Thursday, March 16, 2017

Observations and Sample of Recent Trades-3/16/17 (BAFAX, SNR): Trump's 2005 Tax Return/Trump and His Gang: The Foremost Practitioners of Doublespeak in U.S. History

The GOP's Alternate Reality Universe Or What Used To Be Called Lying:

Doublespeak - Wikipedia

Spicer: Trump didn't mean wiretapping when he tweeted about wiretapping-CNN 

In Doublespeak, wiretapping no longer means wiretapping. I am not exactly sure what it means now. Apparently, wiretapping is some kind of surveillance. An example of Obama wiretapping Trump Tower would be looking at it as he passed by it in a cab.   

Kelly, Director of HMS, on Trump's wiretap accusation: 'He's got his reasons'- CNN 

Kellyanne Conway on surveillance: We have 'microwaves that turn into cameras'- LA Times

I knew about the Samsung "Smart TVs" could be turned into audio receivers, but Kelly Ann enlightened me on the nefarious microwaves. I am going to go unplug mine right now. 

Mike Pence: Mexico will pay for border wall-Mitch McConnell says he doesn't think Mexico will pay for border wall-CNN

Trump: “I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.” Trump gets down to business on 60 Minutes-CBS News 

"Nobody will be worse off financially in the process that we're going through " HHS Sec. Tom Price: 'Nobody Will Be Worse Off Financially' Under GOP Health Plan - NBC News-

CBO report: 24 million fewer insured by 2026 under GOP health care bill-CNN 

Paul Ryan: GOP Health care reform is 'act of mercy'-Wealthy Would Get Billions in Tax Cuts Under Obamacare Repeal Plan-The New York Times

No Magic in How G.O.P. Plan Lowers Premiums: It Pushes Out Older People-The New York Times

Fact-checking what Trump has taken credit for - CBS News

100 days of Trump claims-Washington Post (scorecard of Trump's false and misleading statements during the first 100 days)

Fact-checking the White House’s rhetoric on the CBO report - The Washington Post

Tom Price undercounts Obamacare impact on getting more Americans insured | PolitiFact

No Evidence Jobs Data was ‘Manipulated' as claimed by Trump's OMB Director


Trump's 2005 Two Page 1040-The Alternative Minimum Tax

I discussed this document in a previous comment. 

This return is marked as a "Client Copy". Donald may have released it himself surreptitiously. trump2005tax.pdf

Trump reported $152,737.866 in taxable income. There was a reported loss of $103,201,242 listed on item 21 that reduced taxable income to $49,536,524. The origins of that loss are apparently identified in a statement attached to the return.

As I mentioned previously, this is the most pertinent part of the tax return: 

Without the Alternative Minimum Tax ("AMT"), Trump would have paid $5,310,616 in federal income tax (line 44) or about 3.48% of his total income. 

The AMT required Trump to pay an additional $31,571,795 in taxes (line 46) that brought his total up to $36,571,795 or about 24% of his income before the $103,201,242 loss listed on line 21.    

Here's the rub. 

Trump wants to abolish the AMT. 


In 2005, Trump Was Hit With A Tax That He Now Wants To Abolish : The Two-Way : NPR

If the AMT is continuing to cause him to pay more in taxes, which could only be determined by disclosing his more recent tax returns, then Trump's motive for wanting the AMT abolished is self interest, and he has a clear conflict. 

I doubt that the vast majority of enthusiastic Trump supporters know anything about the AMT since they never have paid it but will cheer loudly when Trump says that the nation needs to abolish it. It is so easy to manipulate millions. The U.S. is fertile ground for demagogues to flourish. 

Line 65 shows 13,391,993 paid in 2005 estimated tax payments. This would income that Trump had a federal tax liability of $13,291,993 in 2004. The ‘Very Strange’ Item on Trump’s 1040: Alternative Minimum Tax - Bloomberg


I am way behind in describing additions to my bond/CD ladder baskets. I am discussing all of my $1K bond purchases. All of the intermediate bond purchases could be purchased yesterday at better prices even after a rally in their respective prices. 

The ten year treasury is having difficulty making a significant move above a 2.6% yield or staying above that level for long: Chart

Bonds rallied in price yesterday after the FED increased the FF range by .25%. The new range is .75% to 1%.

The ten year treasury closed yesterday at a 2.51% yield, down from 2.62% last Monday: Daily Treasury Yield Curve Rates-2017

Closing Prices 3/15/17:

TLT $118.50 +$1.43 1.22% : iShares 20+ Year Treasury Bond ETF
IEF $104.74 +$ 0.91 0.88% : iShares 7-10 Year Treasury Bond ETF
VCIT $85.71 +$0.70 0.82% : Vanguard Intermediate-Term Corporate Bond ETF

The dot plot continues to show that a majority of FED members anticipate three .25% increases this year:

14 out of 17 see at least a .75% hike in 2017
5 out of 17 see at least a 1% hike
1 out of 17 is projecting a 1.5% hike.
FRB: March 15, 2017: FOMC Projections materials


1. Intermediate Term Bond Ladder Basket Strategy

A. Bought  1 TransCanada 2.5% Senior Unsecured Bond Maturing on 8/1/22:

Issuer: TransCanada Corp. (TRP:NYSE)TransCanada (TRP:TOR)
Finra Page: Bonds Detail (prospectus linked)
Moody's at Baa1 (Stable)
S & P at A- (negative)

YTM at Total Cost (99.043 ) =  2.691%

This bond closed at 98.28 yesterday creating a YTM at that price of 2.848%.

TRP Analyst Estimates
Moody's Affirms TransCanada on Acquisition Announcement; Outlook Stable

I also own Transcanada reset equity preferred stocks.

Item # 4. Bought 50 TRPPRE at C$17.68 and 50 at C$17.25: Update For Exchange Traded Bond And Preferred Stock Basket As Of 7/7/17 - South Gent | Seeking Alpha

TRP.PR.E Stock Quote 

2. Bought 100 TRPPRH at C$10.25Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 5/26/2016 - South Gent | Seeking Alpha

TRP.PR.H Stock Quote

I also discussed buying 100 TRPRD at C$18.14 here (12/7/16 comment) This security currently pays a cumulative dividend at the fixed coupon rate of 4% on a C$25 par value. The current discounted price to par value juices the current yield up to 5.52%.

The fixed coupon rate remains in effect to but excluding April 30, 2019. The coupon is then set for five years at a 2.38% spread to the five year Canadian bond and every five years thereafter at the same spread. TRP has the option to redeem at par value on each reset date. The owner has the option to convert their shares on the reset date into Series 8 shares that pay a 2.38% spread to the 3 month Canadian T. Bill.

Links to Prospectuses for TRP Preferred Shares Traded in Toronto: Stock Information

B. Bought 1 Bank of New York Mellon 2.05% Senior Unsecured Bond Maturing on 5/3/21:


FINRA Page: Bond Detail (prospectus linked)
Credit Ratings: 
Moody's at A1
S & P at A
Fitch at A-
YTM at Total Cost (98.839 ) = 2.344%

This bond closed at 98.22 yesterday, creating a YTM at that price of 2.507%. 

C. Bought 2 AvalonBay Communities 2.95% Senior Unsecured Bonds Maturing on 5/11/26:                                                      
Bought 1 in a Taxable Account
Finra Page: Bond Detail (prospectus linked)
Credit Ratings: 
Moody's at A3
S & P at A-
YTM at Total Cost (97.511 ) = 3.265%

Bought 1 in a Roth IRA Account:


2016 Annual Report 

This bond closed at 95.7 yesterday, creating a YTM at that price of 3.503%. 

"As of December 31, 2016, the Company owned or held a direct or indirect ownership interest in 285 apartment communities containing 83,667 apartment homes in 10 states and the District of Columbia, of which 27 communities were under construction and four communities were under reconstruction.

These 285 apartment communities are located in 18 high barrier-to-entry markets characterized by a low supply of zoned apartment land and lengthy entitlement processes." 
Corporate Overview

I will consider buying more when and if the YTM crosses 4%.

D. Bought 1 San Diego Electric & Gas First Mortgage Bond Maturing on 5/15/26


Issuer: San Diego E & G is a wholly owned subsidiary of Sempra Energy (SRE:NYSE) 
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at Aa2
S & P at A+ 
YTM at Total Cost (96.491 ) = 2.937%

This First Mortgage Bond is infrequently available in a 1 bond lot. 

I will consider buying more when 1 bond becomes available at a 4% YTM. 

This bond closed yesterday at 93.99, creating a YTM at that price of 3.265%. 

2. Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 2 WFC 1.55% CDs (monthly interest) Maturing on 3/15/19:


B. Bought 1 Bank of China .75% CD Maturing on 9/15/17:


C. Bought 2 USTs .875% Maturing on 1/31/18:

The YTM is .977%. 
D. Bought 2 First Bank 1.1% CDs (monthly interest) Maturing on 6/25/18


Issuer: Operating Bank of First Bancorp (North Carolina)(FBNC)

3. Continued Paring Stock Allocation

A.  Eliminated the Brown Advisory Flexible Equity Fund  (BAFAX:MFD)-Sold at $17.96

Profit Snapshot: +$353.05

This fund currently has a 3 star rating from Morningstar.

Through the date of sale, the YTD total return was 7.38% and 21.67% over a one year period.

There are several reasons for eliminating this position, including the fund's performance, overall lack of dividend income or capital gains distributions, and profit harvesting in small fund positions as part of my ongoing stock allocation reduction. The total distribution paid for 2016 was $.0274 per share, down from $.0378 per share in 2015.

This fund falls within the large U.S. stock growth category but has underperformed the S & P 500 over the past 1, 3, 5, and 10 year periods through 3/3/17.

4.  Equity REIT Common and Preferred Stock Basket Strategy:

A. Added 50 SNR at $9.57-Commission Free Trade

SNR Stock QuoteNew Senior Investment Group Inc. (SNR:NYSE) 

I bought this odd lot shortly after the ex dividend date (3/8). The current quarterly rate is $.26 per share. At a total cost of $9.57, the dividend yield is about 10.87%.  

Most of the 2016 dividend was classified as a return of capital: 

New Senior Announces Tax Treatment of 2016 Dividends

The question for REITs is whether the dividend is comfortably covered by funds available for distribution rather than GAAP net income.  

SNR is an externally managed REIT that owns and manages senior housing properties-New Senior Investment Group.

Dividend History

On the purchase date, the 52 week range was $9.02 to $12.68. 

I am providing links to prior discussions since I do not want to spend time repeating myself.

I bought back 50 of the 358 shares that were sold last year for a total profit of $375.82. (Snapshots at Equity REIT Common and Preferred Stock Basket Strategy) I sold my highest cost shares.   

My last SNR blog discussion was in connection with that paring: 

Item #6. Sold 108+ SNR at $11.76 and Item # 7. SOLD Highest Cost Lot SNR Lot in Another Taxable Account-Sold 50 at $11.85Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha

I discussed buying back 100 shares at $10.17 that I had previously sold at $12.3 here.

I discussed purchases, which are still owned, made during one of the many periodic price declines in these posts: 

Item # 5. Added 50 SNR at $8.41+: UPDATE For Equity REIT Basket Strategy As Of 2/12/16 - South Gent | Seeking Alpha

Item # 1. Added 50 SNR at $9.1: Update For Equity REIT Basket Strategy As Of 11/16/15 - South Gent | Seeking Alpha

In my SA Comment Blog # 3, I discussed buying a 50 share lot, which is still owned, in a Roth IRA account here. I discussed the 2016 earnings report here.

The price action of this stock highlights that it is held in low regard by institutional investors: SNR Stock Chart 

I simply try to harvest the generous dividend and to realize a gain from selling shares. 

Earnings Report for Q/E 12/31/16: New Senior Announces Fourth Quarter and Full Year 2016 Results

FAD=Funds Available for Distribution

The total dividend amount paid last year was $85.412 (page 66 2016 Annual Report). "Normalized FAD" for 2016 was $86.177M. That is too tight. 

The company spent $30.913M to buyback stock in 2016 which simply means that the dividend and buyback consumed all of the net cash flow and another $17.026M. The buyback may not be repeated this year.

Note that the quarterly dividend of $.26 per share exceeded the funds available for distribution by 1 cent per share: 

To arrive at FAD, SNR has to deduct non-cash revenue from FFO, identified as "straight-line rent" in the preceding snapshot. That item was $5.379M for the quarter. The FFO number is derived by taking the GAAP net loss, subtracting the gain realized from selling assets (non-recurring cash) and adding back depreciation (a non-cash expense)

I do not view a dividend in excess of FAD to be anywhere near safe. 

For this REIT, I am in a consider to sell mode at > $11 and a consider to buy at <$10. 

Closing Price 3/15/17: SNR $9.86 +$0.31 +3.25%

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.


  1. A number of folks have suggested that Trump released the two pages of his 2005 tax return himself. He then expressed outrage about it on Twitter:

    “Does anybody really believe that a reporter, who nobody ever heard of, ‘went to his mailbox’ and found my tax returns?” Trump tweeted at NBC News. "FAKE NEWS!”

    As you and others have pointed out, his desire to abolish the AMT represents a "YUGE" self-serving conflict of interest when you look at his 2005 return.

    Does he really not get this? (I'm sure he DOES get it!)

    Does he really think his supporters are too unquestioningly loyal, willfully ignorant or just too apathetic to be bothered by it, even if it's explained to them?

    The mind reels.

    1. Yes, Trump does believe that most of his supporters are willing to accept whatever he says, even his flood of false statements that are easily proven false.

      Trump was campaigning in Nashville yesterday. His supporters cheer ever inane, false and/or misleading statement that flowed from his mouth.

      The gestures with his right arm and finger are annoying. Perhaps he needs to use his middle index finger and turn his right hand inward. He is an effective demagogue for those that are easily manipulated by him. Maybe a few supporters would gradually realize that he is playing them with that finger signal given to them a few hundred times.

      The AMT issue is just one conflict where Trump is using his office for financial gain.

      If he released the last ten years of returns, I am convinced there would be reams of material that shed light on his conflicts, the alignment of his tax proposals with his own financial self interest, and his dealings with disreputable people.

      The press keeps asking the Alternate Fact Guy whether Trump will release his 2016 return after it is filed. That return would not be under audit, the lame excuse he has used for refusing to release his other returns. To my knowledge, Trump has not responded to those inquiries yet.

  2. Joint Statement Made Today by Senators Warner (D) and Chairman Burr (R) of the Senate Intelligence Committee:

    "based on the information available to us, we see no indications that Trump Tower was the subject of surveillance by any element of the United States government either before or after Election Day 2016."

    Trump's new story is his use of the word wiretapping in three of his tweets does not mean wiretapping:

    Latest Trump Tweet:

    "That really covers -- because wiretapping is pretty old-fashioned stuff -- but that really covers surveillance and many other things. And nobody ever talks about the fact that it was in quotes, but that's a very important thing"

    This is what he said in four tweets:


    3/4/17 at 5:35 AM
    Terrible! Just found out that Obama had my "wires tapped" in Trump Tower just before the victory. Nothing found. This is McCarthyism!

    3/4/17 5:49 AM
    Is it legal for a sitting President to be "wire tapping" a race for president prior to an election? Turned down by court earlier. A NEW LOW!

    3/4/17 5:52 AM
    I'd bet a good lawyer could make a great case out of the fact that President Obama was tapping my phones in October, just prior to Election!

    3/4/17 6:02 AM
    How low has President Obama gone to tapp my phones during the very sacred election process. This is Nixon/Watergate. Bad (or sick) guy!"

    My best guess is that at least one half of the nation no longer believes anything that Trump says, having concluded that he is most likely lying when words are coming out of his mouth. His false statements are just cringeworthy and disgusting.

    About 40% of adults live in Trump's reality creation bubble.

    1. The Alternate Fact Guy says that Trump stands by his claim that Obama ordered the wiretapping of Trump Tower:

  3. I did not realize that the EPA was brainwashing children until Senator James Inhofe (R-OKLA.) set me straight.

    Trump wants to cut the EPA's budget by 31% as part of his America First Plan. If a lot more pollution is allowed, then everything will be better in America.

    Inhofe is a climate change denier and views environmentalists to Nazis. You see, humans can not change God's plans for earth as he stated in his book "The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future", stating it was nothing but arrogance "of people to think that we, human beings, would be able to change what He is doing in the climate is to me outrageous."

  4. There is by now ample evidence that we have entered the Twilight Zone when it comes to U.S. politics.

    Watching those journalists try to reason with Spicer, it's clear they haven't yet realized that you cannot have a rational, fact-based discussion with these people.

    It increasingly feels like the ship of state has hit a massive iceberg and the captain and crew are getting drunk on the bridge, while the band plays on.

    1. Cathie: Some conversations between Trump associates and Russian intelligence agents were probably picked up by legal wiretaps of those Russian agents. Those kind of wiretaps are occurring now as in the past through FISA Court approved warrants.

      It was recently revealed for example that the FBI was monitoring the hacker Guccifer 2, identified as the Russian intelligence unit responsible for the DNC hacking:

      It is clear after today's announcement that no effort was made to wiretap or surveil Trump Tower by the U.S. government. The joint statement by Senators Burr and Warner was made today after an intelligence briefing. Paul Ryan said the same today:

  5. Yep, one of the best clips was on one of the MSNBC of townhall upset people. With a man who stood up and said "I feel like I'm speeding down the highway in a car with a drunk driver."

    I think the journalists realize it, but see this as their job and have no idea what other reactions to have that won't get labeled unprofessional.

    Lawrence O'Donnell hit the nail on the head last night, that we, the public needs to turn on our outrage and keep it on and let it be known... that will let the politicians in Congress and judges know it's safe to act against Trump.

    Reps are changing their votes on Trumpcare based on disastrous townhall meetings.

    The key in my guess is a Russia investigation. I am convinced he was a very "bad boy." (To use his vernacular.) ...Or when the court cases get to subpoenaing his tax returns and he has to either do so or be found in criminal contempt of court.

    We need to keep letting the representatives including at state level know it matters to us.

    On Samantha Bee she made the point that democrats don't come out and vote, even when they gripe.

  6. South Gent,

    Thanks to your blog I have copied your Short Term Bond/CD Ladder Basket Strategy.

    Re. the Intermediate Term Bond Ladder Basket Strategy would the value of the basket fall more (percentage wise) than that of a short term Bond ladder basket? If you hold the intermediate term bonds to maturity would you not miss out the opportunity when the market corrects (and nobody knows when that will happen)? Would the difference of yields outweigh the optionality of cash or a short term bond ladder? I think the difference of yield will diminish as you continue to roll the short term bond/CD ladder basket.

    1. Y: The intermediate term bonds that I have bought have gone down slightly in value due to the rise in rates since I started to purchase them.

      The short term bonds have remained within a few dollars, up or down, from my purchase price due to their short duration.

      I started to build the short term basket last December, focusing on maturities between 5/1/17 through 6/30/18.

      Less emphasis was placed on maturities occurring in the next 18 months since I did not see any yield advantage. I was picking up most of the yield with maturities in June 2018 that I would pick up going out to December 2019.

      Since I was expecting the FED to raise short term interest rates, I did not see any reason to go deep in the back half of my short term bond ladder which is defined generally as 1 month to 3 years from the then current day. The short term ladder now includes maturities up to March 2020. I am starting to move some 2020 maturities from the intermediate term basket to the short term basket (which is done to see my weighting and requires movement of snapshots to a different folder)

      I will use some proceeds from maturities in May through July 2017 to fill in the back half of the short term basket strategy, as I anticipate better short term yields.

      I have gingerly added some CDs and bonds in the July 2018 through February 2020, but the size is slightly less than my current cluster between May-July 2017. Many of the CD purchases in that time period (7/18-2/20) pay interest monthly. Most of the bond purchases are 1 bond, which indicates that I anticipate averaging down.

      It is also possible that I may jettison one or two bond lots maturing in 2019 as I extend my maturities at higher yields. An example would the two Berkshire Hathaway 1.7% bonds maturing 3/15/19 trading now near par value. Yesterday, I bought two more Berkshire bonds maturing later with a higher current yield and YTM. If the 2019 bond rallies sufficiently, I may sell it and keep the longer maturity.

      It is possible that a 2.6% on the ten year will hold, at least for awhile. It is also possible that some external event will cause a massive rally in high quality bonds. There are several possibilities floating around.

      I am draining funds to buy bonds/CDs out of brokerage money market accounts that pay almost nothing. You are a Fidelity customer, as I understand, and you are aware that the highest yielding MM option available to individual customers currently produces a yield of around .2%. Schwab pays me less and IB pays me nothing.

      So whenever I buy a bond yielding say 3.5% and maturing in 2024 using cash that pays next to nothing, I am earning a yield spread of close to the YTM of the purchased bond. I am focusing now on high quality bonds.

      I have not done a calculation of whether I am better off waiting and then deploying. That requires me to predict the future and would be mostly a futile effort. Intermediate term corporate bond yields may start to trend down or accelerate to the downside upon one or more external events occurring.

      I also do not how far prices will fall as I sit on cash earning zilch.

      As I have said earlier, I view this entire allocation to be out of cash earning anywhere from zero to almost nothing into higher yielding bonds and CDs where I continue to roll the maturities until I see a better risk/reward in longer duration bonds and/or stocks.

  7. South Gent,

    I completely agree with your thinking that is clearly summarized in your last paragraph.

    I think Treasuries was the only asset class that held up during the Financial Crisis. I also think HY will go down with any kind of market correction. From a historical perspective did high grade corporate bonds fare differently during a 10%,a 20%, or a 50% market correction?

    1. Y: As a general rule, there is a high positive correlation between stocks and junk bonds. There are periods of negative correlation when junk bonds become overpriced and correct while stocks continue to move up.

      Between September 2008 through Spring 2009, the only U.S. bond category that held up was U.S. treasuries. I owned several "A" or better rated corporate bonds bought in 2007 that went down in value during that period. Junk bonds were crushed with yields soaring over 20%.

      When the stock market went down almost 20% in 2011, I built a short term junk bond ladder that had a weighted average YTM of over 12%. Junk bonds were crushed during that period. Whatever event is causing stocks to decline substantially is probably going to bleed over into junk bond prices.

      You can see how "AA" rated corporates and junk performed during the Near Depression and in 2011 by looking at these charts:

      BofA Merrill Lynch US High Yield Effective Yield

      BofA Merrill Lynch US Corporate AA Effective Yield

      Shortly before the Near Depression, the AA rate corporates were yielding close to 5.8% in July 2007 and hit a peak yield near 7.6% in October 2008 before plummeting back down in yield.

      See also:

    2. The ten year treasury has fallen back below a 2.5% yield in early trading today:

      The Trump Administration is clearly signaling a much tougher posture on North Korea with more of an emphasis on a U.S. led first strike.

  8. I have published a new post that discusses why I eliminated last Wednesday AFSS:

  9. "Whatever event is causing stocks to decline substantially is probably going to bleed over into junk bond prices. "

    Good to know.

    I will not be surprised if Trump decides we need to be in a war with N. Korea. Autocrats use war to situate themselves as leaders. He already let us know he wants one with "America needs to win wars again" to Congress. I hope I'm over guessing on this. Also war takes a budget so I believe congress can keep some reins on this and he will be informed by his staff of that before making any moves.

    1. LMH: Wars invariably cost more than the politicians predict before the onset of hostilities.

      I do believe the odds are at least meaningful that the U.S. will launch a first strike within the next four years provided North Korea continues to increase the range of its ICBMs. Seoul which has 20M inhabitants will bear the brunt of the North Korean response. It is located about 35 miles from North Korea.

      As to junk bonds, the Merrill Lynch junk bond index is currently at a composite yield of 5.95%. That is inadequate compensation IMO for their credit risks compared to BBB or higher rated bonds.

      The Merrill Lynch BBB index is currently at a 3.8% yield:

      Neither yield is appetizing to the Stock Jocks, nor do those yields provide much competition compared to stocks for most equity focused investors who are thoroughly imbued with ebullience-at the moment.