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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: LLCF who wrote (40519)11/3/2005 12:11:10 AM
From: mishedlo  Read Replies (2) of 116555
 
I think Fannie does well as long as rates either stay flat or rates continually go for long stretches of time in one direction.

This back and forth movement above and below their dynamic hedging trigger points is killing them.

Furthermore and I said so at the time, I suspect Greenspan's "recommendation" to buy ARMs right at the lows in yield was done to protect Fannie Mae, transferring interest rate and hedging risk to the consumer.

Mish
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