An interesting forex gamble: Sell the Euro short against the Japanese Yen. This trade should be good for six months.
Things got real squirrely yesterday afternoon, viz:
I don’t know why, but you can see heavy selling (the red bars). This morniing Goldman Sachs upped its price target for Apple to $520.
We are basically in a bear market. If you’re long in this market, you have to keep your finger poised over the sell button.
Annaly reduced its latest dividend from 68 cents to 60 cents. Annaly is the largest and arguably the most conservative mortgage REIT. In its dividend press release, it did not explain the reason for the dividend cut. My sources tell me it’s a function of two things: mortgage prepayments and unwillingness by Annaly management to increase its leverage from 5.7 times to a more common industry standard of seven to eight times. My sources believe that the fourth quarter dividend will be retored to 68 cents or close. Recent dividends have moved around —
September 30, 2010 $0.68
December 23, 2010 $0.64
March 29, 2011 $0.62
June 28, 2011 $0.65
I am not worried. The stock is basically flat on the year, though it may take a hit today.
The key with Annaly — and for that matter all stocks today — is to put in low-price buy orders. For example, I’d put in an order to buy Annaly at $16. Maybe you’ll pick up some on the next flash crash? Merrill Lynch has today cut Annaly to a “neutral.” Here’s their report. Click here. Here’s another one with a higher price target. Click here.
Not one of your perfect investments. Unless you’re one of the owners. From the Wall Street Journal:
The U.S. Justice Department on Tuesday accused poker celebrities Howard Lederer and Christopher Ferguson among other executives of a major poker website of defrauding poker players out of more than $300 million.
The U.S. Attorney in the Southern District of New York filed a motion Tuesday to amend an earlier civil complaint to allege that Mr. Ferguson, Mr. Lederer and two other directors for the website, Full Tilt Poker, operated what the Justice Department says was a Ponzi scheme that allowed the company to pay out $444 million to themselves and other owners, which included other famous poker players.
In the motion to amend the complaint, the government alleges Full Tilt executives misrepresented to the website’s players that the money the company was supposed to be holding in player accounts was safely held when it was actually being used for other purposes, including payments to owners.
Louis XIV’s gifts to the world. Louis XIV (aka the Sun King) was King of France at the age of four and stayed King for seventy-two years, three months, and eighteen days. It is one of the longest documented reigns of any European monarch. He basically built the palace of Versailles (with its hall of mirrors). He also commissioned an incredibly extravagant opera called Atvs, which is being staged this week at the Brooklyn Academy of Music.
Susan and I are seeing it on Friday. Atvs was created in 1676 and derived from Ovid’s poem Fasti, Atys is a breathtaking marriage of the royal court’s dance- and chorus-filled spectacles to Ovid’s tragic tale of love lost to a vengeful god. It lasts over four hours. It will probably never again be staged in our lifetime. A private donor paid for the staging costs, which include original baroque instruments and costumes and wigs like you’ll never see anywhere ever. Get yourself a ticket. Click here.
Latest New Yorker cartooons.
Harry Newton who worries that all of his friends are worrying that the end of the world is at hand. They fear not Greece, but Italy which is a much larger disaster. See yesterday’s column for the extent.
Harry, how about “Mattress Cash”…..? I agree with all the comments today……..crazy things are going on out there and everyone has a different answer. America is without a “leader”….like a ship floundering in the ocean without power or rudder…its sad…….Rip
Nonsense! – NLY cut the dividend in an environment most favorable for its business- low interest rates.With interest rates at historic lows and no sign of going higher NLY should be increasing dividends not cutting. So the question is…what is going on? Merrill Lynch cut their investment rating from buy to neutral while lowering NLY price target to under $16. So if you take the new dividend yield and shave $2.50 off the stock price you dont have the stellar performer you think. The bigger issue is what will unfold next. DO you really want to own this thing while they are struggling with some real issues? And look out below when interest should start to move higher – NLY will be down 50% that day. An 18% dividend yield is unrealistic, unsustainable, and signals huge risk. One something is too gopod to be tru – it usually is. Now is the time to dump all these high yielding REIT's that use leverage to play swaps, mrtgage pass thru, and other financaly engineered instruments. It's a scam. This is the tremor before the earthquake.
I added a second analyst report to today's column. Worth reading. Annaly is actually taking a very small hit today. But, let's say we dump all the mortgage reits, what alternatives are you proposing?
Harry-
You told readers when in doubt stay out – stay in cash. Yet you recommend the most risky of equity – REIT's that trade interest rate swaps with leverage in real estate lending. How absurd. If you feel compelled to own some stocks than buy GE pref or ATT pref – both have 6% yields and trading at reasonable multiples. Duke energy yields over 5% and there are several Master Limited Partnerships in the energy space that pay handsome dividends. Or just stay out for a while . But to constantly warn your readers about scams and to regularly espose “safety” principals of investing and then to recommend the most risky of REIT's makes no sense.
You guys scare the heck out of me, a small REIT holder and such. Good thing I read you first thing in the morning and not last, just before trying to fall sleep!! Talk about nightmares; the real world is far scarier!
Personally, I think it is time to hold the guilty, bankers and politicians, to account for their bad, greedy and for us tax payers, stupid decisions and let the chips fall where the may. Real businesses will do just fine, as will their stocks over time. Let's get it over with.
And then Harry can spend more time on jokes and tennis!
I added 200 more rounds of ammo to my stock pile today…..if you want to see inflation take a look at the price of ammo over just the last 2 years…..Hope and Chance.
So your PILES are getting bigger, maybe some stock in preperation H would be in order!
As I cruise the gun shows and gun stores, Ron, I curse myself for all the things I didn't buy when they were “cheap”. The ONLY place Obama has created jobs outside of government is in the entire firearms industry. An industry association should award him salesman of the year/decade/millennium.
I do note, however, that good shotguns haven't moved up much. Even shotgun ammunition has not gone up anything like the skyrocket ride of .45 or .223. (For those of you not in the know, we are talking a ride of multiple hundreds of % in ammunition with excellent liquidity since the last election.) So, my suggestion, Ron, is to short semi-auto pistols and go long in scatterguns. That section of the market is overdue.