Show notes:
TMSpotlight:
8.14.23 How's Your Appetite? "Eat the Rich"
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Well, rates moved up last morning
On the wrong side of the trade
And now Bonds got to thinkin'
About all those things Jay said
About rich MBS trades
And how they make apps sick.
In Japan and Europe, inflation eased, tanking the Dollar and sinking Oil. But, the bearish US news caused rates to rise amid erratic price action.
Loans can get adversely priced when locks come in during volatile moves. On Friday afternoon, hedgers that waited to sell the flow discovered the pain of selling below the locked price. It made the locks rich.
Secondary tries to fade trades or sell ahead of future flows to Beat the Rich lock. The hedging axiom lives: “You can’t hedge away richness.” But they try.
These views are mine.
Beat the rich
Don't stop them now. They’re going crazy
Beat the rich
Now that's their idea of a good time, LO
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Song: Eat the Rich (1993) Aerosmith
https://www.youtube.com/watch?v=o-0lAhnoDlU