Replies to post #83 on High-yield/macroeconomics (fka YIELD)

[zipjet]

>>I like BAC and WB for their cash dividends ... I guess I'm more conservative.

Rob,

BAC div yield 5.2%
BKCC div yield 11.5%

leverage: debt/equity
BAC 10*
BKCC 1**

Leverage is one indicator of risk - higher leverage = higher risk. Certainly it is NOT the only indicator. And BAC is a great company. But it is levered beyond what most people would recognize. In fact, if a HF, CMO or CDO is 10:1, we scorn it as greed bordering on fraud. :-)

So which is more conservative a mezzanine finance company levered at a maximum 1:1 or BAC at 10:1?

:-)

BTW - not trying be argumentative but I suspect most would accept your view without any critical consideration and some is appropriate - IMO.

zip

* See pg 101 of the BAC 2006 annual report.

** Max by law, closer to 0.6 currently