Our benchmark FNMA 6.0% mortgage bond expanded its intra-day trading range to 88bp today before falling to across the board sales of all asset classes with a loss of 66bp and a close at $100.75. Existing Home Sales surprised to the upside in Sept. with a 5.5% increase to 5.18 million vs. estimates of 4.95 million. Median home prices fell 9% from the year-ago period to $191,600. The unsold existing home inventory fell 1.6% to 4.27 million representing a 9.9 month supply. The NAHB is forecasting new home construction of 936,000 units for 2008, the smallest total since 1945. The overnight U.S. dollar LIBOR rate edged higher to 1.28% from Thursday's 1.206%. The 3-month U.S. dollar LIBOR fell slightly this morning to 3.516% from yesterday's 3.535%. Taiwan just issued a new rule restricting insurance companies investing in mortgage-backed securities (MBS) issued by Fannie Mae, Freddie Mac and Ginnie Mae. Maximum exposure to MBS and collateralized issues by any individual insurance company will now be set at 25% of their offshore investment limit. If restrictions of this nature are adopted by other foreign countries we could see less demand for our MBS develop over time resulting in higher mortgage rates. A global rout in stocks was in full force with major foreign stock exchanges falling 8-10% overnight as investors cashed in their positions over fears of a deepening global recession. Britain's FTSE 100 Index dropped 8.67%, France's CAC40 Index fell 10%, Germany's DAX Index plunged 10.76%, and Japan's Nikkei Index was sliced by 9.60%. This negative market sentiment spilled over into our stock market as well with the Dow and S&P 500 futures beginning today's session 'limit down' and frozen. This action may be signaling true capitulation where investors 'throw in the towel' and sell every asset class to get out of the market. Even high quality investments are not immune to such indiscriminate selling. The Dow traded in a large 496 point intraday range before falling 312 points to end at 8,378. The broader S&P 500 Index lost 51 points to close at 876 while the NASDAQ Composite Index dropped 31 points to close at 1,552.