Mortgage backed securities (MBS) prices are unchanged in quiet trading as investors digest this mornings negative economic reports (favorable for lower rates) and await significant news later in the day.

Home prices, according to Case-Shiller, fell in all regions of the country and was the biggest drop on record in December. The drop in home values is contributing to the decline in consumer spending because home equity was a major source of cash for purchases of expensive items like autos during the housing and credit booms.

Declining stock prices are also hurting household wealth. Consumer Confidence plunged to a record low in February signaling spending will slump further as unemployment soars. Fed Chief Bernanke testifies to Congress today & the President delivers the State of the Union tonight. Also, there is a 2yr note auction this afternoon too; more supply!

Big money whammys'