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Mortgage Spread To Treasuries Hits 100 Bps Again
Wait, didn't the Fed just buy $160 billion in agencies in the last two weeks?
Answer - yes.
Investors and underwater homeowners better be feverishly daytrading their Schwab accounts because the housing value lost from both the treasury and mortgage blow out widening, is not going to come from anywhere else. Then again, in the wake of Fannie's 3rd (4th, 5th?) implosion it is only a matter of time before Obama announces a $100,000 Cash For REOs program and appoints a Housing Czar. After all, the downside is just more ink for the machines, and as we all know China has no option but to keep buying the ink and recycling it.
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Have flashes spawned front running
http://www.reuters.com/article/ousiv/idUSTRE57642I20090807
What happens if Bernanke announces an end to Treasury purchases next week?
http://www.bloomberg.com/apps/news?pid=20601087&sid=adSZxT_ApEsI
lizzy36,
really doesn't matter what BB says, matters what he does. he's said a lot of things.
Can I haz ah and out?
"lizzy36,
really doesn't matter what BB says, matters what he does. he's said a lot of things."
slight amendment to my previous statement above. what BB says matters only insomuch as it is CONTRADICTED by what he does. so far, that seems to happen quite a bit (deeds not matching words).
Whhaaat?
Are you really suggesting that the Gov'ment of THE United States does not support a strong dollar policy in word and deed?
Oh mah goodness! Say it ain't so!
And one should also consider what happens to foreign demand if he announces an extension of the program. If we're anything like the UK then breif buying in Treasuries will be met by lower foreign central bank interst (than already dismal levels).
http://www.telegraph.co.uk/finance/financetopics/recession/5983387/Gilt-prices-soar-after-Bank-of-England-extends-money-printing-plan.html
“They’re clearly not going to extend that program given the improvement in financial markets that’s going on,” said Lyle Gramley, senior economic adviser with New York-based Soleil Securities Corp. and a former governor.
--------------------------------------------------------------
This means that he always could come back and re-open the buying if the stock market should deteriorate for some reason.
So, I wouldn't give that too much of an importance.
So you are telling me that stock market rises are not because of "investors having confidence" in the future?? I thought we were in a free market system where the best and the brightest always win?? I mean that is why Goldman Sachs is doing so well right??
sorry. i didn't mean to take that illusion away from you.
Could you please avoid using religious pictures?
I don't like you wearing a paper bag in your icon. It's personal preference live with it or leave.
no.
WOW!
It is the sensibility POlice!
could you please avoid being an arrogant
self-righteous prick?
It's usually genetic.
Ganesh is most certainly appropriate.
The mover of that which cannot be moved. Part of Siva's troop. Kinda creation's clean up crew.
Ironic. Siva is his father. LOL! Yeah. So long story short, hindus are here in this country deal with it. Peace.
I agree with #29271. The real scary thing will be what happens when people think he is monetizing like crazy, even though he says he is not and CNBC is bringing on guest after guest saying they think he is not. Perceptions can be more dangerous than "honest" information if the honesty part become highly mistrusted. That is the danger in yesterday's revelation that they were buying treasuries in what appeared to be kinda an oddly indirect way - the risk was that if enough people "think" they are monetizing like crazy (and think they are hiding it), then no amount of denials will be effective at stemming the outcome. So as goes bank runs can go equity markets. Bernanke should get on the air and explain that transaction to help head off any misconceptions... Tom
Bernanke wrote a paper how it was expectations that move the herd, not the reality. He advocates lying for policy purposes. Remember what happened with Peter and that Wolf....
Hey Durdy, you've now been a 100% bear since 666
I predicted you were a one way fraud months ago and I was right.
You have disgraced the good name of the Fight Club
Close this blog down and save yourself the trouble of being kicked off hte internet.
Fan boys....don't bother to respond.
Fuck you, cock gobbler.
Hello sonny, how'd you know this was your mother?
Dinner at 8
troll
In other news... Dewey Defeats Truman.
Please tell us who you are so we can go and cut your fucking head off...you basher pos
If you wanted to make the allusion correctly... You could call all the fanboys the incidents of project mayhem... Tyler stirs the pot, gives us a philosophical paradigm (data + headlines), and lets us do the rest in the name of the cause (buying t-shirts, spreading the word, etc.). The fanboys were portrayed as nothing short of idiots in the book...
I'm just wondering when cornelius is going to step in and try and shut us down... of course, we'll have to take his balls.
OK bears ... don't play with your food now. He has to come back up the river to spawn. He'll be fat and tasty by then.
TD - the post below is from "goldman-sachs-state-market", but I know you're a busy guy and wanted to make sure you see it
***************************
TD -
You said "One wonders what is up with all those solid buy ratings on assorted REITs compliments of GS' sell side research"
Well, here are the facts:
GS sell side has a CAUTIOUS view of the REIT sector
GS sell side REIT coverage team has only one stock on the GS CONVICTION list, and it is a SELL (Essex Property Trust)
Once again, TD your ignorance of the facts and bias against Goldman Sachs are damaging your credibility
Again, I must ask - which Division of Goldman Sachs turned you down when you graduated business school? If Lloyd took you to dinner to appologize for the obvious "slight", would that make it better?
4 get it .. I too was turned down by GS and the reasons given was ridiculous, in that it was considered that my finance honours dissertation examining the informational endowments of foreign and domestic investors using a unique Finnish dataset was irrelevant in the US and the US markets.
Further, I was informed that my finance research, studying the Tokyo Stock Exchange and examinations of the distinctive market characteristics of daily and trade price limits was superfluous in the ambit of the selection criteria.
I have a MSc in Financial Economics and various other qualifications together with the necessary work experience at all levels and management of two prominent and profitable financial institutions.
One would have thought that this would have been sufficient to take on the position on offer instead, this was awarded to Lloyd.
Now all things being equal why would a dinner with Lloyd, for an apology on this 'slight' settle past scores?
Obviously it would not, hence your persistent questioning is nothing more that wasted time and space, which is totally irrelevant to the discussions at hand.
It is requested that you take your comments and troll amongst other websites that are more favourable to your miniscule rantings and questions.
Thankyou ..
And when you see Lloyd say hello to him for me.
Saty
ECRI`s LAKSHMAN ACHUTHAN just now on Fox BS --
markets to continue higher for next few quarters
v shaped recovery as opposed to V shaped recovery
I`ll post the video when available
LAKSHMAN has called this turn better than anyone and way in advance
No, he was in the growth camp well into the downturn.
for example....
stock market is not indicative of economic health.
Your commentary is right on. CalculatedRisk had a good graph yesterday showing the build up of defaulted loans vs foreclosures vs REOs in Orange County (which is a decent proxy for the nationwide housing market on the relative value of those measures). The effect of the foreclosure moratorium was plain as day - foreclosures dropped last fall, followed by a drop in REOs. Conveniently right before the selling season.
http://4.bp.blogspot.com/_pMscxxELHEg/SnsM6DXuy-I/AAAAAAAAGBM/fcfh5q7CuY...
Now? Foreclosures have been rising steadily the past few months. REOs are just now starting to catch up, and will soon start to hit the market again. Throw increasing mortgage rates into the mix, along with the end of the selling season, and you have a recipe for another season of pure hell in the housing market this fall.
Add to that the secondary effect of a real loss of income for both individuals and companies from lower mortgage originations due to lower refi volume, and the mortgage market is going to be spitting out a lot of teeth in the next few months.
But unemployment is dropping (the size of the labor market is down? what, did we kill a bunch of people?), so I guess all is well, as those loan officers and mortgage processors will be able to find jobs as, well, whoever is hiring these days to lower the unemployment rate.
oh, and all this pain in the housing market will spike the stock market to all time highs. FNM under $1 is a steal.
"But unemployment is dropping (the size of the labor market is down? what, did we kill a bunch of people?)"
When they no longer can receive UI benes (when their claims are no longer continuing) it is somewhat like death.
But the stock market is doing great.
"Happy days are here again,
The skies above are clear again
Let us sing a song of cheer again --
Happy days are here again
All together, shout it now --
There's no one who can doubt it now
So let's tell the world about it now
Happy days are here again
Your cares and troubles are gone --
There'll be no more from now on!
Happy days are here again,
The skies above are clear again
Let us sing a song of cheer again --
Happy days are here again"
Jack Yellen & Milton Alger, "Happy Days Are Here Again" (copyright 1929)
No, they just gave up. Living with family and friends now (or in the street)
Obama just now:
"as we begin to put an end to this recession"
all these politicians operate on the principle of lies
Willingly assisted by those that still believe that they alone form the basis of this axiom.
“Freedom of the press is guaranteed only to those who own one”. - A.J. Liebling
While failing to realize the power of what is appreciated as Media 2.0 and how more and more citizens are claiming ownership of as many presses as we can create and populate outside of their system. Project Mayhem. Indeed.
Project Mayhem, a little tweak
all these politicians opterate on the principle of deception
Lies can be found out immediately. Deception takes time, let's say a century. LOL !
and Hoover back then
May 1, 1930
“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States—that is, prosperity.”
—Herbert Hoover, Address at annual dinner of the Chamber of Commerce of the United States
http://www.chrismartenson.com/blog/unemployment-report-distortions/24080
closer to the truth than the wall st. baloney.
no surprise there; we all know they are sugarcoating the data to make the SM go up ...
Why the fuck is your president on tv talking about 401 k's? Did he become a mutual fund salesman?
hahahaha "can't afford to return to old economic ways" - hahahahaha
The agenda is to bulk up the 401Ks so that the peasants shut up holding inflated dollars, while the schemesters start giving themselves trillion dollar bonuses.
I agree -- this is part of the mechanism to keep the 401k suckers invested , so they share in the "searing financial pain" when the time is ripe for harvest. If I had a 401k, I would convert it to 100% cash, or remove it entirely and purchase pms. Equities are trash in this political environment despite the present levitation act. The equities charade cannot go on forever -- its foundation is lies and fraud.
He (or Rahm) chooses his words carefully. There's a reason he mentioned 401Ks.
Obama might be the greatest stock timer ever.
On March 3rd 2009 he suggested that "buying stocks is a potentially good deal if you’ve got a long term perspective."
He missed the bottom by about 5%, but the SPX has rallied 50% since his buy recommendation.
I eagerly await his sell call. It'll probably be phrased something like this: "stocks have potentially gotten ahead of the economy."
That will never come out of his mouth
The flip side of Fed buying is heavy selling. Fed intervention masks the selling, but it becomes apparent once the buying stops.
So... if the Fed is winding up with purchases of Treasuries by the end of September, then what?
Stocks and corporate bonds.
Deregulation? The wall Street harvard/Manhattanite boys lost all their money. Big monies. Ie Harvard, new york a catastrophic failure. So now we have to let the bad ass mother Free market Pimp Hand to slap these bastards into the ring of fire. but nope, Obama and his manhattan cronies(berhake, summers, rattner,volker,orsag,feldman,bair,shapiro,axelrod,emmanuel,robert rubin, blankfein,hank greenberg,schumer,pelosi,franks,cass summstein) steal 27 trillion from the "regular'americans. What would the germans do?
Best and brightest win in capitalism? Well, yes. How else should it be? Currently, the flaws of new york "manhattanite" , harvard, wall street, socialism have been exposed. They are broke. Bust. But kept alive by people that actually worked, saved, didnt invest in stocks and real estate. Rational expectations School of economics/Efiicient Markets? If you listened at university, they told you "you cant make excess profit in stocks and real estate ownership". Apparently many of you "slept in"; ahh the American Way......
Regional Banks clear the 200-day with ease on strong volume.
With an avatar like that, it's real hard to care what the chart looks like.
What... you don't prefer Hank Paulson's smiling face? I think this qualifies as a Federal hate crime against Project Mayhem. Off to flag@whitehouse.gov you go...
no offense Project Mayhem, but i want to punch your avatar in the face with a sledge hammer
Aw don't be so hard on chrome dome. He's down to his last billion after the new Gulfstream fleet.
while we are at it; do you think his name will appear on the Forbes 400 in sep/oct
ya got a thing with punching your avatar in the face with a sledge hammer.
plus no question marks, so far.
wow. strange considering how much commercial real estate that has yet to hit the fan
Excellent call Robot Trader. The force is strong in this one.
Market melt up is on! Can't sell if you forgot your password. 1,300 next week.
http://ftalphaville.ft.com/
Worth reading Credit suisse analyst 2005 again?
The pandora box is open
Annaly's Monthly Commentary released today: http://www.annaly.com/mc/AnnalyCommentary809.pdf
If the market is going up due to fundamentals, manipulation, or increased money supply, it doesn't matter if you're a trader. The market is always right. However, if you're Andrew Cuomo, then yes, the reason may be of interest.
"The author (Tyler Durden) makes the statement that the Federal Reserve bought the bonds just one week after issuing the bonds. Anyone with a modicum of understanding of the process knows that the Federal Reserve does not issue bonds. The bonds are issued by the US Treasury and then the Federal Reserve purchases them in the “open market”.
Some will counter that the distinction is one without a difference but in discussing such an esoteric topic and in presenting oneself as expert on that topic one should get the facts absolutely correct. So to make the egregiously incorrect statement that the Federal Reserve issued those bonds should be a warning signal that the author has waded into an area where he lacks some expertise regarding fundamental and elemental facts."
http://acrossthecurve.com/?p=7671
This was already discussed. Jansen is just bitter I think because zerohedge is more popular than his bizarre blog.
Check his posts pre and post that 7yr auction - the results surprised the hell out of him (even though he is supposedly a bond expert with 30 years experience - most at, you guessed it, the Fed). After the strong auction, he tried to justify it with a bunch of BS reasons why it was strong.
Bottom line is the Fed manipulated the bond auction, and some bloggers caught it.
Trust me, someone out there cares about this manipulation.
Doesn't Obama realize that more people moved to Treasuries at the end of the year and are thus getting crushed? Does anyone know the amount of treasuries held in 401k vs stock?
I reckon he is very cognizant of that fact.
OT (sort of) that's been debated on this site over and over again, Bernanke's (non)reappointment. I'm now firmly in the nonreappointment camp based on the chairman's statement below:
"I was not going to be the Federal Reserve Chairman who presided over the second Great Depression."
—Ben Bernanke, at the Town Hall meeting in Kansas City, July 26, 2009
Although relatively new and not very liquid, notice that the ETF where people bet on housing prices going down is actually up today....scared by higher interest rates no doubt.
http://finance.yahoo.com/q?s=dmm
Sooner or later our current president will repeat a former president who also willingly subscribed to the failed policy of the "impregnable wave" theory. This from Lincoln's address to the Army after the first battle of Fredricksburg and General Burnside's tragedy.
Washington
December 22, 1862.
To the Army of the Potomac:
I have just read your commanding general's report of the battle of Fredericksburg. Although you were not successful, the attempt was not an error, nor the failure other than accident. The courage with which you, in an open field, maintained the contest against an intrenched foe, and the consummate skill and success with which you crossed and recrossed the river, in the face of the enemy, show that you possess all the qualities of a great army, which will yet give victory to the cause of the country and of popular government.
Condoling with the mourners for the dead, and sympathizing with the severely wounded, I congratulate you that the number of both is comparatively so small.
I tender to you, officers and soldiers, the thanks of the nation.
A. Lincoln."