Fixed Income Investing II

[COcheesehead]

Vanguard Settlement Fund, VMFXX, is at 5.22%

FZDXX now up to 5.15%

 

[Car-Guy]

^^^^^
Looks like we have a rate war going on between the brokers... SWVXX was just bumped to 5.16 this morning, up from 5.12 yesterday.

 

[jazz4cash]

I've ran into the same thing. I'm discovering that my credit unions seem to have zero interest in retaining my IRA business. They're offering great Promo CD rates at 5.25% but rate does not apply to IRA CD's. The highest IRA CD rate was less than 1% recently at Frontwave and when I complained about it she offered to have someone contact me who she was sure to get me a better rate and next thing I got an e-mail from their wealth management department. This has happened to me at 2 different credit unions now, so I've been moving my IRA's to Fidelity as they mature.

It’s weird how they have completely different rates for IRA accounts. Andrews has no IRA MM, so I’m moving those funds to a small local bank that pays 5.89 (!) on IRA MM but none of their other rates are very good.

 

[COcheesehead]

^^^^^
Looks like we have a rate war going on between the brokers... SWVXX was just bumped to 5.16 this morning, up from 5.12 yesterday.

Not sure of the value, if there is a war. I am not moving money based on ultra short term yields. Just happy that my short term funds are now making something.

 

[Chuckanut]

I've ran into the same thing. I'm discovering that my credit unions seem to have zero interest in retaining my IRA business. They're offering great Promo CD rates at 5.25% but rate does not apply to IRA CD's. The highest IRA CD rate was less than 1% recently at Frontwave and when I complained about it she offered to have someone contact me who she was sure to get me a better rate and next thing I got an e-mail from their wealth management department. This has happened to me at 2 different credit unions now, so I've been moving my IRA's to Fidelity as they mature.

Some credit unions seem to be Big Bank Wannabees. Some still know why they were founded in the first place. I do think the competition from treasuries and brokered CDs must be fierce. Perhaps no matter what they would like to do, even the best intentioned CU management knows they have to survive to be able to do it? I don’t know.

We have one CU in my area that wants to be a Big Bank. It recently offered me a HI-YIELD CD rate of 3.75% for 18 months. CDs with more than 18 months to maturity give a major bend in the yield curve to under 3%. They can keep their HI YIELD, and I will keep my money someplace else.

My agency bonds are having ‘events’ thanks to the downgrade. This is a new experience for me. Could we see 6% non callable? I’m done with callable anything’s for the time being. That bucket is filled.

 

[Car-Guy]

Not sure of the value, if there is a war. I am not moving money based on ultra short term yields. Just happy that my short term funds are now making something.

Me too, but it's is making me park more of my maturing CD money there. But I'm ready to re-buy CD's again in a days notice. Still have more invested in CD's than I do in MM as I wait and watch this unfold.

 

[latexman]

Looks like we have a rate war going on between the brokers... SWVXX was just bumped to 5.16 this morning, up from 5.12 yesterday.

Not sure of the value, if there is a war. I am not moving money based on ultra short term yields. Just happy that my short term funds are now making something.

I suspect they are still settling from the rate increase last Wednesday, July 26. I watch SPAXX (4.97% today) and FIGXX (5.21% today) at Fido and they have not fully settled yet.

 

[Montecfo]

I read that rates are rising but have not seen much to buy. Yet.

 

[aja8888]

I read that rates are rising but have not seen much to buy. Yet.

Me either. I'd like to see 3+ year non callable CDs rise to 5+ %. I'm light in stuff out that far and farther (2028 - 2030). At almost 80, I'm not looking for real long bonds..:laugh

 

[COcheesehead]

I read that rates are rising but have not seen much to buy. Yet.

Ackman is supposedly shorting the 10yr. Maybe he is right, maybe not.

 

[Montecfo]

Ackman is supposedly shorting the 10yr. Maybe he is right, maybe not.

Saw that. But the professional traders were already massively short the 10y-most since 2018 when Fed last raised. The shorts were wrong then.

Developments could validate or blow out of water as you know.

 

[aja8888]

Ackman is supposedly shorting the 10yr. Maybe he is right, maybe not.

I read he was shorting the 30 year?

 

[Affinity4Investing]

Here is a handy link to lookup FDIC insured banks... In the first box on the left, change it to "Bank Name" and in the box below, start typing in the name of the bank. Pick your choice and click "Search".



https://banks.data.fdic.gov/bankfind-suite/bankfind

 

[Affinity4Investing]

Correct - 30yr


https://www.cnbc.com/2023/08/03/bil...says-hes-shorting-30-year-treasury-bills.html

 

[Car-Guy]

Here is a handy link to lookup FDIC insured banks... In the first box on the left, change it to "Bank Name" and in the box below, start typing in the name of the bank. Pick your choice and click "Search".



https://banks.data.fdic.gov/bankfind-suite/bankfind

Here's another that I like (with ratings). Always use it before I buy a brokered CD. One of the forum members posted it here a "good while back" and I've found it very useful.

https://www.bauerfinancial.com/star-ratings/

 

[Montecfo]

Correct - 30yr


https://www.cnbc.com/2023/08/03/bil...says-hes-shorting-30-year-treasury-bills.html

Then both 10 and 30 yr are being shorted.

 

[Montecfo]

I bought this today for my stepladder. Greater of 100 or make whole but bought at discount and it is less than 2 year money. I think it is unlikely to be called, but getting an extra 4+% at call would make it well worth it.

This is the operating company and it is A1 paper. Bought at 95.679 to yield 5.431%

 

[Montecfo]

Moody's bank downgrade announcement seem to have pushed rates back down. If the CPI is benign as some expect we may not be going much higher anytime soon.

A fed governor announced he thinks we may be done on rate hikes.

It just points up the importance of using mini-swoons to fill out your bond inventory.

 

[Car-Guy]

Posted this on a related thread earlier today. SWVXX hit 5.2% today.

 

[COcheesehead]

Moody's bank downgrade announcement seem to have pushed rates back down. If the CPI is benign as some expect we may not be going much higher anytime soon.

A fed governor announced he thinks we may be done on rate hikes.

It just points up the importance of using mini-swoons to fill out your bond inventory.

The downgrade and recession in early ‘24 per Moody’s I think gets folks buying safety again.
My ladder is full until I have some maturing later this year. We’ll see what happens then.

 

[COcheesehead]

So have we seen the top in yields?

 

[Car-Guy]

Probably will see yields top out this month.

I don't think the Fed will raise rates again in fear of overshooting.

 

[COcheesehead]

Probably will see yields top out this month.

I don't think the Fed will raise rates again in fear of overshooting.

Some of my bond holdings seem to have this view. NAVs up.

 

[USGrant1962]

So have we seen the top in yields?

There is an interesting analysis by Bob Carlson in his newsletter that suggests longer term rates will continue to rise. The main reason is that Treasury needs to rebalance their debt - they like to keep a balance between short and long term debt, but have shifted heavily to short term over the past years. They also need to issue a ton more debt to fund spending. At the same time both banks and the Fed have stopped buying additional Treasuries.

So supply of longer-term treasuries is going up and demand going down. The Treasury markets will need to raise rates (cut prices) to balance supply and demand.

Sounds logical, but predicting markets is hard.

 

[COcheesehead]

There is an interesting analysis by Bob Carlson in his newsletter that suggests longer term rates will continue to rise. The main reason is that Treasury needs to rebalance their debt - they like to keep a balance between short and long term debt, but have shifted heavily to short term over the past years. They also need to issue a ton more debt to fund spending. At the same time both banks and the Fed have stopped buying additional Treasuries.

So supply of longer-term treasuries is going up and demand going down. The Treasury markets will need to raise rates (cut prices) to balance supply and demand.

Sounds logical, but predicting markets is hard.

I agree that as headwinds clear on recession/economy fears and that may not be until late next year, we could see the long end tip up and the short end drop down - the normalizing of the curve. The issue is does the long end return to were it was say just last Fall or blow through that?
I wouldn’t want to be too much on the short end now. Those yields will drop and long rates are not attractive right now.