#mREIT

5 12, 2022

FedFin on: The Big Squeeze

2022-12-06T16:24:20-05:00December 5th, 2022|The Vault|

Making an important addition to the ongoing debate about Treasury-market liquidity, a new paper from the Bank for International Settlements provides sobering data on agency MBS liquidity with significant implications not only for secondary-market liquidity, but also primary-market stability…..

The full report is available to subscription clients. To find out how you can sign up for the service, click here.…

5 12, 2022

GSE-120522

2022-12-05T16:12:12-05:00December 5th, 2022|4- GSE Activity Report|

The Big Squeeze

Making an important addition to the ongoing debate about Treasury-market liquidity, a new paper from the Bank for International Settlements provides sobering data on agency MBS liquidity with significant implications not only for secondary-market liquidity, but also primary-market stability.  Treasury has taken some steps to enhance its market, but none of which we are aware has yet been adopted for agency paper, an omission with potentially systemic consequences if liquidity stress in this $10 trillion market turns to shove.

GSE-120522.pdf

1 09, 2022

FedFin on: Centenarians Get a Face Lift

2022-12-20T16:22:39-05:00September 1st, 2022|The Vault|

As seems always the case, FHFA Director Thompson is as good as her word to Congress earlier this summer, announcing yesterday a review of the extent to which the Home Loan Banks and their System meet the mission assigned to them and, regardless, if that mission still makes sense. Building on our initial assessment of FHFA’s plans, we here turn to what the System, its allies, and reformers are likely to say and what FHFA and/or Congress will then do about it.

The full report is available to subscription clients. To find out how you can sign up for the service, click here.…

1 09, 2022

GSE-090122

2022-12-20T16:21:38-05:00September 1st, 2022|4- GSE Activity Report|

Centenarians Get a Face Lift

As seems always the case, FHFA Director Thompson is as good as her word to Congress earlier this summer, announcing yesterday a review of the extent to which the Home Loan Banks and their System meet the mission assigned to them and, regardless, if that mission still makes sense.  Building on our initial assessment of FHFA’s plans, we here turn to what the System, its allies, and reformers are likely to say and what FHFA and/or Congress will then do about it.

GSE-090122.pdf

27 06, 2022

GSE-062722

2023-01-25T15:11:54-05:00June 27th, 2022|4- GSE Activity Report|

That Was Close!

A new Fed paper analyzes the striking differences between mortgage-market liquidity – or the dramatic lack thereof – in the great financial crisis of 2008 and the pandemic crisis of March, 2020.  Providing often unique insights into market strain over the last two weeks of that month, the paper concludes that market resilience in this last near systemic cataclysm was due to better underwriting ahead of the 2020 collapse and – more significantly – far larger and faster federal interventions that quickly stabilized the agency market.

There was significant stress in mortgage banks exposed to TBA-hedge margin calls and among mREITs, with these strains only made manageable thanks to the Fed’s overall market support and the small size of the non-agency market in 2020 versus 2008.  The paper draws no conclusions about the next stress scenario, but its clear inference is that bailout is going to be the necessary order of the day absent more liquidity resilience at nonbank companies and mREITs.

GSE-062722.pdf

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