Our benchmark FNMA 6.0% mortgage bond had one of its wildest intraday price swings since the credit crisis began after it traded in a 131bp range to end 81bp higher with a close of $100.41. At one point the bond had traded 47bp lower than yesterday's close of $99.59. Worse than forecast economic news negatively impacted the stock market while sparking safe haven buying in bonds. The day's economic news was dismal with Retail Sales suffering their worst decline in three years with a -1.2% plunge vs. expectations of a -0.7% decline. Wholesale prices remained high though with the Core Producer Price Index reported at 0.4% vs. the consensus estimate of 0.2% while recording its largest annual increase in more than 17 years. New York region manufacturing was very weak for October with a record low of -24.6 vs. expectations of -10.0. Readings below zero indicate a contraction in manufacturing activity. To make matters worse for stocks, Fed Chairman Ben Bernanke didn't have any soothing words for the market when he spoke about the current condition of the economy before the Economic Club of New York. Bernanke said the economy 'won't snap back quickly even if badly needed confidence in the U.S. financial system returns and roiled markets finally calm.' Big Ben went on to say a 'broader economic recovery will not happen right away.' The Fed's Beige Book, a monthly summary of economic activity, seems to confirm this as it showed a rapidly weakening economy during September. Declines in consumer spending and retail sales were noted as were slowdowns for manufacturing and services companies. Real estate markets remained weak while credit markets tightened up with reduced credit availability. Many economists now believe the U.S. is mired within its first recession since 2001. Meanwhile, the credit markets have been showing early signs of thawing out while investor demand for safe haven assets remains relatively high. Inter-bank lending rates are continuing to edge lower today. LIBOR for three month U.S. dollar loans fell to 4.55% from yesterday's 4.635%, Monday's 4.75%, and from last Friday's level of 4.81% - a welcome trend. The Dow Industrials were torpedoed once more with a loss of 733 points to close well below 9,000 at 8,577. The broader S&P 500 Index didn't fare any better with a 8% loss of 90 points and a close at 907. The NASDAQ Composite Index made it a trifecta for major index losses with a 150 point plunge and close of 1,628.