Global Macro Trading Journal

Quote from Daal:
There is a ton of people chasing those yields. In some stock newsletters I subscribe to these stocks are one of their favorites. The shock from people when they realize the dividend is not safe will be large, specially in the post mid-2013 phrase world

I understand the carry part but honestly maybe the carry thing is a good thing, it attracts a ton of suckers who overvalue the company
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Sure, so I am not really prepared to buy it here. Maybe when/if the dividend cuts happen, so that people who are in it for the wrong reasons get washed out. As a result, when/if it gets quite a bit cheaper, I'll be poised and ready.
 
Quote from Debaser82:
If you are looking for dividend check out BELG.

Sure bet...:)
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Haha, thanks, Debaser... Just a couple of questions arnd that, though:
1) What am I going to do with all those Belgian francs?
2) Actually, come to think of it, the real question is whether it's actually going to be Walloon francs or Flemish francs or a bit of both? Or, better yet, shares of Dexia?

:)
 
Quote from Martinghoul:

Haha, thanks, Debaser... Just a couple of questions arnd that, though:
1) What am I going to do with all those Belgian francs?
2) Actually, come to think of it, the real question is whether it's actually going to be Walloon francs or Flemish francs or a bit of both? Or, better yet, shares of Dexia?

:)
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Hey BELG really is a company man!

And about the Euro I'll bet you a penny it will still be around new year 2012... And we will still be part of it.

You'd be bettter of shorting JBG's...:p
 
Quote from Debaser82:
Hey BELG really is a company man!

And about the Euro I'll bet you a penny it will still be around new year 2012... And we will still be part of it.

You'd be bettter of shorting JBG's...:p
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Ah, I see... Belgacom on Euronext.

And yeah, I was only kidding about the Belgian/Walloon/Flemish Franc.
 
Quote from Daal:

Whoever is still long these scam companies need to have their head examined. 'low for longer' is a total mainstream view(as opposed to a few years back where it was like Hatzius versus the world). Now with this refinance issue they might be even good shorts
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Stop being such a bitter douchebag. Me and a lot of other folks 14 year investment in NLY literally changed our lives (for the richer).

As I mentioned here, I sold out of all my NLY a few months ago (wouldn't be surprised if me and Big Jeff sold :cool: at the same time) because of 3 reasons:

1. The SEC is considering altering a tax rule, which, if changed could prevent NLY from using much, if any leverage.

2. Refi worries if the BO administration actually went ahead and did something to allow a mass move (that worry looks to have passed)

3. Flat yield curve from the Twist makes it harder to profit on the carry trade.

I've since re-purchased at a couple of dollars less than I sold, but a far smaller position than I had built up over the years. I'm certain I'll never have such a large part of my assets in the company again.

Since 1997 NLY has been through several rate hike cycles, rate cut cycles, the 2000 bust, and the financial crisis - the company has cut and then raised its divvie on a number of occasions. It's still standing, and its investors (who reinvested divvies) have seen average compounded returns in the area of 20%. These guys know what the fuck they're doing.

I don't know much about any of the other MREITS.
 
Quote from Daal:

I'm finding tempting to go long BAC and short XLF as a pair trade(The short leg would be only open during the likely US recession and EU troubles, then it would be closed)
Reasoning is as follows
BAC is too big to fail, the main reason the stock is depressed is the litigation uncertainty(some of it is economic uncertainty but BAC is down more than the sector due the former) but its unlikely that the government would itself actively try to bankrupt the firm so the litigation will be lower than otherwise due this fact

There is no TARP now, the way BAC can raise capital by Eric Holder making phone calls and preventing large fines against the firm and let the company raise its own capital through pre-tax earnings
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Just because it's TBTF doesn't mean equity holders will come out OK. Though since there (incredibly, given 2008) doesn't seem to be any formal process to impose losses on bond- and equity holders without causing Lehman-like disruption, it's a decent idea. Future gov't lifeboats will include everyone, and if at some point this changes you'll likely have plenty of warning.
 
Quote from Martinghoul:

ralph, this is interesting, no?

http://www.businessweek.com/news/20...ear-of-mbs-reits-as-homeowners-refinance.html

I would like to know when the right time to get involved is.
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Also, as relevant as Gundlach's perspective is, I would point out his and our investment objectives are not aligned. Gundlach has a bogey to meet, maybe every quarter, at least every year. If he gets caught in an asset class that declines while his competitors are out of it, he will underperform his peers by a few basis points - death to a bond fund manager. It's his job to constantly be rotating out of things that could decline a hair over the next quarter or two, something an investor in NLY shouldn't even be paying attention to.

I should add the overriding reason I sold my NLY was that it had become such a large portion of my liquid net wealth. I could have had all the above concerns about NLY, but a far smaller position, and none would have led me to sell the stock.
 
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It seems they might be facing liquidity pressures
 
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