Most of us know that stinky publicity about ANY product makes it difficult to attract buyers. The real estate market is a great example - bad press has lead to many potential buyers staying in their apartments... The same thing has happened to the mortgage market (as mortgage has become a four letter word) and no one's buying them either... which of course is why when Bernanke lowers Fed Funds rates mortgages remain stubbornly higher. PIMCO revealed in a moment of clarity this morning on CNBC that they expect buyers to come into the mortgage market FROM THE 2 YEAR TREASURY market before the end of the month (actually I think the line was, "they can not deny the possibility" - or is that the line Goldman used this morning about the potential Emergency Fed action? I get confused).
But MOST economist agree that THIS is what you should ACTUALLY be watching: