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American Capital Agency Corp. Message Board

  • emmy_hasnewws emmy_hasnewws Jul 6, 2013 11:16 AM Flag

    This knife..i wanna catch..... $8Bln Co..

    how does 20 sound.......like a BOTTOM ?

    Sentiment: Buy

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    • Emmy, Bottom is like true love, you don't recognize it until its gone. There is no magus number. The earnings report in late July will tell the story for the coming quarter. The comments from Bozo are worthless. He is so inept he can't find the same login twice. Unintended Comic relief would be his only value.

    • Bottom does not have a number. So long as rates keep rising the BV and PPS will keep dropping.

      • 2 Replies to ehpb1
      • NOT TRUE.
        As spread goes up, so does profit.
        No all the portfolio is at the low rates.
        BV will stabilize most likely about 27 (may drop below that for a while, but will go up)
        Divi will stay 1.05 for at least a year.
        30 by YE.

      • Convexity Hedging is driving rates up. As rates rise, refi's plunge, losses on MBS mount, hedging increases. You can't short MBS, so you have to hedge by shorting treasuries, as refi's and prepayments evaporate (down 36% as of 6-16-2013) durations risk increases and MBS holders have to short something as a hedge. The short treasuries on Thursday and make 2 points and some ticks on Friday, not bad. Convexity hedging is going to drive rates to the sky, so many MBS holders since 2009, so man M-REIT's whose investors only cared about the double digit yield and nothing about the risks. M-REIT's knowledge that I learned from over 40 years investing, you definately want to be in them when rates start dropping, but any hint or if the cycle is longer tha 2-3 years, you should force yourself out of them like I did last December, 2012. March was the perfect time to short treasuries, you still can TBT, ultra short 20+ treasuries.

    • You better get out. Bank of America just raised their forecast for 10 yr treasuries to 3% by year end. This is going to single digits just on book value loss. The spread will be near zero, the leverage means nothing when there is no spread. There is going to be no dividend soon.

 
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