http://www.bloomberg.com/news/2012-03-12/goldman-…
interesting to see some of the different desks doing a bit better this year (last year was not pretty for these areas)
anyone in the biz care to comment on if the pickup in mbs volumes in particular will remain
also how will volcker affect this market (agency vs non-agency?)
HY corporates are going to takeoff just you wait and see...
NM
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Not sure that 1Q MBS increase in volume is a good read through for future quarters. Probably a lot of demand for legacy non-agency bonds vs. agency in search of better returns and improving housing fundamentals. As for new issue non-agency, there was solid demand early on and then spreads started to widen later in the quarter (I think mostly due to less attractive prepayment/extension characteristics vs. legacy bonds). My guess 2Q volumes will be driven by agency MBS/spec pool selling from curve steepening and concerns about what the Fed is going to do and when. Legacy non-agency paper is pretty expensive right now from what I hear, so not sure we will see as much interest this time and a lot of traditional investors might just sit out for a bit.
I'm just thinking out loud, I'm not a bond or MBS guy. I just think shit is going to get real interesting with the timing of Fed's tapering/exit and future GSE reform.
Of course its not a good read through, its artificial.However, Fed buying at 30-40bn+ a clip per month still isn't going to change for the foreseeable future so it makes sense to align with what is being bought (long-interm MBS paper). I still wouldn't sleep on IG & HY credit outperforming in 2013. I would bet my next 3 paychecks we hit a 1.85 10yr before we touch 2.85.
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