1. Foreclosures: I thought that this was an interesting Video at CNN.com that discloses how banks will allow properties to deteriorate after foreclosure, or refuse to complete the foreclosure process after forcing the delinquent borrower to vacate the property, thereby contributing to the foreclosure problem by forcing down property values in neighborhoods effected by run down, vandalized vacant properties. RealtyTrac reported yesterday that foreclosure filings increased 32% in July, compared to the same month a year ago, and rose sequentially 7% from June, with banks repossessing 87,000 homes in July.
2. American General Finance & International Lease Bonds: I heard Bill Gross say on CNBC, during the panel discussion on Wednesday after the Fed's rate decision, that his top picks now are short term obligations of AIG subsidiaries. I do not recall him specifically mentioning American General Finance and International Lease Finance, though I believe that is what he meant based on his past comments which I have referenced in a few posts: AIG: SENIOR BONDS FROM SUBSIDIARIES Lottery Tickets & NADX (and see his interview in Forbes.com from about 8 months ago) It is unclear what Gross means by short term. Since he referred to 10 to 15 yields, I suspect that he may be talking about a year or less, just looking at the FINRA data on the trades. BUT, that is just a guess.
That kind of a gamble is not my cup of tea. The bonds of American General Finance are certainly selling at deep discounts to par value, with many issues maturing in the 2013 to 2014 range selling near 1/2 of their par value. The trading data can be found at the FINRA site. Search Results Just navigate to the bond that you are interested in knowing more about, and search the trades at the bottom of the page. Some of the bonds are lightly traded, if at all, particularly those sold to individual investors, and you may need to include a few months in your search range or select one that is more actively traded by the institutions. I have zero interest in any of them.
So, just speaking for myself, I am going to let Bill Gross speculate on these AIG sub bonds without me. I bought some of these bonds before 2008, when they were AAA, and have sold almost all of the International Lease bonds, except for 1 bond maturing in early 2010, at a small loss, just to quit thinking about it and to help fund my stock buying spree in March. If anyone is interested in following Gross' recommendations on this subject, I would hope that they do so based on their own independent review of the quarterly reports filed by the subsidiaries with the SEC. Both American General and International Lease file 10-Qs.
The most recent filing for American General, which reported another large lost for the Q/E 6/30 can be found at SECURITIES AND EXCHANGE COMMISSION Page 8 of that report explains what management is doing to stabilize the company.
The most recent quarterly report from International Lease can be found at EDGAR Filing Documents for 0000950123-09-032249.
3. Sold Trust Certificate PYV at $23.3 in Taxable Account (see Disclaimer): PYV is a synthetic floating rate security, and the last one held in a taxable account. (item # 2:Morning Notes 6/17/2009/CPI/Synthetic Floater Rally/VIX/Glimcher and Lexington Realty/Chart of Composite Bond Rates) I have transitioned these securities to my retirement accounts due to unique and difficult to understand tax issues connected to the swap agreement which creates the float. I had bought this security last December at $18 and change: Buys of a First Mortgage Bond EMO and a JPM TC PYV As I explained in the above linked post from 6/17, I had already bought the replacement for PYV in the Roth account, 100 shares of GJK at $19.83, another synthetic floater with the same underlying J P Morgan bond maturing in 2014, though with a different float provision and guarantee. BOUGHT 100 GJK IN ROTH/JNJ I intend to hold that security to maturity.
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