amREIT NIrvana !!
August 9, 2011 at 3:32 pm | Posted in wall street | 4 CommentsIt doesn’t get any better than this.
The long end of the curve is rallying like crazy, so new capital (and reinvested mortgage principal) won’t get quite as fat a spread, but low repo rates for the next eight quarters is simply amazing.
The FOMC sez:
The Committee currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013
On top of that, the bond market rally will result in surprise increases in book value this quarter. That should make the nervous nellies that have been dumping amREITs feel safe getting back into the pool.
The only cloud that could ruin this silver lining is a liquidity crisis. That won’t come from mortgage land, but could come from CDS land. If it does happen, we could experience a disruption in the repo market.
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