Joseph P. Porter's  Instablog

Joseph P. Porter
Send Message
I am a retired college faculty in Philosophy, with specializations in Ethics, Socio-political Theory and Rational Choice/Decision Theory. My teaching focus was on Business Ethics, Medical Ethics and Logic. After retirement I freelanced as a Grant Writer/Fund Raising Consultant. I have taught at... More
My company:
My blog:
Joseph P. Porter's Instablog
  • Increase In Refinancing Dooms mREITs! 0 comments
    Oct 4, 2012 1:13 PM

    Run for your lives!

    Sell all of your mREITs!

    The Fed has conquered long-term interest rates. Refinancing increases, and this portends a dramatic increase in prepayments! Those double-digit dividend yields offered by mREITs are doomed!

    DOOMED, I tell you.

    In the late 1930's Orson Welles directed and starred in Mercury Theater's production of The War of the Worlds, an adaptation of H.G Wells' novel of the same title. The performance began in the style of a news report, and so frightened residents of the northeastern states that a general panic arose, with people fleeing the cities to find safety.

    I think it is safe to say that it was a hoax, of sorts (although it was not the intent of Welles or anyone else to make people believe the Earth was under attack), and that the Earth was not invaded (although the number of Wall Street executives has increased dramatically since 1938. . . hmmmmm).

    News released on October 3 (2012 - we're returning to the present) indicated that there was a dramatic increase in refinance applications as a result of drastic reductions in long-term interest rates. Market news indicated that prepayments were up, and that mREITs such as AGNC, NLY and the like were in the red, and would go under.

    Well, the last bit is more a matter of my take on what the news was trying to get across.

    Agency-supported MBS may well become albatrosses around the necks of some mREITs, but I am not convinced (yet) that it is doomsday for this class of investments. It may be the end of 15% yields, but I'll wait before cutting loose my ARR, CXS, MFA and TWO.

    Disclosure: I am long ARR, CXS, MFA, TWO.

Back To Joseph P. Porter's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • $CUR up $0.27 @1:20 - can't find any news for big jump (15%!) - anyone know what's going on?? Very smiley face about this.
    Sep 24, 2015
  • $CUR earnings didn't help their case much - @ ~ $2.38. Will take great news somewhere to bring stock back up.
    Mar 16, 2015
  • Ignore ETF Expense Ratios? Maybe
    Dec 18, 2014
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.