PrimeX Selling Accelerates

Tyler Durden's picture

Update: Jeff Gundlach just said on his conference call that PrimeX is 6-8 points overvalued vis a vis the cash prime-backed RMBS

It only took a little over an hour...

PrimeX.FRM.1  Mid 104-240:  103 OR 106-16
PrimeX.FRM.2  Mid 94-080:   92-16 OR 96-00
PrimeX.ARM.1  Mid 100-08:   98-16 OR 102-00
PrimeX.ARM.2  Mid 89-24:    88-00 OR 91-16

MS PrimeX Markets               

                       Cpn    Bid        Offer   Chg from Close  Factor               
PrimeX.FRM.1   442    102-16 / 103-16      -1-120        0.47               
PrimeX.FRM.2   458    92-08  / 93-08       -1-286         0.49               
PrimeX.ARM.1   442    98-16  / 99-16       -1-143         0.41               
PrimeX.ARM.2   458    87-16  / 88-16       -2-072         0.44

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FOC 1183's picture

So, that retail guy hasn't shown up yet?

GeneMarchbanks's picture

Real-time updates... keep them coming.

Trimmed Hedge's picture

I don't even know what all that means, and I'm still scared!


Please hold me, Taylor....

hambone's picture


may Taylor always be there for you in your times of distress!

kito's picture

can someone explain this? 

Michael's picture

Oh how I love the smell of sub-prime collapse version 2.0 aka Prime Collapse in the afternoon.

Dr. Richard Head's picture

The question becomes how long for fallout from this particular iceburg hit by the US economy? 

Mutatto's picture

So, from the earlier post...are these trade volumes significant?  Or is it going to take awhile for this IED to go off?

Tyler D?

Kyle B?




Paralympic Equity's picture

PRIMEX is less in notional than the sub prime index, a lot smaller, but still i guess not all mortgages become an MBS

Dr. Richard Head's picture

All mortgages becomeare MBS, but not all MBS are mortgages. HA

l.hauri's picture

it is an interesting approach. I really like it.
yacht charter phuket

Au_Ag_CuPbCu's picture

Totally off subject but Tori Spelling just had a baby?  WTF??? What sick %^#$ would put his dick in her?

spartan117's picture

She's only worth, what, $30 billion?  you can buy a lot of PrimeX with that. 

mynhair's picture

Who needs PrimeX anyway?  Loser air bonds, phfffttt.

Sell and juice the rip.


Just need 4 more cents on TNA.

Paralympic Equity's picture

Sorry, posted 2 times by accident

FatAmerican's picture

so what index are we buying?, and how do we get the leverage in this? can retail investors buy this index? is there an index for the huge volume for the alt a garbage that is comming due right now?

Dr. Richard Head's picture

Don't forget the Option-Only Jumbos coming due.  MBS are hot, pick em up!

Dr. Richard Head's picture

Don't forget the Option-Only Jumbos coming due.  MBS are hot, pick em up!

gwar5's picture

Bubbles, bubbles everywhere.... with all the Euro troubles we forgot about our own little landmines.

SheepDog-One's picture

And that was the point of it....remember months ago the US problem was getting nuclear hot, suddenly out of the blue GREECE got problems, and they were HUGE ya all attention away from the US to obsess over Europe ills. Like a cancer patient tisk tisking about his neighbors flu.

Dr. Richard Head's picture

Plus Euro-trash panic allowed for a "flight to safety" (I throw up in my mouth when I type that) to the DOHlar.  Worked pretty nicely to help PMs to take their shit and scare out weak handed longs.  The Euro tale was wagging the US dog there, but I guess the world forgot who the World Reserve Currency was.  Time to remember bitchez.,

Ruffcut's picture

When you have so much bullshit in a paper bag, some of it is going to squish out. Thank god we have duct tape. All is well.

Roark_4_Prez's picture

Usually don't comment but. Generally these are just hedges for the big dealers against their cash book. So they are short the hell out of this and making money on it. Primex and abx are just dealer hedges.

Everybodys All American's picture

I'm guessing that's not good for the "real or "fake" balance sheets of our banks.

Tyler Durden's picture

Good piece with one major problem:  synthetic can be created at a moment's notice per client demand. Also, any parked CDS do not have to be reported to DTCC meaning any attempt to make this issue seem smaller than it is is rather naive.

SheepDog-One's picture

But isnt making terrible issues seem irrelevant the America Way now?

Dr. Richard Head's picture

A synthetic CDS market that goes unreported?!?!?!  Surely you jest sir. 

adr's picture

I just saw a stat that said the Dow is trading in the lowest range since July 20th. Something like 78 points. So since July 20th the Dow has moved up or down over 100 points within a session every single day.

The hilarity of a broken market. Too bad it screws us all.

Just like the effin commodity market that will be sending bread to $8 a loaf by christmas. 8% up in wheat in one day, corn limit up. FUCK ALL YOU TRADERS!!!!! Death is not a big enough punishment.

andybev01's picture

Kind of like watching your washing machine walk across the floor when it's spinning an unbalanced load.

It's funny until the hose breaks and floods the basement.

Dr. Richard Head's picture

Plus you see these global markets trading in tandem now across the board (equity wise).  Lower lows are a coming?

Where's my fucking DOW 10,000 cock ring?

LongSoupLine's picture

I'm not concerned...I'm confident the bottomless liquidity giant, ESFS, will cover all issues globally.

If that fails, we can always "break glass in emergency" and wheel out a certain studdering ex-treasury idiot to brew up some scary "financial doom to all if we don't save the banks" campfire stories in front of Congress.

mn1's picture

i guess thats why the market is up again today???

SheepDog-One's picture

'The Market' you mean these things that are still trading below 1999 levels?

d00daa's picture

fucking bagholder.  keep buying the 12% in five sessions rips with no leadership, so very indicative of a true bottom and the start of a healthy bull market.   /s

CrimsonAvenger's picture

I don't know what any of this means, except that I probably need to go get some more lube.

Mitch Comestein's picture

I was wondering why SRS was up 4% and all the other shorts are flat.  Its got to be the reason.  Something is not good in the Real Estate world.

Paralympic Equity's picture

PRIMEX is less in notional than the sub prime index, a lot smaller, but still i guess not all mortgages become an MBS

Tyler Durden's picture

Ah, the old volume argument. Look at historical volumes of ABX in the early days of the subprime rout before everyone wanted in...


Paralympic Equity's picture

Good point, didn't think of it that way.

ghostfaceinvestah's picture

A lot of prime jumbos were held in portfolio, even during the bubble, as they were seen as a good balance sheet product, they were extended to HNW customers of the bank, etc.  So yes, there was a lot less securitized.  Plus the underlying collateral was seen as being more homogenous so less need to dump a ton of securities into each index.

But the selloff in Prime-X is indicative of the worsening performance of the underlying collateral, I believe.  The latest remittance reports came out last week and there is no sign of performance improvement at all.  At this point in the cycle (5 years in for the 2006 vintage collateral) we should see some peaking of CDRs, but that is just not happening, in fact dqs are getting worse.

Of course, all the major banks will reduce reserves this quarter and book those reversals through income, they don't seem to care what the underlying performance is doing (or the fact that a lot of their second liens are performing over a defaulted first, good luck collecting on those).