MFA Financial Inc

Most Recent

  • uploads/// year bond yield LT
    Financials

    Why Did Bonds Barely React to the FOMC Minutes?

    On July 6, the Fed released the minutes from the June FOMC meeting. The Brexit vote mainly overshadowed anything that came out of the June FOMC meeting.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae TBAs Rise with the Bond Market

    For the week ending August 12, 2016, Fannie Mae TBAs ended at 103 24/32—up 4 ticks for the week. The ten-year bond yield fell by 8 basis points to 1.51%.

    By Brent Nyitray, CFA, MBA
  • uploads///Initial Jobless Claims
    Financials

    Initial jobless claims jump

    Initial jobless claims rose to an annualized rate of 360,000 for the week ended May 10th Initial jobless claims are one of the few labor market indicators that are released every week. Unemployment is a profound driver of economic growth, and persistent unemployment has been the Achille’s heel of this recovery. While it seems like […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Miscellaneous

    Fannie Mae TBAs Rally with the Bond Market

    For the week ending April 1, Fannie Mae TBAs ended at 105 2/32. The ten-year bond yield, tradable through TLT, fell by 5 basis points to 1.7%.

    By Brent Nyitray, CFA, MBA
  • uploads///Housing starts
    Macroeconomic Analysis

    Last Week’s Housing Starts Came In Stronger than Expected

    Last week we had some stronger-than-expected economic data with housing starts and building permits topping 1.1 million.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield historical
    Financials

    Recommendation: Should REIT investors fear an accelerated taper?

    Last week, we had some stronger-than-expected data with housing starts and some of the industrial production data. Does that mean the Fed will accelerate tapering?

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Must-know: Why the jobs report slammed Ginnie Mae TBAs

    Friday’s stronger-than-expected jobs report was the catalyst for a heavy sell-off in the bond market. The ten-year bond sold off by 15 basis points.

    By Brent Nyitray, CFA, MBA
  • uploads///Import Price Index
    Financials

    Import prices fall in May

    Import prices are an important driver of inflation The Bureau of Labor Statistics releases its U.S. Import and Export Price Indices monthly. The report keeps track of import prices by locality, type, and fuel/non-fuel. It also separates commodities and non-commodities. Commodity prices tend to be more volatile than non-commodity prices, so it makes sense to […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Weekly Realist real estate roundup (Part 2)

    Back to Part 1 Mortgage-backed securities are the starting point for all mortgage market pricing, and they’re the investment of choice for mortgage REITs  When the Federal Reserve talks about buying mortgage-backed securities (MBS), it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fed  Inflation forecast
    Financials

    Why Did the Fed Increase Its Inflation Forecast?

    The Fed has been consistently high in its inflation forecasts. At the June 2016 FOMC meeting, the Fed took up its 2016 inflation forecast from 1.6% to 1.7%.

    By Brent Nyitray, CFA, MBA
  • uploads///Case Schiller
    Macroeconomic Analysis

    The Jobs Report Is the Highlight of This Short Week

    The bond market will be most sensitive to the jobs report, particularly to wage inflation. REITs such as MFA Financial will also focus on the jobs report.

    By Brent Nyitray, CFA, MBA
  • uploads///FHFA HPI Cumulative
    Macroeconomic Analysis

    Home Prices Hit New Records: What Does This Mean for REITs?

    The recent 5.5% year-over-year gain for home prices has put the FHFA House Price Index about 3% past its April 2007 levels.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae securities catch a bid as bonds rally, reaching 105 5/32

    The front-month Ginnie Mae TBA drifted higher as bonds rallied. After starting the week at 105 17/32, they added about 5/8 of a point to close at 105 5/32.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs rally before the Fed meeting

    Mortgage-backed securities are the starting point for all mortgage market pricing and the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced (also know as the TBA) market. The TBA market allows loan originators to take individual loans and turn them into a homogeneous product […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Consumer

    Why did the Ginnie Mae TBAs catch a bid on the bond market rally?

    The front-month Ginnie Mae TBA drifted higher as bonds rallied. After starting the week at 105 4/32, they traded 7/16 higher to close at 105 18/32.

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Refinance Index
    Real Estate

    The End Of Quantitative Easing Could Make Mortgage REITs Vulnerable

    Big agency REITs like Annaly (NLY) and American Capital Agency (AGNC) took the chance to deleverage their balance sheets after the warning in the spring of 2013.

    By Brent Nyitray, CFA, MBA
  • uploads///Unemployment rate LT
    Macroeconomic Analysis

    January Saw Unemployment Drop below 5%

    In January 2016, the unemployment rate fell from 5.0% to 4.9%, or by about 7.8 million people. The underemployment rate was flat at 9.9%.

    By Brent Nyitray, CFA, MBA
  • uploads///MFA Financial
    Financials

    Why home price appreciation has saved MFA Financial

    MFA Financial is a REIT that invests in both agency and non-agency mortgage-backed securities MFA Financial (MFA) is a mortgage real estate investment trust (REIT) that invests in both agency (government-guaranteed) and non-agency (non-guaranteed) mortgage-backed securities (MBS). Its portfolio is primarily invested in hybrids, adjustable-rate mortgages (ARM), and 15-year fixed-rate mortgages. It chooses to invest […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Why Ginnie Mae TBAs rallied despite looming government shutdown

    Mortgage-backed securities are the starting point for all mortgage market pricing and the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced (also know as the TBA) market. The TBA market allows loan originators to take individual loans and turn them into a homogeneous product […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Real Estate

    Why Ginnie Mae securities followed bonds lower

    The ten-year bond sold off, with yields increasing from 2.19% to 2.27%. Ginnie Mae TBAs followed, dropping from 104 23/32 to 104 20/32.

    By Brent Nyitray, CFA, MBA
  • uploads///MR NFIB
    Financials

    NFIB Small Business Survey flashes warning signs for REITs

    The National Federation of Independent Business Optimism Survey is a finger on the pulse of small business.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae TBAs rally as Ben Bernanke soothes the bond market, better for mortgage REITs

    Mortgage-backed securities are the starting point for all mortgage market pricing, and they’re the investment of choice for mortgage REITs  When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them into […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae TBAs flat as rates stabilize, good for mortgage REITs

    Last week was a relatively light week data-wise, and many market participants were off work ahead of the Labor Day weekend.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Real Estate

    Ginnie Mae securities shake off the end of quantitative easing

    The ten-year bond sold off, with yields increasing from 2.27% to 2.34%. Ginnie Mae TBAs bucked the trend, rising from 104 20/32 to 104 25/32.

    By Brent Nyitray, CFA, MBA
  • uploads///Dallas Fed
    Financials

    The Dallas Fed explains why the Texas housing market is hot

    The General Business Activity Index rose to 11.4 from 7 the month before. The six-month outlook rose as well, to 18.7 from 11.8. Capital expenditures fell, although most other sub-indices were increasing.

    By Brent Nyitray, CFA, MBA
  • uploads///MSR
    Financials

    Mortgage servicing rights increase in value as interest rates rise

    Mortgage servicing rights are one of the few financial assets that increase in value as rates rise Most mortgage REITs are exposed to changes in interest rates, and are usually long-duration, which means that the value of their portfolio decreases in value as interest rates rise. Good examples of these types of REITs would be […]

    By Brent Nyitray, CFA, MBA
  • uploads///FHFA HPI Cumulative
    Company & Industry Overviews

    Behind Home Prices: Status Compared to Incomes

    April’s 5.9% year-over-year gain for home prices has put the FHFA (Federal Housing Finance Agency) House Price Index at about 3% above its April 2007 level.

    By Brent Nyitray, CFA, MBA
  • uploads///CYS Dividend
    Financials

    CYS Investments: An important mid-sized agency mortgage REIT

    CYS Investments (CYS) is a diversified agency mortgage REIT that invests all across the agency mortgage-backed security (or MBS) space.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Financials

    Must-know update: Bonds benefit from the risk-off trade

    There was almost no important economic data last week, so bonds traded inversely to the stock market.

    By Brent Nyitray, CFA, MBA
  • uploads///Dallas Fed
    Financials

    Dallas Fed bounces back in May

    The Dallas Fed Manufacturing Index is a manufacturing-focused index of business activity The Dallas Fed conducts its Texas Manufacturing Survey monthly, and it is similar to many of the other regional Fed surveys, like the Empire State Manufacturing Survey, the Chicago Fed National Activity Index or the Philly Fed. These are all diffusion type indices […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    10-year bond breaks out of its trading range on positive reports

    Mortgage-backed securities are the starting point for all mortgage market pricing, and they’re the investment of choice for mortgage REITs  When the Federal Reserve talks about buying mortgage-backed securities (MBS), it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs are unchanged despite a bond market sell-off

    The front-month Ginnie Mae TBAs were bid up as bonds rallied eight basis points. Ginnie Mae TBAs began the week at 106 21/32 and ended up in the same place. The underlying bond market sold off 12 basis points.

    By Brent Nyitray, CFA, MBA
  • uploads///Dallas Fed
    Financials

    Manufacturing decelerates in the Dallas region, affecting REITs

    The Dallas Fed survey asks about output, employment, orders, prices, shipments, inventories, capacity utilization, prices, capital expenditures, and some other indicators.

    By Brent Nyitray, CFA, MBA
  • uploads///NFIB Small Business Optimism
    Financials

    Must-know: NFIB Small Business Optimism Survey slips in October

    When forecasting the Fed’s next move, it pays to focus on small business earnings as much as or more than the earnings of, say, Apple.

    By Brent Nyitray, CFA, MBA
  • uploads///NLY
    Financials

    Annaly book value per share declines with the rest of the sector

    Annaly Capital is the biggest U.S. mortgage REIT by market capitalization Annaly Capital (NLY) is a self-managed REIT that invests in a variety of real estate–related securities, including pass-through certificates, collateralized mortgage obligations, callable agency debt, and other mortgage-backed securities (MBS). Recently, Annaly has focused on the agency product, and 90% of its portfolio has […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Why Fannie Mae TBAs followed bonds higher, rising 9 basis points

    The ten-year bond yield rallied 9 basis points last week, and TBAs followed. Bonds had been benefiting from the “risk-off” trade.

    By Brent Nyitray, CFA, MBA
  • uploads///MFA basics
    Earnings Report

    Background on MFA Financial

    As a REIT, MFA Financial must distribute 90% of its income to its shareholders, and it isn’t subject to income tax at the corporate level.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Why Ginnie Mae securities flatlined on a lack of economic data

    The front-month Ginnie Mae TBAs were unchanged as bonds flatlined on the lack of economic data. Ginnie Mae TBAs began and finished the week at 106 5/32.

    By Brent Nyitray, CFA, MBA
  • uploads/// year intraday
    Financials

    Bonds and REITs collapse on FOMC statement

    The Federal Open Market Committee determines interest rate policy The June Federal Open Market Committee (FOMC) meeting was recently completed and the results of that meeting were released at 2:00 pm EST. The FOMC statement gives color on how the Fed views the economy, how they are thinking about moving forward, and some guidance regarding […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Lack of volatility implications for NLY, AGNC

    Mortgage-backed securities are the starting point for all mortgage market pricing, and they’re the investment of choice for mortgage REITs  When the Federal Reserve talks about buying mortgage-backed securities (MBS), it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Rising Bond Yields Cause Ginnie Mae TBAs to Fall

    Ginnie Mae and the TBA market The Fannie Mae TBA (to-be-announced) market represents the usual conforming loan—the plain Fannie Mae or Freddie Mac 30-year mortgage. When a mortgage banker makes a Veterans Affairs or Federal Housing Authority loan, that loan is securitized and put into a Ginnie Mae TBA. The biggest difference between Fannie Mae […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Why Ginnie Mae securities are flat amid a declining bond market

    The front-month Ginnie Mae TBAs worked their way higher as bonds rallied on weak economic data. Ginnie Mae TBAs began and finished the week at 106 17/32.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Why Fannie Mae TBAs rallied on the Fed’s decision

    Trading in Fannie Mae TBAs When the Federal Reserve talks about buying mortgage-backed securities (MBS), it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them into a homogeneous product that can be traded. TBAs settle once a month, and […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Real Estate

    Ginnie Mae Securities Buck The Recent Trend And Rally

    Ginnie Mae and the to-be-announced market The Fannie Mae to-be-announced (or TBA) market represents the usual conforming loan—the plain Fannie Mae 30-year mortgage. Meanwhile, Ginnie Mae TBAs are where government loans go—such as the federal housing administration (or FHA) and veterans affairs (or VA) loans. The biggest difference between a Fannie Mae mortgage-backed security (or […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs have remained flat on the government shutdown

    Mortgage-backed securities are the starting point for all mortgage market pricing and the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced (also know as the TBA) market. The TBA market allows loan originators to take individual loans and turn them into a homogeneous product […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Consumer

    Next week’s FOMC statement will be the only market-moving data

    After a heavy week, bonds have an easier schedule After last week’s flood of data, bonds will get a bit of a break. The minutes from the FOMC meeting have the potential to be market-moving. Earnings-wise, the retailers dominate the news—although we’ll get a read on the luxury end of the housing market when Toll […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Financials

    How the government shutdown will affect interest rates

    Bonds fell slightly and equities rallied on the shutdown. Why? Beltway insiders who were hoping that the financial markets would get the attention of politicians posturing in Washington were disappointed this morning with the S&P 500 futures up 7 points pre-open and a sanguine outlook from the bond market. Stocks rallied throughout the day, with […]

    By Brent Nyitray, CFA, MBA
  • uploads///MBS tranching
    Financials

    Understanding American Capital Agency versus peers like Annaly

    American Capital Agency (AGNC) is a diversified agency mortgage REIT that invests all across the agency mortgage-backed security (MBS) space.

    By Brent Nyitray, CFA, MBA
  • uploads///MFA Financial
    Financials

    MFA Financial portfolio yield continues to drop

    MFA Financial is a REIT that invests in both agency and non-agency mortgage backed securities MFA Financial (MFA) is a mortgage Real Estate Investment Trust (REIT) that invests in both agency (government guaranteed) and non-agency (non-guaranteed) mortgage backed securities. Their portfolio is primarily invested in hybrids, adjustable rate mortgages (ARM), and 15 year fixed rate […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield historical
    Consumer

    What exactly is quantitative easing? Part 5

    Back to part 4 Mark-to-market issues The Fed does actually have a profit and loss statement and it is a line item on the Federal Budget. Since quantitative easing began, the Fed has profited from this activity as it has pushed up prices through its own buying. As it stops purchasing MBS and Treasuries, it […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR HAMP
    Financials

    Why the slight HAMP increases in August are negative for REITs

    The Obama Administration is considering expanding the HARP program, meaning agency REITs will face a massive increase in prepayment speeds.

    By Brent Nyitray, CFA, MBA
  • uploads///MFA Financial
    Financials

    Why MFA Financial benefits from increasing real estate prices

    Over the past 12 months, MFA has paid a dividend yield of over 20% when you take into account two special dividends.

    By Brent Nyitray, CFA, MBA
  • uploads///Consumer Debt
    Financials

    Consumer debt falls, low interest and high prepayments for REITs

    Elevated levels of consumer debt have been one of the reasons why the recovery has been so weak.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield historical
    Financials

    Recommendation: Don’t read too much into the emerging market selloff

    Bonds have been rallying as emerging markets sell off. Does a sell-off in emerging markets change the Fed’s decision-making regarding tapering?

    By Brent Nyitray, CFA, MBA
  • uploads///AGNC dividend
    Real Estate

    American Capital Agency’s 3rd quarter earnings: Company overview

    American Capital Agency is one of the biggest REITs in the U.S. by market capitalization. Annaly Capital Management is the other. As such, AGNC is one of the biggest ultimate lenders in the mortgage market.

    By Brent Nyitray, CFA, MBA
  • uploads///Convexity
    Financials

    Primer on mortgage backed securities, Part 5

    Continued from Primer on mortgage backed securities, Part 4. Prepayment risk Prepayment risk and interest rate risk go hand-in-hand. The main difference between a mortgage backed security and a government bond is that with a government bond, you know exactly when you will get your principal and interest payments. If you purchase a 7-year Treasury […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae TBAs have remained flat on the government shutdown

    Trading in Fannie Mae TBAs When the Federal Reserve talks about buying mortgage-backed securities (MBS), it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them into a homogeneous product that can be traded. TBAs settle once a month, and […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield historical
    Financials

    Investing in REITs during a rising interest rate environment

    We may see the occasional cyclical bond bull markets in the context of a secular bear market, but the overall trend is toward increasing interest rates.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Must-read: Worst day for Fannie to-be-announced loans since sell-off began

    Mortgage-backed securities are the starting point for all mortgage market pricing, and they’re the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBA trading

    Mortgage-backed securities are the starting point for all mortgage market pricing and the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced (also know as the TBA) market. The TBA market allows loan originators to take individual loans and turn them into a homogeneous product […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Why Ginnie Mae securities fell to 105 26/32 on a bond sell-off

    The front-month Ginnie Mae TBAs were bid up as bonds rallied eight basis points. Ginnie Mae TBAs began the week at 106 8/32 and fell to 105 26/32. The underlying bond market sold off 15 basis points.

    By Brent Nyitray, CFA, MBA
  • uploads///Dallas Fed
    Financials

    Dallas Fed Manufacturing Index falls in June, but still positive

    The Dallas Fed Manufacturing Index is a manufacturing-focused index of business activity The Dallas Fed conducts its Texas Manufacturing Survey monthly, and it’s similar to many of the other regional Fed surveys, like the Empire State Manufacturing Survey, the Chicago Fed National Activity Index, or the Philly Fed. These are all diffusion-type indices that ask respondents whether a […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs flat, low volatility good for mortgage REITs

    Finally, we saw a week of calm in the bond market last week.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Why flat Ginnie Mae securities and a bond sell-off affect REITs

    The front-month Ginnie Mae TBA drifted went nowhere while bonds sold off slightly. After starting the week at 105 27/32, they finished more or less where they started

    By Brent Nyitray, CFA, MBA
  • uploads///Fed Balance Sheet
    Financials

    Fed balance sheet pushes $3.5 trillion, negative REITs outlook

    The Fed’s balance sheet rose to over $3.48 trillion in Q2 as quantitative easing went into overdrive The Fed’s asset purchase program, also known as quantitative easing, has swelled the Fed’s balance sheet from under $1 trillion pre-crisis to an all-time high of $3.48 trillion. The Fed has pursued this strategy in order to drive down […]

    By Brent Nyitray, CFA, MBA
  • uploads///NLY dividend
    Earnings Report

    Annaly Capital Reported a Drop in Its Earnings for 2Q16

    Annaly Capital reported core earnings of $0.29 per share in 2Q16. Wall Street analysts expected $0.29 per share—earnings were in line with the expectations.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs rally as the Fed keeps the pedal to the metal

    Mortgage-backed securities are the starting point for all mortgage market pricing and the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced (also know as the TBA) market. The TBA market allows loan originators to take individual loans and turn them into a homogeneous product […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Financials

    The Fed keeps the punch bowl around a little longer

    The ten-year bond rallied during the week, with the yield falling to 2.73%. The markets were expecting some sort of reduction in asset purchases and were caught off guard when the Fed decided to stand pat.

    By Brent Nyitray, CFA, MBA
  • uploads///Fed Unemployment Forecast
    Financials

    Federal Reserve significantly lowers unemployment forecast

    The Federal Reserve includes formal economic forecasts in the minutes from its Federal Open Market Committee (FOMC) Meetings The Federal Reserve typically releases a short press release after its two day FOMC meeting, with a general overview and its decision on interest rates. A month later, they release the actual minutes of the meeting which […]

    By Brent Nyitray, CFA, MBA
  • uploads///HAMP modifications
    Financials

    Why HAMP modifications continue to increase homeowner equity

    The intent of HAMP was to stabilize the housing market and prevent avoidable foreclosures.

    By Brent Nyitray, CFA, MBA
  • uploads///MFA Book Value
    Earnings Report

    MFA Financial Reports a Drop in Book Value per Share

    MFA Financial’s (MFA) book value per share fell from $7.96 in the second quarter of 2015 to $7.70 in the third quarter.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae TBAs rally as Fed debates end of quantitative easing

    Trading in Fannie Mae TBAs When the Federal Reserve talks about buying mortgage-backed securities (MBS), it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them into a homogeneous product that can be traded. TBAs settle once a month, and […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR TIC flows
    Financials

    High foreign net purchases of U.S. assets in July, good for REITs

    For the first time since January, foreigners are net buyers of U.S. assets. If foreign investors return to selling mortgage-backed securities, the REITs will feel the pain.

    By Brent Nyitray, CFA, MBA
  • uploads///HAMP modifications
    Financials

    HAMP modifications fall to 11,900 in the month of April

    The Home Affordable Modification Program is one of President Obama’s programs to provide relief to distressed home owners The Home Affordable Modification Program lowers the monthly payments for borrowers by reducing the interest rate or extending the term of the loan. So far, the Federal Housing Finance Agency has resisted allowing principal reductions. They will, […]

    By Brent Nyitray, CFA, MBA
  • uploads///Unemployment rate LT
    Macroeconomic Analysis

    Unemployment Holds Steady at 5% but Raises Are Hard to Come By

    In December 2015, the unemployment rate held steady at 5.0%, or about 7.9 million people. The underemployment rate was flat at 9.9%.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Financials

    Recommendation: how to play increasing interest rates for Mortgage REITs

    Interest Rates are going up. Now what? It is hard to be a mortgage REIT investor right now. The secular bond bull market that began in 1981 – 1982 recession has ended. The wind at the back of REIT investors, quantitative easing, which has put a bid under most of the stuff that mortgage REITs […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Financials

    Bond Yields Increase after the Strong Jobs Report

    Ten-year bond yields influence everything from mortgage rates to corporate debt. Now, they’re the benchmark for long-term US interest rates.

    By Brent Nyitray, CFA, MBA
  • uploads///Labor Force Particiption Rate
    Financials

    REITs must-read: The “yes but” answer to the unemployment rate

    The unemployment rate is the most important data point out there right now, and it has been falling. So why doesn’t the economy feel better to the average citizen?

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond intraday
    Financials

    Must-know: Bonds sell off on the October FOMC minutes

    Lately, there are two adjectives the Fed uses to characterize economic data points—”moderate” and “modest.”

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs Underperform Fannie Mae TBAs

    The ten-year bond yield rose by 2 basis points to 1.6% for the week ending July 22, 2016. Ginnie Mae TBAs fell by 6 ticks to close at 104 12/32.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Financials

    Why bonds were in for a wild ride last week

    The ten-year bond influences everything from mortgage rates to corporate debt. It’s now the benchmark for long-term U.S. interest rates.

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Refinance Index
    Real Estate

    Do REITs need to fear another refi wave?

    It looks like the MBA refinance index is still flat on its back. So while we could see a pickup in refis, so far it hasn’t materialized.

    By Brent Nyitray, CFA, MBA
  • uploads///GN FN spread
    Real Estate

    The markets react to new insurance guidelines

    After Obama announced the new insurance guidelines, the mortgage-backed securities market, especially the TBA market, reacted violently.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Real Estate

    Ginnie Mae Securities Follow Bonds Higher, Affecting REITs

    Ginnie Mae and the to-be-announced (or TBA) market The Fannie Mae to-be-announced (or TBA) market represents the usual conforming loan, the plain Fannie Mae 30-year mortgage. Meanwhile, Ginnie Mae TBAs are where government loans go, such as the federal housing administration (or FHA) and veterans affairs (or VA) loans. The biggest difference between a Fannie […]

    By Brent Nyitray, CFA, MBA
  • uploads///Nonfarm Payrolls
    Financials

    The week ahead: Jobs plus Annaly and other mortgage REIT earnings

    We have a big week ahead, with a slew of important economic data and earnings from the mortgage REIT sector. The biggest REIT will be Annaly Capital reporting on Wednesday.

    By Brent Nyitray, CFA, MBA
  • uploads///Hourly Earnings
    Financials

    How much slack is there in the labor market?

    Leading indicators of the the labor market are flashing bright green. These data indicate the job market is in a transition period and about to accelerate.

    By Brent Nyitray, CFA, MBA
  • uploads///AGNC Book Value Per Share
    Financials

    American Capital Agency’s book value per share increases

    American Capital Agency’s (AGNC) book value per share increased from $25.54 in the third quarter to $25.74 in the fourth quarter.

    By Brent Nyitray, CFA, MBA
  • uploads///NLY leverage
    Financials

    Annaly bumps up its leverage in 3rd quarter 2014

    How do agency REITs pay such high dividends while investing in securities that don’t pay much? Mortgage REITs like Annaly (NLY), American Capital Agency (AGNC), MFA Financial (MFA), Capstead (CMO), and Hatteras (HTS) tend to have high dividend yield. Yet agency mortgage-backed securities don’t pay low-double-digit returns. To achieve these sorts of returns, REITs—particularly agency […]

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Refinance Index
    Financials

    An Old Headache Returns: Increased Prepayment Speeds Up

    The Mortgage Bankers Association (or MBA) Refinance Index rose 66% from 1,349 to 2,245 as rates finally fell enough to allow refinances.

    By Brent Nyitray, CFA, MBA
  • What exactly is quantitative easing? Part 1
    Consumer

    What exactly is quantitative easing? Part 1

    The dual mandate The Federal Reserve is entrusted with monitoring the U.S. money supply, supervising the banking system, and using monetary policy to drive the economy. The Fed’s role in driving the economy is based on a dual mandate – that the Fed must fight inflation and maximize employment. The Fed had a sole mandate […]

    By Brent Nyitray, CFA, MBA
  • uploads///Productivity
    Financials

    Non-farm productivity increases in Q1

    Productivity is a measure of output per unit of labor  Productivity increases allow wage increases without increasing inflation. The sister index to productivity is unit labor costs, and, unsurprisingly, the Bureau of Labor Statistics releases them together. Non-farm productivity is calculated by dividing an index of output by an index of hours worked. Productivity growth […]

    By Brent Nyitray, CFA, MBA
  • uploads///Initial Jobless Claims
    Financials

    Initial jobless claims fall to 324,000

    Initial jobless claims rose to an annualized rate of 324,000 for the week ended April 26th Initial jobless claims are one of the few labor market indicators that are released every week. Unemployment is a profound driver of economic growth, and persistent unemployment has been the Achilles heel of this recovery. While it seems like […]

    By Brent Nyitray, CFA, MBA
  • uploads///Mortgage Rates
    Financials

    Bond Yields Rise as Global Bonds Sell Off

    Ten-year bond yields influence everything from mortgage rates to corporate debt. Now, they’re the benchmark for long-term US interest rates.

    By Brent Nyitray, CFA, MBA
  • uploads///Fed Assets
    Company & Industry Overviews

    Why the Fed Continues to Reinvest Its Maturing QE Assets

    QE increased the size of the Fed’s balance sheet almost eightfold since the turn of the century. Currently, the Fed’s balance sheet holds around $4.5 trillion.

    By Brent Nyitray, CFA, MBA
  • uploads///Fed  Unemployment Forecast
    Financials

    FOMC Minutes Discussed the Fed’s View of the Labor Market

    Some Fed members argued that while unemployment is low, the overall labor utilization rate is low. The Fed has more work to do to achieve full employment.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Company & Industry Overviews

    Bonds Rally on the Dovish July FOMC Minutes

    On August 17, 2016, the Fed released the minutes from the July FOMC meeting. Overall, bonds took the FOMC minutes to be relatively dovish.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs Rise with the Bond Market

    The ten-year bond yield fell by 8 basis points to 1.51% for the week ending August 12, 2016. Ginnie Mae TBAs rose by 4 ticks and closed at 104 28/32.

    By Brent Nyitray, CFA, MBA
  • uploads///NLY financial performance Q
    Earnings Report

    What’s Annaly Capital’s Take on the Bond Market’s Volatility?

    Annaly positioned itself to reduce its interest rate risk and increase its credit risk. Since 2009, global bond markets have risen in value by about $17 trillion.

    By Brent Nyitray, CFA, MBA
  • uploads///NLY liabilities Q
    Earnings Report

    How Does Annaly Capital Finance Its Portfolio?

    Annaly Capital leverages its portfolio with repurchase agreements. Annaly Capital’s repurchase agreements fell from $54.4 billion to $53.9 billion in 2Q16.

    By Brent Nyitray, CFA, MBA
  • uploads///NLY leverage
    Earnings Report

    Annaly Capital Maintained Its Leverage in 2Q16

    Annaly Capital ended 2Q16 at 5.3x leverage—flat with the first quarter. It’s still less than the 6.3x ratio it operated with before the taper tantrum.

    By Brent Nyitray, CFA, MBA
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