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American Capital Agency Corp. Message Board

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  • gcmorgan_98 gcmorgan_98 Jan 28, 2013 4:40 PM Flag

    simple question sure answer is complicated

    Of more immediate concern then changes in the spread income are changes in mbs premium amortization. If the cpr goes down (when rates go up....), then preium amortization drops and net income goes up. AGNC already has a low cpr portfolio by design, but there still will be a major impact. The changes in spread income only happen gradually as the portfolio and repos roll over.....Repo rates can change very fast, that is why they use swaps and possibly long term repos.....

    Alot of factors, Over a one to two year horizon, what the previous poster said about spread rates is important, but on the short time horizon, there are alot of varialbles.

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