tag:blogger.com,1999:blog-3837096154281906877.post8238567367437750555..comments2023-11-27T16:20:59.143-08:00Comments on Merrill over Matter: Mortgage Delinquencies -- A real hockey stick graphGreg Merrillhttp://www.blogger.com/profile/01479219930098544266noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3837096154281906877.post-32456975457169598162010-02-02T08:55:23.401-08:002010-02-02T08:55:23.401-08:00If 'chicken little' is speaking of the nor...If 'chicken little' is speaking of the normal principal paydowns associated with a mortgage backed security, I find that to be the only redeeming factor in the Fed's attempt to add liquidity via Freddie and Fannie MBS. [lets ignore how it is skewing the housing market right now, but that's their plan, right?] The principal paydowns are slower in the beginning and are probably a very small amount (relatively) right now. <br /><br />It will also happen gradually and automatically with no action required by the Fed. This would _hopefully_ mitigate any market dislocation versus the sellling in open market of a Fed held security. <br /><br />But yea, the Fed is getting thier money back and this is a bad thing???Greg Merrillhttps://www.blogger.com/profile/01479219930098544266noreply@blogger.comtag:blogger.com,1999:blog-3837096154281906877.post-69977689519796414422010-02-02T08:24:06.501-08:002010-02-02T08:24:06.501-08:00I read some "chicken little" comment on ...I read some "chicken little" comment on SeekingAlpha the other day that "the Fed's next huge problem is Pre-payments" - to which I nearly fell out of my chair laughing.<br /><br />The Fed scoops up a bunch of illiquid/toxic assets that nobody wants and all of a sudden cash is coming in in the form of pre-payments... and this is supposed to be a bad thing?<br /><br />Again, I laughed my fool head off.Anonymoushttps://www.blogger.com/profile/11444638950251438012noreply@blogger.com