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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (6060)	10/16/2002 7:55:56 PM
From: James C. Mc Gowan	Read Replies (1) \| Respond to of 306849

Field Report: in Santa Rosa, CA, north of SF 55 miles, along the Coast. RE Broker in my bldg. says $400K houses asking prices being cut 15K to 25K now, to move the sales along. First time he's seen this in years. Money still ridiculously available, he was in Mortgage banking as well. Says FNM will have to go to gov't to cover MBS if default rate goes up from here. All hearsay and FWIW. James

To: Wyätt Gwyön who wrote (6060)	10/18/2002 2:25:03 PM
From: Gary L. Kepler	Respond to of 306849

re: NLY Thanks Mucho for your detailed response. I have been researching NLY further but it is still not clear to me what is generating the income to provide such a high yield. Went to Grants and there were about 5 reports at $25 each so I passed. UBS Warburg recently upgraded to a buy and S&P has a buy per Schwab. Any clarification on the nature of their income if they are not using leverage, would be appreciated. Seems too good to be true! If there was a RE crash, do you think, as a mortgage REIT, their income would be jeopardized? On ACG, to my untrained eye, it seems that payouts may be exceeding income currently with funds coming from new financing. If true, this would not be a good thing and the yield may be at risk! ACG does not seem to have an analyst following and Schwab research does not provide much in clarification. ACG does have a good track record on payouts and price over the past ten years or so and there should be some safety in only 25% leverage in government securities. Any churn in securities over time has so far not had any pronounced adverse effect. In your opinion, if one is looking for income and not worried about volatility of principal on a relative small exposure because they are willing to hold forever, would a bond fund be an acceptable investment rather than individual bonds? For example, I have Nuveen's NIO yielding currently about 6.5% federal tax free based on highly rated and insured municipals utilizing 25% leverage. (The current yield is fantastic based on investments in prior years when price was lower.) I like the income which supplements my retirement. It has had a good track record over the last 10-12 years and I have added to it on dips. If I never plan to sell it and am not overly exposed, am I missing something about a moderately leveraged fund? It seems to me that NIO, NLY and perhaps ACG might be good ways to "supplement" retirement income if in a disaster one could afford to lose the entire principal. Your thoughts, if you care to comment, would be most appreciated.

To: Wyätt Gwyön who wrote (6060)	10/18/2002 9:21:09 PM
From: Gary L. Kepler	Read Replies (1) \| Respond to of 306849

Mucho, re: NLY Hope the thread does not mind me getting some education here. Just discovered that Yahoo Finance provides portions of SEC filings that do not require bringing up Adobe (on my older limited machine). So I will continue my research into the SEC filings to gain a better understanding. Does not the following sound like leveraging? Or are leveraged bond funds even higher risk? Maybe there is more risk to NIO than I currently appreciate. (I'll do more research on Sunday night.) We are a real estate investment trust that owns and manages a portfolio of mortgage-backed securities. Our principal business objective is to generate net income for distribution to our stockholders from the spread between the interest income on our mortgage-backed securities and the costs of borrowing to finance our acquisition of mortgage-backed securities.