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Normalizing Markets? Moving Ahead

This is such a calm market today that one has to wonder about whether this is the calm before the storm.  I watch the news out of New York and shudder to think about a similar situation moving across the country.

Each day I see more and more layoffs and as we all know the median American has almost ZIP money in their emergency reserve–I feel fortunate to have months and months and months of $$$ in my cash reserves–I think I could get through 2020 without income–the result of having too much money in my checking accounts and having almost no debt.  I have to wonder what we are going to see on defaults on mortgages/rent, car payments and credit card debt.  Yes I guess the helicopter government money will tide folks over a bit–but not really for long a couple weeks–congress is already reloading the freebies.

Some businesses have seen decent business in the downturn–but I have to believe that folks ran up their credit cards to buy equipment for home schooling etc and that demand is going to fall flat in months ahead and those businesses are going to implode.

This week Friday we are going to have employment numbers for March and we already know they are going to be bad–but I believe the cutoff on the employment report is early in the month so next month will be disasterous.  I would post an economic calendar, but no use really as the forecasts and results are pretty useless for now.

So I hope to get back to normal on the website.  I have a lot of work to do to get caught up–ticker changes, suspended dividends etc. my time is very limited and these daily whipsaw markets have taken all my time.

I did buy some of the New Residential Investment 7.125% perpetual (NRZ-B) this morning–just a part position–no one should be buying full positions all at once–legging in remains a prudent act.  The company has declared their dividends today–whacking their common dividend, and it appears they are making moves to insure their viability.

I know folks have been talking about AATRL which is a 5.15% trust preferred from Affiliated Managers (AMG).  Right now this is a gift at $31/share (a $50 issue) –8.3% current yield.  The company has a $25 issue 5.875% debenture  (MGR) trading at $23.75–current yield of 6.05%.  I have just bought 100 shares of the $50 issue @$30.97.  I already owed 100 in my sock drawer.  Mark my word that this will trade much higher in the month or two ahead–folks are sleeping (except all our readers who have been right on it).

I see no significant difference in these 2 issues–the trust preferred was originally a private placement and both can defer interest payments for 20 quarters.

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