Good afternoon,
Mortgage backed securities are having their most volatile
time in years.
Horrible day followed by great day followed by horrible day.
Yesterday was a really good day.
I believe today is the worst day in the last two years for
the MBS, with the FNMA 3.0% coupon off 103 bps (mortgage rates up ~.25% or so).
The MBS is just lower than it was in mid March. (Price down
= rate up).
10 year treasury yields are over 2%.
Some highlights of Fed comments, which are driving the bad
day.
Wed, May 22 - 2:53 PM ET
Hawkish comments from Fed's Fisher pushes MBS back to session lows.
2:46 PM ET - Fed's Fisher says economy could deal with Fed cutting MBS buying.
2:37 PM ET - The drop in Stock prices begins to accelerate.
2:21 PM ET - Fed's Fisher says printing money does no good if firms aren't going to hire.
2:12 PM ET - The Fed minutes push Stocks lower, Bonds bounce off lows. More debate over whether QE will be tapered or end.
Hawkish comments from Fed's Fisher pushes MBS back to session lows.
2:46 PM ET - Fed's Fisher says economy could deal with Fed cutting MBS buying.
2:37 PM ET - The drop in Stock prices begins to accelerate.
2:21 PM ET - Fed's Fisher says printing money does no good if firms aren't going to hire.
2:12 PM ET - The Fed minutes push Stocks lower, Bonds bounce off lows. More debate over whether QE will be tapered or end.
2:03 PM ET - Some participants express willingness to
reduce QE in June.
11:27 AM ET - Bernanke says mortgage lending is still too
tight, due in part to excess conservatism by lenders.
11:21 AM ET - During the fireworks, Existing Home Sales
rose slightly in April to 4.97 million units annualized - the highest level in
3 1/2 years. The 4.97 million was slightly below the forecast of 4.98 million.
11:15 AM ET - IRS official Lerner takes the 5th and doesn't answer any questions on the alleged scandal.
11:08 AM ET - Mixed statements on QE from Bernanke pushes Bonds lower and cuts the gains in Stocks in half.
10:59 AM ET - The low of 102.09 may be tested again.
10:58 AM ET - The Dow off 100 points from the high.
10:35 AM ET - Volatility ramps up in the markets, MBS fall to near session lows, Stocks losing some of the rally.
10:32 AM ET - Stocks jump on Bernanke's words.
10:10 AM ET - This afternoon's Fed minutes will now have zero impact on the markets after Bernanke's words.
10:09 AM ET - Bernanke cautions against premature tightening.
10:06 AM ET - Bernanke says long-term inflation expectations remain stable, inflation likely to stay at or below Fed's 2% goal over the next few years.
10:04 AM ET - Bernanke touts benefits of Fed easing, no hint of pullback.
10:03 AM ET - Bernanke says employment conditions have shown some improvement recently, but job market remains weak overall.
10:02 AM ET - Bernanke says Bond buying will continue until the labor market outlook has improved substantially. Mortgage Bonds hit session highs.
9:36 AM ET - Stocks open modestly higher.
8:58 AM ET - The MBA reports that its Market Composite Index declined nearly 10% in the latest week, the refi index fell 12% and the purchase index declined by 3%. The drop was due in part to a rise in home loan rates.
8:12 AM ET - Stock futures slightly higher.
8:12 AM ET - Oil at $96/barrel near unchanged.
8:11 AM ET - Mortgage Bonds open near unchanged ahead of Existing Home Sales data and Bernanke's testimony on Capitol Hill that is scheduled to begin at 10:00am ET.
11:15 AM ET - IRS official Lerner takes the 5th and doesn't answer any questions on the alleged scandal.
11:08 AM ET - Mixed statements on QE from Bernanke pushes Bonds lower and cuts the gains in Stocks in half.
10:59 AM ET - The low of 102.09 may be tested again.
10:58 AM ET - The Dow off 100 points from the high.
10:35 AM ET - Volatility ramps up in the markets, MBS fall to near session lows, Stocks losing some of the rally.
10:32 AM ET - Stocks jump on Bernanke's words.
10:10 AM ET - This afternoon's Fed minutes will now have zero impact on the markets after Bernanke's words.
10:09 AM ET - Bernanke cautions against premature tightening.
10:06 AM ET - Bernanke says long-term inflation expectations remain stable, inflation likely to stay at or below Fed's 2% goal over the next few years.
10:04 AM ET - Bernanke touts benefits of Fed easing, no hint of pullback.
10:03 AM ET - Bernanke says employment conditions have shown some improvement recently, but job market remains weak overall.
10:02 AM ET - Bernanke says Bond buying will continue until the labor market outlook has improved substantially. Mortgage Bonds hit session highs.
9:36 AM ET - Stocks open modestly higher.
8:58 AM ET - The MBA reports that its Market Composite Index declined nearly 10% in the latest week, the refi index fell 12% and the purchase index declined by 3%. The drop was due in part to a rise in home loan rates.
8:12 AM ET - Stock futures slightly higher.
8:12 AM ET - Oil at $96/barrel near unchanged.
8:11 AM ET - Mortgage Bonds open near unchanged ahead of Existing Home Sales data and Bernanke's testimony on Capitol Hill that is scheduled to begin at 10:00am ET.
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