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Notes from FOMC Statement & Powell's Presser
Fed fund rate hike of +25 bps to 4.75-5.00%; bank reserve balance rate 4.9%; discount rate 5%. Guidance changed from "ongoing rate increases" to "tightening as necessary" based on future data and eve…
If the objective is to keep up with inflation, 5-yr TIPS held to maturity will do that. Longer-term TIPS will too, but it may be harder to hold them maturity. TIPS funds on the other hand are affected by duration and non-maturity; they are also requ…
AS reported in Barron's this week (my summary below, LINK), JPM is going into China,
"Mary ERDOES, JPM. RISK management in banking is essential. 3 recent bank failures (Silvergate, SVB, Signature) were partly from weaknesses in risk controls. The b…
See pg 13, https://www.sec.gov/ix?doc=/Archives/edgar/data/743367/000155837023003742/bhb-20221231x10k.htm
It is clear to me. May be it didn't fit Editor's narrative of "high" uninsured deposits.
So, (328.5 + 13.8)/3,076.625 = 0.1113, or 11.13%
…
CME FedWatch THIS evening is showing these rate changes and probabilities (see image) for the next several FOMCs:
+25--+25--hold--cut--cut--, etc.
We will know for sure TOMORROW.
Well, I did do some digging yesterday but came out empty. There was no news or Edgar/SEC filing (only preliminary earnings 2/27/23 and annual report 3/14/23), so I didn't post.
Those meetings could just be with analyst(s) covering BHB.
Well, JPM has but people say that's "because" it may hold some AT1/CoCo bonds itself. Of course, we have the hindsight-wiser Gundlach/DL saying that investors should have known (about how the Swiss FINMA would act?).
https://twitter.com/jeuasommenul…
I don't think that AT1 or CoCo bonds are approved by the SEC for the US market. Any regular Credit Suisse bonds would now be the responsibility of UBS. Of course, selling them before maturity could be a problem right now.
A guy on the Fidelity Inve…
I am not sure that lawsuits will help. These bonds did have a clause that the Swiss FINMA could declare a credit-event and that decision will be irrevocable. But nobody thought that FINMA will do that for political convenience. I have read that Swis…
Swiss regulator FINMA declared a credit-event during the negotiations to trigger default of AT1/CoCo (contingent-convertible) bonds that are AHEAD of common stock in the capital structure. The rescue left some residual equity.
That of course, caus…
Polen has Polen Global Growth PGIRX, Polen Global SMID Growth PBGIX, Polen Global EM Growth PGEIX.
Is it dropping "Global" from other funds too, or just from the redundant "Global EM" - what else EM can be? Foreign EM is also redundant; Domestic EM…
There are a variety of stable-value (SV) funds. I don't see any connection to ETNs.
The SVs from insurance companies may be supported directly by their general accounts, or they may be portfolios of bonds at 3rd parties with an insurance wrapper.
…
One just has to be careful. The ETFs and ETNs are often lumped into ETPs. Most ETNs have "ETN" in their names, so it is hard to miss. But if one isn't careful, one could buy an ETN unintentionally.
A good source for ETFs/ETNs is ETFdb.com . On this…
@bilvihur, you are overlooking main point by @msf that so long as you are working, your 401k won't require RMDs. But as soon as you shift some (half?), the RMDs will kick in within the T-IRA. That may be a bigger tax hit than parts of $900 that you …
An interesting thread, Twitter LINK.
European AT1/CoCo market has sold off and may have been compromised despite supportive statements from the ECB, EBA (European Banking Authority), SRB (Single Resolution Board) that what happened to (Swiss) Credi…
Not all plans allow "in-service rollovers". I see that you are at RMD+ age and still working.
If your company does, then yes, you can roll into T-IRA and invest in anything.
You may hear about the controversial wipeout of $17 billion CS AT1/CoCo bonds.
These (AT1) bonds are contingent-convertible (CoCo) bonds common in Europe and Asia. In good times, these convert into equity. But in bad times, forced conversion can be…
Powell could do +25 bps with future guidance for pause or slowing pace. The CME FedWatch is showing +25 bps--hold--cut--cut....for the next few FOMC meetings.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Twitter has been speculating big news ahead of US futures opening this evening - in about 10 min.
So, we got BIG news from Europe on UBS taking over CS.
NO big news in the US except rumors (including Buffett). We only have 2 releases TODAY by the …
I am watching both bank KBE and regional bank KRE. But their Covid 2020 lows are still -42% down from here. So, the banking selloff has been sharp but it doesn't seem to be a washout. I may not wait for -42% down, but it seems too early to bottom fi…
@LewisBraham, when Dutch giant ING got into trouble during the GFC 2008-09 and had to be rescued by the Dutch government, one condition was to refocus on core businesses. It ended up divesting its US operations (noncore):
ING insurance and asset ma…
Lot of Schwab Bank deposits are from Schwab Robo-Advisors that keep high % allocation in cash but robo-holders don't control those bank deposits directly. Schwab was also fined on this but it continues this practice with just a tweak in its disclosu…
@sma3, check this thread out, https://big-bang-investors.proboards.com/post/34619/thread
Schwab clients pull 8.8 B from prime funds in three days
(YBB)
OK, so lot of money shifted internally from Schwab Prime m-mkt funds (subject to gates and/or…
@sma3, see this post https://ybbpersonalfinance.proboards.com/post/929/thread
Edit/Add: I posted it on MFO too, https://www.mutualfundobserver.com/discuss/discussion/60658/m-portfolio-will-be-around-through-2023#latest
PB-Big Bang Post https://big-bang-investors.proboards.com/post/34631/thread
This may be the next step after M* Discussions went private.
I can access the Charts on login, but I get the same message without login ("Invalid Security"). I also see a…
"And a question for Yogi, who is on the list of "two dozen" banks who would have negative equity if all their bond portfolios were marked to market?"
@Jim0445, I haven't seen a specific list but that is from Twitter speculations based on full mark-…
Another tidbit,
Mary ERDOES, JPM. RISK management in banking is essential. 3 recent bank failures (Silvergate, SVB, Signature) were partly from weaknesses in risk controls. The banking system as a whole is in much better shape now than during the G…
@sma3, SVB Financial was the holding company for the SVB Bank. So, this is the bankruptcy filing the holding company that also had some minor brokerage and asset management businesses.
SVB Bank was taken over by the Feds/FDIC. The government-run SV…
Check free-riding violations. Brokers don't like trading that involves unsettled funds because that means that clients are getting a "free-ride" using brokers' money.
https://www.investopedia.com/terms/f/freeriding.asp
https://www.fidelity.com/learn…
@sma3, I learned a lot about the so-called state insurance then!
First, our money was tied up for 5-6 years, not months. Rates offered were below high m-mkt rates at the time. So, only opportunity lost, not nominal money.
I called our state insura…
I was tempted to bottom fish in regional bank KRE. BUT its Covid 2020 low is STILL -44% down from here, and there is hardly any support between here and there. So, just watching for now.
@MikeM, bond volatility indexes are not SD-based. But the info may be similar to short-period-SDs, BBW(20,2), etc.
Even the VIX-like stock indexes are not directly SD-based, but options-based.
@catch22, MOVE is not only a blend but it is normalized, so it doesn't have a direct meaning as VIX.
But we can look at past values and ranges.
All-time high 264.60 (GFC, 2008), all-time low 36.62 (Covid, 2020).
Covid 2020 range 36.62-163.70.
No…
Toyota is sticking with hybrids first, the EVs second. Some say it's foolish, others say that it works for Toyota.
Europeans are making good progress in the EVs; China too and it may be ahead in batteries. In the US, Tesla dominates.
