MBS RECAP: Near 2011 Price Highs


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1:40PM  : 
Failed-Trade Charge for Mortgage Bonds Proposed
(Bloomberg) — Dealers and investors in agency debt and government-backed mortgage bonds should face penalties for failing to complete trades at agreed times, according to an industry group that guides market rules. The Treasury Market Practices Group, which the Federal Reserve Bank of New York helped form in 2007 to offer advice on debt markets, is seeking comments on the proposals, which would follow the introduction of a similar practice for U.S. government bonds that the organization helped create in 2009. Uncompleted trades in agency mortgage securities remain elevated after rising to a record of almost $2.4 trillion during a week in November, according to Fed data. “We strongly believe that, like the fails charge recommended by the TMPG in the Treasury market, these recommendations will lead to more robust markets for agency debt and agency MBS and will serve to broadly reduce the risks associated with high levels of fails,” Tom Wipf, the group’s chairman, said in an e-mailed statement. The central bank’s decision to hold benchmark interest rates at record lows has encouraged failures by reducing the cost of uncompleted trades, while its purchase of $1.25 trillion of mortgage bonds through March 2010 has made it more difficult to find bonds to settle contracts in a timely manner. http://www.businessweek.com/news/2011-04-29/failed-trade-charge-for-mortgage-bonds-proposed-pimco-balks.html

Adam Quinones  :  “i think they offer more yield than TSYs but still have government guarantee. The never ending “chase for yield” aka seeking alpha”

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Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/209562.aspx

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