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An introduction to First National Financial's Treasury Guy Market Commentary blog
September 7, 2019
12:00 pm
Doug
British Columbia, Canada
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First National Financial Corporation, the largest non-bank mortgage originator and servicer of mortgages with roughly $110 billion in mortgages under administration, has a Market Commentary blog for which it routinely features its Chief Operating Officer and Head of Treasury, Jason Ellis, to provide weekly financial market and economic commentary. I've been following it for a few months and I like Ellis':
- use of humour;
- brevity and clever language use; and,
- did I say humour?

In short, his commentary manages to make me chuckle every time, like this week when he writes, "[t]he Chicago Board of Options Exchange Volatility Index (“VIX”) uses option prices to track volatility in the S&P 500. The VIX spiked in August to its highest levels since January. More telling though is the shape of the VIX futures curve. One month contracts cost more than two month contracts, a rare condition known as ‘backwardation’ that has typically accompanied turbulence in equity markets and bearish tilt in sentiment. In case you were wondering, the normal state of the futures curve is not known as ‘forwardation’. It’s called ‘contango’. Obviously."

I also liked the way he succinctly (he's always succinct) summarized recent bond market moves with this brief summary, "[i]t’s been a turbulent couple of weeks in fixed income. Using the 5 year Government of Canada bond yield as a barometer, we’ve climbed from a low of 1.13% on Wednesday August 15th to a high of 1.35% on Thursday August 22nd before falling all the way back down to 1.14% on Wednesday only to bounce back up to 1.34% today." (Today being yesterday's date.)

I also like how varied his commentary is - it runs the gamut from economic commentary, financial and/or economic data analysis, financial market commentary, and even politics. Note this:

"Home Trust announced a roadshow for an inaugural near prime/alt-a RMBS transaction. The roughly $500 million sequential pass through issue will feature an AAA rated note with 15% subordination. No word yet on indicative spreads. The issue marks a potentially important development in the diversification of near prime funding strategy for Home Trust. The news closely follows Equitable Bank’s announcement last month that it is developing a covered bond program. Currently, both lenders depend almost exclusively on CDIC insured deposits to fund their near prime mortgage programs."

You don't need to understand all that, but I included it because it's indicative of Home Trust and Equitable Bank further diversifying their funding sources to be less dependent on GICs and HISAs, which may not be promising for us GIC investors. 😉

Blog link: https://www.firstnational.ca/commercial/resources-insights/article/market-commentary-rates-this-week-s-boc-meeting-data-and-more.-read-about-them-here

Definitely a blog worth following, in my view! sf-cool

Cheers,
Doug

September 11, 2019
8:32 pm
Bud
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FNF is the go to for some mortgage brokers. They are a good provider competitive but not the very top rate and apparently their break fee rules convoluted. They're up front where i have a problem is brokers may be holding some clients captive close to close in order to put them into fnf

https://www.cbc.ca/news/business/go-public-mortgage-prepayment-penalties-first-national-1.4160456

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