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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (375517)	3/30/2008 11:49:54 PM
From: tejek	Respond to of 1574784

Signs of Liquidity Starting to Emerge Moves by Fed, regulators improve liquidity in mortgage-backed securities. By Aleksandrs Rozens March 31, 2008 The US central bank's steady campaign to improve liquidity in credit markets and changes in the regulation of Freddie Mac and Fannie Mae as well as the Federal Home Loan Bank system have improved liquidity in US agency mortgage bonds. Yield premiums of these securities narrowed and participants breathed a sigh of relief, but some investors warn that signs of better liquidity have not changed basic fundamentals plaguing housing finance, notably a steady decline in home prices amid rising defaults and foreclosures. "Spreads have come in from the wides. Things just got nuts there," recalls Steve Point, portfolio manager at Glenmede Investment Management in Philadelphia. "The whole thing seemed to disconnect from reasonable approaches to value." Mark Zandi, chief economist of Moody's Economy.com, believes "it has already had a positive impact. The Fed's objective of shoring up the agency market has been very effective." In recent weeks portfolio managers and Wall Street dealers have been ambushed within a market that was viewed as among the safest havens: the agency pass-through market. It is the simplest because these securities, as their name suggests, are engineered to merely pass monthly home owner principal and interest payments through to bond holders. Securities pooling home loans with guarantees by Freddie and Fannie saw their spreads widen in February and March to levels not seen since 1986, the very early days of the mortgage bond market. Agency mortgage bonds make up some 70% of the $10.5 trillion mortgage bond market. To the surprise of many professionals, even bonds backed by loans with a guarantee from Ginnie Mae, or Government National Mortgage Association, a Department of Housing and Urban Development corporation, saw their yield premiums gallop to wider levels. While there has been ongoing debate about whether the agency mortgage bonds areguaranteed by the US government, the Ginnie Mae-backed bonds are seen as having the full backing of the US government. Much of the widening in agency debt came on the heels of massive selling by investors facing margin calls and dealer firms that had seized collateral. The first rounds of selling pushed spreads wider and this in turn spurred other margin calls and forced sales. Carlyle Group's Carlyle Capital is believed to have been one of the casualties of this spread widening and the disassembling of Carlyle Capital's $22 billion agency mortgage bond folio is believed to have contributed to the dramatic widening in yield premiums. What made matters worse for the US mortgage market was concern about Bear Stearns, a notable presence in the agency and non-agency mortgage debt market. That widening in yield premiums of securities backed by Fannie, Freddie and Ginnie dampened liquidity and investors found they could not readily buy or sell securities. A mortgage bond salesman with a New York dealer firm recalls that the poor liquidity was at its worst in the weeks ended March 14 and March 21. The widening in yield premiums of agency mortgage bonds has been evident since the beginning of the year, but the spread widening was at its worst in mid-March. In January, spreads of Fannie Mae 5-1/2% mortgage pass-throughs were at 85 to 90 basis points versus 10-year swaps. By February, that yield premium was at 120 basis points, and in mid-March the spread was at 145 basis points. Last week, the yield premium had narrowed to 115 basis points. Even with spreads narrowing to the 115 basis-point-over-swaps levels, "this is still a pretty bad quarter" for mortgage securities, says Ajay Rajadhyaksha, head of US fixed income strategy at Barclays Capital. "However, we have definitely seen an improvement from the levels of late February." Not only did spreads widen, the ability to readily buy and sell agency mortgage bonds was dramatically impeded. This showed up in the bid offer spreads. At the height of the illiquid conditions the bid-offer spreads were as wide as 3/32 to 4/32, compared with 1/32 or 1/64 bid-offer spreads in normal market conditions, Glenmede's Point says. Some of that widening in bid-offer spreads was related to a reluctance among dealers to be active market makers, according to investors like Jeff Given, portfolio manager at John Hancock Financial Services. "Dealers were less geared to bid on any paper. Dealers were unwilling to accumulate any paper." Investors generally believe that the improved conditions in the US mortgage market -- the largest credit market worldwide -- are tied to a series of moves by the Fed and agency regulators rather than a single factor. iddmagazine.com

To: i-node who wrote (375517)	3/31/2008 12:02:40 AM
From: tejek	Respond to of 1574784

Bush has everyone carefully screened who attends his public events to insure a friendly audience: I don't know whether it is true or not, You don't know?? I gave you an example of an article on the subject with a link......it is one of many that have come out over the past 7 years. In fact the Bush administration is well known for screening its audiences. however, I cannot think of a good reason why he should NOT try to insure friendly audiences. So then he doesn't "embrace dissent" as you opined in an earlier post. He has been adequate in allowing media access -- even though the bias is evident. If he wants to talk with friendly audiences at times, I don't find a problem with it -- it would seem to be his prerogative. It is well known that he has had fewer press conferences than the last 5-6 presidents. In fact, he discourages contact with the media. It doesn't change the fact that clearly respects the rights of others to have different opinions; but he has his head screwed on straight about who is running the country, and doesn't collapse in the face of polling data the way Clinton did. These are highly desirable traits for a president. The last thing we need is some nitwit like Sheehan influencing policy. Dude, where have you been? Its like you've been in a cave since 2004. Bush/Rove follow the polls very closely......not that they care what the majority of Americans think. Rather, they are concerned that their base still supports them.....which apparently you all do inspite of all the reasons not to.