The high-yielders took a hit 2% hit yesterday, as the market worried about Washington’s manufactured debt ceiling crisis.
This one is so predictable. These two dummies
will get their act together and raise the debt ceiling at the last minute. Doing deals at the last moment is the only thing they’re any good at. But meantime, they love faking crises. Last night, Dummy Number One warned of ‘Deep Economic Crisis’ if the debt ceiling is not raised. Heck, it’s so difficult? It’s been raised at least 13 tiumes in the last 30 years, under every president — republican or democrat.
To invoke an old Australian saying, I wouldn’t employ either of these two dummies to organize a queue to an outhouse.
If the high-yielders — NLY, AGNC, ANH, etc. — drop any more, I’ll be a buyer. Don’t forget you happily drop a few percent if your yield is 14.8%, as NLY’s is. Here’s NLY over the past three years:
Rent, not buy. I can think of no reason to buy anything that doesn’t yield a decent return from day one. To wit:
+ I stupidly bought a 2004 Mercedes for Susan. It’s been a total disaster. Everything on it has broken, some more than once. We took it in recently for “service” — oil change, lube, etc. They now want $11,000 to replace more bits and pieces that are breaking. My friends all lease their pricey cars. They give them back after three years when the pricey cars start falling apart. They’re more intelligent than I am. I assumed that my Mercedes would actually work.
+ There are three strikes against buying houses: First, their prices are still falling (except in New York). Second, local taxes on them are skyrocketting, voiding all assumptions in your pretty Excel spreadsheet. Third, maintenance is also rising rapidly.
Third Point Second quarter newsletter to its investors. Third Point is one of the biggest and most successful hedge funds. Its latest newsletter, written by founder Daniel Loeb, contains a rant against the “paucity of leadership” in our country and talks about Third Point’s present investment strategy — going increasingly to cash. Absolutely worth reading. Click here.
External monitors are cheap, cheap, cheap. Look at this one from newegg.com.
Amazing bike ride. Click here.
The Newfies.
+ The Newfies have solved their own fuel problems. They imported 150 million tons of sand from the Arabs and they’re now going to drill for their own oil.
+ Two Newfies find a mirror in the road.
The first one picks it up and says, “Lard Jasus, I knows this face but I can’t put a name to it.”
The second picks it up and says, “You stupid bastard, it’s me!”
Harry Newton who wonders why everything suddenly seems to be on sale. My inbox is brimming with sales from everyone of my favorite companies. Of course, there’s a “gotcha.” What I want is not in my size. Or what they’re selling is just plain ugly. There are occasional nuggets. But, for the time involved, buying retail has its charms — though that would be difficult for me. After all, why did God invent Christians? And the answer: Someone has to pay retail.
Harry, I like to be astounded at least once a day…the bike video link made my day! Thanks!
Only buy Japanese for a used car
Harry
The old Australian expression is a person is the sort of drongo who couldn't organize a raffle for a duck in a pub on a Saturday afternoon; or a drongo who couldn't organize a piss-up in a brewery. Organizing a queue for dunny (outhouse???) would be a perilous affair – so in that regard you may have been correct, inadvertently.
“To invoke an old Australian saying, I wouldn’t employ either of these two dummies to organize a queue to an outhouse.” I am reading a book that you and many of your readers would enjoy. “The Invention of Air” by a young man who is an excellent writer, Steven Johnson. (He also wrote “Ghost Map” which I also highly recommend) It is the story of Joseph Priestly's life and times. A contemporary of Franklin, Priestly was a prolific experimenter and writer. Every second Thursday he met with other members of “The Club of Honest Whigs” for rambling discussions. In addition to topics like discovering oxygen and understanding electricity, they contemplated how politics corrupted everyone who touched it and how noble men should have nothing to do with it. I guess nothing has changed in either case!
Fderfler…..have you ever read any of the works of Ayn Rand? Sounds as though you might enjoy her writings.
Upon reflection even Ann Rand's new society in Atlas Shrugged would inevitably suffer from the 80-20 rule; 80% of the work done by 20% of the population.
No pill or app for that.
PaminTexas……in my opinion that 80-20 rule has been trending closer to a 90-10 rule in our ongoing state of economic malaise. We will always have a certain number of people who chose to take the easy way out. But I am completely convinced that a state of pure “laissez faire” capitalism would result in a reversal of 90-10 to 10-90.
Your comment lead me to search:
~ bell curve society~
then
~capitalism, human nature~.
Interesting variety of hits.
Conclusion?
A quote from the character Cleggy of Last of the Summer Wine;
“The trouble with human nature is that it is in the hands of so many people.”
Harry – you must be kidding us! These high yielders stop working when interest rates move higher. As we know these REITs play the spread on mortgage backed paper. When rates go up their earnings power goes down. The 2 knuckleheads you have pictures of above will be the reason that there will be a downgrade in US Treasuries and our borrowing costs will climb. That means higher interest rates and an end to the these type of REITs. The 3 year chart you include is absolutely meaningless! We are in unprecendented times. Nowhere on your 3 year chart of NLY is there a debt ceiling crisis, an incompetent president, and a inept Congress. The rpoblem with charts and graphs is that they do not account for anything but pricing. If there ever was a sell signal for AGNC and NLY it is now. Yet you say you will buy more if it goes down. Good luck with that strategy. High yielders pay high dividends because there is a risk reward propistion. Higher yields = more risk. You really want to bet on Bevis and Butthead?