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"One trader said that the competition from the FDIC guarantee has been a real wet blanket for the entire sector and there is no active marginal buyer."
Here's my comment. It's a small example, but clear:
“One trader said that the competition from the FDIC guarantee has been a real wet blanket for the entire sector and there is no active marginal buyer. So spreads can worsen from these levels and there is no rush to pick a bottom.”
Isn’t this one more example of how government guarantees, either explicit or implicit, effect the markets.
By Don the libertarian Democrat on Oct 20, 2008 | Reply
“One trader said that the competition from the FDIC guarantee has been a real wet blanket for the entire sector and there is no active marginal buyer. So spreads can worsen from these levels and there is no rush to pick a bottom.”
Isn’t this one more example of how government guarantees, either explicit or implicit, effect the markets.
By Mario on Oct 20, 2008 | Reply
Hi,
what exactly is that “agency market”? Google isn’t really helpful on that one…
Thanks! - Mario
By John Jansen on Oct 20, 2008 | Reply
agency market is the market for FNMA and Freddie MAC bonds. It would also include Home Loan Bonds as well as FFCB paper.
Principally it is FNMA and Freddie Mac