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PLS market is on track to notch record volume this year

The private-label securities (PLS) market recorded a strong first quarter and is projected to finish 2022 with record volume.
The post PLS market is on…



Despite the turbulence in the U.S. economy fueled by inflation, international tensions and rising mortgage rates, the private-label securities (PLS) market recorded a strong first quarter, at nearly $43 billion in issuance, and is projected to finish 2022 with record volume.

That $43 billion mark represents the second-highest issuance total since the global financial crisis (GFC) some 15 years ago and also was nearly two-and-a-half times above issuance volume for the first quarter of 2021, according to a recent market assessment by Kroll Bond Rating Agency (KBRA). 

The report focuses on so-called RMBS 2.0 deals, defined as all post-GFC residential mortgage-backed securities issuance in the prime, nonprime (including non-QM) and credit-risk transfer (CRT) spaces — the latter typically issued by the government-sponsored enterprises.

“In our view, this [performance] is due to the inherent diversification of RMBS 2.0 deals among subsectors differently sensitive to interest rates, a large variety of issuer types, and a quickly appreciating home-price environment,” the KBRA report states. 

Those dynamics lead KBRA to project record nonagency (private label) residential mortgage-backed security (MBS) issuance for the year, though at a declining rate in the coming quarters. 

“We continue to expect 2022 will close as a record post-GFC issuance year with almost $131 billon in aggregate [RMBS 2.0] issuance,” KBRA reports. “… KBRA expects Q2 2022 to close at approximately $38 billion, and Q3 to decrease further to $29 billion across the prime, non-prime, and credit-risk transfer segments because of rising interest rates and an unfavorable spread environment for issuers.

“… To date,” the KBRA report continues, “issuance spreads [have] widened rapidly for all sectors as supply and demand volatility hit nearly all-time highs.”

The spread is a measure of relative yield value between two types of debt instruments, such as a benchmark U.S. Treasury bond and a mortgage-backed security. As spreads widen in an unfavorable way for issuers, MBS prices tend to decline. Bond prices, however, move in the opposite direction of yield — with a higher yield (the ratio of a bond’s coupon to its price) deemed compensation to an investor for the added risk in a volatile market.

Among the factors industry experts contend are contributing to the volatility in the MBS market, and consequent deal-execution challenges, are fast-rising interest rates in combination with the Federal Reserve’s tapering of its MBS holdings. 

“So the Fed is clearly on a rate-hiking cycle,” said Seth Carpenter, chief global economist at Morgan Stanley, in a presentation at the recent Mortgage Bankers Association’s (MBA’s) Secondary and Capital Markets Conference & Expo in New York City. 

“They raised rates 25 basis points in March,” Carpenter continued. “They raised rates 50 basis points in the May meeting. And [Fed] Chair [Jerome] Powell was clear that the next couple of meetings looked like 50 basis points [hikes], so call it the June meeting and the July meeting.”

Carpenter said Morgan Stanley expects rate bumps after July are likely to return to the 25 basis points level until “we get to a peak of about 3.25% [for the Federal Funds rate] early next year.”  

For now, the Fed is not purchasing new MBS to hold in portfolio, and it also is allowing a portion of its existing portfolio to run off its books as those securities mature. But what happens if the Fed’s run-off strategy isn’t sufficient to meet its MBS divestment goals?

“They’re going to let their mortgage-backed security portfolio prepay without being reinvested, and there will be a cap of $35 billion [a month] starting at half that for the next three months,” Carpenter explained. “Our forecasts from my colleagues at Morgan Stanley suggest that given what the Fed has in their portfolio, [MBS] prepayments [run-off] are unlikely to get up to $35 billion a month.

“Will they end up then selling mortgage-backed securities on an outright basis to get up to that $35 billion level? I think the answer has to be the following: We’re not sure.”

The Fed’s continuing effort to wind down its $2.7 trillion MBS portfolio is expected to fuel widening spreads in the MBS market because it creates more supply to be absorbed, Bloomberg intelligence analyst Erica Adelberg explained in a recent Bloomberg report. That, in turn, puts downward pressure on pricing,

Regardless of how the Fed proceeds in shrinking its MBS portfolio, however, Mike Fratantoni, chief economist for the MBA — who also spoke at the recent MBA conference — expressed confidence that the MBS market will weather the storm. He described it as the “second most liquid market in the world.” 

“There are buyers domestically and abroad for mortgage-backed securities,” he added.

The issue ahead that Fratantoni zeroed in on is investors’ reactions to perceived market volatility, sparked by uncertainty. “Even if it’s not going to result in a [Fed] sale [of its MBS holdings] … every sort of rumination about that has the potential to lead people to change their position,” he said.

Sonny Weng, vice president and senior credit officer at ratings firm Moody’s Investors Service, explained in a recent interview focused on the PLS market that because of inflation and the volatile rate environment, coupled with an abundance of MBS supply — due, in part, to the Fed’s monetary policies — investors are demanding a higher MBS coupon, or the rate of interest paid annually on a note at par value.

The gap between rates on mortgages currently, compared with the much lower rates in 2021, also is creating another layer of deal-execution challenges. A recent market report by digital mortgage exchange and loan aggregator MAXEX reflects that reality.

“…Private-label securitization (PLS) spreads continued to move wider throughout April as issuers digested lower-rate mortgages [3% or lower] that remain in inventory as current market rates rise rapidly,” MAXEX states in its May market report.

Weng added: “And obviously, when your mortgage pool has a lower [interest] rate, and you also have to cover certain fees, a higher coupon translates into a higher funding cost for the issuers.”

There is a light at the end of that pipeline, however, according to MAXEX. “We expect this trend to continue in the short term until issuers’ pipelines stabilize and, over the coming months, note rates closer to 5% migrate to PLS [private label securities],” the company’s report states.

KBRA also indicates that impacts from the pandemic and the war in Ukraine “are important factors in our issuance projections for 2022, and these factors may also influence 2023.”

“Mortgage rates are generally expected to increase further as the Fed attempts to cool down rampant inflation and the housing market, impacting issuance as well,” KBRA’s market-forecast report states.  “…We expect the prime sector to decline in 2022, mainly due to sharp interest rate increases that have decreased overall mortgage production….

“Similar themes could continue through 2023, causing prime issuance to be negatively impacted further. The non-prime sector’s expected issuance is projected to increase moderately in 2023 as spreads normalize after rising precipitously in Q2 2022.”

Another bright spot going forward this year for the PLS market, according to KBRA and MAXEX, is the potential for solid non-agency PLS issuance backed by investment properties and other more “esoteric” offerings. 

“… We are still seeing an increase in the number of second homes and investor property loans being traded through the exchange to avoid the LLPA [loan-level price-adjustment] increase instituted by the FHFA [Federal Housing Finance Agency] for second-home and high-balance loans delivered to the agencies after April 1,” the MAXEX May market report states.

KBRA reported that MBS issuance backed by mortgages on nonowner-occupied properties (NOO), such as investment properties and second homes, “was strong in Q1 2022, with over 10x year-over-year growth.”

“We continue to expect further issuance in this segment…,” the KBRA forecast report states. “This expectation is partly due to existing NOO securitization pipelines built through the end of 2021 and early 2022. 

“… In addition to traditional RMBS 2.0 issuance, reverse mortgage, mortgage servicing rights-backed issuance, home equity line of credit-backed deals, PLS CRT, Ginnie Mae early-buyout (EBO), and other esoteric RMBS transactions are also poised to increase in the remainder of 2022 and 2023 as interest rates rise further.”

The post PLS market is on track to notch record volume this year appeared first on HousingWire.

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New Hampshire Governor Vetoes Ivermectin Bill

New Hampshire Governor Vetoes Ivermectin Bill

Authored by Alice Giordano via The Epoch Times (emphasis ours),

New Hampshire’s Republican…



New Hampshire Governor Vetoes Ivermectin Bill

Authored by Alice Giordano via The Epoch Times (emphasis ours),

New Hampshire’s Republican Gov. Chris Sununu vetoed a bill that would have made Ivermectin available without a prescription.

Ivermectin tablets packaged for human use. (Natasha Holt/The Epoch Times)

The Republican governor vetoed the bill on June 24, the same day that the U.S. Supreme Court overturned Roe v. Wade. Some fellow Republicans questioned the timing.

It certainly seemed like a convenient way to bury a veto of a bill that won support from the vast majority of Republicans in New Hampshire,” JR Hoell, co-founder of the conservative watchdog group RebuildNH, told The Epoch Times.

Hoell is a former four-term House Republican planning to seek re-election after a four-year hiatus from the the New Hampshire legislature.

Earlier this year, the New Hampshire Department of Children Youth and Family (DCYF) tried to take custody of Hoell’s 13-year old son after a nurse reported him for giving human-grade ivermectin to the teen months earlier.

Several states have introduced bills to make human-grade ivermectin available without a prescription at a brick and mortar store. Currently, it can be ordered online from another country. In April, Tennessee became the the first state to sign such a measure into law. New Hampshire lawmakers were first to introduce the idea.

Both chambers of the state’s Republican controlled legislature approved the bill.

In his statement explaining the veto, Sununu noted that there are only four other controlled medications available without a prescription in New Hampshire and that each were only made available after “rigorous reviews and vetting to ensure” before being dispensed.

“Patients should always consult their doctor before taking medications so that they are fully aware of treatment options and potential unintended consequences of taking a medication that may limit other treatment options in the future,” Sununu said in his statement.

Sununu’s statement is very similar to testimony given by Paula Minnehan, senior vice president of state government regulations for the New Hampshire Hospital Association, at hearings on the bill.

Minnehan too placed emphasis on the review that went into the four prescription medications the state made available under a standing order. They include naloxone, the generic name for Narcan, which is used to counter opioid overdoses, hormone replacement therapy drugs, and a prescription-version of the morning after pill.

It also includes a collection of smoking cessation therapy drugs like Chantix, which has been linked to suicide, depression, and other neuropsychiatric conditions. Last year, Pfizer, the leading maker of the FDA-approved drug, conducted a voluntarily recall of Chantix. Narcan has also been linked to deaths caused by severe withdrawals that have led to acute respiratory distress.

Rep. Melissa Blasek, a Republican co-sponsor of the New Hampshire ivermectin bill, told The Epoch Times, that one could veto any drug-related bill under the pretense of overdose concerns.

The reality is you can overdose on Tylenol,” she said. “Ivermectin has one of the safest track records of any drug.”

The use of human-grade ivermectin became controversial when some doctors began promoting it for the treatment and prevention of COVID-19. Government agencies including the FDA and CDC issued warnings against its use while groups like Front Line COVID-19 Critical Care Alliance (FLCCC) heavily promoted it.

Some doctors were  disciplined for prescribing human-grade ivermectin for COVID-19 including a Maine doctor whose medical license was suspended by the state.

Read more here...

Tyler Durden Thu, 06/30/2022 - 20:30

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Aging-US | Time makes histone H3 modifications drift in mouse liver

BUFFALO, NY- June 30, 2022 – A new research paper was published in Aging (Aging-US) on the cover of Volume 14, Issue 12, entitled, “Time makes histone…



BUFFALO, NY- June 30, 2022 – A new research paper was published in Aging (Aging-US) on the cover of Volume 14, Issue 12, entitled, “Time makes histone H3 modifications drift in mouse liver.”

Credit: Hillje et al.

BUFFALO, NY- June 30, 2022 – A new research paper was published in Aging (Aging-US) on the cover of Volume 14, Issue 12, entitled, “Time makes histone H3 modifications drift in mouse liver.”

Aging is known to involve epigenetic histone modifications, which are associated with transcriptional changes, occurring throughout the entire lifespan of an individual.

“So far, no study discloses any drift of histone marks in mammals which is time-dependent or influenced by pro-longevity caloric restriction treatment.”

To detect the epigenetic drift of time passing, researchers—from Istituto di Ricovero e Cura a Carattere Scientifico, University of Urbino ‘Carlo Bo’, University of Milan, and University of Padua—determined the genome-wide distributions of mono- and tri-methylated lysine 4 and acetylated and tri-methylated lysine 27 of histone H3 in the livers of healthy 3, 6 and 12 months old C57BL/6 mice. 

“In this study, we used chromatin immunoprecipitation sequencing technology to acquire 108 high-resolution profiles of H3K4me3, H3K4me1, H3K27me3 and H3K27ac from the livers of mice aged between 3 months and 12 months and fed 30% caloric restriction diet (CR) or standard diet (SD).”

The comparison of different age profiles of histone H3 marks revealed global redistribution of histone H3 modifications with time, in particular in intergenic regions and near transcription start sites, as well as altered correlation between the profiles of different histone modifications. Moreover, feeding mice with caloric restriction diet, a treatment known to retard aging, reduced the extent of changes occurring during the first year of life in these genomic regions.

“In conclusion, while our data do not establish that the observed changes in H3 modification are causally involved in aging, they indicate age, buffered by caloric restriction, releases the histone H3 marking process of transcriptional suppression in gene desert regions of mouse liver genome most of which remain to be functionally understood.”


Corresponding Author: Marco Giorgio – 

Keywords: epigenetics, aging, histones, ChIP-seq, diet

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About Aging-US:

Launched in 2009, Aging (Aging-US) publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.

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FDA asks for COVID boosters to fight Omicron’s BA.4, BA.5 subvariants

The U.S. Food and Drug Administration on Thursday recommended booster doses of COVID-19 vaccines be modified beginning this fall to include components…



FDA asks for COVID boosters to fight Omicron’s BA.4, BA.5 subvariants

By Michael Erman

June 30 (Reuters) – The U.S. Food and Drug Administration on Thursday recommended booster doses of COVID-19 vaccines be modified beginning this fall to include components tailored to combat the currently dominant Omicron BA.4 and BA.5 subvariants of the coronavirus.

The FDA said manufacturers would not need to change the vaccine for the primary vaccination series, saying the coming year will be “a transitional period when this modified booster vaccine may be introduced.”

FILE PHOTO: Signage is seen outside of the Food and Drug Administration (FDA) headquarters in White Oak, Maryland, U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

The new booster shots would be bivalent vaccines, meaning doses would target both the original virus as well as the Omicron subvariants.

The decision follows a recommendation by the agency’s outside advisers to change the design of the shots this fall in order to combat more prevalent versions of the coronavirus. read more

BA.4 and BA.5 are now estimated to account for more than 50% of U.S. infections, according the U.S. Centers for Disease Control and Prevention, and have also become dominant elsewhere.

The FDA said in a statement on Thursday that it hoped the modified vaccines could be used in early to mid-fall.

Pfizer Inc (PFE.N) with partner BioNTech SE (22UAy.DE) and Moderna Inc (MRNA.O) have been testing versions of their vaccines modified to combat the BA.1 Omicron variant that caused the massive surge in cases last winter.

Although they have said those vaccines worked against BA.1 and the more recently circulating variants, they did see a lower immune response against BA.4 and BA.5.

The companies had already been manufacturing their BA.1 vaccines, and said on Tuesday that swapping to a BA.4/BA.5 version could slow the rollout.

Pfizer/BioNTech, which on Wednesday announced a $3.2 billion contract to supply more COVID vaccine doses to the United States, said they would have a substantial amount of BA.4/BA.5 vaccine ready for distribution by the first week of October. read more

Moderna said it would be late October or early November before it would have the newly modified vaccine ready.

Reporting by Michael Erman in New Jersey and Leroy Leo in Bengaluru; Editing by Jonathan Oatis and Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.

Source: Reuters

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