 | "MG, would you mind expounding on that comment?..." |
 | "Let's begin by recalling an analogy we sometimes use of the 'Master and the Dog.' The overall momentum in bond markets is like the Master. The best benchmark we have for that is 10yr yields, which is why we talk about them so much. MBS are like the dog (and no, there's no deeper meaning here). The master..." |
| | "In this analogy, the "leash" is stretchy..." |
| | "when MBS are underperforming, they're like the dog pulling back reluctantly on the leash. Right now it's pretty stretched. If the master continues to walk forward, it could make for a relatively rapid move forward by the dog...." |
| | "That's what I meant by "slingshot" if broader markets improve...." |
| | "conversely, if broader markets lose ground, MBS will have already been lagging behind, and thus potentially not lose ground at the same pace...." |
| | "thank you MG, that really helped..." |
 | "MG so timely just shared analogy w/client who inquired about 10yr/MBS relationship..." |
 | "Still don't trust this rally just yet. Need some follow through IMO. I think for short timers it's a lock opportunity...." |
| | "yeah, it's still pretty sudden. And just because MBS are better positioned to soak up weakness doesn't mean a run to 2.66 in Treasuries wouldn't hurt..." |
