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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • They Crashed the Economy in 2008. Now They’re Back and Bigger Than Ever.
    @Sven, Atlanta Fed GDPNow provides a real-time estimate of the GDP. Normally, 2025/Q1 GDP would be released few weeks after the quarter-end, initial reading and then subsequent revisions - so, Spring/Summer.
    But it's concerning that Atlanta Fed's and Piper Sandler estimates for 2025/Q1 GDP have changed to negative from positive - those are big swings for GDP.
    But the discussion then will be is it just 1 negative quarter on technical tariff factors, or more serious - recession is defined as negative GDP for 2 successive quarters. That won't be known until Fall.
    This is something to watch. https://fred.stlouisfed.org/graph/?g=1E6eR
  • Market Concerns - are you hedging your portfolio, or is it business as usual?
    I am (as posted prior) just under 100% invested in 4.25% Fido mm fund. Cash in other words.
  • Hundreds fired at NOAA, Weather Service. Here’s what that means for Americans and economy.
    Following are excerpts from a current report in The Washington Post:
    Current and former agency officials and lawmakers said the cuts could have major impacts on Americans and the economy, compromising important functions.
    At dozens of National Weather Services offices across the country, staffing levels were low well before President Donald Trump took office. As the new administration announced mass terminations this week, current and former staffers said an exodus of new hires and veterans will hinder the agency’s ability to monitor and predict weather hazards.
    The administration let go of meteorologists, hydrologists and technicians that help inform daily weather forecasts in places including Boston and Boise, Idaho. It fired scientists who build, improve and maintain weather models that form the backbone of weather forecasting around the globe. Staff at offices responsible for warning the public about tsunamis, tornadoes and hurricanes lost their jobs, as did an entire team dedicated to communicating NOAA’s work and science to the public.
    Combined with Thursday’s firings the government climate and weather enterprise’s workforce contracted by more than 6 percent in two days. NOAA’s workforce is still large — starting this year at about 13,000 employees, including about 4,300 who work for the Weather Service — and a spokeswoman said Thursday the agency “remains dedicated to its mission, providing timely information, research, and resources that serve the American public.”
    About half of the Weather Service’s forecast offices were already understaffed, according to a congressional analysis released last year. When Trump took office and instituted a government-wide hiring freeze, it further strained staffs, forcing some to work double shifts to ensure all-day coverage, current and former Weather Service staff told The Washington Post.
    Termination notices reviewed by The Post told NOAA and Weather Service staffers they were “not fit for continued employment because your ability, knowledge and/or skills do not fit the Agency’s current needs.” Louis Uccellini, who served as Weather Service director from 2013 to 2022 said that is far from the truth: “These are exactly the people we need,” he said.
    Jobs were also eliminated at NOAA’s National Hurricane Center and Storm Prediction Center. The offices produce forecasts and analysis that inform work done by meteorologists in local forecast offices around the country — as well as private sector meteorologists and the media. The cuts also impacted NOAA’s tsunami warning centers in Alaska and Hawaii, according to a person familiar with those offices. Even before those layoffs, scientists at the centers logged overtime hours to ensure the public is apprised of tsunami threats, the person said.
    Technicians who repair radar systems across the country lost their jobs, as did several from a team who handled larger repair projects at the Weather Service’s National Reconditioning Center in Missouri, said Jeran Krska, who was fired Thursday after leaving the private sector to join the center as director in September. “We’re falling even more into, we just can’t support the mission anymore,” Krska said. “Now they just terminated all the probationary people? We’re screwed.”
    Krska’s office is responsible for major repairs to systems that gather weather observations to help issue forecasts. Budgets were already tight for many repair parts, and now repair technicians across the country are also among those fired, Krska said. “We were barely Band-Aided together as it was,” he said.
    As much as 25 percent of the staff at NOAA’s Environmental Modeling Center was cut Thursday, Spinrad said — a blow to an office that faces a complex task of building, improving and maintaining the computer models that serve as a foundation for weather prediction.
    The center handles more than 20 numerical weather prediction systems — programs that combine mathematical models of earth systems with observations of current conditions to produce weather predictions. Already, low staffing has affected the operations of at least one weather balloon station in Alaska that collects data on current conditions. Without information from sources like these, experts said the accuracy of models key to forecasts across the country and globe could be affected.
    The modeling center is central to work championed by Neil Jacobs, Trump’s nominee to lead NOAA. The work is meant to improve U.S. weather models, generally outperformed by rival systems developed in Europe and the United Kingdom. The center is collaborating on efforts to build what is known as the Unified Forecast System, of which Jacobs serves as chief science adviser and that he has spearheaded as a means of improving forecasting accuracy.
  • They Crashed the Economy in 2008. Now They’re Back and Bigger Than Ever.
    @yogibb said,
    Noted in Barron's - Economy:
    Atlanta Fed GDPNow is projecting economic contraction for 2025/Q1 of -1.5% (real) vs +2.3% previously, while Piper Sandler switched to -2% from +2% previously.
    @yogibb, The economy is slowing, but this is a serous matter with a negative GDP in Q1. Saw this news too.
    https://cnbc.com/2025/02/28/the-first-quarter-is-on-track-for-negative-gdp-growth-atlanta-fed-indicator-says-.html?&qsearchterm=negative%20GDP
    Is it why the yield curve is inverted this week ? 1 and 3 months T yield over 4.32% vs 4.24% of the 10 years T note?
    https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202502
  • They Crashed the Economy in 2008. Now They’re Back and Bigger Than Ever.
    Not sure with so many expecting a rerun of 2008 if that is a possibility. Black swans come out of nowhere not when it seems to be the consensus, I have been hearing for 15 years or longer about the demise of the junk bond market because of the “debt wall”. Still waiting. Going into this year the pundits were all onboard that the 10 year at 5% was a sure thing because of tariffs, etc. Now suddenly 4% is in sight. Because of Trump’s affinity for crypto, bitcoin was suppose to be the place to be in 2025. We see how that has worked out YTD. Opinions get you nowhere. I would be dead broke working as a 78 year old security guard at the local nursing home if I traded based on my mostly incorrect opinions over the years, Investing/trading is counterintuitive. What seems logical and well thought out and researched doesn’t always pan out in real time. As for CLOs, especially the below investment grade, after being “the” trade the past two years they are suddenly way behind the pack in a year with so many bond funds on pace for double digit gains. Sorry for the rambling.
    I am a bit bummed mentioning the unassuming, rarely mentioned, but stellar tight rising channel bond fund CBRDX. From emails I received far too many said thanks we are joining the party. Yikes, never a good thing. Hope I didn’t jinx it.
  • They Crashed the Economy in 2008. Now They’re Back and Bigger Than Ever.
    "Are these items what are broadly called 'Securitized' in bond funds. Like 21.93 % in VBMFX?
    Or a whopping 49.40% of the highly regarded Dodge and Cox Income Fund."

    The Dodge & Cox Income prospectus from 12/31/2024 indicates 48.7% of total assets were Securitized.
    The breakdown is below.
    Asset-Backed: 5.3%
    ------Auto Loan: 1.0%
    ------Federal Agency: 0.0%
    ------Other: 0.3%
    ------Student Loan: 4.0%
    CMBS: 0.2%
    ------Agency CMBS: 0.2%
    Mortgage-Related: 43.2%
    ------CMO & REMIC: 5.0%
    ------Federal Agency Mortgage Pass-Through: 38.2%
    Fannie Mae, Freddie Mac, and Ginnie Mae securities comprise the Federal Agency Mortgage Pass-Throughs.
    These are pretty, pretty, pretty safe.
    https://connect.rightprospectus.com/DodgeandCox/TVT/256210105/NCSR?site=Funds
  • Paul Krugman has details about near collapse of US federal payments system with Musk in charge.

    why does anyone believe trump will be held accountable? this is year 5 of MAGA swallowing any deflected blame, and if some local gop shills take the heat, no biggie.
    trump has yet to even use musk's 'oops, i'll fix it', which will buy a few extra years (see : healthcare, deficit,...)
  • They Crashed the Economy in 2008. Now They’re Back and Bigger Than Ever.
    Add CLOs too.
    Noted in Barron's - Economy:
    Atlanta Fed GDPNow is projecting economic contraction for 2025/Q1 of -1.5% (real) vs +2.3% previously, while Piper Sandler switched to -2% from +2% previously.
  • SPX ETFs' distribution Breakdown Qualified and Ordinary
    From website info, QDI for 2024:
    SPY 100% (UIT, so cannot use many strategies)
    ETFs can use strategies such as using futures to manage cash flows, securities lending, and that can lead to < 100% QDI.
    SPLG 88.04% (calculated) (also by SSGA)
    IVV 88.84%
    VOO 95.90%
    SSGA (Tax Document/Primary - download) https://www.ssga.com/us/en/intermediary/etfs/spdr-portfolio-sp-500-etf-splg
    iShares https://www.ishares.com/us/literature/tax-information/2024-qdi-summary-stamped.pdf
    Vanguard https://investor.vanguard.com/investor-resources-education/taxes/qdi-yearend-qualified-dividend-income?year=2024
  • They Crashed the Economy in 2008. Now They’re Back and Bigger Than Ever.
    "All this has happened before and will happen again..."
    - Cylons (2004 reboot series)
    They Crashed the Economy in 2008. Now They’re Back and Bigger Than Ever.
    Wall Street expects to sell more than $335 billion in asset-backed debt this year. Remember that conference in ‘The Big Short’? It just drew a record 10,000.
    (free link) https://www.wsj.com/finance/investing/abs-crashed-the-economy-in-2008-now-theyre-back-and-bigger-than-ever-973d5d24?st=DYfrpp&reflink=desktopwebshare_permalink
  • Musk ally is moving to close office behind free tax filing program at IRS
    Following is a current report in The Guardian:
    Program is apparently being closed according to email from former Tesla engineer installed in GSA
    An Elon Musk ally installed in the US government said in a late night email going into Saturday that the office behind a popular free online tax filing option would be shuttered – and its employees would be let go.
    The 18F office within the General Services Administration (GSA) created the IRS Direct File program that allows for free online tax filings. It has been a frequent target of Musk, and one of the billionaire businessman’s close associates who holds a key position in the GSA informed staffers that the agency would close 18F in an email to staffers that arrived around 1am on Saturday morning.
    According to the message, the firings were in support of the executive order Donald Trump issued after beginning his second US presidency, which has empowered Musk’s so-called “department of government efficiency” (Doge) taskforce to cut federal workers.
    “The 18F Office has been identified as part of this phase of the GSA’s Reduction in Force (RIF) as non-critical,” the email states. “This decision was made with explicit direction from the top levels of leadership within both the Administration and GSA. There are no other TTS programs impacted at this time, however we anticipate more change in the future.”
    The email came from Thomas Shedd, a 28-year-old former Tesla software engineer who took over in late January as head of the GSA’s Technology Transformation Services. It’s not immediately clear what may happen to 18F programs such as the direct filing system or the total number of workers that the GSA is firing from the office, which has about 90 employees.
    Musk claimed in early February that he had “deleted” 18F while responding on X to a rightwing influencer who accused the agency of being “far left”. Musk didn’t elaborate on his statement, which caused confusion as the 18F website and services like its direct file program remained online.
    In addition to working on the free tax return program, the 18F office worked across government agencies to update technology and launch new software products. It worked on more than 31 projects across different government agencies in 2024, including the Cybersecurity and Infrastructure Security Agency (Cisa). It has been part of the GSA since 2014.
    Shortly after taking over TTS, Shedd told staffers that he planned to run the agency like a tech startup and that he wanted to implement artificial intelligence programs throughout the government. The GSA is one of the major agencies that Musk and his allies have taken over as part of their wider and potentially illegal dismantling of the federal government, which has cut services such as humanitarian aid and disease prevention while attempting to reshape agencies along ideological grounds.
  • Bloomberg Real Yield
    28 Feb, '25:

    Nisha Patel: 10-Year may well be offering a lower yield by year-end. "Close to 4 or sub-4%."
    Michael Goosay: Outlook is for slowing growth, moderating inflation, and the Fed could be more active than what's priced into the Market. 4% 10-year or lower is not inconceivable.

    ...Concern about DOGE-related falling payrolls. Sooner or later, the bond market will rally, if labor market weakens. Watch the next couple of months' payroll figures.
    The Market is pricing-in two rate cuts in 2025. More than that, really? Labor weakness would be the driver. So, yes, it's possible. (Duh.). ... the 10-Year is at a 19-week LOW. What is that telling you? (The 2-Year is down to 4.0074.) PATEL: Growth is leading the parade, rather than worries about inflation.... GOOSAY: Inflation will begin to take a back seat. FED may cut 3-4 times this year....Upcoming tariffs are a Wild Card in all of this. we must "look through" all that, and focus on long-term growth and inflation, monetary policy, fiscal policy.
    *******************
    CITI "adds to furious Feb. sales of I.G. Credit."
    Others: HSBC, Chevron, State Street, GM.
    *More than $150B for the month. Second-busiest February, ever. The record was set in 2024...Expectations for March: approx. $185B in sales.
    Treasury Auctions:
    2-year: 4.169
    5 yr: 4.123
    7 yr: 4.194
    Kip DeVeer, from Ares, on deal-making. That's when I tuned out. Sorry, sports fans.
  • Market Concerns - are you hedging your portfolio, or is it business as usual?
    I suspect the markets may well unfold in some unusual ways in 2025. But, my crystal ball continues to lack sufficient predictive power for me to try to time the markets, even when considering the punch list of items noted at the start of this thread. Had about 73% invested in "stocks" (per Fido) as of early January and am not anticipating any portfolio changes for 2025. Continue to maintain sector over weights in REITS, Financials, Energy, and Utilities. Monthly dividend income is maintained in a MM account as it is received for potential end of year release of ~4.5% of my beginning of year investment portfolio balance -- subject to 2025 not producing a serious and lasting market meltdown.
  • Significant workforce reductions' are coming to the Social Security Administration
    https://www.cnbc.com/2025/03/01/doge-actions-may-cause-social-security-benefit-interruption-ex-agency-head.html
    I posted this article on another thread and I think it’s appropriate for this thread too. Not a rosy outlook for social security, even for those already receiving benefits
  • Significant workforce reductions' are coming to the Social Security Administration
    "In recent weeks, President Donald Trump and Musk have claimed the discovery of massive fraud within Social Security, which pays benefits to about 69 million retired and disabled Americans and their eligible dependents and survivors. Those reports—including the allegation that millions of dead people were collecting benefits—have been discredited."
    "The SSA already operates efficiently. Administrative costs represent about 1% of the benefits paid out, former Commissioner Martin O’Malley said last year. The agency’s Office of the Inspector General found that less than 1% of total Social Security payments were improper from 2015 to 2022, and most of those were overpayments to living beneficiaries."
    https://www.msn.com/en-us/technology/cybersecurity/is-social-security-safe-from-doge-s-cuts/ar-AA1zSJgv
  • Market Concerns - are you hedging your portfolio, or is it business as usual?
    Good topic. I don’t invest according to the factors listed in the OP (not that it’s a bad idea). But like Yogi Berra said - “It's tough to make predictions, especially about the future.” To a great extent it’s “business as usual” here.
    I have trouble in my head separating “hedging” from just plain building cash for anticipated withdrawals. But have been slowly raising cash from 10% (all of last year) to 12.5%. Have a small sell order in for some shares of GLFOX Monday to seal that.
    Only 34% in equities now with better than half of that in foreign holdings. For real more conventional hedging I use CPLSX (large sum) and CPZ (very small sum). I can tell by the way they behave most days that management has some shorts on - especially in the QQQ.
    Discrepancy in above totals is owing largely to holdings like real estate, preferred stocks, precious metals, energy etc. which are considered neither cash nor equity. For the 12.5% loosely defined cash position I’m splitting the money 3-ways among SPAXX, JAA and VNLA
  • Market Concerns - are you hedging your portfolio, or is it business as usual?
    https://www.fxstreet.com/analysis/us-market-close-alert-the-markets-broken-record-keeps-spinning-202502272230
    There are always headwinds for the markets. The US has some looming issues on the short-term horizon, as noted in the attached article.
    -Declining consumer sentiment
    -Tariffs -rubber hits the road March 4th (Canada & Mexico, +China), with steel and aluminum duties March 12th.
    -US regime shift
    -Inflation remains sticky
    -Possibility of stagflation (high inflation + high unemployment)
    "How much fiscal, tax-cut, and pro-business dry powder does the U.S. administration actually have to fire off?"
  • Paul Krugman has details about near collapse of US federal payments system with Musk in charge.
    It will take an event like say.... payment portals of Medicaid going down in 50 states.....for US citizens to finally wake up and smell the coffee stench.
    I don't wish this on Medicaid recipients, but apparently this country needs a wakeup call.
  • Barron's Best Fund Families, 2024
    The percentages cited in the story from 2024 are interesting. The S&P 500 bested active management with a 25% gain. I hadn’t realized what a hot run it had.
    And a snippet quoted from the referenced article:
    ”Overall, it wasn’t a shabby year to be an investor, no matter where you were. According to LSEG Lipper data, the average U.S. equity fund rose 17.4%, while world equity funds gained 7.3%. Taxable bond funds rose 5.7%, while municipal bond funds returned 2.9%. Mixed-asset funds rose 10.7%. Cash did well, as Lipper data show that taxable money-market funds returned 4.9%; about $6.4 trillion remains in those accounts, close to 2023’s level.”
    Not much discussion on the board lately about C/Ds, Treasury Bills or even money market funds. Curious. You’d think people would be locking in 2024 gains (offered up “tongue-in-cheek”). Personally, I don’t have a single dime invested with any of the 50 “winners” - except for a minuscule investment in one Gugenheim CEF (#48 on the list) and a small sum in Fido’s money market fund. But won’t loose any sleep over this! There’s always next year. :)
  • Paul Krugman has details about near collapse of US federal payments system with Musk in charge.
    https://paulkrugman.substack.com/p/musk-in-your-computers-an-interview
    Krugman "Like most people paying attention, I was and remain terrified by the predictable power grab by the Musk/Trump administration. But it never occurred to me that Musk’s people would try to seize control of the computer systems that, in effect, cut all the checks the federal government sends out. In fact, very few people realized it was happening.
    One person who did realize it, however, was Nathan Tankus — an independent expert on the financial “plumbing” at the Federal Reserve and the Treasury Department. So Nathan suddenly became the man of the moment. His blog Notes on the Crises has become crucial reading — and he may have helped steer us, temporarily at least, away from the edge of the abyss."
    https://www.crisesnotes.com/
    Tankus:
    Yeah, it's truly remarkable. And I really want to emphasize how dramatic this is. I talked about how I wrote about impoundment, what I've been calling ‘part zero’ on January 31st, and talked about the huge disruption of, say, payment portals going down in all 50 states for Medicaid. ....
    You know, in a constitutional crisis, this is the typical thing. You are fighting what I've called bureaucratic trench warfare, agency to agency.
    And that's why they're sending all these people to physically take over the buildings, to shut off people's emails, all that stuff. And that stuff is hard. It's a pain. It's annoying to have to actually go to try to take control of the federal government. It would be a lot easier if you could just flip a switch and it doesn't matter what those people are doing.
    And hey, maybe we can flip a switch and get those people to stop being paid. And with those people stop being paid, then they're going to have to quit and go somewhere else. Because they have to live. And it'll be a lot easier to take over the federal government that way. And that is what they were trying to do. You know, what I've called the payments heart of the federal government is the Bureau of the Fiscal Service. And they were trying to grab a hold of the payments heart and shut things down. And it seems like for now they are respecting court injunctions.
    But, you know, for example, the federal judiciary is paid through the Bureau of the Fiscal Service. Hypothetically, they could just shut down the federal judiciary from getting paid. And then what happens from there? No expert has an answer for you about what happens from there."