muscleman

Seriously? That excludes investment account balance at TDA? My current employer is using hsabank, so I bet they pay the $3 per month admin fee. But if I leave my current employer, I would definitely transfer to another place that doesn't nickle and dime me.

Why does the law say I can withdraw freely for any purposes like a pre-tax IRA after 65? Is it because medicare starts coverage at 65? If this is the case, I think it is quite likely that 40 years later, the law will change to 75.

It is better to trade in your Hyundai and Toyota to something like a Volvo. It is really unsafe, especially Toyota. I would never put my own life at risk. :) http://www.iihs.org/iihs/ratings/vehicle/v/toyota/camry/2013 Volvo is the only car in the small overlap test that didn't collapse the passenger structure. I only drive used cars, but I buy a 1-2 year old certified pre-owned Volvo and intend to drive it for the next 200k miles. A one year old certified pre-owned Volvo is just 60-70% of the price of a new, but it has 10 year 100k mile bumper to bumper warranty. I think it is a very good deal. My Toyota is a Sequoia SUV. Does Volvo make something that can seat 7 and pull a 5500lb camper? Yeah. Volvo XC 90 does that. I wouldn't recommend buying XC 90 though. The technology is way out of date. I am not sure about Sequoia's safety, so I can't comment on that. What is your MPG when towing? I bet it is like 5-7 MPG? I think it is best to use a diesel SUV for towing because that can increase your MPG to 15 or more. No XC90 max towing capacity 3790lbs. I wish there was a large diesel SUV available in the US. I don't want a pickup truck, because it has to double as a family car for around town. My Hyundai Elantra is my commuting car that gets the miles put on it. And yes, my mileage is horrible when towing, somewhere well bellow 10mpg and only about 15-16mpg highway when not towing. I'd love something the size of a Sequoia or Chevy Suburban with a massive amount of seating and towing capacity with a diesel engine. I don't know of one, but it has been a few years since I've shopped for a vehicle, so maybe there is one now. No there is still none. I know if 5 seats are ok to you, Jeep Grand Cherokee diesel can get you 29 MPG highway and 15 MPG when towing a 7000 lb trailer. Otherwise you would have to wait. I heard Jeep will launch a new 7 seat SUV next year, but I don't know if they will put in a diesel heart for it. Gasoline engines are way uneconomic for towing.

It is better to trade in your Hyundai and Toyota to something like a Volvo. It is really unsafe, especially Toyota. I would never put my own life at risk. :) http://www.iihs.org/iihs/ratings/vehicle/v/toyota/camry/2013 Volvo is the only car in the small overlap test that didn't collapse the passenger structure. I only drive used cars, but I buy a 1-2 year old certified pre-owned Volvo and intend to drive it for the next 200k miles. A one year old certified pre-owned Volvo is just 60-70% of the price of a new, but it has 10 year 100k mile bumper to bumper warranty. I think it is a very good deal. My Toyota is a Sequoia SUV. Does Volvo make something that can seat 7 and pull a 5500lb camper? Yeah. Volvo XC 90 does that. I wouldn't recommend buying XC 90 though. The technology is way out of date. I am not sure about Sequoia's safety, so I can't comment on that. What is your MPG when towing? I bet it is like 5-7 MPG? I think it is best to use a diesel SUV for towing because that can increase your MPG to 15 or more.

It is better to trade in your Hyundai and Toyota to something like a Volvo. It is really unsafe, especially Toyota. I would never put my own life at risk. :) http://www.iihs.org/iihs/ratings/vehicle/v/toyota/camry/2013 Volvo is the only car in the small overlap test that didn't collapse the passenger structure. I only drive used cars, but I buy a 1-2 year old certified pre-owned Volvo and intend to drive it for the next 200k miles. A one year old certified pre-owned Volvo is just 60-70% of the price of a new, but it has 10 year 100k mile bumper to bumper warranty. I think it is a very good deal.

Banks are already up a lot last year. The only one I have is BPOP. It is not up so much probably because of Puerto Rico worries. Other banks like BAC and IRE are already expensive. What other financials are you looking at? Seems like you have a taste for risk. There are a lot of cheap smaller banks with better loan books. I took a 5m look at BPOP..at first glance it looks ok. But what's concerning is the ballooning charge-offs, and the explosion of NPA. Maybe I'm too conservative or something, but my preference is to invest in cheap banks where the credit quality metrics are getting better, not worse. Any insight on this? I'm guessing you're seeing something I'm not, what are your thoughts on this? They had a bunch of FDIC assisted transactions, so the balooning of NPA is mostly acquired banks. The adjusted NPA is just 2% and keep dropping, and the reserve/NPA ratio is really high. I don't think this is balooning at all.

Banks are already up a lot last year. The only one I have is BPOP. It is not up so much probably because of Puerto Rico worries. Other banks like BAC and IRE are already expensive. What other financials are you looking at?

To your question #1, the value to shareholders would still be dependent on some sort of unwind of the sweep amendment from 2012, without which it will be really hard to have any recovery. But assuming that happens, shareholders would probably still have plenty of value even if this reform is executed. If you unwind the sweep and revert to the 10% dividend, Fannie's got a total capital stack (remaining gov't prefs + market prefs + equity market cap) of something like 70bn, and is earning perhaps 20bn/year in NIM and fees on its existing portfolio (which would be in full runoff if this reform is implemented). Depending on the speed of runoff and on credit losses, you could have plenty of value in the common. To your #2, it's not clear to me that this is so stupid for the average Joe. Yes, he will perhaps pay more for his mortgage (maybe marginally so... if the last 90% is government guaranteed, the private capital first 10% can be pretty expensive and still produce a cheap result overall). But he's also paying taxes, and those taxes were (in the end very visibly) subsidizing risk-taking on behalf of Fannie's private shareholders. I also doubt the 30-year mortgage will disappear; the primary risk Fannie and Freddie reduce is the credit risk in mortgages which is generally not too much higher in a 30-year fixed structure than in other structure. I'd expect it would be moderately more expensive, as would almost all other conforming mortgages. So your argument suggests that common and preferred are probably on the same boat. Is there any scenario when common loses and preferred wins?

snowball? Is that a book?

So there is no way for us to get in before the IPO?

Is this just a proposal, or is it already law? I hope this proposal can't pass!

I agree that if we can get term funded loans that are not subject to margin calls, it is a much better leverage. But for insurance companies, if you buy stocks with float, and the stock crashes, don't you get regulator pushes? That is similar to margin calls, isn't it? For individual investors, what is the best way to get term funded loans? I don't see any way to do this on a large scale.

Yes. So why is leveraging through insurance float a cheaper way to do it than leveraging through broker margin? Both seem to be similarly dangerous to me.

I have been thinking about BRK and FFH's success, and I wonder what is the difference between buying stocks with margin vs buying stocks with float? For stocks with margin, the current interest rate is just 1.5%, which is pretty low cost leverage. However, margin calls can potentially wipe out the investor overnight. But for insurance floats, don't they have similarities? If the float is used to buy stocks, and the stock market crashes, won't regulators ask for dilutive capital increases? Ideally, if I were a CEO, I would want to have an operating subsidiary which is a stable cash cow, that can be leveraged up, and then I will move the money to the other investing subsidiary to buy stocks. Then I won't worry about margin calls. Thoughts?

I have an IB Reg T account, but I do not use margin. The only reason for me to have a margin account is because I would like to be able to buy a stock using unsettle proceeds immediately after I sell another stock. Fidelity allows this in a cash account, but IB does not. However, after I set up this account, I told the IB onboard guys to enable a setting that prevents me from actually using margin. In this way, I will be safe from a mis-click of a button. I do not recommend using margin because it is too dangerous, especially in IB. However, I do use leverage by borrowing money from credit cards' 0% APR balance transfer and I am about to get a HELOC and draw that.

In the restructuring proposal, Orr formalized earlier plans to treat about $641 million of unlimited and limited tax general obligation bonds outstanding as of June 2012 as unsecured debt.Some $440 million of general obligation bonds would be considered secured debt. http://www.reuters.com/article/2014/02/22/us-usa-detroit-bankruptcy-idUSBREA1K1G520140222 So it sounds like Orr now acknowledges GO bonds are secured debt?

This is not an investment thesis but more like a postmortem. I looked at RDN back in 2011 but couldn't understand it. I felt like it was trading at a 50% discount to book, but it kept losing money, so the MoS could erode quickly. Now it is up 300%, trading at 2.6 times book, and still losing money. Does anyone understand these insurers? Should I value it based on adjusted book value, like MBI?

I only have a few data points. The rates jumped since 10 months ago. My rate includes everything, and assuming that you work for the company for 4 years. It is hard to get the data points, because all the salary websites only show stale data. The rates have jumped up a lot. 100k a year is kind of typical Microsoft pay, which is way too cheap compared to other competitors.

My bad.... S&P has already downgraded PR debt to junk, and there is limited selling, which means it should have already been the bottom right now.

Maybe culture related? Maybe Argentina people just don't like to abide by their contacts?

Dan Leob bought a bunch of bonds and he is underwater now. I think buying the bonds will be interesting, but I haven't bought any yet. I have MBI, AGO and BPOP that have exposure to this play, but I think it is ok to buy bonds. PR constitution says payments must go to bond holders first before going to other liabilities like pension. Not to say that there is only liquidity issue, not solvency issue. So I don't think a default will happen. Morgan Stanley put up a $2 bn refinancing package with 10% coupon. While the term is not great, it at least provides liquidity for the next few years, so there is no liquidity issue either. I think I would wait a bit longer before buying the bonds, because PR government will only take Morgan Stanley's offer at the last moment before Moody decide to downgrade them to junk. Before that, there will be some more scary news going on.

"In a letter to investors on Tuesday, Third Point, the hedge fund run by Daniel S. Loeb, said Puerto Rico bonds were among his firm’s top five losing investments in the fourth quarter." http://dealbook.nytimes.com/2014/01/21/2-billion-deal-in-works-for-puerto-rico/?_php=true&_type=blogs&ref=business&_r=0 So the major concerns are just liquidity. They don't have the solvency problem. Just like Italy and Spain debt problems in 2011. :)

Thank you! I just verified with my employer's HSA admin that they use HSA bank. So I will just stick with them. :D

eli lilly federal credit union? Sounds like a weird name. Do you know other HSA admins that can allow me to have a brokerage option in the HSA account? Right, I thought so too. But I checked it out and didn't like how HSA Bank nickel and dime'd people. I went to eli lilly federal credit union's website but didn't see that they have stocks as an investment option in HSA. I will call them to make sure. So this CU doesn't have the fees that HSA banks have?

Software is hot. Now someone with 2-4 years of good experience can make 200k in Seattle (not Microsoft though), and 250-300k in Bay Area. Are New York financial guys making this number, living expense adjusted? Even if he can, what crazy hours has he to work each week to get there? It will certainly be more than 40 hours a week that a typical software engineer spend. I did consider switching to financials a few years ago, but no one wanted me. Now I think it is fine that I just invest my own 401k and my parent's retirement money, and just keep doing software for a few more years. If I can someday succeed in investing, I will open my own HF shop. :P