My guess it is not Bernanke but Obama that is the source of the REIT market weakness:
Seems the administration is actively considering a massive plan to allow consumers holding GSE mortgages to refinance at lower rates.
Obviously a major concern to MBS bond holders, of which the REITs are major players with significant exposure to repayment.
I have no indication of whether or how this massive impact would be mitigated on bond holders, perhaps they will simply be collateral damage in a clear vote winning play.
That's my average for the 260 contracts, after three sells during July August I have moved my average cost down considerably from the $4.5 I paid originally after the SPO.
I have done much better with the Jan12's than the Jan13's, the latter seem much more resistant to price drops. The breakdown is:
25Jan12 110 contracts average price $2.76
25Jan13 150 contracts average price $3.80
The average cost was driven down by a series of sells and repurchases at lower cost. I think someone called it BATESAT (LOL).
My average is $3.348, but it seems to me had I bought them all this morning at $3.20 I would be better leveraged. That's a lot of hard work to be in about the same place. I tried for 100 today but only got 60, 50 at 3.4 and 10 at 3.3. I have to stop, but once I had done my due diligence on the NY Times article I was hooked again.
I think you are dead right doc, picked up more today, though I missed the lows trying to get confirmation that this was bull crap.
Have you noticed how high the premium on the 25's is? I recall last quarter or the one before that when we were able to buy the 25's at 10 cents above intrinsic; at the $3.4 offered now the price is 64 cents above intrinsic and would probably need $3.5 to bag. Have to blame it on increased volatility, in those days we had volatility at 15% even though the cycle range was pretty much the same. Right now I am up to Batesat 6.75 ( four fills and three sells) this quarter and the truck is overflowing with 260 25's at various expiry dates and fill costs from $4.2 which looked cheap a week ago to as low as $3.30 today.
September should rock.
Another good thing, at these levels chance of spo very low and the closer the upward correction is to exdiv the less chance of a dividend sharing spo. Sets up nicely for a post dividend & post spo call strategy, or even pre dividend bought puts.