Our benchmark FNMA 5.0% bond rallied with a 47bp gain to close at $101.38. Today was also one of those rare days when stocks finished higher as well. Mortgage bonds benefited from the government's buying program for mortgage backed securities while the stock market benefited from news that a deal was struck between congressional leaders and the Bush Administration to offer the Big 3 automakers up to a $15 billion bridge loan package in an effort to keep them out of bankruptcy. Energy sector stocks also benefited from a pop in oil prices with Jan. 2009 crude oil futures rising 4% or $1.81 per barrel to $43.88 per barrel. There was little in the way of economic news to drive the bond market although the Wholesale Inventories report showed a 1.1% drop in inventories vs. a consensus of only a -0.2% drop for October. It was the largest fall in inventories in 7 years along with sales at the wholesale level crashing at an all-time record -4.1% decline. The Treasury sold $28 billion in 3-year notes with a lower than expected bid to cover ratio of 2.15, but with a decent level of foreign participation of 35.3%. Shorter duration Treasury debt offerings are attracting a far greater number of bidders than this multi-year issue suggesting the private credit markets remain very distressed. The Fed sees this also and is discussing plans to issue its own debt securities in an effort to provide it with another tool to normalize the credit markets. The Dow backed off of its best levels of the day to record a 70 point gain to close at 8,761 while the broader S&P 500 Index advanced 10 points to end at 899. The NASDAQ Composite Index picked up 18 points to finish at 1,565.