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You are looking at an ETF holding existing MBS, not the MBS market itself. Like if the Treasury issued a bunch of new t-bills and nobody showed up to the aucti
by mike_d 4y ago
You are looking at an ETF holding existing MBS, not the MBS market itself.
Like if the Treasury issued a bunch of new t-bills and nobody showed up to the auction, that doesn't impact the repayment of existing t-bills. But it is still a really bad sign.
- deleted 4y ago[deleted]
- rocqua 4y agoETFs suffer less from bad liquidity in the underlying. There can be arguments that, in illiquid markets an ETF gives a 'more accurate' price than the market price. Where more accurate means 'better matches the opinion of all traders'.
- heartbreak 4y agoNo, this isn’t right either. MBS deals are still pricing.
- ProjectArcturis 4y agoThe price of existing MBS is, of course, affected by the auction of new MBS. If the Treasury issued a bunch of new T-bills and no one bought them, the price of existing T-bills would crater. And also the financial system would collapse, but that's a different story.