Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
For check writing, one should use only government m-mkt funds. Checks can remain outstanding and valid up to 6 months and some bounced checks can quickly run up NSF fees and related headaches.
Note that Fido and Vanguard use only government m-mkt …
Just be aware of the differences between government m-mkt funds and higher yielding prime-retail m-mkt funds. May be use both, the former for critical needs and check writing, and the latter for less critical needs.
Short-term rates are peaking, but it would still be hard to call the absolute top. It is now? Or, 1-2 +25 bps hikes? But that should be it.
Long-term rates are now a puzzle. When people were expecting a recession, they were calling for long-rates t…
Ally was in the 3rd category - outlook changed to negative.
Category 1 - Downgraded now
Category 2 - Under review, for potential downgrade soon
Category 3 - Outlook negative, meaning that those may be downgraded at some point in the future (or not)…
The Fed is stressing capital requirements. But that hasn't been the real problem.
The problem of unstable deposits in this smartphone & Internet-rumors era is not really quantifiable. Bank runs now develop in hours/days, not months.
One can g…
While Moody's rates credit unions, I haven't seen reports of similar downgrades.
Credit unions have simpler models - take deposits, offer CDs, provide auto and home leans, park excess in Treasuries. They don't have CRE exposures. Their membership m…
Moody's downgraded 10 banks (M&T, etc), placed 6 under review (Northern Trust, BoNY/Mellon, etc), and changed the outlook to negative for 11 banks (Capital One is in this category; others are PNC, Ally, etc).
Moody's concerns are real estate/CR…
NVDA shorts have been killed. But Wall Street made money either way because there are both long NVDL and short NVDS ETFs.
Reverse-splits are BAD news. They are attempts to bury mistakes; some ETFs may eventually be shut.
Single stock ETFs are also …
I have a relative in bank compliance business.
Only reason to use off-bank platform, and use encrypted WhatsApp/Signal, etc, is to hide something. It's a well known NO-NO, but even the employees from big banks are caught doing this.
Weekly 13-wk and 26-wk Auction was on Monday/YESTERDAY.
Once a month 52-wk Auction is TODAY. I have an order in.
Save/bookmark Auction schedule, https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf
Regional bank KRE is showing some damage in the pre-market (-2.7%). It has been rebounding from the May lows.
https://stockcharts.com/h-sc/ui?s=KRE&p=D&yr=1&mn=0&dy=0&id=p21145977994
Rest of the Story
M*, Yahoo Finance and Nasdaq are still showing Schnitzer Steel/SCHN.
Change to Radius Recycling/RDUS is supposed to be official in September 2023; RDUS ticker isn't yet recognized. Some sites may be jumping the gun on the name ch…
M* has put VWEHX / VWEAX on review due to sudden manager change. The new manager has been an analyst for years, been a manager of an analyst group, but has no prior experience with fund management except for a short overlap with the departing manage…
The m-mkt fund yields have lagged as the rates moved up.
They have almost caught up, especially, the low ER VMFXX (core/settlement) and VMRXX, as the rate growth has slowed. Other m-mkt funds have lower yields due to their higher ERs. Schwab pushe…
A fund's % of Treasury obligations can be used for state/local tax exemption, especially in high tax states. But this doesn't apply to Treasury repos. So, the higher yield of SCOXX (12 bps) over SUTXX comes with this catch; similar for Investor shar…
Historically, VWINX has been 38-62, VWELX 62-38.
FWIW, at Fido, I also like multisector FMSDX.
Vanguard just killed its version of multisector - that was VPGDX for a short while, but VG decided to fold it into unexciting VSMGX.
1-yr T-Bill was at 5.37% yesterday. Auction is on Tuesday, settles on Thursday.
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202308
This Fitch insights page provides more details. https://www.fitchratings.com/topics/us-debt-ceiling#insights
US Rating DOWNGRADED to AA+
US GSEs DOWNGRADED to AA+
US Farm Credit System DOWNGRADED to AA+
US Corporations Unaffected (so, JNJ & MS…
Good news is that Fitch is NOT downgrading all US financials to AA+ (as the S&P did in 2011). So, Fitch is maintaining AAA ratings for "New York Life Insurance Company, Northwestern Mutual Life Insurance Co. and Teachers Insurance and Annuity As…
Timing for debt downgrade is never ideal. While odd, Fitch had the US on negative outlook and may have deliberately avoided the period around the debt-ceiling fiasco, a mistake that the S&P/McGraw Hill made on 2011.
Only 2 US nonfinancial compa…
@wxman123, it is well-hidden in the supplementary info.
One has to dig deep into brokers' website to find %income from US Treasury Obligations for funds.
So, one can easily miss these if not specifically looking.
Munis are good for high federal tax brackets; there could be high state tax in addition. So, look at effective/tax-equivalent yields. Barron's had a recent piece that munis now have tax-equivalent yields of 5-8% and are attractive. They are useless …
You have to sign up for the auto-roll program and it basically locks that money. Any changes (additions/subtractions, etc) to it would cancel auto-roll; also the auto-roll order can be cancelled manually when it shows up around the roll time. I trie…
See current Barron's for a feature on pharma (just 1 segment of healthcare), LINK1 LINK2
The PHARMA industry (MRK, JNJ, BMY, ALPMY, etc) is launching legal wars against Medicare/CMS on its new DRUG PRICING negotiation authority. The pharma industr…
Thanks @BaluBalu, @msf.
Federal VMFXX should have higher yield that Treasury-only m-mkt fund but its ER is 2 bps higher than that for VUSXX. So, they are quite close. Also, despite marginally higher current 7-day SEC yield (well, that was yesterday…
Berkowitz gets to play boss at St Joe, and has seat at the table for his other big holdings, both big ego boosters, all on his shareholders' dime. What do the shareholders get?
FAIRX holds 4 stocks. It is non-diversified in extreme.
Investment rate is the bond-equivalent yield.
All brokerages show Cancel button on Treasury orders but I haven't watched when it disappears. My guess is that orders can be cancelled until the brokerage cutoff time for Auctions.
@BaluBalu, both post cutoff dates, so yes, you can enter orders in "early" AM on the Auction day. But I do this ahead, much ahead - soon after the Treasury Announcement is out. With T-Bills maturing in 4 brokerage accounts, and each brokerage site …
Applying 5% withdrawals - With COLA and Without COLA
Lump-sum $1,000,000
Period 1/1/2000 - 6/30/23
All distributions reinvested.
Monthly withdrawals $4167/mo initial + COLA (or $50,000/yr initial + COLA); also a column for without COLA (in th…
He did say that - inflation may be down to +2% average target only in 2025, but rate cuts may start as inflation approaches +2% (sometime in 2024, but not in 2023). So the cuts may start when inflation is between +2% to +3%, but he won't commit to a…
There may be a mix up in times, EST, PST, etc.
Bond market closes at 2pm Eastern.
Stock market closes at 4pm Eastern.
Mutual funds price at 4pm Eastern.
YBB Notes
FED FUND rate hiked by +25 bps to 5.25-5.50%; bank reserves rate 5.4%; discount rate 5.5%. Discount Window use is up and that is being encouraged. More rate hikes are possible but at slower pace. Monetary policy is restrictive as the real…
I have seen issues mentioned elsewhere (e.g. M* TIAA Forum). Sometimes, wrong tables were used. Default is to take RMDs from multiple 403b (from different employers) when the IRS allows consolidation , i.e. round-up and add all 403b RMDs, but take a…
I don't rely on firms' RMD calculators. They have some built-in assumptions that may or may not apply to individual situations.
When I take RMDs, I don't even designate them as RMDs to avoid firms' default RMD screens. I just take them as withdrawa…
In stable markets, OEFs vs ETFs is a wash and only the reinvestment convenience of OEFs matter (automatic on the ex-div date). There are some behavioral aspects too because of OEF pricing only at 4pm Eastern market close and other OEF trading restri…
As for loads, front-load, class A aren't the worst. A good thing is that the firms can simply waive them for 3rd party noload/NTF platforms. This is simpler than firms like American Funds that create new classes for every niche segment.
Backend loa…
In brokerage industry, it's OK to be bullish but wrong.
However, it's tough to be bearish but wrong.
Initially, Mike Wilson was praised for his bold bearish call. But he stayed bearish too long. Of course, when the last bears throw in the towel, …
