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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: westpacific who wrote (11146)	4/2/2004 4:53:12 AM
From: westpacific	Respond to of 110194

This Saudi promise on oil, read what I posted last month. For those that missed this very important report! And one of the main reasons we invaded Iraq, OIL>>>>>> csis.org

To: westpacific who wrote (11146)	4/2/2004 10:40:26 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 110194

next problem could be FannyMae mortgage convexity if we get another strong (even if contrived) jobs report, then watch for REFI activity to dry up and also for FannyMae to be selling their hedge book as REFIs stop, Fanny faces a cashflow problem they respond by selling bond futures in their hedgebook this amplifies the interest rate increase upward momentum they call this "mortgage convexity" we saw this in spades last July when long rates jumped 1.1% on the downside, as REFI activity heats up, Fanny becomes flush with cash they put the money into hedging (overhedging) into bond futures this amplifies the interest rate decrease down momentum anchors are saying the mortgage REFI window just shut this means Fanny will have a cashflow problem unless they have suddenly become much better managed even with Congressional oversight decisions to place them under Dept Treasury, I sincerely doubt this fools manage their REAL ESTATE CASINO HEDGE FUND all that well we could see a long rate move to 4.5% in the next few weeks if the market expects another strong May jobs report I think it is better than 50-50 / jim