The inability of congress to make any real progress whatsoever on the budget deficit – or even anything that gives one hope that they may move in the right direction is stopping me from buying perpetual (or long dated bonds). I own a limited number of perpetual shares already–mostly ones I have held for a long time and have a level of comfort with holding irrespective of the interest rate risk that thye have in them.
I have noticed that the prices on my list of potential buys that have lots of potential for capital gains – keep getting cheaper–obviously investors have little faith in interest rates moving lower.
I am intrigued with the Affiliated Managers baby bonds–the 5.875% issue (MGR) and the 4.75% baby bonds (MGRB) are both trading with current yields of over 7.2%. I have a little of the MGR issue as I sold the majority of my shares at $24.92 in October, 2024 and now it is trading at $20.29. The MGRB issue is trading at $16.39. These are investment grade.
The Brookfield Infrastructure 5% BIPH issue is trading down at $15.99 for a current yield of 7.75%. This is an investment grade issue also.
If we had even an inkling of progress on the budget deficit front I would love to have a truckload of these issues–but we don’t have that inkling of progress–at least that I see. I will be waiting, but these are wonderful issues for those looking for investment grade income.
It was my understanding that this site says it does not tolerate attacks on other posters. Some posters must be exempt from this requirement.
Who? The answer to that is clear.
Calling out facts doesn’t = any kind of attack, SteveA. That is your incorrect and relative personal interpretation. Political grenades are not supposed to be lobbed here, yet it is easily proven that you and CharlesM are 2 of the most frequent offenders (the history is published if you want to review it?) – so much so that when called out for it repeatedly, you both (thankfully) began limiting your postings because of it. We all saw it. We all knew it. You both are also the fastest to pull the cancel culture cards to shutdown opposing views, as in your glib manner with this post. Goodness. Let’s move on to capitalism.
I said that I would only INITIATE posts that had my buy and sell decisions. That is what I have done. I respond to other posters or writings posted as I see fit.
Please, Im tired of the name calling and finger pointing.
If no one has anything related to financial and wants to post politics please think a second before hitting the send button.
This is one of the ‘richest’ comments ever posted on this site, considering the author – Charles M. Pure gold, IMO. We can review YOUR extensively political comment history when you’re ready. You can dish it but you can’t read it? Otherwise, it’s just business as usual in dysfunctional Washington where they print and spend imaginary dollars well beyond our means. And, it’s fascinating that so many commenters whining now about the debt/deficits and the horrible world we are leaving to our children, had nary a thing to say as the pedal was to the metal the last 4 years re: same when they exceeded the deficit spending of the previous 4 years before that. This whole situation is unfortunately far more about politics than it is about capitalism.
Charles, we are choosing to invest in a market that is priced off US government treasury bonds. This is a choice we have all made. We can make other choices with our investments.
Things that impact the pricing of U.S. Treasury bonds are the heart of our investments. We have some posters who almost “rage” post (perhaps that is too dramatic a description, perhaps not) when topics like inflation or deficits (taxes or spending side) are posted. These items have a significant impact on our investments. They should be discussed. Trying to pretend that these items do not impact our investments is like putting your head in the sand.
So now that we’ve seen 9 trillion in stimulus spending past four years, where would you think that should happen?
It’s so easy to borrow, it’s so hard to repay. We warned. Mark zandi Paul krugman Cabo et all ignored
Eventually USA will pull a Japan and you’ll get lower rates OR just buy floaters or fixed resets.
As a retiree, I am more concerned with generating income than capital gains or fluctuating prices. So, I am taking advantage of the current pricing and yields. As long as these IG companies maintain the preferred dividends, I should be okay.
I just bought a little of each of the three issues discussed. I’m sitting on a lot of cash so why not? Buy low sell high. A lot of investors say that but they usually end up doing the opposite. Thought I might try it.
What Richard? You’re going to try buying high and selling low! I’m in that position on a couple preferred I bought when it seemed like the Feds were going to lower rates. I’m underwater but as long as I collect the income I’m not going to sell for a loss.
Actually I m tempted to buy more now that I can get a return at 7%
Well who knows? Did I buy high? I hope I’m buying low but like you I am more concerned with the income. I have a boat load of Corporate Bonds and I treat them the same way. Not really concerned with price movements, just reliable income. It’s impossible to find 7% plus yields in corporates unless you buy junk bonds. These seem like a good alternative. For someone who has stuck to IG corporates recently, I have really jumbled my portfolio as of late. JEPI, JEPQ, HYBD, CHSCN, CHSCL, WFCPL, BACPL, PFFA and now these.
I’m convinced we will address the deficit when it becomes a crisis, just as we did by addressing social security in the 80’s only 2 weeks before benefits were cut.
They are making progress all right, they are making progress to a rating for our sovereign debt down with Argentina.
Fun fact in 1900, Argentina was in the top 10 in per capita but are hovering between the 65th and 75th
I had a dear friend from Argentina.
She emigrated in the 1950s when she was almost 30. She witnessed the socialists/social democrats turn a first world country
into a third world country in a couple of decades.
Good warning for us.
Keep in mind spreads on BBB- have widened as well so not just a duration issue.
“ The inability of congress to make any real progress whatsoever on the budget deficit”
I totally agree. The Big Beautiful Bill that the House has passed should be called the Big Deficits Forever bill.
That name was already taken by Bidum’s Inflation Reduction Act and the 2 trillion deficits ‘they’ ran up. We all know how effective that was in bringing down inflation, reducing the debt/deficit, et al.
https://oversight.house.gov/release/hearing-wrap-up-inflation-reduction-act-adds-to-the-deficit-and-makes-inflation-worse/
Hopefully the Senate takes a large battle ax to it and gets rid of large parts of it, but not likely. They don’t crap where they eat.
Inflation was at 9.1% when the IRA was passed, and sits at 2.1% today.
the 2022 and 2023 deficits were about 1/2 of Trump’s 2020 deficit
You should familiarize yourself with the truth.
DJT left office 1/2021. PCE was reading 1.6%. CPI was reading 1.4%.
The Autopen admin signed the IRA 8/16/22. PCE was reading 6.6%. CPI was reading 8.3%. Astounding differences by any measure.
Facts, are brought to you by the Bureau of Labor Statistics/gov data.
Regarding debt added by President, according to the statistics published by the Treasury Department, the Autopen admin holds the higher amount of added debt record versus DJT v1 (even with the exorbitant costs of the Wuhan plague introduction on his watch & the subsequent shutdowns of almost everything around the world). Things were very different a year later when Autopen took the wheel.
So you appear to be incorrect on all accounts according to official gov statistics unless there is something amiss with the gov statistics.
Landlord –
A tweet from Elon Musk today:
“I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: You know you did wrong. You know it.
“It will massively increase the already gigantic budget deficit to $2.5 Trillion (!!!) and burden American citizens with crushingly unsustainable debt.”
The Big Bad Budget Busting Bill. Many citizens voted for the current Commander in Chief to make a sincere effort to get $2T annual budget deficits and the $37T in national debt under control.
You would think $1T + in annual interest costs (20% of Federal Tax Revenues) would FINALLY shake things up? Nada.
“Meet the New Boss. Same as the Old Boss.”
I took the firm position about 3 or 4 months ago that I will absolutely not even look at anything less than a 6 1/2% coupon. Along time ago I bought a boatload of AGM+E. 5.75% COUPON. It has been totally “annihilated”. Its now trading at $21.33. Rock Solid Company but the big boys don’t care. This is not political but between the tariffs, Iran, Gaza, Russia/Ukraine Iam for the first time in a long long time concerned about where all this is going. Just too much killing & chaos in many places. Iam in the camp of believing a tariff is just a fancy name for a TAX.