Monday, 28 January 2013

Wall Street Oasis - Investment Banking & Finance Community: Insiders can't seem to get enough of mREITs

Wall Street Oasis - Investment Banking & Finance Community
The Wall Street Finance Community where investment bankers, consultants, traders, private equity and hedge fund professionals come to learn and play.
Insiders can't seem to get enough of mREITs
Jan 29th 2013, 01:30

MREIT.jpg

In the continuing search for new ideas, I've stumbled onto an industry-wide insider buying of mortgage REITs (AGNC, TWO, WMC, AMTG). These companies, which borrow short term to buy long term mortgage-backed securities, are in effect leveraged mortgage lenders/banks. They are an implicit bet on the steepness of the yield curve, namely that short term rates (<1 yr) remain (much) lower than long term (mortgage) rates (5 yr+).

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