Saturday, February 28, 2009
Corporations Can Not Be Counted on for Dividends in Retirement/ Nocera on AIG Financial Products Unit/More on GE/Citi Preferred
Friday, February 27, 2009
Time to Hunker Down
GE Pay Cut for Shareholders But Not Management & Kicking Sand in the Wound/ Citi: Equity and Trust Preferred Stocks
GDP Down 6.2%/ Citigroup & Insolvency/ Another Problem: Deferral of BEE Preferred Dividends /
DISCLAIMER:
I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator. I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments. Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed. These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities. All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me.
Thursday, February 26, 2009
SNTA BLOWUP/ Bought WR/Obama Screws Sallie Mae & Health Care Companies/Hyperventilating on Taxes/
DISCLAIMER:
I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator. I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments. Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed. These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities. All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me.
BUY 50 BDNPRC at $9.25/Buy 50 BCF at $6.6/Home Sales/Kudlow's Creation of His Own Reality/LQD & Correction in Bond Prices/
Many cumulative preferred dividends also require interest on the deferred dividend at the same rate as the coupon. Senior bonds are higher up the priority chain of course, and a failure to make a senior bond interest payment is generally a default event that could lead to bankruptcy, voluntarily or involuntarily.
At the height of the credit bubble, some bonds were issued that allowed payment in kind rather than cash interest and had far more liberal provisions in favor of the borrower, so each prospectus has to be looked at individually for a lender to know their rights upon default. Just as an example of what happens when an interest payment is missed on a senior bond, see p. 154 of the prospectus for PFX. /www.sec.gov Optional deferral is allowed in virtually all equity and trust preferred issues that I know about. It is generally only when you get to the senior bond level that consequences for non-payment tilt against the borrower.
A high yield bond ETF, HYG, had a good rally from around 65 in mid December 2008 to around 79 at the end of the year as there was a whiff of optimism about a recovery in 2009. As that belief has waned, and concern about default rates gained the upper hand, the price has fallen from 79 to a few cents below 70 in trading yesterday. While high yield bonds are tempting, I am still avoiding an investment in a high yield ETF for now and I am far more likely to buy back LQD rather than initiate a position in HYG due to concerns about the relative default rates in 2009 between investment grade securities and junk rated issues.
Wednesday, February 25, 2009
Wild West Capitalism & Brooksley Born/Emerson Describes Events Today/ Sold LNC/Japan Exports Plunge/T
What was her offense? Born was proposing that her agency explore regulating the vast market in derivatives. While necessary, it would potentially step on a few Wall Street toes in their practice of wild west capitalism regardless of the consequences to civilization. That was why Larry was yelling at her that morning on the phone back in 1998. Born's effort to regulate derivatives was shot down by Alan Greenspan, Arthur Levitt, Robert Rubin and Larry Summers. NYT
It ended 2008 with 490.998 million in cash which does not include the IBIS sale to Abbott which happened this year. This increased cash to around 650 million at the start of 2009. I just look at the cash burn rate and the company expects to end 2009 with "more than $550 million in cash". It is not material whether the company beats or misses expectations since it has no products for sale. The value will be determined ultimately by the success of its pipeline.
Tuesday, February 24, 2009
Buy of 50 AEV in IRA/Hertz/Bernanke/
DISCLAIMER:
I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator. I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments. Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed. These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities. All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me.
Masters of the Universe=Masters of Disaster/AIG & Financial Black Holes/M, CBR,TGT/BUY OF ISF
It is unfortunate that they are all Americans. It is almost embarrassing. I offer my apologies to the world on their behalf since they have never uttered an apology about anything in their miserable lives and still regard themselves as the cream of mankind, the apex of what we have been struggling to achieve since Adam and Eve walked with the dinosaurs (yes, that is a fact and you can see it for yourself in a Kentucky museum: NYTimes.com)
But that is what happens when a civilization rewards above all else the business of shuffling papers around and creating artistic methods to screw people out of their money rather than making and inventing something that is actually useful.
I still have no interest in the common.
At that price, the yield is over 34%. If it continues to fall in price significantly after going ex dividend tomorrow, I will include it in a Roth conversion. The coupon is 6.375% on a par value of $25, and this is a perpetual security. The brokerage claims that it has a maturity in 2049 but the prospectus says it is perpetual. The common shares fell to below 4 in early trading today. This leaves me about $500 to invest in these speculative preferred stock securities issued by these two Dutch companies.
I am considering switching the retirement asset allocation in favor of bonds but have not done it yet, preferring to use my stock allocation to move into and out of positions which has proven beneficial during this bear market. I sold recently my position in Progress Energy at around 40 in a retirement account and just substituted Pepco (POM) at around 15.4.
I also bought 30 shares of GE today in my regular IRA in the 8.60s somewhere.
I also placed a below market limit order to buy 50 of an Aegon preferred getting smashed today that I do not own. I am more confident in Pepco than I am in GE. So POM was put in the ROTH which has a lot of excess cash now whereas GE was bought in the regular IRA in case it falls further which will make it eligible for the next Roth conversion. Reinvesting the cash in the Roth and redeploying the proceeds from bonds sales in the main account should keep me out of trouble during the next few weeks.