Our benchmark FNMA 5.5% mortgage bond was taken to the woodshed once again as bond traders sold longer-term debt and moved into shorter-term debt, as short as they could find it. The bond ended at its low of the day, down 109bp to close at $98.25. The financial crisis continued to grip the world and like the tiger who chased its tail, stock markets around the globe are chasing each other and are turning to butter. Foreign markets were lower over night as they chased yesterday's steep drop in the U.S. stock market. Today, the major U.S. stock market indexes spiraled lower before coming off steep losses to finish 'mixed.' No one seems to want to own any asset classes but cash. Not stocks, bonds, or commodities. This reminds us of former New York Yankee great Yogi Berra in the Aflac commercial where he says 'And they give you cash which is just the same as money!' No one really knows when the selling will end. Oil prices fell to 52-week lows, falling about $5.50 per barrel to $81.10 per barrel. Oil investors are afraid the global financial crisis will lead to a severe global economic recession and will slash demand for oil products. The International Energy Agency cut its demand estimates by 240,000 barrels per day for the rest of this year and by 440,000 barrels per day for 2009. Lost in the financial crisis news, there was good news on the inflation front. Import prices dropped by 3% during September while oil prices fell 9%, the largest decrease since October 2006. Overall, import prices have risen 14.5% over the past 12 months but import prices for foods, feeds and beverages declined by 1.7% in September, the largest decline since February 2006. The Balance of Trade fell during August to -$59.1 billion, slightly less than the consensus forecast of -$60.0 billion and down slightly from July's level of -$62.2 billion. The financial markets need a 'time out' and they'll get one Monday in the U.S. as they remain closed in observance of the Columbus Day Holiday. After plunging by about 700 points from the Open, the Dow briefly moved into positive territory with about a 300 point gain before retreating to lose 'only 128 points' to close at 8,451. Now that is extreme volatility. The broader S&P 500 Index extended its losses by 10 points to finish at 899 while the NASDAQ Composite Index was the one bright spot on the day with a 4 point gain to end at 1,649.