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To: Dale Baker who wrote (81118)	8/8/2009 1:07:39 PM
From: Paul Senior	Read Replies (2) \| Respond to of 118717

CYS??: Nothing that I can find here about it being mentioned before now: "IN: DDR (6.58), DDR-G (15.37), CSE 2011 5 calls (1.35), CYS (13.45), QABA (23.03)" I'm a current buyer of CYS. CYS has several negatives: recently issued stock, so not much history; stock already up above issue price and insider buys. Company financials and company's actual workings are imo impossible for an outsider to comprehend unless somebody's extremely knowledgeable of financial instruments. Conceptually though, seems simple enough (I hope). Company borrows money at cheap rates, leverages up and buys gov't backed 'stuff' (so the risk of CYS losing money on any default on the bonds/instruments/stuff is somewhat removed). The difference in what CYS pays for borrowings and what it gets from its leveraged holdings is paid back to stockholders (CYS is a reit.). I believe I recall seeing CYS being levered 5:1 which apparently now is okay (-g-), whereas before the financial collapse 9:1 or greater was apparently more likely. Well, I'm okay with owning NLY (a similar stock discussed here before), and so as long as I'm cautiously watching it, I figure I can also go for a few shares of CYS as well. (If the spread narrows between what these companies borrow and what they get from yields on their gov't stuff, profits will contract. These days the spread is pretty wide, maybe unusually wide.) In past, I've been creamed many times by chasing dividends. This (and NLY) may prove to be same. For now though, if CYS's quarterly dividend holds, I chase again.

To: Dale Baker who wrote (81118)	8/8/2009 4:26:47 PM
From: Man on the moon	Read Replies (1) \| Respond to of 118717

Nice write up Dale and easy to make a case of after the last few months. I have been basically churning my account with great longs but my hedge losses have minimized overall gains. Should woulda coulda. If I discontinue the hedges right now, I'm afraid of collapse again. But then again, the Fed and their friends are firmly in charge of the stock market right now so it seems, and the last thing they want to do, is dissapoint Joe the plumber.