It's impossible to get away from oil headlines today.  They're everywhere.  Even smart people are succumbing to the temptation of oversimplifying the current state of financial markets.  To their credit, oil is a major ingredient in the broader phenomenon of the "risk-off" trading we discussed this morning. 

With that in mind, we're actually seeing the movements being led by other markets, like Eurodollars, European bond markets, and equities.  On several occasions today, stock prices and bond yields have moved decisively higher or lower while oil prices stood still.  Oil has returned the favor on some occasions, but less frequently. 

Bottom line: interconnectedness.  Cause and effect aren't a one-way street right now.  Oil is adding to the panic, but it's not creating it without help.  Think "youth soccer."  There are no positions or passes or strategic movements--just a cluster of high-urgency attitudes following the ball.  Today, that ball continues rolling toward the "risk-off" goal. 

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
101-11 : +0-15
FNMA 3.5
104-12 : +0-11
FNMA 4.0
106-24 : +0-07
2 YR
0.5480 : -0.0600
10 YR
2.0940 : -0.0750
30 YR
2.7480 : -0.0630
Pricing as of 12/12/14 12:51PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:22AM  :  Bond Markets React to Consumer Sentiment (Inflation Expectations)
9:52AM  :  It's Nuts to Think that Oil is the Only Motivation for Bond Markets Right Now

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jeff Anderson  :  "Inverted yield curve talk. Awesome. We're still getting our feet on the ground from THIS recession."
Jeff Anderson  :  "Is it Ugly Sweater Day or Ugly Oil Chart Day? Ouch. And woo hoo!!!"
Victor Burek  :  "mbs sure lagging today"
Hugh W. Page  :  "Excellent Day Ahead. It just seems logical that as oil moves down as quickly as it has and the dollar moving up like it has that someone out there on the wrong side of that bet is going to get hurt and you never know it could be someone big. Risk-on/Risk-off!"
Sung Kim  :  "2.05 today. Stock market sells of in to the weekend "
Matt Hodges  :  "mg - nice job on the Day crushed it. My interpretation - GUTFLOP discussions with clients."