In the very short term NLY will move lower. Earnings announcements on 7-29 will surprise the market and the stock will sell off a little. That is a buying opportunity and the stock will move up from there because the market conditions for agency mreits have already improved.
from the ''Opinion'' page of The Wall Street Journal on July 17th:
''The Federal Reserve did well to supply liquidity after Lehman Brothers failed in September 2008 and the world was plunged into financial crisis. But since then the Fed's monetary policy has been increasingly hazardous and bank supervision by the Fed and other regulators dangerously ineffectual.''
''Congress passed the Federal Reserve Act in 1913 mainly to forestall and contain panics, discourage speculation and improve the supervision of banks, not to steer the economy. Indeed, the Federal Reserve System was set up as 12 more-or-less independent reserve banks to assuage concerns about centralized control and capture by financial interests.
Restoring the modest foundational aims and diffused governance of the Fed would be good for our economy and good for our democracy.''
. . . and from an editorial on the ''Issues & Insights'' page of Investor's Business Daily on July 18th:
''It's safe to say the federal government's $800 billion stimulus and the Fed's ease didn't work. Even the Fed's own beige book calls current growth 'modest to moderate' -- not exactly a ripping endorsement.
All this suggests the Fed has painted itself -- and the economy -- into a corner. Looked at realistically, the Fed's 'easing' isn't supporting the economy at all; it's supporting the federal government's extraordinarily reckless trillion-dollar-a-year deficit spending habit.
This is a huge mistake. At some point, the game of monetary musical chairs has to end. Then what?
The federal government will have to find private buyers for its debt as the Fed sells its own huge debt portfolio. Interest rates will soar and, instead of economic growth, we'll be hit by a downturn that will make the Great Recession look mild by comparison.''
Maybe, but at this price it's too tempting. I told myself if we hold up in that $11 to $13 range I would buy another 1/3 of my long term holdings.. I bought more today at $12 and will buy my last 1/3 at $10 if we get that low. I hope we don't.
For me this is more a vote of confidence that NLY management has properly hedged and is ready for the new rate environment. They have done well so far managing and can't control the stock price, but I think we come out of this in time. It will be a bumpy ride.
Obviously you are shorting this stock. I am NOT. But I would like to buy more at a very cheap price. I never seem to catch the bottom. I understand you would love for it to go to 10 Or even three for that matter.. But honestly Do you truly believe it will go to $10 Or are you just hoping it does.