| Mar 22, 2011 11:51AM On March 11th we wrote, "Lots of headlines to digest lately. What region is the market focused on again? North Africa, the Middle East, Spain, Portugal, Greece, China, Japan, the U.S.? What trade is the market working right now? Long Oil? Short Stocks? Long Gold? Short Bonds? Short the Dollar? Wait. What about economic fundamentals? Expansion? Contraction? Inflation? Deflation? Reflation? Rate Hike? QEIII? Certainly enough to make you wonder what's priced into asset valuations and what isn't priced... Mar 22, 2011 9:49AM Well, it seems like the market has grown a little jaded about watching the turmoil in the Middle East, the European debt crisis, and the Japanese nuclear & tsunami havoc. What to do? The U.S. Treasury announced that it will begin an "orderly wind down" of its $142 billion MBS portfolio over about 1 year by selling roughly $10 billion agency MBS's per month . In this case, "agency" means Freddie and Fannie securities, as the Treasury does not have any Ginnie securities in this group, which started...
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