Doubtful. I am betting agencies go higher in value from these levels. Ben will speak of increasing or reducing purchases as conditions warrant with further information that the fed is not happy with the labor market job creation yet. And around and around we go....
Yeah, and non agency paper is still up sharply in q2. So book is probably 24.35 and then add in dividend (undistributed q2 eps) and adjusted book is over 25.
I expect more and more of this until Wednesday then it will be magic again with mtge going up and up but of course no one liked it at 23.50-24 but everyone will love it at 25+. Schizoids.
Sentiment: Strong Buy
Arr dd not invest into nonagency. They are same management as Bimini though. They are just terrible all around. Jmi is their nonagency fund. Stick with mtge for non agency, it has shown repeatedly good asset selection skills. CIM was designed to blow up because NLY took all the toxic assets and moved them to CIM long ago. Although nly management had suspiciously done so because they didn't want the paper on their own books.
I don't know reik, I'm thinking mitt could go $26.50 before spo due to dividend run up. Mtge and agnc I think could hit 25.75 and 33.50 pre ex distribution. The entire sector may rebound due to the dividend run ups and if the agency mbs rally back on European fears or for whatever reason. Markets are nuts.
This is an little tid bit from MITT's Q1 CC.
" Like clockwork, it seems every spring, we have a growth in interest-rate scare but the facts tell a different story. Each year at this time the government, with more complete data to work with, recalculates the job estimates it made in the previous year. What the revised figures show is not encouraging. At the beginning of 2012, jobs grew at approximately a 1.9% annual rate.
But since then, there has been a steady erosion to roughly about 1.5% in March 2013. The employment participation rate continues to deteriorate with people exiting the workforce at roughly the same pace as people are joining. The long-term implications of this increase in structural unemployment do not bode well for our Social Security system and the deficit.
Although, I’m painting a pretty tepid economic picture here, we do not believe that this tepid economic picture will stop the recovery in housing. We expect that housing will increase by approximately 5% to 8% this year and 3% to 4% in 2014. It will then moderate the speed of further increases because of basically stagnant personal income levels."
Is the fed really going to be ending QE Infinity anytime soon? The answer is most likely no, not for at least 2 more years, and at least another 3 years until we see the first rate increases. So we are at least 5 years out from a shrinking spread from the bottom up. Kinda sad when you think about it... negative real interest rates and our economy is barely growing at all.
yeah, when the "dust" settles this stock will be $33. Keep waiting for that "dust" to settle. The FED can not and will not stop QE purchases for quite some time.. they will keep talking about stopping but the truth is they cant stop. The fed targets will not be reached by anytime soon. I see the economy slowing down significantly in the second half of this year and trouble in Europe to mount. It's funny, a couple months ago everyone was talking about how the fed should scale up its purchases.. and ben said a comment that the "fed will scale up or down purchases as necessary" And was an emphasis on up because everyone was hoping the fed would scale up purchases. Everything looks all "butterflies and roses" one month and TERRIBLE, just outright MORBID the next... that is the attitudes of these traders in the financial markets. The only thing you can bet on is that there will be a lot of volatility in the future as to what is the real direction of the economy... and the truth is.. THIS IS A SAD.. SAD economy because we have a negative real interest rate and yet the economy still cannot create 200,000 jobs a month. ITS PRETTY FREAKIN BAD.
I dont think you should own AGNC though, I think MTGE is the buy here. The ability to go into nonagency and fill a void where the GSEs are going to be leaving the space is pretty important. The ability to leave agencies if the spread becomes too flat is important. Of course the spread is going to flatten out.. its a matter of when.
Agency mbs was down sharply today yet mtge rallied. My thoughts are that if mbs rallies back next week mtge will go up pretty fast given the support for the stock.
Sentiment: Strong Buy
I will wait to short at $26 for mitt. Probably short 2500 shares of mitt at $26.
We were fine before QE infinity and we will be fine after QE infinity. Fed funds will stay at 0 until 2016 IMO. Then it goes up 0.50.
Q1 book to share price (premium/discount)... Mtge is much cheaper and had a smaller loss.
Makes no sense.
These shares get snapped up and we trade $25+ again. Market in general is getting heated and value disappearing rapidly from everywhere. Mtge is cheap today, probably won't be 1 week from now or less.
NAV rose today yet prices down on mtge and agnc. Lol!!!
05/13/2013 13:36:51 Bought 100 MTGE Dec 21 2013 25.0 Call @ 0.5
05/13/2013 13:48:08 Bought 28 MTGE Dec 21 2013 25.0 Call @ 0.45
05/13/2013 13:58:06 Bought 72 MTGE Dec 21 2013 25.0 Call @ 0.5
05/14/2013 11:32:19 Bought 1 MTGE Dec 21 2013 25.0 Call @ 0.45
05/14/2013 14:09:20 Bought 7 MTGE Dec 21 2013 25.0 Call @ 0.5
05/14/2013 14:09:44 Bought 22 MTGE Dec 21 2013 25.0 Call @ 0.5
Bud, I bought 200 contracts yesterday, and 30 more today. I have a total of 230 contracts for the $25 strike. Expire in December. I also own 21,500 shares. I have a bunch of a money at risk in MTGE and I have no regrets. The cost average on the calls is 0.493696. I am playing the dividend run up and I believe MTGE will see $26+ again soon.