Finally, just what the doctor ordered... a solid day of gains during a developing downward trend. These new gains will most certainly lead to better pricing and interest rates, that is of course if they hold and levels are sustained. Considering where we are, trading just below 103.00 and 103.00 is truly a high point for this note in the MBS (the 4.5 coupon)... it will probably take a large headline to move us above this psychologocial resistance point.
But as long as our market holds, and these rates continue to be available, there are I'm sure going to be a lot of happy campers out there. I don't want you all to think it nothing but sunshine. There are storm clouds forming. Fannie and Freddie after all were just downgraded and removed from Wall Street. That's right these billion dollar entities are pink stocks which speaks to their credibility and may come into the minds of some traders when they look to execute the buy order on mortgage backed securities. Time will tell as to whether or not this becomes an issue.
For now, let's just enjoy these gains.
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