MBS, the violent gangsta they are, are exhibiting prodigious "stremf," as the man just can't keep them down.

Despite a mini equities rally, 6.0's are unchanged on the day again at 100-17. Plus, the most germane treasury counterpart, 5 years, are faring 8 ticks worse. Another day, another chip in the pile of our argument that TARPtimism is trickling into the MBS bid campfire. Can you feel the electricity!?

As soon as some of this cash is freed up, what then?! More tightening, more strength? Very likely.

The "between now and then" time frame remains highly uncertain and volatile, but 3 days now of resilient spreads and price action bode well for the optimism surrounding the bailouts (TARPtimism) being slowly but surely priced into the market.