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Joe,
I think you are right on the money. The assets they pledged for the interim financing leaves no equity for shareholders and little if any ofr preferred hodlers.
Dave S
If no BK, they return if over 20%. If there is a BK, the
conversion feature goes away and the Z's go to the top of the
heap for claim on assets. That is why they were rising on BK
rumors and dropping on refinance rumors.
Yep, I am betting that the BK occurs sometime over the next several weeks. If it does not, I still can pick up a decent return.
I picked up some CIT.Z today on the falloff.
CIT Preferred Discussion:
http://www.marketwatch.com/story/one-cit-pfd-stock-may-benefit-from-bankruptcy?siteid=yhoof
Purchased some XFD here for a dividend capture.
Thanks for the take on those securities.
What do you think of the AIG Preferreds?
Joe,
One correction. For every $100 payment, Uncle Sam takes about
$28. income tax and 6 or 7 % in sales tax plus various
business permits and local real estate and other taxes, leaving about $55. left after each transaction.
Uncle Sam then redistributes this to his cronies. The government has decided that $45. per $100. of transaction is not enoug and is now moving to confiscate about 70% of every transaction. First, the Government must stop people from moving themselves or their money out of th reach of the US.
Then, they can grab what they want.
Dave
Neil Chriss and others have worked on including the possible jump conditions (black-swan events) into option pricing models. Most modern option models indcude the possibility of a binary event (e.g. new drug approval or not, lawsuit outcome).
FYI:
http://www.amazon.com/Black-Scholes-Beyond-Option-Pricing-Models/dp/0786310251/ref=sr_1_3?ie=UTF8&s=books&qid=1247157455&sr=1-3
FSE is getting crushed here. Could be a buying opportunity. I have been picking some up.
Tilson Talks Mortgage Default Investing
http://www.forbes.com/2009/07/02/tilson-mortgage-freddie-intelligent-investing-default.html?feed=rss_news
Well done. Sorry I missed it.
How easy is it to buy Lear debt. I can't find a record of it at Quantum Online.
I am going to explore cancelling the tender offer. I hold the
top several priority issues.
With the BAC, you sold rather than exchanged? Had you already
accepted the exchange offer. I accepted the exchange on some
BAC preferreds and the symbol changed and I thought the stock
was locked up.
Have you heard anything yet about the start of the Citi preferred exchange?
That is if they keep paying. I hope that they continue the dividend.
CNB getting beaten up.
http://www.reuters.com/article/marketsNews/idINN0940637820090609?rpc=44
CNB-B down big as well in here.
Thanks for the heads up. Let's all hope to have our exchanges accepted.
Joe,
Are you still holding any Citi preferreds? I have the C-E and
have not received any paperwork yet regarding the exchange.
Dave S
Very prescient call in 2005. Well Done.
I have a small position in RGM but no can't get a quote on it.
FYI, message this AM from a broker:
"Effective immediately, the options exchanges are no longer allowing opening options orders for General Motors (GMGMQ)."
I picked up some BAC-E this Am at 15.14. Hoping for an arbitrage trade.
Do you know the new symbols for the Exchange traded Debt? I am unable to find them.
Thanks for checking and providing the feedback.
Has Citi completed there swap yet? I never received a tender request from my broker.
Joe,
At what level of interest rate do you consider selling preferreds/Ex Traded Debt? I have several issues that have appreciated to a point of less than 10% yield.
Dave S
CNB on fire today.
Of the C enhanced turst preferreds, Only C-E and C-W seem little changed. C-G, C-U C-F and C-O are flying.
Only some of them are. Not sure why only those. maybe those are the ones that are allowed to stay as preferred after the conversion.
Citigroup is expanding its Preferred for Stock offering to raise additional funds. Not sure what to make of this.
Great. Hopefully, GM will be better.
If you have the certificates issued to you, you can paper a room with them.
I think we could see a pullback after the euphoria of the "Stress Test" results wears off.
Very well done. Another home run.
Some analysts had been predicting 60 to 100 billion. In the end that may be what BAC really needs versus the pretty version to be released tomorrow.
I agree, the GM debt is now and arbitrage bet. May work out well, just very hard to predict.