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ARMOUR Residential REIT, Inc. Message Board

  • s_klumps s_klumps Sep 1, 2011 12:20 PM Flag

    Big Selloff Today - Obama is launching attack on high profit companies!

     

    Increased uncertainty surrounding MREITS includes the specifics of Obama plan. The plan is rumored to big on "Housing fix". The speech timing is September 9th. Agency MBS priced could come under pressure and lead to increased haircuts and margin call hurting Mreits.

    There is also a SEC examination of some of the exemptions that MREITS are using that could lead to change in the way they have to be registered and regulated.

    http://www.sec.gov/news/press/2011/2011-...

    The MREITS are now vulnerable to selling and short attacks that could lead to a similar price collapse that occurred before the budget deal. This will continue until the cloud of unprecedented MREIT uncertainty lifts. There is a risk that MREITS will trade at an unusual discount for a while. I say that with great pain as a holder of AGNC.

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    • i m a holder of agnc too and its been a painful couple of weeks. one thing is comforting is that all the stocks are losing ground. if it happened to mreits only than it would be more painful to watch.

    • Oh God .... klumps the ass clown is back ....

    • How much of this ember are you going to fan in order to buy long on the cheap?

      Right, they're going to make sure there is value to an industry that by law already has to distribute 90% of its profits to shareholders.

    • It's nothing to do with Obama's speech on Sept 8th, not 9th.

      It's the SEC announcement:

      http://www.sec.gov/news/press/2011/2011-176.htm
      Excerpt:
      Under the Investment Company Act, entities that issue asset-backed securities typically meet the definition of “investment company,” thereby requiring them to comply with the provisions of the Act. In 1992, however, the Commission adopted Rule 3a-7 under the Investment Company Act, which specifically excludes some asset-backed issuers from the definition of “investment company” provided they meet certain specified conditions.

      "One of the conditions is that the asset-backed securities generally be rated by a nationally recognized statistical ratings organization (NRSRO) – but the condition was not primarily intended as a measure of credit-worthiness of the issuer. Instead, the Commission included the credit rating condition because it believed that as part of the ratings process, the rating agencies assessed the issuer’s investor protection measures.

      In the aftermath of the recent financial crisis, the Commission has engaged in various regulatory initiatives to address concerns raised by credit rating procedures and methodologies."

    • I won't worry too much about that. Like any other ridiculous plan Obama comes up with, it will get squashed by the congress.

 
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