62 Million Reasons Why Mortgage REIT Investors Should Be Scared

There are actually 62,000,001 reasons not to invest in mortgage REITs like American Capital Agency Corp. (AGNC) and Annaly Capital Management (NLY).  The first reason is that the USA and the world are slipping back into recession.  This will increase the speed of prepayments of mortgages.  Increase prepayment speeds destroys leveraged earnings in mortgage REITs.  Need proof, then check this out.  The ECRI has an amazing track record.  Ignore them at your financial peril.

http://www.advisorperspectives.com/dshort/updates/ECRI-Weekly-Leading-Index.php

Secondly, this article from Minneapolis attorney Bill Butler on LewRockwell.com should bring fear into the hearts of all mortgage REIT investors worldwide.  Here are the other 62 million reasons not to invest in mortgage REITs.  This is a long article, but it shows how nefarious Fannie Mae and Freddie Mac really are.  Mortgage REITs buy their agency securities from these crooks.

http://lewrockwell.com/butler-b/butler-b14.1.html

DISCLOSURE – I don’t own AGNC or NLY.

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Published in: on November 29, 2011 at 1:02 pm  Leave a Comment  

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