Morning Report

Vital Statistics:

	Last	Change	Percent
S&P Futures	1435.6	-2.6	-0.18%
Eurostoxx Index	2528.4	-10.2	-0.40%
Oil (WTI)	96.16	-0.3	-0.27%
LIBOR	0.404	-0.004	-0.86%
US Dollar Index (DXY)	80.35	0.100	0.12%
10 Year Govt Bond Yield	1.68%	0.01%
RPX Composite Real Estate Index	192.9	0.0

Markets are down slightly on no some disappointing economic data out of China. Treasury plans to sell $18 billion worth of shares in AIG. Bonds are down 1/2 a point, while MBS are flat.

In spite of the disappointing Chinese data, the Street is heavily long commodities. Chart:  GSCI Index:

Italian Prime Minister Mario Monti told CNBC over the weekend that he does not expect Italy to participate in the ECB's bond buying program, at least initially.  Remember, the individual states have to request the ECB to purchase their debt.

JP Morgan is out this morning with a note saying they expect the FOMC to extend the low rate guidance through 2015, and initiate a small asset purchase program (maybe $300b) primarily focused on MBS. The FOMC decision is scheduled to be released Thursday at 12:30 est.

The NAR is reporting that housing affordability continues to increase in spite of the fact that prices are up 9.4% YOY.  Decreasing mortgage rates are able to offset the price increases.

SIFMA and others have provided a formal response to FHFA regarding the Eminent Domain issue in San Bernardino.  They provide a helpful table lining out the trade and who makes / loses money. Basically the winners are the hedge fund behind this and the borrower.  The table doesn't break out what the state gets, but presumably they will get something out of this as well.  The lender gets slammed.