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Annaly Capital Management, Inc. Message Board

  • stockloserman stockloserman Aug 14, 2007 6:19 PM Flag

    I am very worried about this. I am long

    3000 shares and not sure what I should do. I probably will sell in the morning but here is what I found! Any comments? Thanks

    "During the quarter ended June 30, 2007, the Company sold $1.4 billion of Mortgage-Backed Securities, resulting in a realized gain of $7.3 million. During the quarter ended June 30, 2006, the Company sold $852 million of Mortgage-Backed Securities, resulting in a realized loss of $1.2 million. During the quarter ended March 31, 2007, the Company sold $1.2 billion of Mortgage-Backed Securities, resulting in a realized gain of $6.1 million and terminated interest rate swaps with a notional value of $300 million, resulting in a realized gain of $67,000. In addition, during the quarter, the Company had a loss on other-than-temporarily impaired securities of $698,000 as compared to other-than-temporary impairments of $20.1 million and $491,000 for the quarters ended June 30, 2006 and March 31, 2007 respectively."

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    • I've been too. The company isn't broke, the stock price is.
      I don't see it rebounding anytime soon. Finished selling last of my 23,500 shares just in time. It may be awhile before this turns back up.

      I do feel better that I'm out.

      Good luck all.

    • The 2006 losses are a result of interest rates going up resulting in their loan values going down. NLY should be fine as long as the FEDs don't raise rates. If the FEDs drop rates, the mortgages they hold will go up in value. How can AAA rated loans backed by the Federal Government go down in value? The shorts are not comparing apples to apples (they try to make you believe they are). I believe massive mutual fund redemptions in mortgate REIT funds are causing the share price decline.

      • 2 Replies to altitudebrew
      • The AAA ratings are in question. The implied backing of FNM and FRE are in question.

        Seems to me that the market is repricing the risk of all mortgage securities. I suspect that a lot of investors who do not understand the US mortgage market and housing bubble are getting burned in "black box" hedge funds, reits, etc. If the foreign buyers have lost confidence in the ratings agency, US banks, FNM, FRE, the US gov't, etc., then it would seem that all bets are off--at least in the short term.

        If NLY can stay solvent and continue making payments on their debt, then they should be fine once sanity is restored. If the Fed is forced to cut rates, then this would probably be good news for NLY---but even then, if there is no confidence in the system, then it may not matter.

      • Altitude-don't worry about that guy. Yeah, sure he's a "worried long." For Heaven's sake, look at the guy's ID. I'm a 1000 shares long, and not worried one bit.

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