Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Even with no debt deal in place, the overwhelming majority of Republicans and Democrats won't vote for the compromises already made. Imagine that!
If Kevin McCarthy is able to announce a deal, leaders in both chambers of Congress will need to greatly modify the "negotiated agreement" to obtain enough moderate Republican and Democratic votes to pass a deal before the government runs out of money. The far-right and fat-left will oppose these changes, but this greatly altered compromise would still easily pass with enough Republican and Democratic votes.
The House Freedom Caucus, fearful of this inevitable outcome has called for "an end to negotiations until the Senate passes their preferred House bill" they voted for last month sharply cutting the military and direct federal spending on agencies like the IRS.
Meanwhile the Democratic Bill raising the debt limit without any conditions continues to the House floor, which could alternately become the legislation that is changed and passed by both House and Senate.
In a statement Thursday, Senate Majority Leader Charles E. Schumer (D-N.Y.) offered a simple word of caution: “No one will get everything they want.”
At a news conference in Hiroshima on Saturday, Biden said he was “not at all” concerned about the ongoing debt talks, and that any kind of negotiation evolves in stages. “I still believe we’ll be able to avoid a default and we’ll get something decent done,” Biden said.
Fox News continues to stage fake stories they can use to enrage their viewers, along with continuing election disinformation.
Three men currently staying at a homeless shelter in Poughkeepsie New York testified they were among a group of 15 paid by Fox News to portray homeless veterans displaced from empty upstate hotels by incoming migrants.
Fox News has run one apology admitting their story was false.
New York's attorney general's office said it is investigating the network's behavior.
https://www.timesunion.com/hudsonvalley/news/article/homeless-men-recruited-veterans-scam-18108478.php
While Brookfield Properties defaulted on $1 billion of loans, they lost $850 million in their prior equity value in these properties.
333 S Hope Street $701 million
333 S Grand Ave $656 million
725 S Figueroa Street $497 million
These properties are essentially fully leased, although there is a substantial amount of space available for sublease. Brookfield must have been facing a lot of lease expirations they didn't think they could fill.
A US debt default would really knock the floor out from under commercial real estate values
Brookfield had previously filed an application to add a residential high-rise to Bank of America Plaza, a 55-story office tower located at 333 S. Hope Street.
The project, named the Residences at 333 South Hope Street, would replace a portion of the building's plaza and parking structure with a new 34-story edifice featuring 366 studio, one-, and two-bedroom dwellings with a 425-square-foot cafe located at street level.
At one time this added residential would have saved their bacon. - https://downtownla.com/building/residences-at-333-south-hope-street
A year ago, Brookfield Property Partner’s downtown Los Angeles office portfolio encompassed 8 million square feet, including four of the city’s highest-profile trophy towers. It was not a stretch to say that the Canadian REIT dominated the downtown Los Angeles skyline.
What a difference a year makes: Brookfield has now defaulted or missed payments on collateralized mortgage backed security loans encompassing more than $1 Billion that are backed by three of its largest downtown Los Angeles office trophies.
https://www.globest.com/2023/05/18/brookfields-downtown-l-a-trophy-towers-falling-like-dominoes/?slreturn=20230420035147
>>> Two centuries ago, a somewhat obscure Scotsman named Tytler made this profound observation: -
"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy"
https://en.wikipedia.org/wiki/Alexander_Fraser_Tytler,_Lord_Woodhouselee#:~:text=Two%20centuries%20ago%2C%20a%20somewhat,out%20of%20the%20public%20treasury.
Thomas Jefferson -
“If the American people ever allow private banks to control the issue of their currency first by inflation then by deflation the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered... I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people to whom it properly belongs.”
https://www.goodreads.com/quotes/405594-if-the-american-people-ever-allow-private-banks-to-control
Abraham Lincoln -
“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies, all who question its methods or throw light upon its crimes.As a result of the war, corporations have been enthroned, an era of corruption in high places will follow, and the money powers of the country will endeavor to prolong it’s reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
https://www.goodreads.com/quotes/9668566-the-money-powers-prey-upon-the-nation-in-times-of
<<<
---
In an FEC form filed today Congressman George Santos now lists himself as the treasurer of his various campaign and finance committees, replacing the mysterious treasurer Andrew Olson no one could ever identify as a real living person.
Not surprisingly, in his new financial filing George Santos is continuing to use 'Andrew Olson's' email address apolson1964@gmail.com as his personal point of financial contact.
Kevin McCarthy badly needs the votes of Congresspeople George Santos, Marjorie Trailer Queene and other nutters to hold America hostage.
The Republican demand is a 13% cut to all "discretionary government spending", half of which pays for defense and the other half funds all government agencies, and who knows if McCarthy can find the Republican votes for this non-starter.
If that's really their bottom-line, our government will go into a partial default.
We'll just have to see how loony Marjorie Trailer Queene and her pals are.
a.) Sensible people in the Treasury and Fed will continue to pay off maturing government debt and continue paying interest on debt - which is essential in my estimation. There might be assistance from motivated parties like their 'primary dealers", Goldman Sachs et al.
b.) The government will stop making Medicare payments, Social Security benefits, transfer payments to the States, military salaries and pensions, government salaries and pensions and everything else.
McCarthy will say, "We want to stop paying on the debt so we can pay Social Security," or some other noise and no one will care. McCarthy's band of loons can take their complaints to the court system which will have to weigh the meaning of the 14th Amendment, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
How long will it take McCarthy to peddle his complaints through to the Supreme Court while retirees and the military go without monthly checks or medical care?
Biden's advisors offered a wide array of new tax options to instantly balance the budget, like eliminating the "carried interest tax exemption" so popular with Hedge Fund Owners, but McCarthy and Trump want a cut with no repeal of Trump's tax cuts.
I don't think McCarthy's 13% cut to all military spending and all government services is going to be seen kindly by the American public, as incomes stop. They have no real understanding of how out of sync their 'policies' are with public will.
I believe you called that a few days ago.
Debt ceiling talks falling apart is hardly unexpected.
A person with a lot of business experience is a good person to have running a business . . .
. . . but I've come to realize the best person to run a government is someone like Nancy Pelosi who knows all the arcane details of how our government works.
A "business guy" can get elected and rely heavily on experienced political staffers for advice, but that's not different from putting a politician in charge of a Fortune 500 company saying he can rely on experienced business staffers.
Like it or not they're not interchangeable skills.
My skill set obtaining governmental approvals for Chevron's projects from agencies and public meetings were a lot closer to being a politician than a business person. I had to know I had the votes. You have to understand people to do that. Being able to take in a huge amount of information and make sense of it as a whole is helpful too.
There were a lot of real estate and royalty attorneys in Chevron's Land Department who were absolutely incapable of doing what I did, as they so often proved again and again. But if you wanted to review a mineral rights contract or set up a property exchange, they were the people to go to - I'm sure I would have missed many potential liabilities. Different skill set.
I'm open to anyone who's smart and cares about democracy. About 50ish and successful outside of politics would be nice.
santafe, 'Art of the Deal' Don has reportedly been through 6 bankruptcies over the years with his businesses, so maybe not the best one to be giving advice. But Biden was widely known as a perennial screw up even before senility crept in. So we clearly could use a new group in DC. Perhaps a successful corporate CEO could take over the job, an improvement over the Rep/Dem revolving door of self-dealing swamp creatures.
---
It appears that the Donald still has tight control over the Republican party. They walked out of negotiations over the debt ceiling a few minutes after he posted the following on Truth Social:
Yesterday and today have widened the BB width by about 20%. PPO looks slightly positive and RSI is under 60. Barring any existential issues the market has an upward bias. Energy and Health Care sectors are up while Communications, Discretionary and Financials are down.
Hound of the day is LUMN. They had a terrible 2022 and lost over half their value. Apparently falling knife investors were so convinced that $6 was the bottom they've followed it down to $2.35. This is another one trading at a small portion of their enterprise value, (~12%). Seeking Alpha analysts are all over the place from a strong buy to a sell. Wall Street is equally confused; two strong buys, two strong sells and nine other analysts in between.
I asked the Magic 8 Ball and it said; Reply hazy, try again. If the 8 ball doesn't know, no one does..:)
Sold 3 Puts in SKX since I am wearing their sneakers. The truth is that I like my Bally loafers much more and they are 50 years or older.
I had 5Cash Covered Puts put to me at not a price I particularly like, but with the help of selling Covered Calls I am confident the difference will be made up shortly also it pays 45 cents a share dividend.
PFE has come into a pandemic inheritance and just spent it all on one big purchase. I assume when they say they'll reduce costs it's across the combined companies. PFE is always on my watch list or in my portfolio. They're back at the 2018 high as we seem to have forgotten that COVID is still on pace to kill over 100,000 people in the US this year. I'll be watching for a few quarters as it takes time to digest a meal this large.
OK, the "job killing moron" has cost Florida 2,000 tech jobs and $1B in revenue. There is still $17B in planned projects on the table which the mouse through his spokesperson said, "I hope we’re able to do so."
That's mouse for, "It would be shame if you tripped and fell off a bridge".
Pfizer CEO Albert Bourla has promised to reduce costs by one Billion Dollars annually by 2025 following the completion of the Seagen purchase.
So Bourla is not trusting only increased profits from Seagen products to make those debt payments. It's down to those synergies they always promise.
But investors are rightly skeptical since Merck walked away from a Seagen purchase last year because the price was too high.
Citing ‘considerable changes’ to business conditions, Disney has canceled plans for a $900 million office campus in central Florida.
The business campus would have brought more than 2,000 jobs in digital technology, finance and product development from California to Florida.
https://www.washingtonpost.com/business/2023/05/18/disney-florida-desantis-lake-nona/
https://www.pbs.org/newshour/economy/disney-scraps-plans-for-new-central-florida-campus-as-fight-with-gov-desantis-continues
Democratic Rep. Anna Eskamani, who represents the Orlando area in the Florida House, released a statement blaming the governor for the lost jobs.
“Governor Ron DeSantis is a job killing moron who cares more about his own political ambitions and culture wars than Florida and our future,” Eskamani said. “According to him, ‘woke makes you go broke’ but this is another example of how it’s actually the complete opposite. DeSantis is not who you want for President — ever.”
Thanks for the details Dew. Many here are also long PFE. I was until recently when I moved to fixed rate investments and a real estate investment.
Ha, if true, that was cold hearted but in any event, Joe does has a rep. I'm sure he's on the phone with Obama regularly. They will have to come up with a plan that attracts enough support from both sides or this kumbaya moment will be over. McCarthy just wants to remain speaker so if enough Dems will swear to support him as speaker when the crazy caucus turns on him they might have a deal. I know it's crazy to even consider this but maybe the middle of both parties could work together.
Thanks to COVID revenues, PFE reduced its net debt to approximately zero as of 3/31/23*. Hence, PFE can definitely benefit from adding back some balance-sheet leverage. Since PFE plans to monetize its ~$13B stake in HLN (#msg-171915689), that plus the proceeds from the new $31B debt offering will cover the cash for the pending $41B SGEN acquisition.
(I'm long PFE.)
*https://www.sec.gov/ix?doc=/Archives/edgar/data/0000078003/000162828023017196/pfe-20230402.htm#idfe6e72973fb4e83b28a5bb34d34299f_25
Nice little mini-breakout at the bell with a pullback just under 4,200. Tomorrow and again Monday should be very interesting.
A billion here, a billion there...with interest that's ~$57B or and average of ~1.4B a year. First year interest accumulation is ~1.5B. These must be some excellent products and more in the pipeline.
santafe, Looks like the market is itching to get through 4200. Lots of money on the sidelines that needs to go somewhere -- 401-Ks, institutions, pension funds, all chomping for the green light to pile back into stocks. Resolution of the debt ceiling is key, and it looks like the market is assuming a smooth resolution. But as Obama reportedly said about Biden -- 'don't underestimate Joe's ability to screw up'.
---
Secure, but too little for my money.
It is a tighter trading range all the time.
PFE’s $31B debt offering has eight tranches with almost-flat interest rates for the 2-year through 10-year tranches:
https://www.businesswire.com/news/home/20230516005960/en/
• $3B of 2-yr notes @4.65%
• $3B of 3-yr notes @4.45%
• $4B of 5-yr notes @4.45%
• $3B of 7-yr notes @4.65%
• $5B of 10-yr notes @4.75%
• $3B of 20-yr notes @5.11%
• $6B of 30-yr notes @5.30%
• $4B of 40-yr(!) notes @5.34%
I agree, but oh my, all that good research and stats do pay for themselves many times over.
Below 60 O is getting more tempting, especially with a 5% + dividend.
Given the equipment you're running, that's no mean feat.
The goal is to keep the lights on until we have volatility again.
Pfizer PFE will complete a $31 billion debt offering tomorrow, to fund its pending $43 billion acquisition of (ADC) antibody-drug conjugate maker, Seagen SGEN. The bond sale is one of the largest debt offerings of all time.
Seagen has four approved drugs and a large pipeline of additional cancer ADCs - https://www.seagen.com/science/pipeline
The acquisition for $229 per share, an 18% premium to the current SGEN price, should gain regulatory approval and close later this year.
SGEN will immediately increase Pfizer's revenue, up $30 billion by 2030, and will be initially slightly profit accretive, which will grow over time.
Seagen was founded in 1998 as Seattle Genetics.
Census data reveals large U.S. cities have regain population lost during pandemic
But continued work from home means this hasn't translated fully into bustling downtown business areas.
San Francisco and surrounding commuter cities saw pandemic declines, but only the outer cities now continue to show declines as people take advantage of the opportunity to move closer to the center.
Many cities and suburban areas show the same move back towards the center, with many smaller cities which experienced pandemic inflows now watching that reverse.
https://www.washingtonpost.com/dc-md-va/2023/05/18/cities-population-rebound-pandemic/
PPO turned down this morning and RSI reversed from 62 to 56. Both are signaling further weakness in an already weak stock. Stuck with it too long, live and learn. Try not to learn the same lesson more than once. I still have to work on the latter one.
Bought back 10 Covered Calls in MS and sold the underlying shares. It was a bad choice, lost 16% in the long term.
I have added to MO in an IRA and sold Covered Calls on it.
Until the rate hike is signaled, AFTER the coming lowering of rates will end. It is all in cycles, like the big waves at the Banzai Pipeline. If you catch the right one you get a great ride to the beach if you catch the wrong one it will wipe you out very painfully.
This is exactly the time frame I was talking about when the Fed hinted of starting to raise rates was approaching. That was the time to sell all my muni and preferred income positions and wait for now when the Fed may think about stopping to hike rates. Tax free income at 5%+ I can handle fine. I am shopping in the muni areas already for at least A rated muni bonds paying 5% minimum in "safer" states and essential services to the public.
Not at all. The purpose of this board is to offer as much financial information and education as possible.
santafe, I hope you don't mind that I re-posted some of your posts on my Bonds + Fixed income board. Thanks for the great info :o)
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171938762
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171938586
---
If you were in bonds last year you may have felt like you went through the Great Depression. Actually it was much worse. The worst year for bonds in almost 100 years. The quadrant chart above from Black Rock shows that bonds seldom exhibit a negative return and as the previous Barron's article outlined, bonds should exhibit a nice return over the next several years.
Is it time to return to a 60/40 stock/bond portfolio? From Barron's:
A Fed Pause Could Be an ‘Almost Generational’ Opportunity for Bond Investors
Bonds are having a moment. With the Federal Reserve expected to be at the end of its interest-rate hiking cycle, investors are reassessing the fixed-income market—and looking to high-quality bonds with intermediate maturities as the best bet for stable income.
Investment-grade corporate bonds are now yielding around 5%, up from about 2.8% two years ago. Such plump yields cushion bonds against the possibility of negative total returns if the pundits are wrong and the Fed keeps tightening.
In fact, bond pros think the total return potential for bonds this year exceeds that of stocks. For fixed-income investors, that would be a welcome change from last year, when U.S. bonds lost a dismal 13% on a total return basis.
“Now that we’ve gone through the dark tunnel, we’re seeing the end—and it’s sunny outside,” says Benoit Anne, lead strategist of the investment solutions group at MFS Investment Management. “The stars have aligned now for fixed income to do quite well in the period ahead.”
In June, the Fed is expected to pause—meaning hold rates steady, after raising them at each meeting since March of last year. The bond market may be pricing in 2023 rate cuts that might not materialize, says Kristy Akullian, senior iShares strategist at BlackRock. Instead, investors could see a more typical pause playbook, with the Fed holding rates steady at least through the end of the year.
Since 1990, the Fed paused an average of 10 months between the last rate hike and the first cut of each cycle, according to a BlackRock analysis. Every time, the bond market initially rallied, then experienced volatility as the cut approached.
This climate offers an “almost generational” opportunity in fixed income, Akullian says. The potential for total return is greater now than it will be as the Fed starts to loosen. Rate cuts will boost bond prices and decrease yields, eating away at future total returns.
The sweet spot on the yield curve is between about three and seven years, unlike last year, when the short end of the curve was more attractive, Akullian says. “It’s not a bad thing to own some duration right now,” says Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions. Shorter-maturity yields are best when inflation is hot and rates are rising rapidly.
Investors piling into three-month Treasury bills at around 5.2% should remember that’s an annualized yield, Janasiewicz says. To achieve it, you’d need to reinvest your T-bill at the same rate three more times as it matures. Given that rates may fall in the next year, he agrees with Akullian that three- to seven-year maturities are the strongest choice.
Exchange-traded funds like iShares Core U.S. Aggregate BondAGG –0.35% (ticker: AGG) offer exposure to high-quality U.S. bonds in the belly of the yield curve. The average yield to maturity is 4.33%. That fund includes Treasuries; for corporate-only exposure, the iShares iBoxx$ Investment Grade Corporate BondLQD –0.36% ETF (LQD) now yields 5.03%.
With junk bonds offering rates of 8% or so, it might be tempting to venture into high-yield territory. But with a possible recession—and the resulting rise in defaults—they’re risky.
As bonds outperform, cash loses some of its luster. Historical data show that cash exposures return less on average than core bond and short-term bond exposures when the Fed stops tightening, BlackRock found. From 1990 to early 2023, core bond exposures performed 4% better than cash equivalents on average when the Fed held or dropped rates, while high-quality short-term bonds performed 1.9% better than cash.
“The overweight to cash was the big story of last year,” Anne says. “But everything comes to an end.”
Yes, we did, this is like watching grass grow, but not here, it is faster than this market.
The technical indicators RSI at 71.30 is unusually high for DOCU. Also the CMF turned negative. Thus I decided to take 1/4 of the money off the table and buy back 10 Puts at 10.15 premium, it was sold at 11.00. There are better areas to invest in.
You are also correct. This is a core tenet of Bollinger Bands.
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |