 3pm Treasury close.

The most frequently visited low of the past hour was 104-14 (still 2/32nds higher on the day) with a few quick visits to 104-13. Going any lower than that could pose some negative reprice risk to what has otherwise been a fairly uneventful day (break to 104-12 or lower).

Moral of the story is that we're sort of grinding it out in the middle ground between "safe" and "not safe" as far as reprice risk is concerned. As always, you'll have to adjust accordingly when considering locking/floating at certain lenders. Those typically quickest to reprice were probably weighing the decision carefully on the recent ticks down to 104-13, but here at 104-15, not so much.

Most of the rest of the pack would need to see 104-12 or lower in order for market-motivated negative reprice risk to develop. 10yr yields backed down from highs near 1.81, but have yet to move convincingly down through the 1.79's. Things could still go either way.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Adam Dahill  :  "NYC values are at or above peak in certain neighborhoods. "
Andy Pada  :  "I think we are stable, but there are a lot of headwinds that will forestall a recovery."
Brent Borcherding  :  "I don't expect values to truly come bouncing upward yoy, but I do think stable and bouncing along the bottom here is quite likely."
Brent Borcherding  :  "In 2 or 3 years, the thing about the process now appears that that will have them slowly trickle out maintaining supply control, no?"
Steven Stone  :  "the question is: once all of these robo signed properties hit the market, will prices remain higher?"
Andy Pada  :  "a simple way to look at it may be to look at it using appraisal terms: improving, stable, declining. I'm sure there has to be definitions underlying those terms."
Brent Borcherding  :  "My area is in a recovery, Portland, OR, I think. Limited supply, values have gone up 8%+ this year and bidding wars on homes. I'm hearing more and more similar stories, nationally."
Steven Stone  :  "minor supply disruptions dont make for recoveries"
Steven Stone  :  "everytime there is a small bounce...its a recovery"
Brent Borcherding  :  "Looking for a little discussion...Is housing in an actual recovery?"
Matthew Graham  :  "Someone apparently slipped Boehner's cue card in Cantor's stack this morning. I think that was a verbatim repeat of "president can be responsible for largest tax increase in American history" "
Rob Clark  :  "So a waste of time since the Prez said he will veto."

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