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While more risk averse fixed income securities received a continued flight to safety bid today, the MBS coupon stack was subjected to an influx of available supply due to originator's decisions to sell sell sell. Mortgages were outperformed by Treasuries, Agency Debt, and Swaps as market participants...
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[Part 1] [Part 2] [Part 3] [Part 4] [ Return to the blog ] We just said that investors are paying 102% of the face value of a bond in certain cases right? So what happens if they are not interested at that price any more? No more liquidity for the mortgage market. So how do you combat this? In a nutshell...