6/9/09

Mortgage Bonds are trading slightly higher today, after big losses yesterday due to added supply in the markets. Where is that supply coming from? Simple. Those refinances you've heard about lately are actually turned into Mortgage Backed Securities after they're closed, which adds more Bonds to the market.
Although the Fed has a program to purchase some of these Mortgage Bonds, the number of new Bonds simply outweighs what the Fed is able to buy. Still, the Fed's program is helping slow down the rate increases we are seeing.
Currently, Mortgage Bonds are in a good position. So I recommend floating