There's no debacle, take it down the $21.30, $21. $20.70 & below for all I care. I have money waiting in each of those areas. If I don't get filled it doesn't bother me because I already have a well established holding.
This is turning out to be a very sad quarter for AGNC and other mREITs. Since taper has not yet started, the worst part is still ahead.
Most on this board should recognize by now that I think Bernanke is a fool. When Bernanke began talking about taper, the economy was not anywhere near the stated goals for QE, so it was widely believed that taper had other motivations, such as limiting the Fed balance sheet. Ahead of the September meeting, several members of the FOMC spoke and forecast taper in a most subtle way. Then Bernanke pulled the rug out from under the markets, explaining that sufficient economic progress had not been made. Only a fool would have believed in June that economic objectives would have been met by September.
During the summer, Bernanke got of taste of what tapering is going to do to rates. That was one of his reasons for pulling back. However, it's going to be even worse the next time. Bernanke has painted himself into a corner and thinks he can escape without destroying the paint job. He has a lot to learn. The longer he continues his QE, the more these low rates become embedded in the economy, and the more disruptive the taper will be.
If he indeed waits until the economy is moving forward at a good clip before the taper, the closer will be the increase in short rates, which will kill the stock market. So AGNC has three disasters yet to survive: Taper induced increase in long rates, Fed induced increase in short rates, and a tumble in the S&P. It may be best to stay in bed for the next two years.
The only fool is you. QE is the only thing keeping the economy afloat. The idea that if we get rid of it we''ll be ok is ludicrous. Velocity simply isn't strong enough. Agnc is going through a rough patch but even at the worst it yields more than most investments.