the market sold nly's shares down to under 16 today on the carlyle fears and the tma problems. buy it under 15, as nly is temporarily in a bad position due to the once-unthinkable meltdown in the equity of fre and fnm. this company has committed no missteps internally.
what's going on is a remarkable disconnect between those who are worried about inflation and think the fundamentals are sound and the reality that this is a time of great crisis in all credit worlds.
we were getting some resolution to the crunch with the cuts, but that's broken down entirely because we have not developed any plan of any worth to take out the financial insurers, (warrants to own them from feds would do it) a blow out of the fha guarantees -- maybe already too late for this to matter -- cuts below the two-year so banks can rebuild capital, and of course something creative by the morons at the fed to buy all the mortgage and agency paper they can with two year note issuance.
but no one who says everything is fine is ever accountable, whether they be bernanke and bush or paulson and, before him, greenspan. these people have been so wrong that it makes me sick they have a podium. why don't these people have any shame?
this is the worst credit crisis in 20 years because it is totally all encompassing and is affecting every financial out there. it may be the worst of a lifetime for many of us if these big interventions don't occur.
right now we are heading for a bailout that could be as much as $600 billion, all because the Fed did not take action.
this laissez faire attitude has got to go. i am very, very far from being a proponent of bailouts, big government, government intrustion and the like. however, we do need government to provide orderly markets and to provide rule of law. the crisis is being lengthened and worsened each day of inaction. if those in charge and their minions had not been so darned complacent and ignorant and unsophisticated we would already been raising rates with much of the problem behind us owning to refinances and guarantees that would have cost the treasury a fraction of what is going to be.
this is just so damn shameful. this should never have happened to such a well-run firm as nly.
everything i know about this situation says that nly is in much better financial health than carlyle capital is; but still, this is a case where one bad apple is going to make it more difficult for everyone in this space to do business.
during the mortgage scare last august, nly traded down around $13. while i have faith that ceo mike farrell can manage the company through this jam, we need to be wary of where the stock can go, especially when the company will likely have to raise capital with a dilutive secondary offering.
absolutely do your own DD, but i'm a buyer of nly about 10% lower.