Annaly

Reader comment on: REITS and the Cost of Regulation

Submitted by Todd S. (United States), Sep 6, 2011 16:12

As a sometime owner of Annaly Capital (I currently do not hold any of their stock but I probably will sometime in the future at the right price) I find it amusing that the SEC thinks it is a company needing more regulation. The President of Annaly, Michael Farrell, saw the housing bust coming and avoided buying the Alt-A Fannie and Freddie products. Meanwhile the SEC was asleep on Madoff and, well, Fannie and Freddie. You can spend some time on Annaly's website if you want to see an archive of Farrell's market commentaries.

Regarding the leverage comment above, Annaly is currently levered around 6.8 to 1, despite their charter suggesting a range of 8 to 12 times leverage. I'm not sure how the regulators are going to suggest lowering further, considering that commercial banks are around, what, 30 to 1? (Or maybe that's where they were at the height of the crisis.) And the Fed is currently at 55 to 1, higher than Lehman was at before it failed (what could go wrong with Bernanke's strategy?).

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