Credit Suisse issued a report on 6/25/2013, they lowered target prices on many REIT's by $5 on AGNC and MTGE based on continuing decline in BV's.
They also said estimating future BV's is very challenged in the current environment and the magnitude of rates and markets. The note "EXTENSION RISK" during the second quarter have extended by .7-2.0 years given the 70 bp increase in rates. This duration extension is the key reason why M-REIT;s have to reduce duration by selling or extending the duration of liabilities through additional swaps.
ValuationL The mortgage REIT's are trading at a 10% discount to our estimated current book. It is too soon to broadly buth the sector until we see some stability in rates, which would lead to some book value stability.
YOUR WON'T SEE RATES STABILIZE UNTIL THEY REACH 4.00 -4.25%, WHAT WILL BV BE WHEN 10 YRS. TREASURIES AND MBS YIELD 4-4.5%.
My guess is $8.00, at $20-22, great short, almost like gold.