Active Volume Amidst Recession Fears and Write-Downs.

Mortgage volume has been above normal in recent sessions, with Treasury yields trending lower and with the outlook for a full-blown recession gaining steam.

Influencing events in the first half of last week were a weaker-than-expected retail sales report for December, Citigroup's record loss of $9.83 billion in the fourth quarter, resulting from $18.1 billion in write-downs, and a lower-than-expected quarterly profit from JPMorgan following a $1.3 billion write-down. By midweek, the market was waiting to hear Merrill Lynch's fourth quarter results that came out on Thursday.

MBS flows were mostly supportive in the first two trading sessions last week. There was a wide range of investor participation from hedge funds, money managers and overseas buyers …