Morning Report - Moderate, Modest, and Measured.

Vital Statistics:

	Last	Change	Percent
S&P Futures	1611.6	3.6	0.22%
Eurostoxx Index	2725.5	16.2	0.60%
Oil (WTI)	94.24	0.5	0.53%
LIBOR	0.274	0.000	-0.07%
US Dollar Index (DXY)	82.35	-0.248	-0.30%
10 Year Govt Bond Yield	2.11%	0.03%
Current Coupon Ginnie Mae TBA	101.8	-0.2
Current Coupon Fannie Mae TBA	100.2	-0.2
RPX Composite Real Estate Index	201.9	0.1
BankRate 30 Year Fixed Rate Mortgage	4.16

Markets are flattish after initial jobless claims came in as expected. Challenger and Gray reported that announced layoffs are 41% below last year's pace.  Bonds and MBS are flat.

Moderate. Modest. Measured. That is the summary of the Fed's Beige Book Survey of economic growth. The bright spot of the report was residential real estate construction. The Dallas District noted the strongest growth, while growth elsewhere was modest to moderate. Since this report is basically as amalgam of the various Federal Reserve District reports which have been previously released, it isn't a market-mover. 

The Senate plan to wind down the GSE's (Corker / Warner) would liquidate Fannie and Fred, transfer all of their liabilities to Treasury. The liquidation preference would be to the US Government first, then the junior prefs, and then the common shares. Note that Fannie Mae and Freddie Mac's recent record profits have not gone to paying down their debt to the government - those funds have been simply revenues to the government. A new entity - The Federal Mortgage Insurance Commission would have a re-insurance role and backstop private insurance. Ginnie Mae would not be affected.