- Mortgage-backed securities hit a three-month winning streak after outperforming US Treasuries through November, Bloomberg reported Monday.
- The surge was primarily driven by lower refinance rates and a drop in volatility for mortgage-backed assets. When more borrowers refinance loans with lower interest rates, the securities lose their appeal against Treasury bonds.
- The assets gained new fame in 2008 when subprime mortgage-backed securities powered the year’s housing market meltdown and subsequent recession. Those who bet against the assets won millions and even billions when the housing bubble popped.
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