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Old 11-11-2022, 08:10 AM   #1021
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I went to bed thinking I’d be at $X. This morning it’s $X+++.
I saw a lot of bonds disappear off the available screen yesterday.
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Old 11-11-2022, 08:29 AM   #1022
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Originally Posted by COcheesehead View Post
I went to bed thinking Iíd be at $X. This morning itís $X+++.
I saw a lot of bonds disappear off the available screen yesterday.
Yes, similar with CDs. When I saw the rates dropping in the morning, I quickly grabbed some of the 5.5% 15-year callables Fidelity had - there were about 2500 of them still showing, they had been posted for maybe a week or two with a settlement date of 11/16. Within 30 minutes of my order they had taken them down and issued them - they were in my account with a real CUSIP, not the temporary phony one Fidelity assigns that starts with DSM. I still had it on my screen from when I placed the order and was shocked when they were then gone and issued to my account.
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Old 11-11-2022, 08:37 AM   #1023
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Yes, similar with CDs. When I saw the rates dropping in the morning, I quickly grabbed some of the 5.5% 15-year callables Fidelity had - there were about 2500 of them still showing, they had been posted for maybe a week or two with a settlement date of 11/16. Within 30 minutes of my order they had taken them down and issued them - they were in my account with a real CUSIP, not the temporary phony one Fidelity assigns that starts with DSM. I still had it on my screen from when I placed the order and was shocked when they were then gone and issued to my account.
I bought some 5% 4 year non callables. They were gone in a hurry.
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Old 11-11-2022, 10:57 AM   #1024
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Just checked - most all CDs over 1 year are gone at Fidelity. Only 8 available between Feb 2024 and Nov 2031 - with nothing between Feb 2024 and Nov 2028.
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Old 11-13-2022, 04:41 PM   #1025
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Seems like the Muni market may have peaked for the time being? Thoughts?
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Old 11-13-2022, 04:57 PM   #1026
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I think there have been more compelling deals in other types of bonds. Still keeping an eye on munis though.
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Old 11-15-2022, 05:35 PM   #1027
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Seems like the Muni market may have peaked for the time being? Thoughts?


I was thinking the opposite due to supply/demand for corporates and CDs. Guess I should get some hard data.
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Old 11-15-2022, 05:57 PM   #1028
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I was thinking the opposite due to supply/demand for corporates and CDs. Guess I should get some hard data.
I think that's what he meant - that the yield had peaked...prices going higher.
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Old 11-18-2022, 06:53 PM   #1029
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Does anybody know of a price calculator online for determining the tax impact of the de-minimus rule on muni bonds? Currently if I go to Fidelity and check the secondary market for longer dated muni bonds the yields are artificially high due to the bonds being offered at such a discount.

Is it fair to assume that you will only get the muni tax benefit on the actual coupon rate of the bond and the difference between the YTM/YTW and the coupon will be taxable as income at maturity?

For example, there is currently a 10yr NJ GO bond that has a coupon of 2% and a YTW offer of 4.72%. The offer price isroughly 79 so the de-minimus rule would certainly come into play. To me it seems like the 2% coupons would be federally tax free but the 2.72% difference between the coupon and the YTW will be due to the price discount so that would be considered a capital gain at maturity and subject to regular income taxes (due to de-minimus). Do I have this correct or is the math more complicated?

Thanks!
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Old 11-18-2022, 09:52 PM   #1030
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Does anybody know of a price calculator online for determining the tax impact of the de-minimus rule on muni bonds? Currently if I go to Fidelity and check the secondary market for longer dated muni bonds the yields are artificially high due to the bonds being offered at such a discount.

Is it fair to assume that you will only get the muni tax benefit on the actual coupon rate of the bond and the difference between the YTM/YTW and the coupon will be taxable as income at maturity?

For example, there is currently a 10yr NJ GO bond that has a coupon of 2% and a YTW offer of 4.72%. The offer price isroughly 79 so the de-minimus rule would certainly come into play. To me it seems like the 2% coupons would be federally tax free but the 2.72% difference between the coupon and the YTW will be due to the price discount so that would be considered a capital gain at maturity and subject to regular income taxes (due to de-minimus). Do I have this correct or is the math more complicated?

Thanks!
The yields are not artificially high, they represent a rising interest rate market and thatís what happens to low coupon bonds - they sell below par. It should be a fairly easy equation to figure out the cap gains in the sub par price back to par on top of the tax free coupon. Itís a spreadsheet calculation,
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Old 11-23-2022, 04:35 PM   #1031
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Well, we may have seen the bottom for bond prices. If not, then we are very close. Fed is likely to ease up going forward with the rate hikes. 0.5% is the new consensus on the street for December.

Stocks rise after Fed minutes signal rate hike slowdown

https://finance.yahoo.com/news/stock...121031350.html
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Old 12-02-2022, 06:55 AM   #1032
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I plan to do some muni shopping today for my mom's 18 month ladder. Is time of day important? I suspect these offerings are not popping in and out of the list (on Fidelity) , so probably not. I looked at muni defaults and they were rare, but I noticed places like Puerto Rico, so I'll steer clear of those, and stay away from B or less. And go in knowing treasuries are 4.7% as a sanity check. Otherwise, just pick a high YTM?
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Old 12-02-2022, 07:44 AM   #1033
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I plan to do some muni shopping today for my mom's 18 month ladder. Is time of day important? I suspect these offerings are not popping in and out of the list (on Fidelity) , so probably not. I looked at muni defaults and they were rare, but I noticed places like Puerto Rico, so I'll steer clear of those, and stay away from B or less. And go in knowing treasuries are 4.7% as a sanity check. Otherwise, just pick a high YTM?
In general, stay clear of anything that does not have a rating beginning with A and you'll have no worries. If you want to increase your safety, additionally choose a bond which has insurance, then you'll have even fewer worries.

As far as treasuries and 4.7%, that is just for one year, 18 month is around 4.6%. If you're going to be putting the money into a muni, you're going to get the most bang for the buck, and better risk/reward (in my view), if you choose a maturity a bit further out. If you do have a need for the funds in one year, or 18 months, unless you are getting something ridiculously better than the treasury (which likely won't be the case), then just take the treasury or equivalent maturity CD. For 18 month taxable muni today, you're looking at 5.0%-5.2%, tax free maybe 3.4%. You're likely better off with the treasury, or 4.85% you can lock in with a non-callable 18 month new issue CD.
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Old 12-02-2022, 10:01 AM   #1034
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It was saying the taxable munis I was looking at were .75% more than the comparable treasury, but I didn't dig any farther than (what it said on one of those reports Fidelity generates). I decided on a 5.3% YTM muni of 17 months duration. Not sure it was the smartest decision considering treasuries and CD's, but it has been a taxable muni ladder, so I kept it that way.

I looked it up on finra and saw my transaction, my price, and two other transactions, same quantity, at a price of $0.10 less at the same moment (likely moments before), which is probably Fidelity's $1 per bond.
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Old 12-02-2022, 10:26 AM   #1035
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I looked it up on finra and saw my transaction, my price, and two other transactions, same quantity, at a price of $0.10 less at the same moment (likely moments before), which is probably Fidelity's $1 per bond.
Yours was the only transactions. The others are the movement from the seller between dealers and you. The transaction just before yours is Fidelity receiving it and then finally giving it to you with the $1 markup.

What is the CUSIP?
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Old 12-02-2022, 10:52 AM   #1036
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I plan to do some muni shopping today for my mom's 18 month ladder. Is time of day important? I suspect these offerings are not popping in and out of the list (on Fidelity) , so probably not. I looked at muni defaults and they were rare, but I noticed places like Puerto Rico, so I'll steer clear of those, and stay away from B or less. And go in knowing treasuries are 4.7% as a sanity check. Otherwise, just pick a high YTM?
I guess you are referring to the secondary market? I'm not sure how it works but I do check the New Issues tab at Fido and there is a long list of munis that are pre-settlement (I think). Those seem to be getting more attractive but the maturities are a bit far out for my taste. I subscribe to an alert from Fidelity for new issues from my home state and a neighboring state.
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Old 12-02-2022, 11:55 AM   #1037
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I plan to do some muni shopping today for my mom's 18 month ladder. Is time of day important? I suspect these offerings are not popping in and out of the list (on Fidelity) , so probably not. I looked at muni defaults and they were rare, but I noticed places like Puerto Rico, so I'll steer clear of those, and stay away from B or less. And go in knowing treasuries are 4.7% as a sanity check. Otherwise, just pick a high YTM?
18 months seems short, but we all have our own goals.
All else being equal, I will try and buy my own state munis first. They then become double tax free. I will also buy a GO bond before a revenue bond since the source of their income is broader, but I own big chunks of both. So thereís that. Yields are usually better on revenue bonds. Trading is sparse on munis so time of day does not matter. If you are buying a large lot, NJhowie has had good luck with entering limit orders so you may get them for less than ask. I rarely have a limit order go through.
Otherwise, good hunting. Oh and read the MEs - lots of good info there.
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Old 12-02-2022, 04:16 PM   #1038
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Yours was the only transactions. The others are the movement from the seller between dealers and you. The transaction just before yours is Fidelity receiving it and then finally giving it to you with the $1 markup.

What is the CUSIP?
I can't find the CUSIP on the finra site, but it's in this list at 9:42
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Old 12-02-2022, 06:41 PM   #1039
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I can't find the CUSIP on the finra site, but it's in this list at 9:42
This is it:
https://emma.msrb.org/Security/Details/12022GAC7

From my quick review, it's a good issue, no items to be concerned with.

Good job!
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Old 12-07-2022, 01:10 PM   #1040
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10-year treasury can't hold 3.5%, blows through it to the downside.

Next stop 3.0%.

2-year/10-year spread is now at a ridiculous amount. I believe it's never been as wide as now, almost negative 1.3%.
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