I will be adding a new link titled “Sandbox” in the right hand menu.
That link will get you to this page.
I had originally set up the “Reader Initiated Alert” page for ‘alerts’. I was thinking this, for instance, might be when a preferred stock is undergoing a temporary selloff and someone wants to let the population know about it quickly. Of course we all (including me) use the ‘alert’ page for general messaging.
I am requesting that we start using the Sandbox page for all general talk, and try to preserve the ‘alerts’ page for ‘alerts’.
I have had a screen up on one of my monitors all week where I see all comments – no matter where they are posted–it is a great page and I wish everyone had a page like that–believe me we all benefit from all the knowledge being shared. I don’t want to stifle any of the exchange of knowledge, but hope to get things a bit better organized by adding the Sandbox page.
Where’s my inducement ? Big $$ for 3 people.
https://www.schwab.wallst.com/research/public/news/viewStory?YYY20_ty9M1HpQ1xXWiS3AqbLXzzXNCEZJEi5f2JPQ8JIZvpBRXg6/ETBmwWqgOSJr0d1i4HOCK9w5J81NFm6EQY2Nbc72XvB4M6zVPs0JHJDbrpM=&a=1
NSS . . . NuStar Logistics …. seeing that the next qtrly divi for July 15 declared at .7788c … Ex Date Jly 01…….
Those are not declared, being notes, it is just being posted. It doesnt mean anything in terms of when it gets redeemed.
Grid-
So, they could redeem it before the pay date and still pay it?
Not sure what you are saying- what’s different?
thanks
NuStar does something I wish most issuers of F/F rate issues would do – they take the time to actually publish what the upcoming floating rate will be on both their floating note and their preferreds shortly after its calculation date……..That’s all they’re doing here – reporting what the calculated rate will be for as long as NSS is outstanding up until 7/15. Their publishing the rate does not imply that it will or will not remain outstanding until then – https://investor.nustarenergy.com/debt-information
My ERROR re NSS… Not Declared at this time. Saw a post from broker of a July 15 qtrly payment. Yet, due to Sunoco transaction, may have a closing prior to July . Sorry for the posting mistake as to next / final qtrly pay.
Gary, NSS is a debt issue. No dividend is ever declared. Ever… Its a contract. The IR dept or whoever, just posted the interest payment for the next entire quarter. But it can be redeemed earlier if company so desires. Or in other words the merger completely goes through since they have the funds readyto redeem already. Actually even if it was a preferred stock dividend and declared, a company can redeem earlier anyways, unless prospectus specifically states redemption only on payment date which are few. So even a declared dividend doesnt not mean it will be paid….until you get it. It just means declared, it can be pulled back or partially paid if redeemed prior to payment date.
Thanks for the standard Grid input.
NuStar states a unitholder vote scheduled for May 1. Shortly after, should have some accurate payment info.
Jim, nothing is certain. But like you just mentioned I bet things will move pretty quick after May 1. And they still will have to give a 30 day notice, too so that can serve as an additional buffer too.
Thanks Grid– I didn’t know they could change their ‘mind’ on paying after declared. Should have suspected it 😉
Gary, I didn’t used to either….Until it happened to me and they redeemed it and my little flip didn’t work very well, ha.
how do they come up with this number ; the formula is 3 month Libor +673 basis points ( does this mean 3 month SOFR since Libor isn’t used anymore)
so .778 x 4= $3.1152 / 25 = 12.46% yield on Par
12.46- 6.73= 5.73% this must be the factor they are using ; seems high
3 month SOFR 5.31%
Didn’t check all your numbers and calcs, but usually SOFR is substituted for Libor according to
SOFR=LIBOR + 0.26161
The potential changes to the taxation of capital gains has received some news coverage recently. However, it looks like the tax treatment of qualified dividends may also be in the crosshairs. The Treasury released “Advancing Equity through Tax Reform: Effects of the Administration’s Fiscal Year 2025 Revenue Proposals on Racial Wealth Inequality” on March 11, 2024.
Here are some excerpts:
“Treasury estimates that 92 percent of the benefits of the tax expenditure for preferential rates on capital gains and qualified dividends accrue to White families.”
“Thus, the preferential rates amplify the underlying differences in income received by different families, with Black and Hispanic families being disproportionately disadvantaged. This naturally has follow-on consequences regarding wealth accumulation, compared to a tax system that would raise the same amount of revenue in a more equitable manner.”
“Because current benefits of the preferential rates on capital gains and dividends skew toward White families, the proposal to reduce those benefits also skews toward White families.”
Here is the link to the document if you’d like to read it in its entirety:
https://home.treasury.gov/system/files/131/Advancing-Equity-through-Tax-Reform-FY2025.pdf
If dividends from preferred stocks lost their preferential tax treatment, how do you think that would impact their values?
It’s very difficult to get a tax increase bill through Congress. If Republicans hold the house, chances are zero. If they don’t, chances are slightly above zero. Biden will be a lame duck. Circumstances change with time. I can’t take it seriously.
That is a political pandering PR operative publication, not any serious legislative piece. Nothing to worry about here. They wont even address “Carried Interest” let alone this. Meanwhile, Simpson Bowles has as much chance of being passed as preferreds losing their preference tax wise.
Grid,
I agree, but I think they would increase taxes on divi’s before they fix carried interest. The folks with carried interest make bigger “campaign donations”. In the US, you get the government you can buy.
FWIW – California already raised taxes on qualified dividends. No tax break – all divi’s are taxed as ordinary income on your state taxes.
Another benefit of living in the people’s republic of California.
I agree also Private. The tax rate could be raised for sure on qualified dividends. It’s moved around over the decades. When tax rate was real penal corps owned preferred left and right as it was a real tax break. I’m just suggesting this specific political propaganda agenda literature will never become a legislative piece to be enacted on.
Sorry Grid. I should have just shut up. Using cynicism to blow off steam.
I have been having a very “political” couple of weeks fighting with the feds about some land in AZ owned by an the elderly neighbor of one of my elderly relatives.
It is politically difficult to pass taxes (except those local taxes on hotels and car rentals to finance sports stadiums.) Now that the national debt increases by $1T every 100 days, I hope we don’t exclude any source of revenue for our tottering national finances. Tragically, the current administration is looking at new tax sources as justification for new or enhanced entitlement programs; the White House wants to raise taxes without meaningfully lowering the deficit. Any realistic solution to the structural deficit has to include both taxes and spending.
Congress has way more of a say in it than the President.
Congress can (and often does) can tell the President to go pound sand.
We collect WAY less in taxes as a percentage of GDP than almost every member of the OECD with the exception of countries where tax evasion is as popular as soccer
As an American, with the best system of Gov’t in the world (slow and methodical and hardly worth a sh** ) with the best free market in the world, I’m good with having way less taxes taken. One might think that contributes to her greatness. Why would we want to be like everybody else? I’ll drink to hopefully many more centuries of lower taxes than the rest of the world.
So odd to read “white families” in that output. Are black and hispanic unable to buy stocks? Advancing equity through reform my rear. Why don’t they educate the people who do not buy these securities on the benefits of them? Raise them up instead of drag others down to only want more taxes to spend endlessly.
As I typed this I am wondering if this is getting too political but it is a topic we have to keep an eye on.
what a piece of garbage that report is.
I find it repugnant that the government is spending money to create/reinforce animosity among groups based on race/ethnicity, etc.
Best quote:
“One challenge in studying the impact of the tax system is that tax forms do not collect data on race. To address this challenge, Treasury imputed race to its Individual Tax Model, and then used the imputation to evaluate how the largest tax expenditures … are distributed by race and Hispanic ethnicity.”
In other words, they didn’t have any actual data, so they just made some up to support the outcome they wanted (dressed up in fancy calculations) and used it to evaluate their made-up models. Garbage “analysis” built on garbage “data”.
One big problem with this report (and so many that the ultra-left keeps generating) is that they conflate “equal opportunity” with “equal outcome”. Nobody is stopping any group from investing, or from running a business, or from any of the other “metrics” they “studied”. There were huge problems in the past, but the major impediments are long gone – but we can’t just wave our arms and see the end result immediately. It takes time (generations, not weeks).
(Personal Rant follows. Tim, if this is too political, please feel free to delete it. I get worked up about this stuff more than I probably should):
I generally stay out of “race politics”, but as someone who “fits” into their categories of ‘the oppressed’, grew up on a reservation, and is supposedly to be “helped” by their nonsense, I wish they would just leave us alone. Their paternalism is disgusting. A bunch of guilty liberals teaming up with a few self-proclaimed “leaders” of some ethnic/racial/etc. communities to try to gain power/money/influence for themselves and drive “the politics of divisiveness”.
I also wish they would stop trying to find new ways to make people dependent on the government. It makes it harder for people to see the opportunities that can truly lift them out of poverty (regardless of race/ethnicity/etc.)
When you live with it “up close”, you see that the gov. “dole” is one of the most destructive things imaginable. I lived most of my early life (and I remain deeply involved) in places and among groups where gov. programs have destroyed self-respect and ambition by implicitly telling people that they are essentially “lesser people” – i.e. they should take a few government dollars (that they haven’t earned) because their “group” has to be “helped” because they are incapable of helping themselves. It creates an addiction worse than any drug because people actually start to think that they have to rely on the government to fix their problems and chart their future.
If they would just leave folks alone, we would continue to prosper in our own ways and look more and more like the “average” Americans. Of course, that is NOT the outcome they are looking for. They want to amplify racial/ethnic/cultural divisions, keep people dependent on government “largess” and drive their ultra-liberal agendas.
(end Rant)
I am not white and I find it insulting that they keep trying to use race as justification for what they want to do…
If total wealth of the world continues to accelerate, AND the disparity of wealth continues to increase, we will all be on the dole, or at each others throats. I don’t believe this is a political comment, just a prediction…
Thought this was an interesting read with some things to think about. Playing it safe with low interest rates is not good, or at least it wasn’t.
https://www.morningstar.com/portfolios/when-low-risk-means-high-risk
I can’t help but notice how similar the PFF and JNK charts are.
Bot a little REGCP 6.25% past call pfds at 22.82 today w a 6.83% yield on cost; while uncertain on will these old Urstadt Biddle pfds be called, REG strong ratings S&P BBB+ and Moody’s A3 would make it an easy retire at w LOC for some savings; they do not really use pfds but who knows. Anyway juicing cash returns a little. Bea
Bea, the call on REGCP is 01 oct 2024 if I’m not mistaken (https://www.sec.gov/Archives/edgar/data/1029800/000120677419003309/urstadt3638391-424b5.htm)
Bur-
You’re thinking of REGCO.
Has anyone seen any decent research on the determinants of the real rate of interest. Since 1998, the 10 Year TIPS has varied from 4+% to about -1%. Right now, it’s about 2.3%. I read a lot of financial analysis that makes all sort of assumptions about changes in the real rate. Without the benefit of emperical analysis, I have to believe that real rates should increase as US deficits increase, savings decline and foreign purchases of US treasuries declines. Is there a supply demand balance that drives real rates?
Here are a couple to get you started…
https://www.econstor.eu/bitstream/10419/212407/1/bof-rdp2017-036.pdf
https://www.math.purdue.edu/~jbeckley/WD/MA%20373/S19/fm-determinants-interest-rates.pdf
Thank You.
I bought a chunk of these today for my IRA, hoping to still be around when they mature 🙂 If called at the earliest date it is still a decent 2 yr. CD equivalent.
JPMorgan Chase & Co. 6% 04/28/2034 Callable semi annually beginning 4/30/26
CUSIP 48130CKC8 A1 / A-
Experienced a shock this morning.
Checked out 10T rate at 11am on my iPhone
1 day
5 days
1 mo
YTD
5 yr
All dates (goes to 1983)
Try it yourself
Made me do a bit more research
1983 GDP $3.6 BL Nat’l Debt $1.3 BL
2023 GDP $27.4 TR Nat’l Debt $34 TR
Does anyone know the formula to import quotes from Yahoo finance into google sheets? The old formula isn’t working anymore: =yahooF(“ticker symbol”)
Thanks
From a morning post re the GDP Advnc ##…. found it a interesting take ….
‘
…. The key takeaway from the report is that it conveyed a disappointing combination of weaker growth and higher inflation. Some will be quick to label that “stagflation,” but the reality is that the inflation component isn’t the number the Fed is looking for to gain confidence that it can cut rates.
…. Personal consumption expenditure growth increased 2.5% versus 3.3% in the fourth quarter, and contributed 1.68 percentage points to growth.
…. Gross private domestic investment was up 3.2% versus 0.7% in the fourth quarter, and contributed 0.56 percentage points to growth.
…. Exports increased 0.9% versus 5.1% in the fourth quarter. Imports rose 7.2% versus 2.2% in the fourth quarter. Net exports subtracted 0.86 percentage points to growth.
…. Government spending increased 1.2% versus 4.6% in the fourth quarter, and contributed 0.21 percentage points to growth.
…. Real final sales of domestic product, which excludes the change in private inventories, increased 2.0% versus 3.9% in the fourth quarter.
….The personal savings rate as a percentage of disposable personal income was 3.6% versus 4.0% in the fourth quarter.
…. The PCE price index increased 3.4% versus 1.8% in the fourth quarter.
….The core PCE price index, which excludes food and energy, increased 3.7% versus 2.0% in the fourth quarter.
Jim:
Thanks, very interesting figures. I would expect unemployment claims to be up next month because of what is going on here in California. The $16.00 an hour state minimum wage was bad enough, but now that fast food workers get $20.00 an hour at chains with 60 or more locations Nation wide. Some chains have closed altogether, some have reduced hours, increased automation and have kiosk ordering only, no cashiers.
Many high tech layoffs in the Bay Area, stores closed in Oakland/SF Due to crime. Not a good situation here where 10% of the American population lives.
Hey Bill,
Nothing to worry about. We have a governor (and his pet legislature) who thinks he can fix everything. all we have to do is pony up more money in taxes, higher utility rates, higher gas prices… He always has a solution to every problem – but they all involve his hand in my pocket.
(apologies if this sounds political – its just life in the people republic of California).
yes ;State had a big surplus a year ago , and Newsome decided to spread the
wealth and give all the taxpayers a $350 gift ; people do remember such things when they vote ; and here we are now !
Private;
Minor exodus so far, but if Prop 13 ever gets repealed instead of an exodus it will be more of a mass forced march, especially for retirees. Guess we will just go screw up someone else’s state 🙂
Bill, even our minor exodus is screwing up neighboring states.
I hear it all the time from friends in NV, UT, ID, OR, WA, AZ – the Californians coming in bid up home prices like crazy.
If prop 13 were repealed (just the freeze part), my taxes would go up almost 10X. crazy.
There has been talk a couple of times about moving to a split roll (lifting the value freeze on commercial property while leaving residences alone). Not a terrible idea, but I would be reluctant to give a big tax bubble to the current governor/legislature. They would just spend it on silliness and build in more “structural” spending we would have to fund every year.
Challenge to new SEC surveillance program and funding model for its new “consolidated audit trail” or “CAT” program.
When fully implemented in 2024 or 2025 CAT will be a single database for all equity and options trades on U.S. exchanges (program started collecting data in 2020).
Nothing like having the gov. tracking every trade by every person – and making us pay for it – apparently all without congressional approval.
https://archive.ph/XQ3gI
A sign of irrational exuberance? A headline from Barron’s – For those who remember the old Wall Street joke about the tourist who sees the big stockbrokers’ yachts anchored in Newport Harbor…and Fred Schwed’s classic 1940 book with the same title: “Where are the customer’s yachts?”
Jefferies CEO Just Sold $65 Million of Company Stock. He’s Buying a Yacht.
— Barrons, April 24, 2024
https://www.marketwatch.com/articles/jefferies-ceo-stock-yacht-0bbe9020?mod=mw_latestnews
Schwed started trading in 1927 and lost his fortune in 1929. His insights are still useful, like DYODD on financial statements. He talks about being sold an “extra safe” preferred stock with “50 times dividend coverage ” only to find the divvy was buried under a mountain of senior debt. The pushy brokers are gone but the $449 subscription service pundits selling the safe “REIT of the day” are not.
“When the Bull jumped over the Moon.” Schwed’s quip about the Roaring 20’s sounds like the AI stock mania. Margin debt’s up 20% Y2Y. Forget the Mag 7, why does a dead-money pipeline company that brags of fixed contractual returns suddenly jump on AI claims. IMHO, this is like Grandma and Grandpa announcing they are going to be disco dancing stars on Tik-Tok.
Current Market Sentiment: Gradually replacing MMFs with laddered 2 to 5 year Treasuries and agencies with ~1 year call protection. Yes, I think there’s a rate cut out there somewhere. “Gentlemen prefer bonds” – Andrew Mellon, pre-1929, quoted by Schwed.
These days you need a big boat, whether it’s to escape super high taxes and reckless spending or to escape zombies.
Moody’s downgrades Boeing’s senior unsecured rating to Baa3, outlook negative
posting that as i think I remember someone talking about BA bonds
i have no position
When was the last time ba made money? It’s been years now.
Used to be my best stock. Over $400 with a big dividend.
So much for buy and hold. I understand the downgrade.
Boeing is cursed.
Its one of several engineering-based companies that lost their way when the MBAs and financial types got control of the c-suite. Boeing, GE and 3M all come to mind. Hopefully GE will be returning to an investable status after splitting up. Boeing is a no-go for me until they move their headquarters back to Seattle.
On a Boeing now in the emergency exit row. Hope the door doesn’t blow off so I can come back and see the responses to this thread.
MFA … New Preferred …. MFAO …. has anyone seen any mkt yet .
trading at 25.20 this morning
We all benefit from sharing our strategies and our holdings (thanks, Tim)
The past two days were good days to update my Positions in accordance with my “be prepared for a storm” strategy.
I divide my holding into two portfolios:
59% in T-Blls/CD’s/ 5% in BDC bonds 1.34 yrs avg maturity 5.7% avg yield
41% in Stocks, mostly Prefs 6.3% avg dividend yield 3.4% cap gain to date
Largest Preferred holdings:
5% ENB AGMPRF
4% ADM Common) KRP RZC
3% UMHPRD PFE CCC (both Common) PCGPRC SRPRA CTAPRB KIMPRD CPRN RIVPRA EPD
I feel well positioned for the volatility that I expect over the next year.
I held C.PRN for a bit and have read the prospectus too many times regarding redemption. Did you come to any conclusion on why this might not be redeemed in the near future with it’s 10% yield?
DITM
There have been a lot of previous entries on this.
In summary, CPRN is grandfathered as eligible as qualifying as equity for Capital Ratio purposes. The Treas several years ago stated it was unlikely to be called for that reason.
If the rules change, it could be called the next day.
I bought it three years ago and have enjoyed the 10% dividends.
DYODD
Westie, as an added reason and probably the biggest being they are paying out so much on this is that ~$700 million dollar loss they would take as a hit to their earnings if they redeemed it due to how the issue was originally constructed. Their management stated that a couple years ago, but also said basically they will periodically review the situation.
Westie, you mentioned for C-N that:
” if the rules change, they could call it the next day ”
Is there any way we can get some indication or sign of an impending rule change? What is the likelihood of such a change, and should there be time before it is implemented after announcement, as is usually the case with such announcements?
Westie; comment on Royalty Trusts in general ; I avoid them totally because
i got burned on a few I held maybe 10 years ago ; they were more popular then ; the problem is ; the operator determines which wells to drill ,
and the wells the trust has royalties on tend to deplete ; so the Trust has no
say on what the royalties will be ;
I can’t recall where there was a discussion recently of commercial realty occupancy, but I heard a blurb on the radio this morning that San Francisco is seeing 37% vacancy rate at the moment.
FWIW – We have helped a few companies relocate from SFO to San Jose or Milpitas in the last couple of years. Not really our core business, but once we helped a couple, word got around. Kind of fun, but not a big money maker.
Unless employees actually live in SF, the commutes are usually much better (for many – reverse commute), rents are dramatically lower (an order of magnitude in some cases) and parking is free. Plus, a lot less “calcutta by the bay” messiness , and lower taxes and less crazy “progressive” regulation. as an added bonus, the weather is spectacular.
NuStar …. NS-A & NSS …. any news as to date that the Sunoco buy will set the Call date on the NS issues ?? TIA
Jim; the NS meeting to approve the merger is May 1st; to receive .4 shares of Sun ;so if approved the merger will probably take effect in a few days imho
one thing i’m foggy on ; will the Preferred continue to trade as SUN preferred
or will they all be called ; based on the yields of the 4 preferred , around 12%
i cant imagine SUN not calling the whole lot ;
also ;I just checked ; all the series are pinned to Par ; trading above 25 on accrued dividends ; this means a full call is the expectation
Two days ago, the bond pundits were predicting that plenty of the proverbial “money on the sidelines” from MMFs was ready to absorb this week’s mountain of new Treasuries and tamp rates down. Bloomberg reports strong recent demand for Treasuries and a “buy the peak” mindset setting in. Bloomberg suggests a peak in rates even in the face of large issuance.
The Market will speak for itself soon. As of early this morning, the much-talked about 5.0% sticker on the Two-year was only 0.009% away. Or was that 0.002% away. Or was that – gasp – really a 5% that just came across, Or a 5.004%. Don’t blink. JMO. DYODD.
Forgot the two year. Now we are going to see if we hit 5% on the 10 year.
Had a GTC order fill today for a few shares of CNPWM, Conn. Light & Pw,
$2.09 pfd at $33.12 with a CY of 6.31%. It’s a $50 pfd callable at $51. Baa2/BBB+. Whoever put me on to these pfds “thank you.”
Here’s a possible scenario (one of many) for the the stock indexes this week with no particular probability:
Interest rates appear to be stabilizing. MSFT GOOGL META AMZM put up big numbers. The index rally resumes with a spring full moon on Tuesday to juice animal spirits. The index correction has been deep enough to burn off the daily, but not weekly, overbought condition.
Comparing what actually happens to this bullish scenario might give a clue to stock market direction.