Two Harbors Investment Corp

Most Recent

  • uploads///LPS originations
    Financials

    Why low mortgage origination volumes are bad for REITs

    Mortgage originators have had a difficult time over the past year, as rates have begun rising. The increase in interest rates pretty much stopped the refinance boom in its tracks.

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

    Recommendation: REITs are getting bullish—should you?

    2013 was a very difficult year for mortgage REITs, as the Fed finally began to lighten its footprint in the mortgage market by reducing asset purchases.

    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///MR consumer confidence
    Financials

    Consumer confidence ticks down as Americans fret the economy

    The Conference Board Consumer Confidence Index fell to 79.7, from an upward-revised 81.8 in August. (Consumer confidence in 1985 was 100.)

    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///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///Fed  GDP forecast
    Company & Industry Overviews

    Why the FOMC Statement Is Constructive on the Economy

    The FOMC didn’t change its characterization of the economy. The labor markets are improving, economic growth slowed, and household spending moderated.

    By Brent Nyitray, CFA, MBA
  • uploads///CIM Q
    Fund Managers

    Chimera posts growth in third quarter profit and interest income

    Chimera’s core earnings grew to $116 million compared to $93 million in the year-ago period. Growth was mainly due to an increase in net interest income.

    By Samantha Nielson
  • uploads///Capacity Utilization
    Financials

    Capacity Utilization falls in May

    Capacity utilization is a bellwether of economic activity Capacity utilization is a good top-down macroeconomic indicator, which helps forecast the labor market, final demand, consumption, and inflation. While manufacturing is no longer the primary driver of the U.S. economy, it still influences the economy to a large degree, particularly for unskilled workers. U.S. manufacturing is […]

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

    Consumer Confidence dips in May but still improving.

    The Thomson Reuters/University of Michigan Consumer Confidence Index is a leading indicator for the U.S. economy The Thomson Reuters/University of Michigan Consumer Confidence Index is an important indicator of the consumer’s perception of the U.S. economy. Similar to other consumer confidence measures, it asks consumers about their views on the current economic conditions, and their […]

    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///Radar Logic Futures Curve
    Financials

    Radar Logic futures curve predicts flat real estate prices until September 2014

    Radar Logic futures can be used to forecast real estate prices Most people are unaware that there is a futures market for U.S. real estate prices.  The Radar Logic futures contract launched about a year ago on the CBOE Futures Exchange. While they are not especially liquid, they do provide an insight into what the market […]

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

    Why ADP and Moody’s numbers suggest a weak jobs report

    Private sector employment increased by 139,000 in February. January’s numbers were revised downward from 175,000 to 127,000.

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

    Mortgage delinquencies tick up in June: Blip or trend change?

    Ninety-day mortgage delinquencies rebound to 6.7% after hitting 6.1% in May Mortgage delinquencies are falling as home prices rise and the foreclosure pipeline is clearing. While 6.7% seems low compared to the peak of 10%, the “normal” level prior to the housing bubble was in the 4%-to-5% range. This also reflects the mortgage modification push […]

    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///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///Employment Cost Index
    Macroeconomic Analysis

    Employment Costs Rise with Healthcare Inflation

    Employment costs rose 0.6% in the quarter ending March 31, 2016. Over the past 12 months, compensation costs for civilian workers have risen 1.9%.

    By Brent Nyitray, CFA, MBA
  • uploads///LPS originations
    Financials

    Why steeply falling originations mean bad news for non-agency REITs

    Mortgage originators have had a difficult time over the past year, as rates have begun rising. The increase in interest rates pretty much stopped the refinance boom in its tracks.

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

    Why initial jobless claims jumped on the government shutdown

    Initial jobless claims increased to an annualized rate of 374,000 for the week ended October 4. Unemployment has been the Achilles’ heel of this recovery.

    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///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///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///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///MR Corelogc HPI
    Financials

    Must-know: Home prices hit their highest level since May 2008

    The 12% year-over-year gain resembles the gains we saw during the bubble years. Both distressed sales and non-distressed sales rose by similar amounts.

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

    Mortgage delinquencies tick up 6.08%

    Better economic times are helping lower mortgage delinquencies, but we still have some work to do clearing the foreclosure pipeline.

    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///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///foreclosure heat map
    Financials

    State Foreclosure Laws Impact Home Price Appreciation

    There are two basic types of state foreclosure laws—judicial and non-judicial. In non-judicial states, foreclosures are handled through a streamlined process.

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

    The Labor Force Participation Rate Increased in July

    In July 2016, the labor force participation rate rose to 62.8%—up 10 basis points from June. The labor force rose from 158.9 million to 159.3 million.

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

    Why Did American Capital Agency Increase Its Leverage?

    American Capital Agency increased its “at risk” leverage ratio in 1Q16. It funded its balance sheet with ~$41.9 billion in repurchase agreements.

    By Brent Nyitray, CFA, MBA
  • uploads///Fed funds dot graph Jun
    Company & Industry Overviews

    Bonds Rally on July FOMC Statement

    On July 27, 2016, the Fed ended its FOMC meeting without hiking the federal funds rate. The decision was unanimous with only Esther George dissenting.

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

    How Fannie Mae TBAs Affect Mortgage REITs’ Capital Gains

    When the Fed talks about buying MBS (mortgage-backed securities), it’s referring to the TBA (to-be-announced) market.

    By Brent Nyitray, CFA, MBA
  • uploads///foreclosure heat map
    Financials

    Why Are State Foreclosure Laws Important?

    There are two basic types of state foreclosure laws—judicial and non-judicial. In non-judicial states, foreclosures are handled through a streamlined process.

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

    Labor Force Participation Rate Rose in June

    In June 2016, the labor force participation rate rose to 62.7%—up 10 basis points from May. The labor force rose from 158.5 million to 158.9 million.

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

    How Much Did Mortgage Refinance Applications Fall Last Week?

    Mortgage refinance applications, as measured by the MBA (Mortgage Bankers Association) Refinance Index, fell last week. Since mid-2013, refinances have been dropping dramatically.

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

    Mortgage Applications Fell on the Brexit Vote

    Mortgage applications fell 2.6% last week after rising 2.9% the week before. Rates were increasing for most of the week, only to fall on Friday on the Brexit vote.

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

    The Labor Force Participation Rate Heads Back Down Again

    In May 2016, the labor force participation rate fell to 62.6%, down 20 basis points from April.

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

    Why Inflation Remains Too Low for the Fed

    At the March 2016 FOMC meeting, the Fed took down its 2016 inflation forecast from 1.6% to 1.2%. The stronger dollar is affecting commodity prices and imports, and that’s keeping a lid on inflation.

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

    The FOMC Notes That Economic Growth Has Begun to Decelerate

    According to the April FOMC minutes, the staff believes that GDP growth has begun to decelerate. Industrial production and manufacturing output declined in February and March.

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

    Bonds Get Slammed on FOMC Minutes

    On May 18, 2016, the Fed released its minutes from the April FOMC meeting. In this series, we’ll take an in-depth look at those minutes and their implications for investors.

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

    The FOMC Discusses the State of the Labor Market

    Fed participants noted improvement in the labor market, even as growth in economic activity has slowed. That said, the labor market has some strange numbers.

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

    Why Did Ginnie Mae TBAs Underperform Fannie Mae TBAs?

    The ten-year bond yield, tradable through the iShares 20+ Year Treasury Bond ETF (TLT), fell by 5 basis points for the week. Ginnie Mae TBAs rose by three ticks.

    By Brent Nyitray, CFA, MBA
  • uploads///foreclosure heat map
    Macroeconomic Analysis

    Why States Affect the Valuation of Mortgage Servicing Rights

    State laws affect the value of mortgage servicing rights. Typically, the rights in states like New York and New Jersey trade at a 25% discount to other states.

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

    Labor Force Participation Rate Rose: So Why Don’t We Feel Better?

    The unemployment rate has been falling, so why don’t we feel better about the economy? Let’s look to the labor force participation rate to answer that question.

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

    Ginnie Mae TBAs Ignore the Bond Market Rally

    Mortgage REITs such as Annaly Capital Management (NLY), MFA Financial (MFA), and American Capital Agency (AGNC) are big holders of Ginnie Mae TBAs.

    By Brent Nyitray, CFA, MBA
  • uploads///foreclosure heat map
    Macroeconomic Analysis

    Foreclosure Laws Impact Home Price Appreciation

    There are two basic types of state foreclosure laws—judicial and non-judicial. In non-judicial states, foreclosures are handled through a streamlined process.

    By Brent Nyitray, CFA, MBA
  • uploads///FICO Score
    Macroeconomic Analysis

    Mortgage Applications Rose despite Rate Hike

    The Federal Reserve’s decision to increase the federal funds rate by 0.25% on December 16, 2015, had minimal impact on the mortgage volume.

    By Steve Sage
  • uploads///Prices of NLY  to
    Macroeconomic Analysis

    The Rate Hike’s History and Its Impact on Mortgage REITs

    Mortgage REITs like New Residential Investment, Chimera Investment, and American Capital Agency will witness the impact of a rate hike for the first time.

    By Steve Sage
  • uploads///foreclosure heat map
    Macroeconomic Analysis

    Why Home Price Appreciation Differs from State to State

    In the judicial states, particularly New York, New Jersey, and Connecticut, we’re seeing much lower home price appreciation.

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

    Labor Force Participation Rate Still Mired at Multi-Decade Lows

    In October, the labor force participation rate held steady at 62.4%—its lowest point since 1977.

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

    Labor Force Participation Rate Drops Again

    In September, the labor force participation rate slid to 62.4%, its lowest point since 1977. The labor force declined from 157.1 million to 156.7 million, while the population increased from 251.1 million to 251.3 million.

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

    Fannie Mae TBAs Almost Unchanged Last Week: Implications for REITs

    Fannie Mae TBAs started the week at 102 26/32 and gave up 2 ticks to go out at 102 3/4 even. The ten-year bond yield rose by 2 basis points.

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

    The Unemployment Rate Falls as the Labor Force Shrinks

    The unemployment rate ticked down 0.2% to 5.3% in June, or ~8.3 million people. The underemployment rate includes discouraged workers—people who want to work, but who have given up looking.

    By Brent Nyitray, CFA, MBA
  • uploads///Black Knight Origination
    Financials

    Must-know: Understanding non-qualified mortgage loans

    Non-QM loans would typically be useful for borrowers with sporadic income, but a large amount of assets. However, lenders will only consider low loan-to-value (or LTV) loans—like 80% maximum, which really is a ceiling. Most lenders are below that.

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

    ADP’s payroll numbers predict a good jobs report, affecting REITs

    Private-sector employment increased by 281,000 in June. May’s number was 179,000. In terms of industries, professional and business services increased the most, by 53,000.

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

    Why Automatic Data Processing predicts a weak jobs report

    Private sector employment increased by 175,000 in January. December’s numbers were revised downward from 238,000 to 227,000.

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

    Recommendation: With the economy picking up steam, what is a yield investor to do?

    This is an unfriendly environment for bonds, and with the stock market at all-time highs, yield is hard to come by.

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

    Why the Fed maintained its forecast for the US economy in 2014

    In this part of this series, we’ll look at the Fed’s GDP forecast for 2013, 2014, 2015, and 2016, and also at how its forecast for 2014 GDP growth has changed

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

    Recommendation: Why swap interest rate risk for credit risk?

    The most important economic report these days came out last Friday, which is the the monthly jobs report. The Street had set the bar relatively low.

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

    Initial jobless claims fell slightly, good for non-agency REITs

    Initial jobless claims decreased to 339,000 for the week ended November 8. The financial industry is laying people off as the mortgage business dries up.

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

    Must-know analysis: Can mortgage REITs be too big to fail?

    The biggest names in the REIT sector are Annaly (NLY) and American Capital Agency (AGNC). They bear no credit risk, but they do bear a lot of interest rate risk.

    By Brent Nyitray, CFA, MBA
  • uploads///Two Harbors
    Financials

    Must-know: Two Harbors reports a small decline in book value

    Two Harbors’ sophisticated investment strategy of buying mortgage servicing rights and being short TBAs helped it weather the bond market sell-off.

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

    Invesco Mortgage Capital book value per share declines 12%

    Invesco Mortgage Capital (IVR) is a mortgage REIT that focuses on agency and non-agency mortgage-backed securities Invesco invests in a wide range of products, from agency residential mortgage-backed securities, to non-agency mortgage-backed paper, to commercial mortgage-backed securities and residential and commercial mortgage loans. Invesco Mortgage Capital is externally managed by Invesco (IVZ). Its portfolio is […]

    By Brent Nyitray, CFA, MBA
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