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.