We already know the answer to ZIRP. Perhaps we have to invent a new acronym: NIRP. ZIRP did not work out so well. NIRP I think will be even worse. You have properly identified the problem...and perhaps the truly big play..eg.. owning the common of the MREIT that unwinds and pays out the common holders. I remain wary, until a large activist shows up to force the issue. This however is may be like waiting for Gadot.
You sound exactly like the amateur I knew you were. You Don't understand it...so instead of asking Gracie a Q , you are "not going to read all that". You can have your 5 mins back my friend, but it will cost you.....probably A LOT.
You can head up the board of directors tomorrow as far as I am concerned.
Kain could sell off our highly liquid assets, realize an instant 20% gain.
Then reform as a different company .
No big surprise that I think the Fed hoisted an airball in December with it's pea shooter rate rise, but when your talking about soap bubbles (which is what I think the majority of developed nations economies are these days) a pea shooter works. I won't bore everyone with drawn out view on stocks (lower), dividends (way lower), interest rates (lower) but in trying to keep on topic, when the Fed moves to ZIRP sometime in the first half of 2016 will that be good or bad? There's a couple of obvious fallouts, when the US ten year gets to 1% (now before you poo poo that notion remember that Italy and Spain are currently at 1.5% and they aren't going to pay you back), prepayments will be up substantially and margins will be down so dividend yields will probably be in the mid/high single digits, the real question is where will the MBS repo vs LIBOR swap rate basis be when IOER is negative. My guess is +25bps or more, meaning that even if LIBOR is negative, no depository will lend you balance sheet at a rate less than 0%. On 6 turns of leverage this will cost 150bps which could put dividend yields even lower into the mid single digits. This sounds like a problem to me and I don't see how the mREIT complex will continue in a ZIRP world. That means that a few of these will probably unwind and return BV to investors but figuring out who won't be easy. I will repeat what I have said before that the value of shrinking future cash flows (ie: stocks) are likely to continue to be revalued lower and that there is no magic dividend tree (ie: with global dollar GDP in a free fall, dividends must follow, it's mathematically impossible for it to come out any other way), and we have have 24 dividend reductions so far this year. If you simply must own something with a US corporations name on it why not pick up 200bps, move up the capital structure to a safer spot and buy the long term debt of your favorite US company? Seems like a no brainer to me.
None at all Nicky, My cost basis is now in the low $16s and I still get my .20pps every month
in the drip program. In for the long haul here, Great upside for AGNC. You better get on board before the train leaves the station. Thanks
Sentiment: Strong Buy
My views on the FED are not "misconceptions". They are facts. People like nickspitter think they know everything and post their dribble here every day. He is ignorant of who initiated the US central bank, the reason for it, and the total lack of oversight by any branch of government. Yes, the president appoints the chairman of the FED. But from a very short list given to him by the FED. The FED is a private bank made up of private bankers, some not even in the US. People like Nickspitter need to get an education before they spew their bile all over these pages.
...do you ALWAYS have to be such an #$%$ to everybody that may have misconceptions? You truly are the board "jerk-off"!
"How could agnc plummet, starting 2 years ago, with only 1 rate hike ?"
That was the great manipulation named taper tantrum. It sucked 60% of my equity. I think it was designed to kill the bond markets which had been reliable and predictable for a few years. So there were billions of dollars to harvest from the unsuspecting retail investors who felt fairly safe. The mReit space was working at a much higher leverage and delivering super dividends because of it. The bond market collapse forced the reits to sell assets for practically a dime on the dollar and it killed book value and and the ability to make money.
Man those were good times. regular secondary offerings.
Also, have you heard of the Federal Reserve Act of 1913?
Yes, that's right, it was an Act of Congress - the U.S. frigging Congress?
But the Fed isn't under the auspices of the U.S. government, is that your thesis?
ROTFLMAO at you.
Except that the President of the United States appoints the Fed Chair.
Yeah, the Fed is "independent."
January dividend payable on Feb. 8
Sure, but maybe wait for any panic dip.
I wouldnt be suprised to see AGNC bust $25 pps in 2016, My only question is how much higher, a great company w/oustanding mgt. that are on top of their game, Longs will be rewarded, Your thoughts please? Mark this post.
Sentiment: Strong Buy
You really don't understand what the FED was created for. Read "The Creature From Jekyll Island". Its not here to make anyones life better or improve the economy.