Freddie Mac-No Politics (FMCC)

[obiterdictum]

What are your thoughts on the 10 yr treasury as the GSE's profits are closely tied to it?

What evidence and immediate factors beyond constructed technical charts and economic equations and various assumptions held without corresponding material facts are there that GSE profits are closely tied to 10 yr Treasuries?

Numerical correlations can be spurious. For example, in a private multiple regression analysis done some decades ago for a university professor, I found that tin roofs (among other personal and household factors) are highly correlated with greater maize production in Zambia. If a farmer had a tin roof on his home, it was virtually guaranteed that that farmer's' maize production will always be greater than that of his peers without tin roofs.

Of course, correlation is not causation and putting up a tin roof was not a guaranteed method by any stretch of the imagination a viable means to increase the number of 80 kg bags of maize produced in a rural village's farming season.

In same manner, in what specific manner are GSE's profits, that is, guaranty fee income, net interest income, and other income affected by fair value losses and gains, home prices, mortgage interest and guaranty fee rates, number of mortgage originations, etc., closely tied to 10 yr Treasuries?

Those assumed close ties are invisible to me.