I figured it would be a quiet day in the various markets today. Stocks are up a little bit while interest rates are just treading water–plus and minus 2 basis points.
It is so quiet today I turned on Janet Yellen being quizzed for confirmation for Treasury secretary–talk about watching ‘paint dry’–that last 5 minutes. I think we all know that Janet will be dovish in that position. Her and Powell should make a good team–print money, print money and print more money.
I did notice that Wells Fargo (WFC) is selling a $1,000/share preferred stock offering which is a fixed rate reset issue. In the ‘use of proceeds’ section they state they may call preferreds with the proceeds. There are a number of issues currently redeemable and another that becomes callable on 3/15/2021 with a 5.70% coupon (WFC-W)–it is trading at $25.36 so little damage would be done with a call–they must call on a dividend payment date which would be 3/15.
I thought we would have some more new issues come to market today after a long weekend–but no luck–with rates threatening to move higher issuers may want to get the low coupons out now while the time is right.
Tim, where did you see the news about a new WFC $1k pfd?
https://www.sec.gov/Archives/edgar/data/72971/000119312521010921/d95883d424b2.htm#toc95883_5
Cheers to you, Tim.
“make a good team–print money, print money and print more money.”
Perfect summary of where we are today. Bugs me to no end. But I don’t have any answers.
I read this drinking some Irish whiskey to ease the pain but it does not help. We live in interesting times. If we are going to experiment with Modern Monetary Theory (MMT) where a government does not have to worry about defaulting on debt because it can just print more money to pay debt, why is there debt to begin with as they should have just been printing money the entire time to avoid debt? It sounds like we are caught in a loop.
Translation:
:/ I D 10 TS error …..
:/ …..
:/………. recalculating
I can understand inflation and devaluation of our dollars poking us in the face. Just look at your grocery bill. Walk in for a jar of mustard, pick up a few other things and the bill is $75.
I just scratch my head about interest rates. Then drink more whiskey.
It’s a never ending cycle.
Pickle:
The new Treasury Secretary Yellen just admitted today she is a huge fan of Modern Monetary Theory in today’s environment. She feels any additional multi-trillion dollar annual budget deficits are irrelevant until the pandemic is completely over.
But let’s rename MMT to what it really is – the Magical Money Tree.
“Magical Money Tree”
lol
I’m literally going to use that from now on
thanks
I think interest rates will trend higher in the immediate future, so maybe be wise to wait on buying any preferreds or bonds for a while? Might be very possible to pick up investment rated “stuff” at 5% +
I don’t like preferreds under 5% because of interest rate risk. Those paying higher rates may still be worth a look. Bankruptcy risk has been trending down, though that could turn on a dime. I hold several Gabelli’s at 5% and those are the ones I’m not sure what to do with.
martin g , I also hold 2 Gabelli’s in the GDV flavor, the G is my first concern. My cost is under par so I’m rolling the dice “praying” Mario Gabelli or his kids hold a boatload and its not called in July. either way I’m not selling anything rated AA3 over 5% that’s in my sock drawer. Mike