« ROUND Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next

Re: Mortgage Spread Collapses... More

By: Decomposed in ROUND | Recommend this post (0)
Mon, 17 Sep 12 9:46 PM | 28 view(s)
Boardmark this board | De's Test Board
Msg. 44104 of 45651
(This msg. is a reply to 44096 by capt_nemo)

Jump:
Jump to board:
Jump to msg. #

"QEternity." I like that. Rolls off the tongue much better than "QE Infinity."




Avatar

Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months




» You can also:
- - - - -
The above is a reply to the following message:
Mortgage Spread Collapses... More
By: capt_nemo
in ROUND
Mon, 17 Sep 12 6:22 PM
Msg. 44096 of 45651

Submitted by Tyler Durden on 09/17/2012 09:49 -0400

New Home Sales

Since QEternity was announced, the spread between the 30Y mortgage and 10Y Treasury has collapsed from an already very tight (in anticipation of QE3) level to simply incredible levels. Following our comments on Friday about the relative 'safety' of mortgages over Treasuries, the compression from over 60bps pre-Ben to a mere 22bps now is incredible and just highlights how entirely distorted any signaling from any rate market has become. The point remains that lower absolute mortgage rates (which are notably not as exuberant as this relative risk spread would suggest) have not in the recent past provided notable pick-up in the new home sales (which is where real growth in the economy comes from) and furthermore, the benefits to the consumer of further mortgage rate cuts (based on recent JPMorgan work) is around $5bn per annum for every 25bps improvement in the mortgage rate (a drop in the ocean for a consumer who spends $11 trillion per year).

Mortgage spread over TSYs...

Uploaded Image

http://www.zerohedge.com/news/mortgage-spread-collapses-more


« ROUND Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next