Alright. It's judgement day for the mortgage REITs. We have our first hike from the Fed, and they are saying that they want to keep moving forward with this plan. The needle hasn't moved very much on treasuries though, so I think that mREITs have been afforded a little more time to get their houses in order. Annaly Capital (NLY) has started to try to preserve some asset value by diversifying into physical real estate instead of exlcusively mortgage bonds.. From here on, it's going to be a question of who is generating positive cash flow, and what they are able to do with it. Real estate can create cash flow, but the more of it that's out there, the less of an edge each property will have. It's a bit of a pardox, really. Real Estate relies on inflation to become more valuable, but mortgage REITs require stagnant or declining rates to achieve larger spreads on the borrowed money. I'm pretty certain that the Fed is aware of this delicate balance, and doesn't want to cause a panic selloff in mortgage bonds. But at the same time, should that actually occur, then any mREIT out there with cash on the balance sheet will be able to take advantage of their peers liquidating assets to stay afloat. If you've ever played Monopoly the end of the game, then you know what happens when one of the players has more hotels than the others. Some of these companies simply aren't going to survive. I'll be doing some new analysis into the sector to see who has the best chance of coming through this pain stronger. Stay tuned for more soon.