Seeking Alpha

Felix Baumgartner, call your broker. UBS debuts a double-leveraged mortgage REIT ETN (MORL)....

Felix Baumgartner, call your broker. UBS debuts a double-leveraged mortgage REIT ETN (MORL). Charging just 40 basis points/year, the product - tracking and then doubling down on an index of already highly-leveraged mortgage REITs - is currently priced to yield about 25%.
Comments (10)
  • Designed by Art Cashin for a Short!
    17 Oct 2012, 08:48 PM Reply Like
  • Scary.
    17 Oct 2012, 08:56 PM Reply Like
  • if it's too good to be true, it probably is.
    17 Oct 2012, 09:21 PM Reply Like
  • Why stop at double leverage..., increase it to 4x and get a 100% yield every year! Double your money every year!!


    Yippee! Let's all become billionaires!!


    17 Oct 2012, 09:29 PM Reply Like
  • The only reason this exists is because rates are so low it is killing savers and they want something they can get a yield from.


    So it all comes back to our federal government. They are running massive deficits so the FR monetizes the debt and drives rates down as far as possible which kills savers and they flock to exotic stuff like this instrument. Greenspan drove rates low after 9/11 and that also created a market and demand for exotic mortgage securities.


    I am starting to notice a pattern.
    17 Oct 2012, 10:27 PM Reply Like
  • The only thing certain about this thing is that someone will make a "killing" out of it.
    17 Oct 2012, 11:19 PM Reply Like
  • wow, can this actually work, even a 15% return? If you invest in 100 shares @25, could this thing really return $625 in 1 qtr, has this happened before?
    17 Oct 2012, 11:55 PM Reply Like
  • What's the tax treatment of the dividends?
    18 Oct 2012, 01:15 AM Reply Like
  • I'll just buy it on 50% margin = ~48% return. Since the income is paid monthly, your margin will decrease very quickly - and you might just have to buy more!! Why didn't they think of this last year.
    18 Oct 2012, 01:52 PM Reply Like
  • Even the short-version prospectus will make your head spin. And reset every month! Just fly to Vegas and throw the dice.
    19 Oct 2012, 04:46 PM Reply Like
DJIA (DIA) S&P 500 (SPY)