Trying to figure out bonds

P

pat9966

We all know that buying bank common stock as an investment is extremely risky and probably unwise. I've been looking at bank bonds as a possible investment though as I figure it's unlikely that the US government with let Goldman Sachs or JP Morgan fail given that they have preferred stock in the companies and that Goldman is so politically well connected and JP is so large. Bonds are of course lower in the capital stack than the goverment's preferred stock so they are essentially guaranteed no? I can't figure out why the yields are so high though. I've never bought corporate bonds, so does anyone have insight on these GS bonds and why some yields are really high and some are low? One of the highest yields on GS bonds is 50%. According to the website, it's last sale was at 50 cents on the dollar and it matures in 1 year.

http://cxa.marketwatch.com/finra/Bo...uponMin=&CouponMax=&MaturityMin=&MaturityMax=
 
I'm long C sep 2014 bonds. YTM is 9%, people are throwing money at the stock market looking for 10% a year while risking a ton given that shareholders are the first to die
I think there is still value there after the sell-off, the bond is above the tarp, so the government needs to be wiped out before you lose a penny
 
the prices and yields you see on that website doesn't mean that you will get same thing t same price.
they may post all bunch of transactions that have absolutely nothing to do with current bid\ask. and sometimes there is no bid ask for weeks.. transactions between two houses,some "arranged" trades. spreads are huge,liquidity is very thin. if you are with IB you should be able to see the quotes along with YTM in your TWS.this may give you a better picture.
i agree with your point of view on GS and JP. going to take a look on those bonds today
 
Look at the preferreds not bad r/r. I bought the C.W last week at 6.88 and sold it at 8.50 or so. Did the same thing with RBS.L. You have to think how much can I lose? With the preferreds your risk is limited b/c they are already priced so low. Quite an opportunity if your quick enough.

The corporates are still trading .50 to .70 on the dollar, much more downside there. Look at Lehman Corps they went to zero.
 
Quote from pat9966:

We all know that buying bank common stock as an investment is extremely risky and probably unwise. I've been looking at bank bonds as a possible investment though as I figure it's unlikely that the US government with let Goldman Sachs or JP Morgan fail given that they have preferred stock in the companies and that Goldman is so politically well connected and JP is so large. Bonds are of course lower in the capital stack than the goverment's preferred stock so they are essentially guaranteed no? I can't figure out why the yields are so high though. I've never bought corporate bonds, so does anyone have insight on these GS bonds and why some yields are really high and some are low? One of the highest yields on GS bonds is 50%. According to the website, it's last sale was at 50 cents on the dollar and it matures in 1 year.

http://cxa.marketwatch.com/finra/Bo...uponMin=&CouponMax=&MaturityMin=&MaturityMax=
More...

this stuff from link above(at least on first page)-it's not even a bonds(i don't know what a f* this is)

ssue Description: MTN EXCH SER B
Amount Outstanding* $5,000.00

yes..5K

Issue Description: PERP NORMAL AUTOMATIC PFD ENHANCED CAP SECS FLTG RT (APEX)


Issue Description: MTN FLTG RT
Amount Outstanding* $50,000.00

50K

Issue Description: MTN ZERO CPN SER B INDEX-LINKED (LEVERAGED EQUITY)

Amount Outstanding* $3,369.00

3K
 
Quote from pat9966:

I see what you mean bob. Here's one that's a bond and that looks decent: http://cxa.marketwatch.com/finra/BondCenter/BondDetail.aspx?ID=MzgxNDFHRkQx

9.1% yield on a subordinated note. Seems like to good of a yield for bond that is essentially guaranteed. Maybe there's something I'm missing. Will have to track down the prospectus. I just discovered that my library has Bloomberg. Anyone know if Bloomberg has good bond info besides just quotes?
More...

Bloomberg should have ALL info about bonds.FINRA is not bad also. moodys also have some good info, but you have to register (free).
i would stay away from subordinated..they can go to zero in blink..look for senior unsecured at least..
 
here is the screen short from TWS for this bond(but remember-it's matured in 2037(!). they may call it of course,but..you don't want to hold it,if inflation kicks in..
YTM on ask is 8.9%, plenty to buy
 

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