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.
The technical setup is there to take TLT back down to the Oct 2023 low. However, price action at this point is indeterminate and could trend either way.
30-year t-bond futures bounced off the mid-January low and hung just under the 50-day moving average in an overbought condition until today’s turn lower. Same setup as TLT.
This is a daily chart of WFC-L, which moves with long rates. Today’s move down was big.
https://www.tradingview.com/x/BeEq52el/
Some of today’s action might be due to tariff worries. That situation could change on a dime.
I’m not a tech analyst type, and am not knocking you R2S, just having a little end of day/end of week fun… Your quote, “The technical setup is there to take TLT back down to the Oct 2023 low. However, price action at this point is indeterminate and could trend either way,” seems typical for tech analysis to me. I read it and what I hear is the chart’s saying TLT will go down unless it doesn’t…Hmmmmmmmmm, let me see – I think I can agree with that so maybe I actually am a tech analyst kind o guy after all…
2wr-
That’s what you think I said. A bike rider is riding up a hill and comes to a fork, one uphill and one down. If the rider takes the down fork and stays on it long enough, momentum builds and the destination becomes more likely.
Price charts form patterns that can be interpreted. People who haven’t studied these patterns or don’t have the mind for it will say they don’t exist, but they do. To me it’s pretty obvious that quants and their algos know about these patterns also.
I stated my price target for BHFAN was 16. It was actually 15.89. Today BHFAN hit 15.90 and bounced. I don’t consider that a coincidence. It was however lucky because price often stops short of my targets, mainly I believe, because everyone and their algo is looking at the same data and frontrunning it. I don’t usually post technical comments on individual stocks because I doubt it’s useful to anyone. I like to stick to big picture topics and not too often.
None of my chart-interpreting skill makes me a good trader. I use it to keep me out of trouble or from jumping in too soon. Charts continue to keep me cautious in the face of a possible return to the Oct 2023 low for 30-year t-bond futures and similarly TLT, as I’ve said here more than once. I don’t make predictions. Waste of time.
Don’t get me wrong, R2S. It’s not that I think charts should be completely ignored or have no credence. Everyone needs to keep an eye on charts because if for no other reason they can be self fulfilling prophecies with so many people following them… But just like probably every talking head on tv, not just chartists but anyone predicting which direction XYZ will go in the future, If you listen carefully to how they predict, you can almost always see what they’ve have said is said in such a way that when what happens happens, no matter what happens he will almost always be able to say? “See? I told you so.” Like I said, no reason to take me seriously…
Its better than fundamentals people who say the market should have dropped by now for 2+ years when it hasn’t. I would rather deal with probabilities and act accordingly than listen to folks who tell me how things should work based on their 200 level coursework in economics.
With technicals, I just act on price rather than ideology. Fundamentals mainly applies strictly whether a company can stay in business or not, not how the market decides to price it. No one cares right now that Walmart is 40x earnings or Costco is 50x…..until it does. Too bad for most of the authors on SA.
You say, don’t take you seriously, but you wanted to provoke someone without really trying to understand what he said or what goes into it.
Everything is probabilities but fundamentals people try to convince you its really certainties. How about that for a Friday night quote? The only certain things in life are death, taxes, and …. now tariffs. A fundamentals trader will tell you he can time when you pass on this earth based on some ratio or multiplier.
I don’t watch TV for news and I would ignore anyone on TV talking TA. In my experience, most people get chart pattern analysis wrong.
Weather forecasting science has gotten very good with its vast data inputs and refined models. My local 5-day forecast is reliable. It’s all about probabilities. I’m like a weather forecaster from years ago when software tools were less sophisticated. I’m trying to make forecasts based on charts and macro factors.
The situation with 30-year t-bond futures (30futs) today is similar to what happened in November. At that time I wrote that 30futs had peaked in September, sold off, bounced and were rising toward the point where the 50-day moving average had crossed down through the 200-day moving average with overbought conditions. I felt the market would make an important decision soon to continue up or resume the September downtrend. Price hit the moving averages and thrashed there for a week before dropping 8% to a new low on January 14. I hope my post was useful to some.
Once again, 30futs have bounced into the 50-day moving average with overbought conditions. I didn’t mention it in advance this time because I’m more uncertain of the significance. However, today’s broad downturn in rate-based stocks like WFC-L and TLT, no matter how transitory, led to me post.
Then again, “You don’t need a weatherman to know which way the wind blows.”
r2s no I appreciate your posting. It goes back to what I noticed or felt this past week when I said it seemed like Fidelity had a bigger spread of various corporate bond offerings than it had in a long time. I don’t watch them every day and as a matter of fact I was getting tired of seeing nothing but BDC’s offerings like Blue Owl and Reit offerings. Now a few oil & gas energy co’s are back along with Mexican states and Panama bonds. The bond mkt. is selling off risky holdings and I assume shifting money over to treasuries. So like I said earlier in the week I assume the buying is driving prices up and yields down. I think the one unknown is what happens if we reach the debt limit and the Treasury can’t issue new debt are buyers going to pause or continue buying? Then I remember Private saying Countries like China are selling their holdings of treasuries not buying so again it’s hard to figure out.
I just hope we don’t have a bond market freeze like what happened in 2008
I sometimes use an Ouija board to predict the stock market’s direction. While it may sound unconventional, it seems to work as well as some other methods. Many experts rely on technical analysis to predict market swings, but their success rate is often no better than anyone else’s. Charts and technical tools are useful until they aren’t, and there’s always an exception. Technical analysis is just one tool in a toolkit of many. Relying on a single tool for decisions is akin to trusting snake oil from Rida Moron.
An old saying from the owner of a proprietary trading firm:
“For every shipwreck at the bottom of the ocean, there was at least one chart.”
His demo of technical analysis:
At dinner, he would , while chatting, push a knife toward your edge of the table very slowly. He’d continue chatting while slowly edging the knife off the table until it fell and hit the floor.
Inquiring why he did that, he would reply, “Because I thought it would go up!”
R2S. I know you take the ribbing well.
lt-
Rib away. It’s not necessary to do TA to be a good trader or investor. I do charts because I’m visual and I like it. It’s fun for me. The only people I follow outside of the excellent folks here are top-notch macro analysts like Lyn Alden, Michael Howell, Ed Yardeni and Eric Basmajian. I don’t look at anyone else’s charts because I do it better.
I was a stockbroker in the early 1980s. And, I have also taught Probability and Statistics at a Top 20 university. In all my years of experience, I have found only one technical indicator that is useful — it is a divergence indicator.
I have owned stocks like PEP and MRK for more than 4 decades — buy and hold forever. They are acting horrible. I also trade a little to capitalize on the hottest trends. When CEG and IBM go parabolic simultaneously with PEP and MRK acting like crap, that is my signal to sell momentum high flyers. It’s my own complicated mathematical variation of the Hindenburg Omen.
I am currently 67% in short term Treasuries, and almost 100% cash in my trading account.
Thanks af, I enjoy your posts and 2WR but he can get a little technical at times. This post is for you and others who share here. Earlier in the week I mentioned my wife is having me going through boxes and several are old cooking magazines.
Please keep current events out of the conversation. I have good memories of enjoying reading and trying the recipes.
From Cook’s Illustrated, Forward by Christopher Kimball “The Don’t list”
August 2015
#10 Don’t ignore old people
He went once a month over to an 80 yr old friend’s house. Growing up the saying was “don’t trust anyone over 30. He reconsidered that.
If you want a solid career or personal advice listen to a grown up. Above a certain age you don’t care who you offend , you have exhausted anxieties, you’re good at conversation, you have accumulated enough life experience to be a useful companion.
Note- I liked reading his 10 don’ts but I think today too many people both young and old don’t care who they offend. It’s too easy with the anonymity of the internet. I try hard to avoid this. Second take advice with a grain of salt. You never know if the other person has your best interests at heart.
My point was that if I had relied on technical analysis, I would have never been able hold a fairly large number of stocks where the current annual dividend exceeds my cost basis. By way of contrast, there is probably a place for technical analysis when trading.
At this point, I just shake my head and smile. On Thursday, I owned both IBM and CMCSA — IBM up 30 and CMCSA down 4. No better form of electronic entertainment exists.
Don’t forget PendragonY.
Did his fundamental analysis prove any better than if I rolled 20 sided dice? I think I’ll stick with the dice.
Legend, I used to print things out from MSN money. My time in life to go through this stuff and throw it out. I’d kept the article on the Carlyle bond fund CCC Carlyle Capital group collapsing and losing 16.5b on Fannie Mae and Freddie Mac mortgages in March of 2008 Amazing what was going on at that time. I guess the point is at the time pundits were staying the market was going to recover and we should jump in and buy. I suppose charts will work until they don’t.
The person whoencouraged me to start trading full time in 1998 was a CBOE market maker. He told me something I’ve found useful: Market makers don’t have time to look at charts…they buy or sell based on order flow. “If we could reject an order because we didn’t like the chart set-up, markets wouldn’t work.”
He also told me to think about technical analysis “buy” and “sell” signals as turning the technical traders into targets for someone with the opposite agenda and more money.
I’ve always considered that last point most useful.
Lt, I was just going through Tim’s new buttons at the top on the front page. I’ll have to go back and look at volume although being the end of the month I think there were trading volumes related to that but also to the announcement of tariffs. A lot of the charts listed show more red than green.
Charles, if you are referring to the preferreds, there were a bunch of sell imbalances “market on close.” I participated in a few. Several PSA’s had 50,000+ share imbalances, HTLFP had 11,000 to sell MOC, JPM-K had a 65,000 sell imbalance as did TBB in decent size. I covered some existing shorts. There were quite a few additional preferreds selling
I have a small short position on the market. After hours really dumped but since the futures close earlier than cash stocks on Friday, SPY and QQQ went quite a bit lower after 6 PM ET in very light trading, something around 2/3rds of 1%.
Lt, it will be interesting to see what comes Monday.
One of my largest holdings, so painful.
Guessing it was from PFF e.o.m dumps as no news, and my BACL which is similar was only down .44% vs 1.67%.
Think a buying opportunity.
Can someone please remind me… what is the working theory why CHSCP doesn’t get called?
Is it insider ownership, lots of farmers own and they don’t want to “take away” the 8%?
P.s. hope you all got some nice scores from the PFF dump, it was fun!!
Yes, it’s the farmer thing, I think. Back in 2013, they extended CHSCP’s original 2008 call date 10 years out to 2023. I remember reading an old news release somewhere, possibly on their website, which said nothing memorable about callability but suggested quite a lot about why the preferred was issued in the first place: in exchange for capital contributions. I thought it was informative in the way history can illuminate the future while not necessarily being predictive. ( insert Apocryphal Twain Quote here.) I do not have the link. JMO. DYODD.
CHS might very well have a lot in common with Ocean Spray. The only reason Ocean Spray even had preferred was to balance out things for small farmers versus larger. There was some calculation where larger farmers got preferred shares instead of “more power” over smaller farmers. I forget the exact details here since I read the ancient annual reports from the 1940s a few years back. So the preferred larger farms got was so smaller farmers could grow their ?ownership? in the co-op and not always be swamped by the larger farmers.
Thus why would they call the preferred when it served a purpose? A purpose beyond the simple need of borrowing money from “anyone”. So that pool of cash, perhaps from farmers, sits in the business allowing it to operate for them. In exchange they get paid a dividend. This might benefit smaller farms too since CHS is more stable due to this pool of money.
I am making this up for CHS but I can see how both co-ops might think differently then a c-corp.
Thanks Bear and Fc!
I took a chance and bought some on the EOD dump. I think I need to sell next week, for better or worse, I get real antsy holding high price, past call prefs, even though your rationale makes sense. Just not sure it’s a gamble I am comfortable taking.
I probably bought “too many” names today.. the markets looked jittery after the close.. so I could get caught on Monday, can’t win ‘em all!
I usually buy preferreds that are near par or below, so I generally stick to the other CHS preferreds when looking around. Overall happy with CHS.
UMBF/ HTLF :
huge buy imbalance on umb, huge sell on htlf.
Spread closed at .17.
A free $170 for each 1000 shares of HTLF traded MOC against an MOC short in UMBF. Small holding cost , but depending on the broker the short credit may offset the long holding cost. Not true with Fidelity. They keep your credit on shorts
Another attack on FTAI by Snowcap ( whatever that is) – Globenewswire this am. Supposedly they have some former employee info on what they have been doing & some other stuff. Not much change today.
Which preferreds might react to the imposition of tariffs on imports from Mexico and Canada? Stock indexes are having a tariff moment today.
If I had to name one, I’d pick the preferreds of CHS which has already had a drop in energy profits. I do think preferreds generally price off interest rates more than line items in the next quarterly, so commons are more at risk. Reports say there is little forward buying. So businesses may not have fully priced in the impact of immediate 25% tariffs on Canada and Mexico. An overall market sell-off is possible, in stocks like GM, Ford, Stellantis, grocers etc. That’s one way to look at it. I’d rather look at Canada though.
The contrarian bet is that there will NOT be an immediate 25% tariff on Canadian crude (or that it will be brief.) If so, a relief rally among the oversold is possible.
Why, if the Commerce Secretary favors across the board tariffs? He also says the Canadian tariff is “not a tariff per se” but an “action of domestic policy” for a “short term” problem. The Treasury Secretary favors stepped up tariffs. The White House was undecided on Canadian crude tariffs on Thursday, suggesting a policy tug of war. A stepped-up tariff, (starting at a range 0 to 10%, say 5%) and going to 25% in __ weeks works just as well, punishing the Canadians by increasing their cost of doing business but having much less impact on gas for drivers and farmers in the US Midwest. FWIW, the only recent tariff, the brief Colombia tariff was stepped.
Contrary bets here would be: oversold refinery stocks (only to flip – its a rotten business. Ask Exxon), cross-border pipelines, Canadian oilers.
You can put $2 on the chalk horse to win $2.10 and go home with a dollar in your pocket after a long day at the races. Or you can put $2 on a long shot for $50.00 if you get lucky then buy yourself a drink in the clubhouse. A lot of ways to enjoy your day at the track. Disclosure. Long energy. Trimmed / exchanged some Canadian pipe for domestic crude. Holding pipelines and majors. JMO. DYODD.
Purchased Nevada Power ( a Berkshire Hathaway Energy company BHE) 6.25% coupon. BBB/BAA2 (SP/Moodys) in secondary market. CUSIP 641423CH9 at Schwab via the Bond Desk. Fixed rate, 5 year reset (kicker is poor). Issued roughly 2 months ago.
SteveA do you know where can I find prospectus?
only found fwp
https://www.streetinsider.com/dr/news.php?id=24273917&gfv=1
Steve, Thanks!
https://www.sec.gov/Archives/edgar/data/71180/000110465925007427/tm254537-1_424b5.htm = Prelim
Thanks. Okay, after reviewing this further, this is a new issue. Pays semiannual 5/15 and 11/15. Trading start is 2/3/25, so it looks like the first payment will be less than the normal semi-annual payment. Schwab initially said this might not be available and I assumed it was an issue past it’s 1st trading date given the 5/15 1st interest payment. So this issue should still be out there next week for any interested buyers. I moved very quickly today because I thought this was a very limited supply situation.
SOJC was just issued at 6.5% with the same credit rating from SP/Moody’s. So, why buy this at 6.25%? I limit any 1 utility holding company to 1% of my net worth. This is a 5 year fixed reset issue. I do not particularly like the 5Yr CMT+1.936%. To me, it’s about 0.5% short. The magic of being owned by Berkshire Hathaway. All my recently issued $100 baby bonds reset (NI, AEP, C, STT) after 5 years. So, yes, 0.25% under SOJF. Trading off the 0.25% for the fixed rate reset. Plus, I do not expect to see NISource, American Electric Power, or Berkshire Energy in the $25 retail market (could be wrong naturally). A way to enlarge my utility holdings but stay at 1% per company given that all utilities can defer for 5 or 10 years (this one is 10 years)
Should have read.
“SOJF was just issued at 6.5% with the same credit rating from SP/Moody’s. So, why buy this at 6.25%?
5 year A++ Insurer Financial Strength rating:
Mass Mutual Ascend fixed annuity 5.5%
I believe you can withdraw interest plus 5 or 10% annually with no fee.
[If you are under 59.5, you need to get older before buying this!
I can arrange to transfer some of my years to you in exchange for the tax benefits. In fact, I’ll give you DOUBLE for each year you give me!]
This is a no-agent fee annuity available through an RIA or directly with DPL
5 year 5.50% Advantage 5 Advisory MassMutual Ascend A++
dplfp.com
Lt no longer than 5yr ?
Don’t think on that issuer. There are some 7 year annuities from A+ and A- insurers. I’m at the state guaranty fund limit ( for what that’s worth, which isn’t much)
take a look at the myga link on dplfp.com
I bot mitt.prc ftf 6.737 to 3mo sofr at 25.34 (stripped price near parity)..current coupon 11.09 ..article on S/A dated 11/4/2024 on AG mortgage Trust
BDC news – Bain Capital Specialty Finance, Inc. Prices Public Offering of $350 Million 5.950% Senior Notes Due 2030 – FYI
https://www.bdcinvestor.com/bcsf/202501/bain-capital-specialty-finance-inc-prices-public-offering-of-350-million-5-950-senior-notes-due-2030/
Z This is one of the few common I own in a CEF
Tim-
The following could be add to the “Preferred Stock and Baby Bonds From Ocean Ship Owning Companies” spreadsheet:
https://innovativeincomeinvestor.com/preferred-stocks-issued-by-ship-owning-companies/
IMPPP
ATCOL
TRTN-A and its other preferreds
Perhaps there are others, anyone?
SBBA too
I bot sbba at 25.14 (stripped stripped price near parity) 7 6/30/2025 ..tks for show ..good article on S/A dated 10/3/2024..
Opened starter on BHFAN here 8% plus QDI with intention add on possible/likely? further weakness… Also add to EIX ftf 8.125 but thinking common stock may be the better buy for a trade? FWIW
Jerrymac, Which EIX FTF is 8-1/8% ?
Charles, I’m guessing Jerrymac referred to this (btw, it’s a 5-year reset, not a floater):
https://download.edison.com/406/files/202303/prospectus-supplement-junior-subordinated-notes-due-2053.pdf?Signature=U39Kni7bklX5cNkAty66sKjU5Wk%3D&Expires=1738382903&AWSAccessKeyId=AKIATACLJRQCT2IBV7MN&versionId=LAPqn6gvMQggFgxG2OzwpxdkyTKscS7l&response-content-disposition=attachment
The EIX website lists the EIX unsecured bonds and the SCE preferreds and debt:
https://www.edison.com/investors/financial-reports-information/debt-preferred-information
mbg, been watching the EIX and SCE bonds but not as far out as 2053. I was contemplating the BHFAL which is also out to 2058 and showing a 7% yield. Without knowing who BHF will be sold to, I think a util. bond is a better bet.
Well, maybe the train is leaving the station. I looked in Fidelity’s bond offerings clear out to 2054 The farther out you go the yield on available bonds in their holdings for EIX and SCE drops down to around 6.3% the nearer due date bonds are still steady at around 6.7 -6.8% could be the panic is dying down. I looked on FINRA and the 7-7/8% is trading around 94.4 and the 8-1/8 is around 95 maybe worth calling in? Minimum at Fidelity is 50
So 8.125 coupon call protected til ’28 at which time it resets to 5yr tsy plus 386.4 (not sure of reset timetable beyond ’28) Hard maturity 2053 cusip 281020ax5. was trading 105-6 prior to Cali fires.
Hey Jerrymac, I was in the EIX sub notes previously but I got spooked by wording which made it seem like SCE prefs were senior to all EIX debt and prefs. The wording was in an offering from EIX and Moody’s also cited it. But the wording doesn’t make sense as some EIX debt has higher credit ratings than the sce prefs. I can dig it up if helpful. Any thoughts? Hope you are well, and got some bargains today.
III- Tim-
Not sure why Golar GMLPF is also listed as GMLPP — but both work here and at QOnline, but not finding it elsewhere.
I bot IMPPP 8.75 perpetual cumulative at 25(24.82 stripped) ..the impp/vclt pair has seen imppp outperform since inception in december 2021.. on a 1year horizon its trading near fair value.. good article on S/A ..tks for show
IMPPP is organized as a PFIC–Passive Foreign Investment Company
EIX made a new low at 55 this morning in the fire sale. Support at 54 nearby. 45 possible. Market concern about the Eaton fire investigation?
R2S,
4.5 YEAR debt is 6.83.
I’m treating it like prostate cancer…..watchful waiting….and just like that illness I’ll likely do nothing about it.
Lt,
Southern Cal Edison and San Diego gas & Elec. starting to show up. Long term holders are getting nervous. I’m also seeing a lot of oil and gas and pipeline bonds showing up. As Tim observed, some of these are out a ways so long term holds. Maybe a sign of investors moving over to treasuries? Yields are looking tempting over 6.1% and more but I feel this can change and maybe the yields will go higher?
I am using SCE-M as my canary in the coal mine and it is definitely not acting like there is a lot of panic right now. EIX might very well be responsible in some way but that new law in CA makes it seem like they have the state of CA on their side in some fashion.
I mean if people keep suing these utilities into bankruptcy every time there is a fire they will just start shutting off electricity to huge chunks of the state when the risk is too high. Naturally people will be upset with that situation as well. Damned if they do, damned if they don’t. Who in their right mind would ever borrow them money when you will most likely lose it in the state of CA every time that dry windy fire prone state has fires? Even if not their fault they are still the fall guy in the eyes of the people.
good comment..sce.prm/vclt pair trading near all time low close (underperform)
FC, that’s not how it works in the people’s republic of CA.
The theory is that somebody has to be responsible for the costs of fires caused by the utilities – and in CA we decided its the utilities, not homeowners. Sounds good, but doesn’t really work that way.
So, here is how it usually plays out: Utility causes fire, gets sued. Pays out all of its insurance coverage (and can get state funded bail out). If that doesn’t cover it, it goes through a packaged BK (which happened to PCG twice in the last 10 years or so), bonds, preferreds, etc. don’t get touched. In fact, for PCG, they actually went up. Utility sets up a victim compensation fund to pay for damages – in PCG’s case it was mostly funded with PCG common stock (!), so victims don’t get much unless PCG does well.
In CA, the utilities do “public safety power shutoffs” pretty regularly when the winds get going. There were several in place when the LA fires got started (no idea whether they helped, but the shutoffs were in the local news).
The utilities in SoCal led the way in segmenting their grids so that they don’t have to turn off huge sections just to protect a little area. PCG FINALLY started doing that a couple of years ago. People get irritated at losing power for a few hours, but I think most folks understand that it is better than a big fire. In NorCal, there is/was big frustration with PCG before they started segmenting because they would shut off huge areas, most of which weren’t even affected. PCG also had a terrible record for not doing shutoffs and causing fires (which killed a lot of people).
CA utilities are also insulating and undergrounding lines at a frenzied pace. They are undergrounding more than they probably need to, but they make a profit (11.x%, IIRC) on every dollar they spend and the ratepayers have to pay for it. Makes CA power rates second highest in the country (after Hawaii).
Its a farce, in many ways. Our idiot news-hound governor is firmly in the utilities’ pockets, as is the public utilities commission he appoints. Crazy. For example, there were email leaked where the utilities were telling the PUC which of their “judges” could handle which rate increase cases so they would go through. So, if there is a more expensive way to do something, CA utilities will get the PUC to sign off on it and pass the cost to ratepayers – but the securities issued by CA utilities seem to never be affected.
In the case of Eaton EIX would have had to power down transmission lines though. The claim is that the fire started directly under a transmission tower. Not just distribution which is near our homes. We are talking the big towers. In the case of Eaton there are no trees to trim. Nothing. These towers on the side of hills/mountains have the lines high up. With winds as powerful as they had could it simply have been some piece of debris arcing the wires and then falling to the ground starting the fire? I have zero idea.
But you cannot shut down transmission lines without a lot more consequences power wise for people compared to distribution. I am not even sure if they can safely TURN OFF transmission lines willy nilly. It could have severe consequences for the grid.
I had read somewhere SCE recorded a higher than normal power load to that line and they have reported it. The other two fires were probably LAWP , but try using the government.
That was a different and smaller fire they reported that on. It appears they are quite transparent with information as they know it will all eventually come out. There is no point in obfuscation. They seem to know what they do comes with risks.
I bought some EIX bonds this week. Not worried one iota. Chaos brings opportunity. If the bonds take a big hit, I’ll simply double down because past action in PGE bonds proved exactly what you pointed out. The bonds will continue to pay.. To wipe out the bonds is to wipe out the utility. The utility has to survive and it has to be able to issue debt in the future. That means the present bonds are good no matter what. The law may say inverse condemnation but it’s the rate payers who will ultimately pay the cost, not the bond holders.
Here’s a look at the liability to SCE for any wildfire related cost.
California enacted wildfire legislation in 2019 (AB 1054). While AB 1054 did not repeal the application of inverse condemnation, it created a wildfire fund ($21B) to pay wildfire claims and CAPPED A UTILITIES LIABILITY TO 20% OF ITS EQUITY RATE BASE which translates to a cap of $3.9B for SCE. AB 1054 also enhanced the ability of utilities to recover wildfire cost from ratepayers.
This is directly from the Moody’s 2024 Opinion Summary for EIX bonds. If their wildfire expose is limited to approximately $3.9 billion and ratepayers are going to be responsible for cost recovery, the bonds are unaffected. I own the 11/2029 bond issue.
For those who buy CD’s, depositaccounts.com used to be a sort of
EM in CD’s . For years they were the only place I could learn about random Credit unions paying higher than market certificate rates.
That site was bought and turned into a worthless pile of dung.
I thought we might post here any high CD rates we happen to find locally.
One of the things I learned over the years with CU’s is that you have to find a way to be included in each CU’s field of membership.
When the 5 year treasury last fell into the mid 3’s . I was getting 5.47 on certificates from Advancial by joining an association.
I’m looking at my 1099’s as they are coming in and here is the hodgepodge of CU’s that paid high rates at one point in the past few years. None are (is?) now. They are worth checking regularly, but treasuries pay more than most CD’s now.
At one point I negotiated a no-early withdrawal fee special rate with the CEO of a CU. I was getting 3% when MMA rates were 0.
Credit Human, Langley, Sandia Area FCU, Pelican State, Alliant,University Federal (austin), US Senate Federal (this one has a really cool debit card with the Senate logo . You can
show it to people and tell them you charge everything to taxpayers!),
Ocean Air , NASA Federal, All In CU, Library of Congress CU, Agriculture Federal .. these are just some.
Best aspect of many CU cd’s is the put feature (EWD penalty) may not be very expensive.
LT–“none is” is correct (since you asked;-). The way to remember it is that “none” is really an abbreviation of “not one”
Deal closing today or tomorrow: UMBF/ HTFL
Look for imbalances on the close: a buy in UMBF and a sell in HTFL.
It might be worth entering MOC orders against the imbalances ans then letting the stocks reorg on their own. This strategy used to be easy money but not much anymore, because “easy” always gets arbitraged away.
Good luck trying to sell short UMBF market on close at Fidelity cuz they don’t have that order type AFAIK
Initial after-hours market reaction to earnings reports from MSFT, META and TSLA is down. How often does that happen?
Didn’t last long. As usual, it’s best to wait a day or two to assess the market’s reaction.
Sorry about the length- but this might help the unaware–FWIW- Anyone considering a transfer from Fidelity to E-trade (or possibly others):
I initiated my transfer of all 3 accts on 1/15- got a rejection 1/17 of the stocks I listed on the ROTH & Trad-IRA. They asked some confirmation questions & info on option trading (already covered in the application). After a few days passed, and they said- you tried to transfer OTC stocks which we do NOT take! I was told E-t would look ito it & call me on Mon– no call.
Pissed, but I then resubmitted taking out OTCs and some of my old stinkers.
Some stocks came thru on both accounts Mon & Tuesday, then yesterday afternoon I got another rejection notice- WTF??! I called E-t and was told they would look into it- but no callback. This morning they say- Fidelity rejected it because it is a partial transfer and I must leave $150 in each account ( had’t transferred cash) more WTF? R-trade could not say what the money was for- fee or fun money for Fido. I then called back to E-trade and after a lengthy check by the rep, he said the transfer folks did not know why it had not be advancing (??), but they would now fast-track it since it seemed fine. I stressed there was more than enough cash so that will not be a problem. H e says it might take 3-5 days moooooooore (fast-track??). Crap. Beware of OTC stocks in a transfer to them ( no problem from Schwab to Fido).
E-t did not give me a heads up when I asked about OTCs, gray mkt, etc. – meaning i’s up to you to say- can I transfer them?, etc.
One more quirk- you can’t sign in twice to have two active screens at E-T since it will sign you out leaving your hard work lost.
Sitting on my hands –Good luck.
update- I think the problem with having two sign-ins occurs if you use two different programs- like I tried- Safari & Chrome.
Gary – I have two Etrade accounts and can only have one open at a time when using the same browser. But if I use two different browsers, in my case Chrome and Edge, then I can have both accounts open at the same time. I had looked into moving my Vanguard account over to Etrade but when I submitted my list of holdings to them they told me they wouldn’t accept the stocks I had that were now in the expert market so I haven’t gone ahead with this yet even though I find Vanguard to be a miserable platform.
I transferred an account from Fido to Etrade recently and didn’t have any issues. BUT, it was only a bunch of CDs and a few ETFs and mutual funds. I left the “interesting” stuff at Fido for now.
Gary I already thought about possible problems with transferring to E-Trade. I would give them a list and ask for them to approve which they would accept and get it in writing. That would probably kick it upstairs to someone who knows what they are doing. I have been accumulating one illiquid for years and now own about 1% of the issue I’m not selling it after all the time it took to collect.
Mind bender……. Get your arms around this:
I have one share of VOO (500 Index) and PFF (we all know who that is) as reference trackers. Each purchased 9/30/23
As of today, each has returned an identical 5.5%
wow!..keeo us posted
I think we need to re-think owning the preferred ETFs such a PFF or even what were very good active ETFs such as FFC/FLC in the past.
Many of these used leverage of 30-40% and when borrowing costs were very low, this worked fine. But now, with rates much higher and typical expenses of 4-5% it is difficult to see how these funds can keep delivering superior returns without taking more risks to delve into riskier preferreds that they would have avoided earlier
mSquare, good point. I hadn’t thought about that point. I never owned ETF’s but I started looking because I want to do less work picking individual stocks.
One thing I have wondered about with ETF’s is how well they will perform long term. I remember when brokerages first started pushing Mutual Funds and saying leave all the stock investing to a professional money manager. Between fees and market ups and downs and bad decisions by the managers I don’t think most funds beat just buying the DOW or S&P 100
you mean 9/20/2024, not 2023, right?
John
Yes -9/24
Brain fart
Westie-![😉](https://s.w.org/images/core/emoji/15.0.3/svg/1f609.svg)
I ran the numbers thru dividendchannel.com (drip return section) with & without divs reinvested–the diff is large :
with = VOO TR is 44.01% vs 15.71%
without divs TR is 43.71% vs15.18%
not sure why the divs don’t do much for either one
But- I guess you know your big profits there
Has anyone seen this disclosure from Fidelity before? I must have reached my limit on buying low volume and Ill liquid stocks and BB
Fidelity has designated certain investment products identified as more complex and/or higher risk as “Designated Investments”. I understand that from time to time Fidelity may accept orders for Designated Investments only from self-directed, sophisticated, experienced investors who (1) have represented to Fidelity that they do their own investment research and analysis and (2) agree not to rely to any extent upon Fidelity for advice, guidance, information, direction or recommendations relating to these investments. I understand I must agree to this Designated Investments Agreement in order to open positions in such investments through Fidelity. I understand that this Designated Investments Agreement applies to any and all investments that Fidelity has designated or may in the future designate as a Designated Investment. I understand that the Designated Investments list may be updated from time to time without notice to me. I acknowledge that many complex or highly risky products are not on the Designated Investments list and that even though one or more products are not on the Designated Investments list does not mean that they are not complex or highly risky. I am not relying on Fidelity to identify all such complex or risky investments. Before making any investment, I understand I should review and understand each investment and its benefits and risks. By clicking “I Agree” below, I represent and agree:
I am a sophisticated, experienced investor;
My risk tolerance is high, I can afford to lose some or all of any investment I make in a Designated Investment, and I have sufficient resources at Fidelity or elsewhere to sustain such losses;
I am responsible for educating myself regarding Designated Investments, including reading the applicable offering documents (including, where applicable, the prospectus and statement of additional information) and any disclosures provided by Fidelity, if any, before I invest so that I am aware of their investment objectives, unique features and risks as well as their fees and expenses;
I independently analyze the risks of investing in Designated Investments and have the sophistication and experience to do so. I make my own investment decisions and will do so as to all Designated Investments I may transact through Fidelity;
Fidelity does not, and I understand will not, advise, recommend or solicit any transaction in a Designated Investment. To the extent I will have or have had communications with any Fidelity representatives about a Designated Investment, I agree not to rely on those communications as advice, guidance, recommendations, or solicitations;
I have not, and will not, rely on Fidelity or any Fidelity representative for advice, guidance, information or recommendations regarding Designated Investments, their nature or features, their risk profiles or their suitability for me;
I understand Fidelity will not monitor my Designated Investment holdings and I am not relying today and will not rely in the future on Fidelity to monitor my Designated Investment holdings or advise me concerning them; and
I will promptly inform Fidelity if any of these representations are no longer true
I understand and agree that Fidelity will rely on my representations above as a condition to accepting an order in a Designated Investment from me, and that I am bound by them as to my account(s).
Never seen that, but hopefully this is their solution to the problem they created. Thanks much for posting!
I’m skeptical that it’s a solution even if new- I bet they still control the illiquid issue mess (nothing said about that)- but isn’t their interference a form of ‘advice’?
Sounds like they lost a law suit- probably from accounts they run.
I don’t listen to Fidelity advice for any investments whether designated or not. But there are other advantages so they still remain my largest account just pick and choose what I trade there or elsewhere.
where do you sign this? one of my accounts is fidelity.
I have to contact them so they would be sending an email for a docusign. I did a purchase at Schwab no problem but a $5,500.00 GTC limit order at Fidelity was blocked. I understand why, so I’m not going to bother in this instance.
They made me sign a disclaimer (at least that’s what I call it) before they would let me purchase any shares of YMAX which, admittedly, is a strange duck. It’s a fund of funds each dealing with options only. The term they used was designated investment. I bought a small position for experience and as a learning exercise. I learn best when I have money at risk.
Jersey this was a small bet on MDST which is an ETF that uses covered options. So I can see the risk. An ETF holding a basket of energy stocks sounds great until you consider the option risk.
In the case of YMAX and its holdings, I don’t even think the options are covered. I believe they’re naked. The rate on the weekly distribution is huge but I have a strong suspicion the share prices will not hold up, thus creating a yield trap. We’ll see.
nanny broker …have switched all of my low volume orders to schwab
Which way will the wind blow on Wednesday…..????
Bloomberg:
Expectations for further easing climbed to start this week during a tech-driven rout in stocks. The risk-off vibe pushed two-year Treasury yields to the lowest in more than a month and produced a wave of wagers on Treasuries gains. JPMorgan Chase & Co.’s latest client survey released Tuesday shows the biggest net long position in US government debt in almost 15 years.
Westie, Ask yourself why? I can guess 2 reasons and both could be right. Besides risk off like the writer suggests. There is the reason people expect short term interest rates to go down. I will try not to be political here, I’m trying to think this out. The government has paused spending because they have reached the debt limit. What is the ratio? Is it 30% of all treasuries sold are short term to just roll over old debt coming due? Without new notes coming to market the demand is going to drive up bids (prices) on existing notes and push yields down. Congress just approved a new Treasury secretary Scott Bessent They need to quit voting on frivolous stuff and focus on passing a debt package as fast as they have passed other bills since one party has a majority. Once this is approved the Treasury can start selling new debt and there will be a flood at auction. What will this do to prices of older short term notes people have been buying verses the new? and what will happen to yields? I don’t know and can’t guess. I can guess I will not buy older debt because the crowds have pushed up the prices and yields down.
Maybe this is why I have seen better prices on corporate bonds recently as sellers are moving to treasuries and short term debt like CD’s?
How is this going to affect the market if the herd goes risk off?
Bringing up SPRK again:
This is a $2.5 bill largely retail offering of an 8%(says Fidelity) convertible prfd with no known conversion price. It’s part of MSTR’s plan to raise , was it 40ish billion ?
I noted the decline in MSTR vols today. I noticed it in passing, but it occurs to me that just two days after a trader friend said he thought Saylor was trying to corner the market in the non-asset known as “bitcoin, ” and a weekend after I became concerned about a melt-up in it, that all of MSTR’s buying interest seems tied to high MSTR vols. If vols collapse, is the marginal buyer gone and the thing tanks? All of the convertible bonds MSTR has done had a locked in profit for arbs who sold options at the conversion price. Seems like the call option 3 years out and 55% out of the money ( the conversion price) was close to the stock price at one point.
Have I inadvertently called the top?
losingtrader:
What’s skewing this a bit is that now the strikes are so deep in the money from some of those previous convertible issues. Let me give you a real-world example. That $1B+ float that is now on deck for getting redeemend; the strike price on those bonds is $140s vs. MSTR stock now @ $330s. So those folks have a massive payday coming.
In terms of real-time right now, I took a look at a 2 year chain, using that same strike price and you are getting still a 14% premium on that strike (which is in the money by 70%+) vs. current trading price. Was that vig higher in the past, sure but when those earlier bond issues hit the floor and MSTR price was still in $200 range, that vig was gigantic. If Saylor is smart he will still load those new issues with a much lower strike and potentially never have to actually repay any of that debt as people will either just have that arb locked in or take stock since they have 3 or 4 bagger.
But what’s incredible about BTC that is not the case for any stocks, is it’s such a dramatic case of cause and effect. In other words, if those spot ETFs didn’t happen, BTC would be trading massively lower and most likely never have hit 6 figures.
The only two tangible events from here that are going to catapult this to the next level is either corps start adding BTC to their balance sheet and/or the new Canadian PM and our new administration here start buying BTC. Then the whole world will have to follow and that would be the genesis of absolute panic violent buying scenario and perpetual bid support for spot BTC trading price.
Theta,
I would almost violently oppose the US purchasing this garbage from the BTC speculators now in our government. It would be the worst possible end.
Those convertible bond holders don’t want to own MSTR stock. They would be happy to flip for a profit but they are generally in it to sell premium on options and as noted Saylor’s job is to provide volatility. He’s pretty transparent, especially in early interviews and slips up occasionally such as the time he implied common shares were just a tool for options traders. He seemed to take pride in creating additional volatility to BTC.
If vol collapses or BTC falls enough he will be in trouble. These are still loans that are owed and if you read them, there are a lot of conditions under which the bond holders can force repayment in cash. Saylor keeps buying BTC at top tick prices and increasing the cost basis. Cost basis can be found in the latest SEC filings and I think it’s in the 60K-70K area. The software division doesn’t profit much relative to the size of the company and there is some interest in some of the bonds. Will they have to sell assets or assets at a loss and then who will want to buy shares when his new financial metric of BTC Yield is negative. Tons of info on EDGAR, SEC website where they file an 8-K nearly weekly.
I’ve noticed that the average trading range and implied volatility of MSTR has been slowing down a bit. That doesn’t seem like a good sign for their future in my opinion.
Anyone shorting it?
On Saturday I asked this question:
“Looking at inflation from a supply/demand POV, where in the economy (goods and services) is demand, created by plentiful new money courtesy of deficit spending, likely to outstrip supply? In the cost of labor?”
I overlooked one obvious answer: financial assets.
Plucked from a Business Insider article.
“The $36.1 trillion US debt limit was hit on Tuesday, prompting the Treasury to use extraordinary funding measures.
A suspension of debt issuance through March 14 could suppress bond yields and help stocks.”
The helps stocks idea might be because Treasury will be spending its savings account at the Fed (TGA) to fund the gov’t, and that’s pro-liquidity. That effect reverses once the debt ceiling is raised.
What’s DeepSeek?
https://stratechery.com/2025/deepseek-faq/
rocks,
thanks for the post. Very informative.
My head hurts after 1/2 page of abbreviations.
The author predicted a benefit to AAPL, AMZN and META. All three were up today with META making all-time high.
It’s interesting that DeepSeek is so readily embraced with no apparent fears of the gov’t in China likely having their ear to the machines.
And now, Tik-Tok is ok if some money boys & gals?) in the US have 50% or more interest in it. Huh? So it’s just a grab?
DLR, the common stock, -11% this morning. Looks like DeepSeek collateral damage. The preferreds not much.
Inquiry: Does anyone have a really good site for CD rates that might include random credit unions? I used to use depositaccounts.com but that was sold and turned into a true joke.
I’ve got accounts at 6 different credit unions at really good rates before that site became nothing but sponsored ads and out of date rates.
I’ve seen bestcashcow.com but it’s nothing like depositaccounts.com used to be.
Every bank and CU seems to be acting like the yield curve is still inverted.
No really good site. I did google for best CD rates Credit Union and it gave me a link to Investopedia. About half are credit union CDs. Each CU has a detailed description if you scroll down. May be a place to start,
https://www.investopedia.com/best-cd-rates-4770214
Bank rate has a list but you’ll need to scroll way down past the sponsored bank ads and offers and adjust your term.
https://www.bankrate.com/banking/cds/best-1-year-credit-union-cd-rates/
LT,
cdvalet.com
A novel way to raise capital
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It looks as though you also have to start saving today before they’ll tell you what rate the Personal Savings account is earning…………… lo
It turns out, The Treasury has too much money. So it might issue fewer T-bills. Short term interest rates might go down, without Fed action. (And likely CD rates.) The logic is compelling. It’s like finding a $20 bill in an old pants pocket after you lost your job and feeling rich again. JMO. DYODD.
Treasury’s Cash Pile Is a ‘Wild Card’ With New Administration
https://finance.yahoo.com/news/treasury-cash-pile-wild-card-192416798.html
Roofing manufacturers on the West coast announced a 10% price increase for the month of March. Shipments from the manufacturing plants is 2 months out from receipt of your P/O Asphalt and bitumen a by product of refinery production could go down if the refineries slow down driving up the cost of these products.
I can believe consumer sales are up just from the traffic at the shopping centers with Costco, Home Depot’s, and Walmart’s. The stock market is up making people feel well off financially especially if employed.
Sold all my bio-tech stock Friday, for sure too early but I never complain about a profit even if it’s less than what I could get if I held. Cash equivalents now about 25%
Maybe being too cautious in reefing in the sails like Westie.
The US is in its own bubble compared to the rest of the world but how secure are we from what is happening out there?
Playing oil stocks and gold stocks both of which the stock prices are down but still getting the dividends. Never been good in these two areas and have unrealized losses and keep wondering why I play in those sandboxes. Unrealized capital gains on utilities are down as stock prices sink as investors want higher returns for buying the stock. My gains are still positive for what I paid. Bank stocks and dividends are holding steady. On my small holdings in bonds the prices are steady and up from what I paid for them. This is just a few of the market sectors I follow and invest in.
Most important, I am not buying tranches following drops in prices. My reasoning, Market is high and prices drop on stocks I follow? what happens if the market drops? My guess is stock prices will head lower.
The rebuilding of the burned cities in Calif will likely suck-up a large portion of building resources- leading to higher prices and even worsened with any tariffs .
Gary, Front row seat. But I’m impressed with how fast they are acting so rebuilding may go faster than what happened in N. Cal. They are already addressing the toxic waste issue from all the burned plastic and other items like roofing. There is going to be a major rebuild of infrastructure.
with the fire danger, who in their right mind would install an asphalt roof on the west coast?
William I totally agree. Metal roofs seem like a no-brainer – tile for those with more to spend.
Beats me Will. Cost I guess.
Sounds like a risky bet, but that’s what happens when you turn the Treasury over to a hedge fund guy. Probably works until it doesn’t!
The WSJ had an article on convertible bonds, Microstrategy selling them, and who / why is buying them that I found interesting. After reading it I have decided I would rather take any funds I have spare (and you better employ very spare funds!) and going to a casino to gamble with it rather than buying Microstrategy bonds. At least I would get free drinks in the casino………. I am not familiar with casinos. I guess they still give free drinks to high rollers?
This makes perfect sense if you are within this sphere of group think. For the premises to continue buying pressure must out weight selling (greater fool theory) so far participants have maintained a great balance.
Shut up and take my money!
https://youtu.be/OnB1TgxgwEA?si=lxgt0-6FdLfsSF26
That’s a good one!!!!!
For the first time in six weeks, the stock market closed at a new all-time high. The S&P 500 finished Thursday at 6,118.71. The previous record close came on December 6. “Hold on tight and take flight”
https://youtu.be/bFurkDf6WXg?si=3SRtPK8h5AzPlmvj
Rita Coolidge – All Time High (The Theme Song From Octopussy) 1983
LT, You post (which is appreciated) about tax free bonds. This morning the WSJ had the following information concerning muni bonds and the LA fires:
“analysts, meanwhile, are poring over fire-impact maps to check on ““dirt bonds””: financing for community projects backed by fees from just a few neighborhoods. In one damaged patch of Altadena, 272 homes were partway through paying off $7 million in uninsured debt sold 12 years ago, bond filings show. It isn’t clear how many of those houses are still standing”
Are these the type of bonds you purchase?
I am not at all certain. Can you link the article?
The bonds I purchase generally finance common area improvements such as roads and sanitary sewer systems, lighting , parks, etc , which , while they may be shared by many, primarily serve the residents of the neighborhoods in which they are located as part of much larger master-planned communities.
BTW I think we are at very limited risk of wildfire. I’d worry more about earthquake than wildfire. The new developments just do not have extensive vegetation, and grass in front yards has been outlawed for 20+ years due to water restrictions. I never really thought about it but I guess palm trees burn and synthetic turf melts. There just are not so many areas with really old homes.
Also , the Southern Nevada Water Authority says water usage fell by, I believe 25% in the past 15 years despite explosive growth. Water prices are banded, so the bigger the home, the more likely you are to use a higher band, and that is also largely governed by landscaping. The highest price band is a LOT more expensive than the lowest.
Wildfire is something to think about that I haven’t considered, but the bonds are backed by the land and would still be payable even if the homes burned down.
I do not know if there’s insurance , other than public liability
I worry more about forest fires but a water shortage? Not something I usually think about. I live on a huge lake (Pend Oreille) in Idaho and I can pump all the lake water I want for landscaping at simply the price of the pump and the electricity to operate it. Southern Nevada is simply another world.
Richard, spectacular, although a bit chilly about now.
https://www.wsj.com/finance/los-angeles-fires-taxes-rebuilding-bbff725f?st=m8uG6S&reflink=desktopwebshare_permalink
LT, I gifted the link so hopefully all can open. Appreciate your feedback!
Santa Rosa in the news again. Non-profits and neighborhood associations from up here are offering help to Southern Cal and what they dealt with in the aftermath of the Tubbs fire. Coffee park area has been completely rebuilt.
What is crazy is the area in the hills and canyons has been allowed to be rebuilt.
http://santarosahistory.com/wordpress/2019/09/the-1964-hanly-fire/
No wonder the home insurance is not available or sky high.
Southern Cal is not going to be any different.
liquidated TDS.PRU 6.625 perpetual at 22.36 (7.40 cy) as the tds.pru/vclt pair has gone from near 4 sigma cheap in may 2023 to all time high and near 2 sigma rich (3yr horizon) today
Liquidated- meaning you sold, not called?
Nice move mj. I got out too soon at 21.26 but still happy with a 7% capital gain in 1 month. Looking at the TDS swings there may be opportunities in the future.
Hod owns the tds.u .. which has created swap opportunities