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Post by richardsok on Apr 23, 2023 16:14:33 GMT
uncleharley , richardsok , yogibearbull , steelpony10 , rhythmmethod , Fearchar , retiredat48 , steadyeddy ,Bloomberg Day Traders Lose $358,000 Per Day Gambling on Zero-Day Options....... While they did fairly well writing options, decisions to buy them suffered badly. All told, day traders lost $20 million as a result of poor positioning in about two years through February 2023. The bill climbed to more than $70 million when the cost of doing business with market makers was factored in. To be sure, it’s not easy to make money in a new instrument that even Wall Street pros don’t seem to fully understand. To have an edge, one has to be extremely vigilant and nimble — and probably lucky.
A JPMorgan Chase & Co. analysis showed that while buying or selling 0DTE options tended to be profitable in the first 10 minutes of trading, two-thirds of the gains came in the first minute.......
---------- VER-R-R-Y Interesting. Thanks, X. Here's my thinking. I agree it is folly to attempt to go long on ZERO DTEs, except as a leg in a protective spread. Also, I'm presently mulling it is impossible to go short ZERO DTEs and be fully protected on both up and downsides. HOWEVER -- in my lifetime the four biggest one day market bull moves all occurred immediately after market calamities, every one a snap-back rally. The biggest unannounced sudden moves are almost always to the downsides. And, even so, one should never be short ZEROs when anticipating a major market announcement. AND I believe never to keep an existing position overnight. I'm thinking wait until 10AM to open any new position. Further, I am never trading options in a vacuum or massively in cash. One way or another, I always have non-related bullish positions that will usually move in rough sympathy with the broad market, even gold oftentimes. So, if the far-larger part of my portfolio will move upward in the event of a bullish market, I might set up my ZERO DTEs with protection on the DOWNSIDE alone. Just thinking it over and testing on REALLY tiny set-ups. I agree, it will probably all come to nothing. But it's interesting.
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Post by anitya on Apr 23, 2023 16:44:19 GMT
Just an FYI -
The quotes for secondary Treasuries could vary by the brokerage. While these brokerages may not tell you whether or how they are making money for fecilitating your buying / selling (i.e., trading) Treasuries in the secondary market, it may be useful for the investor to focus on what they are getting rather than what / why the brokerage is getting. Of the major brokerages I have access to, TD consistently gave me the worst quotes, then Schwab. Vanguard and Fidelity tend to be similar. Without going into the details, the TD fixed income desk Rep I spoke with said they are aware of the investor disadvantaged quotes on their platform because he compared those with the ones available on Schwab platform but he can only suggest that we trade Treasuries at Schwab.
Good luck!
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Post by anitya on Apr 23, 2023 17:09:29 GMT
yogibearbull, Is this what I should expect - is there anything I could do to improve my experience? I recently had a Treasury bill mature at Schwab on a weekend (4/15). I went into the Schwab account on Monday 30 minutes before Close to move the proceeds into their money market account but the Treasury bill still showed in my Positions and there is no pending incoming cash indication or cash available to trade. I checked later that day and it is still the same. Schwab deposited the proceeds into cash on 4/18 when I could move the money to their MM fund, which is a T+1 fund. I get that maturity date falling on a non-business day is pushed to the next business day and hopefully Treasury adds the extra day(s) interest. This Treasury maturity is treated as if I sold it for settling (T+1) the proceeds. P.S.: I never paid attention to maturing Treasuries at Schwab or Vanguard as they automatically sweep the proceeds into MM sweep account. More work at Schwab. Going forward, I will have to pay attention to whether maturity date is a non-business day. Thanks.
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Post by yogibearbull on Apr 23, 2023 18:40:06 GMT
anitya, although I see Treasury proceeds posted early/mid-mornings on the settlement days, I had a conversation once with Fido Rep about the coordination of maturing Treasury and money due (after earlier Auction purchase) on the same day. He said that the brokerage recognizes both sides of the transaction although Treasury may sometimes take until midnight on settle day to pay. So, if the settle date is over a weekend (less common), everything shift by 1 day. But Schwab system should have allowed m-mkt order entry that Mon for Tue settlement; if margin a/c, it would go through w/o margin interest.
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Post by xray on Apr 25, 2023 11:35:17 GMT
richardsok, anitya, yogibearbull, Business Insider The stock market is unusually quiet right now. Here's why that won't last, and why traders should sell on any bounce.Joe Ciolli Mon, April 24, 2023, 11:25 PM EDT Associated Press By multiple measures, the stock market is the calmest it's been since the end of 2021. JPMorgan quant guru Marko Kolanovic says the equity market is far too placid right now, considering all the headwinds it's facing. He says technical factors are suppressing volatility in the face of rising rates, credit tightening, and macro risks. The stock market is awfully quiet right now. Perhaps too quiet. Price swings are muted no matter how you look at them. On a forward 30-day basis — something measured by the VIX, which is commonly referred to as the stock market's fear gauge — traders are expecting the lowest volatility in more than two years. On an actual realized basis, the past 30 days have also been the most placid since 2021. That calm stands in stark contrast to all the headwinds currently swirling. One major force is rising interest rates, which have been consistently hiked by the Federal Reserve for more than a year in an attempt to cool inflation. Yes, inflation has come down, but the central bank has yet to signal it's ready to pump the brakes. Those rising rates have led to a tightening of credit availability, a dynamic reinforced by recent banking-system turmoil. There's also the ever-looming geopolitical overhang of the Russia-Ukraine conflict, and the widespread impact it's had on energy and foreign-exchange markets. The chart below (not shown - see article) shows just how range-bound markets have been so far in 2023, relative to the second half of 2022. While multiple asset classes match up closely with their prior range, none does so more than equities. No asset class has been more range-bound than stocks this year says JPMorga Marko Kolanovic. JPMorgan's chief market strategist and co-head of global research, agrees with anyone who says the forces outlined above should be roiling markets. The fact that they're not, he says, boils down to temporary technical factors. Once those are removed, watch out. Kolanovic specifically references the dominance of option sellers, whose activity he says drives intraday stock-price reversions, which naturally leads to flat trading for the overall market. That subdued volatility then prompts mechanical buyers — like volatility-targeting and risk-parity funds — to add exposure. The net result is a market that seems strangely unbothered by negative headwinds. (For context, the VIX generally trades inverse to the S&P 500, so gains in stocks are usually accompanied by a low VIX reading.) "This market dynamic artificially suppresses perceptions of macro fundamental risk," Kolanovic wrote in a new client note on Monday. The key word there is "artificially," which conveys the unsustainable nature of the market's current placidity. Kolanovic took his commentary a step further and offered a recommendation for further rallies in stocks: as soon as you see a bounce, hit the sell button and take some profits. Robust fundamentals bode well for 1Q earnings results, but we advise using any market strength on reporting to "reduce exposure," he concluded. --------- Comment: My current analysis data supports what JP Morgan is currently stating (single opinion). Markets are currently appearing stagnate. Words to the wise....
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Post by xray on Apr 25, 2023 11:44:55 GMT
richardsok, anitya, yogibearbull,Bloomberg BofA, JPMorgan Say Time to Sell as Europe Stocks Face Risks Michael Msika Tue, April 25, 2023, 3:51 AM EDT (Bloomberg) -- The rebound in European equities since mid-March has failed to win over strategists, who predict that the sustained campaign of central-bank interest rate hikes will stall the rally. They are sticking to their gloomy outlook for the rest of 2023, unconvinced by a 10% advance in the Stoxx Europe 600 so far. The benchmark index is set to fall to 450 points by year-end, according to the average of 15 forecasts in a Bloomberg strategist survey, implying a drop of 4% from Friday’s close. “Monetary policy has been tightened by the sharpest pace in 40 years, which is resulting in a sharp deterioration of credit and monetary conditions,” Bank of America Corp. strategist Milla Savova said in emailed comments. “We expect this to lead to recessionary growth conditions over the coming months, which, in turn, would be consistent with a meaningful widening in risk premia.” The BofA strategists expect earnings forecast downgrades to add to the headwinds, cutting their year-end target for the Stoxx 600 to 410 from 430 last month, implying about 13% downside from here. For Savova and her team, the low point for stocks should come early in the fourth quarter, when the economic cycle is expected to bottom, dragging the benchmark to as low as 365. “We think this will mark the next big buying opportunity for equity investors, as growth momentum starts rebounding in response to a fading drag from aggressive monetary tightening,” Savova said. European equities have recouped all the losses induced by the banking turmoil in the US and the collapse of Credit Suisse Group AG. The Stoxx 600 surged to the highest since February 2022 this month, buoyed by an economic recovery in China, and rapid intervention by authorities to contain the banking crisis. The trouble is that manufacturing data for the continent have continued to deteriorate, while inflation remains too high for central banks to stop hiking rates. The range of predictions for the benchmark index has narrowed, taking on a negative skew. The most optimistic forecast is 480 from Deutsche Bank AG and ING Groep NV, an upside of just 2.3% from Friday’s close. TFS Derivatives still holds the most pessimistic view at 380 points, representing a drop of 19%. The largely downbeat assessment from sell-side strategists is mirrored by the actions of the investment industry. According to the Bank of America European fund manager survey in April, 70% of investors expect weakness in the region’s equity market over coming months in response to monetary tightening, up from 66% last month. Meanwhile, 55% see stocks heading lower in the next 12 months, up from 42%. Sticky inflation leading to more central bank tightening is seen as the most likely cause of a correction, followed by weakening macro data, the survey showed. Citigroup Inc. strategists led by Beata Manthey said in a note on Tuesday that they favor US stocks over Europe as American shares tend to perform more defensively during EPS slowdowns. Even if European economic growth beats that of the US, European equities and earnings will come under pressure, Citi said. While most strategists in the Bloomberg survey have stuck to their forecasts or slightly adjusted their view downward in the past month, some found justification for an increase. State Street Global Advisors, for instance, raised its target to 475 from 455, although this only implies limited upside for the rest of the year. “The financial contagion from the banking sector in March had been very well contained so far and markets have rebounded,” Frederic Dodard, head of EMEA portfolio management at State Street Global Advisors, said in emailed comments. The firm continues to favor European equities over other regions, but sees a modest risk from negative guidance and additional downgrades to companies’ 2023 and 2024 earnings forecasts, he added. The first-quarter earnings season has kicked off with some positive surprises, and there could be more to come. But this shouldn’t be extrapolated as a signal of stronger stock performance, according to JPMorgan Chase & Co. strategists. Low profit expectations have been easy for companies to beat, while the numbers also got a leg up from economic activity that was better than in the first-quarter of 2022, they argue. “The question is whether the stocks will rally much further on the back of beats, post an already strong rally,” wrote strategists led by Mislav Matejka in a note on Monday. “We advise to use any strength on the back of positive first-quarter results as a good level to reduce from.” --With assistance from Jan-Patrick Barnert and Tommaso Isak Rognoni.
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Post by xray on Apr 25, 2023 11:53:47 GMT
richardsok, anitya, yogibearbull,Reuters Investors flock to one-month bills on US debt ceiling jitters, shun others Mon, April 24, 2023, 2:08 PM EDT (Reuters) - Rising concerns that the U.S. Treasury Department could hit its debt limit in the coming months are leading investors to shun certain Treasury bills and pour into others as they seek out low risk places to park cash.Congress will need to raise the U.S. debt ceiling or risk a catastrophic debt default, with analysts predicting the Treasury is most likely to run out of funds in July or August. As a result, some investors are avoiding debt that comes due in this timeframe. But they are also seeking safe places to park cash. That has led one-month bill yields to tumble, and the spread between one-month and three-month bills to expand to its widest level since the one-month bills were introduced in 2001. -"You're seeing this demand for the very front-end … and then the three- to four-month part of the bill curve is quite cheap because of these debt ceiling concerns," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York. -"There's a lot of cash on the sidelines. Money left the regional banking systems and made it to the larger banks and then from there to money market funds. Money market funds are the highest they've been and there's a dearth of supply," Rajappa added. The failure of two regional banks, including Silicon Valley Bank in mid-March, has increased demand for Treasury bills on concerns about the safety of uninsured bank deposits. But the Treasury has cut its issuance of short-term debt as it bumps up against its debt limit. "The market is nervous and is avoiding the debt ceiling issues and has unfortunately nowhere to go because bill supply continues to be cut," said Gennadiy Goldberg, a senior interest rate strategist at TD Securities in New York. Yields on one-month bills were last at 3.362%. after reaching 3.206% last Thursday, the lowest since Oct. 20. They are now trading around 130 basis points below the Fed funds rate, the largest gap since 2008. Yields on three-month bills, meanwhile, have increased to 5.113%, and are holding just below a 22-year high of 5.318% reached on Thursday. The gap between one-month and three-month bills has widened to a record at around 175 basis points. The Treasury is expected to increase bill issuance once the debt ceiling is raised. Until then, investors are also likely to continue to make use of the Federal Reserve's reverse repurchase agreement facility, which is seeing daily demand of around $2.25 trillion.
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Post by xray on Apr 25, 2023 12:01:12 GMT
richardsok, anitya, yogibearbull, Bloomberg Big Swings in One-Day Volatility Index Leave Traders Bewildered Lu Wang Mon, April 24, 2023, 3:21 PM EDT (Bloomberg) -- One thing Matthew Tym has learned in two decades as a derivatives trader is to make sure he understands something before using it. That lesson is guiding his view of Wall Street’s brand-new fear gauge. The Cboe 1-Day Volatility Index (ticker VIX1D) launched Monday as a way of distilling the price impact of a trading boom in options with a shelf life of less than 24 hours. But most market pros, like the head of equity derivatives trading at Cantor Fitzgerald LP, watched bemused from the sidelines as a series of big moves unfolded. It opened at 8.55, compared with a reference point of 13.27 on Friday, surged as high as 9.88 before pulling back to 9.75 as of 3 p.m. in New York. “I have no idea what it’s pricing,” said Tym. The one-day VIX — which tracks the expected volatility of the S&P 500 based on options with maturities of about 24 trading hours — is supposed to shed fresh light on investor sentiment over ultra-short time frames. Exactly what to make of those numbers was the question bedeviling even the most experienced market pros on Monday. True to its billing, the new indicator moved with a freneticism not captured in its longer-dated cousins. Rather than fall, the VIX — the tried-and-true benchmark volatility index that has been a staple in traders’ toolboxes since the 1990s — rose, adding 0.3 point. The S&P 500 was little changed. “It’s very hard to put into context, being the first day going live,” said Steve Sosnick, the chief strategist at Interactive Brokers. “There are plenty of reasons to expect that index to be volatile. Markets can move substantially — or do nothing — on any given day.” It remains to be seen if Wall Street pros will find a use for the one-day VIX akin to the seminal role played by the longer-dated version, which was conceived three decades ago by Cboe Global Markets Inc. One complicating factor is the lifespan of the instruments it tracks. While the standard VIX can be thought of as an estimate of stock turbulence a month hence, the single-day version’s vastly shorter time horizon may make it a litmus for particularly chaotic market views: one measured in hours, rather than days or weeks. Traders have flocked to options with zero days to expiration, or 0DTE, since the Chicago-based exchange operator expanded contract expirations to every weekday in mid-2022 and as the Federal Reserve’s aggressive monetary tightening spurred market volatility. Right now, the flashy contracts make up about half of S&P 500 options trading volume. The VIX1D was introduced partly in response to the swift migration to short-dated options contracts — activity that is not captured by its older counterparts, according to Rob Hocking, Cboe’s global head of product innovation. For now, the exchange has no immediate plans to launch futures or options products linked to the one-day VIX, he said. Investors tend to pile into 0DTE options when economic data such as inflation and Fed policy meetings are on deck, seeking to make quick profits or hedge positions around events that have in the past year swung markets in big and unpredictable ways. The one-day decline on its first day bucked gains in volatility measures with longer tenors, showing the index working as designed given Monday was a relatively uneventful session, according to Hocking. “I wouldn’t call it a discrepancy,” he said. “In days where it’s calm, you’re going to tend to see a one-day VIX number trading most likely below the 30-day number. And on days where all of a sudden you have an FOMC announcement or a jobs report, you’re going to see that number trending above the 30-day number.” The S&P 500 on Monday swung between gains and losses as traders awaited upcoming earnings from tech giants such as Microsoft Corp. and Friday’s data on first-quarter gross domestic product to gauge the prospect of an economic recession. To Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, the one-day VIX’s closing price is more useful than intraday moves in that it signals what’s expected for the next session in the options market. “We have a lot of data on Friday, so seeing where it closes on Thursday will be interesting,” he said. Still, to Tym at Cantor, the added value from the new tool is limited, at least for now. “What do you do with this? Can’t trade it,” he said. “I can look at the at-the-money straddle to get a much better view of expected volatility for the day,” he added, referring to a strategy that buys an equal number of calls and puts with the same strike price and expiration date. --With assistance from Sam Potter.
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Post by uncleharley on Apr 25, 2023 13:16:22 GMT
I am still working on my 1st cup of coffee, but my impression is that the new VIX might be useful to day traders, but not necessarily to others.
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Post by richardsok on Apr 25, 2023 13:29:42 GMT
Thanks, x. I am pretty much settled on using SWVXX for my money market/short term cash parking. I'm not going to try to over-think the issue. Can't imagine what possible use I'd have for a DAILY VIX fund. At a certain point the gimmicks get awful gimmicky.
I agree with Tym in your quote: the ATM pre-opening straddle prices give us about as good a clue as we're going to get -- if that's where you're looking.
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Post by anitya on Apr 25, 2023 19:34:37 GMT
Just an FYI - The quotes for secondary Treasuries could vary by the brokerage. While these brokerages may not tell you whether or how they are making money for fecilitating your buying / selling (i.e., trading) Treasuries in the secondary market, it may be useful for the investor to focus on what they are getting rather than what / why the brokerage is getting. Of the major brokerages I have access to, TD consistently gave me the worst quotes, then Schwab. Vanguard and Fidelity tend to be similar. Without going into the details, the TD fixed income desk Rep I spoke with said they are aware of the investor disadvantaged quotes on their platform because he compared those with the ones available on Schwab platform but he can only suggest that we trade Treasuries at Schwab. Good luck! Just a quick update - I compared Schwab and Fidelity yesterday and today. Seems like Schwab Treasury quotes are far superior for both price and the minimum investment required at those prices. After deposits fled Schwab, they may have decided to provide better customer experience on their brokerage side and are over competing in the Treasury secondary market. Edit: Not sure why but at the same price for the same security, Schwab shows higher YTM than at Fidelity. So, for a specific CUSIP, it is better to compare price than YTM at different brokerages. I am guessing, price is quoted by the dealer and YTM is calculated by the brokerage.
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Post by xray on Apr 28, 2023 17:35:24 GMT
richardsok, anitya, yogibearbull, uncleharley, Bloomberg Bets Offering 2,400% Payout on US Default Lure Growing Crowd Sujata Rao, Denitsa Tsekova and Liz Capo McCormick Fri, April 28, 2023, 9:00 AM EDT (Bloomberg) -- In what is a traditionally moribund corner of Wall Street, speculators are piling into a bet that once seemed unthinkable: that the US government will default on its debts. With the Treasury Department inching ever closer to running out of cash — most estimates give it another few months — trading in the derivatives, known as credit-default swaps, is growing. The amount of money tied to the contracts, which will reward investors if the US misses any payments, has increased roughly eight-fold since the start of the year.This isn’t the first time that a mini-mania around this trade has erupted. There were episodes back in 2011, 2013, and to a lesser extent 2021. But this time, it all feels a bit different. For one, there’s a greater chance of a lapse in payments. The polarization in Washington is now so extreme that there’s no guarantee Republicans and Democrats can broker a deal to lift the debt ceiling in time to avert a crisis. And there’s an added sweetener for speculators. A quirk in the derivatives market means they can take advantage of the rock-bottom prices on long-term US bonds to juice gains on the contracts should the US actually default. With some Treasuries recently trading below 60 cents on the dollar — the result of the Federal Reserve’s rapid-fire series of interest-rate hikes — the potential payout could exceed 2,400%, according to Bloomberg calculations. “In Washington people think it’s like 30% likely to happen, and on Wall Street people think it’s like zero to 5% that this doesn’t get resolved,” Boaz Weinstein, chief investment officer at $4.3 billion hedge fund Saba Capital Management LP, said in an interview. Weinstein, who rose to prominence a decade ago when he took on JPMorgan Chase & Co. in what became known as the London Whale episode, noted on Twitter earlier this week that he had been “interested” in getting in on the trade but failed to get his hands on enough of the contracts to make it worth his while. This underscores a crucial point about the market: As much as it’s grown, it remains highly illiquid (Net notional outstanding was only $5 billion at the end of March, equal to just a fraction of the US bond market, according to Depository Trust & Clearing Corp. data.) And given the idiosyncrasies of the settlement process, there’s no guarantee the CDS will actually pay out, even if America does briefly miss a debt payment. It can be hard to fathom the possibility of a US default. The nation has never reneged on its debts, and the sanctity of America’s creditworthiness is a pillar of the global financial system. After all, Treasuries are commonly regarded as the “risk-free” asset — used to determine the cost of capital around the world. Yet Wall Street, despite having seen this manufactured crisis get resolved time and again in recent years, is starting to get nervous once more. The spread on one-year credit-default swaps, the most popular contracts for wagering on a missed payment, has surged in recent days, touching a record 1.75 percentage points on Thursday, according to ICE Data Services prices going back to 2007. Put another way, it costs $17,500 to insure $1 million of US debt against default for a year (the contract is actually priced in euros.) That’s up roughly 10-fold since the beginning of 2023, and compares to less than $400 for Germany.This angst is visible in the US Treasury-bill market, too. Investors are demanding higher yields on the bills that would mature around the time of a potential default to compensate for the risk they may not get paid, even for just a short while. Subadra Rajappa, head of US interest-rate strategy at Societe Generale SA, says that while surging CDS spreads don’t necessarily suggest the US is any more likely to default, “it’s an indication of the political environment we are in, and the potential for brinkmanship.” Just Wednesday, Republican House Speaker Kevin McCarthy squeaked a debt limit bill through the chamber that also included trillions of dollars in budget cuts targeting President Joe Biden’s policy priorities. The White House, however, has dug in on its refusal to cave to GOP demands to attach spending cuts to raising the $31.4 trillion debt ceiling. “I’m happy to meet with McCarthy, but not on whether or not the debt limit gets extended,” Biden said. “That’s not negotiable.” ‘Cheap Hedge’In a credit-default swap, buyers make payments to a seller, who provides a payout if a borrower fails to make good on its obligations. That payout is essentially equal to the difference between the par value and market value of the underlying financial asset. Most CDS contracts let the buyer choose between a number of bonds as the underlying asset, and buyers will typically choose the one with the lowest price to maximize their profits. Because some longer-dated US Treasuries are trading below 60 cents on the dollar, a buyer willing to pay the roughly $17,500 it costs to insure $1 million of US debt for a year could receive the equivalent of more than $400,000 in the event of a default. Of course, that’s assuming investors scoop up the Treasuries now with cash on hand, and not wait until the bonds potentially get more expensive as the debt ceiling approaches. The cost to protect against non-payment is also rising fast, likely as CDS sellers increasingly account for the deep discounts on long bonds when determining premiums, according to RBC Capital Markets’s Blake Gwinn. Still, “it feels like a cheap hedge in an environment when the odds of technical default are higher than usual and the payout is attractive relative to the upfront payment,” Rajappa said. Bad BetThe wager has plenty of detractors. Some say there are simply better, more accessible ways to hedge or profit from a potential US debt debacle. For others, history has proven that lawmakers are capable of setting aside their differences before the clock runs out, even if it will ultimately require some 11th-hour deal making. They say the chances of a deal getting done before CDS are triggered is especially high given a three-day grace period built into the contracts. Markets would react so badly in that intervening period, the thinking goes, that elected officials would have no other choice but to quickly hammer out a deal. “It’s every couple of years, the same old, same old. A default is never going to happen,” said Mark Holman, a partner at TwentyFour Asset Management, a London-based investment firm that specializes in fixed-income securities. Still others make the case that even if the US were to miss a debt payment, CDS holders still wouldn’t be assured a profit. A so-called determination committee under the oversight of the International Swaps & Derivatives Association would ultimately have to decide if the swaps pay out, and market watchers say a lack of historical precedent (not withstanding a late payment on some maturing T-bills in 1979) would make what’s already a nebulous process even murkier. “Unclear? Confusing? Undefined? Yes,” said Jim Bianco, who runs his own macro research firm. “Count us among those who think the credit-default swaps market for US Treasury securities offers little in terms of an economic signal.” --With assistance from Hema Parmar and Tasos Vossos. ---------- Live Long and Prosper....
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Post by anitya on May 1, 2023 14:27:15 GMT
yogibearbull , Is this what I should expect - is there anything I could do to improve my experience? I recently had a Treasury bill mature at Schwab on a weekend (4/15). I went into the Schwab account on Monday 30 minutes before Close to move the proceeds into their money market account but the Treasury bill still showed in my Positions and there is no pending incoming cash indication or cash available to trade. I checked later that day and it is still the same. Schwab deposited the proceeds into cash on 4/18 when I could move the money to their MM fund, which is a T+1 fund. I get that maturity date falling on a non-business day is pushed to the next business day and hopefully Treasury adds the extra day(s) interest. This Treasury maturity is treated as if I sold it for settling (T+1) the proceeds. P.S.: I never paid attention to maturing Treasuries at Schwab or Vanguard as they automatically sweep the proceeds into MM sweep account. More work at Schwab. Going forward, I will have to pay attention to whether maturity date is a non-business day. Thanks. Just an FYI - I had a Treasury Note mature yesterday (another weekend maturity!) and the proceeds are already shown in my Fidelity sweep account - not in pending activity. Very surprised how fast the Fidelity settlement is relative to Schwab I had previously reported above.
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Post by xray on May 2, 2023 17:07:48 GMT
The Telegraph Half of America’s banks are already insolvent – this is how a credit crunch begins Ambrose Evans-Pritchard Tue, May 2, 2023, 9:30 AM EDT
The twin crashes in US commercial real estate and the US bond market have collided with $9 trillion uninsured deposits in the American banking system. Such deposits can vanish in an afternoon in the cyber age.
The second and third biggest bank failures in US history have followed in quick succession. The US Treasury and Federal Reserve would like us to believe that they are “idiosyncratic”. That is a dangerous evasion.
Almost half of America’s 4,800 banks have already burned through their capital buffers. They may not have to mark all losses to market under US accounting rules but that does not make them solvent. Somebody will take those losses.
“It’s spooky. Thousands of banks are underwater,” said Professor Amit Seru, a banking expert at Stanford University. “Let’s not pretend that this is just about Silicon Valley Bank and First Republic. A lot of the US banking system is potentially insolvent.”
The full shock of monetary tightening by the Fed has yet to hit. A great edifice of debt faces a refinancing cliff-edge over the next six quarters. Only then will we learn whether the US financial system can safely deflate the excess leverage induced by extreme monetary stimulus during the pandemic.
A Hoover Institution report by Prof Seru and a group of banking experts calculates that more than 2,315 US banks are currently sitting on assets worth less than their liabilities. The market value of their loan portfolios is $2 trillion lower than the stated book value.
These lenders include big beasts. One of the 10 most vulnerable banks is a globally systemic entity with assets of over $1 trillion. Three others are large banks. “It is not just a problem for banks under $250bn that didn’t have to pass stress tests,” he said.
The US Treasury and the Federal Deposit Insurance Corporation (FDIC) thought they had stemmed the crisis by bailing out uninsured depositors of Silicon Valley Bank and Signature Bank with a “systemic risk exemption” after these lenders collapsed in March.
The White House baulked at a blanket guarantee for all deposits because that would look like social welfare for the rich. Besides, the FDIC has only $127bn of assets (and less very soon) and may ultimately require its own bailout.
The authorities preferred to leave the matter vague, hoping that depositors would discern an implicit guarantee. The gamble failed. Depositors fled First Republic Bank at a fast and furious pace last week despite an earlier infusion of $30bn from a group of big banks.
White knights probing a possible takeover of First Republic recoiled once they examined the books and discovered the scale of real estate damage. The FDIC had to seize the bank, wiping out both shareholders and bondholders. It took a $13bn subsidy along with $50bn of loans to entice JP Morgan to pick up the pieces.
“No buyer would take First Republic without a public subsidy,” said Krishna Guha from Evercore ISI. He warns that hundreds of small and mid-sized banks will batten down the hatches and curb lending to avoid the same fate. This is how a credit crunch begins.
The share price of PacWest, the next on the sick list, fell 11pc in late trading on Monday. That will be the bellwether of what happens next. The US authorities can contain the immediate liquidity crisis by guaranteeing all deposits temporarily. But that does not address the greater solvency crisis.
The Treasury and the FDIC are still in the denial phase. They blame the failures on reckless lending, bad management, and over-reliance on foot-loose uninsured depositors by a handful of banks. This has a familiar ring. “They said the same thing when Bear Stearns went down in 2008. Everything was going to be alright,” said Prof Seru.
First Republic lends to technology start-ups, but it chiefly came unstuck on commercial real estate. It will not be the last on that score. Office blocks and industrial property are in the early stage of a deep slump. “Where we stand today is a nearly perfect storm,” said Jeff Fine, real estate guru at Goldman Sachs.
“Rates have gone up 400 to 500 basis points in a year, and financing markets have almost completely shut down. We estimate there’s four to five trillion dollars of debt in the commercial (property) sectors, of which about a trillion is maturing in the next 12 to 18 months,” he said.
Packages of commercial property loans (CMBS) are typically on short maturities and have to be refinanced every two to three years. Borrowing exploded during the pandemic when the Fed flooded the system with liquidity. That debt comes due in late 2023 and 2024.
Could the losses be as bad as the subprime crisis? Probably not. Capital Economics says the investment bubble in US residential property peaked at 6.5pc of GDP in 2007. The comparable figure for commercial property today is 2.6pc.
But the threat is not trivial either. US commercial property prices have so far fallen by just 4pc to 5pc. Capital Economics expects a peak to trough decline of 22pc. This will wreak further havoc on the loan portfolios of the regional banks that account for 70pc of all commercial property financing. “In a worst case scenario, it could create a ‘doom loop’ which accelerates a real estate downturn that then feeds back into the banking system,” said Neil Shearing, the group’s chief economist.
Silicon Valley Bank’s travails were different. Its sin was to park excess deposits in what is supposed to be the safest financial asset in the world: US treasuries. It was encouraged to do so under the risk-weighting rules of the Basel regulators.
Some of these debt securities have lost 20pc on long maturities – a theoretical paper loss only until you have to sell them to cover deposit flight.
The US authorities say the bank should have hedged this Treasury debt with interest rate derivatives. But as the Hoover paper makes clear, hedging merely transfers losses from one bank to another bank. The counterparty that underwrites the hedge contract takes the hit instead.
The root cause of this bond and banking crisis lies in the erratic behaviour and perverse incentives created by the Fed and the US Treasury over many years, culminating in the violent lurch from ultra-easy money to ultra-tight money now underway. They first created “interest rate risk” on a galactic scale: now they are detonating the delayed timebomb of their own creation.
Chris Whalen from Institutional Risk Analyst said we should be wary of a false narrative that pins all blame on miscreant banks. “The Fed’s excessive open market intervention from 2019 through 2022 was the primary cause of the failure of First Republic as well as Silicon Valley Bank,” he said.
Mr Whalen said US banks and bond investors (i.e. pension funds and insurance companies) are “holding the bag” on $5 trillion of implicit losses left by the final blow-off phase of the Fed’s QE experiment. “Since US banks only have about $2 trillion in tangible equity capital, we have a problem,” he said. He predicts that the banking crisis will keep moving up the food chain from the original outliers to mainstream banks until the Fed backs off and slashes rates by 100 basis points. The Fed has no intention of backing off. It plans to raise rates further. It continues to shrink the US money supply at a record pace with $95bn of quantitative tightening each month.
The horrible truth is that the world’s superpower central bank has made such a mess of affairs that it has to pick between two poisons: either it capitulates on inflation; or it lets a banking crisis reach systemic proportions. It has chosen a banking crisis.
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Comment: Bottom Line (IMHO): 1... like some of us have said much earlier, it is "TIME" to move one's money to one of our major top banks (only three left). If we thought the banks got "very" big during the 2007/2008 market crisis, we may not have seen anything yet... 2... time to rethink portfolio's if we haven't already done so....
Live long and Prosper....
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Post by xray on May 2, 2023 17:17:00 GMT
richardsok, anitya, yogibearbull, uncleharley, The Telegraph Shares in US banks suspended as fresh crisis fears grip market - latest updates Chris Price Tue, May 2, 2023, 10:43 AM EDT PacWest Bancorp has suspended trading in its shares - Morgan Lieberman/Bloomberg Shares in two regional US banks have been paused amid fresh concerns about the health of the financial sector in the wake of the rescue of First Republic. PacWest Bancorp and Western Alliance Bancorp halted trading in their equities today after suffering share price falls of 24pc and 20pc respectively. It comes a day after a deal was reached to sell First Republic Bank to JP Morgan after US regulator the FDIC took control of the San Francisco-based lender. Its share price had collapsed by 97pc this year following the crisis of confidence triggered by the collapse of Silicon Valley Bank in March. It revealed last week its deposits had plunged by $100bn in the first quarter. Read the latest updates below. 05:51 PM Wall Street titan Carl Icahn targeted by short seller. Carl Icahn, one of Wall Street’s best-known activist investors, has become the target of a short-seller which has accused the billionaire of inflating the value of his empire. Chief business correspondent Oliver Gill has more: Hindenburg Research accused the hedge fund manager of operating a “ponzi-like economic structure” through his $15bn fund, Icahn Enterprises, and claimed its value had been inflated by at least 75pc. The short-seller added: “We think Icahn, a legend of Wall Street, has made a classic mistake of taking on too much leverage in the face of sustained losses: a combination that rarely ends well.” Icahn Enterprises’ shares, listed on the Nasdaq, fell as much as 24pc following the publication of the Hindenburg report. It is the third high-profile company to have been targeted by Hindenburg this year. In January the short-seller launched a searing attack on Indian billionaire Gautam Adani’s business empire, accusing him of corporate fraud. The company has denied the allegations. Last month the short-seller took aim at Block, the US crypto payments company run by Twitter’s co-founder and former chief executive Jack Dorsey. In its latest attack on Icahn Enterprises, Hindenburg raised questions over the company’s dividend and its recent financing... 05:21 PM Dow Jones sheds over 500 points as banks tumble again The Dow Jones Industrial Average has fallen by over 560 points or 1.65pc to 33,488.42 as shares in beleaguered banks tumble again. Meanwhile, the S&P 500 has fallen 1.66pc to 4,098.59 and the tech-heavy Nasdaq Composite is trading 1.45pc lower at 12,035.95. Some of the sharpest drops came from smaller and mid-sized banks, which have been under heavy scrutiny as the banking system shows cracks under the weight of much higher interest rates. The Dow Jones US Banks Index is currently down 3.75pc, while the S&P 500 Banks Industry Group Index is 3.55pc lower. PacWest and Western Alliance have resumed trading, but have yet to reverse the steep losses suffered earlier today. 05:09 PM FTSE 100 closes in the red The FTSE 100 has ended in the red, closing down 1.24pc at 7,773.03. The blue-chip index was weighed down by education publisher Pearson (share price down 15.31pc) after a major US rival warned that its finances were being hit by the popularity of ChatGPT. The commodity-heavy index was also dragged down by oil and gas majors - including Shell (down 4.37pc) and BP (down 4.05pc). mDespite BP reporting higher than expected quarterly profits, shares in the oil major sank after it revealed plans to reduce its share buyback programme. The mid-cap FTSE 250 index ended 0.57pc lower at 19,314.23. 04:27 PM Thousands of IBM staff at risk from AI, boss warns Artificial intelligence will replace thousands of office workers at IBM within five years, the IT giant’s chief executive has predicted. Technology editor James Titcomb has the story: Arvind Krishna said IBM would suspend or slow down hiring in back office areas such as human resources as many tasks are replaced by automation. Around 26,000 people currently have roles in these positions at IBM, which employed around 288,000 staff at the end of last year. “I could easily see 30pc of that getting replaced by AI and automation over a five-year period,” Mr Krishna told Bloomberg. This would amount to around 7,800 staff. IBM said much of this reduction would come through attrition, rather than widespread layoffs. Mr Krishna’s prediction is among the first signs that a new wave of artificial intelligence programs are disrupting the job market, especially among white collar workers. His forecast comes as many high-tech companies have cut jobs and introduced hiring freezes this year in an attempt to reassure investors... 03:48 PM PacWest and Western Alliance halt trading as share prices sink PacWest Bancorp and Western Alliance Bancorp both "paused" trading in their shares after plunging as much as 24pc and 21pc respectively to lead a rout in shares of regional banks stocks. The volatility led to a halt in trading with the KBW Regional Banking Index sinking as much as 4.2pc in the US, while the KBW Bank Index was down 3.7pc. It follows the rescue of fellow regional bank First Republic on Monday by JP Morgan. 03:20 PM Federal Reserve begins talks that could end series of interest rate rises The US Federal Reserve has kicked off a two-day meeting today to decide whether to raise its benchmark lending rate for a 10th - and possibly final - time to tackle rising prices. The Fed has been on an aggressive campaign of interest-rate increase since March last year, rapidly raising rates to help target high inflation, which remains above its long-term target of two percent. With the Federal Open Market Committee (FOMC) widely expected to raise its base rate a quarter-point on Wednesday, analysts will be looking for any "revisions to the forward guidance in its statement," Goldman Sachs' chief US economist David Mericle wrote in a recent note to clients. He said: "We expect the Committee to signal that it anticipates pausing in June but retains a hawkish bias, stopping earlier than it initially envisioned because bank stress is likely to cause a tightening of credit." Futures traders also see a more than 95pc chance that the Fed will raise its benchmark lending rate by 25 basis points when it announces its decision tomorrow, according to CME Group. Such a move would bring the interest rate to between 5 and 5.25pc - its highest level since before the global financial crisis. ---------- Live Long and Prosper....
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Post by xray on May 3, 2023 15:53:45 GMT
richardsok, anitya, yogibearbull, uncleharley, Business Insider Stocks and bonds would crash 'violently' in a debt crisis - even if the US avoids immediate default, former NY Fed president saysFilip De Mott Tue, May 2, 2023, 11:17 PM EDT Bill Dudley Then-New York Fed President Bill Dudley in 2018.VICTORIA JONES/AFP via Getty Images Bond and stock markets would crash in a debt crisis, even if the US avoids immediate default. That's according to former New York Fed President Bill Dudley, writing in a Bloomberg op-ed. "I have one message for those observing or involved in the standoff over raising the US federal debt limit: Be afraid, be very afraid."Failure to lift the debt ceiling would devastate stocks and bonds, even if the US government prioritized payments to stave off an immediate default, Bill Dudley wrote in a Bloomberg column. The warning comes after Treasury Secretary Janet Yellen said the government could run out of money and trigger an economic crisis as soon as June 1. "I have one message for those observing or involved in the standoff over raising the US federal debt limit: Be afraid, be very afraid," said Dudley, who previously served as president of the New York Federal Reserve. "At this point in the financial and economic cycle, the consequences of failing to reach a deal would be particularly dire." This is as months-long gridlock continues to impair action to avert the crisis, given that Republicans and Democrats are becoming more entrenched in their positions, Dudley wrote. Since January, the US is relying on "extraordinary measures" by the Treasury to keep servicing debt. While Republican House Speaker Kevin McCarthy was able to pass a House bill to lift the debt ceiling, Dudley doesn't see much sign of progress toward an agreement as it targets key Democratic initiatives, such as student loan forgiveness, while adding requirements for programs such as Medicaid. Meanwhile, the White House has maintained that it will only agree to a "clean" deal that lifts the debt ceiling without any spending cuts or other conditions. If lawmakers can't agree to raise the borrowing limit, President Joe Biden likely wouldn't pursue "gimmicks," such as minting a $1 trillion coin, Dudley said. Instead, it's more likely that the Treasury would prioritize payments on government debt, while federal workers would have to wait to be paid. But that would still precipitate a market crash, he added. "Even if prioritization averted an immediate default on Treasury securities, the damage would be vast. Markets — still dealing with the consequences of a rash of bank failures — would be shocked, having expected the usual last-minute deal," Dudley wrote. "Stocks and bond prices would decline violently, Treasuries would gyrate as investors worried about how long the payment prioritization would protect them, and money market mutual funds might pull out of government debt en masse."Already, bond traders have demonstrated worry, causing the yield on three-month Treasury bills, which would mature around when the default deadline arrives, to skyrocket to a two-decade high. And a market crash may be necessary for the GOP to raise the debt limit without conditions, said Rep. Jim Himes, a Democratic member of the House Financial Services Committee, last month."Sadly, I think it's going to take that kind of market signal to wake my ideologically frenzied friends up and just say, 'Let's move on and do some real stuff,'" he said. ---------- Comment: Appears the market will again be going lower (in the short term) as investors/traders flee to current safe investments (IMHO). Some portfolio's will probably be only approximately 25% invested at this point in time (and only in continuous secure dividend paying securities and only in securities that have very good up/down market performance using our crash data analysis).... Live Long and Prosper....
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Post by chang on May 3, 2023 17:20:11 GMT
"I have one message for those observing or involved in the standoff over raising the US federal debt limit: Be afraid, be very afraid," said Dudley, who previously served as president of the New York Federal Reserve. "At this point in the financial and economic cycle, the consequences of failing to reach a deal would be particularly dire."
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Very irresponsible, and foolish, thing to say. Politicians will play the usual game of chicken, but there is 0.00% chance that they will not raise the debt ceiling. It would be suicide for all of them (the politicians), and they do not want to commit suicide. An agreement may be reached with minutes left on the clock, but it will happen. This time will be no different than any other time.
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Post by gman57 on May 3, 2023 17:25:57 GMT
An agreement may be reached with minutes left on the clock, but it will happen. This time will be no different than any other time. I used to believe that but with the radicalization of some politicians I sometimes have doubts. I think some extreme members would like to tear the government completely down and start over. I hope there are still enough logical members to not go there but each time makes me a little more nervous. Maybe the biggest reason for a solution is they think about what would happen to their portfolios.
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Post by retiredat48 on May 4, 2023 2:04:13 GMT
Are these disaster predictions like the economist/reporter Paul Krugman, et al, stating "if Trump wins the 2016 election, stock market will fall by 2000 points the next day"??
Just asking.
R48
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Post by archer on May 4, 2023 3:34:08 GMT
Are these disaster predictions like the economist/reporter Paul Krugman, et al, stating "if Trump wins the 2016 election, stock market will fall by 2000 points the next day"?? Just asking. R48 Bad news gets the most clicks. I like to watch Tom Bowley and Dave Keller on Youtube. When I scroll down the other vids, most seem to warn of some sort of economic and stock market doomsday.
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Post by xray on May 4, 2023 21:04:49 GMT
uncleharley, richardsok, yogibearbull, steelpony10, rhythmmethod, Fearchar, retiredat48, steadyeddy, Reference: Very irresponsible, and foolish, thing to say. Politicians will play the usual game of chicken, but there is 0.00% chance that they will not raise the debt ceiling. It would be suicide for all of them (the politicians), and they do not want to commit suicide. An agreement may be reached with minutes left on the clock, but it will happen. This time will be no different than any other time. --------- The problem, as I see it (IMHO), is the 31T currently owed from the past owed 2022 spending spree is not the immediate problem. The problem is that we are currently well beyond the 31T and is projected to be somewhere around 37T going forward (next year). Many politicians know that we can not pay the current debt and have no plans to pay it back. What some politicians want to do is roll back the "NEW" spending to the 12/31/22 levels (for the current year) which the current administration will not do because of the continuing support for the war and projects that they believe need additional funding. The current border issue (and deal with Mexico) will consume more than our budget allocation (etc).... If we look at France, with their increase in their retirement age to 70, is because of their budget problems. We will be in a similar problem, probably after the election, to change our retirement system (like the last dramatic changes). Currently, Social Security is a " third rail" issue and both Republicans and Democrats can't currently talk about it.... Live Long and Prosper....
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Post by archer on May 4, 2023 22:40:24 GMT
Politicians are in a difficult position. They need to have the support of the majority of voters, but they also need the support of the wealthiest few % so they can campaign, and receive large amounts of money for giving speeches. Also while trickle down has a lot of losses along the way such that what benefits large businesses is in fact just a trickle by the time it gets to the average worker, hardship imposed on business trickles down more freely perhaps. Honestly I am speculating here, but this is my belief. Too big to fail is a reality, so it is good that govt knows this and offers help, but unfortunately has been remiss in overseeing how the help was fiscally handled once given.
My point is that Govt does need to tread carefully, as they are between the interests of often opposing supporters to be answered to. Maintaining support from the wealthy is pretty straight forward. Maintaining the support of a majority of polarized voters is more difficult. So managing the debt, dealing with SS etc. is slow to happen.
I'm trying not to be political here, but when we are giving our thoughts on Govt debt, we are talking about our govt which is made up of politicians doing politics. Kind of unavoidable I think. Hopefully I have not come across as partisan in anyway. Both sides of the isle are dealing with the same dilemma of how to keep their jobs.
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Post by newtecher on May 4, 2023 23:27:15 GMT
"I have one message for those observing or involved in the standoff over raising the US federal debt limit: Be afraid, be very afraid," said Dudley, who previously served as president of the New York Federal Reserve. "At this point in the financial and economic cycle, the consequences of failing to reach a deal would be particularly dire." ===== Very irresponsible, and foolish, thing to say. Politicians will play the usual game of chicken, but there is 0.00% chance that they will not raise the debt ceiling. It would be suicide for all of them (the politicians), and they do not want to commit suicide. An agreement may be reached with minutes left on the clock, but it will happen. This time will be no different than any other time. There is no such thing as zero probability for physically possible events, so I assume you just mean a probability of less than 0.005% so it rounds down to zero. This things are hard to estimate but the chance of a technical default (delay in payments) is definitely higher than 0.005% (one in twenty thousand). I would put it at about 1%. Keeping a small portion of money in FDIC accounts or foreign bonds is a reasonable thing to do for the next couple of months. Most of my assets are in US bonds, though.
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Post by xray on Jun 17, 2023 13:25:49 GMT
richardsok, anitya, yogibearbull, uncleharley, chang, gman57, retiredat48, archer, newtecher, Business Wire Duff & Phelps Utility and Infrastructure Fund Inc. Announces Dividend and Discloses Sources of Distribution Section 19(a) Notice Thu, June 15, 2023, 4:15 PM EDT In this article: DPG -20.36% WatchlistCHICAGO, June 15, 2023--(BUSINESS WIRE)--The Board of Directors of Duff & Phelps Utility and Infrastructure Fund Inc. (NYSE: DPG), a closed-end fund advised by Duff & Phelps Investment Management Co., today authorized the payment of dividends on its common stock as follows: Cents Per Share Ex-Date Record Date Payable Date 21.0 September 14, 2023 September 15, 2023 September 29, 2023 At its June meeting, the Board of Directors voted to maintain the Fund’s Managed Distribution Plan, but to decrease the quarterly distribution rate from its previous level of $0.35 per share to a new level of $0.21 per share. This represents a decrease in the annual distribution level from $1.40 per share to $0.84 per share. The 40% decrease in the distribution reflects the increase in the Fund’s cost of leverage, current and expected earnings, and overall market conditions. The Fund’s investment adviser and Board of Directors believe that the new distribution level should be more sustainable over time and thus that the new level is in the long-term interest of shareholders. The new $0.84 per share annual distribution rate represents a yield of 6.74% based on the market price of the Fund’s shares of $12.47 as of the close of the New York Stock Exchange on Wednesday, June 14, 2023 and approximately 7.62% based on the Fund’s net asset value (NAV) of $11.03 as of the same date. The Fund adopted a Managed Distribution Plan (the "Plan") in 2015. Under the Plan, the Fund will distribute all available investment income to its shareholders, consistent with the Fund’s investment objective. If and when sufficient investment income is not available on a quarterly basis, the Fund will distribute realized capital gains and/or return of capital to its shareholders in order to maintain the 21 cents per share distribution level. ---------- Comment: DPG has been at a "BIG" "PREMIUM and this negative distribution change will reduce the premium substantially. Current data shows their NAV @ 11.24 with their MktPrc at 10.13 (COB Friday) after their announcement and a $2.59 drop in MktPrc/sh. MktPrc was usually around 12.05 earlier. Their NAV has been flat (11.21) looking at my last years data. This cut in the distribution should again be a warning about holding CEF's with a "PREMIUM" attached and the CEF not performing to normal performance (in the NAV).... Live Long and Prosper....
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Post by xray on Jun 25, 2023 22:11:55 GMT
richardsok, anitya, yogibearbull, uncleharley, chang, gman57, retiredat48, archer, newtecher, Don't be fooled by this week's negative performance/numb3rs (IMHO). Looking at my current data against my 5/26 data, only approximately 30% of the securities have declined. Income investors should review their portfolio's as it appear a lot of dividend paying securities continue to do well. Some examples are CAPL, AVK,, AFCG, EFC, HGLB, LGI, MFD, RC, RSF, RVT, USA, EDI, FCT, GLO, GLQ, HQH, HQL, OPP, THW, VGI ZTR.... Not all can be considered current winners (or investable) in the sense of the word but have increased their "value" in either book value or NAV's. Some had insider buying that we all have been tracking. Those income oriented investors, seeking >10% in dividends or distributions, should consider (and analyze further) any security in current portfolio that has declined in MktPrc but has maintained their NAV/book value in the last 30days. Dollar cost averaging might be a option going forward.... None of us can predict markets but we do understand numb3rs and trends.... Live Long and Prosper....
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Post by xray on Aug 19, 2023 13:30:38 GMT
uncleharley, richardsok, yogibearbull, steelpony10, rhythmmethod, Fearchar, retiredat48, steadyeddy, Appears we are entering a down market as just about anything with value has declined this past week. The problem, as I see it, is that many investors have gone to "CASH" because of Gov't spending (forecasting 50T) and the dollar to come into major stress next year. There is continued discussions in the media about replacing our dollar with something else (China and Russia are pushing this). Treasuries appear the place to park some cash for the near future.... Add to this, that " AI" is now being coupled with the new advanced " QUANTUM COMPUTER" technology coming our way and will make all of our current (small investor) analysis systems obsolete by next year. Unless we are hooked into these new systems, computer decisions will be faster (than currently) and buy/sell decisions will not be in a timely manner any more.... Live Long and Prosper....
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Post by retiredat48 on Aug 19, 2023 13:46:23 GMT
uncleharley , richardsok , yogibearbull , steelpony10 , rhythmmethod , Fearchar , retiredat48 , steadyeddy , Appears we are entering a down market as just about anything with value has declined this past week. The problem, as I see it, is that many investors have gone to "CASH" because of Gov't spending (forecasting 50T) and the dollar to come into major stress next year. There is continued discussions in the media about replacing our dollar with something else (China and Russia are pushing this). Treasuries appear the place to park some cash for the near future.... R48 in bold: May be a political goal of China. But currently both Russia and China in dire straights with their economies. China collapse of real estate is huge. Most china people have life savings in their real estate/condo/apartment home. And abysmal return-to-work statistics. Add to this, that " AI" is now being coupled with the new advanced " QUANTUM COMPUTER" technology coming our way and will make all of our current (small investor) analysis systems obsolete by next year. Unless we are hooked into these new systems, computer decisions will be faster (than currently) and buy/sell decisions will not be in a timely manner any more.... R48: Is this not the situation now? Computers making many stock buys/sells just based on "words alone" when encountered. And the world's number one investor., James Simons, (beat Buffett) developed the logarithms for trading hourly by computer...making billions and billions. My horserace betting is now much affected by computers worldwide making bets within 5-10 seconds before the bell, altering odds greatly! I have the math of successful betting down; but the high speed computers beat me/take away the best bets. Greatly reduced betting is my answer. The investor answer to computers is to not trade much...buy and hold. In the long run, the computers are only creating small blips on the charts.
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Post by rhythmmethod on Aug 19, 2023 16:36:47 GMT
uncleharley , richardsok , yogibearbull , steelpony10 , rhythmmethod , Fearchar , retiredat48 , steadyeddy , Greatly reduced betting is my answer. The investor answer to computers is to not trade much...buy and hold. In the long run, the computers are only creating small blips on the charts.
retiredat48, my thoughts exactly. Take the day-to-day gyrations as an opportunity to increase income or potential growth. I'm currently adding VERY lightly to my host of income producers. There is and will always be a wall of worry. I already trimmed some growth which was rebalancing, not trading. Keep some black on the left side of the ledger, live your life, and repeat. Take care - RM
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Post by xray on Aug 20, 2023 16:27:35 GMT
Science, Tech, Math › Science Quantum Computers and Quantum Physics
By Andrew Zimmerman Jones Updated on May 01, 2019
A quantum computer is a computer design which uses the principles of quantum physics to increase the computational power beyond what is attainable by a traditional computer. Quantum computers have been built on a small scale and work continues to upgrade them to more practical models.
How Computers Work
Computers function by storing data in a binary number format, which result in a series of 1s & 0s retained in electronic components such as transistors. Each component of computer memory is called a bit and can be manipulated through the steps of Boolean logic so that the bits change, based upon the algorithms applied by the computer program, between the 1 and 0 modes (sometimes referred to as "on" and "off").
How a Quantum Computer Would Work
A quantum computer, on the other hand, would store information as either a 1, 0, or a quantum superposition of the two states. Such a "quantum bit" allows for far greater flexibility than the binary system.
Specifically, a quantum computer would be able to perform calculations on a far greater order of magnitude than traditional computers ... a concept which has serious concerns and applications in the realm of cryptography & encryption. Some fear that a successful & practical quantum computer would devastate the world's financial system by ripping through their computer security encryptions, which are based on factoring large numbers that literally cannot be cracked by traditional computers within the lifespan of the universe. A quantum computer, on the other hand, could factor the numbers in a reasonable period of time.
To understand how this speeds things up, consider this example. If the qubit is in a superposition of the 1 state and the 0 state, and it performed a calculation with another qubit in the same superposition, then one calculation actually obtains 4 results: a 1/1 result, a 1/0 result, a 0/1 result, and a 0/0 result. This is a result of the mathematics applied to a quantum system when in a state of decoherence, which lasts while it is in a superposition of states until it collapses down into one state. The ability of a quantum computer to perform multiple computations simultaneously (or in parallel, in computer terms) is called quantum parallelism.
The exact physical mechanism at work within the quantum computer is somewhat theoretically complex and intuitively disturbing. Generally, it is explained in terms of the multi-world interpretation of quantum physics, wherein the computer performs calculations not only in our universe but also in other universes simultaneously, while the various qubits are in a state of quantum decoherence. While this sounds far-fetched, the multi-world interpretation has been shown to make predictions which match experimental result.
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Comment:
Anyone who takes these comments lightly may probably fall behind in future investing. "BIG POCKET INVESTORS" are sure to use both AI and Quantum computers to make all of their buy/sell situations. Not something to take lightly IMHO. AI is already a big learning experience for those of us currently involved in it....
Live Long and Prosper....
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Post by xray on Feb 26, 2024 19:35:51 GMT
uncleharley, richardsok, yogibearbull, steelpony10, rhythmmethod, Fearchar, retiredat48, steadyeddy, Selling is beginning according to my current data. Data indicates a negative trend is currently building in the market.... -Investors are taking note that several stocks are controlling the current rise in the market.... -The general market, with some exceptions, is declining or struggling.... Suggest/recommend that investors review their current portfolios and take some precautions where excesses in number of shares is excessive.... Risk management prevails.... Live Long and Prosper....
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