NLY bought CXS because CIM wasn't available due to the financial statement fiasco.
NLY had to dramatically reduce purchases of Agency RMBS because of the Fed-caused market distortion. Margins were squeezed but risks actually increased because the value of the RMBS would drop sharply if the Fed suddenly halted purchases. NLY was looking at the need to return money to shareholders through stock repurchase if attractive investment opportunities were not available.
NLY could not use the money to invest in either non-Agency RMBS or CMBS, because doing so would amount to competing against CXS and/or CIM, creating a conflict of interest because of the shared management company, FIDAC. CXS was immediately available, so they moved to make that purchase. In a couple months the purchase will be complete, and NLY can then direct their free cash to CMBS, thus eliminating their financial dilemma.
Now that NLY's financial dilemma is being resolved, the need to purchase CIM is reduced. CIM is a mess, and NLY probably wants to stay as far away as possible until all issues are resolved. As I have mentioned before, I believe the delay in issuing restatements is due to a refusal of both FIDAC and the auditor to take responsibility for the errors. With a shareholder lawsuit potential liability of hundreds of millions of dollars, each one wants the other to take the blame. If the dispute becomes public before it's resolved, the stock price will get whacked.
The NYSE doesn't want to delist CIM, and will continue to issue monthly extensions for as long as reasonably possible. But the timing for an eventual resolution, and the nature of the final outcome, is very uncertain.
Yahutag, always like your perspective,guess the wild card regarding FDIC,NLY & Cim regarding Accountablity,with respect to suits concerning this matter is Board of Directors & we all know Bloods thicker than water