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David White  

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  • 10.6% Dividend Linn Energy's 'Wheeling And Dealing' Shows It Is Alive As A Viable Company [View article]
    rlp2451:
    I recommended people sell LINE and LNCO in the fall when it was in the $20's. The price has come down considerably. The company has made the distribution fairly clear. The price could go down to $9; but the above sounds like someone getting to the down party late.
    Mar 29, 2015. 09:38 AM | 2 Likes Like |Link to Comment
  • 10.6% Dividend Linn Energy's 'Wheeling And Dealing' Shows It Is Alive As A Viable Company [View article]
    I can't say for sure. However, when prices don't move very much, hedges are expensive and largely unnecessary. Perhaps LINE's folks were lulled into believing oil prices would remain stable or go up. Then hedges are just money losers.
    Mar 28, 2015. 07:19 PM | 2 Likes Like |Link to Comment
  • 10.6% Dividend Linn Energy's 'Wheeling And Dealing' Shows It Is Alive As A Viable Company [View article]
    The parent company of GSO is The Blackstone Group (BX).
    Mar 28, 2015. 02:27 PM | 2 Likes Like |Link to Comment
  • Double Or Triple Top, Slowing Adds, Increasing Content Costs Spell Doom For Netflix [View article]
    For instance, assume Reed Hastings wasn't lying or exaggerating about the 5+ million adds per quarter. However, the Net Adds figure virtually has to be correct. That means the churn rate is almost 40% if both are true. In other words NFLX is losing about 2 million subscribers a quarter. That increases overall cost of growing the subscriber base. It tells you the attraction is not that great. With skyrocketing content costs on top of that, NFLX is in trouble. Could it turn itself into a profitable film-making company? Perhaps. House of Cards is popular; but I am not sure how profitable it is at the moment. Also it is one of the few things that people seem to like about Netflix these days. That probably prevents Netflix from licensing the House of Cards content to other content providers. That in turn probably limits the amount of income Netflix can get from it (limits its profitability). I think you can see the problem.
    Mar 28, 2015. 11:36 AM | 1 Like Like |Link to Comment
  • Double Or Triple Top, Slowing Adds, Increasing Content Costs Spell Doom For Netflix [View article]
    Mark,
    First It could easily fall to $320 or so in the short term. That was where Argus said it might make it a buy. Evercore made it a SELL until $380, so a change in the rating at that point to say HOLD might allow Evercore to push it up again. However, the financials of the company and the fundamental prospects say that the company could go bankrupt on its current path as all the video stores did. It has longer term downside to $100 per share or lower. How you try to short it really depends on your time frame. Shorting a momentum stock at all can require a strong stomach and conviction.
    Mar 28, 2015. 11:29 AM | Likes Like |Link to Comment
  • 10.6% Dividend Linn Energy's 'Wheeling And Dealing' Shows It Is Alive As A Viable Company [View article]
    The results from Q4 2014 plus the hedging should tell you that. The distribution for Q4 2014 was $241 million ($2.90 per unit). The shortfall of net cash was $93 million. Most of the price fall was already in place. Plus much of it was covered by hedges. Hence a $1.25 per year distribution should continue to be doable for LINE, as $148 million amounted to a 1.0x distribution coverage ratio in Q4 2014. $1.25 per year amounts to only about $104 million in distributed funds. Even with further downside, LINE should be able to cover this from profits due to its current production and hedging.
    Mar 27, 2015. 10:14 AM | 15 Likes Like |Link to Comment
  • 15% Dividend Armour Residential REIT's Latest Update Shows Strategy Change Is Working [View article]
    I did suggest that the moves of Q1 2015 could make the results for Q2 2015 more inline with the dividend and better for book value.
    Mar 26, 2015. 03:47 PM | Likes Like |Link to Comment
  • 15% Dividend Armour Residential REIT's Latest Update Shows Strategy Change Is Working [View article]
    I have forgotten, and I used the SA editor, so its gone. However, it didn't say anything about "change is working". If you read the article, it says to ARR management, "prove it", although it does say that I believe the moves are sound ones in theory. Further the article says that the moves have not been working yet, since the book value has continued to go down; and the Core Earnings are still significantly below the dividend.
    Mar 26, 2015. 03:45 PM | 1 Like Like |Link to Comment
  • 15% Dividend Armour Residential REIT's Latest Update Shows Strategy Change Is Working [View article]
    Needless to say the editor changed my title.
    Mar 26, 2015. 11:18 AM | Likes Like |Link to Comment
  • Dovish Fed Statement Puts The Kibosh On 18% Dividend Western Asset Mortgage's Strategy [View article]
    I would guess that there is probably some debate about just what that dividend should be. The total return for Q1 2015 (and for Q4 2014) is likely to be much less than the dividend. WMC won't want to keep that up for long. In other words WMC likely lost book value (a good amount) in Q1 2015. Adapting their strategy to the market conditions could hurt their ability to pay the huge dividend they have been paying.
    Mar 26, 2015. 11:17 AM | Likes Like |Link to Comment
  • Dovish Comments From The Fed Make 12% Dividend American Capital Agency Attractive [View article]
    Dividends#1: I do not want to do the work to answer your questions about Dollar Roll income on AGNC. I don't trust my memory back that far. I think they used Dollar Roll income substantially all through 2014. I am unsure how much of the dividend it covered in all cases. I did look up the Q1 2014 case. For Q1 2014 the net spread and Dollar Roll income was $0.71 per common share. The Dollar Roll income was only $0.14 per common share of that. The dividend was $0.65 per common share. In the latest quarter I believe the Dollar Roll income was 51% of the total, so it has increased as interest rates have gone down. It supposedly works well if interest rates are going down semi-consistently.


    As for MTGE, Gary Kain may be its CIO; but it is a different animal. It has substantial non-Agency holdings (if memory serves). I don't want to compare the two; and I don't think the comparison would be apt.
    Mar 24, 2015. 10:11 AM | 1 Like Like |Link to Comment
  • 12.7% Dividend Yielding AG Mortgage Bet On Lower Interest Rates And The Fed Obliged [View article]
    It does indicate a fair amount of stability in the dividend, especially since that time includes the last two quarters of 2013 -- a time when many mREITs were cutting dividends.
    Mar 24, 2015. 09:59 AM | Likes Like |Link to Comment
  • 12 Reasons U.S. Q1 GDP Growth May Be Much More Negative Than Some Are Thinking [View article]
    I presume you are being sarcastic. However, the nominal GDP is the GDP computed using the current prices for goods. The real GDP uses a market basket from a "base year" (say 2000 in which oil was $27.39/barrel) to take out the effects of inflation supposedly (deflation of energy in this case). However, a market basket is not specific enough to energy for this case, so the school taught GDP difference still doesn't come out the way you want it too. Really the only "real" GDP in this case is the nominal GDP.

    As for the relationship to the averages and etf's, I only mentioned four, not five. However, my point there was really that we have already celebrated the 6th year of the bull market. We are overdue for a bear market. Any sustained downturn in the economy would be seen by the market. It supposedly predicts the economy 6 months in advance. If it starts falling quickly, it may be unlikely to stop easily. It may indicate a new recession. This is by no means a certain indicator. However, a bad Q1 result has been accepted more than once in recent years without the market tanking (as indicated by the four etf's). If the market looks like it is tanking after the one bad quarter, which even the Atlanta Fed is now saying will be poor at +0.3% growth (and the trend of revisions has been downward), then chances are good we will see the end of the bull market. With the economy in a weakened state that would assuredly mean the start of a recession. Keep in mind we have a lot of QE. The BOJ is even supposedly buying US stocks this time. A lot of foreign money has made its way into the US due to the rise of the USD, which makes investing in USD denominated assets that much more profitable for Europeans who have a lot of liquidity from the €1.1T ECB QE program for FY2015. If the US suddenly looks weak, we could easily see foreign investors start to take their money out of US investments; and this would worsen the situation appreciably. In other words worry from foreigners could be part of the trigger for a US recession (or a self-fulfilling prophecy). This is just getting messier, so I will stop here, but I should have made my point.

    Finally whether using N-GDP or R-GDP the oil price fall is only one item in the "market basket", so it will still drag down the GDP regardless of which method is used. We have not had significant "deflation" yet, so you should be able to tell that the "market basket" has not fallen dramatically yet, except for a few commodities, and even those are a very limited number. I prefer to think of things in Nominal-GDP terms this year. They seem a lot closer to reality, but the imperfect "Real-GDP" will work almost the same way. It was not designed for this specific situation.
    Mar 24, 2015. 12:18 AM | 1 Like Like |Link to Comment
  • 12 Reasons U.S. Q1 GDP Growth May Be Much More Negative Than Some Are Thinking [View article]
    Dirk Leach:
    There are a lot of different estimates out there for Q1 2015. The Atlanta Fed one of +0.3% growth is the lowest major one I have seen. Last I looked GS estimate was for +2.7% growth. I don't believe in that one at all.

    My take is that much of the market does not know what to think because people like Jack Lew have been misleading them into thinking that low oil prices will be good for the US economy. Before the explosion in unconventional oil drilling that may have been true. But now the US produces over 9 million bopd. Plus the CapEx for virtually all of the domestic oil producers got hit. Ditto the oilfield services companies. The oilfield services guys lost over 25,000 workers last I heard, and the number was expected to go up another 8,000 or so momentarily when I heard that. Those were probably all reasonably high paying jobs (most $100K+/yr) compared the the say $30K/yr the service jobs Obama is talking about bring. The effect is a huge negative. Add in the oil E & P companies job losses. Add in all of the ancillary job losses from the areas in which those jobs were lost (like grocery store clerks, etc.). The picture looks very ugly. Right now I see at least 3 quarters of very weak results ahead. i do not know the exact numbers. Partly it will depend on how quickly money is spent and respent (the multiplier effect). I believe the multiplier will be substantially lower. I also believe there will be a lag before the money not spent on oil, gasoline, etc. will be spent on something else. I believe the poor Q1 2015 results will tend to make people hesitant to spend. I also believe significant longer term damage will be done to the unconventional oil and natgas E & P business (also the oilfield service businesses). It will not be as easy as some people thing to get them going at the previous level. The Arabs love this. They may even be trying to help drive the prices down. They know the US companies will be hurt a lot more than theirs. On the whole this is a very ugly situation; and no one is bothering to try to figure out what the long term structural damage to the domestic oil & natgas E & P business will be. It will likely be substantial; but Obama is just making it tougher on them with ill-timed new fracking rules.

    New fracking rules are needed; but the timing stinks. I also haven't looked at the new rules yet, so I am a bit ignorant about them. Obama should be trying to figure out a way to lessen the damage to the US domestic oil and natgas E & P businesses. However, that would probably be viewed as un-DEMOCRATIC, so he not going to do that. He has done a few good things; but his misguided rhetoric has done much more damage than he has done good. I can't wait for him to leave. Some of the rhetoric is sheer idiocy to me. Yet he wants to get his way whether or not he even believes the stuff he is saying himself. UGH!
    Mar 23, 2015. 04:24 PM | 3 Likes Like |Link to Comment
  • 12 Reasons U.S. Q1 GDP Growth May Be Much More Negative Than Some Are Thinking [View article]
    Salmo trutta:
    You might be interested in reading my article on the economy that discusses this more thoroughly.

    http://seekingalpha.co...
    Mar 23, 2015. 09:20 AM | 1 Like Like |Link to Comment
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