But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Why Ginnie Mae TBAs rallied with bonds to close at 106 15/32
The front-month Ginnie Mae TBAs were bid up as bonds rallied ten basis points. Ginnie Mae TBAs began the week at 106 1/32 and lost up just about 7/16 to close at 106 15/32.
Fannie Mae MBS rallied a bit on a strong bond market. The Fannie Mae 4% TBA started the week at 105 13/32 and ended up picking up about a quarter of a point.
The Malaysian jetliner that was shot down over Ukraine pushed bonds higher as well. It will probably have a limited impact on the economy overall.
Last week started earnings season in earnest. The markets were also influenced by the Malaysian jetliner that was shot down over Ukraine.
This week begins the deluge of heavyweights announcing earnings. We’ll hear from General Electric (or GE), Google (GOOG), and the biggest banks.
This report will probably give the Fed some comfort. The Fed still fears deflation and will maintain ultra-low interest rates.
Unemployment is a profound driver of economic growth, and persistent unemployment has been the Achilles’ heel of this recovery.
Capacity utilization rates are approaching long-term historical averages.
In many ways, it’s similar to the consumer confidence indices.
Non-QM loans would typically be useful for borrowers with sporadic income, but a large amount of assets.
In general, mortgage delinquencies are falling as home prices rise and the foreclosure pipeline clears.
Small business accounts for roughly half of the U.S. gross domestic product (or GDP) and jobs.
There are also two different Ginnie Mae TBAs—Ginnie 1s and Ginnie 2s.
Fannie Mae MBS rallied a bit on a strong bond market.
The bond market returned to its recent pattern of ignoring bond-bearish data and rallying on bond-bullish data.
The Fed is beginning to contemplate ending the last piece of quantitative easing (or QE), which is the reinvestment portion.
Mortgage real estate investment trusts (or REITs) like American Capital Agency (AGNC) and Annaly (NLY) will focus on data that will move the bond market.
For mortgage REITs, the taper wasn’t a surprise. They had a chance to prepare. Big agency REITs like Annaly (NLY) and American Capital Agency (AGNC) took the chance after the warning last spring to de-leverage their balance sheets.
Economic forces that work at cross-purposes to each other are driving the commercial REIT sector. This is similar to the situation that non-agency mortgage REITs are facing.
One of the things the Fed mentioned is that at some point, rates need to return to more normal historical levels. This will be in the context of a massive Fed balance sheet.