• 6.0's drop a bit (4 ticks) to 100-10 / slightly tighter to treasury
  • No market data, so all focused on Bernanke, Buffet, and buffet of headlines and speculation
  • Buffet's comments were generally well received, adding strength to several sectors
  • Market awaits more potential Fannie / Freddie developments.
  • Speculation continues about Lehman, some say fail, some say buyout, Lehman Rallies
  • Bernanke: effects on economy are apparent, commodity decline is encouraging,  more regulation and oversight needed
  • Bullish day on stocks will put pressure on bonds, but MBS will be the value buy as they continue to widen
  • BOTTOM LINE:
    • Today, at worst, is a storm to be weathered.  Equities have had to tolerate several consecutive down days.  So it's stock rally day, at least for now.  As we might assume given Buffet's comments that Fannie/Freddie "too big to fail," and Bernanke alluding to same with comments regarding regulation and oversight, MBS are much tighter and will fare better against an onslaught of stock bullishness.  Stock bulls could well get carried away today, but don't let that panic you if you are in the float club.  Let the bulls have their Friday.  We'll be back next week. 
    • At best, the markets might realize that equities are not supposed to rally just because we've had several down days, and the afternoon could turn around.  Either way, floaters float and lockers shoulda locked yesterday!  So please mind the rules as we're all "in the club" today.
 
                     








as the kids say: "mad props" to Nirish for the graphic.