Through The Fly's Eyes: Annaly Capital Management
Subprime Mess Only In 3rd Inning
Michael Farrell, Chairman and CEO of Annaly Capital Management (NLY), is Jim Cramer's go-to guy when discussing the mortgage mess. Last night on Mad Money, Farrell said the subprime mess is only in the 3rd inning and has a lot more time to play out.
Annaly participates in the prime space and is not as affected by the subprime blow-up. But his words are worth listening to when looking at the entire mortgage industry. DR Horton, the Texas-based homebuilder, results support his view. Yesterday, the homebuilder reported net sales were down 37% and its cancellation rate dropped 32%. The results for the homebuilding industry remain weak and a quick rebound remains elusive.
As we have been blogging for a while, the subprime will take a while to play out. Continue to stay away from this sector.