Markets ask....and they receive. US stocks bounced off an 11 year low after the White House released a statement regarding bank nationalization and the Treasury Department  announced that next week they would release further details regarding their plan to save the world.

Consequentially MBS bids deteriorated quickly as TSY "flight to safety" trades unwound. Spreads are still 8/9 ticks wider in the short end of the stack.

245 marks...


FN 4.5 -------->>>> +0-06 to 100-29 from 100-23

FN 5.0 -------->>>> +0-04 to 101-31 from 101-27

FN 5.5 -------->>>> +0-03 to 102-16 from 102-13

FN 6.0 -------->>>> +0-02 to 103-03 from 103-01


After White House spokesman Robert Gibbs made these comments...

"This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring they are regulated sufficiently by this government"

This is what happend...

Stocks will remain under pressure until the close but equity investors are rallying right now .... MBS will continue to pace Headline News and TSY yields.