mbs, especially at the low coupons, took the worst single day beating in at least ten years or as far back as i can remember.
10 year treasury yields have gone up 100 bps in less than a week.
35 billion dollars was up for govt repurchase and they bought back 7 billion. What does that tell you?
Well, it is telling the markets that there is a limit to the government's buying. It also gives us sneak preview of what it will look like when the govt will stop buying. Not pretty.
I would imagine there were some unhedged positions that got absolutely destroyed today.
|