Posted To: MBS Commentary

The headline may be the most exciting thing about today and does much to counter the suggestion that the journey is more important than the destination. Indeed, today's destination is much more of a conversation piece than the journey. In the interest of delaying what may or may not be perceived as "rain" on your respective parades, we'll go a bit out of order and start with the medium term picture of MBS showing a higher close than early October. Like we said, one has to go back to May 6th to find a higher close in 4.5 MBS, although you be the judge as to whether or not rates on May 6th are the same rates you're seeing today… No seriously, I'm not going to pull up the old rate sheets, so please tell us! Regardless of the "personal best" for the 2nd half…(read more)

Posted To: MBS Commentary

Heading into the after hours session, the FN 4.0 is +0-05 at 99-17 yielding 4.053% and the FN 4.5 is +0-05 at 101-30 yielding 4.263%. The secondary market current coupon is 4.095%. The CC is +73/10yr TSY and +61/10yr swap. Several lenders have repriced for the better as price improvements have held since the choppy reaction the 2 yr note auction. In the MBS market, trading flows have been slow and volume below average. "Rate sheet influential" yield spreads are marginally tighter as supply from originators has been muted. As the FN 4.5 tests the 102 price handle expect to see profit taking pick up…especially when benchmarks are benefiting from a bid (offers getting lifted). All this means is we dont expect to see MBS prices venture too far into the 102-00 price handle (without spreads…(read more)

Posted To: MND NewsWire

The National Association of Realtors released Existing Home Sales data this morning. READ HOW THE NAR COMPILES DATA AND GAIN A BETTER UNDERSTANDING OF SEASONAL INFLUENCES In last month's report from the NAR, existing-home sales jumped 9.4 percent to an annual rate of 5.57 million units in September from a level of 5.10 million in August. Sales activity was at the highest level since hitting 5.73 million annualized units in July 2007. Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represented an 7.8-month supply. The national median existing-home price for all housing types was $174,900 in September, In this month's report, existing-home sales surged 10.1 percent to an annual rate of 6.10 million units in October…(read more)

Posted To: MBS Commentary

Auction bullet points: $44 BLN 2-YEAR NOTES AT HIGH YIELD 0.802 PCT, AWARDS 95.78 PCT OF BIDS AT HIGH BID-TO-COVER RATIO 3.16, NON-COMP BIDS $416.6 MLN PRIMARY DEALERS TAKE $22.08 BLN OF 2-YEAR NOTES SALE, INDIRECT $19.36 BLN After the results, MBS sold off 4 ticks or so, nothing major. Tsy yields in the long end had already conceded up to around 3.4, and so only moved marginally higher before joining MBS for some moderation. Said moderation has made for more or less unchanged levels from pre-auction trading. Here's how it all looks.. So this is why we advise more patience than you might want to have following auctions… The first move down was quasi alert-worthy, but now we may be headed back to test the resistance in more positive areas of the day. Stay tuned!…(read more)

Posted To: MBS Commentary

As the noon hour approaches, MBS are up on the day with the 4.5 up 2 ticks to 101-27. Meanwhile, treasuries are still down on the day with the 10yr off 4 ticks, bringing the yield up to 3.381. Without support from some positive price movement in tsy's, MBS may have a tough time moving much higher. On the two day chart, we can see MBS struggle with 101-28 despite tsy yields being slightly lower than this AM: There are a couple disturbing developments in tsys that suggest they may have a tough time of their own with important technical levels. Well, at least they've had a tough time so far today in terms of the 3.38 inflection point in 10yr yields. 3.38 served as almost perfect support all week in addition to it acting as a noticeably inflection point for months. But with the slightly…(read more)

Posted To: Mortgage Rate Watch

Last week ended basically where it began with prices of mortgage backed securities moving sideways near record highs and mortgage rates holding steady near six month lows. MBS traded in a very narrowing range as the week progressed which allowed lenders to publish base 30 year conventional mortgage rates in the 4.625% to 4.875% range. While the week ahead is holiday shortened in observance of Thanksgiving, there is still plenty of data to take note of…housing data specifically. The week begins with Existing Home Sales data from the National Association of Realtors. This release totals the number of previously constructed homes in which a sale closed in the previous month. Recent reports have shown existing home sales moving higher thanks to near all time low mortgage rates and government…(read more)

Posted To: Pipeline Press

I was showing my Dad my cell phone over the weekend. He said, "Son, no one gives a damn about all the things your cell phone does. You didn't invent it, you just bought it. Anybody can do that." Life with Dad, always an adventure… Speaking of buying things, us taxpayers bought us another bank on Friday, although Central Bank of Stillwater, MN agreed to assume all of the failed bank's deposits and all of its assets. Commerce Bank of Southwest Florida was taken over , and for those keeping a tally, it was #124 for this year and the 12th in Florida. They had total assets of about $80 million and total deposits of about $76.7 million, according to the FDIC. The FDIC and Central Bank will share in losses on about $61 million of Commerce Bank's assets. Do you have a 401(k…(read more)

Posted To: MBS Commentary

In the week that was, mortgages traded in a narrowing range as 10yr TSY notes bounced back and forth between positional resistance and support. While the range bound behavior of our benchmarks contained MBS price directionality, lock desks were busy as originators took profits on peaking MBS prices and consumers pulled the trigger on six month low mortgage rates Last week the market was, for the most part, stuck in wait and see mode. While this week's schedule is jammed packed with data, auctions, and month end events, one has to wonder how the absent minds of thankful market participants will react to the confluence of data and events that fill the economic calendar this week. That said, the extent to which we are able to place indicative values on reactive price action may be limited…(read more)

Posted To: MND NewsWire

The US dollar is weaker, equities are higher, and gold is soaring. That’s how the Thanksgiving-shortened week is beginning after markets slid back late last week. Led by global markets, US equities are looking to open 1% higher on Monday. Conversely, Treasuries are weaker with the benchmark 10-year yield up 2 basis points at 3.38%. Analysts from BMO note the Treasury is issuing $61 billion in short-term bills and $118 billion in 2-, 5-, and 7-year notes this week. “Given the recent hearty appetite (amid concerns about a flagging recovery), [the market] should have little difficulty swallowing the lot,” they said. Meanwhile, gold prices are flying $19 higher at $1,166 per ounce as the dollar continues to weaken. Key Events This Week: Monday: 10:00 ? Existing Home Sales are…(read more)

Posted To: The Green Home

In September we introduced a project in Southhampton (Long Island), New York under which is being built a completely carbon-neutral home from the ruins of devastating residential fire. As background, the home of David Dubin and his family was hit by a major fire on December 22 of last year. The fire ruined the center of the house but left the shell. The original house was a relatively new shingled, center entrance colonial that looked like hundreds of thousands of houses in the region. The new house, while it will be built from the remains, will have an 800 foot addition (an 4000 sq. ft total) and will resemble the Canadian "lodge houses" Mrs. Dubin recalls from her childhood in that country. The house, at least from viewing the architectural drawings, is quite spectacular. The designers…(read more)