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Trade Matrix: Bear Stearns -- MBS

Remains cautious on MBS in general. Both nominal spreads and OAS on par 30-year passthroughs seem too thin for current risks. Rates remain low, implied option volatility remains high and prepayments still run hotter than a half-price Rolex. Normally, heavy supply of new pools would push spreads wider into July. Still believes that push will prevail.

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