Bingo Jack, and repo borrowing costs really dropped during 2q11 adding so the NIM didn't compress much, if at all depending on what AGNC bought. Extremely low mortgage demand, extremely low refinance generated CPR, looks like the 2Q er will be great.
Expect the dividend to remain good.. I'm still holding over 5k shares for long term capital gains and dividends. Sold calls and bought puts on 7/6 to trade around the position. Expect the calls to be worthless here pretty soon. Keeping the puts until I see the turn around, and then might buy some calls? All good...
Apply your expectations seperately to behavior for the Short rates (staying low) and the longer rates maintaining a spread as lack of mortgage buyer demand acts to lower the mortgage rate, but lender fear of inflation motivates lenders to require higher rates.
Recently, the mortgage rates have sagged, but fear of inflation from continuing monetization (QE3 in the cards) will not let the rates drop very far.
Reduced mortgage rates increase MREIT book value, so they can leverage more to compensate for the reduced spread.
Strange indeed. With the Bernank saying interest rates are going to remain low for a really extended period of time, one would think the stock price would appreciate.
If the stock reaches triple support of $28.78, my plan is to add another 1000 shares.