MBS
October 10th, 2008 9:48 am | by John Jansen |Mortgages got smoked this morning as mutual funds and money managers engaged in what one dealer described as “panic selling”. At one point mortgages had underperformed swaps by nearly a point. There seems to be some stability and improvement now but it would not be difficult to engender another sell off.
Swap spreads were well behaved with 2year through 10 year spreads wider by about a basis point. Spreads in the 30 year sector were tighter by about 8 basis points. I have not conversed with anyone regarding that but I would bet it is the same shenanigans from exotic desks which has motivated that sector over the last few days.
