I'm sure there will be an overreaction today to the Jeffries downgrade but I think CIM management built-in the prospect of defaults into the prices they are paying for mortgages and related securities. And clearly, there will be more defaults but the question is whether they will come at a greater rate than we've already seen. Jeffries and its crystal ball seems to be speculating that will be the case. It could just as easily not be the case.
The recent CIM conference call also telegraphed that returns might be slightly lower because management said it was already diversifying into agency-backed paper -- lower return but safer investment. If management is looking out for both return and safety and continues to do as well as it has, I'm still on board.
"My only concern is rising interest rates once QE2 ends in July!"
Yeah, right, Bernanke and Gartner are on drugs and
after QE2, we should see QE3 or something like that
under different terminology.
Ask yourself: who's going to buy US DEBT???
Unless Outer space aliens arrive in near future, we
going to stay at 0% interest rate and Easy Money
policy, that's the F* guaranteed by the FED Dollar
Pyramid design: 0% $USD interest rate 2011-2012
(and in the nearest foreseeable future) guaranteed!
You can stick this Note to your Fridge.
Kinda like GS issuing a lower forecast for oil last month then upgrading forcast yesterday. Been trading and investing 30 years. Analysts are no better than a monkey throwing darts. They're guessing and manipulating.
That's a LIE - and LIES are not accepted, even on the Yahoo boards.
Divi will RISE this quarter - probably to 15, possibly to 16.
Jefferies is doing a favor to someone's Short interest, probably in return for favors rendered elsewhere in the market.
I'm actually quite angry - and I'd think CIM management is, too.