The WSJ ran an article yesterday claiming that the steepening of the yield curve is an indicator for a prolonged slump. WSJ.com To see the current yield curve, go to this link at yahoo finance and click the treasury yield chartComposite Bond Rates: Bonds Center - Yahoo! Finance After clicking the yield curve chart, this site also gives you information on the typical yields for Municipal and corporate bonds by rating. It is not hard to get a steep yield curve, however, when the short treasury rates, for 3 and 6 month treasury bills, are currently .38% and .86% respectively. So with the 10 year at 3.73%, a curved line drawn from .38% to 3.73% looks steep. I have personally lost all interest in the Treasury market. I am consequently redeeming my treasury bills as they come due, having no desire to lend money to the U.S. government at a negative real rate of return before taxes (return adjusted by inflation), let alone after taxes which makes the real return even worse in a taxable account. Historical bond rates can be found at the Feds web site: FRB: Federal Reserve Statistical Release H.15 - Historical Data
I will be looking tonight at the earnings release of Brandywine Realty (BDN) as a condition to deciding whether to invest in one of its cumulative preferred issues. BDNPRC has a 7.5% coupon and is currently selling at about 1/2 of par value. I read an article last night in Forbes where the author claimed that Brandywine and Highwoods (HIW), as owners of office buildings in suburbia, would suffer more than a REIT like SL Green that owned prime real estate in Manhattan Forbes.com While that makes sense to me, it also looks like Brandywine has already been beaten to a pulp like HRPT Properties which announced earnings today.HRPT Properties Trust Announces Results for the Periods Ended September 30, 2008: Financial News - Yahoo! Finance The author in Forbes also claimed that Brandywine had to pay 20% for cash in late October and I have not yet seen any independent verification of that claim. So, I hope to learn more before making a decision on the preferred.