Question-and-Answer Session
Operator
Thank you sir. The question-and-answer session will begin at this time. (Operator instructions) Our first question comes from the line of Jason Arnold from RBC Capital Markets. You may proceed sir.
Jason Arnold – RBC Capital Markets
Hi good morning everyone. Mike as usual, excellent commentary, depressing and scary but excellent nonetheless. Just wondering if you could please give us an update on what you are hearing and seeing from your repo [ph] counterparties with respect to rates, share cuts, etc and then perhaps offer us some color on where you are seeing your portfolio yield at present.
Michael Farrell
Sure. I will just give you some general color and then I will ask Welly to give you some specific items. In general what the federal reserve is doing is working, it has been working, the result you see posted for us as we cautioned in our third quarter earnings call in the beginning of October, late October we took a quarter over quarter view, we extended our balance sheet over year end because our experience was that every quarter was going to get worse and certainly no one expected Citibank etc to happen in the month of December and even though it only was in December it seems like it was years ago now. The volatility in funding is now subsiding I would say and that we are recognizing the benefit of that higher cost money rolling off from our quarter end results into the first quarter here and that does not mean that we are raising up the Gulf lag in that we think it is full steam ahead, we still think there are a number of challenges to the market that deserves some caution and I will ask Willy to comment on the rest.
Wellington Denahan-Norris
Yes, as everybody is fully aware the fed has been a large buyer in the MBF space and early on in its efforts it is due to have a meaningful set of driving yields down, mortgage rates down with each passing week though the effects have become much less noticeable and even their last set of purchases the rates have actually increased. So just to put it into context, I think there is certainly a lot of confusion in the marketplace not only about what their activities do to the price of mortgages but also the resulting refi activities that comes from it.
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