tag:blogger.com,1999:blog-2986124651030959736.post9005875653251043057..comments2024-03-28T09:42:38.695-05:00Comments on Stocks, Bonds & Politics: Sold 105+ CSCO at $21.2/Bought: 50 GDO at $18.03, 150 CSG at $8.4, 50 NNNPRD at $22.63, 50 BWG at $16.43, 50 GHY AT $17.14, 100 NPI at $12.25/ TENNINDEPENDENThttp://www.blogger.com/profile/17444227958539559639noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-2986124651030959736.post-46591433040628906082013-11-21T21:22:43.808-06:002013-11-21T21:22:43.808-06:00Tennindependent,
Thanks for your response.Tennindependent,<br /><br />Thanks for your response.Tompettytxnoreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-3411220236788411102013-11-21T08:05:03.154-06:002013-11-21T08:05:03.154-06:00Tompettytx: It is my understanding that trust pref...Tompettytx: It is my understanding that trust preferred securities only have to be phased out as Tier 1 capital over a three year period for banks like BAC. <br /><br />Section 171 (b)(4)(b)<br />"(B) Debt or equity instruments issued before may 19, 2010.—For debt or equity instruments issued before May 19, 2010, by depository institution holding companies or by nonbank financial companies supervised by the Board of Governors, any regulatory capital deductions required under this section shall be phased in incrementally over a period of 3 years, with the phase-in period to begin on January 1, 2013, except as set forth in subparagraph (C)."<br /><br />http://www.fdic.gov/regulations/reform/dfa_selections.html#2<br /><br /><br />Both of those securities that you mentioned can be called now at par value plus accrued interest payments and both have relatively high coupons. Those two factors will likely cause them to hug the $25 par values. I would not be surprised by a redemption notice at anytime. Based on the market's prices, other investors believe that they will be called relatively soon. <br /><br />I have not invested in a Merrill Lynch TP. I did buy one from Countrywide, CPP, that has been called in December 2012. <br /><br /> http://tennesseeindependent.blogspot.com/2011/09/bought-back-50-cpp-at-2135sold-50-of-tc.html<br /><br />A list of outstanding BAC equity and trust preferred securities can be found at <br />http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=capitalsecurities#fbid=VGCl0VvU2G-/Trust<br /><br />A number of the outstanding TPs are 3 month Libor floaters and BAC is probably in no hurry to redeem those low yielding securities. <br /><br />I do not know why there are so many Merrill Lynch TPs still outstanding. Of the exchange traded TPs originally issued by BAC, only one remains, BACPRZ which has a 6% coupon. Some TPs are traded in the bond market with $1,000 par values, and I have bought some of those including one issued by MBNA which was redeemed by BAC.<br /><br /><br /> http://tennesseeindependent.blogspot.com/2011/11/earnings-ares-capital-arcc-appelton.html<br /><br />Merrill TPs outstanding: <br />MER-K 6.45%<br />MER-M 6.45%<br />MER-P 7.375%<br />MER-D 7%<br />MER-E 7.12%<br />MER-F 7.28%<br /><br />It is unusual for a TP to have no maturity date, which is the case for several of the Merrill TPs. TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-30490470249775295842013-11-20T19:17:26.798-06:002013-11-20T19:17:26.798-06:00Tennindependent,
Like you, I have been making smal...Tennindependent,<br />Like you, I have been making small investments in my Roth IRA in bond like securities to produce cash flow that can be reinvested. I have been looking at a couple of trust preferred securities (Countrywide Capital CFC-B 7.0% and Merrill Lynch MER-E 7.12%) Unlike the equity preferreds I own, the prices of these two trust preferreds did not decline significantly during the interest rate run up earlier this year. I assume that is because they are likely to be called because they can no longer be counted as tier 1 capital and the coupon rates are relatively high. <br /><br />I enjoy reading your blog each week and I would appreciate your input Tompettytxnoreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-92104939629323634302013-11-20T12:02:38.814-06:002013-11-20T12:02:38.814-06:00Cathie: On the tax issue, I am familiar only with ...Cathie: On the tax issue, I am familiar only with Spain, France, Canada, Australia, Switzerland and the Netherlands. I am not familiar with Italy. I simply have not had any experience with Italy. <br /><br />Canada will not apply its tax to distributions paid into an IRA. <br /><br />For the Netherlands and Spain, I have avoided the withholding tax by reinvesting the dividend (RDS/A, UN, SAN)<br /><br />For France, the tax would be withheld irrespective of whether the dividend was reinvested but the tax rate would depend on whether the broker took advantage of a lower rate by filing for a relief at the source (Vanguard and Fidelity file-15% tax; Schwab and TDAmeritrade do not file-30% tax)<br /><br />http://www.dtcc.com/downloads/legal/imp_notices/2012/dtc/div/1228-12.pdf<br /><br />Australia has not withheld any tax on a dividend when the company has paid the tax ("franked" dividend").<br /><br />see item # 7 and comment section:<br /><br /> http://tennesseeindependent.blogspot.com/2012/08/mtystlprasold-50-nabzy-at-2547earnings.html<br /><br />I am not clear on what that means. Australia may not have a double taxation system for dividends like the U.S.<br /><br /> TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-59797751454169993822013-11-20T11:19:05.214-06:002013-11-20T11:19:05.214-06:00Cathie: Buffett said that stocks will be likely be...Cathie: Buffett said that stocks will be likely be higher in five years and are currently in a zone of reasonableness. The LB agrees with that opinion; the RB opines that DJIA 20,000 will be hit before 1/1/2016; and the OG frets that the market is about to go down 20%, noting that this up and down stuff is just getting old after 50 years. He would have preferred to have bought that 30 year treasury bond yielding 15% in 1982 rather than letting the RB buy stocks. The OG feels that prosperity in his financial affairs will turn into pain and devastation and can not be soothed by any human's predictions about the future. Two 50% or so plunges in stocks since 2000 did not calmed his nerves. <br /><br />A worthwhile read is Jeremy Grantham's quarterly newsletter that I will discuss in the next post:<br /><br />http://online.barrons.com/article/SB50001424053111904253404579207793809107008.html?mod=BOL_article_full_more#articleTabs_article%3D1<br /><br />If Grantham is correct then emerging markets will outperform the U.S. over the next two years, with the U.S. markets gaining 30% or so, elevated by a continuation of highly abnormal central bank monetary policies throughout the developed world, then the likelihood of a nasty correction thereafter will be high, possibly something similar to October 1987 which is how the first phase of the prior long term secular bull market ended with a resounding thud, followed by 4+ years of meandering and consolidation before the second and final phase started in earnest. <br /><br />He shares my views that the efficient market theory is "laughable":<br /><br />My Post on that Subject:<br /><br />Efficient Market Theory: Do Humans Really Behave Rationally-Seek out Relevant Information & Then Process Information With Good Judgment?<br />http://tennesseeindependent.blogspot.com/2009/06/efficient-market-theory-do-humans.html<br /><br />Efficient Market Hypothesis as Hokum<br />http://tennesseeindependent.blogspot.com/2010/03/efficient-market-hypothesis-as-hokumwbs.html<br /><br />Liz Ann Sonders is also positive:<br /><br />http://online.barrons.com/article/SB50001424053111904253404579209882388033144.html?mod=BOL_hp_highlight_1#articleTabs_article%3D1TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-9765475029284176452013-11-20T10:53:28.734-06:002013-11-20T10:53:28.734-06:00To soothe the OG's nerves:
http://www.cnbc.com...To soothe the OG's nerves:<br />http://www.cnbc.com/id/101211132<br />Buffett says stocks are in a "zone of reasonableness" and likely to be higher 5 to 10 years from now.<br /><br />One of the things I like about the Aegon (based in the Netherlands) hybrids is there is no tax skimmed off the distributions. I owned an Italian energy company, Enel, for several years and paid a 27% tax on the paltry dividend. <br /><br />Do you know if it is generally true that you can avoid the foreign tax by reinvesting the dividends?Anonymousnoreply@blogger.com