Mel's Blog

It's the official start of Baseball season for most of the country today.  And after several "wild pitches" from Mortgage Bonds, this morning's action has been relatively quiet.  The good news is that prices are modestly higher, on the heels of a strong rally Friday.   

The Chicago Purchasing Managers Index (PMI) for March showed a reading of 48.2, stronger than expectations of 46.7.  Not much reaction to the number.

Treasury Secretary "Hammering" Hank Paulson is banging away at the mortgage industry and is currently speaking about a plan to have the Federal Reserve become "responsible for overall issues of financial market stability, and not just overseeing the conduct of banks".  This is sure to include the mortgage lending industry, but any proposal will likely take some time to be worked out in Congress.  But not too much time, as Senator Chris "my offer is nothing" Dodd and Barney Frank have already been working on proposals that show their dislike for our industry. 

At 12Noon ET, San Francisco Fed President Janet "always" Yellen will address an audience on foreclosures - she probably won't move the markets like Loose Lips, but it may be interesting to get her read on Housing.

Mortgage Bonds are trading in the middle of a wide 135bp range between a floor of support at the 50-day Moving Average, presently $100.34, and a ceiling of resistance at the $101.69.  At the moment, I will carefully float - but as you know, it can change fast.