Everyone likes an intellectual bully, right?  Well, not really, but everyone likes the person that knows what's up and isn't shy about articulating facts in a calm but confident manner--especially when those facts run contrary to pervasive group mentality, right?  OK, so maybe people don't always like that person either, but odds are far better than the bully.

At least we can agree that the ABILITY to be that person--even if you don't feel compelled to go out and educate others--is useful, if for no other times than when people ask.  And if those people happen to be potential mortgage clients, even better!

With all of the above in mind, if you can see the video attached to this commentary, you are an MBS Live member, or they have forwarded you an email.  If you keep up to speed on the MBS Live updates and commentary, you may be excused.  For everyone else, you should check it out if you haven't done so already.  During weeks like this, I don't have as much time and mental energy to rewrite and recap the day's analysis in this post.  In other words, the best stuff is in the video.

The quick version of the recap is as follows:

  • The bond sell-off continued today, bringing yields back up to Monday's highs
  • Maybe it will not go any higher if stocks end up tanking again.  By the end of today, that looked like a possibility
  • The Bank of England Announcement pushed rates higher this morning.  
  • The stock market losses helped rates recover into the afternoon
  • The 30yr bond auction pushed rates higher again
  • An acceleration in stock losses helped rates recover into the close
  • Higher rates are not pulling stocks lower to anywhere near the extent espoused by talking heads, journalists and analysts.
  • You can use the attached video to learn how to humiliate the next person that suggests such a black and white reality.
  • The end

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.5
100-03 : -0-06
Treasuries
10 YR
2.8276 : -0.0044
Pricing as of 2/8/18 5:40PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:42PM  :  ALERT ISSUED: Negative Reprice Risk For Some Lenders
1:35PM  :  Weaker Following 30yr Bond Auction; Reprice Considerations
12:32PM  :  Treasuries Back into Positive Territory; MBS Not Far Behind
9:39AM  :  ALERT ISSUED: MBS Already Down an Eighth of a Point; BOE Decision Hurting

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "bonds are a convenient scapegoat because they're also doing things they haven't done in a long time."
Matthew Graham  :  "Selling most likely happened because one potential seller saw another potential seller begin to sell, and that observation occurred thousands of times in a short window of time with both humans and machines involved."
Matthew Graham  :  "beyond all that, I'd go back to the notion that stocks have been on an unprecedented run in terms of trajectory, absence of volatility, and outright levels achieved."
Matthew Graham  :  "there's no "magic" about 2.85 that I'm aware of. It would make more sense for the effects of higher rates to play out in a gradual manner when it comes to hurting stocks."
Matthew Graham  :  "that's a great question. I'm guessing we won't be able to say for sure without a few more attempts. So far, it couldn't be disproved, but in general, I don't personally see the cause and effect playing out in such a precipitous fashion."
Chris Kopec  :  "MG is it premature or just flat out wrong to say that the 10 year at around 2.85 is acting as an equity selloff tripwire?"