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NLY has a histroy of doing well in bad times

Annaly is the biggest virtual bank by far. Its potential dividend for 2009 (at 16%) is the smallest of the four stocks. And Annaly's forward price-to-earnings ratio is the highest (at 6.2) of these businesses. But Annaly has a history of doing well in bad times, so it deserves to sell at a premium to its peers. And it's still cheap.

They can earn a huge interest "spread," thanks to the government. They take on essentially ZERO credit risk by investing 100% in government-guaranteed investments (MFA is 99% in government-guaranteed investments). They collect around 5% interest. And they borrow money at low rates – around 3%

As the government tries to help the economy, it helps the virtual banks on both sides of their balance sheets... letting them borrow cheaply and invest risk-free.

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