Mortgage Credit News by Louis Barnes

Michael Burry posted this to his Twitter page late Friday, thought I’d share.

…The CPI news this morning was so awful that it changed the bond market’s view of Fed trajectory, and the weakest sector broke. In bond jargon, MBS went “no-bid.” No buyers for MBS.

…The pause in housing between the first collision and second is elongated because of human nature. Someone desperate to buy a house is still desperate, and modestly relieved to buy even at a higher price and rate so long as not forced into an unlimited auction. Now it’s time for Wile E. Coyote in his Acme sneakers, running off into thin air and all okay until he looks down.
Looking down… MBS are such a weird market that other markets have not processed what is happening. Stocks are down 2% today, but would be down a hell of a lot more if considering what a full-stop to housing will mean…