I was NOT going to post about this, but noticed a brief Barron's article about AGNC's Q1 report. Book value took a big hit, coming in at 28.93, down from 31.64 for Q4 2012. This is a 8.6% drop IN ONE QUARTER.Investors took the common down 7.37% on Friday, which is not surprising.What I did NOT like was that the preferred, AGNCP, was down 1.61% which is a large move on a day when the median preferred was up 0.12%. It is a long way from suggesting that the preferred dividend is at risk, but it does illustrate the frail nature of preferreds. It does not take much incremental selling pressure to make a large impact. If a few more large preferred blocks get sold, it might knock the price down further.If your due diligence convinces you that AGNC's common dividend might be cut, I would suggest avoiding the preferred for a while. If you are convinced the preferred dividend is safe, you will probably be able to buy shares cheaper in the next few weeks.NLY's Q1 report did NOT contain any surprises like AGNC's did. So this appears to be isolated to AGNC at this point.AGNC had a 1.43% net interest rate margin spread with 8.2X leverage at the end of the quarter. What could go wrong?Thanks,Yodaorange Barrons article on AGNC:http://blogs.barrons.com/focusonfunds/2013/05/03/mreit-funds...or Google: "mREIT Funds Suffer From Surprise American Capital Agency Loss"
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