American Capital Agency Corp. Message Board

Realized gains on Agency Securities sales totaled $18.5 million or $0.05 per Common share.

Total available for distribution supports 0.07 for the next quarter

The WSJ piece was written by Jon Hilsenrath. He is known as the Fed's media mouthpiece and known to be close with the Fed. He has telegraphed almost every move the Fed has made over the last several years. Difference this time is that AGNC has changed their leveraging strategy. They did it for the right reason - to juice the returns in the face of a shrinking spread. It helped them in Q4 2012, bit them in Q1 2013. Not sure they can effectively hedge against monthly fluctuating MBS prices in the dollar roll market. The upshot of it all is more volatility for both AGNC and MTGE (they invested quite a bit of their recent SPO proceeds in agency MBS using the same strategy). Kain's two presentations next week will hopefully shed some more light on the current situation at both these REITs.

Second that. Don't feed the monkey

Sentiment: Strong Buy

Hey Ray, I am sure you are glad you bought back in. David Hamomoto has done a fantastic job of navigating the company through the market meltdown and has applied the lessons learned to significantly alter the company's risk profile. In a few years, NRF will be a stable cash generating machine. Need to be patient and keep cashing in the increasing dividends as the revamped business model unfolds

I remember that time too. I was initially upset when they made that announcement but decided to give it a few quarters to see how it would play out. Happy I didn't bail.

Wish I had bought more when the CFO was loading up. Oh well. Hindsight is 20/20

I suspect no Fed action is off the table. Can't fight the Fed. Next week, expect more noise / jawboning about the systemic risks mREITs pose. This just as Goldman and other wall street banks are gearing up to offer more risky real estate investments to yield hungry investors. Quite fascinating.

Since the big melt down in 2009, I believe NRF is the best performing REIT. Insiders are invested in the common and the company is aggressively investing in growing the business. Dividend is on track to double in ~ 1 year. This ticker will not appeal to the folks who play AGNC options etc. but it is a solid buy and hold nonetheless. Good luck to you

They join leveraged loans and money-market mutual funds as areas of risk cited by officials. Three Federal Reserve officials have singled out mortgage REITs in recent weeks, saying the industry merits watching.

Calvin Schnure, vice president of research and industry information at the National Association of Real Estate Investment Trusts, said that rather than a source of instability, mortgage REITs have been essential to the housing recovery.

."Mortgage REITs have tripled their holdings of agency mortgages over the past couple of years because their access to public markets positions them to put new capital into the housing market," said Mr. Schnure.

The heightened scrutiny stems from the growth of such companies as Annaly Capital Management Inc. NLY +1.42%and American Capital Agency Corp., AGNC +0.06%whose assets have ballooned to more than $100 billion apiece over the past three years. The market capitalization of the industry has grown over the past three years from $22.1 billion to $59 billion, according to KBW Research.

"Mortgage REITs are bigger today, but they are bigger by virtue of an increased capital base," said Wellington J. Denahan, chairman and CEO of Annaly Capital. "Many of us have operated through challenging markets, including the financial crisis, and we continue to support and are helping to implement the regulatory changes that are being put in place to make the markets safer for all participants. This low-rate environment poses risks that investors in every market must be prudent about managing. In general, the mortgage REIT sector does so through a range of hedging tools, like interest-rate swaps, reducing leverage and conservative balance-sheet management activities."

The recipe behind their rapid growth is raising red flags in Washington, where regulators worry about the REITs' exposure to interest-rate spikes, reliance on leverage and short-term funding agreements that can dry up in times of crisis.

Ray, for my sake, I hope you sold too soon. With increasing dividends pretty much locked in for the next few quarters, the pps should continue heading north.

Any of the old timers on this board know what happened to ag55gen? I miss his insightful commentary

zz and Liza

Thanks

Liza - I bought ETP last year and have two related questions

1. In Turbotax, the various "Y" items reported by ETP do not have a corresponding place for entering the information. Turbotax has only one box for "Y", nothing for Y1, Y2, ...How have you dealt with this problem before? Where does all that information flow

2. When creating separate K-1s for ETP, APU, and SXL, what do you do with the information that is on form 1065. Do you enter all the information in Part II of that form for each of the K-1s you create for ETP, APU, and SXL

Thanks much

Thanks

liza - today's wsj reports that natural gas supplies are dwindling and prices are rising (approaching 4$). what are the implications for NKA pps and future distributions. thx for your opinion

Sentiment: Hold

One possibility is a lot of ARR investors looking for a new home. Stock is now trading at a 15% premium to last reported NAV. Getting frothy.

Stock is trading at a 10% premium to book value. SPO risk. Plus missed consensus earnings forecast. Price may drift a bit lower

Sentiment: Hold