why is one note so much more liquid than the other? Just the make whole provision?
We are entering a "Golden Period" for fixed income investing
- Thread starter Freedom56
- Start date
- Status
why is one note so much more liquid than the other? Just the make whole provision?
Freedom56
Thinks s/he gets paid by the post
One is a retail note issue and the other is an institutional issue that was much larger in size that is bought and sold by funds.
Freedom56
Thinks s/he gets paid by the post
Big banks have started to report.
JP Morgan earned $12.6 Billion in Q1 2023
“The U.S. economy continues to be on generally healthy footings
—consumers are still spending and have strong balance sheets, and businesses
are in good shape. However, the storm clouds that we have been monitoring for
the past year remain on the horizon, and the banking industry turmoil adds to
these risks. The banking situation is distinct from 2008 as it has involved far
fewer financial players and fewer issues that need to be resolved, but financial
conditions will likely tighten as lenders become more conservative, and we do
not know if this will slow consumer spending. We also continue to monitor for
potentially higher inflation for longer (and thus higher interest rates), the
inflationary impact of continued fiscal stimulus, the unprecedented quantitative
tightening, and geopolitical tensions including relations with China and the
unpredictable war in Ukraine. While we hope these clouds will dissipate, the
Firm is prepared for a broad range of outcomes, and we are confident that we
can serve the needs of our customers and clients in all environments.”
https://www.jpmorganchase.com/conte...rter/be0fc3a0-c499-4af9-933c-6e7f75025097.pdf
https://www.jpmorganchase.com/conte...rter/dff65b34-7980-4e70-be70-1ff6d9466df4.pdf
JP Morgan earned $12.6 Billion in Q1 2023
“The U.S. economy continues to be on generally healthy footings
—consumers are still spending and have strong balance sheets, and businesses
are in good shape. However, the storm clouds that we have been monitoring for
the past year remain on the horizon, and the banking industry turmoil adds to
these risks. The banking situation is distinct from 2008 as it has involved far
fewer financial players and fewer issues that need to be resolved, but financial
conditions will likely tighten as lenders become more conservative, and we do
not know if this will slow consumer spending. We also continue to monitor for
potentially higher inflation for longer (and thus higher interest rates), the
inflationary impact of continued fiscal stimulus, the unprecedented quantitative
tightening, and geopolitical tensions including relations with China and the
unpredictable war in Ukraine. While we hope these clouds will dissipate, the
Firm is prepared for a broad range of outcomes, and we are confident that we
can serve the needs of our customers and clients in all environments.”
https://www.jpmorganchase.com/conte...rter/be0fc3a0-c499-4af9-933c-6e7f75025097.pdf
https://www.jpmorganchase.com/conte...rter/dff65b34-7980-4e70-be70-1ff6d9466df4.pdf
Last edited:
Freedom56
Thinks s/he gets paid by the post
Citigroup earned $4.6 Billion in Q1 2023.
"Citi CEO Jane Fraser said,
“Citi delivered strong operating performance, showing good revenue
growth and expense discipline despite the tumultuous environment for
banks. Our robust and well managed balance sheet was a source of strength for our
clients and we continue making progress in executing our strategy focused on our
five core interconnected businesses while simplifying and transforming the firm."
https://www.citigroup.com/rcs/citigpa/storage/public/2023prqtr1kman.pdf
https://www.citigroup.com/rcs/citigpa/storage/public/2023ptqtr1es.pdf
"Citi CEO Jane Fraser said,
“Citi delivered strong operating performance, showing good revenue
growth and expense discipline despite the tumultuous environment for
banks. Our robust and well managed balance sheet was a source of strength for our
clients and we continue making progress in executing our strategy focused on our
five core interconnected businesses while simplifying and transforming the firm."
https://www.citigroup.com/rcs/citigpa/storage/public/2023prqtr1kman.pdf
https://www.citigroup.com/rcs/citigpa/storage/public/2023ptqtr1es.pdf
Last edited:
Freedom56
Thinks s/he gets paid by the post
Wells Fargo earned $5B in Q1 2023.
“We had strong results in the first quarter including revenue growth from both the fourth quarter and a year ago, and we continued to make progress on our efficiency initiatives.
Delinquencies and net charge-offs continued to slowly increase, as expected. Our CET1 ratio, which was already strong, increased and we resumed our repurchase program, buying back $4 billion in common stock.”
https://www08.wellsfargomedia.com/a...ions/earnings/first-quarter-2023-earnings.pdf
https://www08.wellsfargomedia.com/a...ings/first-quarter-2023-financial-results.pdf
“We had strong results in the first quarter including revenue growth from both the fourth quarter and a year ago, and we continued to make progress on our efficiency initiatives.
Delinquencies and net charge-offs continued to slowly increase, as expected. Our CET1 ratio, which was already strong, increased and we resumed our repurchase program, buying back $4 billion in common stock.”
https://www08.wellsfargomedia.com/a...ions/earnings/first-quarter-2023-earnings.pdf
https://www08.wellsfargomedia.com/a...ings/first-quarter-2023-financial-results.pdf
Last edited:
Freedom56
Thinks s/he gets paid by the post
The big banks have not discussed deposit flows in their release to any great extent. I would expect questions to arise during the conference calls. The other issue is the cash sorting by depositors (moving cash to higher yielding products). This will impact interest income moving forward.
lawman
Thinks s/he gets paid by the post
Has there been any remarks by them regarding the debt ceiling?
Freedom56
Thinks s/he gets paid by the post
No... but you can listen in on their conference calls. Banks in general worry more about borrowers paying back their loans, depositors keeping their balances, and the health of the overall economy.
Montecfo
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Retail sales for March showed a decline that was twice what was expected.
https://www.cnbc.com/amp/2023/04/14...ent-amid-high-inflation-and-rising-rates.html
The PPI showed a steep decline in producer prices over the past three months and just a 2.7% increase over the past year. This was sharply lower than expected.
"US Wholesale Inflation Saw Dramatic Cool Down in March "
https://www.cnn.com/2023/04/13/economy/ppi-inflation-march/index.html
Good news is inflation is moderating. Bad news is that it looks increasingly like a recession, and possibly lower rates, is in our future.
Hopefully there will still be some decent CDs and bonds out there for a while.
https://www.cnbc.com/amp/2023/04/14...ent-amid-high-inflation-and-rising-rates.html
The PPI showed a steep decline in producer prices over the past three months and just a 2.7% increase over the past year. This was sharply lower than expected.
"US Wholesale Inflation Saw Dramatic Cool Down in March "
https://www.cnn.com/2023/04/13/economy/ppi-inflation-march/index.html
Good news is inflation is moderating. Bad news is that it looks increasingly like a recession, and possibly lower rates, is in our future.
Hopefully there will still be some decent CDs and bonds out there for a while.
Freedom56
Thinks s/he gets paid by the post
From the WSJ today.
"People Are Investing in Bonds Again—Once They Figure Them Out"
"As bond returns have picked up, retail investors’ interest in buying bonds has surged, government data shows. Sales of Treasury bills, which mature in a year or less, totaled $16.6 billion in March on the government site TreasuryDirect, up from $2.4 billion a year earlier. U.S. households and nonprofits’ collective bondholdings rose to $4.52 trillion in the fourth quarter from $3.14 trillion a year earlier, according to the Federal Reserve. "
https://www.wsj.com/articles/bonds-investment-interest-rates-inflation-9c9cfe3e?mod=latest_headlines
"People Are Investing in Bonds Again—Once They Figure Them Out"
"As bond returns have picked up, retail investors’ interest in buying bonds has surged, government data shows. Sales of Treasury bills, which mature in a year or less, totaled $16.6 billion in March on the government site TreasuryDirect, up from $2.4 billion a year earlier. U.S. households and nonprofits’ collective bondholdings rose to $4.52 trillion in the fourth quarter from $3.14 trillion a year earlier, according to the Federal Reserve. "
https://www.wsj.com/articles/bonds-investment-interest-rates-inflation-9c9cfe3e?mod=latest_headlines
Freedom56
Thinks s/he gets paid by the post
Listen to JP Morgan's CEO at 33:50 of the conference call.
"There is a risk of higher rates for longer, and don't just think of Fed funds rates"
"Think about the 5 and 10 year rates... it could be 5".
"I'm not saying it's going to happen but people should prepare for them".
"There is a risk of higher rates for longer, and don't just think of Fed funds rates"
"Think about the 5 and 10 year rates... it could be 5".
"I'm not saying it's going to happen but people should prepare for them".
lawman
Thinks s/he gets paid by the post
Works for me..
Freedom56
Thinks s/he gets paid by the post
No paywall. The conference information is free. Just enter you name, email, and "bond investor" for company. Since there is no confirmation, you can enter anything you want.
What he was saying was that 5 or 10 year treasury could hit 5%. Investors and companies need to prepare for that scenario. For those who are laddering bonds and CDs, they can roll short maturities into the long end.
https://event.webcasts.com/starthere.jsp?ei=1603889&tp_key=0f238d3285&tp_special=8
Here is some reporting on this.
https://www.cnbc.com/2023/04/14/jam...-it-will-undress-problems-in-the-economy.html
Montecfo
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I have always found Jamie Dimon interesting, but his rhetoric has certainly missed the mark recently.
He predicted $200 oil last summer amid his "financial hurricane" rhetoric.
And no he says to be ready for higher rates while suggesting we may have more bank failures. Seems rational.
But bank failures will mean lower rates. So I have trouble reconciling his talking points.
He makes these predictions but tends to not flesh them out. How does he suppose these things will happen exactly?
And I suspect we also need to be ready for lower rates.
He predicted $200 oil last summer amid his "financial hurricane" rhetoric.
And no he says to be ready for higher rates while suggesting we may have more bank failures. Seems rational.
But bank failures will mean lower rates. So I have trouble reconciling his talking points.
He makes these predictions but tends to not flesh them out. How does he suppose these things will happen exactly?
And I suspect we also need to be ready for lower rates.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Well, if that were correct and the 5 or 10 year Treasury could hit 5%, combined with 2-3% inflation that would be 3-2% real return... I would be very happy with that but I think that is higher than historical real returns on the 5 or 10 year Treasury.
Freedom56
Thinks s/he gets paid by the post
From Barron's today.
"The Rate-Cut Bulls Hear, but Don’t Heed, the Fed’s Warnings. That Could Be Costly for Them.
"While the odds of one more quarter-point increase in the federal-funds target at the Fed’s policy meeting on May 2-3 have become a near lock, markets keep pricing in rate reductions in 2023’s second half. That’s contrary to the best guesses of Fed Chairman Jerome Powell and his colleagues that the key policy rate will end the year at 5.1%, which implies no cuts after the May hike."
https://www.barrons.com/articles/th...r-them-d0ef2f6e?refsec=bonds&mod=topics_bonds
"The Rate-Cut Bulls Hear, but Don’t Heed, the Fed’s Warnings. That Could Be Costly for Them.
"While the odds of one more quarter-point increase in the federal-funds target at the Fed’s policy meeting on May 2-3 have become a near lock, markets keep pricing in rate reductions in 2023’s second half. That’s contrary to the best guesses of Fed Chairman Jerome Powell and his colleagues that the key policy rate will end the year at 5.1%, which implies no cuts after the May hike."
https://www.barrons.com/articles/th...r-them-d0ef2f6e?refsec=bonds&mod=topics_bonds
Montecfo
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
^^^
Possibly. But isn't this the same guy that assured us rates would remain at zero through this year??
"Fed Expects to Keep Rates Near Zero Through 2023"
https://apnews.com/article/fed-expe...al,markets about potentially higher inflation.
I see little value in Fed predictions, though it is clear from the dot plot that they expect to cut in 2024. So you are talking a difference that could be measured in months, even according to the Fed.
ETA: I have no personal stake in the specifics since I ladder.
Possibly. But isn't this the same guy that assured us rates would remain at zero through this year??
"Fed Expects to Keep Rates Near Zero Through 2023"
https://apnews.com/article/fed-expe...al,markets about potentially higher inflation.
I see little value in Fed predictions, though it is clear from the dot plot that they expect to cut in 2024. So you are talking a difference that could be measured in months, even according to the Fed.
ETA: I have no personal stake in the specifics since I ladder.
Last edited:
lawman
Thinks s/he gets paid by the post
Seems to me like in the long run it would work better if the Fed set one rate and left it alone. Wouldn't the markets make adjustments needed for the economy to prosper? How can this uncertainty about rates work better?
copyright1997reloaded
Thinks s/he gets paid by the post
Hush now, you dare to say the emperor has no clothes?
Yes, there is a supply and demand for credit, and the markets to determine "price". And yes, manipulation of the market (e.g. by the Federal Reserve) always has "justification" yet no one seems to care about the unintended consequences and long term effects.
But as Running_Man would say, "But then what do I really know?". I just play the game that is given, as we all must.
Car-Guy
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Just got my 401k stable value/fixed income investment payment for 1q2023 added to my account late last week... I'm on track for a 7.6% return this year in my 401k. 
I may never need to touch it (other than RMD's that start next year) but I'm sure my heirs will be overjoyed.
The 401k managers invest in long and short term Treasuries, CD's, employee loans, and other fixed income instruments. I'm not completely sure how they make such a return but I'll take it!
I may never need to touch it (other than RMD's that start next year) but I'm sure my heirs will be overjoyed. The 401k managers invest in long and short term Treasuries, CD's, employee loans, and other fixed income instruments. I'm not completely sure how they make such a return but I'll take it!
Last edited:
Just got my 401k stable value/fixed income investment payment for 1q2023 added to my account late last week... I'm on track for a 7.6% return this year in my 401k.
The 401k managers invest in long and short term Treasuries, CD's, employee loans, and other fixed income instruments. I'm not completely sure how they make such a return but I'll take it!
Well, that's great news!
Car-Guy
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
^^^^^^
I wish I could get something near that in my tIRA and cash account investments. I'm lucky to get 5% (more like ~4.5)... Of course, they have MBA's actively managing the money in the 401k and are charging employees 8.5% for loans out of those funds, which in part adds to the returns. No doubt those things help.
I wish I could get something near that in my tIRA and cash account investments. I'm lucky to get 5% (more like ~4.5)... Of course, they have MBA's actively managing the money in the 401k and are charging employees 8.5% for loans out of those funds, which in part adds to the returns. No doubt those things help.
Last edited:
I was interviewed for this article by the WSJ but I don't believe I was quoted. Haven't read it yet.
- Status
Similar threads
