the fed has done 3 QE's and upon the end of each the 10 yr has declined.
You have missed the market at every turn. You will never get the mreit crash simulating the bank crash of 08 you so richly desire. breaking news...... agnc survives. get over it.
ya know that is very offensive. I have friends who are Muslim and your profiling is completely unnecessary.
Why don't you go to youtube and search for (Yusuf Islam) "Cat Stevens- Peace Train" and chill.
The price scale of the chart has been magnified. When the two charts are put in the proper perspective with comparable percentage changes, the eerie comparison fades away.
Now consider the Dow for an even longer period of time, from 1924-29 and 2008-2014. This comparison includes an even greater ascent in both eras. The Dow made a much bigger climb during the "Roaring 20s."
This is why it's important to not get sucked into media hype. Read The Big Picture column and focus on the day-to-day action of the market and leading stocks to know what the forward-moving trend will truly be.
A similar chart made the rounds in the aftermath of the 1987 crash. It showed the run-ups in 1929 and 1987, the crashes and the weak recoveries in both, then the horrible slide to a 1932 low. The implication was that 1988 and 1989 would be like 1930-32. Instead, stocks worked their way higher in 1988, setting the stage for a fine rally in 1989.
Yeah but GK still thinks interest rates are headed up. Spread showed no increase, and never will until the buyback stops. AGNC continues to sell MBS showing a 667M realized loss. The buyback was increased from 1B to 2B. The good news is they had estimated taxable income of 65 cents and 59 cents in the kitty so the dividend is safe.
The buyback needs to stop, leverage increased cause interest rates aren't goin anywhere.
I'm holding. Not much debt on the BS, they raised 300M in an offering and 150M notes and bought 1B in investments in Q2. Principle and payoff payments were 370M so they should be able to adjust to higher rates.
I think they can pay the dividend.
Too bad, enjoyed the preferred stock ideas.
This board seems to go into cycles and with the uncertainty of interest rates, there is not much to trade. AGNC's balance sheet is very defensive and buybacks and hedges have reduced what is available for distribution.
On a more positive note, spreads may continue to rise and the portfolio should adjust. As soon there is a clear picture of long-term rates AGNC will stop selling and the hedges will come off. BATSTAT will be back with those unpredictable SPOs.
Mreits are all about buybacks, leverage, spreads and hedges. With some stable rates, AGNC can be a money machine.
" set it and forget it" I think with any investment you should monitor the financial health of the company, even the preffys. I don't listen to the CC but do look at the 10Qs with a focus on debt on the balance sheet and FFO on statements of cash flows.
That said I have been buying some small preffy positions in Mreits and have done well with NYMTP at 9.2%, even RSO-B is looking cheap. I'd stay away from ARR but some you may look at are AMTG-A, CYS-B, DX-A & B, and NRF-C. All yield over 9%.
People will pay a premium to BV if they think the dividend is secure or rising. Seems WMC management is trying to make a statement here.
The buy back of shares is a result of de-leveraging or the selling of MBS at a realized loss. This is the source of capital for the repurchase over and above CPR and principle payments. This realized loss reduces taxable income and amounts available for dividend distribution. This is done in the name of protecting book value which now has priority over the dividend distributions.
Once de-leveraging stops, we will see fewer buy backs.
Seems to me the problem with the dividend is not so much spreads but the de-leveraging. By de-leveraging taxable income is reduced by realized losses in MBS sales. You also have to consider the environment we were in and the cost of hedges. Both greatly affect what is available for distribution.
The Fed reduced the purchase of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month. If this signals a slow steady and more predictable rise in rates where mreits can adapt then we may see the de-leveraging process begin to stop and hedges come off.
Most got caught with their pants down so this process my have to play out a couple of quarters but we should know something by the next earnings season.
Long-term interest-rates may stay low through mid-2014 after the Federal Reserve said it would be reducing its bond-buying stimulus at a modest pace, calming investors fearful of rising yields, said Peter Hayes , head of BlackRock Inc.'s (BLK) municipal-bond group.
The projection came after Treasury and municipal debt prices posted muted reactions to the Fed's announcement it would begin to trim its bond purchases by $10 billion a month in January. Treasury 10-year note yields, a benchmark for long-term municipal bonds, gyrated after the Fed decision but settled back at 2.88%, little-changed from levels seen earlier in the day, according to Tradeweb.
The bond reaction suggests investors expected the Fed to trim its bond buying by a modest amount, Mr. Hayes said. In addition to the Fed's signals, the combination of a less-than-robust economy and slow inflation "probably keeps a lid on rates over the next several months," he said.
Steady long-term rates could spark purchases of fixed-income investments-- including municipal bonds--by investors who had been on the sidelines waiting for yields to rise, he said.
BlackRock's muni-bond managers earlier this week said they expected investors would gravitate back to municipal bonds as a weak 2013 performance has created " compelling valuations" in the debt. Recent muni-bond issues have been well subscribed.
It is possible the taper will be so watered down and open-end, rates could drop the day of the announcement. hehe What that would do for Mreits?