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American Capital Agency Corp. Message Board

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  • sabolsteven sabolsteven Nov 9, 2012 1:52 PM Flag

    Wow, this board needs a pep talk

    It all comes down to timing. I could agree with you if Washington appeared on the verge of a resolution, but given the recent comments from both sides, I don't see that happening. Obama still seems unwilling to accept anything that doesn't include rate increases on the wealthy and the Reps still seem unwilling to accept anything involving rate increases, period. I don't see a resolution coming any time soon.

    The debt ceiling battle and downgrade came almost 2 months before ex-dividend, leaving plenty of time for recovery. This showdown appears destined to come to fruition near ex, if at all.

    You could make a lot of money buying now, but its a bet on Washington. That's simply not a bet I'm willing to make right now.

    I know you posted this before Obama made his comments. Do you still feel the same way?

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    • """I know you posted this before Obama made his comments. Do you still feel the same way?"""

      If this will indeed solve part of the uncertainty, then yes...because, the fundamentals have not changed(re AGNC)....Here is the meat of the President's statement today:

      """Now, fortunately, we shouldn’t need long negotiations or drama to solve that part of the problem. While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody -- not Republicans, not Democrats -- want taxes to go up for folks making under $250,000 a year. So let’s not wait. Even as we’re negotiating a broader deficit reduction package, let’s extend the middle-class tax cuts right now. Let's do that right now. (Applause.)

      That one step -- that one step -- would give millions of families -- 98 percent of Americans and 97 percent of small businesses -- the certainty that they need going into the new year. It would immediately take a huge chunk of the economic uncertainty off the table, and that will lead to new jobs and faster growth. Business will know that consumers, they're not going to see a big tax increase. They'll know that most small businesses won't see a tax increase. And so a lot of the uncertainty that you're reading about, that will be removed."""


      • 4 Replies to reits_r_us
      • Doc, Obama tried this before and the Republicans refused. Once the Republicans agree to tax cuts for those under $250,000, they have lost all leverage. For them, politically, it is necessary to have agreement on tax cuts for all income levels or they just lose. The Democrats will refuse to cut taxes on the upper income folks, and it is hard to build a groundswell of support for the rich. I hope I am wrong, but I see no partial deals being in the near future.

      • Hi Doc,
        Its easy to lament the current state of affairs. I have watched my seemingly genius buying of calls and stock turn out to being too early. I still do not do spreads etc. but value your thoughts whether they are a profit maker or not.

        No one knows what the future brings- you can only bet on it- some will some won't. My positions were way out in future and DITM as I suspected a rough ride- but not this rough. Whether my current positions make me money in the end is up to fate and my own thoughts and actions. Either way I enjoy this board.

        I am glad everyday I wake up so that is enough for me, others are not as fortunate.

      • Hope you are right, Doc.

        I can't see the Reps agreeing to that since it effectively makes Obama's position the status quo and removes any incentive to address the same changes for the wealthy later on.

        I'm not completely bearish on this stock at all, though I do feel QE infinity has changed the fundamentals somewhat. I see a dividend cut possibility in Q1 (same timing as last year, I believe). Though a little research into the effect the last dividend cut had on this stock might do some good.

        Risk = Rewards. There are tremendous rewards out there for those willing to take the risk today. But, for me, it comes down to timing. If I were going to purchase anything right now, I'd go far out (maybe Jan 14's), a few strikes below the money, and seek to minimize the time premium (possibly creating spreads by selling Dec 12 contracts a few strikes higher). I think you can make great money if you give yourself enough time to be right.

        Best of luck to all right now.

      • Guess you didn't see "Boehner, R-Ohio, signaled a willingness to deal on Friday but also maintained hard-line GOP opposition to any tax increase." ? I think this all means another all or nothing on the tax increases and probably all as Dem's really can't go nothing and admit eliminating their "bush tax cuts for the Rich" would somehow now be a "tax increases for lower incomes"? And Repubs would only accept the upper only option if there is something on the table (i.e., compermise) like real deficit spending cuts involved -- you see Dems offering anything up? yes, both seem to say there are areas for agreement but both are also saying this is not it. In addition, they are bringing back the group of 8 (do you see them changing their minds?) and there will be another debt ceiling debate looming since its $16.3T and we are basically there ... and there is no election presure next year. Fact is, we are not even close so it's just not going to be easy undertaking to get there!

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