Posted on 06/21/2013 9:05:47 AM PDT by whitedog57
Now that we know that The Fed is likely to withdraw its stimulus over the next year, global sovereign rates are rising.
And the US Treasury 10 year continues to rise.
Then there was this tantalizing story in the Wall Street Journal.
Bernanke: Majority of Fed Officials Don’t Expect to Sell MBS
The good news? MBS pay down quickly because of prepayments and other mortgage terminations. Hence, mortgage duration is fairly low.
The bad news? Duration of Fannie Mae 4% MBS was 0.5 on September 25, 2012 and is now at 5.8 (thanks to rising Treasury rates).
So, as Treasury rates rise, the risk (or life) of The Fed’s MBS portfolio grows as well. This will slow down the burn rate of the Fed’s portfolio.
Unfortunately for Bernanke and The Fed, the market finds a way (much like in Ian Malcolm’s speech in Jurassic Park).
Bernanke: “Please make the invisible hand of the free market go away, I beseech thee!”
It can't happen quick enough!
We need a full blown depression that wipes out every leach in this country that is living on credit!
We also need the government to not intervene like 1920 when that depression was over within a year.
You’re welcome.
Awesome idea! Then in 2016, Bernie Sanders can get elected President.
A depression would straighten this country out!
FDR was the worst President this nation ever had!
It’s his fault the depreassion of 29 lasted for 12 years and he did it intentionally!!!
We are still having to live under his socialist programas!!!
Exactly! We also elected Obama during an economic crisis. A depression would guarantee the election of another big government clown.
Worst idea ever.
I want to see everyone living on credit totally destroyed!!!!
Yeah, I’ve heard your idiotic ideas before.
You were going to share your banker wisdom.
I went to sell my treasuries before they went to nothing.
Treasuries can go to nothing? Please explain further.
That may well happen as markets begin to reject Bogus Baraqqi/Bernanke Bucks and the entitlement society implodes. But I think your enjoyment will be short lived, because it will be ugly for most anybody who isn't really wealthy.
Did you see the recent pic of BO and Putin sitting together looking pissed off?
I thought they looked like two teenagers who had just been taken to the woodshed and told to behave. I think they are both being told what to do by the money changers
You were going to explain something about Treasuries going to nothing.
And free money from the Fed.
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