3pm into close now.. last hour of the day.. MTGE lags AGNC but spreads suggest it will factor in by days end.
acas was illiquid assets and equity marked at unrealistic valuations based on a non-mark-to-market approach... kind of like marking your houses equity value... hard to do when you don't know what a buyer will really pay. AGNC is totally different beast. jobs market and housing market will suffer again soon enough. claims data came in super weak today. if the trend continues, purchases may be increased.
i would have done the trade anyways. still long agnc. the stock performs better than mtge on up days. down days agnc gets hit a little harder at first but then mtge catches up by close. im really not a fan of the mtge stock itself... trades like garbage... low liquidity and just a big joke.. it tries to follow agnc when it moves up but fails.. but always seems to manage to follow agncs downward moves. i kind of thought mtge would have done better but its just garbage as of late. so i will wait for the spread to move to 2.20 then swap to mtge.
claims data was terrible btw... Jobs market takes a dump all of a sudden.... was in the making i guess.. about to make the fed look stupid for tapering.
just cuz u said that i swapped back again.. it was a positive spread for me anyways. Worked out... got more cash than after the first swap.(so i'm in AGNC again)
0.65 above my expectations... MTGE cutting to 0.65 was below my expectations... even though AGNC yields less i like it more.. no credit risk and better stock liquidity. The stock performs better too and is more predictable in direction.. tends to follow thru with a trend... easy to spot.. also very easy to hedge with or write options on.
i mean 2.5 percent improvement to NAV + future earnings improvement. assumes 10% outstanding share repurchased at 20 pct discount. so agnc bought back 7 pct in q4 ... so the number is a lil less but you can see it has some value to buyback shares.
yeah ur missing something. they sold assets to finance the buyback. so you get about 2.5% on a 20 discount to NAV + improved future earnings.
collect more in yield.. mtge is cheaper but pays the same. agnc keeps cutting at faster rate.
higher duration gap, can take on more risk.. more leverage now that the majority of the move higher in rates is over.. and the added benefit of the MSRs... so higher ROE, higher dividend going forward.. if not this quarter... then next.
yep.. exactly.. gotta give the muppets something to believe in... "Hey wow a years dividend already declared, lets buy that because it's safe" They will just pay out of book value if they can't cover i guess.. not like they care. I suppose they will just let leverage go up to 20x if needed to keep the dividend level... book to erode.