ANCHOR (OFF-CAMERA) ENGLISH SAYING:

In terms of how the housing recovery is playing into what you're thinking about, where are we in the recovery? How is your fund going to change its holdings as that recovery matures a little bit?

BRAD FRIEDLANDER, ANGEL OAK MULTI-STRATEGY INCOME FUND (ENGLISH) SAYING:

Yeah, right now we're still very much in the early stages of recovery. We're seeing in a path right now for about 10% in home price appreciation. A lot of that is a function of this drawdown of inventories. We were at one point close to a year's worth of home inventory. And now it's whittled down much closer to four or five months, that looming shadow inventory that everyone was so concerned about which is obviously a concern, but has now also come down by a good 30% or 40% from where it was. So you're seeing a drawdown in inventories, delinquencies are down considerably, borrowers and personal consumer balance sheets are a lot better than they were a few years ago. So we're seeing- beginning to see a rebound. And it's an area that we think makes a lot of sense and it ties well to this non-agency sector just because you have the combination of fundamental improvement which there are so few sectors right now in the economy that are as strong as housing; tied to the fact that we still believe the bonds themselves are actually undervalued.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

What would make you buy agency debt? Or do the returns simply- they're just not high enough for you?

BRAD FRIEDLANDER, ANGEL OAK MULTI-STRATEGY INCOME FUND (ENGLISH) SAYING:

It's just not high enough at this point. I think investors and those who have been grown accustomed to always having a significant allocation personally to agency debt or MBS that was guaranteed by Fannie and Freddie and Ginnie. That's an area right now that's just simply not accomplishing the goals that most of the investors are looking for. Yields are low, you are at negative real yields if you're adjusting for inflation, and the real kicker as well is that you're just not prepared as well for a higher interest rate environment that may eventually come.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

When do you think that comes?

BRAD FRIEDLANDER, ANGEL OAK MULTI-STRATEGY INCOME FUND (ENGLISH) SAYING:

Well, it's very difficult. If you'd ask me that question a couple of years ago, I would have said two years. But we're at this point now where you continue to have absolute improvement in the economy. If you take a look back and you have some perspective, we've certainly had improvement, growth has been gradual, but it's not enough momentum to really move us to another level, to have that 4%, 5% type of GDP growth. What it's done now is given the Fed the ability to- and really the slack to continue to accommodate. That's why I believe that QE will continue for some time as well.