Some in the “there are no bad bonds, there are only bad prices” club (or perhaps today, the “there are no bonds club”) continue to espouse a love of nonagency RMBS  — but for how long?

Although some fixed-income people in the business objected when I made gambling analogies in reference to nonagency RMBS between 2005 and 2007, I think time has proven that I am right saying about any investment and particularly those bonds — you pay your money and you take your chances. Of course, you can pay way less money these days. The “discount” and the upside may not be as good as it was, but some believe there are bonds in this category that still have room to run.

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