Hate to interrupt this wonderfully enlightening discussion, but..
Entropy, I get that you think
a.)spread compression is going to cream NLY and b.) REFIs are going to cream NLY
Here's my questions. I haven't seen 30yr rates continuing to drop. In fact they have been creeping back up a bit. Short rates haven't increased, where is the continuing compression you see coming from?
Since 30 yr's are creeping up or at least holding stable. Where are the massive REFIs coming from? Rates have been in this range for a long time.Is there really that big of a pool of 30yr holders that are still at 8%+?
Can you tell the markets are closed?
My but you do bounce around a bit. Everytime we try to pin you down you're off on another tangent.
It's hard to believe you think there's no difference between liberals and conservatives. That seems too flip even for you. Because there are hypocrites on both sides, that means there are no true belivers?
Hey, there's lots wrong with this country. But would you mind telling me which country has the best system? Or, if not, what IS the best system?
Not too sure the relevence of your favorite political moment. One of mine involved Russia too. It was when they decided to pursue a flat tax. Remember, that was the one that could never work here. Just a figment of conservative imagination.
As a sidebar folks, there were a bunch of excellents post between this and #6914 by Entropy. This board is really humming.
Your post is very interesting. You do seem sincere, yet while I agree with some of what you say, I think opposite of some of your other conjectures. When I think of conservatives I think of people so overwhelmed by emotion that their only reply is rigidness, if only things wouldn't change, and the status quota of those in power remains the same, everything will be alright, which means everything will be alright for conservatives; from a materialistic standpoint. Liberals I think of as people more aware of balance, comprehending the flux of life and having faith in it. Yes, liberals can go overboard, so enamored with change and innovation that their ideas get ahead of what is presently possible for society.
Entrophy is a psuedo-liberal, yet committed to be independent of any classifications, so he thinks imaginatively, yet his imagination troubles him. His imagination can lead him to the constructs of utopia, but also the confines of paralysis. Consquently he is attracted to NLY, because NLY has so many possible permutations for its outcomes. I think Entropy should be more focused on the utopias of his imagination rather than the implosions he also can see.
So for NLY, maybe the plunge to $14 was like the 1998 spike down. In 1998 after the spike down NLY spiked back up to the level it previously inhabited. I wonder if we aren't at the plateau after the spike back up, like in 1998. Consequently, after some consolidation NLY can move higher, increase to a new level of valuation. Of course this plateau has differences from the 1998 plateau after the spike up then. NLY is at a higher percentage book value,maybe much higher. But, NLY is also producing higher dividends, and these dividends whether they are more secure or not, seem more secure, and are more secure at least for the next three years. And my thought, my feeling, is that even if NLY dividends decrease, percentage dividend will be the important number, rather than maintaining a certain dollar value of dividends. If NLY dividends go down, yet stay at 10%, while money markets are at 0.7%, NLY will stay in favor.
I think the last concentration of posts on this board have been very good. Looking for clarity, benefitting from clarity, yet realizing there is no present clarity in the markets, or in politics at this time.
The whole Liberal and Conservative petty back and forth nonsense is like the WWF. It is fake. It is either entertainment for those that understand it is fake (which is sad) or a "sport" for those who are dumb enough to think it represents reality (which is sadder).
We do live beyond out means in this Country--every day in every sense of the word. Liberals pretend we cannot cut spending while Conservatives pretend the cuts will not hurt. They agree to both pretend that America is the "best system" because we can borrow enough money from the rest of the world to buy more stuff than any of the other (arbitrary) groups of people on the planet. This is worth a serious discussion?
My FAVORITE political moment in all of 2002 was Vladimir Putin lecturing George Bush (in Canada) on the importance of transparency in US financial markets. Think about that for a second, then explain to me again what you mean by politics.
I'm pretty much on your page, Macman.
I don't want to beat up too much on Entropy because, like you, I enjoy many of his post and he is very intelligent and can be quite insightfull.
I get taken aback when every now and then he will pick up a word or phrase in a post and overreact. I'm probably guilty of the same thing but I try to resist the impulse.
Give him hell Cranskin and GeeHee!
Entropy, you really amaze me. I never figured you for a liberal. It shows you that one cannot lump all liberals together in one pile and all conservatives in another. In my experience most liberals tend to deal with matters from an emotional standpoint whereas conservatives from a logical standpoint. The only arguments that liberals seem to make against conservatives is that they don't care about people (as in your post about schools), or that they are biggoted racists when they argue against the (as it currently used) use of affirmative action. There are many others but I'm sure you get the point. I'm confounded because your analysis of NLY is superb. Unlike other longs monitoring this board I agree with much of what you have to say. I only disagree with your sense of market timing - the market (like our country) is after all driven as much by emotion as by logic.
It seems to me that the people that bring up class warfare are always the liberals that claim that every tax break in the universe is going to benefit the rich at the expense of the working class.Capital gains are always what happens to the Rich never the middle class. Get a life I am middle class and I never want the gov to give me a hand out just a fair shake and not penalty for working my ass off to support those that don't work to exert themselves.
Well, I knew it was too good to last.
Of course everything is open for discussion in a democratic republic.
Sorry, your response is just as simplistic as some of those "conservatives" that, as you put it, "whine."
Class warfare is a legitimate subject for discourse. For years a certain group of liberals aided by a good portion of the media has been "whining" about how life is just not fair. Wow! What a revelation. My mom told be that when I was in elementary school. And her mom informed her of the fact shortly after the turn of the 20th century.
Roads, schools, all should be subject to debate. We had a congressman (Republican by the way) who did his best to pave over most of his district. Should we debate this? Ah, but not the schools. Perish the thought that we should discuss how the educatinal establishment spends our money. Do you know anybody in the public school system? Have you ever worked around it? I can answer yes to both those questions. Believe me, it needs a lot of work.
Entropy, you really are an intelligent guy but get real. Don't pretend class warfare is a figment of imagination. I don't know where you live but it would be worthwhile for you to visit this part of the country.
This very morning I was visiting the local Borders, reading my free copy of Barrons (By the way, fascinating article about TA "What the Market Knows" by Michael Kahn <Hey! Maybe that's you>) Anyway, I looked at the moring Intell (out of Lancaster PA) and there is a story of a group of dairy farmers who asked our congressman Pitts (boy, is that an apt name)not to support the farm bill. They don't want the government price supports or money. Now that actually happened. Is this a great country or what?
No doubt whatsoever that the Martha Stewarts of the world have not helped the cause of the financially sucessfull in this world with their arrogence and attitude. (To digress for a moment did you notice some of the libbers "whining" that Martha is getting undue criticisim because she's a woman...talk about being out to lunch) But look at how the Democrats have tried to demonize any tax cut or change in Social Security.
And it's not all Democrats or all liberals. The ex senior senator from New York was intelligent and capable. I'll bet he just got fed up. And look at the two who are there now.What a joke. Of course I can't say too much because our senior senator can't decide what he wants to be when he grows up. (& he's a Republican. I'm equal opportunity).
Now I don't know what kind of a conservative I sound like to you but in 1974 when we were living in a row home in the arm pit of the world, Camden, NJ, I was ready to pay whatever it cost to put my first born into Catholic school rather than the pathetic (& potentiall lethal) public school system. This despite the fact I was not Catholic, well to do, or eligible for govt. help. Thank God we moved to his country.
None of our many important problems are ever going to be solved until we key in on problem solving.
Just remember, just because you're paranoid doesn't mean they aren't out to get you.
The "class warfare" agenda as you Conservatives like to call it (when you can't think of any way to respond to ANY questions about fairness in the allocated costs of things like roads, schools, and F-18s), is a PERFECTLY legitmate subject for political discourse in any --and especialy this--democracy.
In fact, it is probably the ONLY thing worth debating at any length. If you want to make a point about fairness as it stands today, by all means do so. But don't suggest (by inference) that it is somehow beneath or unworthy of real discussion.
Conservatives that whine about the "class-warfare agenda" ALWAYS end up sounding like the guy who doesn't want to pay taxes for schools once his kids have graduated.