Mortgage backed securiries (MBS) prices opened higher (rates lower) but have reversed course after release of Consumer Confidence and the Fed prepares to buy government securities today and tommorrow; FNMA 4.0% coupon 99.42bps, -6bps. Gains will be tempered by the Treasury's plan to auction a record $101 billion of 2, 5 & 7yr notes this week. Case/shiller Home Price Index decreased 18.7% from March 2008. Year over year rates continue to show little or no improvement, holding in the high negative teens. Rates of decline in hard hit areas are deepening, not improving, providing no evidence that home price recovery is here. Falling prices and low mortgage rates have made homes more affordable, helping stem the slide in sales, which eventually will help prices stabilize. Consumer Confidence jumped much higher than expected in May to 54.9 from 39.2 the previous month. The expectations component rose more than 20 points, with gains in business conditions, employment and income. Current conditions showed only a slight improvement as 45% still describe current business conditions as bad. Confidence readings do not always correspond to changes in retail spending, but signals an upward shift in outlook.