Pj568

Don't Throw Thornburg Mortgage into the Briarpatch Yet

Doesn't seem like the time to betting on mortgage co's. Some think there is a lot of quality here while others make mention of their large holdings in CA and FL and that much of their Alt A is stated income. The stock at 4.00 (approx 25% of the year end book value) indicates that when the financial statements catch up with the market value we'll see losses over 1 Billion. And who really knows what the liquidity situation is. TMA could be out of business at any time.

Total leverage runs around 18. Analysts/writers also talk about picking up additional capital as if there is no cost associated with it. You bet, just ask Citi, Mbia and Etfc how much their capital cost. High rates on debt and high rates on convertible bonds tells you a lot about what the true fear factor is. The stock value of these companies is either the same or lower now than what it was when they picked up their additional capital.

Actually I'd like this company to be a survivor but there is no way I'd put any money on it.