Author: Innovative Income Investor

Finally we get to put a wrap on this year–and to say I am ready for an end would be an understatement. This grind day in and day out has been exhausting and has created plenty of red in our preferreds and baby bonds. Of course it could have been worse–and maybe it will be, but that will be NEXT year–today marks the end of THIS year.

Now if I was a regular writer on Seeking Alpha I would have virtually NO losses–yes it is true. Since most of my losers have not been sold – they aren’t losses!! Actually I like SA and I use it for ideas, but now pretty much all of the most popular folks claim that losses aren’t losses at all–well I guess you just make up the rules as you go–when stocks are going up they are gains, but when they go down they are NOT losses. Oh well whether unrealized or realized losses they are losses. Everyone has their opinion and should do what makes them feel good.

Today the S&P500 futures are off almost 1/2%—thinking this is meaningful is kind of silly, although yesterday futures were green and we continued through the day with a pretty vigorous rally. We know that if we tossed a coin right now we could predict the regular trading day–without the futures market. I prefer flat to a bit up so we don’t get substantial bleed into the income issues

The 10 year treasury is at 3.86% right now which is up a couple basis points from yesterdays close. With only the Chicago PMI being released at 8:45 a.m. we shouldn’t see too much movement in rates.

Yesterday I took a nibble on the Federal Agricultural Mortgage 5.25% perpetual preferred (AGM-F) now with a current yield of 6.82% and yield to first call of around 15%. While my intention was to nibble on a regional/community bank I couldn’t pass up the current yield on this issue, that while unrated, is pretty much investment grade–I hope to write more on Farmer Mac in the next few days or week.

Today I will do no nibbling. I have my annual full body check for skin cancer. I am a picky person when it comes to doc’s and I need to drive an hour each way to my appointment–I could do it at Mayo locally, but I don’t need everyone knowing my business in this small town (not because of the clinic folks, but the ‘locals’ that see you at a clinic). When I find either doc’s or dentists that I am comfortable with I stick with them and will gladly drive an hour and I found that in Faribault, MN just east of me.

Monday markets are closed once again as folks recuperate from their holiday celebrations–won’t be a problem for me because a single glass of bubbly will be plenty.

Once again the equity indexes are up pre-market as has been true for days–and each day equities sell off once the regular session opens. Certainly there are plenty of reasons to sell-not the least of which is tax loss selling and I suspect there is plenty of that going on. If tax loss selling is a major contributor to the losses we should see an end soon–maybe even get some bounces.

Interest rates (the 10 year treasury) are trading around 3.87% this morning down a basis point or two from yesterdays close.

In minutes we get the weekly initial jobless claims number and while in the past this has been a number totally overlooked by everyone that is not the case anymore–everyone is searching for weakness in economic data and I think that the jobs numbers are some of the most important out there–it is hard to imagine a very soft economy until we see some weaker job numbers. We’ll see what we get in 15 minutes.

Yesterday we got weakness in pending home sales – this is another economic sign I think is important, but thus far the fall is sales has not translated to much lower pricing. Certainly there are pockets of price weakness, but many areas are flat to off a few percentages. Inventories remain tight in many areas–some areas have nothing for sale, thus prices have remained stable. We need to see some more weakness here. The Fed is watching.