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American Capital Agency Corp. Message Board

  • nickspinner Oct 28, 2013 12:44 PM Flag

    Why is AGNC getting blasted today?

    On no news. Thoughts anyone?

    Sentiment: Strong Buy

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    • The yield spread is decreasing, not only AGNC, but all M-REIT's. Everyone is fixated on the 10 yr treasury and 30 yr. MBS yields which receded a tad recently, but it is the short term yields that are rising, 30 day, 60 day, 90 day, 3 mos., 6 mos., 1 yr. and 2 yr. Hence, AGNC borrows at the short end and uses leverage which is killing the spread. They can't hedge short term and long term 30 yr. They put all their hedging I believe in 30 yrs. MBS to protect against convexity.

      All the M-REITS were caught off guard with the short end rising, almost just like the long end rise last spring. Dumb and dumber, I guess. What will be the excuses this time.......?

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