Good Wednesday AM (still the best day of the week),

Bonds are up slightly on the day, as they are pulling back from their morning highs. The CPI number that was released this morning was incredibly bond friendly, but as usual, bonds do not seem to care and the overall tone remains bearish. This morning, in the world of unusual options and dark pools, there is nothing but puts being bought, which are bets against treasuries. The volume is not enough to tank the market but it is the tone that is an ongoing concern. We did break the downtrend a couple of days ago but we have yet to keep any traction for the last several months. With that, it is hard to call bottom with any level of confidence. CPI should have sparked a rally, but when the tone of a market is negative, it will ignore good news and over react to bad news.

Did you know that on this day in 1938, “Fannie Mae” was born, as the National Mortgage Association of Washington was created as a subsidiary of the Reconstruction Finance Corp. Its mission: to buy and sell home mortgages insured by the Federal Housing Administration, in order to create a liquid market for mortgage debt that would encourage lenders to continue making home loans.

I know I keep banging the inventory drum but there’s a reason. Please see the latest inventory numbers below. The teal line… 1.0 months… the imbalance continues to widen (and prices will rise).

Please remain safe and healthy, make today great.