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American Capital Agency Corp. Message Board

taymere_lane 1911 posts  |  Last Activity: Feb 4, 2014 3:55 AM Member since: Apr 26, 2009
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  • Reply to

    Terrible earnings

    by obboi Feb 3, 2014 5:30 PM
    taymere_lane taymere_lane Feb 4, 2014 3:55 AM Flag

    I like the buybacks. Especially whenever the discount to what they anticipate BV to be exceeds the annual dividend. Under such conditions buybacks more than pay off within a year.

    I am not shorting, I am still long shares and calls. IMO although the stock market has rallied nothing much has changed for the better in the US economy over the past few years. Sure, the rich have gotten ricer, but the labor force participation rate and velocity of money are both still so very low. There was no fundamental US economy based reason for the stock market rally of 2013. Though of course I wish I hadn't missed it, I had no reason to buy tat rally so I didn't. There was no fundamental reason for UST's to have sold off to 3% yield, and although I am underwater on AGNC I haven't seen a fundamental reason for selling so I held. I think we'll see 2% yields again sooner than we'll see 4% yields again. When I no longer see able bodied 20-40 year old men standing in line at the food bank perhaps I'll reconsider my long position.

  • taymere_lane taymere_lane Oct 2, 2013 3:13 AM Flag

    Yes, the shutdown should be good for mREITS.

    1. Prepayments may slow to a crawl if the IRS doesn't give underwriters timely tax information on borrowers in escrow.

    2. If furloughs and wage back pay uncertainty dampen the economy the Fed will prolong QE.

    3. If as you say treasuries soar again that of course would be good for BV. I don't count on that happening. The shutdown the GOP made a Dimocratic president (Clinton) commit to balanced budgets, which was supportive of UST. We are no where near negotiating that level of financial responsibility this time around.

  • Reply to

    Quote from Q2 conference call

    by stevegrogan04 Sep 18, 2013 10:04 PM
    taymere_lane taymere_lane Sep 19, 2013 8:26 AM Flag

    You're right. The reason the Taper talk in May caught so many people flat footed, Gunlach, Kain, myself included, was because the economic data didn't suggest any change in course for the Fed. I think the taper talk was originally given for political reasons, an attempt to dominate and intimidate Congress with Fed bankster rule. I think Ben Shalom wanted to scare them into fiscal easing so the banksters would have more defecit spending to monetize without liquidity concerns. Those liquidity concerns will probably force them to taper soon though.

  • Reply to

    Institutional investors

    by philberg1946 Jul 9, 2013 11:02 AM
    taymere_lane taymere_lane Jul 15, 2013 3:30 PM Flag

    easy, the analyst are not on your side, they say sell when their investment bank wants to buy shares cheap and they rate buy when their investment bank has shares they want to unload on you

  • Reply to

    OT: EFC estimated BV as of 6/30/13

    by luvpizzasj Jul 8, 2013 7:46 PM
    taymere_lane taymere_lane Jul 9, 2013 9:52 PM Flag

    MTGE duration gap as of March 31st 2013 was 0.1 years, a full 1.2 years less than that of MITT.

    Credit Suisse estimates current BV as of June 25th 2013 at $19.91 and $19.52 for MTGE and MITT respectively, so if you believe CS estimates and if you believe that they will both continue to pay 80 cents div then you will conclude that they are virtually identical in current valuation.

    Both are fantastic bargains at current prices, with huge margins of safety. I don't own any MITT right now, my last MITT round trip was b$17.48 June 24th, s$18.84 July 1st. That sale, along with my PSEC profits, freed up enough margin to safely buy more MTGE b$16.17 July 5th. I will hold that and all my MTGE through the upcoming earnings release.

    I do hope that MTGE has an upside surprise on BV and earnings for 2q13, I am much more familiar with MTGE management than MITT management so at equal valuations I go for MTGE over MITT.

  • Reply to

    OT: EFC estimated BV as of 6/30/13

    by luvpizzasj Jul 8, 2013 7:46 PM
    taymere_lane taymere_lane Jul 9, 2013 4:25 PM Flag

    wrong, MITT had 1.3 years duration gap as of 3/31/13 whereas EFC had a huge short TBA position then. EFC aslo sold their payups before the selloff, whereas MITT bought more payups during 1q13. Night and day responses to the rate back up. Admittedly 1q13 results are stale data, but that's what we have to work with.

  • taymere_lane taymere_lane Jul 9, 2013 4:18 PM Flag

    Thanks reikreik, that's a big vote of confidence from PRCM. PRCM really knows the hybrid mREIT business inside and out. I too have confidence in MTGE's management, MTGE it is still my biggest position by far, followed by AGNC. I am underwater on both positions, 27% on MTGE and 17% on AGNC not adjusted for dividends.

  • taymere_lane taymere_lane Jul 5, 2013 3:57 PM Flag

    qe, large scale asset purchases

  • Reply to

    Writing to inform of position change

    by instantwinbutton Jul 5, 2013 11:11 AM
    taymere_lane taymere_lane Jul 5, 2013 3:17 PM Flag

    Nice work. The 1q13 info is a bit stale, but WMC's biggest position was on 3.5% coupon 30y FRM MBS. Those particular MBS have posted their biggest ever daily downside move today, and in percent terms the downside move there was even bigger than Black Wednedsay's.

  • taymere_lane taymere_lane Jul 5, 2013 2:23 PM Flag

    Yes, however the +70k backward revisions for April and May combined were potent. We are solidly on track for a Fed Sept 2013 LSAP taper.

  • Reply to

    Writing to inform of position change

    by instantwinbutton Jul 5, 2013 11:11 AM
    taymere_lane taymere_lane Jul 5, 2013 2:16 PM Flag

    Thanks for sharing, but I think their prices to current BV are within a few percent of each other today. The difference is certainly nothing worth realizing a loss over.

    EFC is what really sold off unjustifiably today, although the move was much smaller. It was unjustified because EFC's short TBA position has been making serious coin lately. I bought AGNC, MTGE, and EFC today. WMC is perhaps a better value than EFC today, but EFC is a bit of a different animal than AGNC and WMC and I like the slight diversification that EFC adds to my income stream. EFC is a brand new position and I already own some WMC.

    Those are my moves today, again thanks for sharing yours.

  • taymere_lane taymere_lane Jul 5, 2013 12:44 PM Flag

    Hard to say,

    - June Payrolls +195k vs +165k Consensus
    - May Revised to 195k from 175k
    - April Revised to 199k from 149k

    These numbers spell a certain Sept meeting Fed taper. But I like prices right here and bought more shares today. I hate being on margin, but these prices are 15% below my most bearish estimate of current BV and I love the div.

  • taymere_lane by taymere_lane Jul 5, 2013 12:36 PM Flag

    I bought in at $21.93 and may add some more. Their short TBA position is making massive coin lately, leaving them cash flush to buy spread at today's prices without having to delever.

  • Reply to

    BACK TO 2009 AND I[PO PRICES

    by the_spaniard_ii Jul 5, 2013 11:43 AM
    taymere_lane taymere_lane Jul 5, 2013 12:24 PM Flag

    Me too, I doubt BV is below $24 right now and I bought more today.

  • taymere_lane taymere_lane Jul 5, 2013 12:22 PM Flag

    All true, but they've put their thresh hold for raising the FFR at 6.5% unemployment regardless of how the real economy is doing. And paradoxically in terms of the real economy, the lower the labor force participation rate is the easier it is to hit that 6.5% target quickly. It's best to avoid hopeful thinking and just take them at their word, accept it, yes they will taper soon, and invest accordingly.

    How am I investing in light of this? I'm STILL buying mREITS, I bought AGNC, MTGE, and EFC today (the latter is not an mREIT). I took realized gains profits on Monday by selling PSEC and MITT on Monday, and if I hadn't I wouldn't have been willing to buy AGNC MTGE and EFC shares today on margin.

    If I accept that tapering is coming then why am I willing to buy more mREITS? Becuase the 10-2 yld curve is fantastic right now, a spread over 2% is historically rare. The spread is great and interest rate risk can be hedged. I trust management to hedge and pay keep paying divs.

  • Reply to

    Help me understand.....

    by bradsbrt Jun 24, 2013 7:15 PM
    taymere_lane taymere_lane Jun 28, 2013 4:25 AM Flag

    If it gets down below $15 I'll join you in buying heavily.

  • Reply to

    TYPICAL SHAKE-OUT.........

    by makemy2005 Jun 12, 2013 3:11 PM
    taymere_lane taymere_lane Jun 28, 2013 4:16 AM Flag

    Yes, I can find a few specific mistakes they made.

    1. During 1q13 they sold out of their IIO strips position just before a huge rally in IIO strips during 2q13.

    2.Their duration gap of 1.3 years as of 3/31/13 was larger than that of many peers.

    3. They didn't own any swaptions as of 3/31/13, leaving themselves vulnerable to extreme rate shocks that may yet occur.

    4. Their selling out of their 15y FRM mortgage position during 1q13 was ill timed because 15y FRM have less native extension risk.

    5. Their conference call assurances on the dividend for 2013 were ill timed, they may end up having to back pedal on that, and perhaps waste their time defending frivolous lawsuits from disappointed shareholders if they do. IMO they should either have declared outright for the year like PSEC did or stayed mum.

    These mistakes are not the end of the world and they are way more than priced in at current prices. I am not saying management is inept, but you asked for specifics so I gave you 5 of them. Obviously these mistakes are not the only reason MITT has sold off, all mREITS have sold off to way below BV and I am buying mREITS llike crazy. I have opened a long MITT position within the last 30 days my cost basis on MITT is $17.93. The most bearish BV estimate I can countenance is $19.52 from CS, so MITT is a steal at these prices.

  • taymere_lane taymere_lane Jun 28, 2013 3:50 AM Flag

    Nice post stockmeister:) I am totally confused about various asset prices. Precious metals and 5 year TIPS sold off in 2q12 showing that there is no fear of inflation, that would be expected part of a "risk off" trade. Yet 10 year UST's sold off too which doesn't make sense if tere is indeed no fear of inflation. With everything, including equities, selling off, where is the money going? Is it sitting in cash?

    "...they should taper into economic weakness NOT THE OTHER WAY AROUND." fascinating concept. Their impersonation of crabs in a bucket caterwauling like feral cats in heat may have created the weakness to taper into. The main problem is the huge systemic risk that they have created by LSAP. The humongous reserves held at the fed are collateral for speculative derivatives for the 2b2f 2b2j banks. The Fed has bailed out the 2007 arsonists and bought them all brand new flame throwers.

  • taymere_lane taymere_lane Jun 28, 2013 12:14 AM Flag

    My range is $23.72 to $26.45. On the potential downside of that range, they may have realized heavy losses selling out of low coupon MBS and TBA positions. On the upside the rate volatility may give us an upside hedging surprise. For example, what if they bought a ton of IIO strips very early in the 2Q? What if they doubled down on swaptions then later were able to sell some swaptions for realized gains? I do trust this management and I think they do best in volatile illiquid trading environments, calmly picking picking assets on the cheap when everyone is running for the exits using a relative value approach.

    I really don't think anything has changed in our economy and expect ZIRP till perhaps 2018. The fear and confusion generated my multiple Fed members publicly contradicting each other like crabs in a bucket just deepened the liquidity trap. I wish I had enough money to buy another $50k worth of MTGE right now.

  • taymere_lane taymere_lane Jun 22, 2013 1:04 AM Flag

    "...I'll buy a bit more if it doesn't run away from me Friday" I was able to grab a bit more WMC at $17.52 today. I also bought a few AGNC Jan 2015 $20 calls for $3.20 today.

AGNC
19.52-0.19(-0.96%)Aug 29 4:00 PMEDT