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  • The Real Reason Why Stocks Are Down [View article]
    All of these folks who play the oil futures markets are getting margin calls this week. These futures contracts are worth less than nothing and other stocks must be sold at whatever prices to cover the margin calls. The airlines are huge in these markets as they have huge demands on supplies. I suspect that as their cash on hand dries up from margin calls we will see prices of flights fall to help cash flow.
    Of course the global warming crowd should be happier as demand falls. My own take on this is a little more common sense than scientific. All of this oil comes from underground, and oil is a great lubricant. In the light of continental drifting there may be a reason that oil is underground. We have no idea what kind of harm we are doing to the earth's crust.
    Dec 14, 2014. 07:48 PM | 1 Like Like |Link to Comment
  • Western Asset Mortgage: Yeah I'm Dumbfounded Here [View article]
    My thoughts on WMC. I have a degree in finance , I am able to read balance sheets and income statements. I have no idea of the quality of the WMC loan portfolio. There may be a lot of bad loans or nonperforming assets there, but BIG BROTHER stands behind their portfolio and all income streams. I keep reading about all of these hedges and roll overs and whatever else you want to call them. To my way of thinking these are unnecessary. It seems like these strategies are like brother in law finance. Not really cost effective as shown last summer when prices fell and the hedges were not effective. When you have BIG BROTHER backing you why play games.
    I had 30,000 shares of WMC until the market dipped below 16,000 and triggered a sell, needless to say I got whipsawed, and am looking to get back in before the next end of year dividend. Money saved spends just as well as money won, money lost not so well. A good nights sleep is priceless.
    Nov 12, 2014. 04:00 AM | 1 Like Like |Link to Comment
  • Raise Of Dividend To 18.5% Makes Western Asset Mortgage Look Attractive [View article]
    Last summer when the mREITs took such a decline, I believed the rhetoric and thought they were hedged against such things. Well they had feet of clay and I was being asked to pay for the hedges and the losses. I was not a happy camper. So I took a good look at what had transpired and for all intent and purposes these mREITs looked just like a Ponzi scheme. The first ones in do very well and the last ones in not so well. I started looking at IPO's of mREITs and happened on WMC so I bought in and have been rewarded well since. Now the question is 'when to sell.' I would feel much better if there were new money coming into the game as with secondary offerings. SA is letting me know it is time to go now by slowing down to a crawl.
    Sep 29, 2014. 07:16 AM | Likes Like |Link to Comment
  • Book Review: The Big Con [View article]
    I read your article looking for evidence of the greatest scam of all time, the collapse of 2008. Sadly not much there, but you did bring up remembrances of my misspent youth around grifters in the 1970's. I never was in on a big con but was around a lot of little ones. I remember the 1st time I saw "The Sting" with my wife I was laughing so hard at the opening scene and my wife asked what was so funny and I told her they had switched the envelopes and the gangster had an envelope with newspaper in it. A minute later the truth came out and she wanted to know how I knew it. Early on I realized if grifters and cheats worked as hard at a real job as they do at cheating their personal lives would be much better off. Over the years I have supplemented my income playing poker and have caught many cheats over the years. Then came casinos and cheating became institutionalized by the house. I have not caught many folks cheating in Vegas but if you gamble in a Mississippi casino you almost certainly have been cheated. I tried to report this to the Miss. gaming commission and they could not be bothered even with proof. Caveat Emptor.
    When history is written and the evidence comes out Cheney and the Geitners of this world will be connected with the biggest fraud in history, 2008 was not a banking collapse but a real transfer of wealth. Follow the money if you want the Truth.
    Jun 29, 2014. 10:53 AM | 2 Likes Like |Link to Comment
  • Investors Continue To Flock To Armour [View article]
    OK here is the deal on this article, the author claims to not have any position on ARR. This piece of fluff on ARR is in bad faith and lies about the future of ARR. First of all call the investor relations folks at ARR and ask about income and hedging activity. I would be very surprised if they answered the phone even. As far as I can gather ARR is in a race to bankruptcy so the managers can start over with new stock and the Hell with the old stockholders, just like they did with Bimini Capital. I suspect the brokerage firms are in on this also and will gain in the issuance of new stock. Of the mREITs this one is by far the worst run by any metric you want to chose. You would be hard pressed to find any insiders investing in ARR because this shit is for selling not buying. I have not figured out how these hacks stay out of jail but I would gladly testify against them in a heartbeat which I am certain that these managers have none for their shareholders. Let me finish by saying please forgive me for not being more harsh on them but my writing skills forbid.
    Jun 23, 2014. 03:59 PM | 5 Likes Like |Link to Comment
  • American Capital Agency Corp.'s. Dividend Sustainability Analysis (Post Q1 2014 Earnings) - Part 2 [View article]
    Hi Scott, like your articles and analysis, why not write something on AGNC and other mREITs and all of their hedging activity. It seems to me that hedges are for exactly what happened last year to the REITs. What good are these hedges if not to cover your backside when the market goes adversely? Is there anything hincky going on with so many hedges and derivatives allowing your stock to get clobbered? I have reduced my mREIT holdings significantly last year and would like to get back in but the hair on the back of my neck is saying no. What say you? I miss those dividends but not the price and BV depreciations.

    If the Government gets out of the mortgage business altogether ala Fannie and Freddie, how will this affect mREITS? Many folks say that mREITs are akin to bond funds and act accordingly, but the mREIT managers think a lot more highly of their skills by paying themselves exorbitant salaries even when they lose money. When I make bad decisions I lose money directly, why is there no accountability for these guys?
    Jun 2, 2014. 06:41 PM | 1 Like Like |Link to Comment
  • Western Asset Stock Price Is At The Buy Point For This Quarter [View article]
    Option number two seems the way to go, and I thank you for it. The last couple of years I have been doing the opposite and getting spanked at tax time. Most of the writers on SA believe these mREITs work like a bond fund, personally I believe they are akin to Ponzi schemes. How so? When the mREITs are young they issue more stock with every new dividend, claiming that is the only way they can grow. They pay astronomical dividends even above their earnings. So one must assume a good part of that dividend is return of capital, but you are being taxed as income. Secondly these guys are leveraged to the gills. Danger danger Will Robinson. Thirdly they have derivatives out the wazoo, that I defy anyone to try and understand. If this were a poker game there are way too many wild cards to keep up with. If they are able to borrow 8 and 9 times on capital why do they need my money in the first place? The one thing I have trouble understanding is why Bernie Madoff is still in jail and these guys are out and plying their trade of bamboozling folks.
    May 18, 2014. 06:42 AM | 2 Likes Like |Link to Comment
  • Western Asset -3.4% as earnings dive amid strategy shift [View news story]
    Well if "buy the rumor and sell on the news" holds any water then this news is not the time to sell, although I am waxing tired of the bad news and the SA writers shorting the stock. I suppose that I am getting robbed at the gas pump and in the stock market with these oil and gas stocks. The worst of both worlds. If this was a poker game I would be asking for a deck count because the odds are not adding up. If this was a basketball game I would certainly want to check the bank accounts of the officials. Let's see, the product is in all time demand and supplies seem to be fixed, so something must be remiss in the management end of things.
    May 8, 2014. 12:46 PM | Likes Like |Link to Comment
  • Best Time To Buy Western Asset Mortgage Capital [View article]
    It probably had something to do with Fannie and Freddie being dismantled by Congress. But don't listen to me because these mREITs usually do the opposite of what I think they should. Tapering means less competition from the Feds and should be a positive but Market says no. Interest rates going up should mean more money for mREITs, but the Market says no! Cutting dividends and spending the money to buy back their own shares appears to be a negative, but the Market says it is a positive. Now AGNC cuts it's dividend and uses the money to buy it's competition's shares. To my way of thinking this should be a huge negative, but the Market loves that notion for some crazy reason. Color me baffled I guess.
    Mar 12, 2014. 07:52 PM | 1 Like Like |Link to Comment
  • Armour Continues Buybacks In A Big Way For Investors [View article]
    As my daddy used to tell me at report card time "I buy your books. I pay for your schooling and all you think about is screwing the teacher. When are you going to learn?" The folks running ARR and JMI, are the same ones who ran Bimini Capital into the ditch, leaving the shareholders holding the bag. They seem to be in a race to see how soon they can run ARR into bankruptcy court, and start over with new shares. This is the only reason I can figure for the way they treat shareholders. Why else would they cut dividends and use the money to buy back shares? They cut dividends, but not salaries or bonuses. If ARR is not a Ponzi scheme in mREIT clothing then we should let Bernie Madoff out of jail and apologize unreservedly.
    Mar 12, 2014. 10:36 AM | 2 Likes Like |Link to Comment
  • Is An Expensive Himax Technologies Still A Buy? [View article]
    Dear Bernard,
    Do as I did and just get over it. The articles on this site almost never portray the headlines accurately. Generally I come here to see what the comments have to say as they are the holders of the stocks mentioned in the articles.
    Mar 11, 2014. 03:00 PM | 5 Likes Like |Link to Comment
  • American Capital Agency's Mid-Q1 2014 Composition And Valuation Analysis - Part 1 [View article]
    Paint me skeptical, but I didn't read anything about the real route to prosperity for AGNC. A couple of years ago Kain et al hired the 2 top guys from Fannie and Freddie after they both had tanked to nearly zero. The only reason I could discern for such a bonehead move was payback for cherry picking AGNC's portfolio previously. The move smacked of illegality but I had a right smart of AGNC stock at the time and had no room to complain.
    Forgive me Scott but your analysis is not big on mentioning Balance Sheets or Income Statements, I was taught in Finance School that is the 1st place to start any analysis. What say you? I appreciate the obvious time you spent on this report, now I have to wonder which side your bread is buttered. You cannot possibly do this much work for altruistic reasons. Does AGNC have you in their back pocket? Just saying.
    If AGNC's portfolio changes daily, then their derivatives must change hourly or by the minute. So far they have been a complete failure w/derivatives offsetting losses as the stock has gone from high 30's to the very low 20's. What say you?
    I did like you said and skipped over to the conclusions and found none except maybe the $645 million figure that you then quickly hedge by saying things change daily.
    Feb 27, 2014. 10:10 AM | Likes Like |Link to Comment
  • Whiting USA Trust I: Estimating Remaining Distributions [View article]
    Let me think about that, presently I do not see myself holding this dog past where it will hunt. Presently I am thinking they have overstated the costs of shutting down the trust and there may well be some premium left at the end.
    Feb 11, 2014. 11:40 AM | Likes Like |Link to Comment
  • Whiting USA Trust I: Estimating Remaining Distributions [View article]
    In regards to Schwab only having 14,000 shares in customer accounts; I have 21,500 shares of WHX in my acct. with Schwab. I have been wanting to sell covered calls on them but no buyers yet and for small premiums. I had planned to get out of WHX this summer, but may do it sooner per information in this article. This is something I rarely do, trade on any info in a SA article. I have a feeling that the price of oil is headed upward by tensions in the Mideast and general inflation. WHX has been good to me but I am not married to it. I suspect that the .55 dividend is a return of capital as much as profits. In the words of the greatest philosopher in the world Doris Day "que sera' sera'".
    Feb 11, 2014. 07:24 AM | Likes Like |Link to Comment
  • Now Everything Is Crystal Clear [View article]
    Great article, my first time reading you but I will be back. Title of article and content more confusing than ever, nothing much to hang your hat on. I like your covered call strategy as I employ it myself, you are so smart when you agree with me. You might want to consider covered calls on some high yielding mREITs or Ponzi's as I like to call them. If you catch them in their early years they can be profitable, but always keep an eye on the door, for when things get chaotic. They love to tell you about their hedges and swaptions and such but no mention of Balance Sheets or Income Statements. At any rate you can do well with them if you do not buy the hype and realize they are just like a Ponzi in that the guys in early and out do very well, late to the party you get left holding the bag.
    If you buy Chesapeake hoping Ichan will help you out then I wish you well. By the time you hear what Ichan is doing it is finished. It is the nature of his business to talk buy while he is selling, you and I are not on the inside, and CNBC is complicit in these shenanigans.
    Feb 9, 2014. 10:04 AM | Likes Like |Link to Comment