MBS Archive

Macro effect of government MBS purchases

[Skip to the end] The fed buying mortgages at, say, 5% and paying nothing on the balances it credits to pay for the purchases increases fed ‘earnings’/decreases private sector earnings, So at the ‘income level’ it’s a tax that reduces aggregate demand. Only to the extent private sector debt increases more than ...Read More

Re: Agency details

[Skip to the end] (an email exchange) >    >   On Sun, Sep 7, 2008 at 8:33 PM, Mike wrote: >    >    >   In exchange the Treasury receives a quarterly fee, dividend payments and >   ”warrants representing an ownership stake of 79.9% in each GSE going >   forward.” >    >   Support of Agency MBS market: The Treasury will ...Read More

Agency take over

[Skip to the end] Recap: If I’m reading it right, the agencies will fund directly through the Treasury. I’ve been suggesting this for many years. This lowers the cost of funds for housing, the point of the entire program, by removing a premium that’s been paid by the lack of an explicit ...Read More

AGY MBS UPDATE: 08/12/08

[Skip to the end] On Tue, Aug 12, 2008 at 5:18 PM, Andrew wrote: AGY MBS UPDATE: 08/12/08 General Themes: Mortgages were weaker to dealer hedge ratios – versus CXLs they were down only -5cents The small CXL daily price change masks what was a pretty bad performance for mortgages Dealer OAS’s ...Read More

MBS Repo Markets

Thanks Pat, good report. Yes, the Fed knows the assets won’t go away, and all they want is to see funding spreads narrow to help insure the banks aren’t forced to sell due to funding issues and thereby distort prices beyond prudent repricing of risk. TAF auction (20bb) results announcement will come ...Read More

GC Tsy changes post announcment

I’m mainly interested in LIBOR over the turn as an indicator or how the new international facility is doing. Also watching to see when higher oil means higher inflation and higher rates, vs. higher oil currently meaning econ weakness and lower rates. Maybe next week after this weeks inflation numbers are out. ...Read More