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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (73587)	6/1/2002 10:07:17 AM
From: Jdaasoc	Read Replies (1) \| Respond to of 99280

ZEEV did you know that 80% of their loans are not backed by government guarantees. Since there are no options to hedge risk, if small cap funds which own 60% of AGM sold, those shares were probably immeadiately sold short by the market makers. I doubt that the majority of holders of AGM pre May 17 are coming back to the table real soon if ever since it doesn't pay a dividend. If I were a maket maker short AGM, I would continue to bet against it. AGM is no different then Ameresco, First Capital Financial or any other highly leveraged mortgage company that are not with us anymore when times got tough. biz.yahoo.com Credit Risk. The outstanding principal balance of loans held and securities guaranteed by Farmer Mac as of March 31, 2002 and December 31, 2001 is summarized in the table below. March 31, 2002 December 31, 2001 ---------------- ------------------- (in thousands) Farmer Mac I: Post-1996 Act $ 3,781,971 $ 3,542,976 Pre-1996 Act 41,414 48,979 Farmer Mac II 592,835 595,156 ---------------- --------------- Total $ 4,416,220 $ 4,187,111 ---------------- --------------- Farmer Mac assumes 100 percent of the credit risk on post-1996 Act Farmer Mac I loans; pre-1996 Act Farmer Mac I loans back securities that are supported by mandatory 10 percent first loss subordinated interests that mitigate credit exposure; Farmer Mac II loans are guaranteed by the USDA. Farmer Mac believes it has little or no credit risk exposure to pre-1996 Act Farmer Mac I loans because of the first loss subordinated interests related to pools of those loans, or to Farmer Mac II loans because of the USDA guarantee. As of March 31, 2002, post-1996 Act Farmer Mac I loans that were 90 days or more past due, in foreclosure or in bankruptcy represented 2.32 percent of the outstanding principal balance of all post-1996 Act Farmer Mac I loans, compared to 2.62 percent as of March 31, 2001 and 1.70 percent as of December 31, 2001. Farmer Mac anticipates fluctuations in the delinquency rate from quarter to quarter, with higher levels likely as of March 31 and September 30 of each year due to the semi-annual payment characteristics of most Farmer Mac loans. The following table shows Farmer Mac I delinquencies distributed by post-1996 Act loans and pre-1996 Act loans. Farmer Mac I Delinquencies (1) (2) ---------------------------------------------------------------------- Post-1996 Act Pre-1996 Act Total ---------------- --------------- --------- As of: March 31, 2002 2.32% 5.83% 2.37% December 31, 2001 1.70% 7.00% 1.79% September 30, 2001 2.16% 4.66% 2.21% June 30, 2001 1.72% 3.69% 1.77% March 31, 2001 2.62% 5.83% 2.72% December 31, 2000 1.25% 6.49% 1.44% September 30, 2000 1.80% 5.55% 1.96% June 30, 2000 1.25% 4.12% 1.41% March 31, 2000 1.45% 4.89% 1.65% (1) Includes loans 90 days or more past due, in foreclosure or in bankruptcy. (2) Farmer Mac assumes 100 percent of the credit risk on post-1996 Act loans. Pre-1996 Act loans back securities that are supported by unguaranteed first loss subordinated interests representing approximately 10 percent of the balance of the loans backing each security.

To: Zeev Hed who wrote (73587)	6/1/2002 10:26:26 AM
From: Jdaasoc	Respond to of 99280

Zeev would you loan money to a turnip farmer for his turnips, Christmas trees stand or his cow. That's how a read what AGMs primary business is from their 10Q. I would have to believe that they are loaning a lot of money to the timber industry based on geographic region and commodity. I think your comparisons to Fannie Mae and its inherent valuation multiples are not valid. There is not much recoupable value in AGM loans if we get fire, drought or flood. I heard on he radio that this year is worst year on record regarding the health of the corn crop. biz.yahoo.com By geographic region (2): Northwest 29% 4.53% Southwest 46% 1.53% Mid-North 11% 1.56% Mid-South 4% 2.04% Northeast 6% 0.61% Southeast 4% 0.61% --------------- -------------- Total 100% 2.32% --------------- -------------- By commodity: Crops 43% 2.23% Permanent plantings 30% 3.49% Livestock 21% 1.15% Part-time farm 5% 1.29% Other 1% 0.14% --------------- -------------- Total 100% 2.32% --------------- --------------

To: Zeev Hed who wrote (73587)	6/1/2002 10:30:37 AM
From: chainik	Respond to of 99280

Zeev, do you follow COT report and how much emphasis do you put on it? If you do follow it, can you help with with a question that puzzles me? From the latest COT report it seems that commercials are net short S&P 500 LONG \| SHORT 362,607 442,845 My interpretation: professional MMs are expecting sginificant decline in the not too distant future (does this interpretation make sense to you?). I thought that among other obvious reasons (funny valuations, political instability, consumer debt etc), declining dollar is a significant factor (again for obvious reasons). But "smart money" is actually short euro - by a very wide margin. How come? Obviously I am missing something. Thanks.