SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Derivatives: Darth Vader's Revenge
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: ahhaha who wrote (311)10/3/1998 7:56:00 PM
From: Sam  Read Replies (1) of 2794
 
So, to translate to make sure I understand what you're saying, the spread between GMNAs (and mortgage rates generally, I take it) and the 30 yr bond is wider than historically normal because of Japanese buying of the 30 yr, and it would require too much cash/margin for those trying to play the spread to tighten to get it back to where it normally is. Therefore those who bet on the spread narrowing are taking a bath (Lehman, I take it, being one of them, and they just threw in the towel if the report of them buying bonds and selling mortgage backed bonds is true).

Is that a fair assessment of your view? So does this mean that the spread will widen as others throw in the towel on this trade? What does this mean for mortgage rates? That they will go up as people sell their GMNAs? Or is the spread wide enough already, and already reflects this trap?

Finally, what is OPM?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News