Posted To: MBS Commentary

Yes, I write a lot… I'm working on it, OK!? But read every last word of this one… Once a year, I like to have a passionate revelation… Last year, it was the development of a massive triangle of competing trends that I felt were destined to signal the inception of "something really good" for mortgage rates and spreads. There was nothing especially groundbreaking about thinking that "something's gotta give" in reference to MBS into the Fall of 2008. Spreads were over 300bps–all time wides, and continuing to blow out week after week. To make matters worse, relief was so far out of sight that even the Frannie conservatorship failed to remedy the slide. You were either in one camp or another. On one side of the argument foretold the end of days for the mortgage…(read more)

Posted To: Community Commentary

"Social media marketing is here to stay" could very well be chalked up as the understatement of the year. Social media marketing has been on the rise for the past several years. Unfortunately, many small businesses, corporations, and independent freelancers have been slow to get on board the social networking train. Saying "no thank you" to social marketing opportunities reminds me of the new commercial out for PS3. The advertisement begins with a disgruntled girlfriend who can't wrap her mind around the fact that her boyfriend has indeed purchased PS3, but will not (for whatever reason) proceed to the next logical step: connecting to the internet. The girlfriend is speaking to a technical advisor with PlayStation who brings to her attention the fact that without connecting…(read more)

Posted To: MBS Commentary

Heading into the 5pm marking period, the FN 4.0 is +0-08 at 99-05 yielding 4.09% and the FN 4.5 is trading +0-08 at 101-24 yielding 4.287%. The secondary market current coupon is 4.179%. The CC is +75/10yr TSY and +64/10yr swap. Below is the FN 4.5. Quite the post auciton recovery! This is a prime time to take profits on your pipeline. Everyone have a great weekend……..(read more)

Posted To: MBS Commentary

MBS continue to put on show after astounding show when it comes to strength versus tsy's and strength in general… Adjusting for the effects of borrowers' right to prepay and weighting 4.0's and 4.5's to MBS production, the resulting blended, weighted yield, aka current coupon continues its trend of being "really really low," (to use the technical term!) currently at 4.23932. Some simple math shows that MBS yields remain exceedingly close to tsy yields, with the cc/10 yr spread remaining under 80bps (0.80%) at 79.03 bps… With that tightness in mind and considering the recent bullishness in MBS, is next week finally time for the bullishness to take a breather? Despite some intraday bullishness, tsy's are currently trading very close to yesterday's "going…(read more)

Posted To: Mortgage Rate Watch

It was a busy day in the rates market yesterday. Although several data releases needed to be digested, the main event was the 30 year bond auction. Recently, while demand for shorter maturity Treasury notes has proven stable in the "post-November 4 FOMC statement" environment, the market has forced yields higher in the long end of the yield curve. Specifically the benchmark 10yr note and the 30 year bond have taken a beating over the past two weeks. Yesterday was the first chance we had to really test market's appetite for longer dated debt investments, which have more of an influence over mortgage rates. Unfortunately, while specific buyers supported the bidding, overall demand was weak compared to previous auctions. Following the release of the auction results, MBS prices plummeted…(read more)

Posted To: MBS Commentary

The preliminary read on November Reuters/University of Michigan (Penn State loathes you) consumer sentiment fell 4.6 points to 66.0, much lower than the consensus estimate of 71.0 The current conditions index came in at 69.6, lower than the 74.0 economists were expecting and worse than October's final read of 73.7. Consumer expectations for November fell to 63.7 from 68.6 in October….again, worse than the market's expectation for 68.9. The 12-month economic outlook fell drastically to 67 vs. the final october read of 81. The lowest print since April. 1-yr inflation expectations were 2.8% vs the final October's 2.9% final. Sounds pretty bond market friendly right? The data was released at 9:55am. Look how the 10yr reacted to the news. Yields moved higher…hmmm why? I purposely…(read more)

Posted To: Pipeline Press

I regard any day that my 15-yr old daughter doesn't call me "annoying" as a missed opportunity, a waste. Yesterday, for example, I told her that I was tired of hearing Taylor Swift on the radio every time I turned it on. "Dad, stop being annoying." Glare. (I used to like listening to Taylor, but enough is enough, and besides, Cat Stevens is going on tour.) No doubt the folks at Freddie Mac were tired of hearing people ask them about high-cost loan limits, and Thursday they released them. "Today, we are announcing that our base conforming loan limits will be maintained at their current 2009 levels for 2010, with the maximum loan limit for a 1-unit single-family property remaining at $417,000. The temporary high-cost loan limits for properties located in designated…(read more)

Posted To: MBS Commentary

HAPPY FRIDAY THE 13th Recap of Yesterday Jobless Claims 502,000 vs. previous 514,000. 4 week moving average down to 519,750 from 524,250 Treasury's Monthly Budget.: $176.4 billion deficit. Bigger hole than expected. Reciepts - 17.9% FHA Audit reveals FHA reserves at all time low. READ MORE Fed MBS Purchase Program Update: NY Fed buys net $13.5 billion Agency MBS. Slowing pace of purchase program offset by lack of new loan production. READ MORE Although several headlines hit the wires, most of the day's meaningful drama developed around the 30 year bond auction. Treasury auctioned $16 billion long bonds at high yield of 4.469%. Demand was relatively weak, bid to cover ratio registered at 2.26. Following the 1pm release of auction results, 10yr TSY yields rose rapidly and "rate sheet…(read more)

Posted To: MND NewsWire

With the Dow climbing for six consecutive days and breaking fresh 13-month highs, the 0.91% sell-off yesterday was prompted more by timely profit-taking rather than plunging sentiment. After a one-day break, investors are already back in buy-mode this morning, as all three indexes are looking modestly higher. The question will be whether that confidence can last the morning. The trade balance is a never-too-pretty reminder of the nation’s growing debt, and consumer sentiment is unlikely to surge with the unemployment rate hitting double-digits for the first time in 26 years just two weeks ago. Outside the US, the main economic news this morning is that the Eurozone has technically exited the recession with third-quarter GDP inching 0.4%. Annual GDP is down 4.1% but that’s an improvement…(read more)

Posted To: The Green Home

A few months ago we posted a very popular piece on this forum about Dragon Board (April 9, 2009), a drywall substitute that has many environmental, structural, and economic advantages. We christened it almost too good to be true. Let me quickly say that I stand by that statement. But, in the course of researching that article we ran across a reference to Chinese gypsum, another drywall substitute, that was giving the Dragon Board people fits as customers confused their quality product with an import that was anything but green. We rather off-handedly mentioned the confusion in our article. Let me state again - Chinese gypsum has nothing to do with Dragon Board! Since then the negative news about Chinese gypsum, now commonly called Chinese dry wall, has exploded. While use of the product has…(read more)