Hope You Locked: Pre-Market Dow up 216/Nasd up 36

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GSE_

493 Posts

Posted - 09/07/2008 : 4:09:13 PM

**Hope everyone locked, rates will sky rocket this week. Look at the Pre-Market activity.

financeone

1635 Posts

Posted - 09/07/2008 : 4:16:43 PM

They're giddy about the "bailout". Don't go where fools rush in.
Float Club!

quote:
Originally posted by GSE_

**Hope everyone locked, rates will sky rocket this week. Look at the Pre-Market activity.

acibella

618 Posts

Posted - 09/07/2008 : 4:19:27 PM

Yeah, this is knee jerk. There's no way that MBS don't improve as the details get worked out. The gov't just turned MBS into defacto treasuries. This HAS to tighten spreads. Even if money is flowing into stocks that doesn't mean MBS can't get better as well.

Bob H

300 Posts

Posted - 09/07/2008 : 4:21:25 PM

Why will rates skyrocket? The treasury is buying $5 billion in open market MBS's? How many foreign and central banks will follow? It's rally time in the fixed income market. 5.5% par...here we come!

Mandyvilla

3405 Posts

Posted - 09/07/2008 : 4:29:13 PM

Hellooooo,

The tax payers are buying theh MBS's.

Guaranteed tax increases.

Inflation.

GSE_

493 Posts

Posted - 09/07/2008 : 4:30:02 PM

Rates spiked sharpley when this was rumored on Friday. Here is what pricing did once the Treasury was announced to be bailing out/placing in conservatorship Freddie/Fannie:

MBS prices are down -10/32 (FNMA 30yr 5.5 at 99.14), below the 9:45 et pricing level of +1/32, and near the low for the day. A high of +6/32 was reached, and unfavorable repricing took place.

acibella

618 Posts

Posted - 09/07/2008 : 4:34:47 PM

quote:
Originally posted by GSE_

Rates spiked sharpley when this was rumored on Friday. Here is what pricing did once the Treasury was announced to be bailing out/placing in conservatorship Freddie/Fannie:

MBS prices are down -10/32 (FNMA 30yr 5.5 at 99.14), below the 9:45 et pricing level of +1/32, and near the low for the day. A high of +6/32 was reached, and unfavorable repricing took place.

While this is true, there were a couple of other reasons as well that dropped MBS Friday afternoon. I know nothing is certain, but I'm far from a secondary market newb, and you cannot convince me that the government backing Fannie Freddie is going to lead to higher rates than when they were 'free enterprise'. Rates had risen due to spreads widening, while in the short term there may be a BUNDLE of volatility, in the medium to long term, spreads will tighten and rates will drop. Regardles of the knee jerk reaction of Friday afternoon and the futures over the weekend, explain to me economically how government backing would create MORE risk for MBS? It can't be logically explained, which again leads me back to the belief that once this all shakes out, rates will come down.

GSE_

493 Posts

Posted - 09/07/2008 : 4:38:16 PM

As my post says, rates will rise sharply this week (Knee Jerk Reaction to Bailout)..................It will be a continuation of Fidays rate rise throughout the week. I did not state anything long term.........

financeone

1635 Posts

Posted - 09/07/2008 : 4:39:11 PM

As I understand it...the Treasury and the Fed are not Inflation mongers?

Why would having the treasury purchase MBS cause either inflation or tax increases? (especially with a new admin coming-- be it democratic or republican)

I think (think underlined) the govt realizes that the failure (and or continued drop off)of the US housing market will cause our economy to become "junk bond" status with the rest of the world.

Can you say Revolution?

Thanks. (Mandy please tell me us what you think)

SoCalRay

2698 Posts

Posted - 09/07/2008 : 4:44:51 PM

the opening T bond market is pretty much unchanged

And I have seen the futures market be up 200 before and then watch the dow open barely up 10

financeone

1635 Posts

Posted - 09/07/2008 : 5:24:13 PM

getting hammered...3.83 10Yr...

omigod...should've locked! not

quote]Originally posted by SoCalRay

the opening T bond market is pretty much unchanged

And I have seen the futures market be up 200 before and then watch the dow open barely up 10
[/quote]

GSE_

493 Posts

Posted - 09/07/2008 : 5:25:38 PM

3.83 is up 13 ticks already from close on Friday. Rates will rise sharply.......

Mandyvilla

3405 Posts

Posted - 09/07/2008 : 5:28:44 PM

The Treasury Dept. is attempting to prevent the entire financial system from a collapse. I really don't think there is much of a choice but to prop up Fannie and Freddie. But if you think it's on someone else's dime, I hope you are right, but fear you are wrong.

US NEWS AND WORLD REPORT, OPINION PAGE http://www.usnews.com/blogs/flowchart/2008/7/30/why-the-fanniefreddie-bailout-seems-cheap.html

quote:
That's one of the big unknowns in the housing bill signed by President Bush, which among other things gives the Treasury a blank check for bailing out Fannie Mae and Freddie Mac. The explicit backing of the U.S. government might be enough to help the two mortgage giants sort out their own problems. Or, they might need billions in loans or stock purchases. Whatever the cost, it will ultimately come out of taxpayers' pockets.

From Marke*****ch: http://www.marke*****ch.com/news/story/treasury-set-bail-out-fannie/story.aspx?guid=%7B46D1439E%2DA2C4%2D418C%2D9BE0%2D09BE0B9EE60D%7D&dist=TNMostRead

quote:

Together, Fannie Mae and Freddie Mac form the cornerstones of the U.S. mortgage market and own or guarantee more than $5 trillion worth of American mortgages -- or almost half the home loans in the country's roughly $12 trillion mortgage market. Over the past year, the companies have recorded combined losses of around $14 billion.

Where is the US Treasury (the US Taxpayer) going to get these funds? Are these excess funds we have laying around? The dollar is going down the tubes, how would you prevent a free-fall? Print more money?

Note: for whatever reason M A R K E T W A T C H is being edited from both my caption and the link.

SoCalRay

2698 Posts

Posted - 09/07/2008 : 5:34:17 PM

We might a flat market tomorrow

Price of Oil rising also

Up $2 in first hour of trading

financeone

1635 Posts

Posted - 09/07/2008 : 5:49:35 PM

We are already paying for the costs of foreclosures. Not sure what the cost vs benefit is. (gotta be some huge dollars with no benefit)
I'd personally like to see foreclosed properties purchased by people that can afford them. Makes more sense to me. With lower rates this might be a possibility. Heck maybe I'll jump in and buy something.

SoCalRay

2698 Posts

Posted - 09/07/2008 : 6:35:29 PM

Oil Likes it too

Up $2.75

GSE_

493 Posts

Posted - 09/07/2008 : 6:37:13 PM

Dow up 244/Nas up 38/Ten Year up 3.83...Rates way up Monday

MisterVA

6570 Posts

Posted - 09/07/2008 : 6:40:05 PM

quote:
Originally posted by GSE_

3.83 is up 13 ticks already from close on Friday. Rates will rise sharply.......

Oh, so it is UST that drives rates! I thought that was a myth long ago debunked.

SoCalRay

2698 Posts

Posted - 09/07/2008 : 6:42:01 PM

quote:
Originally posted by GSE_

Dow up 244/Nas up 38/Ten Year up 3.83...Rates way up Monday

Way up?

It only went from 3.7 - 3.83

That is barely a blip

GSE_

493 Posts

Posted - 09/07/2008 : 6:42:40 PM

quote:
Originally posted by MisterVA

quote:
Originally posted by GSE_

3.83 is up 13 ticks already from close on Friday. Rates will rise sharply.......

Oh, so it is UST that drives rates! I thought that was a myth long ago debunked.

Friday, the UST and MBS followed one another. What drove that Friday? The same announcment driving the pre-market activity we are seeing tonight.
Hence when the MBS Market opens, we will see a coninuation of what happened friday...higher rates.....

Up 13 ticks to 3.83 is no small move, as it began friday in the 3.60's.........might want to check the swing that MBS followed Friday as well. That is almost a 20bp mve up since the open on Friday

Don't worry it is ok to be wrong.......

MisterVA

6570 Posts

Posted - 09/07/2008 : 6:43:48 PM

quote:
Originally posted by GSE_

quote:
Originally posted by MisterVA

quote:
Originally posted by GSE_

3.83 is up 13 ticks already from close on Friday. Rates will rise sharply.......

Oh, so it is UST that drives rates! I thought that was a myth long ago debunked.

Friday, the UST and MBS followed one another. What drove that Friday? The same announcment driving the pre-market activity we are seeing tonight.
Hence when the MBS Market opens, we will see a coninuation of what happened friday...higher rates.....

They don't always track each other. After the initial reaction it will be BFD.

financeone

1635 Posts

Posted - 09/07/2008 : 6:45:02 PM

Your outlook is too short. Unless you need to absolutely lock something, wait at least a week if not more.

GSE_

493 Posts

Posted - 09/07/2008 : 6:47:23 PM

quote:
Originally posted by financeone

Your outlook is too short. Unless you need to absolutely lock something, wait at least a week if not more.

Again, please read my intial post, my thread only pertained to the coming week.

Mandyvilla

3405 Posts

Posted - 09/07/2008 : 6:52:11 PM

quote:
Originally posted by MisterVA

quote:
Originally posted by GSE_

quote:
Originally posted by MisterVA

quote:
Originally posted by GSE_

3.83 is up 13 ticks already from close on Friday. Rates will rise sharply.......

Oh, so it is UST that drives rates! I thought that was a myth long ago debunked.

Friday, the UST and MBS followed one another. What drove that Friday? The same announcment driving the pre-market activity we are seeing tonight.
Hence when the MBS Market opens, we will see a coninuation of what happened friday...higher rates.....

They don't always track each other. After the initial reaction it will be BFD.

I really hope you are right - but,I just can't see how. This is a monsterous undertaking, it feels larger than life.....as one columnist put it, "towers over the RFC happenings of 20 years ago."

SoCalRay

2698 Posts

Posted - 09/07/2008 : 6:54:59 PM

It could turn real quickly with the other news coming

12 More banks need help

WAMU fires CEO

financeone

1635 Posts

Posted - 09/07/2008 : 6:59:27 PM

And any outlook beyond? Too short term, unless you have purchases or banking on a few 30 day refi's.

quote:
Originally posted by GSE_

quote:
Originally posted by financeone

Your outlook is too short. Unless you need to absolutely lock something, wait at least a week if not more.

Again, please read my intial post, my thread only pertained to the coming week.

GSE_

493 Posts

Posted - 09/07/2008 : 7:11:33 PM

I think it is way to early to forecast things past the coming week. Rates will be up this week, then the market will digest the full extent of this bailout at that point (Next weekend) one can give a more accurate forecast.

financeone

1635 Posts

Posted - 09/07/2008 : 7:19:22 PM

I respectfully disagree. Short term thinking seldom pays my bills. The old stand by's don't work...inflation up/rates up- unemployment up/rates down- Gold up/rates up- etc. We have become global thanks to the powers that be. Too many cooks in the kitchen.
But I do believe that our Govt. understands that home failure = US failure.

It'll be interesting ( as if it hasn't been already!)

Good luck.

quote:
Originally posted by GSE_

I think it is way to early to forecast things past the coming week. Rates will be up this week, then the market will digest the full extent of this bailout at that point (Next weekend) one can give a more accurate forecast.

SoCalRay

2698 Posts

Posted - 09/07/2008 : 8:14:49 PM

Short Term Notes barely moving at all

mgraham224

1008 Posts

Posted - 09/08/2008 : 03:54:54 AM

Wow... All I can say is wow...
I try to be diplomatic, but I'm having a hard time with some of the posts on this thread.

Keep copying and pasting your MBSQuoteline email alerts without crediting the source... Keep up the cocky attitude with respectful and intelligent members... Keep up the Nostradamus-esque "rates are going WAY up" predictions, keep on espousing the false notion that rising stocks = rising rates, keep on referencing a skyrocketing 10 yr note failing to mention a ridiculously tightening spread.

You remind me a lot of myself when I was a cocky little know-it-all bastard with just enough understanding of the market to be dangerous, not yet realizing how much more there was (and still is) left to learn. I take the time out of what has been a busy-all-nighter to post this in the hopes that people will read it and hear the following plea: Please put NO STOCK in anything you read on this forum regarding interest rate predictions. Please EDUCATE YOURSELF, draw your own conclusions, digest how the market moves with respect to your conclusions, internalize the lessons you can, and move on.

Some of you couldn't possibly begin to understand what idiots you look like to a medium knowledgeable audience. The really sad thing is that the highly knowledgeable audience wouldn't even understand your commentary because it's based on conclusions that just don't exist in the real world of capital market analysis. Look, I'm not cocky, but I know that within the scope of BO, I tend to receive favorable opinion re: my knowledge of MBS. With that in mind, please take this for what it's worth. The more I pursue the "rabbit hole" of MBS analysis and capital markets, the more I feel like a high school kid who is just learning there is something called "college."

Bottom line, a few guys I talk to make me feel like an idiot because of how much more than me they know. And I think you (and you know who you aren't) are an idiot. So if I'm an idiot to the true students of capital markets and you're an idiot to me, I don't know what that makes you, but it ain't good. get thee back to google searches of MBS related topics and learn a bit more about the topic before dropping the hammer.

shoe

148 Posts

Posted - 09/08/2008 : 04:35:36 AM

Check out the yield on the 10 yr. Already up to 3.80 in premarket. Rates will probably be up today and most of the week. Anyone see this bailout as a positive? I mean when you look at it, it's a necessary evil. Without it, most of us would be well on our way to being on our asses! This extends the season a few more games.

Bob H

300 Posts

Posted - 09/08/2008 : 04:54:50 AM

Who cares about treasuries??? Has anyone see the MBS qoutes?!?!?

5.5% Coupon up 26 ticks since Friday's close!
6.0% up half a point from Friday's close!

Read the mortgage rates blog. Anticipated .625% improvement in pricing!

The hammer has been dropped and the ridiculous spreads are going to narrow. We can only hope this trend remains through the end of the year.

darkstar

18092 Posts

Posted - 09/08/2008 : 04:56:40 AM

quote:
Originally posted by GSE_

**Hope everyone locked, rates will sky rocket this week. Look at the Pre-Market activity.

Do you work for a lender?...This seems to be something they would say to make more money...

3006 Posts

Posted - 09/08/2008 : 05:11:32 AM

The spreads between MBS and 10 Year T have ranged from 100bps to 250bps over the last year, settling around 190 last week, should narrow in the future. Volatility will continue with intra-day swings of 20-40 ticks likely.

The Fed takeover of Frannie was a done deal a while ago, it was just a question of when. Unfortunately, when Fed beancounters got a look under the hood, it was worse than they thought. Combine this with housing news last week and the Fed had no choice but to pull the trigger.

One would think, with the implicit backing of the Fed, MBS would move in the direction of lower mortgage interest rates. However, with the Fed assuming the risk of bad Frannie loans, which could grow into the 100's of billions, this puts pressure on the Fed (the US treasury) and the underlying benchmark debt, the 10yrT.

If the spreads decrease, mortgage rates go down, and housing improves as a result, it should help the economy as a whole. Until the stars all align, it's going to be a bumpy ride. Look for increased volatility day to day, and prepare to lock your loans as close to origination as possible.

darkstar

18092 Posts

Posted - 09/08/2008 : 05:14:03 AM

>>>>, and prepare to lock your loans as close to origination as possible.

I'd read this first:
http://www.brokeroutpost.com/loans/brokers/forum/topic.asp?TOPIC_ID=239590

3006 Posts

Posted - 09/08/2008 : 05:32:03 AM

quote:
Originally posted by darkstar

>>>>, and prepare to lock your loans as close to origination as possible.

I'd read this first:
http://www.brokeroutpost.com/loans/brokers/forum/topic.asp?TOPIC_ID=239590

It's to benefit the client, insures against volatility. Many of course will continue to low-ball rate quotes, tell their clients they are "locked in" and game the system trying to catch the lock on a dip (which is easy enough to do given the volatility). A dis-service to the client. While I'm sure you are shocked, shocked I tell you, to think that this could happen, think again.

dmoises

74 Posts

Posted - 09/08/2008 : 06:18:17 AM

Value
5.39 Change-0.234 % Change -4.163 High 5.49 Low 5.30 Open 5.49

Rates will be significantly lower this morning. Just get ready to lock because this won't last.

mgraham224

1008 Posts

Posted - 09/08/2008 : 06:51:19 AM

quote:
Originally posted by dmoises

Value
5.39 Change-0.234 % Change -4.163 High 5.49 Low 5.30 Open 5.49

Rates will be significantly lower this morning. Just get ready to lock because this won't last.

oh?

financeone

1635 Posts

Posted - 09/08/2008 : 09:05:40 AM

Sorry Matt!

Really good stuff at the goto meeting, keep up the good work. Others will catch on!

quote:
Originally posted by mgraham224

Wow... All I can say is wow...
I try to be diplomatic, but I'm having a hard time with some of the posts on this thread.

Keep copying and pasting your MBSQuoteline email alerts without crediting the source... Keep up the cocky attitude with respectful and intelligent members... Keep up the Nostradamus-esque "rates are going WAY up" predictions, keep on espousing the false notion that rising stocks = rising rates, keep on referencing a skyrocketing 10 yr note failing to mention a ridiculously tightening spread.

You remind me a lot of myself when I was a cocky little know-it-all bastard with just enough understanding of the market to be dangerous, not yet realizing how much more there was (and still is) left to learn. I take the time out of what has been a busy-all-nighter to post this in the hopes that people will read it and hear the following plea: Please put NO STOCK in anything you read on this forum regarding interest rate predictions. Please EDUCATE YOURSELF, draw your own conclusions, digest how the market moves with respect to your conclusions, internalize the lessons you can, and move on.

Some of you couldn't possibly begin to understand what idiots you look like to a medium knowledgeable audience. The really sad thing is that the highly knowledgeable audience wouldn't even understand your commentary because it's based on conclusions that just don't exist in the real world of capital market analysis. Look, I'm not cocky, but I know that within the scope of BO, I tend to receive favorable opinion re: my knowledge of MBS. With that in mind, please take this for what it's worth. The more I pursue the "rabbit hole" of MBS analysis and capital markets, the more I feel like a high school kid who is just learning there is something called "college."

Bottom line, a few guys I talk to make me feel like an idiot because of how much more than me they know. And I think you (and you know who you aren't) are an idiot. So if I'm an idiot to the true students of capital markets and you're an idiot to me, I don't know what that makes you, but it ain't good. get thee back to google searches of MBS related topics and learn a bit more about the topic before dropping the hammer.