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To: Keith Feral who wrote (3699)	8/23/2011 12:40:07 PM
From: Oblivious	Read Replies (1) \| Respond to of 13719

Bought DZZ also.

To: Keith Feral who wrote (3699)	8/23/2011 12:51:52 PM
From: Keith Feral	Read Replies (1) \| Respond to of 13719

FFC and FLC went ex dividend today after a recent pullback off the bounce. CEF's with alot of preferred look very interesting right now. Any negative credit events for the banks would give them the green light to repurchase more preferreds back at par to get rid of those nasty high yield debt replacements. BAC preferreds were trading down to $21 the other day which boost the yield up to 8.5% with a 20% upside to $25 par. I'm sure they would love to reclaim the rest of their preferreds in this low interest rate environment. They could turn around and sell 10 year bonds at a reasonable spread to the 10 year Treasury at 1/3 of the yield right now. Market is looking at the replay of 2008, how about the replay of early 2009 when all the banks were in rally mode when their CDS spreads were obnoxiously high and they were retiring preferreds hand over fist. Why not buy back the $17 billion worth of preferreds given an excuse. Despite what the market is suggesting, these guys still have plenty of capital to move around any way they see fit. Even more so since they are in the process of selling $20 billion worth of assets this quarter. Buying back all the preferreds would improve their capital structure since Basel 3 might not allow them to include preferred equity towards Tier 1 capital. FFC and FLC have a ton of bank preferreds that are underwater again. It's just as easy of a way to play the trade on bank preferreds and collect a nice fat dividend along the way.