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.
Bloomberg ~ Top C-Suite Stock Sellers Before Tariff Market Rout
1. Zuckerberg ~ Meta ~ $733,483, 827
2. Catz ~ Oracle ~ $705,455,414
3. Arora ~ Palo Alto Networks ~ $432,371,610
4. de Groen ~ Nutanix ~ $409,805,000
5. Davis ~ Axis Capital ~ $399,999,882
6. Cohen ~ Palantir ~ $337,239,916
7. Dimon ~ JPM ~ $233,776,513
8. Lefkowski ~ Tempus AI ~ $231,462,927
9. Sarandos ~ Netflix ~ $194,880,917
10. Boersma ~ Dutch Brothers ~ $189,611,197
Michael Howell:
“BTC can act like a real asset given its fixed supply. My main question over BTC is that its ‘value’ is its network. This requires expensive energy to exist. Gold does not.”
Me:
Yes! BTC’s value is its network. The fixed supply just puts BTC on the same playing field as other assets. A fixed supply is not a unique property.
Rock,
I am not sure posting so many links and blurbs to other stuff is really that great an idea. We all know how to get to other sites to read news, blogs, social media, etc. Yea this is the sandbox page but at what point does all of this become overwhelming?
This site appears to only have true value when it is lasered focus on a very defined scope. I can’t be the only one who has no desire to attempt to keep up with this and wade through so much stuff. This place will simply not scale to how it is getting used. Just my opinion. We have so much random stuff now days I am losing interest to even try to find relevant topics.
I really wish we had the ability to follow specific posters. For now, I manually track a few standout voices using my ISS reader and search for their names, but it’s a bit of an old-school process. Otherwise, I mainly look at the Reader alerts and highlight the unread ones, which, let’s be honest, is about as active as a buy-and-hold investor during a bull run. Hardly any fresh ideas, mostly just commentary on the wind, which seems to be blowing in every direction.
Despite the market’s best attempts at shaking things around, I’m still 100% invested. The past three weeks have been a steady game of legging down and rotating out of preferreds that moved the least into ones that have dropped a solid $3-4. It’s been quite the shuffle—like rearranging deck chairs on a ship that’s doing circles—but now I’ve got a sprawling collection of almost 200 preferreds and BBs spread across the board.
Fc-
I’m a macro guy and right now I can’t think of anything more important to my investments than macro directions and trends. I read a lot and post only the choicest, most relevant items here. I try to be clear and succinct so that my content is easy to read or SKIP at a glance.
Rocks,
You get around to reading a lot more different sites than I do. Macro I understand. Continue to post or not, up to you. I like reading some of it.
If you were expecting DOGE to have an impact, the numbers aren’t good, according to this NY Times chart.
https://x.com/SpencerHakimian/status/1913006079241314799
I think I saw an Elon comment suggesting that it wasn’t going as he had hoped/planned.
Eric Basmajian. Inescapable math. Isn’t reduced consumption on the administration’s check list?
“You can’t run big budget deficits, small trade deficits, and also maintain high consumption and high private investment.
We choose to run big trade deficits.
If you close the trade deficit without addressing the budget deficit, you must reduce consumption or private investment.”
Economist Lacy Hunt’s Hoisington Review for Q1 2025. Some here dislike Hunt. It would be helpful if those people focused on the content and not on Hunt. We’ve heard it before. Hunt’s analysis is always interesting and worth considering.
https://hoisington.com/pdf/HIM2025Q1NP.pdf
Hunt runs bond funds and IIRC the conclusion of his reviews is generally favorable for bonds. Here’s this quarter’s:
“Such an uncertain environment of tepid or negative economic growth will be conducive to a downward trajectory of long-term Treasury rates.”
In the interview I posted yesterday, Julian Brigden came to the opposite conclusion: long yields will trend up. Economist vs. market analyst. Whoever is right makes a big difference to investment decisions. Both could be right depending on the timeframe. Brigden was looking beyond a downturn, as I remember. Both see recession risk. Hunt is critical of the Fed for not cutting rates now, based on his favored data and historical precedent. Serious stuff.
Excerpt from John Mauldin’s weekly newsletter.
“My friend Mark Mills will be presenting at the SIC on energy, but he is also an expert on all sorts of government activity. In a recent paper at the Manhattan Institute he noted that “…complying with federal regulations now costs $29,100 for large companies and $50,100 for small firms—per employee, per year. Tomorrow’s large firms start as small ones, and over 90 percent of manufacturers are small firms that account for 40 percent of manufacturing employment.”
Since 2017, there have been 550 major rules costing over $100 million imposed on manufacturing businesses. The total cost of regulations is $80 billion a year. Mark argues with real data that regulations are far more destructive to jobs than technology. Technology in fact creates jobs.
Now think about how much regulation costs Chinese or other foreign manufacturers. And we wonder why US manufacturers have trouble competing! Some regulations are obviously needed, but bureaucrats are incentivized to increase regulations, as it increases their budgets and importance. Or creates opportunities when they go into the private sector. The exact opposite of what is needed. We will see what Trump can do.”
Those compliance cost figures per employee are very suspect. Take a big company , Walmart for example, and you’d get “compliance costs” of $46 billion. That number is just absurd unless you allocate 100% of many expenses to “compliance costs” when the reality is only a small portion of a particular job or expense could be properly allocable to compliance.
I seriously doubt the figures someone pulled put of thin air to make a point.
Show me the line item on the income statement.
lt-
I’m glad you pointed that out. The numbers seemed too large to me. Do they include FICA and Medicare?
Those arguing for reduced regulation might be prone to exaggeration. Everything’s political.
Interesting, unverified. Significance? Chart at link.
“Tax cuts account for 38% of the national debt today, while recession responses and spending increases each caused 29%.”
https://x.com/steverattner/status/1910652766390804886
Today’s Daily Spark from Torsten Slok is a must read. Use the link on Saturday.
https://www.apolloacademy.com/the-daily-spark
Here’s the text without the charts:
The US economy has been the envy of the world for decades—the biggest economy in the world with strong economic performance and open access for the rest of the world to consumers, investments, and capital markets.
The US is also the freest trading market in the world (2nd freest considering just financial friction/1st considering financial and non-financial barriers), and the administration is not wrong to want to adjust the terms of trade to position the US fairly and to insist on a level playing field for US consumers.
However, tariffs have been implemented in a way that has not been effective, and there is now a 90% chance of what can be called a Voluntary Trade Reset Recession (“VTRR”), see the first chart below.
The administration inherited an economy with strong growth, 4% unemployment, positive hiring, and a substantial tailwind from investments. US and international investors are building infrastructure, next-generation factories, and data centers. The Inflation Reduction Act increased capex, and the US was poised for a substantial increase due to energy supply additions, increased defense production, and deregulation.
But implementing extremely high tariffs overnight hurts many businesses; particularly small businesses because the tariff must be paid by the business when the imported goods arrive in the US. Small businesses that have for decades relied on a stable US system will have to adjust immediately and do not have the working capital to pay tariffs. Expect ships to sit offshore, orders to be canceled, and well-run generational retailers to file for bankruptcy.
To make exceptions for large businesses that have the flexibility and resources to handle unforeseen expenses but not small businesses does not make sense. The challenges for small- and medium-sized enterprises are now a macro problem for the US economy, where small businesses account for more than 80% of US employment and capex, see the second and third chart below.
One way to quantify the coming negative impact on GDP is to compare the current tariff increase with the tariff increase observed during the trade war in 2018. During the 2018 trade war with China, the US average tariff rate increased from 2% to 3%, and studies show (here and here) that the impact on GDP was between 0.25% and 0.7%. Using the smallest of these estimates for the current tariff increase from 3% to 18% shows that the negative impact on GDP in 2025 could be almost 4 percentage points, not including additional non-linear effects because of the current increase in uncertainty for consumer spending decisions and business planning.
What can be done to avoid a recession? It is not too late to modify the course. For Mexico and Canada, there is a unique opportunity for the US to move first and get an agreement where labor, capital, and natural resources can be efficiently used in the North American economy. For any country that reduces tariffs to zero, the 10% tariff could stay in place, giving 180 days to negotiate non-tariff barriers, at which time, if agreed, the 10% is removed. For China, one approach could be to keep tariffs in place on autos, solar, and other strategic product groups. For all other products from China, tariffs can be gradually phased in over a period of, say, 18 or 24 months.
The bottom line: If the current level of tariffs continues, a sharp slowdown in the US economy is coming.
What happens to CEF preferreds where the CEF is diversified stocks if the market falls 50% in a year, then begins to fall more the next year?
Will the funds be redeeming some, or would they merely have higher credit risks?
I’m curious because I have not owned mine for very long and I’m just thinking through scenarios. What did happen in 07-08?
Lt no idea maybe someone else can provide some color.
I am only answering because our risk reward mentality changes over time and situation. I got burned in the Dot.com bubble so I hid in a Bond mutual fund in 2008 and didn’t come out of my bomb shelter until 2012. I didn’t lose any money, actually made money but not as much as if I had gotten back into the market sooner.
If they are required to stay under 200% coverage then they must do something to maintain that level. Partial redemption is one way to do it. There are other ways such as buying or selling off assets, issuing new commonstock or whatever, and probably some other techniques. Credit rating may go down but they are still required to follow the rules.
Martin, don’t you mean above 200% not under?
Here is a link from the Investment Company Institute to start your research. “Closed-End Funds and Their Use of Leverage – Frequently Asked Questions” https://www.ici.org/faqs/faqs_closed_end
Under the topic: “What are the regulatory limits on a fund’s use of leverage?” you will find …”for each $1.00 of preferred stock issued, the (closed end) fund must have $2.00 of assets at issuance and dividend declaration dates (commonly referred to as 50 percent leverage). ” As I read that, CEFs are required to meet leverage requirements at only two points in time, not continuously.
CEF Debt and preferreds are called “’40 Act leverage.” New to me, Fidelity says there is an ummm loophole called “Non-’40 Act leverage.” Worth a read. JMO. DYODD.
Leverage https://www.fidelity.com/learning-center/investment-products/closed-end-funds/leverage
Interview of Julian Brigden again. Excellent. Answered many of my questions and confirmed some of my views.
https://www.youtube.com/watch?v=cq6_7Xue4eg&t=1434s
For the first 1/3 of the video, YouTube kept interrupting with long commercials, no skip. I learned to click on the “The Monetary Matters Network” at the lower left, then click on the interview icon. That brought back the interview at roughly the same spot.
This was good. Here’s a summary:
Core Points
Understanding the Dollar and Its Influence: The video begins by emphasizing the importance of the US dollar in the global economy. A decline in the dollar can lead to profound economic implications, highlighting that financial markets are increasingly interconnected.
Julian Brigden’s Track Record: Julian Brigden, co-founder of MI2 Partners, is recognized for making accurate predictions about market trends relating to the US dollar, credit spreads, and stock prices. He suggested that the dollar’s decline would coincide with widening credit spreads and a falling stock market.
The Reflexive Cycle: Brigden explains the concept of a “reflexive cycle,” where rising equity prices in the US lead to increased consumption and spending. This cycle is driven by three economic effects: the wealth effect from rising stock prices, corporate behavior tied to stock performance, and the US’ tendency to import more, which deepens the current account deficit.
Policy Interventions: Policy changes under the Trump administration aim to lower the dollar value without weakening the underlying economy. Historical precedents demonstrate that attempts to devalue the dollar have been made before, leading to significant impacts on trade balances and foreign investments.
Market Predictions and Risk Assumptions: Brigden discusses market predictions, indicating that a weaker dollar is likely, and he anticipates further declines. He expresses concern for US domestic investors who have significantly invested in equities despite external warnings.
Investor Behavior: Bridging from the previous point, Brigden analyzes that US domestic investors are heavily invested in equities, which carries the risk of significant losses should the market continue to decline. Foreign investors, conversely, may engage in profit-taking, likely leading to further market declines.
Immediate Economic Outlook: The conversation shifts to imminent threats to economic stability such as rising inflation and potential recessionary pressures. Various indicators suggest that economic conditions may continue to worsen, challenging the US economy’s resilience.
Tariffs and Economic Consequences: The discussion turns to tariffs, explaining how current administration practices may lead to stagflation. The revenue generated from tariffs could hinder growth and investment while adversely affecting consumer spending.
Implications for Bonds and Stocks: Brigden converses about the bond market’s past behavior during market fluctuations. During periods of stock market downturns, bond prices typically rise; however, this time may be different as investors adjust to tariff-induced market uncertainty.
Long-term Structural Changes: Over a more extended period, Brigden posits systemic shifts are inevitable as the US transitions from a highly financialized economy to one that emphasizes more domestic production and consumption.
Key Conclusions
Dollar Dynamics are Key: The dollar’s strength or weakness directly affects the stability of global markets, necessitating attention to its fluctuations in financial analysis. As the dollar declines, it could lead not only to capital flight from US assets but also impacts the purchasing power of US consumers.
Economic Transition Indicator: The current administration’s policies indicate a shift towards re-industrialization and away from a consumption-led growth model. This transition could have necessary long-term benefits but short-term pain, especially for equity markets.
Investor Sentiment: There exists a notable disconnect between domestic investor sentiment and market realities. Overexposure to equities may leave these investors vulnerable to sharp corrections as external factors shift, particularly with riskier positions.
Urgency in Market Response: There is an urgency for investors to reassess and possibly recalibrate their portfolios in anticipation of upcoming market volatility. Heightened market conditions suggest that a thorough analysis of asset classes is more crucial than ever.
Uncertain Economic Growth: Despite projections of increased employment and consumption, the potential for economic stagnation or recession could counteract any advantages from tariff revenues. It is imperative to closely monitor foundational economic indicators to avoid being caught off guard.
Tariffs as a Double-Edged Sword: While tariffs serve as a tool for adjusting trade balances, the risk of creating a stagflationary environment where inflation rises, and economic growth stalls cannot be ignored. Thus, a careful evaluation of their long-term efficacy is required.
International Capital Flows: The recalibration of capital flows between the US and foreign markets indicates that as investors withdraw from US equities, the associated shifts could result in a more bearish outlook for the US market, necessitating heightened vigilance.
Long-term Bearish Sentiment on Treasuries: Long-term forecasts suggest bond yields will rise. This trend will persist unless there is a coordinated response from global central banks. As such, institutional investors need to adjust their strategies with this outlook in mind.
Gold as a Safe Haven: With growing financial uncertainties, gold is posited as a favorable investment. It presents an avenue for wealth preservation through times of economic instability, even as current market movements may reflect shorter-term volatility.
Need for Strategic Planning: Investors should adopt a long-term strategic planning mindset focused on macroeconomic indicators and potential shifts. It is essential to stay informed and adaptable as these evolving economic conditions will impact performance across asset classes.
Important Details
Research Service Discount: Monetary Matters listeners have the opportunity to access Julian Brigden’s research service, Macro Capture, with a 10% discount by using the code MM10 for annually and MM10Q for quarterly memberships.
Tariff Rates: Specific tariff rates were highlighted, with China facing over 125% tariffs and reciprocal tariffs for other countries starting at 10%. These rates signal an immediate tactical approach by the US to reshape trade relations.
Reflexive Cycle Explained: Brigden elucidates how financial dynamics create a cycle where asset purchasing influences economic fundamentals, thus establishing a relationship between rising stock prices, consumption patterns, and dollar strength.
Investor Behavior in the Face of Fluctuation: There has been a notable trend of US domestic investors ‘buying the dip’ in equities. This pattern could be detrimental if the anticipated market corrections do occur, potentially exacerbating losses further.
Impact of Foreign Investment on US Markets: Foreign investors have historically benefitted from US equities through currency gains. A potential decline in the dollar may lead to considerable changes in foreign investment behavior, leading to significant shifts in the markets.
Long-term Structural Adjustments: The current administration is seen as pursuing a radical rebalancing of the economy, targeting improvements in domestic industry. The implications of these changes may be substantial, calling for a thorough consideration of policy effects.
Budgets and Revenue: The administration has pinned a significant revenue expectation from tariffs, estimating a potential $2 trillion over ten years, suggesting that this revenue could play a pivotal role in managing budget deficits.
Market Correlation with Economic Indicators: There is considerable emphasis on monitoring labor market performance and economic metrics in light of potential recessionary signals, especially for the labor market which historically shows lagged responses to downturns.
Behavior of Central Bank Policies: The discussions surrounding the Federal Reserve center on its approach to interest rates in light of inflation and recession risks. The importance of maintaining stability in interest rates and overall market confidence is highlighted.
Monitoring International Markets: Brigden encourages vigilance around foreign markets, indicating that strategies should adjust in anticipation of broader global economic trends as capital flows and investment behaviors shift.
Jim-
Thanks! Really well done.
Jim, Thanks for posting. The one of many hidden dangers is this is a long term change in the economy. To achieve this is going to require large capital expenditures that may not appeal to businesses with the unknowns of a stable economy and demand.
The effort to devalue the dollar at the same time going to higher cost domestic production means it will cost consumers and businesses more of their dollars to buy something produced here. This will cause less demand unless people have more income to spend which again is inflationary.
The main advantage overseas markets have is the cheaper labor.
This brings up the dreaded specter of falling wages which may only happen if people are forced to work for less money because jobs are scarcer. This would be one way to have less inflation if we had a bad crash in the economy.
This is one way the drop in equities could happen that Brigden is talking about.
Should there be concern for California/NJ/PA/NYs Munis due to Rep Nancy Mace(R, SC) trying to push a “No Tax Breaks for Sanctuary Cities Act” (H.R. 1879)? The tries to take away tax exempt status for any state which has sanctuary jurisdictions.
https://www.reddit.com/r/bonds/comments/1k1uo53/hr_1879_a_potential_financial_tsunami_for/
I own enough underwater munis already.
She is not even on the House Financial Services Committee. The committee chair, French Hill, is said to favor the muni exemptions. How can she be of concern? Bills come from the committee. What is important are the committees and their members. It is difficult to overcome a chairperson on these committees. Maxine Waters is the ranking member, she also supports muni exemptions. One also needs to understand the Senate committees and the conference process. Especially if one is interested in munis.
Normally I would not take this seriously. But these are wild and abnormal times. French Hill was chosen to support the pro crypto agenda and beholden. This act punishes the blue states. If the president wants to strong arm support, he can.
No.
Here is the link to the Bill.
It was referred over a month ago to Ways and Means. Financial services has nothing to do with it.
Steube is one of the co-sponsors and is on the Ways and Means Committee. If it had any chance of passing, it would have had mark-up hearings by now.
https://www.congress.gov/bill/119th-congress/house-bill/1879/text
Committee hearings can be viewed here:
https://democrats-waysandmeans.house.gov/legislation/hearings/all
You would think that tax legislation would be top of the list of stuff to have hearings on, but crickets…
Could it become law at some point?
Possibly, but HIGHLY unlikely. Tax legislation that can pass W&M is subject to a markup usually pretty quickly after introduction.
I haven’t read this article yet; perhaps it’s good.
“This is called ‘capital flight'”
https://www.noahpinion.blog/p/this-is-called-capital-flight
What I find interesting is the fourth chart comparing the dollar index to the 10-year treasury yield. It would be better if the chart covered more than two years. Weaker economies with more uncertainty pay higher yields on their currencies compared to stronger economies. It looks like the market gave the dollar a downgrade. What’s your take?
So, what happens if trump is able to fire Powell and install someone sympathetic to his wishes?
Do we see rates go back to ZIRP, or a significant lowering of rates in a very short period of time? This might actually help if we can refinance the US debt at lower rates. But what about the unintended consequences to markets and the economy? Obviously, we can’t foresee all those until the pieces are put into motion.
Do we watch as inflation roars back with cheap money?
Do we watch the debt soar into a parabolic curve? As a side note, if we weren’t already $36T in the hole, then servicing our debt wouldn’t be such an issue. It’s not just the refinancing of the old debt that is a problem. It’s how much more is trump going to add to it? Last time, he added $8T……. If we are going to lower rates, then we should also focus on lowering the debt.
What if any of this causes us to lose another notch on our US government credit rating?
It’s probably too late for many of us to do major changes. As I’ve discovered in my own circumstance, it’s a years long process to reposition a portfolio. While I’ve been working on it for a few years now, I still have a long ways to go before I can sit back and relax and not worry about daily fluctuations, or which political party is in power.
Mark-
The FOMC votes on rate changes. The chair has a lot of influence but is only one vote.
Mark
What would happen if Powell got fired and replaced with a loyalist?
Think Credit Risk Spread.
If uncertainty rises, the risk spread rises.
If Powell is fired and replaced with a loyalist
IMHO
Long-term rates will rise
Substantially
The new US port fees / shipping rates (taxes, docking fees, whatever) are out. The fees are effective in October, They are complicated. (40+ pages of complicated.) You can find them on line. This is how see it:
— Rates are less than the large per-stop, flat fees originally proposed. (~1.5 to 2.5 million per stop). There are carve outs that should benefit US grain exporters like CHS.
— Rates are calculated per ton or or per container. Ships that are both Chinese owned and Chinese built are targeted with the highest rates. Non-Chinese owned but Chinese-built ships are taxed at a lower rate, 32% of the Chinese rate. The rates will increase each year for the next 3 years.
— Even ships taxed at the lower rate could pay big dollars. (News item – “a ship loaded with 15,000 containers would be charged $1.8m”.)
— Of interest, there is a $150 fee on each car, wherever built, carried on an affected ship. This is on top of tariffs.
— Fees are expected on LNG carriers, effective in 3 years. TBA.
JMO. DYODD.
BearNJ – here are a couple of TradeWinds News articles on point:
+++++
‘Nowhere near as punitive’: Major shipowners digest new US port fees
Bulker, tanker and boxships unlikely to face significant disruption from US trade measures targeting Chinese shipyards
18 April 2025 9:01 GMT UPDATED 18 April 2025 11:35 GMT
By Harry Papachristou in Athens
US port fees on Chinese-built vessels appear less severe than initially feared — at least for large segments of the shipping industry, which are likely to absorb the costs, two senior shipping figures told TradeWinds in a first reaction.
“The measures are nowhere near as punitive as the initial indications,” said John Coustas, principal of US-listed container ship player Danaos.
“For container ships, they seem manageable — we do not, therefore, expect the presence of such levies to disrupt the container business,” he added.
Coustas’ comments come a few hours after the US administration unveiled its long-awaited measures against Chinese-built ships, which form part of Washington’s ongoing trade war with Beijing amid efforts to boost US shipbuilding.
Several shipping players had expressed concerns about the looming port fees.
They said the charges were an even bigger headache to them than tariffs, which directly impact cargo owners rather than shipowners.
As part of a series of measures announced by US trade representative Jamieson Greer, the US will begin imposing fees in approximately six months on every Chinese-built vessel approaching its ports, based on per net tonne or container count, whichever is higher.
The fees will start at $18 per net tonne and rise to $33 in 2028. The alternative is a fee of $120 per container, increasing to $250 in 2028.
Major Greek bulker owner Panos Laskaridis said at first glance, the measures looked more benign than US authorities first suggested.
“They’re milder than initially feared as far as Chinese-built ships are concerned that are not with Chinese owners,” the principal of Lavinia Corp told TradeWinds.
Assuming a large kamsarmax, capesize or newcastlemax carrying coal, Laskaridis estimated the port fee to about 5% or 6% of the cargo cost, at current prices.
“That’s not a disaster… cargo price fluctuations of that magnitude are not unusual,” he said.
A manager at a third, major US-listed company beat the same drum.
“The US administration seems to have heeded — at least to some degree — the concerns expressed by the industry,” the executive said.
This is reflected in the numerous expemptions set out in the text of the decision.
Vessels “arriving empty or in ballast” and “smaller vessels”, for example, are exempt.
“Small” is defined as “vessels with a capacity of equal to or less than: 4,000 Twenty-Foot Equivalent Units, 55,000 deadweight tons, or an individual bulk capacity of 80,000 deadweight tons”.
Voyages shorter than 2,000 nautical miles (3,700 km) are exempt, along with vessels owned by US companies engaged in certain specialised export trades, as well as those participating in subsidy programmes administered by the US Maritime Administration.
Another key element noted by the third, unnamed executive is a passage in the decision, according to which “the US trade representative has determined not to impose any fee based on fleet composition at this time”.
This means there is no risk of Japanese-built or South Korean-built vessels paying a price as well, if their owner or operator owns or manages Chinese-built vessels.
…
(Article continues …)
https://www.tradewindsnews.com/regulation/-nowhere-near-as-punitive-major-shipowners-digest-new-us-port-fees/2-1-1808887
‘A step in the wrong direction’: Liner group questions legality of US port fees
World Shipping Council says port fees may overstep authority of US trade representative
18 April 2025 16:13 GMT UPDATED 18 April 2025 16:13 GMT
By Eric Priante Martin in Miami
The World Shipping Council has questioned the legality of port fees announced by US President Donald Trump’s top trade ambassador and warned of the disproportionate impact on larger vessels that feed the US economy.
The group also complained that surprise fees on car carriers built outside China represent an “arbitrary” action.
…
Among its concerns, the group said the “fees appear to extend beyond the authority” that US trade law gives Greer’s office.
The Office of the US Trade Representative said on Thursday that the action Section 301 of the Trade Act authorises Greer to impose a number of fees and restrictions.
Applying fees to vessels already on the water does not help shipbuilding but risks harming American exporters at a time of economic strain, and they disrupt long-term investment planning, the World Shipping Council said.
…
(Article continues…)
https://www.tradewindsnews.com/containers/-a-step-in-the-wrong-direction-liner-group-questions-legality-of-us-port-fees/2-1-1808925
BearNJ….. Sure glad I don’t work for the us Customs department collecting tariffs or the Port Authority collecting port fees…….. My life is complicated enough without the daily headaches of trying to figure what to charge / collect!
Three day weekend – time for reflection….
My investment banking career was in underwriting and syndication of leveraged loans. In our relatively small circle, I was renowned for my conservative (negative?) approach. Whereas my competitors were breezily optimistic (“Sure, we can do that!”), I generally was doubtful until the necessary building blocks for success had been identified. Some clients were turned off by my approach, others were impressed.
With the above in perspective, following is my personal investment outlook and current portfolio holdings. As in everything posted on this page, the intent is to assist my fellow investors with their own decisions.
Economic outlook 2025 & 2026:
Recession – Risk spread increasing by 200+ bps + – Upward pressure on long term US Treasury rates – Increased volatility in all markets leading to liquidity issues – Fed coming to the rescue…late – SPY capitulation in the 4,000 to 4,500 range.
As a result of the above outlook, my portfolio is as follows:
Bonds: 66% of portfolio, yield 5.2% unrealized gain/loss: +.05%,
Duration no longer than 2030, majority Treasury’s,
Largest non T holdings: XFLTPRA, EICB, ATCOL, CGBDL, NEWTZ
Prefs: 11% of portfolio, yield 7.2%, unrealized loss -.07%
Largest: ALLPRD, ETPRI, PCGPRC, SPNTPR, CHSCN
Sock Drawer: 18% of port, yield 5.8%, unrealized loss – 03%
Largest: ELV, ET, ENB, GIS, ARCC
My view is that the greatest opportunity for gain going forward will be in low P/E, high div common stocks in the core businesses- “Value stocks”
On downward volatility, I marginally add to Sock holdings.
Averaging down – low/no confidence I will capture capitulation “bottom”
Hedge: 6% of port, yield .08%, unrealized gain 9.7%
Largest: SH, GLD, GD, GGNPRE
Continued employment in my career choice required success. What I enjoyed most about my job was that everyone around me had their own opinion as to whether a deal was “good” or not. They were not the ones at risk – I was. If the deal syndicated and we received our large underwriting fee, I was a hero. If it did not ……… well……. “that’s one…….”
I retired when I wanted to, not before. At the end, I was 10-15 years older than my peers.
That is not to say that the above views are correct nor that you should look to them for your investment decisions. The marketplace is the sum of different opinions and outlooks. No one can predict the future with any degree of certainty.
Measure you own outlook against the above and measure your own results against it.
Westie I respect your lifetime of experiences and add your thoughts to my mix.
Overall you are conservative on what you want for yields and don’t want to be locked into a fixed investment for longer than 5 to 6 years. Not quite as conservative as Tim’s 1 to 2 yrs 🙂
For having a stormy outlook you still are optimistic about the future of common stocks and the potential for a rebound. ( the key is low debt and low P/E )
There is a lot of verbal discussion on this site.
Not as much follow up.
How about those of you with confidence in your convictions, tell us:
– What is your economic outlook?
– Investment strategy?
– Portfolio allocation?
– Yield?
– Duration?
– Capital gain/loss to date? (helpful if you add time period)
Won’t we all gain by seeing different views and allocations?
Great idea Westie:
– economic outlook: I have no clue. Have never known what the economy is going to do.
– Investment strategy: Income, then cap gains if possible. Buy and Sell in all market conditions.
– Portfolio allocation:
Stock (Equity CEF, ETFs, and Common) – 28%
Preferred Stock – 27%
IG Corporate/Agency Bonds – 25%
Baby Bonds/Term Preferred – 10%
US Treasuries/TIPS – 10%
– Yield: 6.2%
– Duration: 6.25
+1.8% YTD Return
Tariff/Treasury Tantrum drawdown reached -2.55% Return at Low.
– What is your economic outlook?
Same as Mr Pig… no clue. my belief is the markets tend to overreact, then self-correct.. a “triumph of the optimists” w a tactical bent. Keep equity / risk at low levels when valuations/spreads are expensive.. try to park that $ in “good enough” investments in the meantime.. then re-deploy as valuations become more attractive. This has included the illiquid utes, munis, prefs/credit that are likely to be called and have attractive enough YTC. When risk gets more attractive.. allocate more to junkier credit, all types but esp REITs and mREIT widgets. The focus is mostly due to my experience and comfort, not a belief that REITs are superior. I will also go boglehead and buy VT and chill at times, or at least try.
– Investment strategy?
See above. I’m also a massive pref flipper.. constantly looking for illogical dumps. This is probably 30% of my value add. It’s become more difficult lately w the Fidelity trading limits on low volume names.
Related to the above, I am a firm believer in relative value.. looking across the cap stack.. common, pref, bonds. Right now, I have a medium position in HPP notes w ~14% YTM.. more attractive than HPP-C when considering risk/reward.
And lastly.. for better or worse.. I will short stocks, or sell options, when I believe risk gets very skewed.. ie super frothy. This hurt last year and helped this year. This is mostly shorting hype names (eg quantum computing names) or expensive, like WMT or EAT earlier this yr. I don’t have much now… took my profits.. I do have a few $125 GME call options sold for $1.3, couldn’t resist..
– Portfolio allocation?
30% muni, increased lately as I can’t resist 5% yields for AA w 8+ yrs call protection
15% safe IG FI
15% safe prefs, think cobank, illiquid utes
25% mREIT common , this position has grown recently.. I esp like beaten down credit mREITs where I think the market is too punishing
30% risky prefs/bonds.. this used to be higher..
15% common stocks/ equity beta
I will also use moderate levels margin of tactically. IBKR charges ~5.5% currently and I get to write it off against income. I am never comfortable w margin, so I always plan to eliminate it. My risk is that the market has a sustained bear market.
And I still have a slug of MSEX sitting in broadridge, but I currently have a short on that.
– Yield? Gonna guess around 8%
– Duration? Gonna guess around 7.. have some super long duration issues, and others w zero rate duration but high spread duration.
– Capital gain/loss to date? (helpful if you add time period) positive, thank goodness!
Maine I have not sat down and done a compilation yet, but I think it’s a good exercise Westie has proposed.
One thing I found interesting on your post is the mix of risk and safety you do.
I actually had the same idea regarding bonds of Reit’s and started looking but with Fidelity’s 50k minimum I figured I was wasting my time except for information gathering.
I have an interest in Reit’s and thought that their bonds would have less risk than their preferred’s so I started looking.
One thing for those who might be considering investing in a company’s preferred for the risk reward is see if they have outstanding bonds. See how well the bonds are holding up.
I have an interest in KIM and REXR preferred and their bonds have been holding up well, not a lot of trades and still under 5% yield which means investors have confidence in these companies. Next risk reward up is the preferred then the common.
Westie you seem to have touched on several sectors of the market to hold commons in. I see healthcare and insurance, energy, food/ consumer staples and ARCC which I guess is private equity and investment. The one thing I think that is missing is a military defense stock.
I don’t have any prognostic predictions short term. But it’s obvious that domestic on shoring of ship building, steel plants and related business has increased the possibility of a major war within the next 4 years at least that is my feelings.
Westie-
Regarding economic outlook and SPX low…
My crude guess: Tariffs as they stand will cause damage. I agree with John Mauldin that the window to back off is short, maybe two months, otherwise recession risk is elevated even higher.
Outcome 1, backing off on tariffs: The SPX tests the current low. Target guess 4614. And that’s it, a deep correction, not a crash. Much of the damage reversed to an extent, some not. Licking wounds. No recession. Treasury yields somewhat lower. Growth slower, inflation contained.
Outcome 2, recession: A wide range of possibilities with unpredictable elements. SPX possibly to lower channel line. Much wider spreads. Rate cuts.
If #1, buy good deals as they show up. Modest cash reserve.
If #2, sit on hands. Large cash reserve.
I haven’t gotten around to creating a spreadsheet summary page that breaks down my portfolio by asset type. Of the invested portion: It’s roughly 2/3 IG senior CUSIPs with YOC 6% and 1/3 $25 stocks with YOC 7.1%. I didn’t plan it that way; it evolved. My SGOV reserve has dwindled to 4% but grows with dividends received. The much bigger “cash equivalent” is in WTFCP/M until July 15, although I would sell early if I needed to.
Rocks
Like your strategy
BUT
On Monday, which do you use if opportunities arise : Outcome #1 or #2
Westie-
There could be a #3 or #4, stagflation or whatever.
Right now I’m trying really hard not to buy anything, even 2027 maturities with YTM close to 10% or near-term YTM of 7%. If the market needs to go #2, it could take a big dump. I want to wait.
I’m looking really hard at PFFA, CY 10.1%. I’d be much better off if I’d just bought PFFA at the Oct 2023 low instead of the motley collection of preferreds and BBs I own now.
Pros: high levered yield, no individual stock risk, no risk of dividend stopping, stable dividend, liquid, trades near NAV, appears to be well-managed and is not a tracker, possibility of MtM gain, time efficient for investor
Cons: risk of a dividend cut, risk of MtM loss, risks overlooked by or unknown to me.
The price of PFFA will go up and down. As a B&H investor looking for cash flow, I don’t mind the volatility. PFFA goes down, I buy more. Folks who trade for cap gains won’t like this at all.
When I read a post on III, I try to remember what the person’s trading style is because it affects their reasoning. Someone says “Buy AAPL” and you buy it only to be at a loss a year later. Then you find out the person with the buy reco sold a week later at a profit. I always appreciate when some states their reason for a buy or sell.
Not much cash reserves here. All I did was switch a few 9%ers to 6%ers with less volatility and risk. I look forward to trading any kind of market whatever happens.
Westie-
Just to clarify for readers-
I think 3 of those listed might have been typos:
ALL-D (called 6 yrs ago) – maybe ALL-B?
SPNTPR – maybe pr-B?
GGNPR ( no such) ‘B’ is the only one.
Enjoyed your take-thanks.
Good catches, Gary
Shouldabin:
ALLPRB
SPNTR
GGNPRB
Worse, my most successful single top five holding is GDX, not GD, in Hedge.
Up 52%
what a great post, thanks much
I have shifted my investment thesis. Under the last administration (2020-2024), I was concerned about the swings in the T-Bill market. In my opinion, the world’s safe haven, the US treasury, should not have swings of 15% to 20% in short periods of time. Things are the same in 2025 (perhaps even worse with tariffs) and look to be the new norm.
On this board, the issue seems to be that we are spending too much or we are cutting taxes too much. That is an opinion for which much debate takes place.
Here is a fact that we should all agree upon. The deficit is way too large and growing every single year. We cannot afford to service our debt, particularly if interest rates stay where they are. Some are advocating that the Fed cut rates. Sorry, that does not impact the long end of the curve, where the bigger problems seem to be developing. The long end is where the preferred investors can get hurt the most. Even if Fed rate cuts lowered the longer-term interest rates, it does not solve the problem as long as the deficit keeps getting larger. At best, it delays the problem.
I have seen enough. It is a 5-year pattern; the long end of the curve is too concerning to ignore. Tim, has a solution and has many term preferreds. As an investor who is focused on investment-grade rated issues (from Moody’s and SP) that doesn’t work for me. My solution is floating rate or fixed rate reset issues. Sure, on the fixed rate reset issues, I have to wait 5 years for a reset, but it happens at some point. Presently, right now, I am at 70% “inflation hedged” which includes lots of money market funds (SGOV). The minimum coupon, I would consider is 6.5% – 7% (the 10 year TBILL + 2%).
Yes, there are more political posts on this site. Bur some who complain, offer little investment insight and seem to be here waiting for a political post to rail against. Are they any less political? Do they want to talk less about politics than those advocating for a political view? Just something to consider.
I would sure rather hear about people’s investment thesis and how they are positioning in the market, as well as opportunities they are finding.
Thanks Steve A, I think very well worded and thought provoking. I have many of the same thoughts. Do you ever consider IG corporate bonds or are you strictly in preferreds and baby bonds.
To fit my investing thesis, it needs to be a fixed-rate reset. I am finding almost all of this market to be in preferred or junior subordinated issues. But, yes I would invest in corporates if they offer such terms. I own 13 IG $100 issues that only trade on the bond market.
Steve,
The strategy seems fine , except I ask “What happens if rates soar?”
Would many of the issuers would not be able to refi the preferred or even continue paying much higher rates?
I also would look at the index being used. I definitely do not want a margin that’s tied to a short-term rate. The term premium between short -term paper and even the five- year treasury constant could be very large since (from memory) 51% of the debt is financed for 1 year or less. The fed has historically controlled the short term rate, but not necessarily the long -term rate. Granted, the Fed COULD use unlimited QE to control the long end, but I question whether the 24 primary dealers would want to continue having to bid for their proportionate share of notes and bonds if the QE controlled rate was below the rate they could earn elsewhere in private credit.
The dealers obviously did bid when QE was a thing previously, but there was at least low inflation justifying fed purchases. If they do it merely at behest on pols I’m not sure what would happen. They have to be able to sell the debt to customers.
If rates soar. SGOV should do okay. Floating rates will do fine. Fixed rate resets will drop significantly in value until they close to the reset date. Then, they should go back closer to PAR (so 4 years of “paper losses” may well occur).
Steve, I have a lot of fixed rate resets kinda like insurance. Like the SPNT-PB, UMBFP. I understand Tim’s point of view going with short term resets and with a high possibility they will get called then you redeploy the money at that time. I also have a few resets out to 20 & 30 but not that many.
Then I have a mix of lower yielding preferred like CNTHO that on cost basis are yielding about 6.2% or barely at your minimum of T bill + 2
I had bought some of these lower yields around when the Fed started cutting rates and it was thought there would be capital gains plus a decent income. That plan changed a little when Fidelity who used to let you buy and sell with no limitations changed their policy. I’m used to being able to liquidate a position if I want to move my money and their restrictions caused me to sell out of some of my positions. What had been a normal percentage of my accounts turned into looking like I was overweight so I have sold out of several illiquids.
This is reminding me of the Carter and Reagan era. I didn’t have much extra cash then but seeing stocks like utilities paying double digits I bought a few. Was a time when situations were different for different people. I was young and had a job and I owed nothing and didn’t spend much so I was better off than people who owed money, had a home and were losing their jobs.
Then I joined the merry-go-round, I saved up enough to buy a new truck and my first house. I had to sell those stocks to buy the house.
Since then I wished I could have kept those stocks.
This time around it’s different, but it still seems similar. I would say it can’t hurt to have a % of higher paying bonds and stocks in the portfolio that are long term and just ride out the up and down swings. For my age that might be only 10 or 20 yrs. Not sure something like MGR fits since it’s not a utility but it might.
Steve-
When the Fed cut rates 50bp in Sep 2024, the 10-year treasury yield reversed to an uptrend, a surprise to many.
https://www.tradingview.com/x/T4tN99L8/
Predicting how long yields will respond to rate cuts has become difficult.
The Mad King has caused so much chaos and fear I no longer even care to invest in anything. I just keep adding cash into MM from dividends.
Call me a 🐓 but this not worth it . Mental health matters.✅
With three days off from the market, I am going to posit a thought that some will see as political, but I’m stating this thought more to get feedback about the logic.
A number of smart people say that the recent decline in markets, which they acknowledge follows presidential action, is acceptable because we will end up better in the long run.
My thought: If you believe the above statement, isn’t it a necessary supposition that President Trump is smarter/wiser/more correct (you choose which), than the combined judgments of investors?
lt-
What is the “combined judgments of investors” as you read it?
By “Combined judgment of investors” I mean the prices expressed by the market.
LT – I think any casual market observer should know that markets are not infallible. There are countless historical examples of markets misjudging policy, mispricing assets, or simply overreacting.
In the early 2000s, do you believe that the prices of tech stocks expressed by the market demonstrated the wisdom of the combined judgments of investors? How about oil prices going negative in April 2020?
I think the market thought that MBS and CDOs were safe in 2006 based on market pricing. What’s the market cap of fartcoin again?
Your logic here is deeply flawed.
Thank you for the comment
lt, I don’t know if we end up better but we may end up less bad than if he did nothing. I’m somewhat pessimistic about our longterm economic future either way. Keeps me from getting too manic in my investing.
There’s a lot we don’t know about what’s really going on behind the scenes. . So I just soldier on. Try to downplay theories and bias focus more on playing the numbers and patterns, that’s what works for me.
Added to pummeled F-D (Ford long dated Baby). Lately baby stands for ‘thrown out with the bathwater’. 7.68% for BBB- issue seems a little off kilter. Everybody hates Ford. I don’t.
Loved my old 1986 Ford Bronco II. 250k miles in 22 years. Looked for Ford replacements in 2009 when I traded it in on Cash for Clunkers (pending maintenance costs would have been very expensive), but couldn’t find a Ford replacement that I liked.
good comment.. F-D/VCLT pair trading near since inception low in august 2022 set december 2022..good article on S/A titled FORD BONDS OFFER AN ATTRACTIVE PAIR TRADE OPPORTUNITY by Arbitrage Trader ..although it references F-B they are virtually the same
Not sure if it’s hate of Ford or just a dislike of 6.5% coupon long dated maturity with BBB- rating in today’s rate environment and economic turmoil. ARGD is similar coupon/rating with long dated maturity, $20.14 (8%) today vs F-D at $20.96 (7.7%). And BPYPP 6.5% coupon perpetual is $14.10 (11.7%). Kudos to F for not taking the BK route back in 2008.
Want to see a hated issue? BWNB, 6.5% coupon that matures end of 2026. Trading at $16.47 (almost 10%). Obvious concerns if that makes it across the finish line.
good comment.. excellent article on BPY on S/A by Trapping Value titled
BPY Preferreds:A Backdoor Play on Brookfield Real Estate?
BWNB’s YTM = 34%+ Now that’s obvious concern…….
2062 is a long time for something that can dramatically change. Its not a long dated utility bond.
legend, certainly understand that.
Further researching tonight, kinda looks fairly priced if one considers its comparison to the 30Yr. Its not exact but its close enough to indicate market is looking for 30Yr + 290 basis points for this BBB- issue. That’s inline I think with maybe one might expect. Not as good a deal as I imagined, research I should have done yesterday, lol, but I’m still ok with it.
FL Guy, I took a look at BWNB, yikes, no thanks 🙂
Pig, It’s a fast moving market so it’s easy to make assumptions which become dated quickly! I’ve made that mistake many times lately. 345370BS8 might be a decent comp for F-D. It last traded at 7.9%; it’s non-callable so seems slightly more attractive.
https://www.finra.org/finra-data/fixed-income/bond?symbol=F.GQ&bondType=CA
I love having access to the 1,000 issues on IBKR for this type of market. I got 10 of the T 2095 non-call 7% issue (079867ap2) for 1.01 on 4/11. I liked other names better but just thought it would be “cool” to have an ~7% AT&T annuity. I have also been dumpster diving w the Ally/Gm instl prefs.. including the Ally FtR at prices ranging from 88 to 94. It pays 4.7% through May 15, 2026; thereafter resetting every 5 years at the 5-year treasury rate + 3.868%
https://www.ally.com/about/investor/capital-securities/
Maine, Thanks for those suggestions, already been put on my watchlist. Definitely can see a scenario where my IRA’s get split up with some portion at IBKR. Schwab is very frustrating from the bond side.
I am thinking of doing the same thing
SteveA you mentioned you have 13 bonds of 1000.00 value that have reset feature. I think Maine has mentioned he is also into resets. I have thought about IBKR and have a silly question. How safe are they? I am not happy with Fidelity’s bond offerings and if I am interested in something else they set a 50k barrier.
There has been discussion here and other sites about the ballooning of world debt. The mention of China and India and Canada and the EU all lowering their benchmark rates then with China selling 50 yrs Treasuries. Nothing we can do anything about so why should I worry? Reminds me of the story I read that millinials or was it Gen Z that are stressing out over all the news coming in on the media they listen.
But this cycle of lowering rates and increasing debt should reach critical mass at some point I would think?
I have a very different view of foreign countries selling US T-bills. I do not think they will. Why take a loss? However, our T-BIll rates will still be hurt. Why? The foreign countries will be hurt by the tarriffs. They will need to worry about and stimulate their own economies. It only makes sense that they will not be buying as many T-Bills. Less demand means higher rates. Plus, given the political environment in the US, why would foreigners not diversify future purchases in countries like Canada, Germany, or Japan? Less bond purchases via diversification means higher rates also. So, my thesis is foriegners do not have to sell to cause our bond prices to rise. Our actions, will result in less demand for T-Bills. Increasing supply due to our deficits with less demand. Bad News.
Yes, I am concerned about IBKR also. That is why I have no moved to them yet.
Steve, re comments on future non-US demand for Tsys …. and the stagflation topic … would Current Floaters ( or nearby , 6 mos ~ 18 mos ahead ) work well in a short maty curve being a defensive reset area.
Have a reasonable amount of Current Floaters resetting every three mos. and a few old time TruPs with current resets. Thanks to all the ” off-day” posters.
I would current floaters should work well, if rates go up. Of course, if rates go down, they would not work so well. So, if your thesis is a recession, that may not work as well. Part of the reason I like the fixed rate reset. But of course, at reset time, they could not be attractive, if rates are down.
Of course, this is not investing advice. Just my view of the world.
Transferring into IBKR is super easy. I have done two partial transfers from my fidelity account, not full account transfers. This can all be done on the IBKR website.. just specify which securities or cash you want transferred, provide an account statement.. and they show up the next day!
How safe is IBKR?
I had this same question before I transferred. This is how I think about it now.
All the normal insurance found elsewhere, SIPC etc
Public company, $67B market cap
One of the fastest growing brokerages… esp as retail discovers it .
I assume it’s the top brokerage for small/medium institutional investment managers. It’s very popular for DIY retail types, esp those w account nuances… electronic access to fixed income, broad access to international markets, margin users
I wish I invested in their stock when I opened my account in 2016!!
https://www.interactivebrokers.com/en/general/about/presentations-and-events.php
Thanks for the link Maine
Recently, I posted a monthly log chart of SPX with parallel channel lines drawn that define the trend and capture almost all of the price movement from the 2009 low. Here’s an update.
https://www.tradingview.com/x/matPZzi8/
The recent price low touched the midline in a much shorter time than I expected. Based on that touch, you could conclude that the correction is over. Looking at the historical examples, I see that the first midline touch in 2011 was similarly quick, but followed by two more touches in the next two months. In fact, two or more touches is true for all of the corrections.
My takeaway: Continued patience is warranted.
Thanks Rocks
R2S, Thanks for the SPX chart comment, great backdrop for all this chaos we are dealing with. Your recent posting was only one of the many fine ideas you put on our site.
Suggestion. How about we ask posters to voluntarily limit their posts to one per day for the next 30 days unless it is a true reader-initiated alert?
We can make a collective judgment if we like it better.
Steve, maybe right but I see 2 posts by you.. I like reading about peoples experiences in life just because, like Yield Hunter’s mention his observation about he noticed that if you are in a situation that the government want what you’d have they will take it. In a way it has influenced who he is. BTY, the town where I live now wanted me to “give” them part of my property for a road widening. We do have laws and I negotiated with them right up to the scheduled start then was threatened with eminent domain. In a lot of ways it was worth it, in others it was not. It took the joy out of living here.
I don’t know what to believe when I read the news, except when a lot of sources are saying the same thing I tend to think it has to be true. A man who doesn’t believe in the rule of law and that it doesn’t apply to him except when he wants it to was put in charge. When a person like that threatens a college that has been around 388 years longer even than this place has been a country it starts to scare me
dream on.. these online blogs have taken place of neighborhood coffee shops
To begin, thanks to both Gridbird and 2whiteroses who have educated me.
It’s not the political content or the frequency of posting that diminishes this website, rather it’s the narcissistic and self-absorbed nature of so many comments.
DYODD.
https://wolfstreet.com/2025/04/16/foreign-investors-massively-bought-us-treasury-securities-in-february-china-japan-canada-euro-area-uk-financial-centers-taiwan-india-even-brazil/
Well, that was then.
SteveA,
Are people actually donating money to this guy, who then abuses them in the comments?
Maybe he was having a bad day in the responses I read, but it seemed completely unwarranted.
IBKR has $225k Ask at 80.393 and $5k Bid at 80.391
Not $154.xx ? Interactive Brkrs
Nevermind- I see your same post below for the S jersey bond.
Weird
Can the 5 year Treasury ever go below zero when calculating a reset?
Pretty sure some resets have wording to the effect they won’t go neg- just to zero– not sure if all have it.
And you know where that wording is????? Of course! In the prospectus….. So the answer to af’s question cannot be a blanket one. It varies issue to issue. All roads lead to the prospectus.
Even the yellow brick road …
I hold the Tin Man’s fixed-rate preferred.
2wr-
Obviously correct. I did say some, not all.
Excerpt from Torsten Slok. Reminds me of the broken window fallacy.
“Creating a Recession to Lower Long Rates Is Not a Good Idea”
“Specifically, if interest rates decline by two percentage points, the US government would save around $500 billion in annual interest payments. But if the US enters a recession, the government will have lower tax collections and pay more in unemployment benefits, and the historical deepening of the budget deficit during recessions of around 4% of GDP would correspond to an additional $1.3 trillion erosion of US government finances measured in 2025 dollars.”
How about a recession to tame inflation and bring back a little more affordability of necessities like housing? Do you think the raging inflation of the last 4 years had anything to do with the outcome of the last presidential election?
The median household income can’t afford the median home in the United States. More people are impacted by the lack of housing affordability than the price levels of the S&P 500. The stock market performed very well from 2021-2024 and the incumbent party still lost. How about a recession to give the middle class some relief?
Sequence: layoffs, recession, massive stimulation, debt increased, debt service increased, inflation risk.
Recessions are deflationary, so yeah, for a while some prices might even be lower, but at what cost? Lost jobs, bankruptcies, more debt. The pain will be felt by those who can least afford it. The Covid recession was two-tiered.
One of the best price benefits of recessions is cheaper gasoline. That’s already happened with crude trading in the low 60s and gasoline futures at $2.
Who is in the middle class anymore?
Me. I’m in the middle class.
LOL, martin. That was rather specific.
Let’s try this, focusing on working age adults. How would you define the middle class today compared to 30 or 60 years ago?
How is any of that defined? How do we determine who is “rich”? Is it by adjusted gross income? Is it by net worth? Is it adjusted based on the cost of living in the area where a person lives?
New-
You’re right. All you can do is chose criteria to measure the population and see if you learn anything useful. One of the most interesting is who owns assets, real and financial, and who doesn’t? Haves and have nots. Can a “definition” of middle class be established on this basis?
Owning a home has been a middle-class marker for decades. From the Google AI: “The current homeownership rate in the U.S. is approximately 65.7%,” and “In 2022, approximately 39.9% of U.S. homeowners owned their homes outright.” More questions: Who owns the homes? Who lives in them? What is the historical rate of home ownership? Can the owners afford to keep them?
A sign of wealth is owning income producing assets. Middle class: owns a houseboat. Upper class: owns a fleet. Lower class: owns a row boat and two paddles.
I’ve spend a lot of my life buying, repairing and renting rental units/houses and at some point I concluded that I didn’t really own anything (even when there was no debt on some). The local tax authority can levy a ridiculous tax, local government can implement new regulations (zoning or otherwise), the State can take it by eminent domain, the Fed can take it for unpaid taxes or eminent domain, etc.
I remember there was a car dealership on the main road in the town I went to high school in. It was very successful and flourishing. The State took it by eminent domain to expand the congested road and they had a very valid argument for that. They forced it’s sale and paid what was thought to be a price below market. The business moved to another part of town and it completely sank. The State did not begin the process of expanding this congested road onto the land of that formerly flourishing business for more than 25 years as the former showroom sat empty. I always thought that was a tragic waste.
The concept of ownership, in my opinion, is an illusion. We sell and buy permissions to utilize assets for a finite (but often unknown) period of time. This perception has since been foundational in all of my investments since.
Apologies if that was too philo… but this is the sandbox so…
YH, the airport authority in Las Vegas did that with thousands of homes, then didn’t expand the airport. Only one person refused to sell, thinking it would be valued later as commercial property. He also liked his location. He now owns the only home in that area
https://www.google.com/maps/@36.0800708,-115.114287,3a,75y,251.3h,70.55t/data=!3m7!1e1!3m5!1sbpui4-6zfHIxzV4L6rBDVg!2e0!6shttps:%2F%2Fstreetviewpixels-pa.googleapis.com%2Fv1%2Fthumbnail%3Fcb_client%3Dmaps_sv.tactile%26w%3D900%26h%3D600%26pitch%3D19.449357115877262%26panoid%3Dbpui4-6zfHIxzV4L6rBDVg%26yaw%3D251.30202835645494!7i16384!8i8192?entry=ttu&g_ep=EgoyMDI1MDQxNC4xIKXMDSoJLDEwMjExNDUzSAFQAw%3D%3D
Hard to tell if that guy won or not. He won a battle for sure, but did he win the war?
I guess that is only for him to decide.
I look at the bell curve. 3m in cash or cashable assets puts you in the 98% percentile. Income is irrelevant, most jobs are for suckers, and half of all people in our country have no money. You can adjust things however you want; when you turn off the heat in the west wing to save some coin, don’t pretend you don’t know where you stand. We all know what it means: cars that run, decent accommodation, available credit, access to opportunities, choices about food, and the ability to visit the doctor. 3m in a capital account is 30 years worth of median household wages in my county. 1m is way over middle class, and any cash assets at all is probably a baseline for not being part of the working poor. Median retiree has saved 200k.
I’m muddle crass
Again, have to make a comment: gas prices are relatively the CHEAPEST thing, and the USA has that over anywhere. How are we arguing gas at $3/gal when we pay $5 for a coffee, $3.00 for McD soda etc. In places where gas is more it is not a gas price problem, it’s locale and taxes. Don’t quote NYC, LA or other gas/gallon pump price – has nothing to do with the raw gas. I always laughed when I heard gas brought up as an inflation impact – IMHO it regresses the USA inflation. I think gas is as low here in western NY as I can remember in 12 years – so zero inflation in a heavy labor, transport, processing, and liability product. Amazing.
Isn’t that what happened in the Carter years to some extent? Higher rates to stifle inflation?
Funny but I rarely hear of the USA vs. others. Housing? Cheap in USA – even now- compared to other 1st world locales, by far. Wages? higher in USA by far. Healthcare costs: Arguable, but most procedures available in USA. Only shortcoming is vaction days/work hours (hahah). All this is even true in most of Canada.
So we live better than anywhere else, and until this admin (where who knows what), were still tracking a path above others. Raging USA inflation – it was a global problem and that ripples and USA did not get hit as hard as most.
So I think we overplay/overleverage the narratives. However, that posturing is now causing a LOSS of USA lifestyle versus others, and the USA is not used to that. Why did I write this? Because I think this playbook will head the USA backwards and that crashes traditional markets. So I’ve gone safe, (but near retirement as well) sold most common shares and will take 4-7% until the current directions play out. IMHO.
Japan is meeting with the US today. Japan badly needs a tariff deal. Bloomberg speculates that Japan, a large holder of Treasuries, might be pressured to buy more (yes, more) US Treasuries. The US needs Japan here. Faith in US Treasuries as safe-haven has been shaken and alternatives like gold are being sought world-wide. Good news and tweets would not surprise me.
A contrary view on China. In spite of continuously bad US-China headline news, going right down to stories that the trade war could end up in a shooting war, (an “unlikely but not impossible” scenario posed in a 2014 book), China and the US are slowly edging closer to trade talks. The two latest Chinese demands seem easy enough to meet – tell your officials to stop dissing us in public and give us a point man to work with. Any positive news here could ignite a huge relief rally. JMO. DYODD.
For the stock indexes the possibility of good news seems to be offsetting the reality of a bad business climate. Who wants to miss out on a huge relief rally? Can’t we just go back to the way things were?
Here’s something that hasn’t changed and probably won’t: the every increasing debt and interest expense.
I have been accumulating a position in the South Jersey Indus bond, cusip 838518aa6 (it is now privately owned by JP Morgan Infrastructure fund).
I have been buying at Vanguard and they currently show the price to buy at 83.411 but there have been a lot of buys in the 80..50-80.90 for the past week. Vanguard has no explanation for the lower priced trades. My question is does anyone see them available at this lower price on a different platform? Is so please tell me where. Thanks
Schwab has trades in the $84.70 range, and the latest trade is dated 4/1
Could they be dealer to dealer purchases and not to retail?
Maybe, but the TRACE activity shows that they are customer bot and the other side of the trades shows an Inter-dealer trade
IBKR has $225k Ask at 80.393 and $5k Bid at 80.391
I have had the same problem at Schwab. It feels like dealer collusion against the retail trade. They have inventory at some ridiculous price, then you reject that and put in a limit order and get no takers. Plus, having to call the bond desk is torture. IBKR is the answer, but I really don’t want to split an IRA account just for this security. Yesterday, I called to place a limit order for SJI at the bond desk and was told it could not be done. After asking for a supervisor, the agent said it could be done. Grid used to talk about going through the bond desk and asking for a “higher power” to get a better deal. Unless someone here has figured out how to get these bonds at a good price at Schwab, it seems like a waste of time to spend on the bond desk phone.
Schwab pricing is hit or miss, but they are a million times better than fidelity for bonds not in inventory.
As an aside, I still hold a slug of south jersey. In terms of being privately owned.. I couldn’t think of a better home than IIF/JPM. See link for a pitch deck on the fund as of Dec 2023.
https://www.principal.cl/sites/default/files/2024-03/jpmorgan-IIf-flipbook-q4-2023.pdf
Schwab — for bonds not in inventory how are they better than Fidelity? And do they have a minimum purchase for those (fidelity is either 25k or 50k, can’t remember). Have accounts at both but Fidelity is my main one and am not happy.
Yes, it was offered all week at about 80.40 on IB. I bought a huge $5k position mainly because why own something where you don’t know what the financials look like?
If you don’t want to open an IB account, you’ll never see the true market for many bonds . This is not meant to be an ad for IB, which I hate with a passion for specific , unrelated reasons.
Lt I own a little, about 15k since Dec 22 at 79
To be honest that is my most long dated bond outside the ETD notes I hold.
I now have about 7% of one account in bonds with a 6.46% yield on cost and everything from B2 to Aaa heavy to Baa2 ave. 90% mature in 2029. I figured that would get me past the unknowns in the economy for the next 5 years when I started buying them.
CharlesM,
I think I need to start looking at international stuff.
Everything our pols do lately seems designed to weaken the dollar.
Much of what I have is still in long -term munis
Keep to countries that have reciprocal tax agreements (at least for now)
“ASML Orders Miss Estimates as Uncertainty Over US Tariffs Looms”
https://www.msn.com/en-us/money/markets/asml-orders-miss-estimates-as-uncertainty-over-us-tariffs-looms/ar-AA1D0i5E
Even with the price dip, I still think it’s expensive. Now NVDA is seeing that 5.5B expected tariff impact which should be a reflection of demand for chips and demand for ASML machines.
Waiting for fair value on this one.
This is strange. I got an email from Schwab about a month ago informing me that this bond would be called today 4/15/2025 about 11 months early : 02006DM32
ALLY FINL INC. 6.15%26 DUE 03/15/26
It is a monthly payer and I did get the dividend today.
On my account the bond was marked “called” for 4/15/2025, until about 5 days ago, it was no longer marked as called nor was it called today. Can a company call a bond then change their mind and rescind the call ? I am wondering if it was just a Schwab mistake or ?
Anyone ever have that happen ? Glad they didn’t call it yet, but still curious.
My favorite Italian olive oil is up 50%. Now it’s personal.
Rocks, On Monday I did a little shopping while the wife is gone for a few days, I haven’t confirm this is happening at all stores, but I went to Target for shave cream and mouthwash. Normally I buy the store brand as it’s cheaper. Not a bottle or can of TGT’s could I find. As a matter of fact they didn’t even have space on the shelves for the store brands. Plenty of the major brands like Colgate and Listerine, both the same prices over $7,50 a bottle. The cheapest shave cream was my old Barbasol brand I used to pay I think $1.50 and now it’s $2,50.
Of course TGT doesn’t really make their own brands but still.
Later I went to my discount grocery store Grocery Outlet and decided I wanted some beer. It’s been warm here lately. Well I know beer isn’t good for you, but the sticker shock gave me second thoughts. Almost all the Craft beers were $10.00 a 6 pk. or 20.00 a 12.00 pack.
I picked a 12 pack of a national brand one of the few for $16.00. I doubt I will be buying more beer this summer at these prices.
After this trip to town I want to check Wally World and the big grocery chain Safeway and Dollar Tree to see if a similar thing is happening.
I was joking when I said recently we could be like Russia or Venezuela with fewer items on the shelves and our dollar worth less. But now?
CM-
Those are pretty much bottom prices for craft beers in OR & NV. Even Walmart & TJ’s chgs $9.98 for Deschutes Black Butte Porter or New Belgium Voodoo Ranger IPA. TJ’s has others 10.99 to 16.99 for 4 or 6 cans.
Lucky you 🙂 $1.67/can — or compare to buying at a bar /restaurant- $4-12 ea
easily.
Make your own. It’s not much cheaper, but it’s fun!
John, my friend just made a batch of Irish red ale. I need to stop by and sample it! I was making my own when I was 16 and living at home. My parents thought that was better than running around and partying who knew where.
For a preferred stock investing site, this is spam.
Dick, it’s in the Kitty litter box and I know it stinks!
I know you’re an intelligent investor who likes to make snide remarks. I know you can add something to this website if you want to. Any observations on TFIN and it’s $5.00 drop in price this morning?
More spam Charles M. How many posts have you made today? Have you thought about getting a pen pal?
I’m working on what I should be looking at to invest in next Dick if you look at most of my posts I am trying to Focus.
I take a break just to have some repartee with you and your comments Dick.
BTY I was serious when I asked you about TFIN nothing serious to say?
And one more comment from Charles M!
If someone were purposefully trying to destroy the utility of this site, they would do exactly what you are doing.
Me ? Please post something useful Dick and do you know what is going on with TFIN ?
I wonder how this might affect TFINP
Most successful forum sites that I know have one page/section where chatter that might otherwise be off-topic is welcome. Of course, it is Tim’s site and it is up to him whether that would be this page, some other, or none at all. I am completely satisfied with the site as is.
FreightWaves has a decent article about TFIN.
https://www.freightwaves.com/news/despite-quarterly-loss-and-battered-stock-triumph-financial-stays-aggressive
“Rocks, On Monday I did a little shopping while the wife is gone for a few days, I haven’t confirm this is happening at all stores, but I went to Target for shave cream and mouthwash. Normally I buy the store brand as it’s cheaper. Not a bottle or can of TGT’s could I find. As a matter of fact they didn’t even have space on the shelves for the store brands. Plenty of the major brands like Colgate and Listerine, both the same prices over $7,50 a bottle. The cheapest shave cream was my old Barbasol brand I used to pay I think $1.50 and now it’s $2,50.
Of course TGT doesn’t really make their own brands but still.
Later I went to my discount grocery store Grocery Outlet and decided I wanted some beer. It’s been warm here lately. Well I know beer isn’t good for you, but the sticker shock gave me second thoughts. Almost all the Craft beers were $10.00 a 6 pk. or 20.00 a 12.00 pack.
I picked a 12 pack of a national brand one of the few for $16.00. I doubt I will be buying more beer this summer at these prices.
After this trip to town I want to check Wally World and the big grocery chain Safeway and Dollar Tree to see if a similar thing is happening.
I was joking when I said recently we could be like Russia or Venezuela with fewer items on the shelves and our dollar worth less. But now?”
Did you buy anything else at the grocery store Charles M? What else is on your shopping list? This is all very interesting information and many people want to know.
Thanks Mike D, at one time TFINP was discussed on this sight. I think maybe by Gridbird who was flipping it for short trades. I bought into it but as a long term hold but then got out. I think this was right after the bank crisis and a lot of bank preferred took a dump but TFINP stayed steady.
I deal a lot with freight carriers in my business and have seen a lot of them go BK in the last few years. I didn’t completely understand TFIN business model of them buying carriers and independent drivers invoices for service due and paying the drivers ahead and taking a cut to advance the payment. Not understanding something and seeing the turmoil in the trucking business made me nervous.
Things could be at even higher risk now if the shippers who owe the payment on the invoices get in trouble and delay payment or even go under due to a lot of factors with these tariffs and delays of overseas material.
Thanks again for the link.
Charles M – I live in a modest ranch house in Texas. The sun beats down on my patchy lawn most days, but I don’t mind. I’ve got my air conditioning, my recliner, and a portfolio of preferred stocks that keeps the bills paid and the fridge stocked with Shiner Bock. I’ve been investing in these things for decades—steady dividends, low volatility, just the way I like it. Lately, though, my body’s been staging a revolt, and let me tell you, it’s more awkward than a board meeting where nobody read the quarterly report.
It started with the urinary incontinence. I noticed it about six months ago when I was analyzing the latest callable preferreds from CMS Energy. I’d be sitting at my desk, hunched over my laptop, crunching yield-to-call numbers, when—wham—a sudden urge to pee would hit me like a flash crash. I’d shuffle to the bathroom, but sometimes I wouldn’t make it. One time, I left a damp spot on my khakis right in the middle of a Zoom call with my investment group. I blamed it on spilling my sweet tea, but the look on Jerry’s face said he wasn’t buying it. Now I keep a pack of adult diapers in my desk drawer, right next to my highlighters and my dog-eared copy of The Intelligent Investor. They’re not exactly stylish, but they’ve saved my recliner from a few close calls.
The diapers crinkle when I walk, which is embarrassing enough, but the real kicker is the hemorrhoids. Lord have mercy, those things are like uninvited guests at a shareholder meeting. I’ve got three of ‘em, swollen and throbbing like overpriced REITs after a rate hike. They itch something fierce, especially when I’m sitting too long, which is all the time because I’m always glued to my screens, tracking dividend payouts. I’ve tried every cream in the pharmacy—Preparation H, witch hazel, even some off-brand stuff that smelled like a tire fire. Nothing works for long. I’ve taken to sitting on a donut cushion, this bright red thing that looks like a life preserver for my backside. My neighbor, Wanda, saw it on my porch one day and asked if I was taking up pool float decorating. I just mumbled something about “investment strategy” and hightailed it inside.
The worst was last week. I was at the local diner, meeting with my buddy Carl to discuss the new preferred from Bank of New York Mellon. I’d had a big glass of iced tea—mistake number one—and I was perched on the vinyl booth seat, trying not to squirm because of my hemorrhoids. The itching was so bad I could barely focus on Carl’s spiel about floating-rate dividends. Then, out of nowhere, my bladder decided it was time to sell all positions. I clenched every muscle I had, but it was no use. A warm trickle started down my leg, right there in the diner. I grabbed a stack of napkins and shoved them under the table, pretending to wipe up a spill, but Carl’s eyebrows shot up like a stock chart on a breakout day. “You okay, Earl?” he asked, leaning forward. I nodded, face redder than a stoplight, and muttered something about needing to check my portfolio.
I waddled to the bathroom, my diaper doing its best but not quite keeping up. Once I got there, I realized the hemorrhoids had picked that moment to start bleeding. There I was, standing in a stall that smelled like Lysol and regret, trying to clean up a mess that was both front and back. I used half a roll of toilet paper, wincing as I dabbed at those angry little knots. By the time I got back to the table, Carl was finishing his pie, looking at me like I’d just confessed to shorting Berkshire Hathaway. I paid the bill and left, vowing never to show my face at that diner again.
Back home, I sank into my recliner, popped a Shiner, and pulled up my brokerage account. My preferreds were still chugging along, spitting out dividends like clockwork. There’s comfort in that, you know? The market doesn’t care about my leaky plumbing or my throbbing backside. It just keeps paying out, steady as a Texas sunrise. I’ve started researching bidets online—heard they’re a game-changer for folks like me. Maybe I’ll use next month’s dividends to buy one. Until then, I’ve got my diapers, my donut cushion, and a whole lot of grit. Life’s messy, but so long as my stocks keep paying, I’ll keep shuffling along.
Future General Business Conditions; Diffusion Index for New York
https://fred.stlouisfed.org/series/GAFDISA066MSFRBNY
An interesting chart I haven’t seen before.
– Major lows are associated with recessions and stock bears.
– Most of the time the trend is down.
– The drop to the current low was sudden, unlike the others.
Thanks Rocks–looks like things fell off a cliff. This jives now with the GDPNow model of the St Louis Fed-
https://www.atlantafed.org/cqer/research/gdpnow
But the Economic Index from the Dallas Fed is still showing GDP growth–
https://www.dallasfed.org/research/wei
The ‘New Order’ chart looks the same- not good.