Two Harbors Investment Corp. (TWO) is a mortgage REIT, which focuses on investing in, financing, and managing RMBS and related investments. Its main target assets until now have been Agency RMBS, non-Agency RMBS, and other financial assets (about 5% to 10% of the portfolio). It is externally managed and advised by PRCM Advisers LLC, a wholly owned subsidiary of Pine River Capital Management LP.

Many worry that the dividend is falling now, but one cannot legitimately say that is the case. In 2011 TWO declared an annual dividend of $1.60. In 2012 TWO declared an annual dividend of $1.71. In 2013, due to the special dividend associated with the Silver Bay Realty Trust Corp. (SBY) distribution, TWO already declared (and paid) $1.33 per share in dividends. The total by the end of 2013 should easily be over $2 per share (or greater than 17%).

Some might worry

Chesapeake Energy Corp. (CHK) is an oil and gas E&P company. It is the second largest producer of natural gas in the US; and it is the 11th largest producer of oil and NGLs in the US. It owns large leasehold positions in many of the leading US onshore unconventional oil and gas fields. These include (but are not limited to) the Eagle Ford, the Utica, the Granite Wash, the Cleveland, the Tonkawa, the Mississippi Lime, the Niobrara, the Marcellus, the Haynesville/Bossier, and the Barnett plays. The company also owns substantial marketing and oilfield services businesses through its subsidiaries Chesapeake Energy Marketing Inc. and Chesapeake Oilfield Services LLC.

In the latest quarter - Q1 2013 - CHK beat on both earnings and revenues. It reported adjusted profit of $0.30 per share. This result represented 67% year over year growth, and it beat the average analysts' estimate of $0.26

American Capital Agency Corp. (AGNC) is a mortgage REIT that invests in Agency securities (RMBS). Its goal is to preserve net asset value, while generating attractive risk-adjusted returns for distribution to its stockholders via regular quarterly dividends. It does this through a combination of net interest income and net realized gains and losses on its investments and hedging activities. It funds itself primarily through repurchase agreements (with a base of capital from shareholders) and lately partially through the dollar roll market. AGNC is externally managed and advised by American Capital AGNC Management LLC, which is a wholly owned subsidiary of American Capital (ACAS) -- a publicly traded private equity firm and global asset manager.

For Q1 2013 the dividend was a hefty $1.25 (or $5.00 annually -- 16.3%). This was almost covered by the $1.18 in net spread income per common share (including the dollar roll income). Without the

Arlington Asset Investment Corp. (AI) is an investment company that acquires and holds mortgage-related and other assets. These include both agency and non-agency RMBS. AI is taxed as a C corporation, so its dividends are regular dividends (you do not need to file a Form K-1). This is great for investors who want to own AI in a vehicle that is not tax sheltered, although owning AI in a tax sheltered account is a good idea too. AI is internally managed, and the managers seem to be doing a great job in recent years.

AI selects its agency assets for as complete prepayment protection as possible. Sixty percent of AI's agency RMBS are HARP loans. Others are high LTV (loan to value) -- you won't refinance if you will have trouble getting a loan. Some are low loan balance RMBS -- you won't be likely to refinance if you

Amazon.com (AMZN) has a largely deserved reputation for being "the" online marketplace. It earned this reputation many years ago and since then it has been a Wall Street darling. It has been designated a "momentum" stock and its value has been run up beyond all reason. Its FPE is 75, and that number is highly questionable. It now trades at roughly a 10-fold premium to most of its retail peers. Does any stock deserve this kind of valuation? I would argue that no stock does. As a counter many would argue that AMZN has managed to achieve this over valuation successfully for years. I can argue fundamentals to that, but it is hard to deny the reality of AMZN's over priced history. The only strong argument against that is that AMZN's situation is significantly changing. Below I detail 12 reasons AMZN's situation may be changing for the worse.

1. On

CYS Investments (CYS) is a mortgage REIT company. Its objective is to earn consistent, risk-adjusted investment income. CYS invests in Agency RMBS. With mortgage rates falling for most of the past year, CYS's net interest spread has been hurt. This in turn has pressured CYS's dividends. However, in the fall fixed rate Agency mortgage rates bottomed, and they are now slightly higher than that bottom. This led to a spate of refinancing.

The good news appears to be that the spate of refinancing is over. CYS had an average CPR (Constant Prepayment Rate) of 17.6% for Q1 2013. However, the average CPR of the RMBS held at the end of Q1 2013 was only 13.4%. Further, the latest April 2013 data indicate that the CPR has fallen further to 12.1%. This is important. The CPR and the mortgage rates are the prime determiners of core earnings. This large decrease

In the last few weeks, we have seen a huge spate of negative world economic and oil news. Much of the EU economic news has been negative, especially the industrial production numbers. Plus EU GDP growth for Q4 2012 was down -0.9% year over year in the Euro Area and down -0.6% in the EU27. The Chinese Q1 GDP growth disappointed at 7.7% versus an expected 8.0%. The US non-farm payrolls data for March disappointed at 88,000 versus an expected 192,000 and the previous month's 268,000. Further the household survey showed that 496,000 people left the US workforce in March 2013 versus a decline of only 130,000 in February 2013. This belies the reduction in the unemployment rate to 7.6%. More people are clearly out of work. The above are just a few of the highlights. There has been a huge amount of negative economic news in

RNF announced on April 18, 2013 that it had completed a $320 million debt offering of 6.5% second lien senior notes due in 2021. This fully finances the estimated costs of its announced expansion and maintenance projects. It said that this was expected to increase cash available for distribution to unit holders beginning in 2014. It reaffirmed its distribution guidance for FY2013 of $2.60; and it then told how much extra cash would be available for distribution in each year due to the notes offering monies. The per unit increases are expected to be: $0.18 in FY2014, $0.28 in FY2015, $0.60 in FY2016, and $0.69 in FY2017. The stock rose sharply on this news. However, with the West Fertilizer plant explosion, RNF may well rise considerably further. Technically and fundamentally, it is due for a rebound.

On April 17, 2013, there was a huge explosion at the West

If you are looking for a safe haven in economic times that look continually more troubled, you should consider a top performing company in an industry that is being directly supported by the Fed. The phrase, "Don't fight the Fed," should resonate with many; and history has proven that there is good reason for this. When you can get a 15.6% dividend payout at the same time, you really have to be interested.

American Capital Agency Corp. (AGNC) is a mortgage REIT that invests in Agency securities (RMBS). Its goal is to preserve net asset value, while generating attractive risk-adjusted returns for distribution to its stockholders via regular quarterly dividends. It does this through a combination of net interest income and net realized gains and losses on its investments and hedging activities. It funds itself primarily through repurchase agreements (with a base of capital from shareholders). AGNC is externally

BreitBurn Energy Partners LP (BBEP) is an independent oil and gas limited partnership. It acquires, explores, and develops oil and gas properties for the purpose of generating cash flow to ultimately distribute to its unit holders. It pays about a 9.3% dividend currently. It has a market capitalization of $2.01B and an enterprise value of $3.11B. It has approximately 77% of its production hedged. Approximately 78% of oil production is hedged at $92.93/barrel; and approximately 77% of natural gas production is hedged at $5.96/MMBtu. This makes BBEP a relatively safe company to invest in even if you think the US economy is in for a slowdown/recession. Further, natural gas prices closed at $4.14/MMBtu on Thursday April 11, 2013. This is much higher than the approximately $1.90/MMBtu at the nadir in 2012. The hedging chart going out several years is below.

(click to enlarge)

In Q4 2012 BBEP increased its

Cyprus is a small country with a GDP of only $24.69B as of December 2011. It should be unimportant. Its economy is roughly a tenth the size of Greece's economy. Here are 7 reasons it is important.

1. It's not over. On April 12, 2013 Eurozone finance ministers formerly approved a new 17B Euro bailout deal after many had thought the 10B Euro bailout by the EU-IMF earlier in March 2013. This means Cyprus must now find 6B Euros more than it originally estimated to get the 10B Euros from the EU-IMF. The original number for the needs of the bailout was 17.5B Euros. That number has recently jumped to 23B Euros. I am not sure anyone knows where this new money is coming from yet. Cyprus is not over! The new deal may mean that all or virtually all of depositors' monies over 100,000 Euros will be

Barclays was the only major bank in the last Reuters monthly poll to maintain a 2013 Brent price forecast above $120/barrel. On Wednesday April 3, 2013, Barclays cut its Brent forecast to $112/barrel on average for 2013. Goldman Sachs cut its forecasts steeply in October 2012. It cited a rise in unconventional oil supplies in the US and Canada as the reason; and that was when the US Q3 GDP growth of +3.1% was the basis of the estimate. Since that time the US has seen a lot of data that indicates a significant US slowdown if not a US recession in 2013. The sharp drop in the US Q4 2012 GDP growth to +0.4% was the first of the negative data items.

The EU recession was the second. The EU GDP growth was down by -0.9% year over year in the Euro Area and -0.6% in

The Blackstone Group LP (BX) is a global leader in alternative asset management. Total AUM (assets under management) reached a record $210B by 2012. This was up $44B or 26% from 2011. As of 2012 70% of AUM was under long-term contracts, which are not subject to redemption risk. Fee-related earnings grew 28% in 2012 to a record $700 million.

BX has no net debt. It has $2.3B in cash and corporate treasury investments and $6.7B in total net value, which includes cash, corporate treasury investments, and net performance fees. In 2012 BX's economic net income increased 30% to about $2B. Its distributable earnings increased 48% to over $1B (or $0.85 per common unit). Its adjusted EBITDA increased 49% to approximately $1.3B. Pre-Tax GAAP income was $1B. For Q4 2012 distributable earnings were $449 million or $0.39 per common unit. That was more than double Q4 2011. BX

Cedar Fair LP (FUN) owns and operates amusement and water parks in the US and Canada. It owns 11 amusement parks. It has one amusement park under contract. It has 4 separately gated water parks, 5 hotels (about 1700 rooms), 5 campgrounds, 2 marinas, 850+ rides and attractions, and 120+ roller coasters. It has about 1700 regular employees and about 37,000 seasonal/part-time employees. It also floundered in the last recession. With a new one likely approaching, it seems likely to do so again soon. With the double whammy of the payroll tax hikes, this is even more likely.

What business is more dependent on discretionary spending than an amusement park business? Sure, kids go to amusement parks, but they are taken there by their parents. How many parents feel like going to an amusement park when they have home budget issues or job issues? How many want to spend

Vanguard Natural Resources LLC (VNR) is an oil and gas E & P company that focuses on the development of mature, long lived oil and natural gas properties. VNR attempts to generate stable cash flows that it can distribute to its shareholders/unitholders. It attempts to grow its distribution over time. It has grown the dividend 43% since 2007. The dividend/distribution is currently $2.43 per year (8.5%). It is a limited liability company that behaves as an LP for distributions/dividends and tax purposes. It has no general partner and no IDRs. It pays its distribution/dividend monthly; and investors will need to file a K-1 form for this stock.

VNR has been displaying great management lately in Buffet like style ("Buy when there's blood in the streets"). When oil prices hit their low in 2009, VNR management saw a big opportunity. It proceeded to buy huge new, mostly oil assets

Capstead Mortgage Corp. (CMO) is a mortgage REIT. It has a leveraged investment portfolio of almost exclusively agency ARM RMBS. The ARMs (adjustable rate mortgages) reset to more current interest rates within a relatively short period of time. This can allow for expansion of financing spreads when interest rates are falling. It can allow for the recovery of financing spreads when interest rates are rising. It generally results in smaller fluctuations in portfolio values from changes in interest rates compared to fixed-rate RMBS portfolios. CMO is recognized as the most defensively positioned agency mortgage REIT. It is self-managed, and its management team is experienced. It was started in 1985. It has a five-year compound annual total return of 12.4%, which exceeds that of the NAREIT Mortgage REIT Index.

CMO theoretically gives good returns almost no matter what. The problem is that there has been a confluence of events negatively

Kohlberg Kravis Roberts & Co. (KKR) is a global leader in alternative asset management. As of December 31, 2012 KKR had $49B in AUM in the private markets. These private equity investments included natural resources, infrastructure, and real estate. It had $26B in AUM in the public markets. These leveraged credit investments included mezzanine financing, special situations, direct lending, equity strategies, and fund of funds. KKR had $4.8B in AUM in capital markets and principal activities.

For FY2012 KKR generated $2.1B of ENI (economic net income) or $2.90 per unit. This was almost four times the ENI KKR reported for FY2011 of $0.73 per unit. This is fairly straightforward. However, KKR's accounting is very hard to follow as it has huge off balance sheet items. For instance, KKR reported $348 million in net economic income for Q4 2012. This was 45% higher than the ENI in Q4 2011.

Many people have asked me for a list of mortgage REIT ETFs. They love the great dividends of mortgage REIT companies, but they don't want to have to try to evaluate the complex financials of these companies. The list below, with some recent performance data is an attempt to answer that question.

Two of the top performing mortgage REIT ETFs in 2013 are:

1) Market Vectors Mortgage REIT Income Fund (MORT). The price of this ETF has appreciated +13.75% year to date. Its trailing twelve month yield is 9.76%. Some of its top holdings with their weightings in the fund are:

Two Harbors Investment Corp. (TWO) is a REIT that specializes in investing in RMBS -- both Agency and Non-Agency and related investments. It is externally managed and advised by PRCM Advisers, LLC, a wholly owned subsidiary of Pine River Capital Management LP. For Q4 2012 TWO had core earnings of $0.28 per share and GAAP earnings of $0.64 per share. Its leverage declined from 3.8x to 3.4x at the end of the quarter. TWO paid a $0.55 quarterly dividend (18.06% annually at TWO's close Thursday February 7, 2013 of $12.18). This dividend alone seemed to make TWO a great investment, but in addition to that dividend TWO announced it would also pay a special dividend of the 17.8 million shares of Silver Bay Realty Trust Corp. (SBY) it had acquired in exchange for a portfolio of single family homes.

Since that time TWO's stock has risen to $13.95

Some groups have given rosy outlooks for US economic growth in the range of 2%-3% in FY2013. Other groups are much more pessimistic. Given past experience, the rosy outlooks generally get revised downward over the course of the year as negative factors come into play. As much as I would like to believe there will be good growth in the US in 2013, a number of factors make me believe otherwise. First the US Q4 2012 GDP growth was only +0.1%. This was a considerable drop from the +3.1% growth in Q3 2012.

How distressed are current times? The EU GDP growth was down by -0.9% in the Euro Area and -0.6% in the EU 27 in Q4 2012. These numbers were down significantly from the -0.6% and -0.4% in Q3 2012 respectively (year-over-year figures). Japan's GDP growth was -0.7% year-over-year in Q4 2012. The OECD (most