Tuesday, October 27, 2009

Added 50 NYB/IBM & Intel/Sold FXA/More Ruminations on Privatizing Rewards-Benefits While Socializing the Consequences/Risks

1. IBM & INTEL (owned): IBM gave the market a lift earlier in the morning after announcing that it would increase its ongoing stock buy back by 5 billion. Intel's CEO said that he believed that there was "a very good chance corporate spending on PCs will improve significantly in 2010".

2. Added 50 NYB at $10.90 (see disclaimer): New York Community Bank is one of the few publicly traded banks that refused to accept TARP funds. And, while it is almost impossible to believe, NYB has not cut its dividend either. That is a twofer in my book. I recently bought 50 shares in a taxable account at a higher price (Bought 50 NYB at $11.3), and I have added 50 shares at $10.9 in the regular IRA. At a total cost of $11 per share, the current dividend, which some analysts believe will be cut, results in a yield of around 9%: NYB Stock I have no idea whether or not the dividend will be cut. If it stays in place, it will not take much price appreciation in the stock to give me a 10% annualized yield which is all that I want from this investment. Earnings will be released tomorrow morning.

NYB did apply for 596 million in TARP funds and then withdrew its request: N Y Business

3. SOLD 30 FXA at $91.62 (see Disclaimer): I had a good profit in FXA and decided to harvest it. The Australian currency has risen fast and far against the U.S. dollar since early March. I do not profess to know much if anything about currency trading. I would note that I successfully traded these currency ETFs in 2008, and I kept the 30 FXA to reflect my gains. I am now moving into yield hog status.

FXA 30 SHARES +$349.82
2007 FXA 145 Shares +$347.75

This means -unfortunately- that I am likely to revisit some TCs sold as they approached par value even though they may be selling at a slight premium to par now. I hate saying that. I Never Buy Bonds at More than Par Value or CEFs at Premiums to Net Asset Value/ That last linked post was written in August. I am changing my tune as I suffer more months as punishment for being a frugal and responsible person who actually saves money. It is unfortunate that the responsible ones in our society are required to pick up the tab for the reckless and irresponsible ones. I am of course willing to pay for my own mistakes, as a firm believer in personal responsibility, but I am growing weary of paying to clean up the mistakes of others, particularly when they profited from creating the mess. Privatize the rewards and socialize the consequences is the new mantra. . Freedom From Responsibility More Discussion on Black Swan and Taleb's book If the ones who are ultimately responsible for the currently low rates, including all those Wunderkind and Masters of Disaster (who have proven themselves to be doofuses of the highest order) had to pay back all of their undeserved gains from blowing up the world's financial system, maybe I would be more tolerable of what is happening now. Judging from the current bonus pool at Goldman Sachs, the Masters are back at their old game as if nothing has happened. That pool has increased to almost 17 billion dollars for the first nine months. guardian.co.uk

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