August 7, 2017
We recently purchased BMXT for the Core Portfolio. We saw a very positive article last week on the position, and here is an excerpt. The link to the full text is below. The pricing is slightly below where we purchased and you can buy now.
I have doubled down on Blackstone Mortgage Trust, Inc. (BMXT) this week because I see the REIT as a promising income vehicle that has capital upside on the back of its floating-rate loan portfolio. The real estate finance company has invested heavily in variable-rate assets, which will serve the REIT well as long as the Federal Reserve keeps lifting interest rates. I think Blackstone Mortgage Trust will not only be able to maintain its current dividend rate, but actually grow it in lockstep with rising short term interest rates.
How can companies that already pay out a good chunk of their money to shareholders manage to increase their dividends? Four words: positive interest rate sensitivity.
In a nutshell, positive interest rate sensitivity requires a company to invest into variable-rate assets. As opposed to fixed-rate assets, variable-rate assets become more valuable in an environment of rising short term interest rates. As interest rates rise, (net) interest income rises also. Obviously, this relationship has huge value for income investors since we are still in the relatively early stages of the current rate hiking cycle. Companies that have invested a large part of their investment portfolio in floating-rate assets are therefore in a good position to post higher (net) interest income and core earnings as we move along the interest rate curve.
Blackstone Mortgage Trust has done just that. The real estate finance company has assembled a $10.6 billion portfolio consisting of senior loans, and, importantly, has huge net interest income upside related to positive changes in U.S. interest rates. The REIT’s management estimates that a 1.00 percent increase in USD LIBOR will boost net interest income by $0.23/share annually. Blackstone Mortgage Trust’s investment portfolio has 92 percent exposure to floating-rate assets, which sharply contrasts with the REIT’s fixed-rate exposure of only 8 percent.
From CNN: the approval polls on the Congressional morons goes even LOWER LOL.
Washington (CNN)It’s no secret that Congress isn’t exactly the most popular institution in American government. But now it’s reaching new lows.
Congress sank to a 10% approval rating in a new Quinnipiac University poll released on Thursday, with roughly five in six Americans saying they disapprove of the country’s legislative body. This compares to an 18% approval rating in March.
And if you’re searching for the main reason behind the drop, look no further than Republican voters.
Back in January and March, more than one in three Republicans said they had positive views of Congress, which is controlled by the GOP in both chambers.
But now, that’s plummeted to just 14% of Republican voters who give Congress a thumbs up.
According to 720 Global, total government debt plus total personal debt in the United States was just over 3 trillion dollars in 1980. That broke down to $38,552 per household, and that figure represented 79 percent of median household income at the time.
Today, total government debt plus total personal debt in the United States has blown past the 41 trillion dollar mark. When you break that down, it comes to $329,961.34 per household, and that figure represents 584 percent of median household income.
If anyone can make a good argument that we are not in very serious debt trouble, I would love to hear it.
And remember, the figures above don’t even include corporate debt. They only include government debt on the federal, state and local levels, and all forms of personal debt.
So do you have $329,961.34 ready to pay your share of the debt that we have accumulated?
For example, the U.S. military actually spends 42 million dollars a year on Viagra.
Yes, you read that correctly. 42 million of your tax dollars are being spent on Viagra every year.
GO HERE FOR THE FULL ARTICLE: