It is my opinion that the the main reason Mreit sector is being hurt by marigin compression or the fear of it. Everyone in my business knows that cost of funding cannot really go much lower but the yield on new investments have come down substantially. We can talk all we want how AGNC's investment portfolio is paying at a very slow CPR but when new money gets put to work its going into MBS that are yielding a good 50-60 bps lower than before Sept 14 (QE infinity announced)
Something else I have to add. Suddenly everyone and his brother is telling me about "this stock I am investing in that is yielding 15-16%!!, it has something to do with mortgages...A...G ...something something"
Very reminicent of the time I had a cocktail party at my home in 2000 and I was amazed to overhear my neighbors, carpenters, software engineers, sales people, housewives all chatting about stocks they were buying, DELL, SUNW, EBAY, etc
Anyone who has been investing as long as we have knows that " The m#$%$ are #$%$"
Joseph P. Kennedy (1888-1969) knew that it was time to get out of the market in 1929 when his shoeshine boy began giving him stock tips...