FTN Financial last week took a look at relative value of 15-years versus 30-years, and recommended whole loan 10/1 hybrid ARMs as a way to take advantage of the cheapness in the 15-year sector.

Analysts started first noted that the 30-year market is four basis points cheap relative to the 15-year sector. In looking at specific coupons, they compared 30-year 6s to 15-year 5.5s, and 30-year 5.5s to 15-year 5s. This comparison reveals that

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