MBS
Angel Oak Mortgage-Backed Securities ETF
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I mostly agree the bubble framing feels overstated, but I think it’s worth separating growth from valuation support. NVDA forward multiples look less extreme if you assume sustained data center demand, but the market is also pricing in high margins and continued capex intensity from customers. A small demand pause or pricing pressure can matter a lot. PLTR. The growth rates are real, but the debate is durability/quality—how much is repeatable software revenue vs. project-heavy work, and how sticky are contracts if budgets tighten? Burry/MBS analogy: Different mechanics, leverage/opacity aren’t comparable, but sentiment can still overshoot. What metric are you using to call NVDA shockingly reasonable (FCF yield, PEG, forward P/E, something else)?
In November 2008, the Federal Reserve initiated the first round of quantitative easing (QE1) by announcing plans to purchase up to $600 billion in mortgage-backed securities (MBS) and agency debt. This was the initial phase of an, at the time, unprecedented expansion of the Fed's balance sheet, which aimed to stabilize the financial system after interest rates were cut to near-zero. Key details of the initial 2008 QE launch: Announcement Date: November 25, 2008. Initial Amount: $600 billion ($500 billion in mortgage-backed securities and $100 billion in direct obligations of Fannie Mae, Freddie Mac, and federal home loan banks). Expansion: By March 2009, this program was significantly expanded, with total purchases under the QE1 umbrella eventually reaching over $1.75 trillion by the time it concluded. By the end of the first round of QE in March 2010, the Federal Reserve had acquired $1.25 trillion in mortgage-backed securities, $175 billion in federal agency debt, and $300 billion in U.S. Treasury securities.
NVDA’s valuations are not even that stretched. They’re actually shockingly reasonable given the amount of growth they have. The “how much larger can they possibly be and how long can this last?” Concerns are arguably already hampering the price. PLTR valuations are certainly a different matter, but claiming there are “limited revenues” from their investments when they have 70% YoY growth with over 120% commercial growth and margins of nearly 60% is also kind of a ridiculous claim. Neither of these stocks may necessarily be rocked correctly right now but Burry trying to hype this as his next MBS crisis seems laughable.
I think the Yen trade is the just the roots and in cascades into the rest of the market. Let’s say I have a fuck ton of NVDA and paper silver but, ope, I’m in danger with my carry trade, I need to smash sell for liquidity, selling then off rapidly. Then you, who are use NVDA as collateral to hold MSFT on margin goes ope, I need to trim both these positions to avoid liquidation. There ends up being a lot of different you’s in the market who are not in the carry trade, but due to others getting smacked by it, get smacked yourself. Then there are even more people who see all the blood and panic sell their positions, whether they’re leveraged or not. One funky trade can cause broad market sell offs, we see it quite frequently. Back in 2021 short sellers got caught off guard in shorting GME and various other retail companies facing macro headwinds and the unwind hit the whole market. The 09 crash was due to over leveraging dogshit MBS and CDO, admittedly not a niche trade, but the ramifications hit the whole market. The VW short squeeze the same era also had big effects.
Yeah, you ever watch the movie The Big Short? The part where they are trading massive amounts of MBS between two traders at big banks does happen regularly with everything.
Yeah I've never seen tech bring our entire world system to its knees because of "some MBS swaps here and there whats the big deal"
Diversify with International stocks & bonds, Emerging Market stocks & bonds, Preferred stocks, Commodity funds, US Treasuries, REITs, BDCs, MLPs, COLs, & MBS; then only look at your portfolio on the second Tuesday of the month.
Watch the data center securities basically the same as 08 MBS. Gonna clap everyone soon.
I'm afraid that's just how Ronaldo's ear looks. I think this was the dinner at the WH when MBS visited.
What’s up with Saudi Arabia cash problems did MBS get margin called
Same trick that’s used with CLOs or MBS, we just call it “diversification”
In these type of markets you have to ask who holds the bags? You can't extract cash from where it doesn't exist, so where does the hard cash come from and where does the bags accumulate? Unfortunately, I think the answer in this market cycle is passive funds, which in proxy really mean "Americans Retirements". Historically, usually the extraction of cash comes in terms of the "baggie" ending up holding debt. But that isn't what is happening here. I know many you tards want to believe this is coordinated crime, but realistically these things tend to be mechanistic over malevolent, in some famous cases both (GFC-2008; mechanistic market demand of CBOs/MBS as collateral outweighing supply, and malevolent fraud in rating bonds). Here I don't see the need for malevolent fraud, just mechanisticly capable. To this we just have to answer a very simple question, which is that if a fully self leading option market exists and we do not see zero-sum price movement between daily hedging and settlement, where are the shares going? IMO with the available market data and evidence I think the following is our new market plumbing: 1. Daily Expiration Risk >>>> Any other risk, and self leads pricing 2. Most settlement is not done on Lit exchange preventing return of collateral to market for open bid. 3. On weekly OPEX and autobuy from passive investing lining up, large blocks from early expiration in the week gets to be unloaded to passive funds which inherently do not do price discovery and can catch any bid. 4. This results in cash extracted from the options and bags securly deposited in some poor twats 401k, etc. 5. This is a positive feedback loop underwhich available collateral on paper expands and people move more cash into the market to buy more options as their "paper value" in "safe havens" looks secure. TYFYATTM
Warsh apparently believes in a dual Fed mandate of controlling inflation and a strong dollar, as opposed to full employment. His strategy seems to consist of lowering rates while also tightening liquidity(QT) through selling assets like MBS. This liquidity management strategy will put pressure on real assets like PM. Considering the run up in silver and gold recently, this news was a major catalyst for the pullback.
Kevin Warsh isn't just a new Chair. He represents a monetary "Regime Change" (The 1951 Accord logic) I've been reading up on Kevin Warsh's background and his recent comments, and I feel like the market is treating him like "Just another Powell," but more hawkish. I think it's deeper than that. If you look at his history (Morgan Stanley M&A, youngest Fed Governor, liaison to Wall St in 2008), he is not an academic economist. He explicitly criticizes the current Fed for being stuck in a "1970s model" that ignores how AI boosts productivity and is deflationary. **The "Give and Take" Strategy (The Scary Part)** The most interesting part of his philosophy is this potential "New Accord" with the Treasury (similar to 1951). It basically sounds like: * **The Give:** He gives Trump the rate cuts he wants (ignoring traditional inflation models). * **The Take:** He aggressively nukes the balance sheet (QT) and sells MBS to defend the Dollar. **Why this matters for your portfolio:** He wants to replace the dual mandate with "Price Stability & Defense of the Dollar." If this happens, we are looking at a **Strong Dollar** regime coupled with **Liquidity Contraction**. **Look at Silver & Commodities** We just saw Silver tank -28% in a day. Yes, the suspension of the UBS Silver Fund in China was the trigger, but the macro backdrop of a "Warsh Fed" sucking out liquidity is the fuel. **My take:** This feels less like a soft landing and more like a regime shift. If Warsh actually executes this "Rate Cut + Aggressive QT" combo, assets that rely on loose liquidity (Crypto, Gold, Silver) might get hammered even if rates go down. Does anyone else see this "Strong Dollar / Tight Liquidity" scenario playing out, or am I overestimating his influence? source: [https://tmmmacro.com/kevin-warsh-fed-strategy/](https://tmmmacro.com/kevin-warsh-fed-strategy/)
He also inflated the housing market by buying MBS way into 2023. Fucking idiot.
It’s not guidance, it’s Warsh. Sofi had a lot of potential to refi student loans, but Warsh doesn’t believe in Fed asset buying (like MBS). Look at RKT. Also pretty bad day for growth in general on higher interest rate expectations.
Prior to 2008, The Fed didn't pay interest on deposits held at The Fed. It conducted monetary policy through Open Market Operations (i.e. Repo and Reverse Repo). This meant that banks held close to zero excess reserves. In 2008, this changed. From 2008 to today, The Fed has paid interest on reserve balances. This mean that banks held tons of excess reserves at The Fed. Warsh thinks this is bad and ties up money from banks to lend to the economy. Ted Cruz and others have proposed legislation (FAIR Act) to preven The Fed from doing pay interest in reserves at The Fed. Warsh also things that inflation is a monetary problem from too much credit creation, not interest rates. He doesn't believe that inflation is caused by too hot an economy, but from too much money - so the only thing that matters is stable monetary policy. So, he's for reducing interst rates. So, short-run intrest rates heading lower. On the long-end, he's for reduce The Fed Balance Sheet - which means no more buying of MBS or longer-end assets. Which, is why the yield is steepening. Basically, we're going back to Greenspan Era of Monetary Policy.
With that much cap he can prob get a loan from MBS to buy Argentina and Malta and force thousands of women to carry his seed.
Watch Warsh hike by 100bps his first meeting, and sell half the Fed’s MBS in his first month. ‘06-‘11 Warsh would’ve done it.
oil money - they continue to court MBS
If I’m understanding this product correctly, BND’s monthly distributions are backward-looking cash flows affected by coupon timing and MBS payments. Rising BND distributions would mostly reflect higher coupons being locked in after prior rate hikes?
It is, though that part is loaded with innuendo. A loan company wont keep buying MBS if they're bad, so the CVNA/Drivetime must be sweetening it (e.g. a cash rebate makes sense given the financials or cvna stock ).
You’re right it’s an animal that can hide it wounds and bait your attention to others things. Unfortunately OP is right, we are fucked and it’s going to hurt everyone. They never cleared the 2008 mess. They hid their fuck ups, took the bailout money and continued doing the same shit but at greater volume. In 2008 MBS was dog shit, wrapped in cat shit. In 2026 it’s MBS debts, medical, student loans, auto loans and more all wrapped up in elephant and donkey shit. There is a free library explaining most of this online. Happy to share if you’re curious about glass house and naked emperors.
I believe this meeting is what happened in the early AM hours of Thursday August 9th 2007. That morning, the mortgage backed securities market went into free fall and then eventually froze - meaning all trading stopped. This event came dangerously close to stopping all credit market trading worldwide, to the point where your ATM card was very close to not working. The video clip mentions that this has been happening slowly for the last 2 weeks. Living through this and following the MBS market daily at the time, I recall the downward turn accelerated on July 24th 2007 when Countrywide, possibly the Nation's largest servicer of subprime loans, announced that 24% of its subprime loans were in default. On the morning of August 9, BNP Paribas froze withdrawals from 3 of its funds based on mortgage back securities. So, investors could not take out their money. https://www.moneyandbanking.com/commentary/2017/8/6/looking-back-the-financial-crisis-began-10-years-ago-this-week https://www.marketplace.org/story/2017/08/09/when-did-financial-crisis-begin-many-say-august-7th-2007-france That morning, when US markets opened, prices of mortgage backed securities plummeted as everyone raced to sell. By noon prices were down 30%. In other words, a security worth a million dollars at the close of business the night before was only worth $700,000 by lunch the next day. By the end of the day it was down to $500,000 and the next day $250K to $300K. In the two days that followed, nothing traded, no mortgage backed security, no corporate bonds. All trading had stopped while firms tried to figure out the value of what they held. Was it a security that would actually yield returns or not? The *biggest bag of xxxx” referred to in the clip isn't just what they are holding, that's what every Investment bank and the country is holding, and they all realized at the same time. The lighthearted term for this is a credit / liquidity crunch. Because no one was willing to extend credit or liquidity to anyone else when it came to bonds. Trust in the rating system disappeared. And even if the bonds performed over time, regulators would force anyone holding the private MBS to take a loss on their books - even if they didn't sell at a loss - due to “mark to market” accounting rules. In the video, the analyst says that the company would become insolvent if they had to sell assets at the price of 0.75 (75%)…so, back in the real world, on August 9th, by noon, prices had already fallen to 70%. if they hadn't sold all their mortgage holdings by then, the company in the movie goes bankrupt. Keep in mind, mortgages were a small component of this investment bank’s business. Yet, despite all the other sources of business, the whole company could go belly up within a few hours if they didn't sell quick enough. If they did sell quick enough, the company barely survives, but every trader who made those sales knows that is the end of their job. Within a few hours, the private mortgage backed security market will cease to exist. In reality, the private mortgage backed securities market completely disappeared after that day and has yet to recover. In 2006, there was nearly $1.5 Trillion in Private mortgage-backed securities issued. That number was essentially zero for the next decade. Even now, it's only about 8% of that number. Trading and the risk distribution is completely different. Within 2 days, most private MBS bankers and likely 20% of the mortgage industry had lost their jobs. About 60% of the mortgage industry lost their jobs by 2010. Side note: I was on a conference call with Goldman Sachs that day. They told us that they were examining the performance of all their loans. The majority of us on the call were extremely surprised that this information wasn't something they were already tracking. I was able to ask them how they determined pricing and the “risk based price adjustment premiums” for the loans that they were buying from us - without knowing performance numbers. They indicated that the base rates and adjustments were simply ‘market based’ and had nothing to do with actual loan performance. That's when I knew we were in for a rough ride. You see, for a market to work correctly data has to be transparent. If the sellers didn't even know how these loan pools performed, how could the buyers? If the buyers don't know what they're buying, market based pricing isn't based on anything real or truthful, just what a trader tells you likely over the phone. What made the events of these 2 days especially scary is that Money Market Accounts, the kind you can keep your savings in at your local bank or credit union, are typically based on corporate bonds whose trading & prices were also affected. Without Fed / government support, money market accounts would have also frozen which could have caused ATMs to stop disbursing funds. Imagine the chaos that would have ensued if regular people went to fill up their car with gas, or buy groceries and their bank card no longer worked. Ultimately, what allowed the country to survive and Americans to be able to continue to buy homes is the fact that Fannie Mae, Freddie Mac and government-sponsored lending programs have very strict guidelines. The securities made from those loans perform predictably and are guaranteed by those entities. That's far different than the securities that caused the problems mentioned in the movie. Funny enough, Fannie Mae and Freddie Mac both got in trouble, not because of the loans made according to their own lending guidelines, but because they bought these “steaming bag of XXX” loans to try to increase their shareholders' returns. Their mission was always to promote home ownership, but in an effort to make their shareholders more money, they almost destroyed their ability to carry out the core mission.
You said nothing about your risk tolerance, whether you may need access to this capital at some point along the way, how long your time horizon is, whether the funds are part of an estate plan. And more. Hire a fee-only fiduciary financial planner for advice, not reddit. This is a decent chunk of change way more information is needed to make a smart allocation decision. That said you could get this with, bonds, dividend stocks, CLOs, CEFs, MBS, REITs, to name a few. Some annuities can do this, but annuities are generally a terrible deal.
The new MBS/CBO of our age. Wallstreet has found another financial vehichle they will push to every limit to maximize extraction blow up the markets and go "whoopsie, MONEY PLZZZZ"
MBS is down bad after Neom flopped. bullish
More RKT... It's GREEN this morning, after dropping from $24+ to under $21 pre-market during last weeks "Greenland" selloff. Should be $25+ after earnings, in mid-late Feb, and the FHFA just authorized Fannie Freddie to buy upto $450 BILLION in MBS, up from $200B that was announced earlier this month. [https://abcnews.go.com/Business/wireStory/trump-housing-finance-chief-oks-mortgage-spending-adds-129516313](https://abcnews.go.com/Business/wireStory/trump-housing-finance-chief-oks-mortgage-spending-adds-129516313) Bullish on housing...
Wake up America. Pension funds dumping treasuries. Housing market sales down but somehow MBS market needs more intervention.
[https://abcnews.go.com/Business/wireStory/trump-housing-finance-chief-oks-mortgage-spending-adds-129516313](https://abcnews.go.com/Business/wireStory/trump-housing-finance-chief-oks-mortgage-spending-adds-129516313) Fannie Freddie MBS purchases increased to $450M - Double original number. Housing stocks, like RKT, should benefit, in the coming week, from expectations of lower Mortgage Rates.
Been happening since 2008. Started with bush admin taking stake in car companies. 2008 killed capitalism as it existed before. You can make the same argument for the fed. Why did the fed bought MBS for as long as they did?
Not really. If you are a dissident, you do not go to the embassy of your country of origin for the same reason you left that country in the first place. That is basic common sense. The thing is, Khashoggi was part of the elite. He was a cousin of Dodi Al-Fayed (Jamal’s father and Dodi’s mother were siblings). He believed he was untouchable. What he misjudged was that MBS had already shown he was willing to kill his own cousins. Royal family members were dissappeared in prisons in Saudi or killed in "accidents" abroad. Khashoggi’s confidence when he entered the Saudi embassy is baffling.
Orders FNMA to buy $200B in MBS and then dumps the lower rates as Europe dumps treasury bonds. Art of the Deal
I always thought the same thing. Saudis kill team sure knew just where to find Khasshogi. He was critical of Jared’s best friend, MBS
He announced his MBS buying strategy. But the bond market response to the Greenland shit has wiped away all improvements made since he signed that up. So now rates are higher than before.
Things that would have drastically changed the world: 2001: Osama just ripped a J and chilled out 2008: MBS weren't fraudently rated 2015: Trump stayed on as the apprentice host 2016: We didnt shoot that gorilla
The decline accelerated after President Donald Trump directed Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) to purchase $200 billion in mortgage-backed securities (MBS)...
Dude I work here and these metrics are a core part of my job. You aren't counted as active unless you actively log into your account. My primary focus is a small sliver of MBS and the amount of impressions and activity my part of the codebase gets would make your head spin.
The reality is too much unreal wealth in America. Shortings, margin, loans for restricted securities, borrowings, selling of MBS’s again; the fact is the whole of the markets are going up on at least 5 times of the true amount of cash in the economy.
The ultra billionaires are only allowing all of this as long as their interests continue to be served. Trump's sudden turn towards populist/socialist policies like 10% credit card rate caps, executive overreach by purchasing MBS and investigating Powell, and bans on institutional purchase of single family homes suggest that he's willing to throw the ultra wealthy under the bus to save himself.
Those numbers are across all apps, so you have to consider Instagram, WhatsApp, and Threads in those numbers. I don't know if MBS users get counted in that total, but that would also bring the average daily use up considerably.
“Are we” is the worst question to ever ask in active investing (active investing is not just buying an ETF and holding). Figure out reasons why you do or do not want to hold something, whether that be statistically based (e.g., pairs trading), factor based (e.g., hold low P/E vs high P/E stocks) given the current economic background, or a more discretionary approach (e.g., I read an article about $200B of MBS securities are expected to be purchased, but I think Trump will influence more aggression so I’m going to buy stocks that appreciate with rising home values/falling mortgage rates ). By asking everyone else around you what they think and collectively weighing their opinions, you are in essence pricing in the market as it already is. No harm no foul, if you enjoy a passive based approach, but i would not expect enhanced returns from it. Reddit may be a little different given that it’s mostly retail and not institutional, meaning that you aren’t conversing with the heavy hitters.
I keep thinking about the scenes in the Big Short when the mortgage defaults were SKYROCKETING in subprimes, and the MBS didn't move. Didn't it take like... 8 months for the market to react? Feels like these things happen slower than you think... then all of a sudden. Probably the smart thing is to just watch and see...
It’s gonna crash. I keep contending it’s gonna be the credit card that is securitized…yeah just like mortgages were aka MBS - mortgage backed securities. Credit card is the same they package it up and sell it. I contend that is gonna break and it is already showing. Look up late car payments and late credit card payments. Both are going up last 12 months. The credit card that Lowe’s and Home Depot offer they don’t give a shit cause I don’t own that debt. They securitize it and sell it off.
"I also had to LEARN (the HARD way) \*when\* to sell Covered Calls & PUTS, when NOT to, when to take Profits early on CCs and PUTS, when you need to just BTC (Buy To Close) a losing Options Trade. For example, today's losses came from getting "caught" in an overnight 10% run-up in RKT last week, after Trump tweeted TWICE about Housing, where I should have closed the CCs after the 1st Tweet (and then dropped the $200B MBS bombshell afterhours). I knew RKT would get to this range, but I assumed it would get to today's level after Feb/Earnings. Then the tweets happened....." Basically it's about pricing, and timing your Options Buy/Sell, keep the Options sizes "manageable" and be willing to ROLL or BTC a losing position. In last week's case, I didn't close my CC's \*twice\* when I probably should have, when my the Tweet's came out (not wanting/being paralyzed from "taking the loss". Luckily, I had the weekend to lay out my plan for this morning, AND the J Powell news came out. Otherwise, my losses would have been 2-3x what they were).
Mango may be truly regarded, buying 200B in MBS to push rates lower, only to threaten JPowell right after, which rockets the 10yr straight back to where it was. Way to undo any progress and make a situation worse.
He just fundamentally doesn't understand what he is doing to the economy. The 10% interest rate on credit cards will make banks stop offering rewards & subprime borrowers will lose access to credit cards. The $200b MBS buyback from F&F will be a 5 month stop-gap, but it'll likely just keep the 10 year yield stable and/or MAYBE we'll see 25bp reduction in interest rates for mortgages loans. He may successfully cause a melt-up, but that's only because he doesn't understand that we are overheating right now and higher stock market doesn't mean healthier. We need a mean reversion and some pain to cool off, then we can go higher. I do have puts for QQQ expiry december, but that's just out of an abundance of caution. There is way too much volatility in the market and none of it is priced in (See VIX).
10% credit card interest cap and 200B MBS purchase were the other big news into the weekend. These may not have been enough so they had to strong arm Powell.
You are about to see the fed funds rate push interest rates down and the 10 year and 30 year yield go up. The fed only controls the short end of the yield. You'll see failed treasury bond auctions if the fed floods the market with QE (ie. buying MBS & Treasuries).
Moreso the printing / buying debt well after the crisis had passed, then not raising rates until inflation printed 9%. Also the lack of oversight of insider trading among Fed officials, also breaking the fucking Securties Act and buying individual corporate debt issuances and MBS.
That’s true for MBS pure (like MBB) but mortgage REITs hedge against interest rates for most of their book. I was wondering about the full impact of $200B. Thats two months worth of current coupon issuance.
I would still be very wary of investing in mortgages right now. Primarily MBS rates are impacted by the 10 year T note, which is more a response to inflation than any other outside influence. Fed cutting rates has almost no impact on it and lately has even pushed MBS rates even higher. MBS won't naturally fall until inflation drops, home prices ease, or the market broadly seems secure. Trump also said he wants Feddie and Frannie to buy $200b worth of bonds. That's about 1 days worth of activity. It won't move the market much. MBS needs to come down to somewhere in the low 5s to make refinancing worth it. The cost of refinancing adds years to your mortgage, so it doesn't make financial sense until rates drop enough that you see immediate savings. (Think of it this way - if I save $100/mo by refinancing, but it costs me $3,000, it would take 30 months to realize any savings... and at that point rates are hopefully even lower.) Another thing to keep in mind - only about 20% of mortgages right now are in the 6s. 50% are under 4%. That's not a HUGE pool of people who are going to refinance. https://imgur.com/a/7NUVJoX Personally I'd stay away from real estate right now. Until homes themselves correct (or interest rates drop to 2% again), it's going to stay rather stagnant.
This sounds more like a political message than a real economic policy. The president does not have the authority to unilaterally “instruct” the purchase of $200 billion in MBS, especially without any clarity on who would actually be buying them -the Fed, the Treasury, or the GSEs themselves. Moreover, a massive intervention in the mortgage-backed securities market carries serious risks: price distortion, inflationary pressure, and undermining the independence of monetary policy. If the goal is lower interest rates, that doesn’t happen through a Truth Social post, but through a coordinated fiscal and monetary strategy - and transparency.
This is a headline, but the mechanics matter more than the message. Buying $200B in MBS could compress mortgage spreads short-term, but without clarity on who has authority, how it's executed, and whether it conflicts with Fed policy, markets will likely treat this as noise unity details emerge. If anything, the uncertainty itself may keep rates sticky.
$200B of MBS will boost M2 money supply and mortgage related stocks. Hello inflation!
Wait what? Fed has been dumping MBS for a month.
Fannie Mae has been purchasing and warehousing more MBS on their books since Oct. They do have $132B in cash available.
> mortgage-backed security (MBS) is a type of asset-backed security (an "instrument") which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment bank) that securitizes, or packages, the loans together into a security that investors can buy. Bonds securitizing mortgages are usually treated as a separate class, termed residential;[1] another class is commercial, depending on whether the underlying asset is mortgages owned by borrowers or assets for commercial purposes ranging from office space to multi-dwelling buildings. So he's telling his guys to buy more stocks that they then use to buy your house and rent it back to your kids.
I types into gpt and 200B is 2% of the MBS market. Even gpt said this is nonsense. I fee like I’m being gaslit
depending on the type of banks. $200B increase in MBS purchase hurts regional banks the most while benefit investment banks. Bullish for MS & GS
We buying NAIL? Seems like an easy play if the admin is going to start pumping MBS and the housing market
Even “too big to fail” is beside the point. If that really does come to pass and the US guarantees private credit investments in AI datacenters that will only prolong the inevitable Investors will still want their money back in order to fund a better vehicle as was the case with housing and MBS in 2008. IMHO the AI investment cycle is doomed to collapse under it’s own weight at this rate unless someone achieves miraculous efficiency improvements. The things that AI can currently generate with the grid strain and investments we already have *are* impressive, but they aren’t sustainable and are already dicey enough that watering down quality to extract profits will probably kill the model. On the other hand the *future* investments are so staggeringly large that if they really honestly need that in order to achieve their stated goals then I have a hard time believing it will actually be cheaper *or better* than just using existing human labor. Right now it looks like everyone is dumping money into a slim chance of a moonshot technology (like fusion decades ago). Don’t get me wrong, the achievements of the chip manufacturers and data center designers are remarkable, it’s just that they barely have a use-case. It’s like if SpaceX suddenly offered the ability to launch an entire container ship to GEO orbit, but we’ve decided to use it to power a wind turbine. Like cool I guess, but where are the adults?
Sounds like the 2008 mortgage-backed securities (MBS) crisis. A housing bubble fueled by risky subprime loans, repackaged into complex MBS and sold with inflated AAA ratings, masking underlying risks. What could go wrong when the mortgage adjustable interest skyrockets and the lendee can no longer pay their mortgage on a house that is worth less than the mortgage?
1. Adjust the numbers for inflation. 2. Realize that repo lending increases during **quant tightening**, periods of economic duress, **and economic growth**. These are blips. 2020? That was fucking bailouts and it shouldn't have happened, then again, a lot of things shouldn't have happened, and they were a result of upstream events breaking fucking everything. It might be a start to a trend, but I see no underlying cause (where COVID? Where MBS collapse?), so right now I see it as simple liquidity maintenance. An oil change. It doesn't change the fundamentals (companies profitable, economic growth good) and doesn't change the thesis of no sell, only buy, to at a minimum hedge inflation.
1. Adjust the numbers for inflation. 2. Realize that repo lending increases during **quant tightening**, periods of economic duress, **and economic growth**. These are blips. 2020? That was fucking bailouts and it shouldn't have happened, then again, a lot of things shouldn't have happened, and they were a result of upstream events breaking fucking everything. It might be a start to a trend, but I see no underlying cause (where COVID? Where MBS collapse?), so right now I see it as simple liquidity maintenance. An oil change. It doesn't change the fundamentals (companies profitable, economic growth good) and doesn't change the thesis of no sell, only buy, to at a minimum hedge inflation.
TL;DR - markets gonna moon in 2026, BTFD Retard ber: >It's not actually QE if there's no duration!!! Meanwhile, Fannie and Freddie are substantially increasing their retained holdings of mortgages and MBS: https://www.bloomberg.com/news/articles/2025-12-15/fannie-freddie-quietly-add-billions-to-mortgage-bond-portfolios Increasing total holdings by 25% in just five months to $234B. They're estimated to increase by another $100B in the coming months. Add on to that: 1. Treasury continuing to aggressively restrict issuance. 2. Fed's massive balance sheet can still rollover T Bills to notes and bonds at any time they wish. 3. Even T bill buying will still provide some liquidity to duration eventually. If yields temporarily go up it's because *we have allowed them to* not because of some dire irreversible market trend or "vigilantes" imposing discipline.
Retard ber: >It's not actually QE if there's no duration!!! Meanwhile, Fannie and Freddie are substantially increasing their retained holdings of mortgages and MBS: https://www.bloomberg.com/news/articles/2025-12-15/fannie-freddie-quietly-add-billions-to-mortgage-bond-portfolios Increasing total holdings by 25% in just five months to $234B. They're estimated to increase by another $100B in the coming months. Add on to that: 1. Treasury continuing to aggressively restrict issuance. 2. Fed's massive balance sheet can still rollover T Bills to notes and bonds at any time they wish. 3. Even T bill buying will still provide some liquidity to duration eventually. If yields temporarily go up it's because *we have allowed them to* not because of some dire irreversible market trend or "vigilantes" imposing discipline.
Yes, both the dot-com bubble and the housing/MBS bubble were widely discussed as bubbles years before the actual crash. The key pattern is timing: bubbles don’t burst when people start calling them bubbles they burst when liquidity tightens and expectations break. The dot-com boom ran roughly five years after early warnings. Housing ran nearly a decade after “this is a bubble” talk began. So the existence of AI-bubble discourse doesn’t say much about when or even if it pops. It mostly tells us we’re in the narrative phase, not necessarily the terminal one.
Global liquidity deleveraging and the effects of how mortgage rates dropping can create an effect where a ton of refinancing happens, MBS durations shorten, banks & funds buy back treasuries to unwind shorts, bond yields fall further, which creates a massive liquidity injection, which then suppresses volatility across risk on assets like BTC. It’s basically a low volume liquidity boom that takes out the speculative ability for a high beta risk on asset like BTC to rip. It can actually get bad enough for it to get lower than $40k, but I use that figure as maybe a healthy medium.
That's interesting. But I'm a bit worried about this leveraged MBS business going on. Seems a bit fishy.
I get it, I do but those comments where it is reccomended are probably where this information or awareness should be raised. or in a post about it itself. Too often things get excused because there's this sense that the person raising the very relevant and valid ethical concerns are somehow not reliable or are being hysterical because there are other terrible things that they didnt mention. I think it normalizes acceptance personally. Im sorry I just hate to see these things minimized, but truly Fuck MBS AND fuck MSFT
Fuck MBS and question here mr ethical, why no one talk about what MSFT did here ? https://www.theguardian.com/world/2025/aug/06/microsoft-israeli-military-palestinian-phone-calls-cloud
First question to Saudi AI, why did MBS order the killing and dismemberment of Jamal Khashoggi? Second question, why is MBS a punk bitch
The damage hasn’t been felt yet. Why do people or understand how there is a time component to the world’s economy? At the end of the day the tariffs are not a significant amount of money on strict dollar values. Most people’s money is spent on homes. While building costs go up there is a huge lag effect there. Or if we look at many people’s second expense it’s their vehicle. The vehicle market isn’t healthy but remember people don’t it a new car every day. Further many retailers are cover the costs and hiding the increased prices. Only parts of the country have really experienced these in full effect. So I don’t understand how short sighted investors can be, time and time again. The MBS policy was changed under Clinton in 1999 but killed the economy under Bush in 2008. Fixed under Obama. I’m not faulting any party or person. Just using this example as one economic incident that took nearly a decade to go off. How can you sit here with a straight face say tariffs that are not even being fully felt have had no damage?
I will never buy another EA game again. They were always shit anyway but fuck the sultan MBS chopping off American journalist heads.
He’s not the first trillionaire. Will be the first public trillionaire. MBS is a trillionaire
Thats literally pocket change for the Arabs Qatar world cup cost them upwards of $200B - for a fuckin party. MBS could wipe his ass with $10B
He wants oil prices down. Idk how people don’t know this is a geopolitical pricing at this level. MBS has been playing nice controlling OPEC while we continue to improve and pump shale. US just can’t keep pumping $55 shale unfortunately.
See MBS being dumped on pension funds pre-2008
I'm doubtful on this. Rate drops won't help the residential real estate market at all. MBS rates are tied to the 10 year, not fed rate. So rate cuts won't make homes more affordable. With tariffs jacking up the cost of construction material, at best rate cuts will help offset the higher cost of construction. There's a lot that goes into residential housing sentiment but I think with how shaky the economy is people aren't going to rush to buy unless they feel like there's really good deals out there. And prices are still way higher than that.
All-out COVID QE was $80b a month in treasuries and $40b a month in MBS. I think the 'adjustment' going on right now outpaces the rounds of QE we had in 2009-2014 after the GFC.
Carvana hasn't publicly sold subprime since their 2025-N1 issuance. In the past they issued prime and subprime ABS notes at about the same frequency; they've issued 4 prime notes this year, so they've probably issued 1 public subprime note and 3 through Bridgecrest/their other secondary buyer that they won't disclose. The delinquency rate for all their notes are within the models for Morningstar/S&P Global but they rate their prime/subprime transactions based on internal metrics ("Deal Score") rather than FICO. Their prime issuance No FICO loans shot up from around 0.1% (I think?) prior to 2025 to ~3-5% this year, depending on the set of notes you're talking about (~5% in 2025-P4, ~3% in 2025-P5, I think?) All this to say is that their lending standards have declined drastically this year. Not sure how long it will take for subprime car loans to go bad vs. subprime MBS but they sure are playing the game!
It manipulated the entire bond market. If the Fed didn't absorb so much MBS debt and Tbills, interest rates would be much higher and the economy would slow down, because the rates would go higher if global markets had to buy another $4T in Tbills than they have already purchased.
$40bn of treasury purchases by Fed PLUS $15bn more of bill purchases due to MBS rolloff. The Fed debt financing QE has begun! Buy assets or be left impoverished.
Yes this is on top of converting MBS to Treasuries. They're printing $40B a month.
$40B initial on just T-bills is a high starting baseline, isn't it? Are they still doing the maturing MBS conversions too?
OMG. So many regards. They already announced they were keeping the balance sheet flat starting Dec 1. They are simply switching to allowing MBS to roll off and replacing them with short duration notes. Basically only purchasing as necessary to keep said balance sheet flat as other items on the balance sheet reach term.
The fed interest rate isn't really that important per se. It drives the liquidity and the liquidity drives supply/demand for buying Treasury bonds, that then sets the price/yield. So low interest rates by the fed means easier lending requirements, which means more money sloshing in the system. Now the fund part is QE. They are pivoting from MBS to Treasury bills, which will effectively be a form of yield control. Match that with eSLR buffer rate to 1% in April & we should have significantly more debt sloshing about the system. So really they are going to kick the can down the road another year until Open AI goes bankrupt because of competition & that 1.3 trillion dollar commit evaporates.
Nah Saudi Arabia are the ones debasing themselves here. Paramount–Skydance’s control of CBS has produced a lot of programming hostile to the Saudis and their agenda. They were going after them hard to try and convince Trump not to give MBS those F-35s a couple weeks ago. But Riyadh is now courting them pathetically anyway. Also the Ellison family doesn’t need money from the Gulf oil states. This shit is purely symbolic, just for Saudi and the others to show they’re still down for the ultra-right wing Zionist agenda.
I mean, back in the 2008 crash Goldman Sachs was telling their clients to buy MBS while they were selling MBS. There's video of Blankfein testifying (ie. having to admit) to this before congress. All to say, I don't trust anything the bankers say, ever. Yes, sometimes they are telling the truth, but they are just as often not.
So his buddy MBS and the Saudi fund are backing him too, with infinite cash
You gotta build a portfolio of high yield small business loans, mostly in construction. Your fixed income will make you feel like you are living on the edge, creating your own personal MBS crisis...
the Fed doesn't buy stocks dude. It buys back bonds/MBS, the proceeds from which are used by the former holds to buy stocks.
Yes - on its own it’s regular cash management by Treasury and would happen regardless/not cause for concern. This routine is to prevent spikes in repo rates/money markets stressing out. But Fed also officially stopped QT at start of the month. Now all treasuries/MBS will mature and principal reinvested. Buying more bonds and putting liquidity in system. Fed balance sheet doesn’t shrink but remains flat and sets up for QE should the market sneeze. Adding liquidity not ideal when currency devaluing, economy not looking certain, Fed talking about cuts. Note - I am biased and hate the Fed pumping money into system.
TBH we've known they were going to use the profits from MBS to buy treasuries for a while now.
No no no… it’s not QE… totally different. We’re just using the proceeds of maturing assets to buy shorter treasuries instead of MBS this time… Totally different this time. We’ll call it. Quantitive Re-easing. It’s QR! Yeahh.. we’re injecting liquidity to banks… sue me.
Nothing. First of all it is a massively volatile asset. Could easily still go up or down 20 % before christmas. But they needed to prop it up. If Bitcoin remained depressed, MSTR share prices would continued to drop. That would have meant all the leveraged MSTR ETFs would have been in trouble. And if those had to liquidate assets MSTR would drop significantly faster and then they might have to sell assets and then there goes the whole ballgame. Point is, the whole schabang is basically the subprime MBS crisis on speed. As of now however they are to small in size to wobble the market to much. So yes, It was likely an intervention. Some big hedge funds have put bets on retail´s stupid... I mean on MSTR. I loved how the guy on The Close talked this stuff up, claiming Bitcoin had to drop to 12k or so before MSTR was in trouble, because they had more than 50 billion in assets and only 700 million in yearly interest payments. Yes, genius, but they have only 70 million or so in actual revenue from the remnants of the business Strategy once was. Bitcoin does not pay dividends, pal. And if they don´t trade BC, that means, they would be out of cash in no time without selling fresh stock. And it is kind of cute, how this is framed as "dilution." They take equity of existing shareholders and sell it to new shareholders in order to pay a dividend for their old shareholders and the costs of business. If the only business that exists is new shareholders paying the interest of the old stakeholders, than there is a very much different word for that. Well, not my problem. If nothing else in this case the cards are very much on the table.