Summer vacations and ongoing worrisome conditions kept MBS volume below normal through the first half of the week with better selling overall following the sector's strong rally on the previous Friday.

There were several disconcerting reports out that made a recovery elusive to this credit and housing crisis, and thus kept MBS buyers on the sidelines. A number of reports influenced last week's mortgage market activity including UBS stating a larger-than-expected 2Q08 loss of $328.9 million, JPMorgan announcing that it had incurred losses of $1.5 billion since July and several analysts issuing various downgrades to Goldman Sachs, among other things.

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