Medicaid used to be voluntary but now one can be forced to have it because of the ACA. Medicaid requires that when you die that your estate pay back what you owe if the estate has money as it is treated as a loan. This was done to prevent medicade fraud. This could be a major issue for a married couple when one of them dies as the other may lose their home to pay off medicaid. Have you had enough?
There has been inflation in food but they don't count food. Tech products keep declining in price which offsets many other things. College and healthcare goes up in cost rapidly but that is the case for anything that is subsidized or paid for by a third party because competitive forces no longer drive these prices down.
Much of the reason we don't have significant inflation is because when the government stimulates they create jobs in China where labor cost are so low that it is not perceived here in the US.
Never look to stocks as a long term investment. The only people making money in stocks now days invest in stocks when they are performing and quickly dump the losers. Holding on to the losers only incrdases your loses.
AGNC buys back shares whenever the book value per share is higher than the stock price because it allows them to raise their book value per share even more which makes them more profitable in the future. It also allows them to deleverage which is smart in a rising interest rate environment. They need to reduce their leverage so they can survive the upcoming rise in interest rates. Otherwise they could go insolvent if interest rates rise fast enough to cause them to have a negative spread. If they were not buying back their shares then this would indicate that they were incompetent at preparing for the inevitable and would be putting your investment at risk. It is a long term strategy.
People may get attracted to the stock because of the high dividend but they only feel safe to own it if the book value per share is at or higher than the stock price because if it isn't then it means they are not on a sustainable path. You should be thankful that they are doing this.
That said I am not saying that this is a reason to own the stock. Just because they are handing out life preservers doesn't mean one should not avoid the flood altogether. Before all is over the book value is going to be headed lower in all likelihood and that will cause a decline in the stock price which pretty much makes the dividend irrelevant. A dividend only matters if you preserve your capital investment and that is not likely. The most likely out come will be that the stock price will decline at a rate that will cause one to lose money for the years to come until interest rates have peaked. The worst case scenario being if interest rates rise fast enough that their average spread goes negative and they run out of cash in which case they will go bankrupt. If that happens then you will lose your entire investment.
It is not a certainty that this will happen but the possibility of it is significant and thus it makes this stock much too risky compared to alternative investments.
The Fed announces the start of the taper and you say shorts should cover. What planet do you live on? Evidently one with an alternative reality
You're going to lose money because you act like you understand things that you don't. Go ahead and argue otherwise but it won't change what is going to happen. You will still lose your money. And you won't learn anything from the experence because you are too stubborn to accept that you were wrong.
Unfortunately I am unfamiliar with convexity in an investment sense. In my field it is used to describe the characteristic of a multi-variable linear system and it's suitability to converge to a solution when being optimized for a specified optimization criteria.
However, my shallow understanding that I have gleamed from over simplified explanations obtained from the web seem to imply what you say. And an investment with low convexity is lower risk than an investment with higher convexity. However, it seems you would need a lot of data available to you to determine these convexity values and I don't think that most casual investors, such as ourselves, have the time and resources to determine them on our own. So I am not sure why it gets discussed as it seems more theoretical than practical for us, unless someone has a tool capable of doing such analysis. If so then I would like to know how to access it. But I am not expecting any directions by anyone because I doubt anyone has been doing this. Surely the large bond funds do it and probably the managers of mREITs as well. But I doubt they are going to give to anyone their proprietary methods.
However if there are any articles that explain how convexity increases or decreases under certain interest rate conditions and thus causes risk to increase or decrease as a result I would think that this knowledge could be put to practical use as a caution flag or as a move forward flag. And maybe that is all it was ever meant to be which is a way to understand why certain conditions are favorable or unfavorable for investors. Currently I do not have such knowledge about convexity but see things with perspectives that may amount to the same thing but I'm not sure. I'm sure it cannot hurt to become aware of convexity in a deeper sense but I am not sure it is necessary and one might conclude after spending the time to familiarize one's self that it wasn't worth the effort.
If you want to be in an mREIT, best to be in one that won't get hammered as much by rising rates because they are mostly into ARMs. However, I think the reported 26% divy is higher than normal because they had a special divy. They also pay dividends at inconsistent times, not exactly on quarters. Note that their stock price has not declined as much as AGNC's. I found them by looking at the holdings list for REM which also has suffered less of a stock price decline so I wanted to know why. I looked at the charts for many of their holdings and some even went up but I did not investigate why yet in all cases, just this one.
Was there a special dividend in the recent past?
Both sides of the isle lie. But in Obama's case just about everything he says is a lie except when the truth happens to work. In other words he only tells the truth if it happens to be the best thing to say, otherwise he doesn't even consider it. It is clear that Bushes weapons of mass destruction argument was suspect back when he was making it. I never believed it and thus I was opposed to going into Iraq. But that does not give Obama a free pass. You can't say because someone else lied that it is OK then that the next guy can lie all he wants and then it is OK. It is NOT OK. It is NEVER OK.
It was not OK for Bush and it is not OK for Obama. Lying is lying and they should all be flushed. And many are. Many political careers have been ruined over this. But for some reason people support Obama even when he lies.
However that may change. I have noticed that many young people are getting pretty #$%$ off over Obama care.
BTW, all you young people out there. Thank you very much for subsidizing the insurance of us older folks. I kind of think you have been suckered but thanks anyway. It is nice to know that you are sacrificing for us. Get used to it. The Democrats will take even more from you as time goes on. Thank you for putting up with it.
Obama was always a lier. Just read the books by people who interviewed the people who knew him well in the past. It has been this way with him all his life. Obama does not have very many old friends and it is for good reasons. They dispise him because of how he has treated them.
Obama tried to oppose moving 787 production to NC because it is a right to work state. If the people in NC voted for their state to be "right to work" then what is wrong with letting that be? But Obama wanted to keep NC residents from getting these jobs because they were such a state. It is all about control. Obama wants to punish states that do not allow unions absolute power.
For those who don't know the right to work laws are, they state that a union cannot force people to join a union as a condition of employment. In other words such union contracts between the union and management are illegal. Management never wanted to agree to such contracts anyway but the union forced them to accept them as a condition to end a strike. The law allows new employees to choose if they want to be in a union or not. Call it a pro choice law if you like. But as usual, Democrats use this concept only when they like it. They really are not about choice. Only their agenda and if taking away choice supports their agenda then the ends justifies the means.
However they won't say that. What they will do is hope you don't connect the dots and see all the contradictions in their platform. That way they can promote choice when it is to their advantage and not having choice when it is to their advantage. When in reality the freedom to choose is a basic part of individual liberty upon which our constitution was founded. But as you can see the Democrats only promote liberty when it suits them. When it does not suit them they oppose it and thus the reason they oppose the right to work laws. They want to force people to join unions against their will. Sound familiar?
It's not corruption. All it means is that GS is a very large organization and one part wants to do one thing and another part wants to do another thing. That is all it means. You can find many fidelity mutual funds where one fund is buying a stock and another fund it selling it or even shorting it. It is up to the fund manager to decide and these people are all individuals with varying opinions.
You are tying to think of large organization as if they act with one mind like the Borg and it never happens that way. Within companies you get competing organizations that are trying to steal business from each other. They even try to undermine each other. It is because they are looking out for their individual jobs. If they succeed and the others fail then it is their jobs that get kept. It is just normal competitive business and nothing more. Internal competition is healthy otherwise you end up with a situation like the government where no one feels like their job is at stake and thus they feel like any level of productivity is good enough as the internal customer is without choices.
What do you mean? The bad news hasn't even started yet. What we have had up to now is anticipation of bad news to come. Wait until it actually happens. Then it will get priced in.
I never look at buy recommendations. I don't trust these people. I don't trust what motivates them. The only conclusions you can trust are your own if you put enough time in to make sure they are valid.