Mortgage Spread Continues Epic Collapse

Submitted by: Colin Lokey
       Earlier this week I published an article (see here) which discussed how mortgage spreads have tightened dramatically (that's probably an understatement) in the wake of the Fed's promise to buy MBS until the cows come home or unemployment drops 1.1%, whichever comes first. Well, the spread continues to collapse and mortgages are now just 19bps more risky than 10-year Treasury bonds (you believe that right?). Green is the mortgage spread:



Chart: ZeroHedge

 

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