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OK kids, my banker called today flogging a new BoA CD, 20-year term, paying 5% for the first 5 years, 6% for the next 5, 7% for the next 5, 8% for the final 5, assuming it ever gets that far which is doubtful. Callable after 1 year and then every 6 months thereafter.

No fixed penalty for early breakage, it's on the secondary market which means penalty would be assessed at the time based on prevaling conditions, competitive rates, etc.

He says it will be full by Tuesday. FDIC insured.

What does anybody think?
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Ah, silly me, it's a bond, not a CD. I thought it was TGTBT, and even asked the guy at the bank who flags things for me but he assured me it was a CD. The guy in their brokerage department said so too, so it took his word for it. Oops, he just called back. It's a bond, of course.
 
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goofy,

a bond? 5678 who do we appreciate???

not bank of america....that is for sure.....

ofw,

Dave

PS....1234 what are we fighting for
I dont know I dont give a D
next stop is vietnam.....
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How many people reading that know where it came from?




It's been a looooooooooooooooong time since I listened to Country Joe & The Fish. Now I've ogt to dig out the album and listen again.
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What does anybody think?

Beats current 1 year and 5 year rates hands down. If it gets called after one year you are ahead, this holds out until year 5 for money invested in a insured asset today.

My long term crystal ball, or as some call it "the magic 8 ball toy", keeps changing its answer every time I ask about the long term future. When rates finally come off the bottom the scale is plausible but IMHO not likely. There are way too many iffies and buts flying around. My best guess is that the Fed is not going to raise rates quickly which would make the 6% of the second term over priced. The caveat is "when do the bond vigilantes mount up and ride". Another consideration is that BoA is overpaying today, will they still be in a situation 6 years from now where they will feel compelled to overpay?

If you have money that you would like to put to work short term with reasonable long term prospects it looks like a fair/good deal to me.

Does make me glad I don't have money invested in BofA stock, this is pretty pricy debt to be selling under current conditions.

jack
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Goofyhoofy,

You wrote, Ah, silly me, it's a bond, not a CD. I thought it was TGTBT, and even asked the guy at the bank who flags things for me but he assured me it was a CD. The guy in their brokerage department said so too, so it took his word for it. Oops, he just called back. It's a bond, of course.

There are bank-issued, FDIC-insured bonds trading. They were issued under the FDIC Temporary Liquidity Guarantee Program (TLGP). Your broker can screen specifically for them. All of these bonds are AAA rated and backed by the US government. http://www.fdic.gov/regulations/resources/TLGP/index.html

- Joel
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How about...."God Bless my 2-S" ???

Sure kept me in one piece, while a few lost a few limbs, parts of their intestines, and a couple have been pushing us daisies for 40+ years mow.
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