Here’s An Example Of Extraordinary Value In The Wreckage Of Panic Selling

Here is a moment in time that illustrates what can happen in a panic. A severe dislocation played out this week in the mortgage REIT space. NY Mortgage Trust’s 7.875% Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (NYMTM) traded briefly as if the company were suddenly, instantly insolvent. The attached is a quick analysis of bankruptcy risk. Also, there was notable insider buying during this volatility the same day MBS spreads widened by 30 bps. This security’s volatility means it is speculative.

And here is the answer to the propaganda that ETF/ETNs are universally beneficial because they create liquidity for their underlying reference securities:

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