10y T v. 30y Conventional Mortgage Spread?
±10 bps, FedGov is not a playah
5% (3 votes)
25-50 bps, transactional costs
11% (6 votes)
51-75 bps, uncertainty premium
18% (10 votes)
76-100 bps, supply/demand reasserts itself
18% (10 votes)
101-125 bps, historical mean?
11% (6 votes)
126-150 bps, all of the above
9% (5 votes)
151+ bps, market price
27% (15 votes)
Total votes: 55
Comments
Bloomberg.com:
Personal Finance
Bloomberg.com:
Government Bonds
March 18th, 4.34-3.67 = 67bps
March 19th, 4.37-3.69= 68bps
March 22nd, 4.32-3.66 = 66bps
March 24th, 4.50-3.84 = 66bps
March 30th, 4.48-3.86=62bps
Mark it. QE is officially over today, March 31st. GLTA. Spread at market close is:
March 31st, 4.50-3.83=67bps.
And so it begins:
April 1st, 4.56 - 3.86 = 70bps
April 5th, 4.67- 3.98=69bps
April 19th, 4.47-3.80=67bps
April 30th, 4.39-3.66=73bps.
Why did Bernanke print that 1.25T anyway?
What's the date of judgement?
I want a new entry! Spreads won't change (because the market has been cross-pricing treasuries and mortgages all along), but all bond yields will face upwards pressure (removal of Fed stimulus) and the stock market will also slow its advance (and possibly rise no further this year) since the Fed is no longer exchanging fungible cash for toxic trash...
Is this supposed to be asking us for the absolute spread after April 1, or the change in the spread?
My 76-100bps vote infers the latter. I think the absolute spread will go to 1.5%+ absent continued Fed intervention in the markets.
Which, paradoxically, means that it won't.
Hey, wait a minute - we've got ourselves a recipriversexcluson!
You got it correct. The change in the spread. I agree, if we get close to market conditions they'll be forced to intervene.
picosec wrote:
I am voting for April 30th, to give the market time to "normalize".
Also assuming no re-intervention up until that date.
4.39-3.66=73bps.
Why did Bernanke print that 1.25T anyway?