Folks, it is all about interest rates and MBS pricing, I mean real market prices and yields, not the phoney talk by Big Ben and Financial Commentators. MBS is trending weeker, fresh new lows this afternoon, reprice risk is constant. I am look at the boardm Ginnies are 2-7 Ticks lower, but Treasuries are even worse, 3-19 Ticks lower.
Commentary from MBS Prices (Search Engine)
Negative reprice risk has been and will continue to be a constant companion for the rest of the day. Whereas prices were close enough to 10am levels to logically argue for less reprice risk an hour ago, that's not the case to the same extent now.
Even lenders who were conservative with today's initial rate sheets are now facing a decidedly linear downtrend in prices. Same story with the uptrend in 10yr yields. Highly risky environment regardless of how far you are from initial rate sheet print time.
Fannie 3.0s down 21 ticks at 104-00 even, 10yr yields up 12.6 bps to 1.75. S&P's still flyin' at 1615. To reiterate the previous alert, there's no reason to assume that this trend will stop until we've actually witnessed it stopping.
Not kidding, I use real time 10 yr treasuries, if they drop, MBS drops 1.2-1.5 X 10 yr treasuries. If you got hurt holding AGNC or didn't short it above $33, buy some Ultra short treasuries (TBT), I dumped all of my M-REIT's near the highs and bought TBT at 58, I think this can go to 90 or even higher, it will be a gold mine.
Update, 10 yr trreasuries plummet again, not good for MBS pricing. I think this second quarter will be much worse than the first quarter. I mean, $4-6 drop in BV is possible. TARGET PRICE in this rising interest rate environment is $22, maybe even high teens by Labor Day, it is now probable. The leverage is going to kill this guys when rates move up unexpectedly. Holy Cow......rates are rising and bond prices are falling.
This is Euro and China traders and pros. Institutional funds hedging for higher rates..THIS IS REAL...rates are skyrocketing and FED has no control, this is Europe, China, Japan, Hong Kong, who hold all the debt. USA is just a DEBT JUNKIE, if these four countries want or hedge for higher rates, we will get higher rates. DOES ANYONE KNOW IF THEIR IS A SHORT M-REIT etf fund. There should be one, this will be a goldmine, all this leverage is going to get unwound at record low rates. LOTS OF UPSIDE ON THE SHORT TRADE AND VERY LITTLE DOWNSIDE RISK, RATES ARE AT ZERO, THEY CAN ONLY GO UP OR STAY THE SAME, NO CHANCE OF LOOSING MONEY IN TBT at 58. That is why I bought it, I never loose or take risks.