There will always be mortgages and a profitable spread..Sooooo please take your negativity somewhere else...Get a grip DR. You lost some green and now you want to take it out on the remaining longs????... That is Sooooooooo screwed up dude...Please just go away, We will be just fine without your negativity...
I have found something more extremely dangerous here. It is the stock prices of "Asset Managers" of all types. They are all down huge this year and are at their lows with very little movement on this three day rally. THIS IS A CLEAR SIGN that the stock markets are in trouble. Looks at the insider selling at the M-REIT managers, look at the inside selling at the mutual fund managers, like Manning Napier, Calamos Asset Managers, these are my two "Canaries in a Coal Mine" warning signs. Both making new lows monthly, weekly, the oscilations are getting faster and shorter, VERY OMINOUS SIGN. sell the rally.......fast.
These are actually real life victims of Mortgage REIT's. I have known many over the decades. The 1970's, Atico Mortgage Investors or Associated Mortgage Investors or Continental Mortgage Investors (aka Continental Bank of Chicago which collapse in the 1980's from the OIL Patch Crash.)
Those three mortgage REIT's went through a 5-10 year phase, some went quick, some lasted a decade, none made it past two decades, not even close. What was left was selling for pennies, the asset managers and the liquidators and the lawyers made all the money.
You will be taught a very painful lesson SHORTLY. Paying a high price for yield is no way to build a monthly income that is low risk. You buy an asset, you have yield and principle depreciation. Right now principle depreciation is higher than yield, hence you will have the illusion of $1,000 monthly income but when you do a balance sheet analysis your asset value will have decline 2,000. Since many people and companies have suspended "Mark to Market" valuations, through financial engineering, rosey scenaries, make believe recoveries, they live in a world of illusion. If you owned this stock a year ago, you essentially earning ZERO PERCENT, YOU MAY EVEN HAVE A LOSS, EVEN WHEN YOU ADD ALL THE DIVIDENDS IN YOUR ANALYSIS.
I HAVE SAID THIS SEVERAL TIMES SINCE JUNE. Now I will say it again. Selling pressure comes in as we near the 50-day moving average, funds and hedgers will be unloading to the buy the dip suckers. A bearish PUT spread makes the most sense, WE WILL RETEST THE AUGUST LOWS, GUARANTEED !
Not really, it is the smartest trade in town. The 50-day moving average and 200-day moving average is hitting very strong selling pressure. We are rallying now to the 50 day moving average. IT WON'T HOLD. We will sell off again, TRUST ME. SELL THIS NOW AND THANK ME in November - December.
We are looking at two possible rate hikes in the next two months. One in October and one in December. The economy is a lot stronger than what employment numbers are showing. The frugal tight employers are actually hiring the most productive and hardest workers ever, hence the lag in the employment figures. The real productive output is soaring, HENCE THE FED IS BEHIND THE CURVE. Business is booming, profits are booming, look at the price run-up in new car prices, sales volumes, new home purchases at the high end, price rise, EGGS up 300% in last 24 months. Beef prices up 50% in last 12 months. The economy is soaring. Rents are up 20-30% in big cities less in rural areas. THE ECONOMY IS SMOKING. The sad fact, there are too many young people all over the world from overproduction of humanity. Technology and simplified our consumptions and services, on a 10 year, 20 year and 30 year historical comparison. Everyone is more and more productive than ever, we get 30, 40 50 60 miles per gallon from a gallon of gas, i.e., the continued collapse of the "Oil Monopoly". Debt slavery is booming around the globe and debt keeps get piled on to more debt. RATES WILL RISE,,,,TBT will go back up and you can take that to the bank.
If you had any sense, you would sell into this rally and buy this back at 16-17 in the next descending triangle down. Don't you understand the illusions and distortions the FED has done to the economy. Even Trump said on Sat. that he is reducing his exposure to the "Carry Trade". The San Francisco FED put out a study that said stock investors are expected to loose 40-60% over the next 3 years. The warnings are starting to be announced. Yellen timidity in raising rates is just a warning to buy time for the "yield seekers" who are going to get cleaned out. I WOULD SELL INTO ANY RALLIES, YOU CAN THANK ME IN 1-2 YEARS. You can start strategic shorting into the 3-5 days into this rally, the market is way overbought now. Shortcovering by weak shorts, distorted hype that rates will stay low and the economy is struggling, all BULL in this bull market that end in May 2015. TBT looks tempting at 41.
I trade TBT on the rate news, always have. Rates will rise. Right now the FED played to Wall Street and now the technically rally and forcing shorts to cover. This is the oscillations at the top of the market, it goes down dramatically and there are violent sharp rallies. Remember the quarter spinning on the table, it gets more erratic. Same thing with rates. I would buy in the 38-41 range and hold for a rally of 2,4,6 or 10 points. Or buy at 38 and hold for 3 years, it should be 200, on paper. As for m-REIT's, a lot of assumptions and financial engineering went on in arriving at book values to stabilize, look for restructuring like ACAS is doing to become very common. This is the preparation phase for the GREAT ASSET devaluation coming in the future, as rates rise. It is a process, educate your selves now to take advantage and make money with low risk.
Scottrade's analyst MarketEdge just (10/2/2015) upgraded AGNC to "LONG" and Second Opinion gives it their second highest rating (a -1 on a 0 to -5 scale). I will add more to my account with the goal of getting a $1000/month income from this investment. Interest rates will stay where they are or go lower between now and 2020 according to the guys I respect.
Sentiment: Strong Buy
You are absolutely correct about all of this.
The next mREIT to plunge into oblivion is WMC. It's clearly on the way. It got all its hedges completely wrong.
And somehow the MORON thinks this is a bad thing. In the simplest definition: In a normal market, futures price would be greater than the spot price due to the effect of cost of carry. This is called a normal market and in recent years 'CONTANGO'. This moron is trying to mis-apply a definition from the futures market to equities.
Why 'mis-apply'? 1) excepting for opportunity cost, possible forgone interest (big deal with rates at tenths of a percent) and margin costs for those using it__equities do not have a cost of carry. 2) He/she defines it as a downward future slope__when it is exactly the opposite. He/she purports 'contango' is a bad thing (only for those rolling contracts forward) or (those stupid enough to through coin at ETPs; such as "TBT").
Definition of 'Backwardation': Backwardation, is the market condition wherein the price of a forward or futures contract is trading below the expected spot price at contract maturity. The resulting futures or forward curve would typically be downward sloping (i.e. "inverted"), since contracts for further dates would typically trade at even lower prices.
In actuality it is an academic argument whether a forward sloping or downward sloping is the "Normal" market. That is because the median average differs between different commodities and financial futures contracts.
It is argued that backwardation is abnormal, and suggests supply insufficiencies in the corresponding (physical) spot market. However, many commodities markets are frequently in backwardation, especially when the seasonal aspect is taken into consideration (perishable and/or soft commodities).
However, economist John Maynard Keynes argued that in commodity markets, backwardation is not an abnormal market situation, but rather arises naturally as "normal backwardation" from the fact that producers of commodities are more prone to hedge their price risk than consumers.
For sure Chumps is what is 'ABNORMAL'
Complete lie -Agency backed securities are going up in price and short term interest rates have just given up on a Fed raise and gone down!
AGNC has traded down this week despite the fact it's book value and interest rate spread have both improved dramatically in the past week.
AGNC trades at an incredible low value to book and always has the option to sell portfolio and buy shares (management interests aside). Based on today's news we can and should have a reversal of this trend.
Take small profit and buy puts. MBS are getting creamed vs swaps (ie: liabilities up a bunch more than assets). When BVs get announced later this month people are gonna be shocked.