MBS market

[solarbird]

No time for more, but I want to note that over the last couple of days the new benchmark bond (5.0 FNMA) for mortgages has spiked back up, in a large, intervention-of-scale sort of way. Mortgage rates are accordingly being shoved hard down, in the 5.375 area again, well down from the 6.0% touched earlier on. That's a long way to go from the 4.0 target, but it's closer.

MBS traders talking about this are saying that this either strong intervention or flight to safety, and if it's flight to safety, look out below for the equities markets - this is a lot of money. Various others have said that the Fed can support the stock market or the bond market at this point in time, but not both.

I have a bunch of news stuff, but no time to post it now. Maybe tonight.

Comments

[maellenkleth]

Well, that mortgage spike is just plain strange, but as we are in the middle of refi jigoku right now, any drop in the rates (even temporarily so) is a breath of fresh air.

In general concur that the economy is broadly fucked, but have said that many times before already.