preferreds

No private investor would have been happy with 5% on preferreds sold to a U. S. bank at the height of the crisis.

Typically callable five years after their initial public offering, preferreds have long maturities or none at all.

Now rising interest rates are reducing the number of preferreds that would normally be called and removed from the market.

For now, regulators do not seem keen on preferreds.

But with few brokerages tracking domestic or foreign preferreds, they often lie anonymously between stocks and bonds.

Unlike common stocks, high-quality US preferreds are largely driven by interest rates and credit spreads.

To reduce risk, you can invest in a diversified group of preferreds.

Mr Phelps attributes the sell-off to more than credit fears, observing a "perfect storm" that is inundating the supply of preferreds.

Buffett bought similar perpetual preferreds that pay 10%, or $300 million.

At the same time, they took profits on some lower-grade preferreds and enhanced their holdings in higher-quality issues.

Many preferreds are issued by banks.

Who get's to buy $5 billion in Goldman Sach's preferreds with a junk bond yield?

Now, the preferreds are valued at $13, but 7. 3 shares of common are $22.