It seems as if RWT is taking advantage of short term opportunities in the mortgage market which is not a viable long term strategy. While this opportunistically driven strategy has worked well over the past six months, they are still waiting for the Treasury and Fed to stop dominating the mortgage markets and for the private mortgage securitization business model to reemerge.

This could take a while.

So, while we are all waiting for a viable long term strategy to emerge, RWT has increasing cash flow and management is being well paid. Why not reward the long suffering shareholders with higher dividends? At least that would pay shareholders for not shifting to the other, more stable agency Mreits that are paying over double the dividend yield.