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AmNet Mortgage, Inc (AMNT) Message Board

  • packeteerslikeus packeteerslikeus Aug 5, 2003 7:17 PM Flag

    Rates won't go down anytime soon

    you lemmings are buying this undervalued Refi hoping that rates will turn lower. here's why they won't. take a look at the interest in today's 3-year bonds. granted, this is a new instrument, so traders are not yet comfortable with it, but what was remarkable about today was the absence of foreign buyers. why? because they all know that as our government incurred growing record deficits they all expect our Dollar will weaken once again. (why buy a 4% bond when it's currency may lose +8% of it's value) Foreigners are propping up the dollar to keep their imports strong so we'll buy their crap with our child credit tax rebate. They are also buying dollars to participate in our equity markets, but they cannot keep that support up for long as we start the historically weak 3rd quarter.

    Wednesday and Thursday billions more in 5 and 10 year bonds will be sold, and the leaner the interest, the higher it will drive rates to attract buyers. the Fed hates what is going on, but can do nothing about it because they can only control the shortest of term rates, little else. So even if Greenspan tries to talk long rates down during their mid August meeting, few will take it seriously. institutions looking for safety would rather buy bonds than REITs now trading at rates so close to each other. even if Refi's keep booking loans, the market for those willing to buy the REIT, especially on higher risk profiled loans will be drying up as well.

    I am actually long this stock, and want to buy more, however my intuition tells me to wait until this stock is under much more distress, and we shake off all the margined momentum traders that jumped on this stocks back as the Refi boom was occurring. I would not recommend buying any more of this stock until is closes under $5 a share.

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    • I recommend not listening to packeteer. He's obviously trying to talk the stock down with these rants (none of which is based in intelligent investment rasoning) either because he's short or wants to buy it lower. All he offers is "I think it's going lower so therefore it is". I recommend people look at the fundamentals of the company and make up their mind based on that. He recommends waiting until 5 to buy a stock that will earn over 1/2 that this year alone...that is rather insane and makes as much sense as him bashing me for suggesting people look at the fundamentals rather than fishing for a magical bottom. I have a growing sense these scare tactics that INV is going out of business because rates went up a bit isn't working any longer and we saw the bottom yesterday around 6.30. INV will be just fine at these rate levels just as they would have been a year ago if we never saw the decline we did. But we did see that decline and the company earned a ton of $$$ due to it which is a huge plus for funding the company's expansion plans (guess what, people still need mortgages at rates equal to a year ago rates or even higher). So if we have more normal earnings going forward we just might be forced to deal with a company that is very undervalued rather than ridiculously undervalued...I'll take that risk.


    • Rates will back off some. They have gone up to much too fast. I'm not saying they will not go higher this year. I work at a large title compnay and we are still so busy. 3Q will be inline with estimates. This stock will be higher before 3Q earnings are out.

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