The Only Buyer of Mortgage Backed Securities Stupid Enough To Buy At Nose Bleed Prices

The only chump stupid enough to buy MBS paper at 2020 - 2021 prices has been the Federal Reserve.  They ceased their purchases in March (finally).  They were a full "day late and a dollar short".  These chumps bought bullshit paper at nearly full price.  Selling them at any point in the future is not an option unless they want to take a loss because no one in their right mind would buy them at the prices they would need to ask in order to cover their asses.  It is "hold until maturity" for the Fed.

They are "screwed, blued and tattooed" to use an old Mississippi term should they need to unload them quickly.  But, the Fed won't dump them anytime soon.  My thought is that, at some point in the future after the spotlight is no longer upon them, they will sell them at a deep discount to a group of their cronies but that is a "horse of a different color".  

You just have to remind yourself of how fucking corrupt and manipulative this country truly is and thoughts like this will pop into your head as if by magic.

Mortgage rates are rising because private investors who buy mortgage backed securities demand higher compensation for the risks associated with providing a long term loan to some loser to buy his or her shack.  The only chump at the card table has finally, mercifully, left the room.

Private investment can not compete with the Federal Reserve.  Why?  Because we don't have a fucking printing press (metaphorically speaking - they don't have an actual printing printing press but they can create digital credit, etc. - it's complicated, but they control the monetary supply of the country among other things).

Higher interest rates and higher underwriting standards will be headed toward the housing industry.  That will translate into fewer borrowers.  That will translate into job losses in many industries.  When the last housing bubble burst, the unemployment showed up in a lot of areas that were not part of the mortgage industry.  Builders of homes, people who make and sell home furnishings, appliance makers, etc. felt the pinch.  A lot of people make a living when some schmuck goes into the local bank with hat in hand to borrow for the purchase of his or her American Dream.  Increased inventory and lower prices on housing will be headed to many markets.  Who knows where this will lead.