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I think it was more important to share this here where more people can see it instead of over on broker and brokerage page. I was fighting all day to place some orders on Fidelity. I decided to try something that had worked before.
Placing orders after closing hours seems that the orders go through with no problems.
Now since I posted this, I probably jinxed it. Good luck to all you game players out there.
MCSAP (soon to be STRF) trading on OTC this morning. People are catching on and it’s popped $3 now. Some brokers can’t trade it though however.
STRF offering had to be upsized by nearly 50% due to high demand. (I heard lt was buying a ton)
Priced @ $85. Will be interesting to see where this lands when it begins trading in the secondary markets. Yield going to be in the 11%-12% range.
“The company sold 8.5M shares of its 10% Series A Perpetual Strife Preferred Stock at price of $85 each, raising roughly $711.2M. Strategy initially had hoped to raise $500M.”
I have no horse in this race but what Saylor is doing strikes me as the Wall St version of shenanigans that was going on back in 2015. Crap coins, pump and dumps, etc.. Once again bitcoin is not doing anything worthwhile for anyone except getting people’s cash out of their pockets and it being transferred to someone else. My eyes glaze over now days with all of this related news and content from crypto land.
fc – I concur with you. All of those meme coins, alts, the whole DeFi platform, the levered layered staking etc. so many rug pulls and money into the abyss. Essentially most were all trying to copy cat and sell hope, since you missed out, this could/will be the next bitcoin etc.
Reality is, the entire now so-called universe of “crypto” as what it evolved into, all of it, should not be lumped in with bitcoin. Bitcoin is really a unique digital currency/placement holder, for me personally and of course a pure once in a lifetime tech play.
It has been a great way to protect against the unrelenting decline in USD buying power. Something you can swap into, no different than when I rode the EUR/USD pair for nearly a year or went short the YEN/USD etc.
The now near 16 year performance track record of bitcoin is both impressive and undeniable. Only 3 negative return years. 2010 isn’t populated because it would be 10,000%+
2011: 1,473%
2012: 186%
2013: 5,507%
2014: -58%
2015: 35%
2016: 125%
2017: 1,331%
2018: -73%
2019: 95%
2020: 301%
2021: 66%
2022: -65%
2023: 156%
2024: 121%
That was my whole point Theta. You do not do anything with Bitcoin except pray someone else will pay more. It has no real life use case for normal people. It is just a hot potato being tossed around by Wall St now days instead of nerds in their mom’s basement.
I have read replies like yours going back a long time and they always say the same thing. unique, once in a life time, etc… and several years back the early promoters were right. Just get this in the hands of Wall St and watch it go up because they have the money to spike it. I freely admit it has gone up in price. We would not be here discussing this if it had not. Nobody would care about it “unless” it went up in price.
But just like blockchain.. it is surprisingly useless in the real world and energy intensive. With all of that said I do hope you make money on it. I wish you well.
fc – You have some good points there. On the tech specific actual applications side, I just think we are still early in the evolution. But having said that, if in the next decade we aren’t seeing this blockchain integration say in a sector of finance or even healthcare to secure and reliably manage data, than your hot potato theory will be proven accurate.
And to your point in terms of the energy requirements, we are now seeing this landscape dramatically change as it is quite intensive and wasteful from a carbon footprint perspective.
Off-hand I want to say world-wide, mining is now 50% sourced from renewable energy whether it’s hydro, solar, or wind. There has been a massive uptick in mining operations moving to Iceland and Quebec due to this phenom.
Time will tell! In the interim, I’m just looking to get some double digit yield here off the perpetuals.
Theta:
“The now near 16 year performance track record of bitcoin is both impressive and undeniable. Only 3 negative return years.”
You are boasting about the performance track record of Bitcoin when the drawdown years are -58%, -73%, and -65%?
I will stick to Gold for my store of value investment allocation.
Best of luck on this MSTR/STRK Bitcoin yield security.
And don’t forget the tried and true investing adage all income investors must remember:
“More people have been killed reaching for yield than they have from the barrel of a gun.”
Papa Doc – I hear you on the performance, at face value the -65% and -73% years in particular are pretty ridiculous but it’s relative when you factor in 4 four digit and 5 three digit % return years.
I would say though on the -58% year, that’s pretty close to where we saw equities and allot of individual fixed income fall in 2008/2009, especially lower quality preferreds that hit single digits from previous near par levels.
I appreciate your comment because I really never prefaced this by saying, this holding is going in my junk box allocation. In general and especially this point in the interest rate/economic cycle, I am very reluctant to add low credit quality/levered to the moon type entities be it mREITs or some other form of physical corp/retail REIT with occupancies plunging and other macro concerns etc.
If you have something in this 9-11% yield range you happen to like, feel free to share as I have a very open mind when it comes to holdings in my proverbial junk box portfolio.
I agree with Theta that there is substantial risk and it is basically a bet on further Bitcoin Adoption as a store of value, but the yield is high enough to justify a small speculative position imo. Gold is up 10x over the last 25 years and will probably do another 10x over the next 25 relative to the USD. I can envision BTC doing 10x or more also. STRF could do 16x over the next 25 if dividends are reinvested and untaxed at the 11.75% yield at IPO.
Theta –
“If you have something in this 9-11% yield range you happen to like, feel free to share as I have a very open mind when it comes to holdings in my proverbial junk box portfolio.”
Check out IIPR-A and its 9% yield. But please DYODD as the cannabis industry is undergoing many changes with major risks.
REIT preferred paying g up to 11% nd their term issues 9-10%. They’ve had a low default rate so far but still some risk in a meltdown. MFAN MFAO CIMN CIMO MITN MITP NYMTG NYMTI for term issues, RITM-D CIM-B for floaters a little below par.
Step down to 8% if you don’t want REITs with SB-C SB-D EICC.
Unlisted LTSAP at 10-13% if your broker allows it, you need to enter limit riders blind.
First let me say I am a large holder of Bitcoin, continue to buy more every month and have no intent on selling. I started buying when Bitcoin was $3500/$4500 as a former COO/CFO of a Fortune 250 company that were clients of mine asked me about Bitcoin and though I’d heard of it, I’d had never done the research or known anyone that owned any. I hold the vast majority of my coins in a cold wallet with a 14 word password and Bitcoin trades 24/7/365 not when the markets decide they are going to open. I spent 24+ years on Wall Street after law school in Michigan managing and doing daily risk profiles of billions of institutional assets, doing hundreds of presentations, had a national investment call in radio show every Sunday night for many years and I will always say I DO MY DEEP RESEARCH before I recommend or even talk about a security or asset. I have NEVER had any investment perform as well as my Bitcoin. Let that sink in for a moment. Bitcoin is decentralized and has no counter-party risk. World governments might be able to print unlimited fiat currency, but Bitcoin is a finite asset. The total number of bitcoins issued to date is approximately 19 million.
just spoke at a large Bitcoin conference in Miami (I was there) and the largest and most dynamic economic superpower 
has plans to add Bitcoin to their strategic reserves (if they already haven’t). My belief is that the US should just really buy Microstrategy/Strategy and give Michael Saylor a Cabinet position for many reasons. Do you really want future generation of yours to ask you why you or wonder why you didn’t buy Bitcoin when it will be $1MM+ (just my opinion). Lastly, as I tell my institution clients that pay me a small fortune to advise them, “ you and your Board of Directors” should own Bitcoin as an asset of the company as EVERYONE should own some Bitcoin. Each individual should do their own deep due diligence and keep an open mind before you begin your journey. A mind is like a parachute, it only works when it’s open. Finally, only MORONS advise people to do things that they know nothing about, many that talk about Bitcoin should look in the mirror.
The maximum supply of bitcoins is capped at 21 million.
New bitcoins are created through a process called mining.
The mining reward halves approximately every four years, reducing the rate of new bitcoin issuance.
It is estimated that the last bitcoin will be mined around the year 2140.
After reaching the 21 million limit, no new bitcoins will be created.
Bitcoin’s scarcity is a key factor in its value proposition. Bitcoin has been and will continue to be a great store of value and has increased utility each and every day. We have come along way from the Silk Road; the most powerful man on the planet
Wishing you profitable investing, Azure
Azure well put. What changed my mind about bitcoin. Is when the bitcoin foundation wanted to alter and carry out software changes. The miners (people) voted no.
This one event told me the miners (people) where in control.
Azure Blue,
you say “First let me say I am a large holder of Bitcoin”
Does this mean you are overweight, or you own a lot of Bitcoin?
Please clarify.
Just kidding….
I do respect your opinion, but I’ll always disagree on Bitcoin. If it takes over the financial system, and the dollar becomes worthless, I will still own a home I can sell and 4 cloned dogs (the 4th is being manufactured by Viagen as I type)
I know this is a dumb question but Azure how does one actually buy it?
Franklin, I had the same thought. I googled it. We have one of those Coin machines in Safeway and I figured anything that somebody was trying to sell with a vending machine would be questionable on cost and when I saw there was a combined 14% to 16% commission I figured I would stick to gold or silver which has a commission both buying and selling so it wouldn’t surprise me that it is the same with that machine.
There are many ways to buy (and sell) Bitcoin. Some of the more user friendly sites: Coinbase, Fidelity and an ETF (IBIT), but these are just a few and there are so many others.
Coinbase https://www.coinbase.com/
Fidelity https://www.fidelity.com/crypto/trading?imm_pid=58700008059199145&immid=100927_SEA&imm_eid=ep73306203346&utm_source=MICROSOFT&utm_medium=paid_search&utm_account_id=700000002659201&utm_campaign=CRY&utm_content=58700008059199145&utm_term=buy+bitcoin&utm_campaign_id=100927&utm_id=71700000100495520&gclid=747bd02c243a102ef51cb7ce881b1cbf&gclsrc=3p.ds
iShares Bitcoin Trust ETF (IBIT)
Total Assets $52.6 billion
Expense ratio 0.12%
Inception Date January 5, 2024
I hope that helps and I thank you for your question, A
Franklin – I’ll just add that if you currently have a Robinhood account, you can buy spot bitcoin on there as well. Of the ETFs, I do like IBIT. It has the best liquidity and also trades in the 24 hour market.
I have a specific IBIT allocation that I write weekly calls against which effectively turns it into a bond hybrid income generating position. The yield on an annualized basis is nearly 50%.
Thanks Ab ,
I didn’t know that Fidelity was doing it.
Charles M – Just so you know, you have to open a Fidelity Crypto account. You won’t be able to buy spot BTC through your current Fidelity brokerage.
Azure –
“My belief is that the US should just really buy Microstrategy/Strategy and give Michael Saylor a Cabinet position for many reasons. ”
You have posted many great comments over the years, but that one is by far the most ridiculous – for many reasons, including how far of a premium MSTR trades over the Bitcoin it actually holds.
And how about this one from you:
“Bitcoin has been and will continue to be a great store of value and has increased utility each and every day”
Yes – especially more utility from hackers, thieves, and bandits. They truly worship Bitcoin and thank the investing Gods everyday for its creation.
I have lots of friends that own Bitcoin and they almost always say the same thing when I ask them why they own it…..”Because it keeps going up”.
Full disclosure – I own (and often trade) a tiny amount of FBTC in my IRA. But to me it is the ultimate “greater fool theory” position. That is what makes a market. So far, I have never lost money on any Bitcoin trade.
Having gone through multiple crypto winters, I would say the extreme volatility is not for everyone. When Bitcoin block rewards do diminish, mining will become less and less profitable and transaction fees probably have to rise. Azureblue- how do you see mining playing out as we near 2040?
On Ethereum network before they upgraded to a proof of stake model instead of mining, the transaction “gas” fee was extortionately high. Coinbase gives out free crypto for learning about different platforms and they gave me the gas fee at the time, a whopping $10 of ETH to move 3 dollars worth some shXXcoin for the tutorial exercise. I obviously kept the ETH.
I think establishing crypto on-ramp and putting fun money/pocket change into crypto can be a useful exercise. But be fully prepared to lose money.
Even if crypto is my all time best performing asset, I’ve been moving more towards gold as an asset for store of value.
Scorpio Tankers (NYSE:STNG) is offering common shares, preferred shares, debt securities, warrants, purchase contracts, rights, and units, with potential convertible or exchangeable securities.
https://seekingalpha.com/filing/9707268#hasComeFromMpArticle=false
Fab – as the headline reads, what Scorpio has done is to file an SOP “automatic shelf registration.” Many companies do this… They are not offering any common or preferred shares, debt securities warrants, purchase contracts, rights, units with potential convertible or exchangeable securities at all under or because of this filing….. It’s just giving them the ability to issue any of the above in the future under separate filings that will happen when/if they ever wish to come with a new issue..
Theta,
This could be like the Fnma 9% preferred that was issued less than 3 months before the government placed it into conservatorship.
Theta,
LT always buys his crypto from Coinstar machines at Kroger.
All my spare change has been converted to crypto!
This actually isn’t a bad idea given I wasn’t using the change.
Coinstar, oh Coinstar, thank you for helping me clean up my desk!
So, you see , BTC DOES have a use case!
That’s a hefty commission Lt 16 to 17% buying from that machine.
lt – I missed that FNMA preferred issue. Interesting analogy. Your coinstar maneuver there is epic. You made me think of something really awesome that happened in the early days of BTC with a vending machine. I’ll have to dig up the link and post it over in the sandbox. Cheers.
Theta,
I owned that FNMA prfd,=; I think FNA was the symbol but don’t quote me.
The Board had declared the quarterly dividend before the takeover, making the $1.125 dividend payment on a $50 par pari-passu with the other unsecured debt of FNMA.
I was able to buy a bunch at .20 before the market was certain they’d be obligated to pay the 1 dividend if they were going to keep paying on their unsecured debt.
That knowledge was courtesy of paying attention in business law class in college. Still, not even securities lawyers were certain what the conservatorship meant.
theta-
I find STRK to be the series A – trading since 1/31 It is 8% – is on QOnline.
Stockhouse.com has this confused bit:
” Strategy™ (Nasdaq: MSTR/STRK) (the “Company”) today announced the pricing of its offering on March 20, 2025 of 8,500,000 shares of 10.00% Series A Perpetual Strife Preferred Stock (the “perpetual strife preferred stock”), at a public offering price of $85.00 per share. The issuance and sale of the perpetual strife preferred stock are scheduled to settle on March 25, 2025, subject to customary closing conditions.”
I think they confused K with F. With name changes, and multiple issues, this thing is confusing.
Not sure if this stuff is any better than the common- except it’s cheaper.
I own none of any.
Gary – Probably just easier to refer to the two floats as either the 8%er or 10%er. Hoping the 10%er closes and is available tomorrow morning on NasdaqGM. It already went up $5 today now closing over $90 handle on the OTC.
Brings back some good memories of buying new preferred issues on OTC below par and then when they’d open up on the regular secondary exchange, they’d shoot up to $26 in no-time.
Theta,
Wasn’t there a problem with BTC software code in 2010 that permitted someone to create billions of BTC and it then had to be forked?
lt – Yes this happened only I believe 6 months after the launch. There was a bug that basically allowed summing up of all the overflow. It was caught pretty quickly by developers and Satoshi himself completed an update; a soft fork was implemented in order to time machine bitcoin back to right before the incident happened, as if it never did by restoring it to the earlier state where all blocks were valid.
I’ve been waiting for “RPTP,” the Ritm Property Trust 9.875% FtF cum perp preferred, to start trading. Now I see the symbol is RPT-C and it’s trading history on TradingView and QOL started on Feb 27 and on Schwab on Mar 12.
Got is at $24.76 soon after it opened at Schwab. I know I was also looking for a different ticker but they decided to change it at the last minute apparently. Sit back and enjoy the really good yield until 5/2030 or later as they have no maturity date !
Supplement dated 3/10
https://www.sec.gov/Archives/edgar/data/1614806/000110465925022178/tm258631d1_424b5.htm
MicroStrategy — now operating under the name “Strategy” (Nasdaq: MSTR/STRK) — has priced a new preferred stock offering that will raise $711.2 million, with most of the proceeds headed straight into Bitcoin.
The company announced the pricing of its 10.00% Series A Perpetual Strife Preferred Stock on March 21, with 8.5 million shares offered at $85 each. The offering is scheduled to close on March 25, subject to standard conditions.
According to Strategy, “the net proceeds to it from the offering will be approximately $711.2 million,” after fees. The firm said it plans to use the cash “for general corporate purposes, including the acquisition of bitcoin and for working capital.”
The preferred shares come with a 10% annual dividend, paid in cash every quarter. If Strategy misses a dividend payment, it will owe extra “compounded dividends” that increase by 1% every quarter until they’re paid — up to a maximum of 18% per year.
The company added that it can redeem all of the preferred stock if less than 25% of the original amount remains outstanding or if certain tax events occur. If a “fundamental change” happens — such as a change of control — holders have the right to demand a repurchase…
https://www.thestreet.com/crypto/markets/strategy-raises-711-million-to-buy-more-bitcoin-through-preferred-stock-offering
the new STRF perpetual pref priced at $85, which is a ~11.75% yield at the offering price (10% on $100 par). Price talk had been between $75-85 on where to price it, so the yield is higher than that 10% headline number.
Jack be nimble, Jack be quick…this will be fun to watch.
Hey buddy, I will give you a bunch of magic beans for your cow and sell you back the milk for $5.00 a gallon.
I bet xerty, ChrisW, and Charles M are 1st day buyers!
Sorry I missed Fabrib’s post gents and posted mine. Fabrib’s is populating under R2S’s thread from yesterday, so I didn’t see it yet. Cheers.
Theta,
I missed the train on MSN, FB, AMZN, AMD, Yahoo, or got on at the wrong station then got off. I guess I will wave as you speed on by.
lol @ Charles M – At this point in the near two decade price cycle, with new money, I’m just playing BTC via my fixed income bias inclinations hence why the new convertible debt ETF and these preferred perpetuals are such an interest.
The low hanging fruit opportunity is long gone. As you alluded to it’s no different than say even missing out on Apple before the iPhone came out but all of sudden now two decades later, getting super excited and going all-in on Apple @ a $3.2T+ cap. I’ll pass on that one as well.
Theta, I’m clueless when it comes to new tech. I got in on the FB IPO and bailed around 27.00 as a matter of fact I don’t use it. Not because I don’t think it’s great, but because it’s obvious that bad actors collect information and use it to scam people. I have seen tech evolve like machines that can print metal parts, or new battery tech that seems like a new company comes along with a better idea than the last one. Problem is I never made any money buying and holding stock of these companies. A lot I think comes down to your experience with your job and training in different fields of technology to recognize an opportunity.
the day before the first ex-div date should be very interesting.
Actually, at $85 it ylds 9.41%
And- Fabrib- it began trading 1/31, where did the closing of 3/25 come from?
Actually, at $85 it ylds 9.41% It pays $8 on $100 par, 8% but is discounted.
And- Fabrib- it began trading 1/31, where did the closing of 3/25 come from?
Gary – Not sure if you saw my above post but there are now two different preferred issues from MSTR. The previous STRK 8% which you outlined 1/31 and now a 10%, STRF, which hasn’t landed yet and is trading on the OTC as of yesterday.
Many retailers are unable to buy it on the OTC. STRF is currently trading under MCSAP and opened yesterday @ $85. It hit $93 today.
F&G Annuities, FG down 15% today…anyone have news? FGSN, FGN holding.
https://www.sec.gov/Archives/edgar/data/1934850/000162828025013869/fg424b5preliminaryprospect.htm
Took a starter in Affiliated Managers MGR-B @ 18.19 for a CY of 6.54% rated BBB-. I looked at the MGR-E issue but couldn’t understand why that one, which yields about .25% more is trading just over par. So for 25 basis points I’ll take the upside to 25 if rates drop at some point over the next 35 years lol.
Good comment.. MGRB/VCLT pair has gone from 2 sigma rich in october to near 1.5 sigma sigma cheap now (3 yr horizon).. i t was near 3 sigma cheap in december 2023 ..
Really have to tip-toe into these given the downward trajectory. Might dip toe around 7%. MGRD is $2 less, has lowest coupon, – call in ’26, mat in ’61, now 6.51% and at $15 = 7% yld
Dan- typo ? it’s MGRB not MGR-B that would likely be a preferred
Gary, you are correct. Ticker is MGRB.
MGR 22.14 YIELDS 6.6% call it I dare ya.
Both under 7%, why bother when there are so many over 8% /innovativeincomeinvestor.com/new-preferred-stock-and-baby-bonds-since-12-2020/
Well what the heck, why settle for even 8% when you can get 9% or 9 7/8%, etc. They’re all interchangeable anyway, right?
Microchip Technology Series A Mandatory Convertible Preferred Stock MCHPP incoming
https://www.sec.gov/Archives/edgar/data/827054/000119312525057892/d903706d424b5.htm
Moody’s periodic review of WRB:
https://www.moodys.com/research/null-Moodys-Ratings-announces-completion-of-a-periodic-review-of-ratings-Announcement-of-Periodic-Review–PR_1000011025
The Baa1 senior unsecured debt rating of W. R. Berkley Corporation (NYSE: WRB) and the A1 insurance financial strength (IFS) ratings of W. R. Berkley’s principal property and casualty insurance subsidiaries reflect the company’s strong franchise within the commercial and specialty insurance segment with a diverse array of small- to medium-sized risks, a disciplined approach to underwriting, the company’s track record of strong, stable profitability coupled with low catastrophe risk and good risk-adjusted capitalization. Partially offsetting these strengths are the company’s exposure to long-tail casualty businesses, which have greater reserve and pricing risk. The company also maintains somewhat high operating leverage, which Moody’s views as tempering the group’s strong operational profile.
Why are they doing so poorly? A couple at 6.3+% at 10- almost 20% discount,
and past call. Low coupon must be a factor. Not a good place to put cash as a MMKt sub.
I bought a miniscule position in speculative biotech IBRX at 3.20 when it was discussed recently. Now 2.76. Since then, the appetite for such stocks may have fallen due to changes in national policy.
The chart suggests a possible return to area of the Oct low. Price has been dropping since the Feb 19 high. With very little to lose, I’m holding.
Rocks I added
I don’t think I’ve ever seen a higher short %. Will be fun to watch.
IBRX Short Float 68.63%
furcal – Where are you getting that data from? You probably meant to denote a “mm” instead of a % sign. I almost fell out of my chair.
I’m showing insider ownership is 63% with only 10% institutional. The # of shares borrowed is just under 61mm but the float is gigantic; that SI represents 7% of the total outstanding shares or 19% of the float. Total outstanding shares is 868mm vs. float of 205mm.
Either way, I’ll take a look as I’m always up for some degeneracy.
theta-the info was from finviz- I didn’t look further, so thanks for the clarification.
Haha, I have a borrow agreement with my Schwab account. I’ll have to check what they are paying me to borrow my shares.
I think the doctor owns like 80% of the outstanding shares so that leaves the crumbs for the rest of the investors to fight over and like Theta mentioned, institutions own 10% or half of the leftovers. So it’s probably easy to manipulate the price.
But the traders don’t control the news and what they are doing.
Charles M – Brilliant idea. Ping this when you find out what they are paying.
MGRE trading just under par right now.
(Affiliated Managers 6.75% 03/30/2064)
*Company has been publicly traded for nearly 3 decades with a $5B cap.
*25% net profit margin on $2B+ annual revenues.
*Operating cash flow just under $1B
Theta—thanks. I have been considering this one. It’s super safe, but its long-dated maturity makes it susceptible to share price movement.
Tim – 100%. As you obviously know there is always that trade off between credit quality vs. time vs. yield. If I can only pick two of those attributes, I always go with credit quality and yield.
This holding is for my “annuity” bucket and it’s something I buy consistently (depending on price) on at least a monthly basis. It held up quite well during the panic fixed income hysteria last fall and when we had that more recent dump post election it broke $24 just for a brief moment.
MGRE has a 42 cents ex-div on March 28.
MGR is past call and about 11% below par- good to 2059 too. Prob won’t call, but nice if they did. current yld 6.61%
good comment.. mgre/vclt pair trading near fair value (3yr horizon).. was near 3 sigma cheap in September
Any thoughts on PFFV? I am using a little of it to put cash to use when I have no better ideas. .25% seems a reasonable expense ratio with instant diversification and access to some issues I don’t / can/t see.
Many preferreds are low volume so it’s hard for big funds to be nimble.
PFFV within 70 cents of 52 week low. Decent entry here. Based on YTD distributions, yield at 7% not including potential year end “bonus”
PFFV, PFFA and PFFR is what I use to sweep cash into from other distributions when they are trading within a certain band range.
do you look at mNAV before choosing a sweep ETF?
Yield Hunter – Not for these. I have a different mantra. For CEFs, absolutely this is a key data point I track. Ironically that are long bursts of time where CEFs trading premiums to NAV outperformed par or discounted NAV counterparts. But that’s a different story.
For those specific ETFs above, There are three deemed buckets I self utilize, one is cheap, neutral, and too expensive. This is based off price action on a hundred plus preferreds I have on watch daily that gets dumped down for analytics.
So for instance right now, current price action is neutral in my opinion in terms of value, hence I’ll add. Back in recent fall October, obviously that is a cheap period so I am overweighting. As opposed to the previous spring/summer where everything was trading over par. At that point, I just park it in MMF or short term T Bill ladders.
Also worth noting on some of the iShare bond termed funds, I’ll dump those down to see how far away current market price trading value is vs. notional and if the spread is good enough, I’ll add those in size as well.
I like the strategy. I still have some PFFA but it just sits. These ETFs have been good sources to find preferred issues worth owning outright too.
Knowing the timing for rebalancing and determining what is likely to be sold off or bought could be advantageous.
Tidbits from the PFFV 2024 Summary Prospectus https://www.globalxetfs.com/prospectus-regulatory/?id=6024:
“The Global X Variable Rate Preferred ETF (“Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the ICE U.S. Variable Rate Preferred Securities Index (“Underlying Index”).”
“The Fund invests at least 80% of its total assets, plus borrowings for investment purposes (if any)…”
“For the most recent fiscal period, the Fund’s portfolio turnover rate was 81.87% of the average value of its portfolio.”
“The Fund may lend securities…”
“Qualifying securities must be issued in $25, $50, $100, or $1000 par…”
“The Fund is not actively managed…”
Not too exciting. No comment indicates intentional leverage, unlike PFFA. The top 10 holdings include three BBs (MER-K, RZC, APOS).
Rocks, Just on a quick glance I see where Theta picked 3 to have the opportunity to stash cash in the one that has the return for the least risk at the time he needs them. But, depending on the time frame you pick to look at total returns you could have a capital loss over time but a decent dividend return. My feeling is that none of these are a long term hold, set it and forget it kind of investment. Theta pretty much says that it’s his alternative to holding in a MM fund or short term T bills.
One way of spiking your returns. Everyone has different ways. If you are looking for long term investment and average return just buy GAM-PB for 6% return.
Charles M – I concur with your longer term investment logic. I’ll add two more to your GAM-PB; these are favs on my 6%+ coupon list, JPM-PC and HIG-PG.
Theta, you gave me a couple ideas. Another reader suggested going back into lower coupon preferred on the off chance they might get called and you have a capital gain while sitting and collecting 2% above a T-bill, but a lot of these have low volume and I don’t know if I want to get back into the low volume game with Fidelity.
Just looking, HIG-PG fits that description.
But while looking at your suggestion of JPM-PC I saw JPM-PK is yielding 6.6% on cost and decent volume for one of those older low coupon preferred.
OOPs, my mistake. the JPM-PK is 5.6% YOC what I get for not checking the numbers posted on another site.
good comment.. pffv/vrp price pair trading near .5 sigma cheap.. pffv has signficantly underperformed since inception March 2022 (total return 12.2* vs 20.22 vrp)
New Strategy MSTR preferred “Strife” ticker STRF
https://www.sec.gov/Archives/edgar/data/1050446/000119312525056178/d927140d424b5.htm
What a beast. 10% coupon. Day 1 purchase for me.
I can’t find it on SCHWAB
Dan – It prices this Thursday and will begin trading Friday morning, depending on your broker.
Awesome thank you Theta.
Next MSTR offering is the Perpetual Ponzi Preferred (PNZI), which will be used to pay the interest on the STRF preferreds. Amazed that they are allowed to issue this dung.
hahaha – love the ticker
Definitely classic ticker! I will say this though. In the spectrum of junk and speculation, I’ll take these MSTR preferreds all day long over something like Magnum Hunter, ATPG, Millers, Quicksilver, Energy XXI, Saratoga Resources, Green Hunter, etc. those were all absolute death traps for your money.
Yet in real-time, those types of levered investments were the “Nvidia” pinnacle peak for fixed income at the time with all the oil resources backing them, what could go wrong?
Theta, blast from the past. I think it was Jim Cramer who was promoting Energy XXI at the time. That was my one and only time I listened to that guy.
So you are long those preferreds. Are you hedging by shorting shares or selling premium?
Charles M – Indeed. That time period leading up to late 2014 into the 2015 crash was wild in that particular area of the oil space. Can’t recall a swifter reversal of fortune. I remember for an eternity you could get all the Green Hunter 10% preferreds you wanted between $10-$15, then a light switch later, they are trading over par and ultimately fell just as fast.
Yield Hunter – I am long the current MSTR preferred as well as the new MSTR convertible bond ETF and the new preferred debuting this Friday. I no longer dabble in selling MSTR credit option spreads.
I am a bit biased being a former miner in this space so my perspective and insight is a little different than most. But I’ll just say we are almost at the pivot point where BTC will be too big to fail. Currently a handful of states have implemented a bitcoin strategic reserve and right now Texas is a big one to watch unfold. One more recent move that surprised me honestly is the state of Wisconsin pension fund deploying hundreds of millions of dollars into spot BTC ETFs.
I think the technology is interesting and I have mined some back in the day but the volatility would scare me if it were in my pension fund. Should pension fund managers be buying digital commodities? idk.. this is probably a sandbox conversation
BMAX (trading now today on the NasdaqGM)
Now you don’t have to be a large institution nor accredited investor; retail folks can purchase the Strategy bitcoin convertible debt.
Just started trading two days ago. Saylor has done it again. I know there will be mass amounts of people from this site tripping over themselves to load this today. You get all the upside of bitcoin with the downside protection of a bond. You’re welcome!
Theta,
riddle me this:
If I buy STRK at 87.50, I own 1/10th of a perpetual $1000 call on MSTR.
The value of that call using the vol of the furthest 1000 call trading (Jan 2027, vol of 87) would be $300 using Black Scholes, so I would then be long an 8% $100 par perp and $30 of call value.
I could then sell the Jan 2027 in a ration of 1000 STRK to one call
Does this make any sense to you to do?
lt – In terms of your logic and the math, it makes sense, yes. But a couple of caveats.
Let’s just say hypothetically, price of bitcoin goes ballistic in the next two years and that strike is magically hit. I’m not sure of the mechanics and the timing etc. of the convertible process, and who dictates that, when/how your shares are delivered etc. so that could present a problem to cover that short end of the arb on the common.
Secondly, because I have to protect myself from myself, I no longer commingle any options trades with my core or main accounts, not even a trading account. So the problem I have run into in the past with either selling naked calls or credit spreads is the broker stepping in and closing me out even though I had wiggle room etc. and actually would have been fine at expiration but unless you are selling those MSTR calls in a giant size account that the % weighting of that position is a pittance, I’d be concerned about that as well.
I actually own STRK. What people are not getting is, Saylor will easily support the distributions by selling MSTR via ATM. He is a maximalist and thereby doesn’t want to hold USD. For every billion dollars of issued STRK, he only has to sell 70,000 shares or less (depending on MSTR trading price) each quarter.
And the rub is, as he buys more bitcoin with these proceeds from STRK, he is effectively lowering his aggregate cost basis on the overall spot BTC position and building more equity from the lens of a balance sheet since he never has to actually pay back the perpetual preferreds. Quite frankly, I don’t know why he didn’t go the perpetual preferred route from the get-go. Public Storage has done this brilliantly for years now. They always have a ton of preferred issues out there in the wild.
But PS preferred payments are only 1/10th of net income and about 6% of cash flow. They def COULD pay them off. MSTR doesn’t have the cash flow to do this.
“And the rub is, as he buys more bitcoin with these proceeds from STRK, he is effectively lowering his aggregate cost basis on the overall spot BTC position and building more equity from the lens of a balance sheet”
I do not understand this statement.
Also,He has to record the BTC at the price paid, and then each quarter record “Unrealized gain /loss” as part of the income statement. That’s the accounting change he wanted and he’s stuck with it if MSTR chooses this method and then he owes Corporate AMT on unrealized gains but doesn’t have the money to pay the tax. I’m guessing he doesn’t change the acctg method. He’s trying to get Trump admin to change the corporate AMT
Also he can only issue stock as long as MSTR is above 119 ish ( the “ish” is a few cents cuz its around 119.50 from memory).
MSTR’s BTC is worth about $40 bill and the company market cap is about $74 bill
oooh, this is very relevant to MSTR…they have to pay billions in tax and don’t have the money:
https://www.thecoinrepublic.com/2025/01/28/bitcoin-accounting-update-could-leave-microstrategy-with-billions-due/
lt – Regarding that link above on taxes, both MSTR and COIN are right now actively engaged with regulators and have submitted formal documentation to the IRS concerning this logistical accounting change and how/why it is not applicable to their particular balance sheets.
I spoke to two different crypto accountants and when all is said and done, what/how MSTR/COIN are specifically doing with bitcoin, many believe, will not be subject to CAMT interpretation. I’ll get back to you shortly on your other post but having too much fun right now losing money on 0DTEs in testing out some new wicking software.
There’s someone left at the IRS? I was hoping they wouldn’t miss me not filing
“I do not understand this statement.”
lt – what I’m driving at here is, because the perpetual preferreds are being placed on the equity side of their balance sheet and it’s technically not something he has to ever pay back, the cash proceeds from those preferreds relative to bitcoin is lowering his average cost, hence creating more equity. I’ll give you a scenario…
Say I go out and buy a kilo bar of spot Gold for $100K cash; this is my cost basis. Now pretend, you have a magic monopoly game and gave me $100K of which I was able to go out and buy another kilo bar of spot Gold with.
In essence you have cut my cost basis in half in that scenario. Similar phenom is happening here. The cash proceeds raised from the preferreds is buying more spot BTC hence it is fully accretive. Now if BTC price tanks to $5,000, obviously this becomes a different conversation…..
3.4% off Fri’s high…moving along.
OXLCP, was able to pick up a few shares last Friday before the ex-div date. Mature 2/28/2027, less than two years. If you can get it below $24, yield about 8% according to my guestimation.
If you want to own better quality and even shorter duration, NEWTZ still offers close to 8% yield if you can get it below $24.7, ex-div next month.
Atlas Corp filed their Form 20-F with the SEC today. They lease container ships to the many of the largest container freight companies in the world.
You can find their Form 20-F with this link. The Form 20-F for foreign filers is the Form 10-K equivalent for domestic filers.
https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=319011169&type=PDF&symbol=ATCO&cdn=aff039d4f77ac50cc812188f10e68911&companyName=Atlas+Corp.&formType=20-F&dateFiled=2025-03-14
I own a 1/2 position in their BBs – ATCOL, 7.125% due 10/20/27…
The University of Michigan’s inflation indicator is reported at 3.9%.
According yahoo that’s a 34year high. Wall st. Hasn’t noticed yet.
That number is due to political reasons and thus cannot be discussed here. It does not take a rocket scientist to figure out who UMICH is mainly calling though.
Well politics aside, last time that number shot up they raised interest rates.
So, it’s not connected to the 9+ % a couple yrs ago?
It is a Saturday so maybe I can sneak this in without typing too much. In the past both “groups” tended to agree on the direction if not the magnitude. This time it is bizarre.
https://www.zerohedge.com/markets/panicking-democrats-send-umich-inflation-expectations-highest-32-years
So in the past bout of inflation a certain party saw it coming while the other sorta saw it coming but did not want to admit it? Either way they both tended to agree something was up. But now you toss in a different “leader” and all of a sudden the divergence is just extreme. I never saw anything like that before. If you sort of balance out the “extreme feelings” involved the number would probably be in line with the NY Fed’s numbers.
And i need to just shut up now. Sorry. I am unclear how else to discuss this number without… the dreaded P word.
Seems like all of the UMICH stuff above is really more suited to the litterbox pages.
The NY Federal Reserve inflation survey poured cold water on Univ of Michigan report. Caveat Emptor!
https://www.newyorkfed.org/microeconomics/sce#/
BNJ came down, is still over 7% B 15.81 A- 15.95 BBB perpet subord Notes
Prob the only thing connected with them I want for the long term ( or short).
good comment..bnk/vclt pair has gone from 2 sigma rich in november to over 1 sigma cheap this week..currently .5 sigma cheap.. was two sigma cheap in december 2023 ..
HFRO Preferred B will start legit trading today (yesterday’s price was a sham 100 shares).
I signed up for the tender and have my shares at Fidelity. Full disclosure, I’m looking to flip some of my shares at a decent discount to HFRO Preferred A, which has exactly the same terms (what a steal!)
This is not a recommendation to buy — just a heads up in case anyone was planning to buy.
VIASP has another tender offer at 24.00/ After two failed tender offers at 22.5 not many fools tendered below the selling price. Currently selling around 24 but with accumulated dividends that don’t apply to tender. This is a high float issue on a recovered company that should call it at par. Just looking for what they can get lower. No tender for me, and if I’m ever out at par I’m never coming back I don’t like their tactics.
Actually thought he did well, at least much better than I thought they would when it never traded below 22.5 after the first tender. I thought they’d get zero so I’m the foolish one. But still holding here too
Never underestimate the knee-jerk reaction by low information investors to accept any offer they see.
That is how some people made millions by doing below market “Mini-tenders” that the SEC had to put out notice after notice to try to educate people on them.
I bot splp/pra 6 2/7/2026 term preferred at 24.32 9% ytm.. good article on S/A titled Bargain 10.4% ytm on term preferred stock from steel partner holding by preferred stock trader dated 11/9/2023
mj I recognize the name, but I looked at it once but can’t remember why I didn’t like it. I’m thinking maybe something about they can pay you in common?
Charles and mj,
You got it, Charles. From the prospectus (p. 154):
https://www.sec.gov/Archives/edgar/data/1452857/000119312517032524/d321918d424b3.htm#rom321918_127
Mandatory Redemption
If not earlier redeemed, on the date that is the ninth (9th) anniversary of the original issuance date of the SPLP preferred units, SPLP shall redeem all of the SPLP preferred units at a redemption price equal to $25.00 per SPLP preferred unit plus an amount equal to accumulated and unpaid distributions, if any, on such SPLP preferred unit to, but excluding, the redemption date, in cash or in common units or a combination thereof, at the sole discretion of the SPLP GP Board.
It’s also a LP and since its not debt, that means a K-1. Not a big deal but may be for some folks.
Thanks for mentioning splp-a. I was in this 5 years ago when the company was struggling. I just reviewed the 2024 annual report and operations have drastically improved since then. 2024 net income was $262M on sales of $1.243B – wow! Also, capital was $1.173B on assets of $3.58B. I just bought 400 shares @ 24.37 which is a ytm of 9.05%. With a mandatory maturity of 10.5 months from now I consider this a relatively safe high yield investment. Thanks again.
Accumulated about a 1/2 position in splp/pra back in the spring of 2021. The company has been purchasing these shares in the open market and in private transactions. This is from their 10-k, filed on 3/11/2025.
Preferred Unit Repurchase Program
On February 2, 2024, the board of directors of the general partner of the Company approved the repurchase of up to 400,000 of the Company’s 6.0% Series A preferred units (the “Preferred Repurchase Program”). Any purchases made by the Company and/or its applicable subsidiaries under the Preferred Repurchase Program will be made from time to time on the open market or in negotiated transactions off the market, in compliance with applicable laws and regulations. The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. The Preferred Repurchase Program has no termination date. During the year ended December 31, 2024, the Company repurchased 80,881 preferred units for $1,945. On February 6, 2025, the board of directors of the general partner of the Company approved the repurchase of an additional 1,000,000 of the Company’s 6.0% Series A preferred units. From January 1, 2025 through March 3, 2025, the Company repurchased 508,812 preferred units for $12,486.
The 2024 and 2025 purchases are at an average price of $24.05 and $24.54 per share respectively, but check my math!
A down week for JNK
https://www.tradingview.com/x/h4dDUl86/
on absolute price basis closes below 20.77 on bkln, 25.09 sjnk, 94.77 jnk would be ominous
Just sold BANFP for $28.16. No idea why the price spiked.
Timdman – Congratulations!!!!
From,
Jealous Former Owner (care of Gridbird)
I think this is worthy of an “alert”?
There’s been some discussion about a lawsuit that might force PennyMac to go to a higher floating rate for PMT-A and PMT-B. The judge recently issued an opinion denying a dismissal and suggesting that there was a reasonable chance that PennyMac would be found to have violated the LIBOR act if this goes to trial: https://drive.google.com/file/d/1JSdPZSUaLJ9dcTsJ8-djKZ0pBEpFm_CI/view
Related to this, there are some comments on SA by William Packer on a post by Timberica Yield that pointed out some extra risks to the PMT common. Because the preferred stocks are cumulative, if PennyMac goes to trial, it seems plausible that there might be a court order suspending dividends on PMT common until the preferred holders are paid in arrears. Packer’s theory is this order might be issued preemptively even before the case is decided.
I’m neither a lawyer nor an expert, and I don’t know how solid Packer’s theory is nor what his qualifications are. But having read the opinion, it all sounds plausible to me. And I’m pretty sure that a court order suspending the dividend even temporarily would tank the price of the common in a hurry. And even without an order to suspend, a loss in this case wouldn’t do their common share price any favors.
If you are holding PMT common without strong conviction, this might be a good time to reevaluate. I’ve never held the common, but I was convinced enough to buy some PMT puts this morning. The put prices seemed reasonable, although some are fluctuating a lot. I’m holding enough other mREIT preferred’s that this seems like a decent insurance policy against an industry wide wipeout, and maybe I’ll hit a homerun depending on what happens in this lawsuit.
All that accomplishes is saying the trial can proceed. Verdict for float and payment in arrears would be a big windfall for PMT-A/B. Yet the price didn’t move. Investors not very optimistic that it will happen without trouble
I certainly agree that the markets haven’t shown much reaction yet. The question would be whether this is because everyone has considered the facts of the lawsuit and decided it’s no big deal, or whether the news is slow to reach everyone. There hasn’t been a lot of news coverage yet, and I’d guess that few retail investors have heard of the suit, and that almost none have read the decision yet. But I presume the pros are better informed?
And while you are right that while this is officially just an opinion that allows the trial to proceed, the judge is clearly tipping his hand that barring new evidence he’s inclined to side with the Plaintiff and force PMT-A and PMT-B to float if he gets to rule. And the part I was considering an alert was the possibility of a dividend suspension for the PMT common if this goes to trial. This wasn’t something I’d seen mentioned previously, but I think the logic reasonable.
In any case, my bets on the table at this point (holding PMT-B and PMT puts). My dollar amounts aren’t very large by many people’s standards, and it’s an amount I’m comfortable losing if I am wrong. We’ll see how it works out!
good comment …first time I actually saw a link to lawsuit ..what’s odd is that pmt/prb and and pmt/pra peaked (near 25) a couple of days after this was published ..I follow Packer and do consider him a credible resource.. he indicated that he would be a buyer of both below 24.50 ..the fixed offering for penny mac pmt/prc has cv of 8.66 while pmt/prb near 8.30 so clearly if they don’t float there is room for price decline
> it seems plausible that there might be a court order suspending dividends on PMT common until the preferred holders are paid in arrears. Packer’s theory is this order might be issued preemptively even before the case is decided.
Fade the heck out of this. A court would be exceeding its authority by doing that pre-emptively; especially because, even if the company is found to be in arrears on a floating preferred dividend, *the company doesn’t actually have to pay it* so long as they turn off the common as well. A court’s not going to start flinging injunctions about that before it’s absolutely necessary (and did the plaintiffs even ASK for it?).
> A court would be exceeding its authority by doing that pre-emptively;
Yes, I thought I covered that when I mentioned it was a California court?
The argument would presumably be that a hold on paying the common is necessary to prevent irreparable harm to the preferred shareholders. If they pay money to the common shareholders now, they won’t have enough on hand to pay what the court might immediately require them to pay to the preferred holders in arrears.
You probably know more than I about the legality of this order. My guess would be that if there is even a small threat of this that PennyMac would seek to settle before it happened. But if they were rational, we probably wouldn’t be where we are at.
> (and did the plaintiffs even ASK for it?)
No, I don’t think so. But from his comments on SA, my impression is that Packard probably has been in contact with the Plaintiffs. PennyMac has until March 28 to file an Answer. My blind guess would be that the Plaintiff’s will only make this request if PennyMac refuses to settle. But I’m guessing they’ll choose to settle instead.
New Highland Fund preferred HFRO-B incoming
https://www.sec.gov/Archives/edgar/data/1710680/000183988225006188/ex99-d8.htm
What? Isnt this old
Ken, Do you invest in Highland issues? I’ve come to the conclusion that it is impossible for me to get comfortable unless I know all their internal funds they invest in, which I don’t.
Maine,
I don’t. Here’s the Q4 2024 factsheet for Highland Funds:
https://www.nexpointassetmgmt.com/wp-content/uploads/2025/03/Income-Opportunity-Fact-Sheet.pdf
A whole lot of self dealing AND concentration.. and trust issues in the past. What could go wrong??
Anyone here used to be on the Morningstar CEF discussion forum?
Highland mishaps were covered in detail..
Ken.. my bad.. I used poor grammar. I meant to say that I would need to understand the risk/reward of the underlying funds, they seem to black boxy for me to partake, maybe I will take a gander if the prefs hit 11% yield.
Speaking of risky prefs.. today’s nibbles included: TFINP ~$22 (ex div tmmrw), $NYMTL $21.6, and the Land o Lakes 7%.
good comment.. agreed
Fidus Investment (NASDAQ:FDUS) priced an offering of $100M of 6.750% notes due 2030, the company said on Wednesday.
AHH cuts quarterly dividend to .14 from their previois .205.
Thanks Fan, I had been looking at the AHH PA now I see volume was down today on both the common and the preferred. I wonder if there will be a bigger reaction tomorrow.
I know that they are a builder and a Reit.
This is what is making me nervous about mreits like RWT and residential builders. Sales are down and defaults and late payments are up on mortgages. Although I think AHH is more a commercial builder.
Wow, quite a surprise. AHH got an investment grade credit rating in 2023 and it was reaffirmed in 2024. They have some nice projects but I thought their risk was concentrated geographically. JMO. DYODD
RWTN (9.125% senior BB 2029) -1% to 9.3% CY
PRH (Prudential 5.95% debenture 2062) * trading under par right now
SOJD (Southern Co 4.95% 2080) * trading near 52 week low @ 6.02% yield
[I find it interesting that many perpetuals and BBs trading price have fallen back now to 52 week low territory BUT there have been several surprises such as DUKB for instance, still trading near par and nowhere in the vicinity of the 52 week Fall fixed income panic meltdown price]
DUKH IS THE SAME … PRICE HOLDING WELL ESPECIALLY COMNPARED TO NEEPRN
Ramaco Resources, Inc. (NASDAQ: METC, METCB, “Ramaco” or the “Company”) reported their Q4 earnings.
https://ramacoresources.com/investors/press-releases/
I hold a small amount of their BB – METCL
Thanks for posting. I follow Ramaco pretty closely as I too own METC. After a tone of research into this previously unknown company to me I purchased METC in July 2021. I was initially turned off by it being considered a “coal” company, which I considered a dead, dirty industry going away. After discovering it wasn’t involved in power coal production at all and appeared to be well run I bought a position. It has turned out to be all a long term holder could ask for….. Stable price, 9% dividend paid on time, and strong financial performance by the company. METC matures in July 2026 and Ramaco will redeem it then or before as it can be redeemed at any time now.
dj, METCL matures 7/2026 not METC.
Whoops! Meant METCL ! Thanks for pointing that out.
dj, I’m guessing you must be referring to the L shares as METC just took a 20% tumble today.
I’m trying to figure out why there is such a difference in the dividend between METC (4.73% @ $9.08) and METCB (8.39% @ $8.92) I pulled those numbers from Schwab. Is one a voting share and the other a non-voting share? I’m looking around on their website and the answer is not jumping out at me. And the B shares have a falling dividend while the other shares show a rising / stable dividend. I haven’t read the earnings release yet.
I own a small amount of the L and the Z.
If you go to the Ramaco website and read the news releases concerning METCB you might get your answer. METCB is weird one to me. I primarily buy bonds, botes, and preferred stock for the income and stay away from common stock.
Again tariffs may or may not have an impact. In the case of Ramaco, tariffs may be beneficial. From Ramaco March 10th Forth Quarter Report:
“On the demand side, the world is closely watching the new Trump Administration and the potential for additional tariffs on steel imports. Based on our analysis, we believe there is roughly 2 – 3 million tons of potential upward incremental domestic metallurgical coal demand if new tariffs were to limit steel imports, causing domestic blast furnaces in turn ramp up steel production.”
I own some METCZ and METCL.
METC dropped 19% today. It was dropping as it approached ex-dividend than jumped up a week later now back down.
Interesting comment from Ran Dalio (below), about U.S. debt We need to have buyers. How many buyers of our debt have we alienated recently? If we’ve decreased the pool of buyers, will it be necessary to raise yields to attract buyers? Isolationists with massive debt may have a difficult time in a global economy, especially if they anger their historic partners.
“Bridgewater founder Ray Dalio on Wednesday warned that a “very severe” U.S. supply-demand problem could lead to “shocking developments.”
“The first thing is the debt issue, we have a very severe supply-demand problem,” Dalio told CNBC’s Sara Eisen at CONVERGE LIVE in Singapore.
Dalio said this will require the White House to sell a quantity of debt the world is just not going to want to buy.
“That’s a set of circumstances that is imminent, OK? That is paramount importance,” he said, adding that most people don’t understand the mechanics of debt.
Dalio said the U.S. deficit needs to go from a projected level of 7.2% of gross domestic product to about 3% of GDP.
“That’s a big deal. You are going to see shocking developments in terms of how that’s going to be dealt with,” he added.
His comments come amid a tariff roller-coaster ride for markets in recent days. Trade policy uncertainty has added to a sense of unease on Wall Street, with investors concerned about the impact of a brewing trade war on the global economy.”
Honestly this piece of information doesn’t belong in Reader Initiated Alerts.
You’re right. I apologize.
Harbor: I beg to differ:
Pertinent observation for those in fixed income. This is a site for income investing.
Would you accept control of your life’s work to an ‘advisor’ who has gone bankrupt several times AND did not understand the dynamics of buying, selling and managing? Well, that is where we are at and Dalio is asking for the scales to be dropped from the eyes of inverstors like us.
This WILL be very valid over the next year. or two. Even the short end is suspect. The Fed has done EVERYTHING it can, it does NOT make policy.
We’ve all been talked into a corner by a proxy.
Completely agree Joel. I’m sure many here recall GFC and the bond vigilantes who said “No mas” and sat on their hands. Don’t always agree with Dalio but his point was well made. I worry little about the recent equity temper tantrum, but the bond market tantrum should be headed off at the pass at all costs… JMHO.
Agree- what is the actionable part for a portfolio? See TIM’s description above– but then, everyone knows what it says.
goin
To add to the concern, Howell pointed out that Yellen re-financed maturing gov’t debt with short term Bills, keeping longer-term interest rates down..
As a result, Howell said, 1/3 of all gov’t debt [>$34 trillion] has to be refinanced in 2025.
That shocked me.
Westie who is going to buy All that debt?
Good points, so is now the time to short the long bond?
A funny thing happened that might be relevant. For many months DXY (dollar v. euro and yen) and TNX (10-year treasury yield) have traded in the same direction until recently. On March 3 DXY started falling rapidly from 107.4 and today stands at 103.7. At the same time TNX started rising. I believe these events are related to statements and actions of the US administration and the international response.
The concern is that foreign investors are pulling out of US financial assets, which could explain the above. If the goal of the administration is to wean (abruptly) the economy from dependence on foreign investors, you have to wonder who will, or even can, replace them and what the effect will be on financial markets. China has been investing its trade surplus here. There is no alternative of the required size. What will happen with that?
rocks and Charles
ICE High Yield Credit Spread
I kept harping about the 260 bps credit spread in 2024 being at its lowest point in history
Warning sound…….
Nov 1,2024 2.6
Jan 2, 2025 2.8
Feb 1, 2025 2.8
Mar 1, 2025 2.8
Mar 12, 2025 3.22
Worrisome Westie
That kids song comes to mind “the king is in the altogether, he’s as naked as the day that he was born”. I know that people outside of the USA see that because I talk to them.
Maybe China will buy more gold with its surplus.