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.
10-year t-note 4.52%. 30-year t-bond 4.96%. If this trend continues, the stock market will have to pay attention.
Utilities are paying attention.
General question for the group: Can the issuing company of preferred’s prevented from buying back their own preferred’s in the open market (such as Utilities, Banks, Insurer’s) . Thanks.
Generally not, but it must be authorized by the Board of Directors and publicly disclosed to the SEC.
However, individual companies may have prohibitions against buying back preferreds in the prospectus documents for other securities they have issued. (especially bonds, as buying back the preferreds jumps over them in the capital stack)
Do you have a specific issuer of preferred securities in mind? (other than CODI, they are a special case)
reits too. I sold most of my utilities except MLPs and really want DNP below 9
R2S not that I am lazy, just my computer or Internet connection is acting up. But wat is the 5yr currently?
5-year 4.17%
78397cab4
Security Benefit Life surplus capital note due in 2031 at 7.44%
BBB-
I like the defined term, I don’t like these represent surplus capital if needed (as I understand it)
In his daily Bloomberg column, Matt Levine wrote about a way to have a levered 401k. I copied the entire, very long article to Spam Reporting because it would take up too much space anywhere else. Maybe Tim will leave it up.
I suggest commenting here in the Sandbox and leave Spam alone.
The Federal Deposit Insurance Corporation published its 2025 Risk Review, an annual publication which uses year-end banking data from the prior year to summarize conditions in the U.S. economy, financial markets, and the banking industry.
https://www.fdic.gov/analysis/2025-risk-review.pdf#page=5
Thanks – always a good read –
MSDL BDC Bond FYI – Morgan Stanley Direct Lending Fund Prices Public Offering of $350.0 Million 6.000% Notes Due 2030
https://www.bdcinvestor.com/msdl/202505/morgan-stanley-direct-lending-fund-prices-public-offering-of-350-million-6-000-notes-due-2030/
I believe Moody’s rates their outstanding unsecured notes Baa3. They have outstanding MORGAN STANLEY DIRECT LENDING SER B
6.15000% 05/17/2029 NOTE CALL MAKE WHOLE 61774AAF0 offered @ 5.90.. As a BDC, doesn’t this seem high?
Here’s something you don’t see everyday: a big gap up in the 13-week t-bill yield.
IRX (13-week t-bill index) daily for the past year.
https://www.tradingview.com/x/AoJ9aEJS/
Moves in this index align with expectations for rate cuts and are predictive. A move up means lowered expectations.
The idle speculation scenario working today: indexes, long rates, DXY up, gold down.
If this were day one of tariff announcements with China set at 30%, today’s number, what would be the reaction of markets?
Bond market vigilantes showing they don’t like $4T added debt…!
Finally, I have something useful to contribute:
Append “udm=14” to a Google search URL to strip away the AI summaries, knowledge panels, and ads that clutter the results.
Great post. For those that are a bit less technically inclined:
1. Enter your google search as you normally would, e.g. “how fast can a corvette stingray go”
2. copy add “&udm=14” to the end of the URL shown in the browser URL box on the page that shows the results and search again
You could also manually enter the URL instead of 1&2. Using the example, “https://www.google.com/search?q=how+fast+can+a+corvette+stingray+go&udm=14”
“Globalization did not hollow out the American middle class”
https://www.noahpinion.blog/p/globalization-did-not-hollow-out
This is a long article featuring lots of charts and numbers. I didn’t have the patience or the background to consider the arguments in detail. What’s important is that people, including the author, are challenging the popular narrative about the middle class being gutted.
I think there is a related narrative whose truth matters: the system (judicial rulings, fiscal and tax policy, monetary policy) has unfairly favored the distribution of wealth to the rentier class.
A cogent article. Thanks for posting it.
Trying to assess which SOFR the variable rate prefererds use typically. Would help to determine if one should add / sell some of these variable SOFR dependent rates.
eg. GS-D which yields 6.75% at today’s price of $20.76 as per Schwab, and yields ‘7/1/2023 Now trading at 3 month SOFR plus .2616%’ as per iiInv at
https://innovativeincomeinvestor.com/security/goldman-sachs-group-dep-shares-float-rate-non-cumul-preferred-stock-series-d/
Is the yield of 6.75% currently correct? It last paid a dividend of $0.3409 on Feb 10, 2025
Is there a link to get quote of the SOFR used in above example ?
If you know the date that rate is reset, here is link to the historical data. Find the date and that should be the SOFR.
https://www.barchart.com/stocks/quotes/SOFERMM3.RT/interactive-chart
This link has most recent SOFR rates:
https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html
A good newsletter from John Mauldin.
https://www.mauldineconomics.com/frontlinethoughts/tension-in-the-sandpile#share
Torsten Slok
https://www.apolloacademy.com/chinese-exports-redirected-from-the-us-to-the-rest-of-the-world/
“The US is no longer importing cheap goods from China. As a result, the rest of the world will likely see a significant increase in imports of cheap Chinese goods that China can no longer sell in the US.
This creates a highly unusual macroeconomic situation, with upward pressure on inflation in the US and downward pressure on inflation in Europe, Canada, Australia, and Japan.
The consequence for markets is that rates will be higher in the US and lower in the rest of the world.”
Rocks, This is getting me confused. The Treasury secretary Bessent wants lower rates along with a lot of people involved with him. Normally in the past when rates were higher in the US money moved into the US from countries with lower returns. Not so sure it will happen again especially if they succeed in devaluing the dollar?
Right now in other countries I have heard their stock markets are doing good so if they invest at home chances are they will make good returns and not have to deal with taxes on American investments?
I am considering an annuity purchase. I came across a decent rate from SBLI (The Savings Bank Mutual Life Insurance Company of Massachusetts) on blueprintincome.com. AM Best rating of A. I’ve done some reading on the AM Best site about the company, but I’m wondering if anybody out there has any input about this company? they were unknown to me before now….
Voner,
I am going to suggest you stick to annuities that do not pay a commission to the agent. You can buy these from the same seller that investment advisors with a fee-based clientele use: DPLFP.com. As an example of the difference in yield, you’ll find an addl .25-.50 pct / per year on the same annuity from the same company.
I did look at blueprint just this morning and saw the annuities paying 6%+. I’ve no idea what to make of them except to tell you getting an A+ insurer strength rating occurs where the entire set of assets held by the insurer is BBB bonds!! I found this out researching North American/ Sammons Financial, which holds $50 bill+ in BBB to BBB- avg debt. I’m sure existing equity and management are factors also, but it’s something to think about. You could just hold a BBB- target date bond fund if such a thing exists.
All this being said, I do have quite a few 5 year annuities and I manage to bottom-tick rates!
LT,
thanks.
At dflp.com, do I register as a “advisor” or “consumer”?
Voner,You don’t need to register to see the rates. Look under MYGA marketplace. I registered as both with diff emails just to look at the life annuity summaries they have. None of those made sense to me. I think the IRR was under 4% on virtually every life annuity I’ve ever seen.
I’ I merely gave them a call and told them an RIA told me I could buy an annuity directly from them. They receive a very small administrative fee, I believe.
Don’t expect them to deal with you if you need your hand held: For example NV is the only state with a premium tax on annuities and they were unaware of the implications. I had to contact the state to determine it only applies if I ultimately annuitize payments.
Lt,
thanks for the info on dplfp.com. I was able to get a better rate from a higher rated company.
If you’re looking at some form of a Step-Up annuity which provides X% of downside protection and Y% of potential appreciation, each year, be aware that you can synthetically duplicate these with options.
Their claim that they don’t charge a “fee” is true. Their profit comes from giving you less than the full amount of the upside profit as well as less of the downside protection. Also, they don’t give you the dividends so the index has to rise by the amount of the dividend just for you to break even. It’s hidden “fees”.
theohornsby,
You are absolutely correct. Flex options from CBOE can be customized for an insurer so the insurer can hedge on an individual policy basis (though I can’t imagine a large insurer does given illiquidity of options)
The annuities mentioned above are straight MYGA’s and the one from Corebridge (AIG) has no withdrawal fee . It has an up/down market value adjustment for changes in rates since purchase. I wasn’t aware of the lack of a surrender charge when I bought it, so that’s actually a positive. i believe the 3 and 5 year rate is 5.3 , so you could borrow using SPX options at 3.9 for 3 years and put the money in an annuity at 5.3 (A+ Best rating) and hope the insurer doesn’t default, because the CBOE is considered TBTF . I can’t imagine an AIG spinoff getting TBTF treatment a second time, though.
The rate arb is something I did awhile back when I borrowed at 3.55 to 4.2 and funded CD’s at 5.40 for 5 years. That’s producing a nice net, but the “Interest deduction” is actually a capital loss deduction, so I’ve had to create some cap gains in order to take the deduction (sold some gold).
Liquidity would not be a problem because insurers offer Step-Up annuities on major indexes like SPY, IWM, Naz 100, etc. Index and ETF options on such indexes are extremely liquid with narrow spreads.
I’ve used this strategy many times on individual stocks, particularly when IV is high thereby offering better P&L on both sides.
CODI and preferred getting spanked.
Investigations into business practices.
Ouch. These have been in my high risk bucket for a while.
see the entry on compass..
See discussion in “Reader Initiated Alerts “
New preferred coming, WTFCV.
FWP 1 tm2513736d4_fwp.htm FWP
Filed pursuant to Rule 433
Issuer Free Writing Prospectus, dated May 8, 2025
Supplementing the Preliminary Prospectus Supplement, dated May 8, 2025
Registration No. 333-271788
Wintrust Financial Corporation
17,000,000 DEPOSITARY SHARES,
EACH REPRESENTING A 1/1,000th INTEREST IN A SHARE OF 7.875% FIXED-RATE RESET
NON-CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES F
(liquidation preference $25,000 per share (equivalent to $25.00 per depositary share))
PRICING TERM SHEET
This Pricing Term Sheet should be read in conjunction with the preliminary prospectus supplement dated May 8, 2025 for this offering and the accompanying prospectus dated May 9, 2023, filed pursuant to Rule 424(b) (together, the “Preliminary Prospectus”). The information in this Pricing Term Sheet supersedes the information in the Preliminary Prospectus to the extent it is inconsistent with the information in the Preliminary Prospectus. Terms used but not defined herein have the respective meanings assigned to them in the Preliminary Prospectus.
Issuer: Wintrust Financial Corporation
Security Offered: Depositary Shares (the “depositary shares”), each representing a 1/1,000th interest in a share of 7.875% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series F (the “Series F Preferred Stock”)
Format: SEC registered
Expected Ratings1: BB (stable) (Fitch) / BBBL (stable) (DBRS)
Size: $425,000,000 (17,000,000 depositary shares)
Over-allotment Option: None
Liquidation Preference: $25,000 per share of Series F Preferred Stock (equivalent to $25.00 per depositary share)
First Reset Date: July 15, 2030
Reset Dates: The First Reset Date and each date falling on the fifth anniversary of the preceding Reset Date
Reset Periods: The period from, and including, the First Reset Date to, but excluding, the next following Reset Date and thereafter each period from, and including, each Reset Date to, but excluding, the next following Reset Date
1 A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time. Each rating should be evaluated independently of any other rating.
Dividend Rate (Non-Cumulative): From and including May 22, 2025 to, but excluding, July 15, 2030, at a fixed rate of 7.875% per annum, and from and including the Reset Date with respect to each Reset Period, at a rate per annum equal to the “five-year treasury rate” as of the most recent “reset dividend determination date” (in each case, as defined in the Preliminary Prospectus) plus 3.878%
Dividend Payment Dates: Quarterly in arrears on the 15th day of January, April, July and October of each year, commencing on October 15, 2025
Day Count: 30/360
Term: Perpetual
Optional Redemption:
In whole or in part, from time to time, on any Dividend Payment Date on or after July 15, 2030, or in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the Preliminary Prospectus), in each case at a redemption price equal to $25,000 per share (equivalent to $25.00 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends to, but excluding, the redemption date
Any redemption of the Series F Preferred Stock is subject to the Issuer’s receipt of any required prior approvals by the Board of Directors of the Federal Reserve System and to the satisfaction of any conditions set forth in the capital guidelines or regulations of the Federal Reserve applicable to redemption of the Series F Preferred Stock.
Trade Date: May 8, 2025
Settlement Date:
May 22, 2025 (T+10)
It is expected that delivery of the depositary shares will be made against payment therefor on or about the tenth business day following the date hereof (this settlement cycle being referred to as “T+10”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in one business day, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the depositary shares prior to May 21, 2025 will be required, by virtue of the fact that the depositary shares initially will settle in T+10, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the depositary shares who wish to trade their depositary shares prior to May 21, 2025 should consult their own advisors.
Public Offering Price: $25.00 per depositary share
Underwriting Discount:
$9,187,700, reflecting 14,608,000 depositary shares sold to institutional investors, for which the underwriters received an underwriting discount of $0.5000 per depositary share, and 2,392,000 depositary shares sold to retail investors, for which the underwriters received an underwriting discount of $0.7875 per depositary share
Estimated Net Proceeds to Issuer, After Deducting Underwriting Discount (Before Expenses)
$415,812,300
CUSIP/ISIN for Depositary Shares: 97650W702/US97650W7020
Listing:
Application will be made to list the depositary shares on the NASDAQ Global Select Market under the symbol “WTFCN.” If approved for listing, trading of the depositary shares on the NASDAQ Global Select Market is expected to commence within the 30-day period after the original issuance date of the depositary shares.
Sole Book-Running Manager:
RBC Capital Markets, LLC
Co-Managers:
Keefe, Bruyette & Woods, Inc.
Piper Sandler & Co.
U.S. Bancorp Investments, Inc.
The Issuer has filed a registration statement (including a prospectus and prospectus supplement) with the Securities and Exchange Commission for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and the related prospectus supplement for the offering and other documents the Issuer has filed with the Securities and Exchange Commission for more complete information about the Issuer and this offering. You may obtain these documents for free by visiting EDGAR on the website of the Securities and Exchange Commission at http://www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in this offering, will arrange to send you the prospectus and prospectus supplement if you request them by contacting RBC Capital Markets, LLC toll free at +1 (866) 375-6829.
Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg email or another communication system.
Seems like a good time to give an update on the PennyMac trial: https://www.courtlistener.com/docket/68857557/roberto-verthelyi-v-pennymac-mortgage-investment-trust/
The basic backstory is that PennyMac is being sued for keeping a couple of their preferred stocks at a fixed rate after LIBOR disappeared rather than allowing them to float. Until now, the case had been going pretty smoothly (if slowly) for the plaintiff. The most recent update is that the California judge in the case approved a motion for “interlocutory appeal”. This means that 9th Circuit gets to hear an appeal of some of the contested legal matters in this case before they continue.
The first matter of appeal is whether a California law should even apply in this case, or whether it needs to be decided by a Maryland court since Pennymac is based there. The second matter is whether the “LIBOR Act”, which was passed to provide smooth transition to all the contracts that specified rates based on LIBOR, allows for the option of keeping a fixed rate instead of floating using SOFR as a base.
The good news for preferred shareholders is that the LIBOR Act part of the case seems pretty strong. It seems likely that the appeals court will rule that the Act requires these preferred stocks to float, and if this happens PennyMac will probably also be required to backdate this higher rate. The bad news is that jurisdiction issues are hard to predict, and it’s possible that the case gets dropped (and potentially restarted under weaker Maryland law) without any ruling on the LIBOR act part.
We’ll see where it goes. Right now I’m still holding PMT-B with moderate hope that it will see a boost if it’s decided that PennyMac needs to retroactively let it float.
A Ninth Circuit appeal can take eighteen months or more to be finally resolved.
Re muni exemption, I communicated with the Bond Dealers Assn , which had a website devoted to the topic:
response:
Its still at a standstill at this juncture. Potentially could see some tax text in the next 7 days
Brett Bolton
Bond Dealers of America
850-393-3728 Cell
You must have bought that annuity for rates to have increased so much today.
Af,
It’s amazing my negative predictive powers, huh? I funded a $250k 5 -yr yesterday . Still, 5.5 for 5 years from an A++ Best-rated insurer ain’t bad. Hoping we don’t have an uncontrolled epidemic.
Forgive me for some idle speculation.
Scenario: Markets are seeing a return to growth later this year accompanied by some amount of rising inflation. Worldwide liquidity is at a high level, in part due to the weaker dollar, according to Michael Howell, and might continue this way through 2025.
– Stock indexes head back up toward all-time highs.
– Long-end rates rise.
– Dollar up? Gold down?
These trends would continue until the narrative changes, e.g. unemployment rises or no progress with China or…?
The premise of the scenario is questionable. No doubt something different will happen.
Rocks, Thanks for thinking out loud. You kept it short, I have a tendency to wander out into the weeds.
Cheap borrowing rates:
I’ve mentioned before you can borrow against your securities using the options market at very attractive rates, much better than broker margin rates.
The link provided lists currently available rates / term lengths and how much is on offer at each rate and term. The full site included a chrome extension that will set up the order for you. I have not used the extension, rather I set the trade up myself so I cannot verify the extension works. You should note you may be able to borrow at better rates than these by placing an order at a lower rate and leaving it in as a limit. These are just the offers visible.
Check it out:
https://app.syntheticfi.com/cob
First time I’ve seen a non-paywalled link at BBG Law. Relevant article for any BDCs holding struggling loans.
Private Equity Is Dumping Angry Lenders in the Cheap Seats
https://news.bloomberglaw.com/business-and-practice/private-equity-is-dumping-angry-lenders-in-the-cheap-seats
Starting to sound like the bond market in the housing mortgage crisis in 2007 and 2008 when companies thought they were holding grade A bundles of loans until mortgage defaults started to rise and there wasn’t enough interest income to cover a return of 100 % on the dollar.
I still think P.E. should be held liable for loans taken out by the companies they own.
Notice the statement in the article that says even if the loans for these troubled companies are restructured with new money they end up failing anyway.
Thanks. Top notch article. The DelMonte chart is worth looking at and worrying about about if you own debt instruments directly or indirectly. At one point, all loans equal. Then some were made less equal. Now wonder, who owns the degraded paper: BDCs, CLOs, PE-owned annuity companies, ETFs, CEFs?
Ever see the “buy risky debt for income” website blah-blah that encourages, buy junk, why worry? Investors always recover most of their losses in the long run if a junkier company defaults and the assets are divvied up anyway? Looks like PE just changed the equation. Who knew that when you played musical chairs in grammar school you were getting financial advice?
The article reminds me of the Lumen “debt restructuring” that earned it a Selective Default rating from S&P because many bonds were pushed down the food chain. The company survived. Your investment didn’t. JMO. DYODD.
Bear, I had a recent comment on the BDC OCSL restructuring the loan for Singer. I did a little search on Singer. See where it was bought out by P.E that went on to buy other sewing machine companies. As of now, all sewing machines are made in China by several manufacturers and different brand labels of companies are slapped on them. Only one Western manufacturer left Bernina and that is a Swiss company.
I am sorry to read that Oregon tool is in trouble. That has been my brand of choice for my chainsaws.
A lot of these middle tier companies are going to be in trouble with debt load and lower demand with sales. Time line wise I don’t know if lower interest rates and a devalued dollar will be able to help a lot of these middle tier companies depending what percentage of their sales are domestic and export. Also, a lot of these companies depend on imported parts, with a devalued dollar it’s going to cost them more to buy those parts. Short term it’s possible we might see a loss of small and mid-size manufacturers here and this is who employs a major part of American workers.
Our decisions on investments are dependent on these Rube Goldberg contraptions of financial machines to pay out an income. I can see losing faith in some of these investments like insurance companies owned by P.E.
Jan 13-15, 2025:
DXY peak at 110.2, now 99.8
10-year t-note peak at 4.81%, now 4.28%
crude futures peak at 80.86, now 58.0
It can’t be a coincidence that crude peaked with the other two. One of many possible interpretations of the crude chart projects to 40. I’d venture a guess that if 55 doesn’t hold, 50 is likely.
I was expecting crude to hit the high 50s for the last two years, but I finally gave up. Buyers always held the line higher. And then suddenly here it is in totally unexpected circumstances. Now, who knows?
Rocks I keep hoping DINO hits 34.00 with the start of early summer.
ET reported increased volumes. Don’t underestimate the ability of consumers to burn cheap fuel…they over estimate its importance on their budgets and even the lowest wage workers will throw a hail mary on cheap gas before paying the rent or utilities.
volumes this steady in the face of higher mpg and electrification and wfh is kinda wild. China growth rates for energy also wild.
There are a few things I won’t underestimate: Farmers’ ability to overproduce, American consumers appetite for cheap fuel, and car dealers willingness to sell anything to anyone who is walking.
Confucius says: Man who walks is good used car customer
FWIW.
DYODD.
Beginning with the March Dividend (now 3 months: March, April, May), CLIP has started to outperform SGOV.
CLIP has paid (0.35+0.352+0.352) or $1.054 on a lower NAV and market price for the last three months.
SGOV, meanwhile, has paid (0.33498+0.34602+0.31329) or $0.99429 on a higher priced NAV and market price.
I have a load of it, plus SGOV, and USFR which has a higher 30d sec yld of 4.27% vs Clip’s 4.18% – per their sites.
Also have a lot of JAAA – pmt was up over 3% for the latest div, 30 d sec yld is 5.45% ( AAA CLOs)
To SteveA and Gary:
I have taken small positions in some of your choices as well as some others. I don’t consider them as suitable substitutes for MMFs for me because the price varies. This is where I stand now:
JAAA -16 cents/share; PAAA – 13 cents/sh; USFR +9 cents/sh;
TBUX +19 cents/sh; JPST +12 cents/sh; SGOV +3. cents/sh; and CLIP -5 cents/sh. Not only do I look at the dividend but I look at the stock price as well. Liquidating shares at a loss can greatly reduce your yield. Some of mine showing paper profits now have been negative in the past.
I will continue to hold small amounts in these but not as a substitute for a MMF.
Why do you suppose that is?
No idea why SGOV stopped outperforming CLIP.
SGOV has a fee of .095 vs CLIP of .07%, so that doesn’t account for the drop
this month: -3.19% and .0057%, respectively. Ck back next month.
Oops meant .09% for SGOV
Top CEOs heading to Saudi Arabia’s ‘MAGA in the Desert’ conference to boost investing in the US:
https://nypost.com/2025/05/06/business/elon-musk-mark-zuckerberg-and-larry-fink-slated-for-saudi-conference-next-week/
By James Franey
Published May 6, 2025, 10:44 a.m. ET
Top US corporate titans including Elon Musk, Mark Zuckerberg and Larry Fink are heading to Saudi Arabia next week for an investor conference — even as President Trump himself flies to the oil-rich kingdom to meet with regional heads of state, The Post has learned.
The Saudi-US Investment Forum — which one insider branded “MAGA in the Desert” — will be held on May 13. Other guests will include OpenAI CEO Sam Altman, Citigroup CEO Jane Fraser, Boeing CEO Kelly Ortberg and David Sacks, the White House czar for AI and crypto.
Government officials set to beat the drum for investing in the US include Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, sources told The Post.
There will be sword dancing and deal making galore!
Some say the road to politically popular $2.00 gasoline runs through Saudi Arabia. Travel plans of high US officials to the MidEast have been noticed. Likewise, the pre-trip OPEC output increase in the face of declining prices. The Saudis claim their overproduction will punish overproduction by errant OPEC members. Just like eating more cupcakes will promote weight loss.
If the price drops continue, US shale oil producers will be collateral — or intentional — damage. IMHO, there are a lot of factors influencing oil prices mostly downward (recession, Ukraine settlement) , only one upward (US, Israel, Iran) Under $60. US oil profits become challenging. Time to trim US E&P holdings? Sentiment: Long energy and bearish. JMO. DYODD.
.
Oil prices will drop to $40 range following OPEC+ decision, predicts oil analyst Paul Sankey
https://www.youtube.com/watch?v=8Zs26E-QzLI
As Munger used to say, if you can buy oil cheap buy it elsewhere. Keep your assests in the ground until no one else has them. Can’t imagine a $7.00 starbucks coffee, $8 Big Mac and $2.00 gas/gallon. Loof at the costs and efforts. But consider the asset value left in the ground….
A follow-up to a CNN article that Steve A posted on April 24:
Bessent says US has not engaged in trade talks with China, contradicting Trump
Joey Garrison, USA TODAY, May 6, 2025
WASHINGTON ― Treasury Secretary Scott Bessent said the Trump Administration still has not engaged in trade negotiations with China, contradicting previous claims from President Donald Trump that the U.S. is talking to Beijing about tariffs.
“China we have not engaged in negotiations with as of yet,” Bessent told the House Appropriations Committee at a May 6 hearing.
Leaders from the world’s two largest economies have not blinked after the Trump administration imposed tariffs totaling 145% on imports from China, prompting Beijing to slap 125% tariffs on U.S. exports. Bessent has said it’s up to China to de-escalate the trade tensions because they sell more goods to the U.S. than the U.S. does to China.
Yet Trump has signaled multiple times in recent weeks that trade talks with China are underway. “Everything’s active” Trump told reporters on April 23 when asked whether he’s actively talking to Chinese leaders.
Trump, in an interview with Time Magazine that published April 25, said he won’t reach out first to Chinese President Xi Jinping to discuss tariffs but said Xi contacted him. “He’s called. And I don’t think that’s a sign of weakness on his behalf,” Trump said.
Shortly after Bessent’s comments, however, Trump told reporters on May 6 the U.S. is “losing nothing” by not trading with China, while acknowledging negotiations haven’t started. “They want to have a meeting,” Trump said during a bilateral meeting with Canadian Prime Minister Mark Carney. “We’ll be meeting with them at the right time.”
“I have not met with them ‒ no,” Trump said. “You would know if I met. I would tell you.”
China’s Commerce Ministry on May 2 said Beijing is “currently evaluating” information conveyed by the U.S. through certain channels but emphasized China won’t negotiate trade with the U.S. until Trump cancels the steep reciprocal tariffs placed on Chinese goods.
I’ve been reading about the decline in container box ships from China, and the inventories that businesses have developed to buy some time for negotiations. Even if the advance business planning succeeds, these tariffs will cause inflated prices for some parts of the economy. These developments will have an impact on select areas of the economy, and on the preferred stocks that these companies have issued, much like the California fires had a direct impact on the preferred stocks of EIX. Facts and information are key components of successful investing.
I can’t improve on Private’s last comment to Steve A’s April 24 post.
Fool me 50X shame on me.
goin-
May 6 “US-China Trade Talks to Start This Week as Tariffs Start to Bite”
https://finance.yahoo.com/news/us-china-trade-talks-start-041902171.html
The consensus among market participants and analysts appears to be that the negative impact of tariffs will be largely confined to the next two quarters, and further, these expectations are part of current market prices.
IMO, anything is possible and I’m under no pressure to take a stance now. I don’t like buying/selling on headlines, especially when the situation is developing and it’s too soon to see the impact of tariffs. And that includes the sector and company-specific impacts you mentioned, on which front I have no guesses.
Taxes raise costs in the present but aren’t the cause of spiraling Inflation long term. That’s the flaw in the “tariffs cause Inflation” argument people keep saying. It’ more accurate to say tariffs raise costs now. … Or am i just making the old “inflation is transitory’ argument.
Wall Street inflation, meaning CPI as a YoY rate of change, is what we watch to understand financial markets. Main Street inflation, meaning CPI as a cumulative rising line, was a big factor in turning voters against Dems.
CPI from 1951-present.
https://www.tradingview.com/x/9xNOc9rp/
martin g – mathematically, I believe that you are right that, while tariffs are inflationary, the inflation could be transitory or static without compounding annually. But, this assumes that the post-tariff product supply remains constant. On the other hand, if a product-specific tariff causes shortages due to panic buying or dramatic cuts in the supply (say suppliers establish more reliable buyers in other countries), then the cost for that product can compound if we don’t establish other supply chains or produce that product. Further, US products will cost more due to higher labor rates, and those costs will go up more every year, compounding at a higher $ amount than the same rates applied to countries with lower labor rates.
Ultimately, tariffs will hit the wallets of Americans who are already tapped out, forcing them to cut elsewhere or do without. While most of us should cut back (I could certainly do without most of my many tools and closets full of clothes I don’t wear), this will hit corporate profits and increase loan defaults, which can be a very bad thing for a country built on massive debt.
I admit that I only took two econ classes in college (which was 2 more than I wanted), but we seem to be violating the absolute rule of TANSTAAFL – there ain’t no such thing as a free lunch. While I might agree with some of the administration’s goals, I believe that they are trying to invert the manufacturing sequence. I also believe that there are some bears that we should not befriend, and some sleeping bears that we should not poke. Perhaps we shouldn’t blame other countries for problems that we created and grew. And, above all else, we should be truthful and avoid making false statements that our staff publicly contradicts two weeks later. Or better yet, use the diplomatic phrase of “We will not discuss trade and tariff negotiations. All negotiations will occur behind closed doors. We will inform the public when we have signed agreements.”
This seems like a confusing change From ADAMS ADX:
On April 17, 2025, Adams Diversified Equity Fund, Inc. (NYSE: ADX) declared a distribution of $0.46 per share payable May 30, 2025 to shareholders of record on April 28, 2025. The distribution is optionally payable in additional shares of common stock (default) or in cash by specific stockholder election received before 4 p.m. (ET) on May 16, 2025, the valuation date. The issue price for shares will be the Fund’s closing NYSE market price on the valuation date.
I’m pretty sure when I owned it in the past, you got cash unless you opted in for shares. Why do they say optionally payable in shares (default) ? !
Gary maybe Maine or Bear might know. One of them mentioned ADX on here and said it’s better to own when the market is going up. Not so much in a downward market. Reminds me in a way of GAM just one is a fund and the other is a asset manager I think.
adx gave me shares default, usa gives me cash default, and I think cet is cash default.
What is your brokerage account setting for your dividends? Cash or reinvest?
IMHO, there is no change. It is more like a reminder. Adams typically reinvests dividends in ADX company stock. If you set your brokerage account to receive cash, that overrides the reinvestment option. The current May 30 dividend should be paid the same way as the prior one.
FWIW, I set my dividends to pay cash. Others may prefer to reinvest. JMO. DYODD.
Yes- I am set for all cash for all stocks. New to etrade and not sure if I’d get cash.
Still, the wording could be better.
Note- had to switch from Safari to Firefox- the button to open the options would keep saying ‘refresh’ in Safari.
thanks to all
Adams has been issuing shares as the default for their registered investors (which are probably only about 10% of the total) since something like the 1960’s.
I used to get new stock certificates of a few shares each every quarter when I owned it in the 1990’s and 2000’s….
gold at a discount:
Have a 2% cash back credit card?
This morning you can buy a 100 oz gold bar at Costco for $10,899. The spot price value of 100 g as I type this is $ 10,886.41, so, with 2% back you’re getting ~about a $215 discount.
I’m not interested in this after finding how inefficient it is to sell physical gold, but it’s a deal if you’re a nutjob survivalist who thinks he /she will need gold for transactions.
Note: Sorry for insulting you if you are reading this from your decommissioned missile silo.
That should read “100 gram gold bar”
> I’m not interested in this after finding how inefficient it is to sell physical gold, but it’s a deal if you’re a nutjob survivalist who thinks he /she will need gold for transactions.
Very rude. Going to stop holding a spot for you in my silo.
Since when is selling gold hard when you just walk into a reputable coin store and sell for melt when discussing gold bars? Oh sure.. depending on their sales they might want to pay 1-2% below melt or slightly above if they can sell it in 24 hours but I never considered that hard. But then I collected rare coins in a past life so I understand how they operate. I would probably just drive up to Rare Coins of NH with an appointment which is a very reputable coin/bullion dealer. But then that would be for a large sale. Not a few ounces. A few ounces any local coin store could handle. When gold spikes and becomes volatile the prices dealers pay has to be back of spot a bit. In the time it takes for the cash/check to be handed over in 10 minutes the price could swing by a few percent.
Maybe I missed the hard part of the convo? Was it dodging taxes?
Interesting FC , I used to have a coin dealer here locally who treated me well. I was saddened when he decided to retire and move to Arizona. Found that quotes varied a lot between dealers. Just because I used to go to Sacramento a lot I found better deals over there.
It was especially hard when I was left in charge of selling my father in law’s coin collection he collected from pocket change to distribute the proceeds to the grandkids. I had a 1909s dvb? Penny to sell. Several dealers were not interested due to fakes I guess. Finally had a dealer offer me 425.00 for it.
fc,
when I said “inefficient” I was referring to being offered less than spot for MS70 proofs, and the variability between dealers being so great. At III we are used to a single market with an NBBO, and you even get that with GLD, for example. I was offered anywhere from $150 per oz over spot to $200 per oz below. By the time I told the $150 over buyer I wanted to sell he begged off because I’m rather certain no coin shop or individual dealer has a local buyer for a bunch of gold eagle proof sets. From talking at length to Calif dealers they all work off wholesaler price sheets for stuff like I have and premiums for proofs have collapsed.
What is the unit of retail sale? Does Costco sell gold by the bar or by the gram? Remember, during the pandemic, the Kirkland Signature tissue paper roll shrank from 425 to 380 sheets.
Just Whistling Dixie here DXY but IMHO, Invesco Currency Shares should offer a cross-asset Gold-to-Tissue Paper ETF. Even though this might cause questions about the merits of physical toilet paper versus TP squared (paper toilet paper.) JMO. DYODD. Long: gold
New Kids on the Block for money market funds, just not in your neighborhood. Two firms have brought money market funds in an ETF wrapper for the first time. iShares, the mammoth ETF house owned by Blackrock has two, PMMF and GMMF. Texas Capital Bank has one, MMKT. Only challenge is that not all brokerage’s allow you to trade these. They rightfully see them as direct competition with their own money market funds and do not want to lose that business. You will have to check and see if your brokerage offers these.
All other money market funds to my knowledge are traditional open ended mutual funds. You put your buy/sell order in before the 4:00PM Eastern Time close and later that evening the trade executes. While we assume that all shares trade at $1.00, there is a possibility for some MM funds to “break the buck” and trade for less than $1.00 a share. Won’t go into details here because it has been widely discussed, even if the masses do not understand it.
ETF’s on the other hand trade freely through the regular trading hours of 9:30 to 4:00 Eastern, but also can trade in the pre-market and aftermarket, aka extended hours. They do trade with a bid/ask spread, hopefully very small. However, looking over the trading history of the three ETF’s, you see what I call “mini flash crashes” where the price spikes higher/lower. Super easy to mitigate that risk by using limit orders when you trade. And since you should get a fill in way under one second, it should not be an issue. All three of the ETF’s have nominal prices ~ $100.00, so unless your brokerage allows partial share fills, that is a drawback compared to typically much lower minimums for traditional MM funds.
Both iShares and Texas Capital are capping their expense ratios which likely is why they are out yielding the open-ended offerings. Not clear how long they will continue to do that, but in the worse case if they substantially increased them, the ETF’s would no longer be competitive
You are not going to buy a new yacht with the slight yield advantage the ETF’s offer, but there might be some pennies to pick up.
Here are the 7-day SEC yields at Friday (5/2/25) close
CSV format per 2WR: ticker, 7-day SEC yield, fund name
PMMF,4.33%, iShares Prime Money Market ETF
MMKT,4.28%, Texas Capital Government Money Market ETF
VMRXX,4.25%, Vanguard Cash Reserves Federal Money Market Fund
VUSXX,4.23%, Vanguard Treasury Money Market Fund
SWVXX,4.17%, Schwab Value Advantage Money Fund
GMMF,4.16%, iShares Government Money Market ETF
SNVXX,4.08%, Schwab Government Market Fund
SNOXX,4.05%, Schwab Treasury Obligations Money Market
FDRXX,4.03%, Fidelity Government Cash Reserves
SPRXX,4.03%, Fidelity Money Market Fund
SPAXX,3.98%, Fidelity Government Money Market Fund
Link to iShares write-up on PMMF and GMMF
https://www.ishares.com/us/literature/product-brief/mmf-etf-product-brief.pdf
Hmm. I’m not sure what these really get you over something like SGOV or BIL. I suppose you shed some extremely small duration risk.
But I also see an extra 11 bps of expenses for PMMF over SGOV.
O said: “I’m not sure what these really get you over something like SGOV or BIL.” O, they are fundamentally different in that the new MM ETF’s attempt to maintain a constant NAV by following the money market rules under Rule 2a-7. That mandates much shorter duration that SGOV/BIL, which have durations in the .11 to .15 years. Maintaining a constant NAV is NOT the primary goal of SGOV/BIL. iShares must have thought there was a market for the new ETF’s, otherwise they would just recommend everybody use SGOV instead.
If the two iShares offerings get wide acceptance, I would expect their expense ratio to fall from 0.2% to SGOV’s 0.09%.
SGOV and BIL are fine choices, just depends on individual investor risk tolerance. Some investors are not comfortable taking as much risk to principal as they have, even though we might think it is negligible.
MMKT switched from monthly to weekly dividends. The latest div was 7.9 cents. Multiplied by 52 = $4.108.
https://www.tradingview.com/x/DakUTD8p/
If the ETF’s have mini -crashes, then I/ you/everyone on III need(s) to run an envelope program to sit XX amount below the bid/ above the offer.
I did manually sit below the bid with BOXX for awhile.
there is another MM etf that seems to be flying under the radar, ticker JPST a JP morgan product With a 7 day sec of 4.52 and ER o.18
Less safety than the gov’t based funds = more$.
FYI
I thought Lyn Alden’s newsletter was pretty interesting.
https://www.lynalden.com/may-2025-newsletter/
Thanks Greg, I have always found Lynn very insightful. It’s going to be messy. The shock and awe will be short lived. Playing from a position of strength that isn’t that strong when other players in the game call your bluff. This is going to be a long term effort , not a short term one. it’s inevitable that change has to happen we can’t keep going in the direction we have been going and there has to be a plan but it has flaws. The elites will be better off and make money off the changes and the rest as Ron Weasley said, “you’re gonna suffer but you’re going to be happy about it”
https://www.youtube.com/watch?v=KjmtY1mYddM
Now I just have to figure out how to make the right investments myself.
Anyone getting blank screens for quotes that are kept on their Fido Active trader pro screen? ( new quotes work but opening it in the morning gives all black boxes). Started last week- it says I’m up to date.
thx
Also, strange: Fido has TECTP post ex today last: 10.39, B10.34 Ask 10.39
Etrade has been showing last: 10.25, B 10.29 A- 10.40
What gives- diff trading hubs? Seem like a big diff.
Trump’s actions now remarkably similar to Nixon’s in 1971.
https://alhambrapartners.com/weekly-market-pulse-deja-vu-all-over-again
That article wants to discuss the economy, Nixon, and etc.. and fails to mention the oil shock/energy crisis of the 70s? The one thing that caused the most problems for economies world wide? Seems disingenuous.
Fc-
The two conditions I thought of that distinguish the two eras are energy, as you mentioned, and the level of US debt, which was low in the 1970s. I don’t think the author intended to make an exhaustive comparison. My takeaway was to think harder about the possibility of stagflation.
Rocks, as always thanks for posting these articles. A lot of people on here are old enough to remember this era and some like myself lived it but didn’t completely know what was going on.
Middle class parents who moved up in life in Southern Cal. Bought their 2nd home brand new in 69. 5yrs later the war ended, spending was cut back with the war ended and other programs like the Apollo space program cut back, The oil embargo hit, even if there were tariff’s cheap imports like VW and Toyota cars beat American cars for price and mileage. Inflation hit and one parent lost their job. Things got worse as unemployment went up and people moved out of Calif. to places it was cheaper to live.
Starting to sound familiar?
I lived in Southern California in 1969, just married 1 year, bought our starter home for $13,000. My job paid all the bills, wife didn’t go to work until 1981 when my son was 10 years old. Never got laid off, but things did get a little slow around 1974. Didn’t care about new car prices, drove used ones and a motorcycle. Life was pretty good, just didn’t know it at the time.