Government will grant loans on terms similar to those discussed during last week's failed talks.  Granted, there are numerous conditions on these loans and one eventuality for the loans is to ease the way into chapter 11 bankruptcies.  Basically the government just showed it's cards in saying, "ok, you win.  We really don't care about the details, we'd just really like to give you some money."  Granted Also, that the 13.4 bln amount being mentioned is not a significant amount, the president noted that the money would come out of the financial rescue package, aka TARP.  This does two bad things for MBS.

A) it allocates TARP money to something non-MBS related.  Less for us = prices stay that much lower

B) it may cause some stock bullishness today and depending on interpretation may cause treasuries to sell off a bit as it may alleviate a modicum of armageddon-esque panic evident in current treasury prices.