Nemo wrote:

I am betting that the Fed re-ups its mortgage purchases this year to the tune of at least $200 billion.

I'm betting they'll start taking out mortgages on federal property.

Hey CR --

but this graph suggests to me that mortgage rates will rise 35 to 50 bps relative to the Ten Year when the Fed stops buying agency MBS at the end of March.

You have said the same before, but that is not really the question. The question is, how much have the MBS purchases themselves affected the 10-year yield?

If the Fed stops purchasing, and the 10-year rises by (say) 200 bps, and mortgage rates rise by 240bps, would you say your prediction was correct?

(Not that I am expecting anything like this. But with $1 trillion in purchases, distinguishing the effects on mortgage rates from mortgage spreads is not at all simple.)

I remain astonished that the Fed began this purchase program in the first place. When this was announced, it was the moment all the things I thought I understood about economic rules were scrubbed clean away. Kind of like Santa Claus, only in reverse.

edit : by that, I mean there was a Santa, but all the presents went to everybody else, and the naughty/nice didn't really factor in.

How come all them triangle things are above that dotted blue line; what keeps them up there .....

but this graph suggests to me that mortgage rates will rise 35 to 50 bps relative to the Ten Year when the Fed stops buying agency MBS at the end of March.

My bet is on the way over if they actually stop. Can we have a poll?

mpthompson wrote:

Have we big shot?

Leave my mom out of this, jerk.

and NG are both looking punch-drunk. hasn't been Jake La Motta on a consistent basis in a long, long time.

I love how that equation expresses the exponent as a fraction instead of a simple value, just to make it look more impressive.

exactly who is going to pay a spread of only 50bps more than today?

supply / demand is a bitch.

Casey's Charts - Fed MBS Purchases Matched by Foreign Sales

Vonbek777 wrote:

can't beat the damn computer half the time.

Neither can Kasparov, so don't feel bad.

noob goldberg wrote:

I'm betting they'll start taking out mortgages on federal property.

Just wait until the FedGov (and their GSE) entities start exercising their Constitutional authority to erase any State or local tax liens on repossessed properties.

Teach him both.

My high school calculus teacher would let us play if we finished our home work, and he would often play four or five of us at a time, clocks and all.

I think my Lean Hogs pile of baseball cards is my only big winner today. Commodities are all over the map.

Rob Dawg wrote:

Just wait until the FedGov (and their GSE) entities start exercising their Constitutional authority to erase any State or local tax liens on repossessed properties.

I cannot wait until FedGov entities start exercising their Constitutional authority to exorcize possessed properties. Because, there are some seriously evil things happening in real estate these days.

OT : Regarding Pelosi's comment that 400,000 jobs will be created instantly if/when the health care reform kicks in. I mostly agree. However, these jobs will have little to do with patient care in the traditional sense. After all, they are not addressing physician/nursing shortages in critical specialties, or rural care, or boots on the ground types. Undoubtedly, most of the 400K jobs will be in administering the program itself, far removed in every sense from a hospital or clinic. The analogy would educational reform that promised to create thousands of new jobs, yet resulted in still larger classrooms and further skewing the top-heavy administrative balance, far removed from the grubby frontlines of an innner city grade school classroom.

Can't happen here.

Elvis wrote:

I cannot wait until FedGov entities start exercising their Constitutional authority to exorcize possessed properties.

Trouble is, the properties keep getting re-possessed...

BTO?

I think the Elvis motto predates the BTO jam, but, yes.

Vonbek777 wrote:

Elvis, what is your definition of success?

Success is unachievable until the human race is equiped with four thumbs. Right now, we are all losers.

"School and prison have a lot in common."

Yes, the UC and CA correctional system are indeed mirrors of each other. Roughly the same size, roughly the same social function.

I saw an article this week saying the spread between 30yr Treasuries and 30 year mortgage rates was currently the lowest in history.

greenchutes wrote:

Roughly the same size, roughly the same social function.

What an amazing insult.

What's up with this
Vancouver Now - Emergency shipment of condoms headed to Olympic athletes - Post Sports

is on the way, kids!

Uncle Ar wrote:

I saw an article this week saying the spread between 30yr Treasuries and 30 year mortgage rates was currently the lowest in history.

Link? All I can find is relative to the 10 year. No reason to be rewarded for taking risk.

Bob Dobbs wrote:

As a private organization, the guards union can bribe the legislature.

When I think of prison guards, I think of corruption. When I think of politicians, I think of corruption. However, I never just think of corruption. Maybe if corruption had a face, I would think of it.

When I think of corruption I think of 'shortcuts'...shortcuts are another one of entropy's tools.

What's up with this

The new olympic sports: Bobbedding, Lube, Giant Sodom, Short Trick Skating, Nice Figure skating, Tonsil Hockey, and Curlies.

Federal Reserve Chairman Ben Bernanke Warns Congress That The Federal Reserve Will Not “Print Money” To Pay For The Exploding U.S. National Debt

Did he have his fingers crossed behind his back? Wait, I forgot, his mouth was moving.

Rob Dawg wrote:

Worse. 11% corrections. 7% higher ed.

I want an apology from greenchutes.

To those prison guards.

I should add, I think we will see a divergence between Fannie/Freddie MBS spreads and Ginnie MBS spreads.

Vonbek777 wrote:

Calvinball is the only 'real' game!

YouTube -

I feel less animus for the actual zookeepers as time goes on.

The legislators, and our own apathy to a machine deserve the blame - just like the national apathy that enabled the gop natl machine '02-'06 is to blame.

We really do get the government we deserve.

JP wrote:

If that risk perception changes, then I would expect many of the future points to leave the curve.

Just like if there are a bunch of pretty woman at the nude beach and then they all leave and are replaced by a bunch of obese women, the watching crowd virtually disappears except for the real freaks.

JP wrote:

Yes, I just said I'm worried that it's different this time.

Don't hear that every day.

You raise a fair point, but with FHA dominating the mortgage market and the FED likely to resume buying MBS if anything goes awry, what event would would cause that to happen that would be out of their ability to control?

I had not watched that one before. Very good. Still laughing. New code word Mars.

Vonbek777 wrote:

New code word Mars.

Mars is amazing.

Yeah, I got in that fray earlier with Sister Green Shoots...I came back over here to hang out with the naked short people...They seem saner over here.

I figured that was you.

Elvis wrote:

Just like if there are a bunch of pretty woman at the nude beach and then they all leave and are replaced by a bunch of obese women, the watching crowd virtually disappears except for the real freaks.

So you are saying that obese women are not pretty?
Lawsuits are being prepared...
For the real freaks, it's party time, but you've chosen to segregate yourself from that...
tsk, tsk.

CaptainMorgan wrote:

the FED likely to resume buying MBS if anything goes awry,

If the Fed resumed buying, then I think we can conclude the delta was greater than 50bps

Red Shoes

How do we get the Fed to take off those red shoes.

JP wrote:

If the Fed resumed buying, then I think we can conclude the delta was greater than 50bps

Right you are.

@Comrade Kristina (profile) wrote (in reply to...) on Thu, 2/25/2010 - 1:04 pm
I figured that was you.

Nice read
BTW bobswern really nailed our totally corrupt Congress, the Obama admin and the f**cking with his diary Daily Kos: Breaking: Game Over..

I don't know his handle on CR but he's cites this blog quite a bit !

Here is the link to the conversation about the CR community being "naked shorts". The woman is apparently hitting the and the a little too hard. It's good for a chuckle anyway...

Daily Kos :: Comments Breaking: Game Over.

Eric,
No offense, but the Fed and Treasury have been actively propping up the markets for the past year. Fundamentals went out the window when the orgy of liquidity got dumped on the markets and the government effectively backstopped all risk.

The markets are a casino now, and I barely even participate. However, I find it frustrating that those responsible for regulating and maintaining efficient markets are now actively engaged in a ponzi scheme.

Yes I'm pissed, but no, it isn't for the reasons that you think.

@Comrade Kristina (profile) wrote on Thu, 2/25/2010 - 1:10 pm
Here is the link to the conversation about the CR community being "naked shorts". The woman is apparently hitting the In Vino Veritas and the The Purple Pill a little too hard. It's good for a chuckle anyway...
Daily Kos :: Comments Breaking: Game Over.

HeHe she needs more +

Construction unemployment still on the rise - USATODAY.com

I was shocked to learn I was a naked short seller JP. I don't even have a margin account...I do have an ETrade account but I think there is 8 dollars in it.

Slumdog wrote:

So you are saying that obese women are not pretty?

I have commented to my wife that some plus sized models look more attractive to me than the "regular" models in the same outfits, but she also pointed out that plus sized models are usually wearing sizes that aren't considered plus size.

Not sure I want to know what anyone here thinks is a good freaky party.

Comrade Kristina wrote:

I was shocked to learn I was a naked short seller JP.

Wouldn't HAMP be considered as a short against the RE value?

You made a ton, baby!

I wouldn't know about the "naked" part, though.

CaptainMorgan wrote:

I have commented to my wife that some plus sized models look more attractive to me than the "regular" models in the same outfits,

There is a definite distinction between plus size and obese. Dolly Parton is plus sized. The fat lady at the carnival is obese. Who wouldn't want to see Dolly Parton's boobs once? I don't even want to see the fat ladies fingers.

Even if you could short: Doing it naked requires more resources than anyone who bothers posting here can muster.

fwiw: It's rarely worth your time trying to argue with such people. Or maybe you like banging your head against the wall more than I do.

Uncle Ar wrote:

But would you like to see her sing?

I'd rather just hear it. There are no fat ladies for the public builders. Only fat Senators.

Any historical relationship between mortgage rates & treasuries is IRRELEVANT. All the historical data is based upon a world wherein mortgages were considered ultra safe debt secured by ever-appreciating collateral... and that world doesn't exist any more.

The more recent history of MBS debt was highly distorted -- first, FCBs, SWFs and our own banks & pension funds bought'em by the bunches during the boom, then our own Fed picked'em up after the crash. Well... the first group are sellers now, and the Fed is claiming they'll discontinue. Unfortunately, that'll leave a lot of supply and little demand, resulting in rate increases far in excess of that the historical relationship to Treasuries would suggest.

Oh, sure, there have been other players in the MBS market -- all speculators front-running the Fed. I expect them to desert MBS en masse just as PIMCO has.

CaptainMorgan wrote:

I have commented to my wife that some plus sized models look more attractive to me than the "regular" models in the same outfits

We supply apparel for the entire cross section of America. We mfr from Double XSmall, a size I invented for petite females, to 6XLarge. The size allocation is primarly by ethnicity plus geographic location. Further, Elvis omitted the age range of the "pretty women" vs the "obese women". We adjusted sleeve length and width for older females, as well.

I'm guessing Elvis, while protective of his less than obese women remains highly prejudiced, unconsciously so, in their age range of attractiveness as well. In a word, "bigot".

JP wrote:

Even if you could short:

The only thing keeping individuals from going short is the lack of knowledge of how to do so and the mindset to know if it is a good idea or not.

I think this is partly why there is so much hate from J6P about short selling, they don't understand it enough to know the issues.

Yes, I have actually shorted stocks before.

Stheeman sees no risk of UK debt crisis as sterling slides - Telegraph
"Politicians of all colours are taking the situation very seriously indeed. Investors derive a lot of comfort that there is agreement across the spectrum that the deficit needs to be brought under control," he told the Euromoney bond congress in London. While a hung Parliament would create uncertainties, it might prove a "less disruptive" than assumed.

The comments came as sterling tumbled two cents against the dollar to a nine-month low of $1.5253 on news that business investment fell 5.8pc in the final quarter of last year, heightening the risk of a double-dip recession. Howard Archer, UK economist at IHS Global Insight, said the data was a "horrible surprise".

Jim Rogers, the millionaire financier, went further warning that the pound could "collapse" within weeks, heralding a downturn worse than 2008/09 and in turn leading to a "global economic winter".

Well put, TJ. I would also add that once upon a time folks generally considered higher commodity prices to be expected to correspond with higher interest rates. Another utterly dead paradigm.

Slumdog wrote:

a size I invented for petite females,

http://www.moviewavs.com/0085412111/WAVS/Movies/Zoolander/getthejobdone.wav

TJ and The Bear wrote:

The more recent history of MBS debt was highly distorted -- first, FCBs, SWFs and our own banks & pension funds bought'em by the bunches during the boom, then our own Fed picked'em up after the crash.

Not just distorted. MBSs are not the same asset class that "everyone" thought they were. At some point, "everyone" figured out what they actually were, and that's when they became a different asset class.

Data from Germany and UK show renewed declines, which is significant because the #1 improvement in leading/coincident indicators came from auto production and those countries implemented cash for clunkers first, although that would be more true for Germany than the UK. Given that we only ever stabilized in the west, and if there is broad data to show the economy in recession before September then I'm not sure the NBER would make a point of separating it into 2 different recessions

I was shocked to learn I was a naked short seller JP. I don't even have a margin account...I do have an ETrade account but I think there is 8 dollars in it.

Lol I just cashed out myself the other day, my account balance as of 2/25/10

$8.05....I got you beat CK ...

Comrade Janošik wrote:

American fatties

bigot.

Come on PPT.... just a little more.....

aleister perdurabo wrote:

PASADENA, Calif.—The human brain is a big believer in equality—and a team of scientists from the California Institute of Technology (Caltech) and Trinity College in Dublin, Ireland, has become the first to gather the images to prove it.

Specifically, the team found that the reward centers in the human brain respond more strongly when a poor person receives a financial reward than when a rich person does. The surprising thing? This activity pattern holds true even if the brain being looked at is in the rich person's head, rather than the poor person's.
....

I've speculated on this myself previously and I disagree with this conclusion. The poor person is bereft of toys and bemoans that unempowered reality. It is unfair to compare responses when the mindsets are so different at the outset.

Why would the question not be directed to the rich persons, proposing a significant loss of their possessions? Would not there be an equally intense response, which would result in an observation that the human brain is a big believer in inequality?

The conclusion by Caltech imo is absurdly biased.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7294624/European-banks-face-showdown-over-1-trillion-of-debt.html
Roughly €560bn of EU bank debt matures in 2010 and €540bn in 2011. The banks will have to roll over loans at a time when unprecedented bond issuance by governments worldwide risks saturating the debt markets. European states alone must raise €1.6 trillion this year.

that's a recipe for a very sensitive market place

Comrade Janošik wrote:

Mens T-shirt sizes are skewed toward American fatties

Not sure where you are shopping at. I'm 6' and 165lbs, and would rip a small like the incredible hulk. I wear a large in T-shirts.

km4 wrote:

Hillary Clinton slams Greenspan
Says fmr. Fed chairman's 'outrageous' advice partly to blame for crisis.

Is there an icon for :technicoloryawn: ?

Oops shill, just checked mine, it is 8.48. So I'm the big daytrader out of the two of us. I'm thinking I could buy a silver quarter or something with that money and come out way ahead.

Comrade Janošik wrote:

yup, tired of subsidizing their health care premiums

Yes.

Lol I just cashed out myself the other day, my account balance as of 2/25/10
$8.05....I got you beat CK

I had an etrade account back in the heyday (1999, 2000). they started to charge fees so I had the stocks sent to another broker and the cash returned to me (as a check). I think it was like 75$. The check had an expiration date I think 6 months out and I never cashed it, still have it. One day when I have some free time I will try to get my money back from them.

broward wrote:

Slumdog wrote:

a size I invented for petite females

Broward, it's just a truth. My brand is the only one that I know of that's ever offered that choice. The alternative is to stick the very petite females into Youth sized and styled clothing. One little rascal of a gal works for me and one of the first topics we discussed was her relationship with her tailor as her clothes must all be taken in, even when X Small. The designs of Europe of yore, when the size scale wasn't petite to beefy, but was more that of chivalric times, offered that size, but today, notta chance.

Oops shill, just checked mine, it is 8.48. So I'm the big daytrader out of the two of us. I'm thinking I could buy a silver quarter or something with that money and come out way ahead.

You would be wise to do so , that is just what I did when I cashed out....no more DOW for me....show me DOW 5000 Them maybe I might consider it.

In fact I would not be surprised to see s&p @ 600 within the next few months ( few being 7 at best )

In a bigger picture though, it means that such an individual is not self-aware of the world around them. That can lead to some very nasty behavior when they are put into certain types of situations, that they see as out of their control. I choose to distance myself as far as possible from that.

Yes, I am aware that I too have these same lapses in reasoning. But I do think that taking the extra step back to see yourself outside of yourself, is a very important skill to develop, and one that is often lacking.

Slumdog wrote:

My apologies that my funning with you didn't appear so to you.

Fat jokes are not funny.

Uncle Ar wrote:

I had an etrade account back in the heyday (1999, 2000). they started to charge fees so I had the stocks sent to another broker and the cash returned to me (as a check). I think it was like 75$.

I moved from ETrade to Fido.

Somehow, somewhere, the transfer got botched and one of my accounts ended up with a -0.01 balance.

I still occasionally (four years later) get emails and even paper statements for it.

Did you hear the one about the fat lady who rode her scooter into the bar?

Elvis wrote:

Fat jokes are not funny.

There's interesting recent research into the number of cases of so called "normal weight obesity".

In which a person looks to be of fairly normal weight, but have such little muscle mass and such a high body fat percentage, that they have many of the same medical problems as obese individuals.

Comrade Janošik wrote:

In which a person looks to be of fairly normal weight, but have such little muscle mass and such a high body fat percentage, that they have many of the same medical problems as obese individuals.

It is also called the chess club.

There is a ????

Ma!

Kattie was lying all this time!

noob goldberg, Bubblisimo Gerkinov, other Canadians
Missisauga is internationally famous HUGE CITY DEBT FREE--Run by 88 Year Old Mayor with 92% approval-elected over, and, over again- over 800 million in reserves-31 years in office / 11 terms-This is Epic.. : reddit.com
good for them

Well, back from my power nap. 4 hours is just about right. What did I miss?

If my last name was Pretzel, I'd name my kid Elvis. If I had a dory, I'd name it Andrea.

Back to work. [AB dons the Cloak of ]

All hope abandon ye who enter here

So to summarize...

Healthy, active people who attempt to make sound financial decisions....subsidize the flock of the fat and ignorant.

Okay, now I'm a bigot....

For once, I agree.

Hey, where's the selloff into the close?

"How was the first day of high school, son?"

"Great. I signed up for the chess club and the future economist's club."

"Well, you aren't going to do them. Chess is for kings. You are white trash. And economists are just weathermen without the looks for television. You are a good looking kid. Don't underestimate yourself. Join the future weathermen's club."

http://s.wsj.net/public/resources/MWimages/MW-AD659_pelosi_MD_20100225144926.jpg

Duh! what?

Eric wrote:

Waiting for you to close out your shorts first, you hater.

Out of my cold, dead, hands.

Which shouldn't take long, given my weak heart and the volatile market.

Am I missing something?

I agree with CR. Why would the spread be more than the historical average when fannie and freddie recieved a blank check from the treasury xmas eve?

With QE ending (and assuming the stock market not tanking and sending money into bonds) I don't see how the 10yr does not rise ... and raising 30yr mortgage rates as well, but the spread remains relatively unchanged.

black dog wrote:

With QE ending (and assuming the stock market not tanking and sending money into bonds) I don't see how the 10yr does not rise ... and raising 30yr mortgage rates as well, but the spread remains relatively unchanged.

Everybody already went into bonds. So rates must go up to inflict max pain.

Well, not until two a day practices in +100 degree heat.

RevolutionWillNotBeTelevised wrote:
The talking heads on Bloomberg, just referred to the latest east coast storm as a... wait for it...
"Snurricane"
We have become a parody of a satire of a joke.
Nope - just the true society of the Spectacle.

LMAO!! We are doomed to economic stagnation for at least another 10 years now. Check this out. Can we kick the can any further?

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

"The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program. "

RevolutionWillNotBeTelevised wrote:

"Snurricane"

• What's 'Snu'?
• Oh, nothing much, what's new with you?

ghostfaceinvestah wrote:

banning all foreclosures on home loans

hahahaha.

that's awesome.

If you foreclose on a home, the terrorists win.

ghostfaceinvestah wrote:

LMAO!! We are doomed to economic stagnation for at least another 10 years now. Check this out. Can we kick the can any further?

ghost:

About 18 months ago, I brilliantly suggested that the government offer 100yr, zero-interest, IO loans to homeowners in trouble. I am excited to see them get closer and closer to my goal.

I am a genius.

ghostfaceinvestah wrote:

banning all foreclosures on home loans

imagine how dumb you'd have to be to carry the paper now

Uncle Ar,

No shorts but I did wear baggies when I surfed years ago. Today it is snow boots and a welding helmet! Is it OK to weld in the snow?

Mike in Long Island wrote:

Home prices to the moon.

This is even better. Not just interest-only loans, but zero-payment loans.

Now with

MrBeach wrote:

About 18 months ago, I brilliantly suggested that the government offer 100yr, zero-interest, IO loans to homeowners in trouble. I am excited to see them get closer and closer to my goal.

I am a genius.

Throw in a teaser rate of -2.5% and I think we may have a housing recovery.

MrBeach wrote:

suggested that the government offer 100yr, zero-interest, IO loans to homeowners in trouble.

A forbearance kind of does the same thing as extending the loan terms and interest rate, but in a way that isn't as blatant to the public as to what is going on. The difference being in 30 years when you have to deal with reality.

I wonder if this is one step closer to cram downs though.

Political tidbit of the day: Rumors flying that Crist is going to leave the GOP to run as an indie for Florida senate seat. Not very surprising to anyone who's followed the race. Crist's campaign died the day he gave a bear hug and a sloppy kiss to Obama's stimulus plan.

Anyone who voted against both TARP and the stimulus gets a free pass this November. Anyone who voted for either or both better watch their backs.

LOL!

Uncle Ar wrote:

enough money to short naked.

btw I actually said "resources" for the reason that you need to sell the shares in the market without anyone loaning them to you. That requires something beyond money.

LMAO!!!

Here's a good way to stick it to the Support 'America Saves Week' or Spend? | zero hedge

Save more, spend less!

rosethorn wrote:

Save more, spend less!

How about "Buy a Kruggerand" week? Keeps the savings away from the In fact, the is probably short , so it would amusing watching them try to cover.

And it would work even better with , because there are no government reserves to bail them out with.

...it would amusing watching them try to cover.

I'm sure it would worry them terribly [irony].