The Bond Market

[dalakhani]

...is getting THROTTLED.

[GPK]

Glad I'm aggresive

[dalakhani]

Its oversold now as the carnage continued throughout the rest of the day. The govt will start buying again...soon.

The bigger question is, what happens when the govt can no longer buy? I guess theoretically money can be printed to infiniti but there has to be a day of reckoning.

[gales0678]

Originally Posted by dalakhani

Its oversold now as the carnage continued throughout the rest of the day. The govt will start buying again...soon.

The bigger question is, what happens when the govt can no longer buy? I guess theoretically money can be printed to infiniti but there has to be a day of reckoning.

hyper-inflation like Brazil?

[dalakhani]

mbs, especially at the low coupons, took the worst single day beating in at least ten years or as far back as i can remember.

10 year treasury yields have gone up 100 bps in less than a week.

35 billion dollars was up for govt repurchase and they bought back 7 billion. What does that tell you?

Well, it is telling the markets that there is a limit to the government's buying. It also gives us sneak preview of what it will look like when the govt will stop buying. Not pretty.

I would imagine there were some unhedged positions that got absolutely destroyed today.

[Cannon Shell]

http://www.telegraph.co.uk/finance/f...ing-money.html

[ninetoone]

Looks like the old refi is on hold for now!!

[gales0678]

Originally Posted by dalakhani

mbs, especially at the low coupons, took the worst single day beating in at least ten years or as far back as i can remember.

10 year treasury yields have gone up 100 bps in less than a week.

35 billion dollars was up for govt repurchase and they bought back 7 billion. What does that tell you?

Well, it is telling the markets that there is a limit to the government's buying. It also gives us sneak preview of what it will look like when the govt will stop buying. Not pretty.

I would imagine there were some unhedged positions that got absolutely destroyed today.

dalakhani we are broke are we not? we just can't keep the printing presses running forever , at some point there will be a day of reckoninig, it will not be pretty , we will have a land of have's and not's - i think the middle is doomed , i hope i'm wrong

[wiphan]

Mortgage rates increased .625% today. Largest increase I can remember in 1 day in the last 10 years. We saw a .5% dip one day, but I can't remember a day like today. Our interest rates got worse 4 different times today. Personally I am kind of relieved and hope that we can keep things slightly higher for a while so that I can catch up and actually have a life outside of work.

[dalakhani]

Originally Posted by wiphan

Mortgage rates increased .625% today. Largest increase I can remember in 1 day in the last 10 years. We saw a .5% dip one day, but I can't remember a day like today. Our interest rates got worse 4 different times today. Personally I am kind of relieved and hope that we can keep things slightly higher for a while so that I can catch up and actually have a life outside of work.

You won't get your wish wip. Feds will start buying mbs again next week. Just watch.

Enjoy your weekend though.

[wiphan]

Originally Posted by dalakhani

You won't get your wish wip. Feds will start buying mbs again next week. Just watch.

Enjoy your weekend though.

I know. The fed will keep buying thru 2010, which is a good thing and means job security in a tough time for most people and allows me to put some $ away for when things won't be as good. The fed has committed to buying 1.25 trillion in MBS and so far I think they are under 500 billion in purchases. There are still a lot of issues that need to be worked out with the Obama HARP(home affordability Refinance program) program. At least though we can maybe work thru some of our capacity issues. It is twice as hard to do the same mortgage this year as it was 8 months ago even for the best credit worthy individuals. That coupled with appraisal issues on just about every loan is just a mess right now and I live in a very conservative state.

[SuffolkGirl]

http://www.breakingviews.com/2009/05...spx?sg=nytimes