Guest Posted August 13, 2003 Report Share Posted August 13, 2003 If this pig breaks out to new 52-wk high and volume shrinks, I will be shorting. Could be a 3-drive-to-top play and scare out all shorts -- short at 23-25 area? Link to comment Share on other sites More sharing options...
Guest Posted August 13, 2003 Report Share Posted August 13, 2003 From Reuters: FNMA Duration Gap now at +6 The last time Fannie Mae's duration gap swung from negative to positive was at the end of November when it moved to +2 months from -6 months at the end of October. In both instances, the asset and debt mismatch changed sharply as a result of a dramatic rise in Treasury yields which pushed up mortgage rates and lowered the expected prepayments of home loans and bonds backed by mortgages. When the duration gap is positive, Fannie Mae's mortgage holdings on average are being paid off at a slower rate and at lower interest rates than the bonds it issues. Can any Stoolies clarify what this means please? Thanks Link to comment Share on other sites More sharing options...
wndysrf Posted August 13, 2003 Report Share Posted August 13, 2003 Dip Buyers are like Cockroaches. Can't get rid of them. They crawl out no matter what. Link to comment Share on other sites More sharing options...
MyGoldenStool Posted August 13, 2003 Report Share Posted August 13, 2003 With OPEX, 22.50 looks like a good parking spot. 25 would be better. Link to comment Share on other sites More sharing options...
soup Posted August 13, 2003 Report Share Posted August 13, 2003 they came in to save the close, perception is everything in the largest con game known to man Link to comment Share on other sites More sharing options...
richmtn Posted August 13, 2003 Report Share Posted August 13, 2003 Gannfandango Link to comment Share on other sites More sharing options...
Guest bullseatshitndie Posted August 13, 2003 Report Share Posted August 13, 2003 another bs bounce at the close and another bs day where dow down only 2/3 of spx Link to comment Share on other sites More sharing options...
Bird D Durr Posted August 13, 2003 Report Share Posted August 13, 2003 Same Sh*&!.............Different Day...................... Link to comment Share on other sites More sharing options...
soup Posted August 13, 2003 Report Share Posted August 13, 2003 bs: the bulge boyz are heavily short puts, they will control this thing until at least Friday. Always the outside chance tahat they lose control and the selling becomes self reinforcing, but very rarely do these guys lose. Link to comment Share on other sites More sharing options...
Jimi Posted August 13, 2003 Report Share Posted August 13, 2003 From Reuters: FNMA Duration Gap now at +6 The last time Fannie Mae's duration gap swung from negative to positive was at the end of November when it moved to +2 months from -6 months at the end of October. In both instances, the asset and debt mismatch changed sharply as a result of a dramatic rise in Treasury yields which pushed up mortgage rates and lowered the expected prepayments of home loans and bonds backed by mortgages. QUOTE] Can any Stoolies clarify what this means please? Thanks The Agencies--Freddie & Fannie--issue debt to purchase mortgages. The debt is issued at one rate (a liability). The mortgage pays another rate (the asset). When rates are falling, the agencies are stuck with having to make payment on the debt they've issued, while seeing refinancing lower the future amount they can expect from their portfolio of mortgages. This mismatch--between what they owe on the portfolio of debt they've issued, and what they earn from their portfolio of mortgages held--is referred to as "duration." As the Reuters report says, when duration is positive, that means that they're in good shape: their future cash flow liability based on debt notes is smaller than the future cash flow assets from mortgages held. When it's negative, they've got problems. But they can handle some of these swings with interest rate swaps, that allow them to hedge away some of the risk exposure they have by issuing debt and holding mortgages. They can also use treasuries (I think) as a means of hedging some of their risk i.e., "cross hedge"). That's why when the Treasury market spooked recently, and the debt/interest rate derivatives market sppoked, there was the stench of fear in the air that the Big Players--Agencies, Hedge Funds & Others--might not be able to limit their exposure in the ways in which they'd become accustomed. Sorry for the length, but the market's closed. Al corrections/confirmations appreciated, Jimi EDIT: I think according to the article, I reversed the implications of "positive duration," since as the article observes, When the duration gap is positive, Fannie Mae's mortgage holdings on average are being paid off at a slower rate and at lower interest rates than the bonds it issues.. If this is so, "positive duration" implies that the returns being generated by the mortgage portfolio are insufficient to cover the debt portfolio side of the equation (i.e., a disadvantageous mismatch between liabilties & assets). The mortgage stuff is complicated. Link to comment Share on other sites More sharing options...
soup Posted August 13, 2003 Report Share Posted August 13, 2003 we need an gap down on the open which would then feed upon itself. But once again, chances are slim. Make no mistake, this is aMajor accident waiting to happen, but as to when I do not have a clue. Link to comment Share on other sites More sharing options...
DrStool Posted August 13, 2003 Report Share Posted August 13, 2003 Uncle Buck and the Long Bong Hit, including short and long term updated charts and price targets, is now loaded. Yields are high, but Uncle Buck is feelin' low.? Take a subscribatory and get the latest whiff of the of the Long Bong Hit and Uncle Buck in the Anals RIGHT NOW! Closing Anals Intraday. Unable to open your Closing Anals Intraday? Take a subscribatory, open it and download it RIGHT NOW, along with everything else in your Anals! Link to comment Share on other sites More sharing options...
The Mad Hungarian Posted August 13, 2003 Report Share Posted August 13, 2003 For those in BGO, this just crossed on Bloomberg: BEMA says results confirm high grade deposit (Russia) Link to comment Share on other sites More sharing options...
osiris Posted August 13, 2003 Report Share Posted August 13, 2003 Well today the market failed at a previous trendline, That trend line being form the 7/1 low to the 7/22 low, at the begining fo the month the market broke down thrugh it , and now it has come back up on light volume to test it and it failed there today. Would have been nice if 980 faile dtoo but, we shal see what happens, if that goes there is 976 then the 960-62 level which i doubt very heavily will hold if we can get some good movement/volume through that 80-76 level. We still be in da big range mon' but it tis heavy oud dare. I'll trade it from the Long side is if the trendline down form the 7/14 -7/31 H's is broken to the upside on heavy volume. One of my favorite intermediate term trading methods is to play breakouts (on volume) of consolidatin patterns that are aprox a month or more in duration, FX, Indexes, Sectors, good old Edwards and Magee basics. Link to comment Share on other sites More sharing options...
soup Posted August 13, 2003 Report Share Posted August 13, 2003 I agree w/ sinclair ( although I am not familiar with him) they have their plate full trying to keep all these balls in the air. If stocks come under pressure the short puts have to hedge, selling begets selling. Can they hold this up for another 2 days to protect the dealer community? Link to comment Share on other sites More sharing options...
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