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May 27, 2009



my old shops research group closed current coupon mbs at 4.60 and primary mortgage rate at 5.34. However, with the curve so steep the rates out in July and August may be in the mid to higher 5's


5.08 to 5.50 is a definite possibility but i can't imagine that they jumped to 6.50


6.50!!! Nah. It won't get there until at least next Tuesday!


So I'm working on a refi right now? How (insert technical term)ed am I? I saw on some dude's blog that the 30 yr fixed went from 5.08% yesterday to 6.50% today.


Yep. More selling leads to more duration..which leads to more selling. Usually when the biggest loan servicer (or guys with the worst convexity profile) sells his last bond.....it's time for a big rally!

At least that's how it used to work


Hey Eric, today's bond selloff is being led by mortgage bond selling correct? is this another one of those convexity trades that feeds on itself for a few days then marks the lows of the year?

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