patrick.net

Here we go again. I am so ready for this.

:
It's annoying that they keep talking about this vague "hedge." Can't they just say what they're talking about ?

I'll assume that it's something along the lines of long t-note against their short mortgage position (since they committed to rates on mortgages temporarily on behalf of the borrower who hasn't closed yet.). But mortgages went up way (in price) more than T-notes when the fed bought all those Mortgage securities. They changed the spread. Oopsie.

Maybe the real problem is that they didn't hedge.

Hey, you fucked up. Shit happens. sometimes you lose. Of course the banks are crying to mommy. I guess now the fed is supposed to buy notes until they can get out of their spread ?

All those yams, ammo, armaments, bunkers and barbed wire, only to be stricken down by !CORONAVIRUS! against whom bullets are futile!

OccasionalCortex says

But there had better not be a fucking bailout of the mortgage lenders over this.

Um, when I read the article, the first thing I noticed was that they are buying up MBS again. They do that when the canary in the coal mine dies.

Damn, 20 years later, still no hope that the housing market will have to deal with actual market forces?