Bryce_in_TX's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/4542301/comments http://seekingalpha.com/article/1418151/comments?source=feed#comment-19099931 19099931
NLY had a losing quarter also, from a comprehensive income standpoint, and that is the bottom line. Their book value fell as well. You are distorting facts for your own purposes.]]> Tue, 21 May 2013 22:21:11 -0400
NLY had a losing quarter also, from a comprehensive income standpoint, and that is the bottom line. Their book value fell as well. You are distorting facts for your own purposes.]]> http://seekingalpha.com/article/1418151/comments?source=feed#comment-19099381 19099381
I've already demonstrated from AGNCs 10-Qs/10-Ks that you are factually wrong. Less than 50% of AGNCs revenues came from the sales of their MBS each year. You are not reasonable. I'm out. It is futile to discuss with you. You are dont' recognize truth and facts when they are presented to you. It's not possible to reason with such nonsense. ]]> Tue, 21 May 2013 22:02:27 -0400
I've already demonstrated from AGNCs 10-Qs/10-Ks that you are factually wrong. Less than 50% of AGNCs revenues came from the sales of their MBS each year. You are not reasonable. I'm out. It is futile to discuss with you. You are dont' recognize truth and facts when they are presented to you. It's not possible to reason with such nonsense. ]]> http://seekingalpha.com/article/1418151/comments?source=feed#comment-19098941 19098941 Tue, 21 May 2013 21:53:25 -0400 http://seekingalpha.com/article/1418151/comments?source=feed#comment-19098761 19098761
I have no investment in AGNC or any mREIT at the current time. I am long "O", Realty Income Trust, but none of the mREITs.]]> Tue, 21 May 2013 21:49:15 -0400
I have no investment in AGNC or any mREIT at the current time. I am long "O", Realty Income Trust, but none of the mREITs.]]> http://seekingalpha.com/article/1418151/comments?source=feed#comment-19098381 19098381
No it's not. $655 million of this number are "unrealized losses". What comprises the ($1.029) billion in losses on the Income Statement labeled, "Loss on derivative instruments and other securities, net" are:

(1) ($62) million in losses from "Other periodic interest costs of interest rate swaps"
(2) ($312) million in losses from "Total other realized loss on derivative instruments and other securities, net"
(3) ($655) million in losses from "Total unrealized gain (loss) on derivative instruments and other securities, net"

The sum of those totals to ($1.029) billion in losses. $655 million of the losses reported are "unrealized", as the description states. I've already explained this in detail in my post above, and why this is required. I didn't misinterpret anything. These losses are unrealized because the derivatives used as hedges have not been settled/terminated yet, but the change in their fair value is required by GAAP to be reported in earnings. Note that for the same period, there was an offsetting increase in the value of MBS of $689 million. (See Statement of Comprehensive Income, the line after Net Income labeled, "Unrealized gain on available-for-sale securities, net". ) But because the MBS are "available for sale" the unrealized gain on them is reported as "Other Comprehensive Income" (OCI) in the equity section of the balance sheet (See Consolidated Statement of Stockholder's Equity, "Unrealized gain on available-for-sale securities, net" of $689 million), and is not reported in earnings and the Income Statement for the period. This is the accounting mismatch I and KPMG spoke of. Both sides of the hedge transaction do not hit the Income Statement in the same period. This causes GAAP Net Income to be materially distorted. That ($655) million has to be added back to GAAP Net Income.

"Go to page 35 of the 10-Q. Under "Gain (Loss) on Derivative Instruments and Other Securities, Net", is a table showing all "Realized" and "Unrealized" gains and losses on derivatives for the quarter and for the first six months of 2012 and 2011. Referring to 2012's numbers, the ($1.029) billion at the bottom is the sum of "realized" and "unrealized" gains and losses. Note the caption near the bottom of the page, "Total unrealized gain (loss) on derivative instruments and other securities, net " of ($655) million. This number is included in the ($1.029) billion of losses, but the ($655) million in losses are "unrealized", as the caption states.

http://1.usa.gov/12Qleyz

Page 7 of the 2nd Qtr, 2012 10-Q:
"We account for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). ASC 815
requires an entity to recognize all derivatives as either assets or liabilities in the balance sheet and to measure those instruments at
fair value."

Derivatives which are classified as assets or liabilities are active, unsettled/unexpired derivatives. They are required to be marked to fair value.

"Changes in fair value related to derivatives not in hedge designated relationships are recorded in gain (loss) on derivative
instruments and other securities, net; whereas changes in fair value related to derivatives in hedge designated relationships are
initially recorded in OCI and later reclassified to income at the time that the hedged transactions affect earnings."

The change in fair value of unsettled/unexpired derivatives not designated as hedges, for accounting purposes, is required to be reported on the Income Statement as either an unrealized gain or loss. The change in fair value of unsettled/unexpired derivatives designated as a hedge, for accounting purposes, is recorded to OCI and later hits the Income Statement upon settlement/expiration of the derivative. None of AGNC's derivatives are designated as hedges, for accounting purposes, any longer, as of Sept. 30, 2011.]]> Tue, 21 May 2013 21:40:28 -0400
No it's not. $655 million of this number are "unrealized losses". What comprises the ($1.029) billion in losses on the Income Statement labeled, "Loss on derivative instruments and other securities, net" are:

(1) ($62) million in losses from "Other periodic interest costs of interest rate swaps"
(2) ($312) million in losses from "Total other realized loss on derivative instruments and other securities, net"
(3) ($655) million in losses from "Total unrealized gain (loss) on derivative instruments and other securities, net"

The sum of those totals to ($1.029) billion in losses. $655 million of the losses reported are "unrealized", as the description states. I've already explained this in detail in my post above, and why this is required. I didn't misinterpret anything. These losses are unrealized because the derivatives used as hedges have not been settled/terminated yet, but the change in their fair value is required by GAAP to be reported in earnings. Note that for the same period, there was an offsetting increase in the value of MBS of $689 million. (See Statement of Comprehensive Income, the line after Net Income labeled, "Unrealized gain on available-for-sale securities, net". ) But because the MBS are "available for sale" the unrealized gain on them is reported as "Other Comprehensive Income" (OCI) in the equity section of the balance sheet (See Consolidated Statement of Stockholder's Equity, "Unrealized gain on available-for-sale securities, net" of $689 million), and is not reported in earnings and the Income Statement for the period. This is the accounting mismatch I and KPMG spoke of. Both sides of the hedge transaction do not hit the Income Statement in the same period. This causes GAAP Net Income to be materially distorted. That ($655) million has to be added back to GAAP Net Income.

"Go to page 35 of the 10-Q. Under "Gain (Loss) on Derivative Instruments and Other Securities, Net", is a table showing all "Realized" and "Unrealized" gains and losses on derivatives for the quarter and for the first six months of 2012 and 2011. Referring to 2012's numbers, the ($1.029) billion at the bottom is the sum of "realized" and "unrealized" gains and losses. Note the caption near the bottom of the page, "Total unrealized gain (loss) on derivative instruments and other securities, net " of ($655) million. This number is included in the ($1.029) billion of losses, but the ($655) million in losses are "unrealized", as the caption states.

http://1.usa.gov/12Qleyz

Page 7 of the 2nd Qtr, 2012 10-Q:
"We account for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). ASC 815
requires an entity to recognize all derivatives as either assets or liabilities in the balance sheet and to measure those instruments at
fair value."

Derivatives which are classified as assets or liabilities are active, unsettled/unexpired derivatives. They are required to be marked to fair value.

"Changes in fair value related to derivatives not in hedge designated relationships are recorded in gain (loss) on derivative
instruments and other securities, net; whereas changes in fair value related to derivatives in hedge designated relationships are
initially recorded in OCI and later reclassified to income at the time that the hedged transactions affect earnings."

The change in fair value of unsettled/unexpired derivatives not designated as hedges, for accounting purposes, is required to be reported on the Income Statement as either an unrealized gain or loss. The change in fair value of unsettled/unexpired derivatives designated as a hedge, for accounting purposes, is recorded to OCI and later hits the Income Statement upon settlement/expiration of the derivative. None of AGNC's derivatives are designated as hedges, for accounting purposes, any longer, as of Sept. 30, 2011.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19092771 19092771
"“Adjusted net income is a performance measure used by Company management to evaluate its operational performance from oil and natural gas properties. The Company defines adjusted net income as net income (loss) plus the following adjustments:
• Unrealized (gains) losses on commodity derivatives;
• Realized (gains) losses on canceled derivatives;
• Realized gains on recovery of bankruptcy claim;
• Impairment of long-lived assets;
• Loss on extinguishment of debt;
• (Gains) losses on sale of assets, net; and
• Merger transaction costs.”

LINE itself uses adjusted GAAP numbers as a performance measure to evaluate its operational performance. LINE's own numbers, from its 10-Ks, 2006 through 2012, for "adjusted Net Income" sum to $1,294,555,000. (Note: I could not find a number for 2006, so I estimated $28.819 millon)

So, LINE"s own numbers sum to $1,294,555,000 and my numbers sum to $1,315,519,000. Both numbers are about $900 million less than total distributions paid for this period. So, from LINE's own numbers, they do not generate sufficient earnings to fund the distributions, by a large margin.

You state:
""You keep going on about GAAP, and as has been explained to you GAAP is a very bad measure to use for MLPs""

From LINE's own SEC reports, your statement simply is not credible.]]> Tue, 21 May 2013 18:25:13 -0400
"“Adjusted net income is a performance measure used by Company management to evaluate its operational performance from oil and natural gas properties. The Company defines adjusted net income as net income (loss) plus the following adjustments:
• Unrealized (gains) losses on commodity derivatives;
• Realized (gains) losses on canceled derivatives;
• Realized gains on recovery of bankruptcy claim;
• Impairment of long-lived assets;
• Loss on extinguishment of debt;
• (Gains) losses on sale of assets, net; and
• Merger transaction costs.”

LINE itself uses adjusted GAAP numbers as a performance measure to evaluate its operational performance. LINE's own numbers, from its 10-Ks, 2006 through 2012, for "adjusted Net Income" sum to $1,294,555,000. (Note: I could not find a number for 2006, so I estimated $28.819 millon)

So, LINE"s own numbers sum to $1,294,555,000 and my numbers sum to $1,315,519,000. Both numbers are about $900 million less than total distributions paid for this period. So, from LINE's own numbers, they do not generate sufficient earnings to fund the distributions, by a large margin.

You state:
""You keep going on about GAAP, and as has been explained to you GAAP is a very bad measure to use for MLPs""

From LINE's own SEC reports, your statement simply is not credible.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19089901 19089901 Tue, 21 May 2013 17:01:40 -0400 http://seekingalpha.com/article/1428501/comments?source=feed#comment-19051011 19051011 Mon, 20 May 2013 20:23:54 -0400 http://seekingalpha.com/article/1447751/comments?source=feed#comment-19049151 19049151 Mon, 20 May 2013 19:14:40 -0400 http://seekingalpha.com/article/1447751/comments?source=feed#comment-19047371 19047371
Can a tablet edit video and create new vids as fast as a PC? I still have tons of family VHS vids I need to edit and convert to DVD. Can it work with QuickBooks as fast as a PC? Just asking. I don't play games hardly at all, but that would be another issue. What about graphics design? Can a tablet effectively allow you to do lay outs and create personal graphics? I still create my own cards, and at times make up certificates and things for the wife, she's a teacher. In regards to all of this, I need a DVD drive. Do tablets come with such drives? I would think I've hit on a number of issues common to the average PC user.

I can see the portability issue, and something less expensive is attractive to some folks.

I personally prefer more viewing space than 10 or 11 inches, and don't want a crimped keyboard. Not into touch screen,thanks. I prefer a laptop powerful enough to replace a desktop unit, but don't want anything smaller than 15 inches viewing as a computer.]]> Mon, 20 May 2013 18:12:22 -0400
Can a tablet edit video and create new vids as fast as a PC? I still have tons of family VHS vids I need to edit and convert to DVD. Can it work with QuickBooks as fast as a PC? Just asking. I don't play games hardly at all, but that would be another issue. What about graphics design? Can a tablet effectively allow you to do lay outs and create personal graphics? I still create my own cards, and at times make up certificates and things for the wife, she's a teacher. In regards to all of this, I need a DVD drive. Do tablets come with such drives? I would think I've hit on a number of issues common to the average PC user.

I can see the portability issue, and something less expensive is attractive to some folks.

I personally prefer more viewing space than 10 or 11 inches, and don't want a crimped keyboard. Not into touch screen,thanks. I prefer a laptop powerful enough to replace a desktop unit, but don't want anything smaller than 15 inches viewing as a computer.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19045731 19045731
Not from earnings it doesn't. ]]> Mon, 20 May 2013 17:29:41 -0400
Not from earnings it doesn't. ]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19045631 19045631
Jerry,

The accounting system records the financial impact of the work being performed in the field. It measures the financial impact of all transactions a company enters into.]]> Mon, 20 May 2013 17:27:52 -0400
Jerry,

The accounting system records the financial impact of the work being performed in the field. It measures the financial impact of all transactions a company enters into.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19045451 19045451
Take 2010, 2011, or 2012, and show me how you arrive at a Net Income number that is materially different from my adjusted numbers."

I'm waiting. ]]> Mon, 20 May 2013 17:20:33 -0400
Take 2010, 2011, or 2012, and show me how you arrive at a Net Income number that is materially different from my adjusted numbers."

I'm waiting. ]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19044291 19044291
I have adjusted for GAAP. I see nothing invalid about what I have presented. Show me how what I have presented is invalid

The Cash flows from ops. over time, should approximate or come close to Net Income. Using the Cash Flow from Ops numbers, from the financials, they come close to my adjusted Net Income number. LINE's own cash flow numbers don't come close to the adjusted number, largely due to the fact they add back the cash costs of the puts.

Give me numbers that validate, not statements with no support.]]> Mon, 20 May 2013 16:50:47 -0400
I have adjusted for GAAP. I see nothing invalid about what I have presented. Show me how what I have presented is invalid

The Cash flows from ops. over time, should approximate or come close to Net Income. Using the Cash Flow from Ops numbers, from the financials, they come close to my adjusted Net Income number. LINE's own cash flow numbers don't come close to the adjusted number, largely due to the fact they add back the cash costs of the puts.

Give me numbers that validate, not statements with no support.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19043961 19043961
Take 2010, 2011, or 2012, and show me how you arrive at a Net Income number that is materially different from my adjusted numbers. ]]> Mon, 20 May 2013 16:42:26 -0400
Take 2010, 2011, or 2012, and show me how you arrive at a Net Income number that is materially different from my adjusted numbers. ]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19043761 19043761
The difference between cash accounting and accrual accounting are timing differences. So, cash flows over an extended period of time should approximate closer and closer the accrual accounting, and vice versa. Using the Cash Flow Statement, they do. ($1.695 billion in cash flow from ops through 2012, $1.315 billion in adjusted Net Income) Using LINE's numbers they don't. ($2.79 billion) I have to conclude LINE's numbers aren't valid. Seems very logical to me.

Give me numbers from the Financials that verify one another. LINE's numbers don't jive with the financials.]]> Mon, 20 May 2013 16:35:42 -0400
The difference between cash accounting and accrual accounting are timing differences. So, cash flows over an extended period of time should approximate closer and closer the accrual accounting, and vice versa. Using the Cash Flow Statement, they do. ($1.695 billion in cash flow from ops through 2012, $1.315 billion in adjusted Net Income) Using LINE's numbers they don't. ($2.79 billion) I have to conclude LINE's numbers aren't valid. Seems very logical to me.

Give me numbers from the Financials that verify one another. LINE's numbers don't jive with the financials.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19042611 19042611 Mon, 20 May 2013 16:18:21 -0400 http://seekingalpha.com/article/1428501/comments?source=feed#comment-19041861 19041861
Let's take 3 years, 2010, 2012, and 2012, to demonstrate what I am saying.

For 2010: LINE's 10-K reports a ($114.218) million loss, per GAAP. But it had ($232.376) million in unrealized losses on derivatives, so I add that back to the (114.218). Then it also had $63.918 million in unrealized gains on interest rate derivatives, so I add that to the ($114.218) loss. The resulting Net Income number is a positive $54.11 million adjusted Net Income. But the distributions paid that year were $365.711 million. Adjusted Net Income doesn't come close to paying for all the distributions. So, where does the money come from? Debt and/or Equity issues. That's the only place left it can come from.

For 2011, LINE's 10-K reports $438.439 million in Net Income. But, there are $192.951 in unrealized gains on commodity derivatives which have to be subtracted from that, yielding an adjusted number of $245.488 Net Income. Line paid out $466.488 million in distributions. Where does the extra funds come from? Debt and/or Equity.

For 2012, LINE's 10-K reports a Net Loss of ($386.616). But there were ($277.882) in unrealized losses from commodity derivatives that have to be added to that number, and a ($422.499) impairment charge which also has to be added back. That yields an adjusted Net Income of $313.765 million. But distributions paid out were $596.935 million. The deficit of funds has to come from debt and/or equity.

Each year, earnings, adjusted for distortions, are not sufficient to fund the distributions. I'm not comfortable with that.]]> Mon, 20 May 2013 16:03:19 -0400
Let's take 3 years, 2010, 2012, and 2012, to demonstrate what I am saying.

For 2010: LINE's 10-K reports a ($114.218) million loss, per GAAP. But it had ($232.376) million in unrealized losses on derivatives, so I add that back to the (114.218). Then it also had $63.918 million in unrealized gains on interest rate derivatives, so I add that to the ($114.218) loss. The resulting Net Income number is a positive $54.11 million adjusted Net Income. But the distributions paid that year were $365.711 million. Adjusted Net Income doesn't come close to paying for all the distributions. So, where does the money come from? Debt and/or Equity issues. That's the only place left it can come from.

For 2011, LINE's 10-K reports $438.439 million in Net Income. But, there are $192.951 in unrealized gains on commodity derivatives which have to be subtracted from that, yielding an adjusted number of $245.488 Net Income. Line paid out $466.488 million in distributions. Where does the extra funds come from? Debt and/or Equity.

For 2012, LINE's 10-K reports a Net Loss of ($386.616). But there were ($277.882) in unrealized losses from commodity derivatives that have to be added to that number, and a ($422.499) impairment charge which also has to be added back. That yields an adjusted Net Income of $313.765 million. But distributions paid out were $596.935 million. The deficit of funds has to come from debt and/or equity.

Each year, earnings, adjusted for distortions, are not sufficient to fund the distributions. I'm not comfortable with that.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-19040451 19040451
"Its distributions are covered by the cash the business generates,"

That would be profit, debt, and equity, not just profit. I think some folks are misled to believe what you have stated only includes earnings or profit. That is not the case, and I can back that up from the 10-Ks, making adjustments for the distortions created by GAAP.

"The GAAP earnings metric is not reflective of the actual cash generated for MLPs"

GAAP, unadjusted, has problems, specifically the unrealized gains/losses on derivatives used as hedges but not designated as such. Recording impairments to oil/gas reserves due to declines in commodity prices is also a potential problem with GAAP. My understanding is that if prices recover, a company, under GAAP, is not allowed to mark the reserves back up to fair market value, but instead adjusts the amount of depletion recorded over the remaining reserve life.

So, agreed, GAAP has some problems. But, I have adjusted for that in my number, by adding back the unrealized losses to or deducting the unrealized gains from Net Income and adding back the impairments to Net Income. I fail to see how the resulting number is not valid. It does stand up to scrutiny.

You can argue that the depletion/depreication is an estimate, which it is, which is distorting Net Income. All I can tell you is that I am not aware of any GAAP rules which would cause a distortion in this regard. That would be management's miscalculation. If they believe they have miscalculated, then why don't they make an adjustment for that in the current year, as required by FAS 154 "Accounting Changes and Error Corrections", so that the same error does not continue in the future? Frankly, I find little credibility in this argument against GAAP.

To state that all distributions have been paid from cash generated from operations, and imply that means from "earnings" is, IMO, a total lie. The numbers do not back that up, i.e. that all distributions have been paid out of earnings.

LINE's own calculation of DCF takes out depreciation/depletion and other cash costs to the company. The cash acquisition costs of long term assets are not included in that DCF, just as other cash costs are not included in the number. That measure DOES NOT measure LINE's earnings or profit. To state DCF is a measure of LINE's true profitability is totally bogus. I believe a lot of folks are being mislead and believe DCF represents only profit. That is not true.

"You as an individual, may make money on LINE by buying low and selling after a period of time, collecting the distributions. But anything you receive that didn't come from earnings is coming either from other unitholders' contributions or through the issuance of debt. In the end, all owners, as a whole, can not get anymore out of LINE than its real earnings. That's it. "

If you disagree with that, show me, using the accounting equation, how it's wrong.]]> Mon, 20 May 2013 15:35:51 -0400
"Its distributions are covered by the cash the business generates,"

That would be profit, debt, and equity, not just profit. I think some folks are misled to believe what you have stated only includes earnings or profit. That is not the case, and I can back that up from the 10-Ks, making adjustments for the distortions created by GAAP.

"The GAAP earnings metric is not reflective of the actual cash generated for MLPs"

GAAP, unadjusted, has problems, specifically the unrealized gains/losses on derivatives used as hedges but not designated as such. Recording impairments to oil/gas reserves due to declines in commodity prices is also a potential problem with GAAP. My understanding is that if prices recover, a company, under GAAP, is not allowed to mark the reserves back up to fair market value, but instead adjusts the amount of depletion recorded over the remaining reserve life.

So, agreed, GAAP has some problems. But, I have adjusted for that in my number, by adding back the unrealized losses to or deducting the unrealized gains from Net Income and adding back the impairments to Net Income. I fail to see how the resulting number is not valid. It does stand up to scrutiny.

You can argue that the depletion/depreication is an estimate, which it is, which is distorting Net Income. All I can tell you is that I am not aware of any GAAP rules which would cause a distortion in this regard. That would be management's miscalculation. If they believe they have miscalculated, then why don't they make an adjustment for that in the current year, as required by FAS 154 "Accounting Changes and Error Corrections", so that the same error does not continue in the future? Frankly, I find little credibility in this argument against GAAP.

To state that all distributions have been paid from cash generated from operations, and imply that means from "earnings" is, IMO, a total lie. The numbers do not back that up, i.e. that all distributions have been paid out of earnings.

LINE's own calculation of DCF takes out depreciation/depletion and other cash costs to the company. The cash acquisition costs of long term assets are not included in that DCF, just as other cash costs are not included in the number. That measure DOES NOT measure LINE's earnings or profit. To state DCF is a measure of LINE's true profitability is totally bogus. I believe a lot of folks are being mislead and believe DCF represents only profit. That is not true.

"You as an individual, may make money on LINE by buying low and selling after a period of time, collecting the distributions. But anything you receive that didn't come from earnings is coming either from other unitholders' contributions or through the issuance of debt. In the end, all owners, as a whole, can not get anymore out of LINE than its real earnings. That's it. "

If you disagree with that, show me, using the accounting equation, how it's wrong.]]> http://seekingalpha.com/article/1428571/comments?source=feed#comment-19037401 19037401
But, seeing how Blacks were treated, then Viet Nam, my views began to change. Since then, I have learned about the Women's Suffrage Movement and Susan B. Anthony's efforts to change the White male dominated society and give women the right to vote and the right to be treated as human beings, not as inferior human beings or property. The history I was taught in high school didn't include the mistakes and failures our society has made since its founding. Learning how the Indians were treated, getting screwed out of their land, was another eye opener for me.

So, do I think that the federal government was seeking to control the left wing back in the late '60s, when they were espousing freedom, equal rights, etc., and our society was still largely against such values for Blacks? Hell yes. That was viewed as a threat to many people.

Do I think the same thing could be going on, except now the pendulum has swung a 180 degrees and now it's the right wing being demonized, i.e. the Tea Party and the IRS? Could very well be. Let's hope the congressional investigations bring out the truth.]]> Mon, 20 May 2013 14:27:20 -0400
But, seeing how Blacks were treated, then Viet Nam, my views began to change. Since then, I have learned about the Women's Suffrage Movement and Susan B. Anthony's efforts to change the White male dominated society and give women the right to vote and the right to be treated as human beings, not as inferior human beings or property. The history I was taught in high school didn't include the mistakes and failures our society has made since its founding. Learning how the Indians were treated, getting screwed out of their land, was another eye opener for me.

So, do I think that the federal government was seeking to control the left wing back in the late '60s, when they were espousing freedom, equal rights, etc., and our society was still largely against such values for Blacks? Hell yes. That was viewed as a threat to many people.

Do I think the same thing could be going on, except now the pendulum has swung a 180 degrees and now it's the right wing being demonized, i.e. the Tea Party and the IRS? Could very well be. Let's hope the congressional investigations bring out the truth.]]> http://seekingalpha.com/article/1428571/comments?source=feed#comment-19035571 19035571
I am a conservative, but not a tea partier, though I do share some of the same values. If the Democrats did not favor abortion as a means of birth control, I'd probably be a Democrat on most issues. However, during my college days I was President for Young Americans for Freedom (YAF) on my college campus, a Republican supported organization. I have generally always supported conservative ideas.

I'm not sure what this is supposed to mean but it sounds like my Brother: "" I cant remember is all to convenient."

Not actually remembering because it was 1968 and an employment form of no importance to me, some 45 years ago.................is "too convenient"? I assume the SDS and Black Panters were on that form, I don't actually remember.

Here is what I don't like about the Tea Partiers, my Brother being one of them: They take the truth and distort it, turning it into lies at times. I'll give you two specific examples, because that's all I can remember from the emails my Brother sent me from about 2010 to 2011 when I told him to stop sending me the junk. I don't have the specific emails now because I recently reformatted my hard drive and eliminated them, so I have to use a site called "Snopes" because that's the reference I was given by my Brother to verify the authenticity of the email he sent to me.

One of about a dozen lies he sent to me was one created around President Obama nominating Elena Kagan as a Supreme Court Justice as a reward for her help in getting 9 challenges to his eligibility of being President being dismissed. The link is below. Understand, the email sent to me stated she was nominated for this reason, and it cited 9 or so court cases which supposedly were related to his lack of natural born citizenship. I personally looked up each court reference in the email. None of them had anything to do with Obama's natural born citizenship status. Each case was as Snopes describes, totally bogus. So, that email was totally bogus, lies.

http://bit.ly/115pH4O

The other email example was one my Brother sent to me stating that Obama had created and issued the Muslim U.S. postage stamp because he is a Muslim. However, I checked this one also, and the Muslim stamp was created under President George Bush, in 2001. Not only that, but the email referenced Christ and the 10 commandments, one of which is "Thou Shalt Not Lie". That's very ironic, since the entire email created was a total lie itself.

http://bit.ly/10QosSk

There were another 10 or so emails which I don't recall exactly what they were now, but all were a pack of lies which my Brother sent to me. After the first 3 or so I suggested he start doing his own due diligence in researching the emails as to their credibility before he forwarded them to me and others. (He is in a network of emailers who pass this junk to each other) That just went in one ear and out the other. After I told him to stop sending me the emails for about the 3rd time, he told me I must be a Democrat. LOL No, I am interested in truth, not lies, as simple as that.

Now, if you want to infer that our government back in the late '60s was pure and righteous and simply couldn't have been involved in controlling left wing groups, whether they had been involved in violence or not, that's your choice to believe. I don't believe it. That doesn't mean I'm a left winger. Far from it. I simply realize the realities of this world. As a nine year old boy, I witnessed Black families having to eat in the washroom of my Uncle's Cafe/Restaurant because Whites had established rules of society which made no sense to a nine year old boy, which the government allowed to be enforced. That was 1959, 1960. Do I believe society and the government changed in 8 years? No way.

If the Tea Partiers want to be accepted as credible, they have got to stop the nonsense in the making up of and spreading of lies about the left wing. IF they are capable of that, who knows what else they are capable of.

If you want to stand for truth, justice, Mom, Apple Pie, God, etc. then you had better personally demonstrate those qualities to everyone, and not spread lies about others. That violates the 10 Commandments, the very values they say they believe in.

Now, I don't want to condone the violence by Blacks in the '60s. However, I believe, had I been mistreated, abused, and controlled like the Blacks were, I may have very well been involved in the violence myself. It's the Whites that cause this mess, not the Blacks, through a century or more of abuse, control, and evil. And it wasn't just the Blacks who were viewed as "property". Women were as well.

I'm not saying the IRS was justified in what they did. I'm simply pointing out that both sides, right and left have their own faults.]]> Mon, 20 May 2013 13:47:26 -0400
I am a conservative, but not a tea partier, though I do share some of the same values. If the Democrats did not favor abortion as a means of birth control, I'd probably be a Democrat on most issues. However, during my college days I was President for Young Americans for Freedom (YAF) on my college campus, a Republican supported organization. I have generally always supported conservative ideas.

I'm not sure what this is supposed to mean but it sounds like my Brother: "" I cant remember is all to convenient."

Not actually remembering because it was 1968 and an employment form of no importance to me, some 45 years ago.................is "too convenient"? I assume the SDS and Black Panters were on that form, I don't actually remember.

Here is what I don't like about the Tea Partiers, my Brother being one of them: They take the truth and distort it, turning it into lies at times. I'll give you two specific examples, because that's all I can remember from the emails my Brother sent me from about 2010 to 2011 when I told him to stop sending me the junk. I don't have the specific emails now because I recently reformatted my hard drive and eliminated them, so I have to use a site called "Snopes" because that's the reference I was given by my Brother to verify the authenticity of the email he sent to me.

One of about a dozen lies he sent to me was one created around President Obama nominating Elena Kagan as a Supreme Court Justice as a reward for her help in getting 9 challenges to his eligibility of being President being dismissed. The link is below. Understand, the email sent to me stated she was nominated for this reason, and it cited 9 or so court cases which supposedly were related to his lack of natural born citizenship. I personally looked up each court reference in the email. None of them had anything to do with Obama's natural born citizenship status. Each case was as Snopes describes, totally bogus. So, that email was totally bogus, lies.

http://bit.ly/115pH4O

The other email example was one my Brother sent to me stating that Obama had created and issued the Muslim U.S. postage stamp because he is a Muslim. However, I checked this one also, and the Muslim stamp was created under President George Bush, in 2001. Not only that, but the email referenced Christ and the 10 commandments, one of which is "Thou Shalt Not Lie". That's very ironic, since the entire email created was a total lie itself.

http://bit.ly/10QosSk

There were another 10 or so emails which I don't recall exactly what they were now, but all were a pack of lies which my Brother sent to me. After the first 3 or so I suggested he start doing his own due diligence in researching the emails as to their credibility before he forwarded them to me and others. (He is in a network of emailers who pass this junk to each other) That just went in one ear and out the other. After I told him to stop sending me the emails for about the 3rd time, he told me I must be a Democrat. LOL No, I am interested in truth, not lies, as simple as that.

Now, if you want to infer that our government back in the late '60s was pure and righteous and simply couldn't have been involved in controlling left wing groups, whether they had been involved in violence or not, that's your choice to believe. I don't believe it. That doesn't mean I'm a left winger. Far from it. I simply realize the realities of this world. As a nine year old boy, I witnessed Black families having to eat in the washroom of my Uncle's Cafe/Restaurant because Whites had established rules of society which made no sense to a nine year old boy, which the government allowed to be enforced. That was 1959, 1960. Do I believe society and the government changed in 8 years? No way.

If the Tea Partiers want to be accepted as credible, they have got to stop the nonsense in the making up of and spreading of lies about the left wing. IF they are capable of that, who knows what else they are capable of.

If you want to stand for truth, justice, Mom, Apple Pie, God, etc. then you had better personally demonstrate those qualities to everyone, and not spread lies about others. That violates the 10 Commandments, the very values they say they believe in.

Now, I don't want to condone the violence by Blacks in the '60s. However, I believe, had I been mistreated, abused, and controlled like the Blacks were, I may have very well been involved in the violence myself. It's the Whites that cause this mess, not the Blacks, through a century or more of abuse, control, and evil. And it wasn't just the Blacks who were viewed as "property". Women were as well.

I'm not saying the IRS was justified in what they did. I'm simply pointing out that both sides, right and left have their own faults.]]> http://seekingalpha.com/article/1440781/comments?source=feed#comment-19001331 19001331
Based on that, I won't pursue this further. My feelings are the same, nevertheless. I have esteem and regard for what you suffered. Take care.]]> Sun, 19 May 2013 14:35:58 -0400
Based on that, I won't pursue this further. My feelings are the same, nevertheless. I have esteem and regard for what you suffered. Take care.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-18991721 18991721
And the DCF calculated far exceeds GAAP Net Income, adjusted for distortions such as unrealized gains/losses on derivatives, and oil/gas reserve impairments. So, the distributions that have been paid through 2012 far exceed the actual earnings of LINE. That means the shortfall has to be made up through new equity being issued or through obtaining debt. I call that leveraging. If you are comfortable with that, cool. I am not.

You as an individual, may make money on LINE by buying low and selling after a period of time, collecting the distributions. But anything you receive that didn't come from earnings is coming either from other unitholders' contributions or through the issuance of debt. In the end, all owners, as a whole, can not get anymore out of LINE than its real earnings. That's it. That's how the accounting equation works. But, not one is paying attention to earnings, at all. Cool, I am getting out as soon as I can get $40 for my shares.]]> Sat, 18 May 2013 21:36:59 -0400
And the DCF calculated far exceeds GAAP Net Income, adjusted for distortions such as unrealized gains/losses on derivatives, and oil/gas reserve impairments. So, the distributions that have been paid through 2012 far exceed the actual earnings of LINE. That means the shortfall has to be made up through new equity being issued or through obtaining debt. I call that leveraging. If you are comfortable with that, cool. I am not.

You as an individual, may make money on LINE by buying low and selling after a period of time, collecting the distributions. But anything you receive that didn't come from earnings is coming either from other unitholders' contributions or through the issuance of debt. In the end, all owners, as a whole, can not get anymore out of LINE than its real earnings. That's it. That's how the accounting equation works. But, not one is paying attention to earnings, at all. Cool, I am getting out as soon as I can get $40 for my shares.]]> http://seekingalpha.com/article/1428501/comments?source=feed#comment-18979431 18979431 Sat, 18 May 2013 10:12:17 -0400 http://seekingalpha.com/article/1440781/comments?source=feed#comment-18972781 18972781
I think the reason most people don't achieve this level of monetary wealth is due to a host of factors, some health related, some family related, some job related, some intelligence related. Not everyone makes wealth their goal in life. A lot of people grow up in less than ideal environments and it takes them a large part of their adult life to figure out their strengths. ]]> Sat, 18 May 2013 00:24:55 -0400
I think the reason most people don't achieve this level of monetary wealth is due to a host of factors, some health related, some family related, some job related, some intelligence related. Not everyone makes wealth their goal in life. A lot of people grow up in less than ideal environments and it takes them a large part of their adult life to figure out their strengths. ]]> http://seekingalpha.com/article/1444591/comments?source=feed#comment-18968281 18968281 Fri, 17 May 2013 19:57:49 -0400 http://seekingalpha.com/article/1444591/comments?source=feed#comment-18968151 18968151
Seems to me it could eat away at DCF available for distributions.]]> Fri, 17 May 2013 19:50:56 -0400
Seems to me it could eat away at DCF available for distributions.]]> http://seekingalpha.com/article/1444591/comments?source=feed#comment-18967381 18967381
Are we looking at the right chart? What is an MLP's interest rate on debt based upon, treasury rates or the prime rate or some index linked to the prime rate? The prime rate had been declining since 9-18-2007 and was at its low of 3.25% on 12-16-2008. I'm thinking banks base their loans on the prime, not treasuries?

Prime Rate
"The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with good credit,"

"The Federal funds rate plus a much smaller increment is frequently used for lending to the most creditworthy borrowers today, as is LIBOR, the London Interbank Offered Rate. The Federal Open Market Committee (FOMC) meets eight times per year wherein they set a target for the federal funds rate. Other rates, including the prime rate, derive from this base rate."

What do treasuries have to do with how much a bank charges to an MLP for debt? It's the prime rate or LIBOR, not treasuries, as best I know.

http://bit.ly/YPn4BX
http://bit.ly/NVGpgp

My guess is that lending rates were at all time lows then and now. Very advantageous for an MLP, I would think.]]> Fri, 17 May 2013 19:17:16 -0400
Are we looking at the right chart? What is an MLP's interest rate on debt based upon, treasury rates or the prime rate or some index linked to the prime rate? The prime rate had been declining since 9-18-2007 and was at its low of 3.25% on 12-16-2008. I'm thinking banks base their loans on the prime, not treasuries?

Prime Rate
"The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with good credit,"

"The Federal funds rate plus a much smaller increment is frequently used for lending to the most creditworthy borrowers today, as is LIBOR, the London Interbank Offered Rate. The Federal Open Market Committee (FOMC) meets eight times per year wherein they set a target for the federal funds rate. Other rates, including the prime rate, derive from this base rate."

What do treasuries have to do with how much a bank charges to an MLP for debt? It's the prime rate or LIBOR, not treasuries, as best I know.

http://bit.ly/YPn4BX
http://bit.ly/NVGpgp

My guess is that lending rates were at all time lows then and now. Very advantageous for an MLP, I would think.]]> http://seekingalpha.com/article/1418151/comments?source=feed#comment-18928411 18928411
"AGNC's losses that quarter were related to its derivatives (hedges which go out years
-------------------------

AGNC's losses for the quarter were for REALIZED ACTUAL UNDILUTED losses...

when they first reported that loss, before the filings, I assumed the losses were "unrealized" losses on their hedges for the future... they were not... they were REALIZED losses... in otherwords the kind of earnings you look for from a company. now everyone in this business takes Realized and unrealized losses on hedges, that is what they are for... but NO ONE in this business takes that sort of REAL losses, far more than they earned for 6 months, possibly 9 months.

that is the kind of thing that you check for... I was blown away when they filed, and it turned out to be REAL losses... something by the way they didn't mention in their "earnings" release... gee.. sort of par for the course with AGNC...

an investor should be taking away from this a pattern AGNC does when reporting earnings... (mostly an investor shouldn't be investing in a management that would constantly pull this sort of shindig when they report) "
----------------------...


You have misinterpreted what is happening here. This is referring to 2nd qtr, 2012 for AGNC. Let's look at that 10-Q, link below. Page 4 shows the consolidated statements of comprehensive income. Under the category of: "Other (loss) income, net" is the line, "Loss on derivative instruments and other securities, net" showing a loss of ($1.029) billion. I think you have interpreted this as being all "realized" losses. That is not correct.

Go to page 35 of the 10-Q. Under "Gain (Loss) on Derivative Instruments and Other Securities, Net", is a table showing all "Realized" and "Unrealized" gains and losses on derivatives for the quarter and for the first six months of 2012 and 2011. Referring to 2012's numbers, the ($1.029) billion at the bottom is the sum of "realized" and "unrealized" gains and losses. Note the caption near the bottom of the page, "Total unrealized gain (loss) on derivative instruments and other securities, net " of ($655) million. This number is included in the ($1.029) billion of losses, but the ($655) million in losses are "unrealized", as the caption states.

http://1.usa.gov/12Qleyz

So these are not realized losses. They are unrealized. They have been included in AGNC's earnings for 2nd qtr. because under GAAP, for any derivatives used as hedges but not designated as hedges for accounting purposes, the changes in fair value of those derivatives must be included in net income for the period.

FAS 133 states: "For a derivative not designated as a hedging instrument, the gain or loss is recognized in earnings in the period of change."

http://bit.ly/1323CEO

AGNC makes it clear in their 10-Qs and 10-Ks that they no longer designate any of their derivatives as hedges any longer. So, all changes in fair value of their hedges is required to be reported in earnings in the current period. However, because these hedging transactions have not been settled yet, they are all "unrealized" gains or losses.

The strategy in using hedges is to protect against or mitigate the impact of market risk upon company assets or revenues. As a result, the hedge is designed to react in the opposite direction to market risk, versus the hedged item. But, under these circumstances, when the derivative is not designated as a hedge for accounting purposes, a timing difference occurs for when the changes in fair value of the hedge and the underlying exposure being hedged (hedged item) impact earnings. The impact of the timing difference results in an accounting mismatch and in distorting GAAP earnings. To the degree the hedge is effective, the unrealized gains/losses resulting from the hedging transaction will never be realized.

What that means is that the GAAP number is materially wrong in most cases, unless the unrealized gains or losses are not material to Net Income/loss.

The ($655) million in unrealized losses on derivatives for 2nd qtr, which reduced Net Income must be added back to GAAP Net Income to get a reliable number. So, the reported ($.88)/share loss for 2nd qtr turns into a $1.30/share Net Income when those losses are added back.

AGNC wasn't trying to fool anyone. The GAAP number was just wrong.

Footnote, from Page 2 of link below: "The accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments. Specifically, such organizations may face an accounting mismatch
between the derivative instrument which is measured at fair value, and the underlying exposure being hedged, as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized. This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument."

http://bit.ly/VsWvjX

A long and detailed, but fairly easy to understand, example of derivative accounting, and its impact on earnings is included in link below for anyone interested. Note in this example, how the $800,000 in derivative losses recorded on the Natural Gas futures contract, before the futures contract is settled, never materialized (to the degree the hedge was effective) once the contract was settled, when the contract was not designated as a hedge.

http://bit.ly/ZH3fKU]]> Thu, 16 May 2013 23:35:44 -0400
"AGNC's losses that quarter were related to its derivatives (hedges which go out years
-------------------------

AGNC's losses for the quarter were for REALIZED ACTUAL UNDILUTED losses...

when they first reported that loss, before the filings, I assumed the losses were "unrealized" losses on their hedges for the future... they were not... they were REALIZED losses... in otherwords the kind of earnings you look for from a company. now everyone in this business takes Realized and unrealized losses on hedges, that is what they are for... but NO ONE in this business takes that sort of REAL losses, far more than they earned for 6 months, possibly 9 months.

that is the kind of thing that you check for... I was blown away when they filed, and it turned out to be REAL losses... something by the way they didn't mention in their "earnings" release... gee.. sort of par for the course with AGNC...

an investor should be taking away from this a pattern AGNC does when reporting earnings... (mostly an investor shouldn't be investing in a management that would constantly pull this sort of shindig when they report) "
----------------------...


You have misinterpreted what is happening here. This is referring to 2nd qtr, 2012 for AGNC. Let's look at that 10-Q, link below. Page 4 shows the consolidated statements of comprehensive income. Under the category of: "Other (loss) income, net" is the line, "Loss on derivative instruments and other securities, net" showing a loss of ($1.029) billion. I think you have interpreted this as being all "realized" losses. That is not correct.

Go to page 35 of the 10-Q. Under "Gain (Loss) on Derivative Instruments and Other Securities, Net", is a table showing all "Realized" and "Unrealized" gains and losses on derivatives for the quarter and for the first six months of 2012 and 2011. Referring to 2012's numbers, the ($1.029) billion at the bottom is the sum of "realized" and "unrealized" gains and losses. Note the caption near the bottom of the page, "Total unrealized gain (loss) on derivative instruments and other securities, net " of ($655) million. This number is included in the ($1.029) billion of losses, but the ($655) million in losses are "unrealized", as the caption states.

http://1.usa.gov/12Qleyz

So these are not realized losses. They are unrealized. They have been included in AGNC's earnings for 2nd qtr. because under GAAP, for any derivatives used as hedges but not designated as hedges for accounting purposes, the changes in fair value of those derivatives must be included in net income for the period.

FAS 133 states: "For a derivative not designated as a hedging instrument, the gain or loss is recognized in earnings in the period of change."

http://bit.ly/1323CEO

AGNC makes it clear in their 10-Qs and 10-Ks that they no longer designate any of their derivatives as hedges any longer. So, all changes in fair value of their hedges is required to be reported in earnings in the current period. However, because these hedging transactions have not been settled yet, they are all "unrealized" gains or losses.

The strategy in using hedges is to protect against or mitigate the impact of market risk upon company assets or revenues. As a result, the hedge is designed to react in the opposite direction to market risk, versus the hedged item. But, under these circumstances, when the derivative is not designated as a hedge for accounting purposes, a timing difference occurs for when the changes in fair value of the hedge and the underlying exposure being hedged (hedged item) impact earnings. The impact of the timing difference results in an accounting mismatch and in distorting GAAP earnings. To the degree the hedge is effective, the unrealized gains/losses resulting from the hedging transaction will never be realized.

What that means is that the GAAP number is materially wrong in most cases, unless the unrealized gains or losses are not material to Net Income/loss.

The ($655) million in unrealized losses on derivatives for 2nd qtr, which reduced Net Income must be added back to GAAP Net Income to get a reliable number. So, the reported ($.88)/share loss for 2nd qtr turns into a $1.30/share Net Income when those losses are added back.

AGNC wasn't trying to fool anyone. The GAAP number was just wrong.

Footnote, from Page 2 of link below: "The accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments. Specifically, such organizations may face an accounting mismatch
between the derivative instrument which is measured at fair value, and the underlying exposure being hedged, as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized. This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument."

http://bit.ly/VsWvjX

A long and detailed, but fairly easy to understand, example of derivative accounting, and its impact on earnings is included in link below for anyone interested. Note in this example, how the $800,000 in derivative losses recorded on the Natural Gas futures contract, before the futures contract is settled, never materialized (to the degree the hedge was effective) once the contract was settled, when the contract was not designated as a hedge.

http://bit.ly/ZH3fKU]]> http://seekingalpha.com/article/1418151/comments?source=feed#comment-18907031 18907031
"now here is the important part, most of their income was from SELLING OFF THEIR PORTFOLIO.. or to be specific capital gains."

That is a distortion of reality.

I don't view the management of AGNC as "the Evil Empire" as you do.]]> Thu, 16 May 2013 13:50:47 -0400
"now here is the important part, most of their income was from SELLING OFF THEIR PORTFOLIO.. or to be specific capital gains."

That is a distortion of reality.

I don't view the management of AGNC as "the Evil Empire" as you do.]]>