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American Capital Agency Corp. Message Board

  • turbofever turbofever Dec 4, 2012 4:34 PM Flag

    AGNC Dec bulls: Please be careful re: Dec 11th

    Haven't posted in a while. Continuing to essentially stay in cash w/ my portfolio for now, so not too much to say lately. I suppose the vehement & frequent debates here about politics and religion have been a touch off-putting, too ;)

    Anyways, with no one talking about it (that I spotted), but with a variety of people posting about loading up on bullish AGNC options plays for late December... I thought I'd note once more that the Fed's Dec 11-12th meeting is rapidly approaching.

    The potential risk, even if it doesn't have a huge likelihood, is that the Fed could expand their program(s) in a way that could impact or be perceived to impact mREIT's. Example: the Fed is certainly capable of increasing the $40 billion/month MBS purchase program to a higher monthly limit.

    I hope the FOMC meeting is a non-event, and also that you guys get a great divvy run! The div run was a wonderful gift for me last quarter. But should the unexpected happen with the FOMC, AGNC's price could quickly take a hit without enough time left to recover for a successful Dec div-run play. The possibility of this is at least worth me taking the time to post, in case someone with skin in the game or contemplating a bullish play hasn't already considered it.

    For me personally, were I to ignore the fiscal cliff risk and decide to place a bet on a Dec AGNC div run, I'd wait 1 more week until Dec 11th, to at least take the (small likelihood, high-impact) FOMC risk off the table, gambling I suppose that AGNC's price doesn't increase much in the next week.

    Best wishes/good luck to all.

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    • Hey Turbofever, the general forecast is QE2 would get re-vamped into something in January.

      Last I read about all this the jury is still out on weather it will be just like QE2, more than QE2, or less than QE2.

      But I don't think is much "shock" potential as the expectation is something will happen once QE2 ends anyway.

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