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American Capital Agency Corp. Message Board

  • clarkjwc clarkjwc Mar 31, 2011 10:42 AM Flag

    When QE-2 Ends?

    When the Fed stops giving the banks free money to lend to the likes of AGNC, will that end our good ride?

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    • "Where in the region will U.S. troops now be based?

      Some 400 to 500 troops will remain in Saudi Arabia as part of the longstanding U.S. training mission with the Saudi Arabia National Guard. The air operations center will move to the $1 billion Al Udeid Air Base in Qatar, which was built in 1996 at Qatar's expense. The tiny nation, population 750,000, reportedly views the United States as its primary protector in the region. With the threat of Iraq gone, Washington is repositioning other forces in the region as well. Aircraft patrolling the northern no-fly zone from Incirlik Air Base in Turkey, for example, have already been recalled to their home bases."

      http://www.cfr.org/saudi-arabia/saudi-arabia-withdrawl-us-forces/p7739


      Stop changing your argument. First you said that food and oil are not commodities, now you're saying that since oil is only produced by a small oligarchy, so it shouldn't be included in the CPI.

      Alright blockhead.

      Try using that same argument for food.

    • This is more crack head stuff.

      Banks aren't going to lend when the collaterial is going down in value.

      Why bother when they can make double digit returns in the stock market...

      The mortgages AGNC and other MREITS buy is a small slice of the pie. Sure there are some people that can get mortgages: 2 w-2 incomes, excellent credit, 20% down.

      SOME PEOPLE. Not most crack head.

    • Because they can get more by lending money to you.

      That's why banks ever do that instead of just buying low-risk government securities.

      Because the rate you get for a home/car/business loan from the bank is never Prime, it's always Prime+vig. They don't want to play at the zero-risk cost of capital when they can play at the full-risk buffet of working folk. They'd be leaving money on the table.

      The current home-sales rate is over 5 million/year. That may sound slack to long-time real-estate hacks, but it looks like a whole bunch of activity to me. I don't even know how they count them all. So someone's getting loans, and it's not taking exhorbitant measures. There's even sub-prime lending still going on, just nothing like what it was when it was the way for bank managers to pad their bonuses.

      As for what you heard about inventory, it's wrong. The current inventory is about 3.8 million, which I'm pretty sure is less than 5%. Maybe that doesn't count empty houses nobody wants to sell, but really, you think there are a lot of those, and do they count as a problem in making loans? Because if the bank owns them they're on the market, and if someone else owns them they're either paid for or paying off a mortgage, and if they're not paying it they'll soon be turning the keys over to the bank, which counts as revenue of a sort, just not the folding green electronic kind.

      Banks are selling mortgages hand over fist. Otherwise...uh...what are Fannie and Freddie buying, repackaging, and selling to AGNC?

    • More proof you don't have a clue.

      The U.S. hasn't had a military base in Saudi Arabia for nearly a decade.

      OPEC still operates as a cartel, still controls the production of its member nations, and its production still controls prices worldwide.

      A commodity is not something produced by a couple of giant companies. It's something produced by thousands of companies. Oil is controlled by a small oligarchy. It is not a true commodity, and anyone telling you it is is trying to get you to make a mistake they can exploit.

      What are you going to do with the CPI when OPEC shuts down the pumps and the U.S. has to fully open the spigots on the strategic reserve? Is that a true economic indicator? Or is it a political manipulation of the indicator?

      As I said, the only people who want oil included in inflation calculations are those who want their entire government run by remote-control from the the other side of the planet.

    • Banks can take money, which they are getting at near zero, and get several percentage at zero risk in the Treasury and bond markets. Why do anything else? Beats making a load, and risk default in an uncertain economy. Actually, it's the same thing that AGNC does. I wonder if banks are buying AGNC.

      Also, I heard that 12% of all homes in America are vacant, but haven't all been written down as the poster above notes. It will be years and years before the housing market is made right.

    • What!

      OPEC hasn't been in control of production since the first gulf war. You do realize there is a large U.S. military base in Saudi Arabia. There's a fellow by the name of Osama that was a little ticked off about that.

      Oil and food are not commodities??? What are you talking about!

      Go on the Chicago Mercantile Exchange. Guess what? Oil is a tradeable commodity. Same with corn, wheat, pork bellies.

      Sigh...

    • Lay off the crack. Banks aren't lending except to those that give a pound of their flesh. One of my clients is an underwriter and banks are not lending.

      Banks are hoarding the cash and using that money to fuel the stock and commodities bubble. It's the smart thing to do.

      Large companies are hoarding the cash and either sit on it or buy other companies. That's why there's no hiring. That's why there's no wage inflation.

      And as for real estate, you do realize that banks are holding off foreclosures because of the massive damage to their balance sheets that will happen once the losses are realized.

      Core inflation isn't happening because there's not very many people willing to spend (the unemployed and those that are worried about getting the can)

      Seriously, lay off the crack...

    • If it's stuck in the bank, it's not inflating anything. It has to get into the hands of the demand side of the equation before there's any impetus to raise prices on the supply side.

      But it's not stuck in the bank. Banks are lending. Just not to truckloads of hobos being brought in from the railyards to lie about their pay on robo-signed loans.

      The money is going to buy property, but there's so much property on the market and coming on the market that prices are stable to slack.

      So inflation isn't happening not because the banks are keeping the money, but because the real-estate market is soaking it all up.

    • Inflation isn't happening because the banks are keeping the money the Fed has credited in their accounts for the purchase of their Treasuries. Sometimes this process(QE),like Olee said, causes inflation, sometimes hyperinflation and sometimes zero inflation. It just depends what the banks do with this Fiat money credited to them by the Fed. In our case they are hoarding the $$$, therefore no inflation on the books(not talking food and energy).

      http://blogs.reuters.com/felix-salmon/2010/11/04/how-qe-works/

    • >The only time the cartel directly influenced oil prices was in the 1970's because the U.S. supported Israel against Egypt.

      Wow. Have you been in hibernation that long? OPEC is still well in control of its own production. We're a little buffered from it by the supply from Russia and Venezuela, but the Saudis still wield the biggest stick in the tar-pit.

      >Oil and food are the most important factors in cost of living.

      I didn't say they weren't. I said they weren't valid indicators of the economy to be used in setting general policy because they aren't commoditized. They are dealt with specially. They aren't totally ignored. But everyone loses a screw when the 9th-graders who pass for newsreaders robotically report the CPI and add the obligatory "except food and energy" caveat. Like it's sudden and nefarious.

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