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.
So Feedbro RSS reader on Chrome is no longer available. What are others using to get a feed of all articles/comments on the site? I’ve been trying a few other RSS readers and they don’t appear to work like Feedbro did.
TIA.
I use The Old Reader, http://www.theoldreader.com . There is also https://rss.app/ .
Mike D, how do you get them to show comments from across the website and not just new articles?
Never mind, I dug through past discussions and found it.
CME Fed Watch Site ….. FF Rate Moves Probabilities …. Live ##’s
There is an 86.9% probability of a 25 bps rate cut to 4.00-4.25% at the June meeting versus 80.2% a day ago and 69.1% a week ago.
There is a 58.8% probability of a 25 bps rate cut to 3.75-4.00% at the July meeting versus 46.7% a day ago and 32.1% a week ago.
Surprise, surprise! The yield curve is inverted again. This is a monthly chart of the 10-year yield minus the 3-month yield going back to April 2005.
https://www.tradingview.com/x/exKzE7kI/
Tuesday Pre Mkt ….. 10yr to 3Mo . . . . @ -.12bp
Also Global 10yr Govis Lower yld by + – .05 ~ .10 bp
Fed Atlanta Report re 2025 1st Qtr GDP Estimates ….. Revised DOWN from prior Down estimate.
11:40 ECONX Atlanta Fed reduces Q1 GDP forecast to -2.8% from -1.5% prior
Release
SGOV dividend is meager this month. Was 0.3634 in Feb. Dropped to 0.313292. 28 day month? If you contrast with CLIP, that was 0.358 in February with only a minor dropoff in March to 0.352
Not sure why the dropoff occurred with SGOV, will monitor.
short month
Steve mentions 28 days. But the two have diff declines – no? 13.8% vs 1.68%
Maybe diff holdings in the treasuries- older higher ones?
short month
US Banks’ Unrealized Losses Explode by $118,400,000,000 in Three Months As FDIC Declares 66 Banks on ‘Problem List’
https://dailyhodl.com/2025/03/01/us-banks-unrealized-losses-explode-by-118400000000-in-three-months-as-fdic-declares-66-banks-on-problem-list/
Good Times, Azure
66 banks would be in the middle of the typical range for a non-crisis period. At least that is what the report said. I clicked through to the actual FDIC report looking for the names of those banks but they weren’t there. Maybe someone else can find them.
Unrealized losses haven been way up since inflation spiked in 2022 and not come back down. The last qtr. does not look much different than most of the others since then to me — which is to say neither improving nor getting worse than the range established since then.
Yes, article says 66, down 2 from 68 prior quarter. Not like there was a spike in new additions.
Fan59, same as you, I would be interested in the list of the banks. The number of banks may be down but the amount of unrealized losses could be up.
I would like to see that list just to see if I own any of them.
I think there are larger banks that aren’t evaluated for CRA but I am not an expert. I did find this article and FDIC site where they go to different banks monthly and put out a rating on their condition. The article does a good job of explaining the status.
I then opened the FDIC site and all links for the past 2 years, set record count to 100 and clicked the status a couple of times to see the poorly performing banks at the top and bottom of the list. It would be more thorough to do 3 years I think but again, not an expert.
article:
https://www.noradarealestate.com/blog/which-banks-are-in-danger-of-failing/
fdic list:
https://www.fdic.gov/banker-resource-center/monthly-list-banks-examined-cra-compliance-52
Does anyone have workaround for banks that might be excluded from these lists?
The FDIC Problem Bank List is confidential, so you can’t access the specific names of banks on it. However, you can check the health of your bank by looking at their recent financial statements or contacting them directly.
Most people fail in the markets because they talk themselves out of doing and investing what they are most passionate about. Ideas are a dime a dozen. What makes the difference is the execution of the idea.
I am Azure
Azure,
I love reading your comments. I had been wondering why nobody had been talking about this, but I wonder i the 66 banks as problems is related to unrealized losses occasioned due to rate moves as with the March ’23 freak out, or is related to real estate losses.
I have not noticed an explosion of FHLB lending as occurred back in 2023, so I will assume the latter and that means it’s not a liquidity issue as back then.\
Comment?
losingtrader, thank you so much for your kind words and post. I am in magnificent Vancouver, British Columbia Canada for the next few days and want to encourage everyone reading this post to travel here and take the 90 minute BC Ferry to Victoria Swartz Bay on Victoria Island; certainly one of the most beautiful places on our planet.
’; I have personally been investing in these areas and have advised clients to make sure they are tilting these areas into their portfolios.
My insight into the banks is somewhat limited and my belief is that there are 2 major issues for the safety of individual or smaller banks right now: commercial real estate loans have been an issue for some time and I do not see a recovery in the sector on the horizon. I own many NNN and NN commercial buildings and have enjoyed the cash flow and write offs over many years. I am a partner in 3 Starbucks buildings (all 7%+) and they will ONLY sign NN leases, so we are responsible for the roof; this is only an issue if the building is older. A few years back, I decided to sell everything that I had commercial exposure (no private companies) to that wasn’t investment grade and/or companies that I and my accountants couldn’t properly see their quarterly financial filings. The reason why I tell you this portion of the real estate story is because the banks in their haste to lend lend lend and compete with the other lenders really didn’t care much about the incredible risks they were taking and now are stuck with a massive amount of empty or non paying clients in their buildings. The other issue for the massive multi national banks is their leverage of derivatives (Buffett warns of this is well) because most of the banks have built stress models and the Board of Directors and management must be alright with the huge leveraged risk (much more to say about this, but just too much to type). Finally, my institution money management friends are focused on 3 areas for the future: crypto (mainly Bitcoin only), AI (increases productivity and deflationary) and robots
In Latin we say, Gratias tibi ago quod me audientem sonum, sicut servus tuus humilis sum in hac equitatione fera
Ab, I have been on that ferry a few times with my wife. The car rental firms must have their parking lots stuffed full. Take a trip to Salt Spring Island across the bay and drive up to Ganges. Try the fish and chips at Moby’s pub great view of the harbor at lunch or evening dinner. Looks like it would be a great harbor to sail to if you had a boat.
Just a comment on real estate lending. I’m a limited partner in a very well run private REIT focused solely on shopping centers. For several years the REIT has been borrowing from insurance companies because banks are either not lending or not offering attractive rates.
kmrealty.net
DYODD. I’m not recommending an investment at all in this.
Pretty pictures can be all true but may not be all the truth you need. That depends on the details included. Picture one: A difference of one or two banks on a chart of 66? A mere nothing! No need to worry my friends! Picture two: adding the assets one or two TBTFs or big regionals to a chart full of tiny micro-communities, concerning.
Picture two: The FDIC changed its charting on problem banks to show only the number of problem banks over time instead of BOTH the number of problem banks AND assets over time. One of the reasons was to prevent a “disorderly run” if the public guessed the bank. Naturally, this has caused some speculation by traders about whether a big bank might be in trouble.
Find the FDIC link embedded in Azures link, then go to chart 14. Click over to Wolf Street website for a discussion of the FDIC charting change.
Adding a new worry bead to the “Is Government Data Really Accurate” bracelet: “Did they change the methodology again this month.” Right next to the “Is it accurate?” bead. Good post by Azure, thanks. JMO. DYODD.
> Click over to Wolf Street website for a discussion of the FDIC charting change.
Here’s a direct link for those who are interested: https://wolfstreet.com/2025/02/26/fdic-ends-disclosing-total-assets-of-banks-on-problem-bank-list-as-disclosure-might-suddenly-trigger-a-disorderly-run/
All of the comments re the FDIC Bank List are appreciated.
Will be interested on any Monday Prx action on sizeable Regionals.
This FDIC 66 Bank item will be a focus going further into the year.
One useful “old school” bank risk indicator is the Texas Ratio. It is more or less the ratio of loans in trouble to the capital cushion. A high ratio over 100% is a good indicator of impending failure.
TR works best during economic slowdowns. It doesn’t capture all risks. Like nervous Tech Bros ready to pull their $500,000 bonuses and run. A 100% performing portfolio of mortgages on Class B central city offices might get you nervous but is not troubled.
There are fewer free sites with detailed data these days. I think Deposit Accounts still has at least a letter grade and a TR direction on each bank.
I was able to find an interactive list there. It may not be current.
https://www.depositaccounts.com/banks/health.aspx
JMO, DYODD,
Florida Atlantic University did a study in June 2024 of U.S. bank exposure to risk from CRE, uninsured deposits, etc. It may shed some light on which banks are included in the 66 banks on the PDIC “problem list”. Flagstar and Bank of the Ozarks are high on the list with exposure to CRE.
https://business.fau.edu/departments/finance/banking-initiative/liquidity-risk-from-exposures-to-uninsured-deposits/
Thanks Larry, I book marked that web page but for some reason my bookmark link was broken.
Thanks Larry ….. If I am correct, that FLG is the former NYCB that owned FLG and had the name swap a year or so back.
Correct Jim, I used to own them and traded NYCB PU now FLG PU That is one I dropped to winnow my bank holdings and no longer hold or trade.
Still holding my CUBI-PF which I consider my most high risk bank holding.
Look at the volume, be in a world of hurt if you suddenly had to sell at Fido.
Interestingly, that list has Chase with Ohio as their home state (I guess due to their purchase of Banc One years ago). US Bank is also listed as an Ohio bank (which I think has HQ in MN?)
Is there any way possible to get a list of those 66 Banks???? I think all of us would be quite interested in that topic!!!
check my comment from earlier up top
ChuckP, go to the fdic.gov page (second webpage provided in Yield Hunter’s earlier post) then click on link for each respective month to see the list; set entries per page to 100, and click on top of the right column (i.e., Rating) to sort. “O” is Outstanding, S: satisfactory, NI: needs improvement.
Almost $40B / mo- that seems huge for a less than huge bank. Errkk!
The yield on any trade is
yield = gain/cost
For example, if you pay $1000 and make $50,
yield = 50/1000 = 0.05 = 5%
To annualize, do this
annualized yield = yield * (days in a year/days held)
If in the above example the holding period was 180 days and a year is 360 days,
annualized yield = 0.05 * (360/180) = 0.10 = 10%
Cost and days held are known. What about gain?
gain = payments received – cost
For a preferred stock held to call or maturity,
payments received = all dividends + principal at par
For a completed trade everything is known to easily calculate annualized yield. The challenge in figuring YTC or YTM for a possible preferred trade is calculating “all dividends” expected. That was the subject of my post yesterday.
If the holding period for a preferred YTC or YTM trade is relatively short, say under two years, the timing of the purchase can substantially affect the yield. The best result is a low purchase price before and close to an ex-date. I think my bias is to focus on price and not timing. In any case, my spreadsheet tells me the YTC/YTM to help with the decision.
Another way to look at gain:
gain = payments received – cost
payments received = all dividends + principal at par
gain = all dividends + principal at par – cost
cap gain/loss = principal at par – cost
gain = all dividends + cap gain/loss
Nathan,
I think its important if you find you can sell a holding before maturity and make more income by locking in the capital gain and moving the money over into something else or even buying it back ex-dividend date like 2WR ‘s did with SPNT-B the other thing is seeing an opportunity when people do sell because they don’t want to stick around for the call like the SBBA knowing it was getting called I looked at it like a short term CD.
There is money in this if you like to flip and trade like mjtroll but personally I don’t make enough money for the work, so I just hold.
You know how 2WR comments about Schwab and E-Trade holding payouts overnite and over the weekend to make money off the float?
There are companies who announce a call and say interest quits accruing on a certain date but the final payout is another date. It would be nice if you had a program showing those two dates and lets you know if you sell and even lose a few pennies of the full payout you might gain several weeks of interest by moving into something else.
Thanks for your thoughts, although I’m wondering if my ranting might have obscured my point.
I’m definitely not arguing that YTC or YTM are unimportant. Instead, I’m arguing that calculating accrued is red herring. People think it helps, because it helps get closer answers when using the spreadsheet YIELD function, but this approach will never give you an accurate answer. Even if you adjust the price by the “right” accrued, there are cases where you will get grossly misleading answers for real-world preferred stocks.
You can certainly get directionally-correct answers using YIELD with accrued adjustments for long maturity stuff, but as the time frames get shorter the errors magnify. If you want reliable numbers, your choices are either to manually use a two-step process with a bond calculator as 2WR does (first pass to calculate accrued, then again with the price and possibly dates fudged), or to use an exact cashflow based method like XIRR. I’m pursuing an XIRR based solution.
My argument is that if you are using YIELD in a spreadsheet to calculate YTM for a preferred stock or baby bond you are almost certainly using it wrong, and adjusting the accrued interest isn’t going to help you. You are on much thinner ice than you probably realize. I was using YIELD in my preferred stock spreadsheet, and now that I understand it better, I will never do it again. I realize this claim probably makes me sound crazy, but such is the zeal of a convert.
Nathan, I went off track. My thoughts were that today Ready Capital announced payment of dividend for ex-dividend date of March 31st and payment April 30th.
If this is how they operate and you had a capital gain equal to the dividend before March 31st. I would take it so I wouldn’t have to wait 30 days to get paid.
Dividend Sensei on SA posted an interesting article on his ‘family’ fund- having to sell-off a million or so to help 16 family members leave Ukraine.
He talks about having a balanced portfolio with a few he considers ultra-safe long term, but I am intrigued by the CTA-Simplify Managed Futures Strategy ETF. Never heard of them- several that are similar that they sell and some other companies noted too. He has ~ 55% of the p’folio totaling $2.2million.
I saw one commenter say he couldn’t buy it because it wasn’t consider managed to reflect an index etc.
Anyone with opinions, thoughts. I see they prob pay 70-75% as ROC according to a couple 19As.
I like CTA and recently added it as portfolio ballast – it is not correlated to equities. So far it’s a loser. (Not necessarly a fault.) I was looking for some form of diversifier / hedge with a reasonably stable NAV and some possibility of “event” upside and CTA fit my needs. I would not put first dollars into it until your other buckets are filled to overflowing. Don’t buy it for income and don’t expect monthly distributions – it’s an erratic payer.
CTA’s pros and cons are the same – it uses a secret sauce (not a strict index) and the ingredients vary so you are relying on the chef. Not for you if – lunch is a burger medium on toasted whole wheat with fries and Heinz on the side. For you if – you order the Daily Special.
The sponsor has fact sheets and video. There are likely influencer videos on You tube. While not necessarily trustworthy, I find them useful for sharpening differences between competing funds.
Other funds to look at are BTAL and KMLM. I know nothing about this area, so I set up a portfolio of tickers to watch performance against say SPY. You can also backtest. K-1’s are common for these funds and tax treatment of distys varies so know what you are buying. CTA is no K-1. JMO. DYODD,
Funny Bear, I ordered the bacon and cheese burger on a toasted bun at the Bluebird cafe in Hopland yesterday. Best burger and fries in a long time for $18.00 and fries so hot it almost burned my fingers.
I need to try Fidelity’s tracker again. Get someone to help me to set it up for lists. The last time I thought I had it set up it disappeared. My one list on Yahoo always shows up when I log in and I have one on SA but don’t follow that one as I haven’t updated it. These have been easier to set up for some reason.
My other lists I keep losing the pcs of paper I have them written on.
One account I have holdings spread out to lessen the risk and no ETF’s
Lately I have just been adding to existing holdings. If I sell something or it gets called I have been more likely to not add something new.
If I’m going to continue to hold the BB and preferred of BDC’s and CLO’s it may make more sense to hold buy an ETF to spread the risk around.
Hopland! My godmother ran McDowell Valley Vineyards for many years. Beautiful country.
For me, the Q is what percentage of my stocks ( of all types) would be required to make a meaningful hedge? Div Sensei had 55%, which for me would be a non-starter, but not sure if 5 or 10% would work to any extent –that would be a large $ amount for me- especially if they aren’t paying much.
thx
The most practical advice I ever read came from an ordinary investor, not a expert: you don’t need to hedge 100% because your portfolio is not going to zero. (2nd place, the 1890’s version: if your stocks are keeping you awake at night, sell down to a sleeping point.)
Figure out how much loss you can take without freaking out. Figure out what events you want to hedge against. Figure out the cost. Proceed from there. It may make sense to do nothing. Cash has worked for me in most markets. I stop reinvesting dividends, call proceeds and buyout money when I get nervous. A lot of times the storm passes.
Alt ETFs are popular but may not perform as expected. There are cheap simple things you can do like stop loss orders. Options. I am a buy and hold kind of guy. Day traders can ignore this post. JMO. DYODD,
I’m approaching 50% cash equivalents, not sweating it- just curious about one I had never heard of.
Gary
I used to bank the commodity exchanges in Chicago – the Board of Trade and CME.
A commonly discussed topic was that 90% of retail investors in commodity futures lost money.
The money to be made was in selling futures to those investors.
I personally would never invest in a Futures ETF.
DYODD
I appreciate that– don’t really see me doing it.
thx
i spent 20+ years in the pits at the cme,the cbot and the floor in new york
Same was true of day traders back in the day wen it exploded in popularity. Short sellers are predictable as hell covering whenever prices go up. And anybody else following some formula millions of people have been sold. The sharks make money playing against predictable players. Every poker player knows that why don’t investors?
There have been several discussions of YTC and YTM calculations and calculators for preferred stocks with 2wr being the most knowledgeable. Sorry to say, I haven’t been reading the details, and so I want to present a simple thought on the subject.
On what date (SD) does a new position start “accruing” dividends? It will always be a payment date as defined in the prospectus. If the purchase is made…
1) On a payment date. SD = purchase date.
2) After a payment date but before the following ex-date. SD = previous payment date.
3) On or after an ex-date but before the next payment date. SD = next payment date.
Another way to say it is to think of a range of dates starting on an ex-date and ending the day before the next ex-date. SD will be the payment date within the range. The purchase can be on (1), after (2), or before (3) SD.
Because ex-dates aren’t on fixed dates due to weekends, holidays, and issuer vagaries, knowing SD is the only tricky part of calculating YTM or YTC. All the other variables are easily determined. I didn’t see a calculator that took this into account.
Let me know if you agree or disagree with this analysis.
I think you have it nailed. And when the Start Date for the next payment falls on a weekend or holiday, it still remains that numeric date. Said differently, the “weekend” doesn’t effect the Start Date
I’m not an expert, but I’ve been working on this quite a bit over the last couple weeks. I’ve become radicalized. My current view is that trying to exactly calculate exact accrued for preferred stocks is almost always a mistake. It comes down to why we are trying to calculate accrued. For a bond that trades clean, it’s because you (or someone) needs to know how much interest you’ll be paying at the time of purchase. But for a preferred (or baby bond that trades dirty), this doesn’t happen.
The main reason people want to calculate accrued is so that they can fool the yield tools that have been created for bonds into mostly working. But in this case, we don’t actually care about what the accrued is on a theoretical level. Instead, you care only about what internal calculation the tool is using to calculate the accrued, so you can fake up a price that that will cancel out what the tool is doing internally.
Now, if the tool is something like the Fidelity calculator that 2WR recommends, it directly tells you what it thinks the accrued is. If you are creative, you can make this work. But if your goal is to use the YIELD formula in Excel or Google Sheets, I think it’s a dead end. The function makes too many internal assumptions that are specific to bonds that trade clean and have don’t have separate ex-div and payment dates. With YIELD, no matter what you try to use for accrued, there will always be situations where the answer is wrong. The knobs you need are not there.
The better solution for preferred stocks (in my opinion at this time) is to ignore accrued and use a tool like XIRR that doesn’t require it. What matters is how much you pay, and how much you collect, and when you collect it. Accrued doesn’t factor in. You either get a full payment, or you don’t. Instead of trying to figure out how to make YIELD sort-of work in most cases with an acceptable level of error, use a tool that actually suitable for the task.
But that’s a rant. For the question you actually asked, I think you need to be a little more specific about for what purpose you are calculating the accrued. If you are trying to calculate it for the purpose of fooling the YIELD function into giving a mostly correct answer, then you need to treat it the same as a standard bond which starts on a payment date. If you are trying to figure out fair pricing at all points in the cycle, you need to consider the ex-div date. If you are doing it just for your own interest, you can use whatever you want.
But if you are trying to accurately compare the yield of two preferred stocks, or a preferred against some other investment, you really should use a tool that is based on cashflows rather than caring about what counts as accrued. It’s tricky to set up initially, but everything else eventually leads to madness and despair. And now that that’s out of the way I can get back to yelling at clouds!
For years we ran a successful preferred stock arbitrage, despite not using the correct accrual date based on what I’ve read on this site.
It’s sorta funny looking back the only reason we stopped is that the owners of the preferreds we were short played stupid games (and I’m speculating here) by moving their stock from a margin account to a cash account, thereby making the stock we were short extremely hard to borrow, elevating the borrow rate from , say 1%, to HUNDREDS of % and wiping out any potential profit.
Lt
I was going to keep my opinions to myself, but decided to reply to your question about trading out of munis and going into something like GAM or TY
You asked for opinions twice in two difference places but unfortunately I can’t find the post without wasting too much time and no search for the poster.
Your and Westie’s posts pretty much sum it up.
Stick to what you know.
Everything is going to go down in a market drop. Ask yourself what will happen to muni’s if the market drops. Is there some insurance for payment?
Does the market feel like it has a greater chance of going up or going down? who knows.
People default on payments. Is there an asset backing the muni’s ?
Which will continue to pay and recover faster, Muni’s or the preferred? I know in the Covid drop quality preferred did recover over about 9 months.
Maybe just spread your bets around.
Good luck.
The following is an excerpt from an new article. I’m not including the link because the article might be seen as political, but not this part…
“A difficult time to invest.”
“Everybody’s paralyzed.”
“I’m sorry I can’t be particularly positive.”
“The chaos that is reigning right now is causing everyone to sit on their hands.”
“That’s Citadel CEO Ken Griffin, ON Semiconductor CEO Hassane El-Khoury, Franklin Templeton CEO Jenny Johnson, and Nasdaq Private Market CEO Tom Callahan”
My reaction: Feeling good in fixed income.
So I have a question for anyone who could help me understand something.
If FRT is rated BBB+ and KIM is also rated BBB+ and REG is rated A-.
Why is FRT-C around 5.7% and both KIM-L and M around 6%. But both
REGCO and REGCP are currently yielding over 6.5%. Any thoughts ?
I’m not familiar with the specific issues, but my first guess would be that you aren’t using comparable ratings. Quantum has FRT-C , KIM-L and KIM-M as as “Baa2 BBB-” by Moodys and S&P, while it shows REGCO and REGCP as “NF NF” (not rated).
Where are you getting the A- rating for REG? Are you possibly using a Fitch rating for REG? Fitch is generally not taken as seriously. The other possibilities are that the market thinks that REG’s stability has decreased since the rating was done, or thinks the rating for their Preferred should be a greater discount to their rating as a whole than the other two.
Headlines of interest dated 2/26/25. REG was upgraded to A-.
I know that’s not there preferred rating but neither was FRT and KIM BBB+
Rating. I was under the impression that preferred’s are 2 notches below that rating ?
The “2 notches” is a rule-of-thumb rather than an absolute. It’s possible that there is something about REG’s capital stack that makes their preferred stock relatively riskier compared to their debt and thus justifies a lower rating. But given the recency of the upgrade, I’m guessing you are ahead of the curve and have found something that might be mispriced. Thanks for pointing it out. I guess I’ll start paying attention to it!
Woody, For what it’s worth, I’ve been buying up some REGCP every chance I get for the last 6 months. IMHO, one of the best deals out there right now.
You’ve quoted ratings at the corporate level for senior unsecured and these are preferred, hence the lower ratings… Don’t know why the market differentiates the way it does but if you compare comparable outstanding corporate issues, you’ll see that the same yield comparisons seem to stand for the 3 names…. Why???? Go figure. I don’t follow any of them.
I can’t find the comment I made yesterday , so I’ll add this here as a request for comment:
I’m thinking about a very large purchase of GAM-b, the 5.95% CEF preferred that has had a seller around in size lately near par.
Considering accrued dividend this is trading slightly below par .
I looked at the last 10 years of dividend 1099’s and they contained a very tiny amount of ordinary div that wasn’t qualified or cap gains or ROC…just a few % .
As I have likely trimmed my muni holdings (prolly stupidly), I was considering putting all the cash into GAM-b or BCV-A, both around 6% with the long bond under 4.5.
Please let me know if you see any risks other than a change in tax rates.
These securities are not as safe as the munis with a GSE backstop (or in many cases govt ins on a large portion), but they are very close to being that safe and I won’t worry about either unless someone has a worry in these comments.
I have a huge chunk of change coming back in the next few months from 490 shares of MSEXP, and I’ll need a home for that also.
I’m thinking about putting 7-10 % of my portfolio in GAM-b and BCV-A.
Any others?
As a note , there were a number of sell imbalances in preferreds at month -end. TBB , ALL-B, SPNT-b, FLG-U, and a few others I saw. I did buy some FLG-U on the close, as well as covering the TBB short I have against KTBA.
I’ve noticed the market screener for imbalances on IB does not pick up all the imbalances…it misses some large ones and I’ve never been able to get them to fix this. They want me to send them screen shots. That’s really a dumb request that would require me to screen shot both their imbalance screen as well as a TWS screenshot of the actual imbalance as reported in another area of IB. I hardly have the time to FIND a difference and try to trade in the last 20 mins, much less solve software problems . I’ve been telling them about this for 5 years. It’s one reason why I say IB is a crap system compared to truly professional software like Takion, but I cannot clear through a retail broker using Takion AFAIK, there’s a $350 / month software cost–which is really cheap when you consider the advantages, and I’m not happy with the way I was treated when I traded with the owner of the Takion software.
(the last year of my professional career I traded the owners retail account using Takion, and I kept getting charged for failure to deliver a short position when it was the other side of the trade’s obligation to deliver after I covered the short. It made no sense and cost me $17k, but was not worth my time to arbitrate ). That last trading deal was that I had millions in buying power with no investment . The owner had to trust I would pay him if I lost money, and the settle value was at $50k…which I did promptly lose after starting. Split was 90/10 if I recall. It worked well for the owner of the account as he also owns a stock lending firm that charges WAY more than IB for shorts.
There are a lot of people who would kill for a deal trading millions in someone else’s money with a promise to pay if they lose $50k, but that’s an extremely limited deal. I think there were 12 people with that deal, and all were known to the owner..
Based on the rest of your comment you are obviously more experienced in this than I am, but I do have a few thoughts.
I’m sure you considered it, but the obvious downside to putting lots of money into GAM-B is that it’s a perpetual. You are making a big bet that long term interest don’t go higher. I personally have been moving the other way and removing my exposure to duration. I don’t know what’s going to happen in the next few years, but right now I feel more comfortable with term issues. And if I was betting on a drop, I’d want something that won’t be called from under me as quickly.
Assuming you explicitly want a perpetual preferred, the other question would be why GAM-B. Is there a reason to believe it has a higher return for the level of safety it provides than all the alternatives? If it’s primarily that CEF preferreds have historically never defaulted, there are some other perpetual CEFs that are paying more. I haven’t researched them, but my list shows HFRO-A, PRIF-K, NCZ-A, NCV-A, RIV-A with higher current yields. I’m happy to believe that GAM-B is safer than all of these, but I guess I’d research and eliminate the higher paying ones first.
Nathan,
I’ve decided I’ll replace muni duration risk with qualified dividend stuff. I’m 65 and own my home outright so the basic shelter cost is fixed although servicing the home obviously isn’t.
I’ve read on III comment that HFRO is riskier than it appears and the market agrees. I have some NCZ A and B but anything where the underlying is CLO equity gives me cause to worry.
The Bancroft prfd and Gam b were chosen because they seemed to have enough diversification and 5x asset coverage or more
I owned SBBA in both Fidelity and Schwab. At Fidelity I got notice of the call and the principal and interest were credited Friday, 2/28. At Schwab, crickets.
Call isn’t until March 3. Fidelity will often post Monday’s divis on Saturday.
After the brouhaha at the White House today, I’m kind of surprised that the equity markets finished so strongly. The markets usually hate uncertainty and we definitely have some. I’m thinking beyond Ukraine, which will eventually get worked out in some way. I’m thinking more about our current geopolitical alliances. Maybe the US will become more of an isolationist country. Maybe international trade will be significantly reduced by high tariffs from everyone. Maybe certain countries will trade with each other in separate groups. The final result, in my opinion, will probably be a reduced standard of living for most countries, if not all. I can see increased conflict as some countries invade others to acquire much needed natural resources or just because they can. Beggar thy neighbor will become the norm. JM2C
Whidbey,
In other news, this time about private equity. Makes me wonder about the loans that were made to buy Twitter and the recent effort to sell some of those loans. How do you put a value on private loans or Private bond placements?
https://finance.yahoo.com/news/us-regulators-unusual-move-raise-231432693.html
Whidbey-
What I texted to a friend in the middle of last night:
“Ya gotta believe there’s gonna be a bounce sooner or later. Sooner is feeling better and better.”
Reasons: Stock indexes oversold and due for relief. Some traders betting Tariff Tuesday will be canceled again. (Plan on tacos.)
My equity portfolio remains tilted towards cash (more), sector bets (energy, legacy) and an income core (utes, preferreds, REITs.) A tortoise, slow but steady.
Looking to hedge against The Coming Disaster — but which one? The event risk changes every 24 hours. So tiptoe-ing into alt investments (commodities, crypto, gold, the usual suspects.) No success, but but … Lady Volatility is as seductive as a free drink at the slots in Vegas. (“Luck Be A Lady Tonight”- Sinatra) Buffett warned against investing outside your circle of competence. Buffett likely did not spend much time in casinos or on Wall Street Bets. JMO. DYODD.
The markets strong move up was attributed to the GDPNow released by the Federal Reserve Bank of Atlanta estimating negative 1.5% GDP growth in first quarter. Two year Treasury Notes fell below 4%.
https://www.atlantafed.org/cqer/research/gdpnow
Whid,
I think it was more of a “brou” and less of a “ha ha!”
Now that RILYM has been paid the next two to watch are RILYG and RILYN both mature in late 2026. Don’t know if they can make it that far but worth watching.
My take on the article: This eye-opening analysis of gov’t economic statistics makes the point that the way stats are calculated, analyzed and reported doesn’t reflect economic reality for have-not, or perhaps most, Americans.
(I’m treating the article as non-political. If you have a political comment to make, please don’t.)
https://www.politico.com/news/magazine/2025/02/11/democrats-tricked-strong-economy-00203464
Thank you Rocks
Well, this article points out what I think is common knowledge among many…… The Labor Report has long been unreliable as employment statistics. Data is collected and analyzed far different than it was in the past. I used to follow the report and I recall there was a data point (U9?) that gave the unemployment like the old way. Recall it was over double the official number!
The top 10 to 20% see the world far different than the bottom 80%. The haves are getting virtually all the benefits of our economy and the rest get “the short end of the stick”.
DJ, What I posted yesterday was tongue and cheek about the top 10% wanting androids as servants and to replace workers, but the reality is this would just make unemployment worse. I saw a comment attributed to Elon Musk that he said the government may have to supply a universal income to people at some point. I.E. you need to keep the natives from becoming restless when they have nothing to do.
The massive demographic changes due to baby boomer retirements has been blowing up the BLS stats for years.
One reason is that they can measure job openings and they can measure unemployment applications, but they can’t measure social security applications.
Every time I read an article, like this one, that explains how the methodology used to calculate CPI underestimates the real size and impact of inflation on Americans, I have the same thought. If the methodology was changed and produced higher numbers, COLA adjustments would blow the roof off of Social Security.
r2s,
Perhaps not strangely, among the emails I receive from my FRED subscription is one indicating that most economists believe govt CPI OVERSTATES inflation
because it fails to account for substitution.
https://www.dallasfed.org/research/economics/2024/0618
Just my read and opinion of the article posted in the comments above is that is seems a little childish in evidence regarding it’s assertions. One man’s opinion.
We are all greatly benefitted when Tim shares his portfolio.
It allows one to see how others view the market and compare their own view.
For whatever it is worth
Here is my current portfolio:
67% Short-term [less than five years] T-Bills, BB’s, and prefs yield mid 5’s
16% Prefs other than above yield 6.9%
14% Sock Drawer low P/E high div Common
3% Hedge Gold and SPY short
DYODD
Stormy Westie
westie, is that your entire portfolio? do u own no stocks/etfs? just curious about that w/many people on here. hope u dont mind the question.
Hey — all you technicians, this is pretty extreme
https://www.aaii.com/sentimentsurvey
May be wrong place for post ….. White House – Ukranine talks are HOT !!!
I keep my political comments to a minimum, just not the place for most of them. But to ignore politics and world events entirely and their relationship to the stock and bond markets would be foolish, regardless of one’s political affiliations.
Jim-
May be wrong place for your post….
Thanks, understood, and apologies to members.
Jim, your comment was not political, just the news and facts, with no opinion. No need to apologize.
Unbiased discussion is fine, end of ukraine war will likely affect some investments in various ways. Stumping for a bias is not cool. Easy to tell the difference.
World event, no apology needed for me at least.
This survey is forward looking. People say the economy is good but they are bearish.
Did anyone get paid the SPNT.B dividend yet, I thought 2/28 was pay date.
Not yet @Schwab @12:00pm
Thank you, rk160.
Not yet, at Fido. 12:44 pm EST
Yes, 12/28 is the pay date. Fido matches this source:
https://www.nasdaq.com/market-activity/stocks/spnt.prb/dividend-history
Not at Schwab yet, but I seem to recall this from the last payment “12/03/2024 as of 12/02/2024”, so the payment was 1 day late, we will see this time.
I did get paid by SAJ today.
or ETrade
Boys and girls. I was always the last one who wanted to open my Christmas presents. Everyone here must have been the first kids to start ripping open their presents Xmas morning.
Charles-
I always laugh when I see the “did you receive the xxx dividend” comments get going. Over the course of the day I received 15 dividend payments and 3 bond interest payments. Patience, Prudence. They’ll come.
In my case, it was not impatience. I was trying to measure ETrade’s timeliness of delivery of dividend vs its competition….. My experience has been Schwab was the slowest, and most likely it was done intentionally as well. Now the same pattern is emerging in this new account at ETrade. And I don’t think it’s coincidental that both do not have sweep accounts into true interest earning MMs….. By depositing into my account late after the close, they have essentially free use of my dividend money until I can manually move it the next day (or post weekend in this case) into SGOV….. BTW, I got called out as a suspected day trader today due to so many ins and outs on SGOV after having unexpected buys and sells happening in my account and trying to zero out my cash balance during the day. That and the UMBFP trades…. Grrr
That’s funny 2WR!
Rocks, Xmas was over too soon. Now I have to wait for the 15th and the end of the month
LoL
rk160,
I got it now. It arrived this afternoon.
Got it.
Still no at ETrade…..
2WR posted both Fido and Schwab on our accounts.
Divvy SPNT-B now is in @ ETrade
Wow, no SPNT-B from my Erade as of this morning. Strange that some got it and some have not……
RILYM redeemed to today in Fidelity account plus dividend paid as promised.
GDP Qtrly’s ##’s 2023 ~ 4th Qtr 2024 ( recent 2nd est ) …..
Source BEA with Qtrly revisions
4th Q 2024 = 2.30% (2nd Est)
3rd Q 2024 = 3.10%
2nd Q 2024 = 3.00%
1st Q 2024 = 1.30%
4th Q 2023 = 3.20%
3rd Q 2023 = 4.90%
2nd Q 2023 = 2.10%
1st Q 2023 = 2.00%
Yes you’re correct …. slow day for poster.
I trust the BEA data source, yet the look back on the Qtrly #’s, scary.
$5 million Gold Card visa residency in US:
I have several wealthy American friends with global investments planning to expatriate to St Kitts where I believe no taxes are due (at least no cap gains),
and then buy a gold card to get residency back into the US.
It’s sounding like a poorly thought out idea now.
Give us your tired, you poor and your hungry.
Heck we don’t want no rift raft here, only millionaires that can afford to lease robots to the hard working on a subscription basis to make even more money off the working class.
Could someone write a song about how the man has a hand in your pocket wanting you to share your paycheck with them
I apologize about the satire. I probably get sued by some billionaire
I think Bob Dylan wrote one close …..
Eh?
“American friends”
“buy a gold card to get residency back into the US.”
Why would Americans have to buy anything to get back into the US?
Your post is nonsensical by every defination.
PickleNick,
“Expatriate” means the Americans plan to change their citizenship to St Kitts, then gain permanent residency in the US via the $5 mill gold card. They would no longer owe tax on worldwide income as they won’t be US citizens.
Normally, someone who expatriates for tax reasons is barred from entering the US, even on a tourist visa. Of course, nobody tells the truth as to why they expatriated if it’s for tax reasons.
I hope this clarifies the post for you .
An expatriate (in abbreviated form, expat) is a person temporarily or permanently residing in a country and culture other than that of the person’s upbringing or legal residence
Hmm. In this case I was using “expatriate” as a verb, not a noun, but I see the confusion and my use my not be correct. I accept that.
What word would be used if one changes his/her citizenship but does not actually leave the country in which he resides?
I don’t think “immigrate/emigrate” is correct
SVOL trades inversely to VIX. Sharply down today. 3/4 of the last monthly dividends have been 27 cents. It would be no surprise to see 26 cents or ??? At today’s 20.25 close, the CY is 16%.
What I learned from the last swoon is that price bounces back. This time I’m considering a little bottom picking. I’ll probably catch a knife instead.
SVOL makes lower highs on each bounce. It looks like it’s eating itself. That’s okay for a trade if you know what to expect. The high dividend provides some protection.
Imagine me giving trading advice!
Yes, I sold SVOL a couple months back. Not a good long term holding for me.
Both AGNC (mREIT invested in MBS) and PFFR (REIT preferred etf) pay 12 cents monthly. AGNC 10.42, PFFR 18.67. Do they both dance to the same piper?
UMBFP – WEEeeeeeeeeeeeeee! Fun ride just now as some one just ran it up to 25.87 on 15k shares….. Foolish me, I let some go at 25.68 which is 2% YTC….. ha! No way this doesn’t get called
2wr—you’re correct–no way it will stay outstanding. Take the generous bid if you can get it.
I had a trap set for UBMFP but instead of catching a meal I caught a minnow. Landed 1 share at 24.99
Crazy coupla days on UMBFP…. I bot back what I sold yesterday at 25.68 at 25.30 today and then got hit with an additional 500 on a dump at the close at 25.17! I’m feeling like a madman day trading genius! YTC @ 25.17 = 7.63%.
My 25.19 limit order was filled at 25.17. From what I see in Streetsmart Edge (and freerealtime dot com), it seems that some institution unleashed 43,772 shares at 25.17 at the end of market … and then 244 more shares.
2W, you didn’t get mine. I sold UMBFP today at 25.51 after calling Fidelity to allow me to sell.
Now the question is will they call on 7/15/25.
I calculate 25.17 YTC closer to 6.3%
Dan & 2WR I just held and didn’t sell my UMBFP (had too high a ask) but I did pick up another 200 shares at 25.17 so over my limit on holding. I also picked up 500 shares of SPNT-B for my wife’s account at 25.17 missing the low for the day.
I also picked up an odd lot of 109 shares of SPNT-B at the same price to round out to 500 shares in one of my accounts.
I see someone after hours was crazy enough to pay $28.21 for UMBFP wish it had been the shares I had for sale.
It will be called…. period…. but if it’s not, we’re golden for 5 years at what will be a large improvement in the coupon rate.. only if the 5 year is lower than 0.325% will it be lower…. UMB is investment grade. I think I’m OK taking on the credit risk…….
Laugh of the day-
B Riley gets $160mm loan from Oaktree at a sweet 3mo sofr + 8%.
Was up almost 28%, now ~17%. What could go wrong….
Yes, I mean it’s better than going bankrupt, but oh boy Oaktree gets its pound of flesh…
Howard Marks & Company are some of the most shrewd vultures of the market. I miss OAK stock.
For FTF preferreds which replaced their 3-month LIBOR (“3mL”) floating reference rate with the 3-month SOFR (“3mS”), they also add the 26.121 bps tenor adjustment to each dividend’s coupon.
In the last few years, several FTF preferreds were created with the 3mS as their floating reference rate. For example, GPMT-A, NYMTL, ABR-F, and now RPTP.
I wonder – when GPMT-A, NYMTL, ABR-F, and RPTP begin their floating periods, will they just float off the 3mS or will their divs include the 26.121 bps tenor adjustment as well?
I own some ABR-F. The prospectus seems to be clear that the floating rate will 3mS + 5.442%. There is no 26.121 bps adder.
The 3mS + 26.121 bps serves as a replacement for 3mL in those cases where the issues would have floated off LIBOR had LIBOR not been discontinued. ABR-F was never intended to float off LIBOR.
I would say read the prospectuses and DYODD.
nhcoast – what about p S-11 which says, “Under the terms of the Series F Preferred Stock, the calculation agent is expressly authorized to make determinations, decisions or elections with respect to technical, administrative or operational matters that it decides may be appropriate to reflect the use of Three-Month Term SOFR as the dividend rate for the Series F Preferred Stock in a manner substantially consistent with market practice, which are defined in the terms of the Series F Preferred Stock as “Three-Month Term SOFR Conventions.”” I did not dig deeper to find that actual definition of “Three Month Term SOFR Conventions,” but this says to me they’ll do what’s convention in the marketplace for use of TMT SOFR. I think it’s safe to say the .261 tenor is added to their calculation.
Here it is: “Three-Month Term SOFR Conventions” means any determination, decision or election with respect to any technical, administrative or operational matter (including with respect to the manner and timing of the publication of Three-Month Term SOFR, or changes to the definition of “Dividend Period,” timing and frequency of determining Three-Month Term SOFR with respect to each Dividend Period and making dividend payments, rounding of amounts or tenors, and other administrative matters) that the calculation agent decides may be appropriate to reflect the use of Three-Month Term SOFR as the Benchmark in a manner substantially consistent with market practice (or, if the calculation agent decides that adoption of any portion of such market practice is not administratively feasible or if the calculation agent determines that no market practice for the use of Three-Month Term SOFR exists, in such other manner as the calculation agent determines is reasonably necessary).
If no .26161, then they skated thru since they IPO’d about 1.5 yrs before the end of Libor use, and might have been expected to conform to the coming change. But, perhaps they are above that.
2WR – The language you cite appears to me to be relevant only to the manner of determining the appropriate 3 month SOFR, and does not pertain in any way to the relationship between SOFR and LIBOR.
As I recall, by October 2021, it was understood that LIBOR was going away. If the understanding from the get-go was that SOFR would be used, then there is no reason to compensate investors for switching from LIBOR to SOFR, which was the purpose of the additional 26 bps.
And they didn’t “skate.” To the extent that SOFR is lower than the comparable LIBOR tenor, that would presumably be reflected in the 5.442% add-on. In other words, if ABR-F had started with LIBOR as the base, it’s logical that the add-on would have been ~5.18% rather than ~5.44%.
To me, the important statement is “to reflect the use of Three-Month Term SOFR as the Benchmark in a manner substantially CONSISTENT WITH MARKET PRACTICE.” To me that means they’ll use what the market uses regarding use of Three-Month Term SOFR….. I don’t know one instance of anyone using 3MT SOFR without including the tenor, do you? So to me this is confirming the use of tenor as long as the rest of the world uses it….. Could I be wrong in my interpretation???? Absolutely not….. I’m never wrong…. hehehe
To my knowledge everyone using 3mS plus .0026 to date had originally designated LIBOR as the benchmark. ABR-F did not.
Now I’m confused as to what you are saying…. Are you thinking that they’re not adopting SOFR at all????? I thought you were arguing that they were going to be using SOFR without the tenor….
All I’m saying that they will use the the 3mS without the 26 bps adder. As I understand it, the 26 bps adder was to compensate investors for the switch from LIBOR to SOFR (because, as I recall it, the ARRC research found that on average LIBOR had been 26 bps lower than the comparable SOFR). As ABR-F is not switching from LIBOR to SOFR, the 26 bps adjustment is not necessary.
Well let’s agree to disagree and reconvene come Oct ’26, OK? I do see where the way it’s written they have actually not adopted 3 mo SOFR now and have left the door open to what they will actually adopt when the time comes rather than declaring 3mo SOFR at the time the prospectus was written, so I get that… but I also think it unlikely that when the time comes, if nothing’s changed as to what convention is, they will do anything other than adopt 3 Mo Term SOFR + .26. I’ll put it on my calendar…. [not really – lol]
FYI
NEW YORK –(BUSINESS WIRE)– Rithm Property Trust Inc. (formerly known as Great Ajax Corp.) (NYSE: RPT, “RPT” or the “Company”) announced today the pricing of a public offering of 2,000,000 shares of its 9.875% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) with a $25.00 per share liquidation preference, for gross proceeds of $50,000,000 , before deducting underwriting discounts and offering expenses. The Company has granted the underwriters an option for a period of 30 days to purchase up to an additional 300,000 shares of the Series C Preferred Stock to cover over-allotments, if any. The offering is subject to customary closing conditions and is expected to close on March 4, 2025 . The Company intends to use the net proceeds from the offering for investments and general corporate and working capital purposes.
“Simple” Website Update Request:
One if not the greatest parts of III is the commentary/insights provided by all that interact here including Tim, Charles M, Pig Pile, Losing Trader, LT, Maine, 2WR and many, many others.
I would love to be able to click a page that was all comments (like the little widget on the side) but a page that contains 200 of them as I often get involved in a topic and can no longer locate it.
I have worked with WordPress in the past and would offer assistance gratis. I don’t think it would be the complicated considering the code to grab the most recent 10 or so is written into the theme of each page.
Tim, email me if you are keen.
Would anyone else be interested in an iteration of this?
Similarly, a page that had “investment thesis” by III users for specific issues would be amazing. A lot of times this is done inadvertently in the other threads but it would be excellent to have a page where these were consolidated and users could illustrate where their conviction for a specific issue is derived from or why they have no conviction in a certain company/issue.
Yield Hunter—I think what you would want it a page like I have–a master page of comments. I have a bookmark labeled ‘comments’ so I can quickly skim through them all. I think I have looked into this before, but I will send the idea to Riley (the tech guy) and see if there is a method to do that – I think it would be great if we could accomplish that.
New features are nice and appreciated.
For now RSS Feeds (Feedbro) works nicely for me. I can see how many new comments are in each category (Sandbox, Alerts, Reit Chat, etc) and within minutes scan through them.
danzeb, can you please shed light how you were able to do that? thanks GnG
As Green mentioned there are various RSS apps. For me Feedbro worked the best. It works with Chrome and Firefox and maybe other browsers. Get it by going to the browser “add on” or “extentions” option. Once installed it has an option called “Find Feeds in Current Tab” As an example go to III Sandbox Page and then when you select “Find Feeds in Current Tab” it will add Sandbox Page to its list of RSS feeds. Go to a different III section and do the same thing to develop a list. The RSS feeds will indicate if there are new messages in each selected Feed. Click on one and the new messages get displayed. There are various ways of displaying the feeds in the Options section.
Thanks danzeb. That is very helpful. I have been using Feedboro (and RSS Feed Reader) for a while but not at that detailed level. I will try to explore with Options. My struggle has been trying to find what I have missed when I’ve been out for some days. I typically have to go to the page (e.g., Sandbox) and search in browser by date to make sense of each respective thread. Thank you for your help.
Feedbro is no longer available for Chrome. When you find the extension in the Chrome Web Store, there is this message “This extension is no longer available because it doesn’t follow best practices for Chrome extensions.” Based on comments from developer, this is due to it not adhering to Manifest V3. Developer has commented they are working on MV3 version now. o if you have it don’t delete it because if you want it back you are SOL until if/when developer adheres to current required standards.
An an alternative, Feeder is what I’m now using.
As you probably know, but others may not know, the most recent comments are available through what’s known as an “RSS feed”. Various apps and website turn that feed into a page you can load in your browser, like
https://rss.app/feed/FgYBjaDML9R9x2Y9?utm_source=rssviewer&utm_medium=website
I use it all the time to follow the most recent comments, both on III and on other WordPress sites. It’s great. But I agree that for those who don’t want to go through those extra steps, it would be handy to have that functionality right on the main website.