Tuesday, February 21, 2017

Observations and Sample of Recent Trades- 2-22-17 (BSCL, DCPRD,FFHPRG, BBC, SCHC, PGNX)/Trump as Alex Jones' Fake News Parrot/The GOP and The Coal Industry

Alex Jones and His Fake News Parrot:

Mr. Jones believes that 9/11 was an inside job and the massacre of children at Sandy Hook did not occur and was staged by the government.  In Trump’s Volleys, Echoes of Alex Jones’s Conspiracy Theories - The New York Times

FLASHBACK: Alex Jones said 9/11 inside job on the day it happened » Alex Jones' Infowars: There's a war on for your mind!

Alex Jones "Sandy Hook is a SYNTHETIC, COMPLETELY FAKE with ACTORS!!" 01-13-2014 - YouTube

One of his legions of fans took him up on his recommendation that Hillary Clinton's child sex operation known as Pizzagate needed to be investigated further. Alex Jones Pulls Video Urging Fans To Investigate ‘Pizzagate’ After Fan ‘Investigated’ It With A Gun

He also claimed that the government was involved in the Oklahoma City Bombing.

Jones was apparently the first nationally known person to label the press as the enemy of the people.

When California was suffering drought a few years go, Jones suggested that the draught was fake news manufactured to protect a fish, and Trump later repeated that claim.

The Secret Agenda Of The California Water Drought Exposed - YouTubeTrump's 'fishy' statements about the California drought

Another fake news stories promulgated by Infowars and given credence by the parrot was that the press was covering up acts of terror committed by Muslims InfoWars is behind President Trump’s idea that the media is covering up terrorist attacks - The Washington Post

I mentioned Alex Jone's in my last blog. Trump has repeatedly refused to distance himself from Mr. Jones: Why Won’t Donald Trump Denounce Sandy Hook Deniers? - The New YorkerDonald Trump and the “Amazing” Alex Jones - The New Yorker;

Other examples can be found here: Have Conspiracy Theories Gone Mainstream? How Alex Jones and Steve Bannon Pushed Them Into the Spotlight - The Atlantic

In fact, Trump praised Jones in a radio interview:  "Your reputation is amazing. I will not let you down" Donald Trump praises Alex Jones' 'amazing' reputation - CNN

Trump is certainly not letting Jones down.

Many of the "fake news" stories given credence by Mr. Trump originate from Mr. Jones' radio show that is enjoyed by Trump voters nationwide.

A frequent Trump tactic is to accuse others of doing what he is in fact doing. He is the creator of fake news and consequently attacks the news media as fake news when they contradict him with facts. False is True. True is False.

The GOP is not a conservative party.

Border Adjustment Tax:

If the border adjustment tax becomes law, I doubt that the GOP will control the Senate after the 2018 election.

This is an easy issue for middle class white voters to understand. Trump and the GOP promised to help those voters and make America Great Again. And, look what they got for voting for them, a major tax increase to pay for a corporate tax cut. Possibly as many as 80% of Trump voters will not believe it since the Lying Press would be pointing out that Fake News. However, with liberal spending on catchy political ads on their favorite TV channels, up to 20% can be peeled off in the next election.

Border tax could wipe out retail earnings by 50% or more, analyst says

There are other facets of the House plans that can cause bad results as well. The Stock Jocks, mostly loyal Trump supporters, only see what they have been told to see-a 20% corporate tax rate with none of the baggage.

The problem for the GOP is that they are now sowing the seeds for their own defeat.

And for long term investors, it is not going to matter much in the scheme of things to have the GOP tax plan dismantled when the Democrats regain power, and they will, except the next time could see a Democrat party swung into the rich folks confiscation business. Neither Clinton nor Obama were part of the liberal wing of the party, contrary to GOP protestations to the contrary.  That would be Bernie Sanders. When and if that wing has power to pass legislation, you will find out the differences.


Mike Pence-The Reasonable Sounding Donald Trump Clone

I would recommend to the Europeans to ignore Mike Pence and listen to Donald Trump.

Pence said that Trump is a firm supporter of an independent and free press, but both Pence and Trump will continue  "call out the media when they play fast and loose with the facts."  It is just laughable. Was he talking about our Donald? 

The problem is not the media placing fast and loose with the facts, but reporting facts that Pence and Trump do not like. It would be impossible for any truthful person to call Trump's comments as supportive of an independent and free press. 

The Europeans of course see the contradiction between what Pence told them and what has been coming out of Donald's mouth for months. Pence defends Trump media attacks during Brussels trip-CNNMike Pence Tries to Reassure Europe on U.S. Support-Time.com Mike Pence Europe Trip-The New York Times.

Pence does not make policy. He is only the reasonable sounding talk version of Donald Trump.

Trump enjoys creating chaos. I suspect that the Europeans and the Stock Jocks will gradually become more aware that chaos and nihilism are the two new sheriffs in town.  

I do agree with Trump that our Nato allies need to honor their defense spending commitments.


Trump Tackles Regulations To Create More Jobs:

Trump told his enthusiastic supporters at the recent campaign rallies that he had already taken steps to Make America Great Again by eliminating two regulations. This was part of his plan to bring jobs to America. Let's take a look under the hood.

The first elimination was an SEC regulation that required energy and mining companies to disclose payments to foreign governments.

You may be wondering how the elimination of that regulation creates U.S. jobs. If that thought just entered your brain, then you are thinking too much if you are a Trump supporter.

It looks and smells like a craven pay back for the financial support given to republicans by those two industries.

Kevin McCarthy, the GOP House Majority Leader, claimed that the real reason was to relieve an "unreasonable compliance burden on American energy companies that isn’t applied to their foreign competitors”. A big signing: Donald Trump signs a law repealing a disclosure rule for oil companies | The Economist

USA Today: Trump signs legislation to scrap Dodd-Frank rule on oil extraction

Isn't this a coincidence: Yes, ExxonMobil under Tillerson fought oil payment disclosure rule | PolitiFact Global News Service

The other elimination was a pending EPA rule governing the discharge of coal waste into streams and rivers. House to repeal Obama coal rule Wednesday | TheHill; Mountaintop Removal Mining: Digging Into Community Health Concerns

The GOP will say that they are in favor of environmental protection while permitting substantially more pollution. It is part of their True is False and False is True campaign.

One GOP politician claimed that the GOP was "not doing anything negative for the environment" by allowing more toxic substances to contaminate water supply.

At least the GOP was not claiming-yet-that coal slurry in the drinking water provided nourishing minerals.

An independent analysis found that this rule would have protected and improved about 6,000 miles of stream and 50,000 acres of forest between now and 2040.

I doubt that this rule will stop the decline of strip mining in Appalachia. As I have discussed in several posts, electric utility companies are building combined cycle natural gas fired plants to provide both baseload and intermediate generation. That trend is going to continue regardless of whether the stream rule goes into effect.

Combined-Cycle Power Plant – How it Works | GE Power Generation
Power plants with maximum efficiency and state-of-the-art technology - Siemens
Combined Cycle Power Plant Construction - Bechtel
Average utilization for natural gas combined-cycle plants exceeded coal plants in 2015 - Today in Energy - U.S. Energy Information Administration (EIA)

The GOP politicians know all of that since it is widely known except among Trump voters.  I would challenge anyone to find a republican engaging in an honest discussion with their constituents or anyone else about this trend.

The government estimated that this rule would cost 124 coal mining jobs per year.  One of Trump's supporters at his Melbourne Florida campaign stop was gleeful that the rescission of this rule would allow all of the coal miners to keep their jobs.  The Washington Post

The better alternative than permitting more air, water and land pollution would be to devote government resources toward retraining and possibly relocation. That sensible approach is also the losing one for politicians outside of the deep blue states.

There is no question that the coal industry wants to be unshackled from pollution regulations, and the GOP is willing to help.

Murray Energy CEO claims global warming is a hoax

Murray will sue reporters for making claims about his environmental record: Murray Energy vs. WV GazetteCoal Company, West Virginia Newspaper Reach Settlement in Libel Suit | 89.3 WFPL News Louisville

In this particular example involving the stream regulation, it is a question of whether the nation wants less water and air pollution for possibility 126 more jobs in the coal industry. And, while those jobs may be lost in the coal industry, that is not equivalent to saying that those workers are unemployed or are unable to find other jobs that are safer.

After Advancing Scott Pruitt Confirmation, Senator John Barrasso (R-WYO) Heads Over to Energy Lobbyist Fundraiser

GOP senators will say that they are in favor of protecting the environment while arguing that it is important to emasculate the EPA to create jobs. Talk is cheap.

Find out first how much money is given in campaign contributions by the mining and energy industries.

Sen. John A Barrasso: Campaign Finance/Money - Industries - Senator 2016 | OpenSecrets

Then look at what they do rather than what they say. They are without question going to permit more water, air and land pollution. Global warming is a hoax for them because money talks more to the GOP than science.

The EIA last Coal Report was for 2015 and was published in November 2016. Annual Coal Report - Energy Information Administration As of 12/31/15, there were 65,971 persons employed in coal mines. Of that number, 40,045 were employed to work in underground mines and the remaining 25,814 worked on the surface (i.e. strip mining). The number was at 87,755 at the end of Bush's second term.

I will update this post when the 2016 employment numbers become available in order to measure just how successful the GOP will be in bringing back coal mining jobs in return for substantially more pollution. I do believe that the removal of pollution regulations will make the coal companies more profitable, and that is the name of the game.

The coal industry has never had a President and Congress more willing to do its bidding and follow its orders in lock step.

Trump to roll back Obama’s climate, water rules through executive action - The Washington Post

Trump is an environmentalist just like all republicans. Donald Trump, environmentalist?


Trump's Well-Oiled and "Fine Tuned Machine":

Trump claims that his administration is a "well-oiled" machine. He frequently complains about the Democrats challenging his cabinet nominees.

Of the 549 key political appointee positions, Trump has not even named a person for 515.

Donald Trump nominations list

Anyone home in Trumpville? - The Washington Post


Pedophilia appears to be the "red line" conservative Republicans won't cross to side with Trump fan Milo — QuartzCPAC rescinds Milo Yiannopoulos' invitation after swift backlash - Feb. 20, 2017


The Trump White House is already cooking the books - The Washington Post


The appointment of Lt. Gen. H.R. McMaster to replace Flynn is a vast improvement IMO.

McMaster did not have the option to turn down Trump's offer since he is on active duty. Several other retired generals turned down the job. But, in this case, all is well that ends well.


1. Intermediate Term Bond Ladder Basket Strategy-Underweighted

A. Added 1 Centerpoint 2.25% General Mortgage Bond Maturing on 8/1/22 (IB Account)

I now own two of these bonds. The prior 1 bond purchase was at a 98.328 total cost and a 2.579% YTM. 

FINRA Page: Bond Detail

Moody's RatingA1 (01/30/2014)
Standard & Poor's RatingA (02/14/2013)
Fitch RatingA (03/18/2016)

YTM at Total Cost ( 98.805) = 2.485

Moody's  January 2014 Report

B. Bought 2 Exxon 2.709% Senior Unsecured Bonds Maturing on 3/6/25

FINRA Page: Bond Detail (prospectus is not linked)

Final Prospectus Supplement

Moody's RatingAaa (02/25/2016)
Standard & Poor's RatingAA+ (04/26/2016)

YTM at Total Cost (97.61) = 3.045%

2016 4th Quarter Earnings Report

C. Bought 100 BSCL at $21.14 (commission free ETF for Schwab customers)

The Guggenheim BulletShares 2021 Corporate Bond ETF (BSCL) owns investment grade bonds that mature in 2021. The fund will liquidate on or about 12/31/21. 

As of 12/31/16, the average duration was 3.92 years. The fund then owned 343 investment grade bonds.

Sponsor's Website: BSCL (expense ratio .24%)

Fund Holdings 

Dividends are paid monthly at a variable rate: Fund Details

D. Bought 1 WFC 2.1% Senior Unsecured Maturing on 7/26/21

Moody's RatingA2 (07/20/2016)
Standard & Poor's RatingA (07/20/2016)
Fitch RatingAA- (10/04/2016)

YTM at Total Cost (98.103) = 2.553%

E. Bought 2 Entergy Louisiana First Mortgage Bond Maturing on 10/1/2026

I bought 1 in my IB taxable account ($1 Commission)

I bought 1 in my Vanguard Roth IRA account, which at least turns this first mortgage bond into a tax free one. I have to pay $2 per bond in my Vanguard accounts. 

S & P raised the rating of this issuer's secured bonds to A from A- last August. Moody's apparently stopped rating this issuer's secured debt in 2015. It was last rated by Moody's at A2.   

FINRA Page:  Bond Detail (prospectus is not linked here)

Prospectus (IPO Late September 2016)

YTM at Total Cost (94.715 ) = 3.037%
YTM at Total Cost Roth IRA (94.65 ) = 3.045%

The price had fallen some when I bought this bond in my Vanguard account which resulted in a higher YTM even with the $1 extra commission.

However, when I placed that order, Fidelity had an even lower price for a one bond lot:

The Vanguard order book did not display the 254 bonds available at 94.387 with a 1 bond minimum.

Make Whole Provision: 

The issuer can redeem at par plus accrued interest on or after 7/1/2026. 

2. Long Term Bond Basket Strategy-Substantially Underweighted

A. Bought 1 TIP with a 2.5% coupon maturing on 1/15/29

Bond Detail
Adjusted Principal Amount = $1,124.25
Inflation Factor 1.12425
Original Issue Date: 1/15/2009 (20 Year TIP)
Premium Payment Over Adjusted Principal = $259.72
Originally Issued 1/15/2009: TIPS/CPI
Reference CPI Dated Date 1/15/09 = 214.69971
Reference CPI 2/9/16: 241.37557

Stocks, Bonds & Politics: TIP Trading in the Secondary Market

Update On Buying TIPs In The Secondary Market - South Gent | Seeking Alpha

The Mechanics Of Purchasing A TIP In The Secondary Market - South Gent | Seeking Alpha

B. Sold 1 Qwest Capital Senior Unsecured Maturing in 2031

FINRA PAGE:  Bond Detail

QWEST was acquired by CenturyLink Inc.  (CTL).

I discussed this purchase in a 1/4/17 comment that can be found here. As noted in this comment, I owned in the past fixed coupon Trust Certificates that had this bond as their underlying security.

Fitch has a BB+ rating. Fitch Places CenturyLink's BB+ on Negative Credit Watch

3. Continued Profit Taking in Canadian Reset Equity Preferred Stocks:

A. Sold Highest Cost DCPRD Shares at C$13.81

Profit: C$50.5

I discussed buying those shares here: 

Item 5. Bought 100 DCPRD: 50 at C$13.45 and 50 at C$13.1-IB Taxable AccountUpdate For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 8/25/16 - South Gent | Seeking Alpha

I am keeping a 50 share lot bought at C$12.27 (11/22/16).

This Dundee equity preferred stock is viewed as high risk.  

This reset equity preferred stock pays cumulative dividends at a 4.1% spread to the three month Canadian treasury bill. 

B. Sold Remaining 50 shares of FFHPRG at C$18.4:

Profit Snapshot: C$168.5

I include Canadian reset equity preferred stock in my equity preferred floating rate category. Snapshots of round-trip trades can be found here: Stocks, Bonds & Politics: Advantages and Disadvantages of Equity Preferred Floating Rate Securities

Profit = $19,339.54 (all small lots)

4. Continued Paring of Stock Allocation:

A. Eliminated the ETF SCHC:

Profit on 63+ Shares: +$67.93

Quote: Schwab International Small-Cap Equity ETF  (SCHC)

This Schwab ETF can be traded commission free by Schwab customers. When paring my stock allocation, I will toss a number of ETFs that are at my portfolio's fringe, and a 63+ share position in an international small cap stock ETF qualifies as an inconsequential holding and a source for cash.  

B. Eliminated BBC Again: Sold 30 at $21.24

Quote BioShares Biotechnology Clinical Trials Fund (BBC)

Profit Snapshot: +$77.18

This ETF is extremely volatile. The stocks owned by this fund do not have approved drugs, but are clinical stage biotech companies. When there is a drug failure, the price generally collapses and soars on positive news about an ongoing trial or an FDA approval. When the company receives an FDA approval, it will be taken out of this ETF during the next semi-annual rebalancing and reconstitution.

BBC Fund Chart

Biotechnology Clinical Trials Fund


I use this fund as part of my Small Cap Biotech Lottery Ticket Basket Strategy: Update on Small Cap Biotech Lottery Ticket Basket Strategy

C. Sold 50 PGNX at $10.42:

Profit Snapshot: +$216.11

2017 PGNX 50 Shares +$216.11
The stock popped on news that it was going to be added to the S & P 600: 

Closing Priced 2/16/17: PGNX $10.54 0.92 9.56% : Progenics Pharmaceuticals Inc.

Progenics Pharmaceuticals and Shutterfly to Join S&P SmallCap 600

I bought this lot at $5.95 last July: Item # 4 Bought 50 PGNX at $5.94-Update For Healthcare Basket Strategy As Of 7/29/16-Growing Lottery Ticket Component - South Gent | Seeking Alpha

5. Short Term Bond/CD Ladder Basket Strategy

A. Bought 2 Potash 3.25% Senior Unsecured Bonds Maturing on 12/1/17

FINRA Page: Bond Detail

Moody's assigns Baa1 rating to Potash Corp's notes; under review for downgrade

YTM at Total Cost (100.950) = 2.04%

Potash may redeem this bond now but will have to pay a make whole payment.

Pages S-11 and S-12: Prospectus

Any optional redemption prior to the maturity date requires Potash to make that payment. It would be the sum of the principal amount plus all remaining interest due on the note discounted to present value using the comparable treasury rate plus .2%. Since the bond matures in December, the comparable treasury rate would be less than 1 year. The discount rate would be slow since the 1 year treasury bill was trading at .79% when I bought this bond. Any shorter maturity would have a lower yield. As the discount rate moves lower, the make whole payment goes up. I can not calculate the make whole redemption amount but would generally note that it would require a slightly lower payment than the sum of principal amount ($1K per bond) plus the interest payments at 3.25% owed to the maturity date.

Last December, Potash sold $500M in a 4% coupon senior unsecured bond maturing in 2026. In the Use of Proceeds section of that bond's prospectus, POT stated that it may redeem the 3.25% note maturing in December 2017. Prospectus

If Potash does not redeem early, then I will lose some on the bond but the FINRA calculation on the YTM at my total cost would be 2.04%. If Potash redeems early, that number will change based on the variables then existing (time to maturity and the discount rate).

B. Bought 1 TransAmerica Pipeline 1.625% Senior Unsecured Bond Maturing on 11/9/2017

FINRA Page: Bond Detail (prospectus is not linked)

Moody's at A3
S & P at A-

YTM at Total Cost = 1.438%

This security can be called at the greater of par value "or a discount rate of Treasury plus 12.5 basis points". FWP I interpreted it as a make whole provision that would use the sum of the principal amount ($1K) and the remaining interest due until maturity discounted to present value using the comparable treasury yield plus 12.5 basis points. I found the  Prospectus which confirmed that interpretation.

C. Bought 2 Guildford Savings CDs .65% (monthly interest) Maturing on 7/24/17

D. Bought 2 People's National CDs .55% Maturing on 5/17/17:

These low yielding, short term CDs are view only as a better alternative to idle cash sitting in the Fidelity Government MM fund: SPAXX - Fidelity ® Government Money Market Fund | Fidelity Investments The current seven day yield has been stuck at .2% for awhile. Taxable Money Market Funds - F (Alphabetically) - Barron's

E. Bought 2 U.S.T.s at Auction-Treasury Direct Account:

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members

Sunday, February 19, 2017

Observations and Sample of Trades (UMPQ, GMTA, GJO, DLRPRI, MRK): 2/19/17/ Trump The Classless/Trump as the Victim of a Fake News Conspiracy

Trump as the Victim of a Massive Fake News Conspiracy

The Kremlin ordered "its" media to cut back on their fawning Donald Trump coverage. I can see why Donald admires Putin so much.  

Donald tweeted the other day demanding an apology from the failing New York Times "and others".

"Leaking, and even illegal classified leaking, has been a big problem in Washington for years. Failing New York Times (and others) must apologize"

I agree. The NYT and Washington Post need to apologize for reporting about (1) pre-election communications between members of Trump campaign and Russian intelligence officers and (2) for reporting that Flynn had mislead the VP and others about his Russian contacts and was considered a security risk by the intelligence agencies.

Let me now apologize to Donald on my hands and knees for every true statement that I have made about him. I do not want to end up in jail like the CNN guy on SNL who is behind bars and in his underwear at the press conferences. (at 5:09: Sean Spicer Press Conference (Melissa McCarthy) - SNL - YouTube)

Another tweet published at the same time came up with a cogent explanation why the Lying Press was reporting false stories. It is a conspiracy to improve their circulation numbers. 

"FAKE NEWS media, which makes up stories and "sources" is far more effective than the discredited Democrats--but they are fading fast!"

All of the recent news stories about Donald's Russia issues originate from Democrats who are just trying to explain why they lost the election so badly.

"The Democrats had to come up with a story as to why they lost the election, and so badly (306), so they made up a story-RUSSIA. Fake news!"

DT Tweets 2/16/17: Donald J. Trump (@realDonaldTrump)

If I understand Donald's "thinking" correctly, the Democrats conspired with the intelligence community and the Lying Free Press to conjure up this Flynn story and prior contacts between Russia and Trump's campaign which Trump has repeatedly denied ever took place. 

The Failing Lying Press cooperated in this Fake News conspiracy apparently to slow down their rapid movement into bankruptcy by temporarily increasing their revenues with the Fake News.

I am having some difficulty in following Donald's train of "thought" so feel free to correct me if my characterization of those tweets is in error. Perhaps, when I am deep into dementia, somewhere short of being totally brain dead, it will become clear to me. 

As far as I can tell listening to Donald, the only trustworthy news sources are Breitbart, Rush Limbaugh, Sean Hannity, the Fox and Friends show, and Alex Jones' Infowars which claims that Sandy Hook Elementary School massacre that resulted in 20 children being murdered was staged in an effort to take away our guns and to increase the government's tyrannical power. 

Why Won’t Donald Trump Denounce Sandy Hook Deniers? - The New Yorker

Donald Trump and the “Amazing” Alex Jones - The New Yorker

USA Today: Fact check: President Trump's press conference falsehoods

Trump is upset that the intelligence agencies concluded that Russia interfered in the election on his behalf.  Intelligence community says Putin ordered campaign to influence election, 'denigrate' Clinton His remedy is to shoot the messenger.  


Trump's Thursday News Conference: A Total Lack of Class But That is Not News

In his news conference last Thursday, Donald continued ranting and raving against the Lying Press. 

Some will be comforted by Donald's assurance that he was not ranting and raving:

"Tomorrow, they will say, "Donald Trump rants and raves at the press." I'm not ranting and raving. I'm just telling you. You know, you're dishonest people. But -- but I'm not ranting and raving. I love this. I'm having a good time doing it.
But tomorrow, the headlines are going to be, "Donald Trump rants and raves." I'm not ranting and raving."
Maybe he is ranting and raving about not ranting and raving. 

The True Believers would not characterize the following as rants but the whole truth, and nothing but the Truth: 

“Many of our nation's reporters will not tell you the truth.”

 “The press honestly is out of control.” 

“The level of dishonesty is out of control.”

These kind of repetitive statements are key features in Trump's authoritarian and demagogic dialogue with his 60+M followers who believe those statements and view Trump as the real Truth Teller.  

Trump was in one of his best reality creation modes since he become President. Sure things become garbled here and there:

"And, you know, you can talk all you want about Russia, which was all a, you know, fake news, fabricated deal, to try and make up for the loss of the Democrats and the press plays right into it. In fact, I saw a couple of the people that were supposedly involved with all of this -- that they know nothing about it; they weren't in Russia; they never made a phone call to Russia; they never received a phone call.
It's all fake news. It's all fake news. The nice thing is, I see it starting to turn, where people are now looking at the illegal -- I think it's very important -- the illegal, giving out classified information. It was -- and let me just tell you - it was given out like so much.  ...  it's an illegal process and the press should be ashamed of themselves. But more importantly, the people that gave out the information to the press should be ashamed of themselves, really ashamed."
If he was my Dad, I would have to take away his keys. 

He is taking the position that all of the recent disclosures about Russian and his campaign are fabrications by the failing New York Times and other papers: 

"TRUMP: The failing New York Times wrote a big, long front-page story yesterday. And it was very much discredited, as you know. It was — it’s a joke. And the people mentioned in the story, I notice they were on television today saying they never even spoke to Russia. They weren’t even a part, really — I mean, they were such a minor part. They — I hadn’t spoken to them. . . . And I can tell you, speaking for myself, I own nothing in Russia. I have no loans in Russia. I don’t have any deals in Russia. . . Russia is fake news. Russia — this is fake news put out by the media. The real news is the fact that people, probably from the Obama administration because they’re there, because we have our new people going in place, right now. . . . I have nothing to do with Russia. I told you, I have no deals there, I have no anything. "

Transcript And Analysis: Trump Press Conference On Labor Secretary, Russia, 'Fake News' | WBUR News

The Curious World of Donald Trump’s Private Russian Connections - The American Interest

Donald Trump delivers a series of raw and personal attacks on the media in a news conference for the ages - The Washington Post

I wonder what Donald means when he says the leaks were real but the news was fake

Think about that for a few seconds, which should be all the mind chewing necessary. 

The only way to reconcile those two thoughts, assuming one is still a rational and sane human being with at least five functioning brain cells, is that real facts were given to the Lying Press and then the Lying Press created Fake Facts/Fake News from those Real Leaks. 

If the media was only reporting what was told to them by sources in the intelligence community, then the leaks were real and the news was true, and the later is what got our Dear Leader into a lather. 

Trump needs to release his tax returns so we can see for ourselves whether he has any business interests relating to Russia. He is not going to do so since it would be damaging to him.  

The White House petition calling on Donald to release his tax returns now has over 1 million signatures.

Petition the White House on the Issues that Matter to You | We the People: Your Voice in Our Government  

As I have been saying for over a decade now, and maybe you have to live in the heartland to see it clearly, the greatest danger to our freedoms and democracy comes from within the U.S. 

I do wonder whether Russia is sitting on incriminating evidence involving Trump. If Russia wants to cause more chaos in the U.S., it might be more beneficial to leak whatever they may have through WikiLeaks, their favorite route, rather than trying to blackmail Trump. The U.S. is ripe for chaos now and creating chaos for no sane reason is Trump's specialty.  

Russian dossier on Trump gaining credibility with law enforcement - CBS News

Is the FBI taking the Russian dossier about Trump more seriously? - CSMonitor.com


Just Another Example of Donald's Lack of Class 

During the news conference, Our Dear Leader was asked the following question by an orthodox Jewish reporter Jake Turx: 

“what we are concerned about and what we haven’t really heard being addressed is an uptick in anti-Semitism and how the government is planning to take care of it. There’s been a report out that 48 bomb threats have been made against Jewish centers all across the country in the last couple of weeks. There are people committing anti-Semitic acts or threatening to——”

Trump cut him off saying "not a fair question"  and then said "sit down". 

Trump then volunteered again that he was least racist person that ever existed. 

The reporter tried to say something and Trump told him to be "quiet, quiet, quiet".  Sit down and shut your mouth. 

A Jewish Reporter Got to Ask Trump a Question. It Didn’t Go Well. - The New York Times

'Telephone terrorism' rattles 48 Jewish centers - CNN.com

In 2016, people have read anti-Semitic tweets 10 billion times, many from Trump supporters - The Washington Post

Surge in Anti-Semitism Alarming American Jewish Leaders | Fortune.com

ADL Audit: Anti-Semitic Assaults Rise Dramatically Across the Country in 2015

The CEO and National Director of the Anti-Defamation League Jonathan Greenblatt wrote an article asking why Trump had such difficulty in rejecting racism and hatred: President Trump thinks asking him to condemn anti-Semitism is ‘insulting.’ Why? - The Washington Post 

In the same news conference, Trump asked a black reporter April Ryan to arrange a news conference with the Black Congressional Caucus since they are her friends. Trump asks black reporter to schedule meeting with Congressional Black Caucus-ABC News Just another example of Trump's total lack of class.

Cummings' office denies canceling meeting with Trump - POLITICOCummings: Trump made up a story about me - CNNPolitics.com


Flynn's FBI Interview

Flynn in FBI interview denied discussing sanctions with Russian ambassador - The Washington Post

If the CBS sources are correct, and Flynn is not charged with lying to the FBI, then Jeff Sessions may at least have to explain his decision. CBS News reported last Friday that the Justice Department will probably not charge Flynn due to a "lack of evidence".
Michael Flynn unlikely to face charges for lying to FBI, sources say - CBS News

I have zero confidence that Comey and Sessions will do their jobs when it conflicts with the interests of the GOP. And, the republicans in Congress will nothing that would sink the Trump Presidency.  He is furthering their reactionary agenda. 


New Immigration EO Coming: 

Trump did state in his news conference that a new immigration EO will be signed next week. 

The government's brief filed with the Ninth Circuit  on the 2/16 also mentions that a new EO will be coming. Supplemental Brief for Defendants on En Banc Reconsideration The brief indicates to me that the government has some good lawyers now working to provide legal cover for Trump. However, I found sections of the brief to be farcical (e.g. starting at page 16).

I am assuming that some of the bad lawyering that led to defects in the first EO will be corrected, and the new EO will likely survive court challenges. 

The EO, for example, will disguise the Christian exception much better and will exclude legal U.S. residents from its scope. 

More discussion will likely be made on the alleged security threat issue. 

Given the wide authority granted to the President to implement travel bans for security purposes, this is one area where a President can abuse his power fairly easily with bad motives. 

One of those motives practiced by other demagogues throughout history is to whip up fear and anger. A minority group will be the focus. The demagogue then takes decisive and strong actions in dealing with the threats created or exaggerated for the purpose of acquiring and maintaining power. 

This group believes Islam threatens America: ‘It’s a spiritual battle of good and evil.’ - The Washington Post

So a temporary travel ban will survive legal challenges. Later, "extreme vetting" measures will be adopted that will in practice bar entry to Muslims from several nations including all Muslim Syrian refugees. This will mostly be out-of-sight, out-of-mind. 

Maybe Trump needed to engage first in extreme vetting of his cabinet nominees and his former national security advisor.  


L├╝genpresse: The Free Press As Public Enemy # 1   

McCain: Dictators 'get started by suppressing free press' - CNNPolitics.com

At least there is one republican willing to point out the obvious.  The Democrat politicians are far too passive about Trump's authoritarian tendencies.

The GOP is not a conservative party but a deeply reactionary one that now IMO threatens core American values. For the first time in our history, a far right demagogue has been elected President and is receiving succor from virtually all republican politicians. As demagogue's go, I can not name one who lies anywhere near as much as Trump. True has indeed become false and false is now true under Trump.  It is already a done deal. 

No modern American President  has made a statement like this one: 


"The FAKE NEWS media (failing , , , , ) is not my enemy, it is the enemy of the American People!"

Donald J. Trump (@realDonaldTrump) | Twitter

Lock Them Up, Lock Them Up, Lock Them Up, Lock Them Up, Lock Them Up  

White House chief of staff says take Trump seriously when he calls press "the enemy" - CBS News

I was reminded of Joseph Goebbels after reading that Trump remark. The Nazi propaganda minister was fond of calling Jews "enemy of the people".  Goebbels on the Jews (1941)

The GOP's 5+  decade effort, starting with Richard Nixon and Spiro Agnew, to demonize the free press and and to undermine confidence in voting results and voting rights has been an unqualified success.   

Donald Trump is the natural and inevitable result of those efforts. For about 1/2 of the voting population, true is now false and false is true. 

It is not just talk either. The Trump Administration will abuse its power in efforts to silence criticism. A recent example was reported by the WSJ. Jared Kushner Delivers Critique of CNN to Time Warner Executive - WSJ 

Time Warner and AT & T need the government's approval to merge. The clear message sent to the Time Warner executives and its Board is to change their coverage of Trump or pay the consequences. (For those without WSJ subscriptions: WSJ: Jared Kushner Rips CNN in Time Warner Meeting

This is only the beginning. Trump and his supporters will not change. 

The U.S. will lose a considerable amount of goodwill and prestige in the world over the next four years. I view that as inevitable now.     

"The indifference about the distinction between truth and lies is the precondition of fascism. When truth perishes so does freedom"-Simon Schama


Stock Jocks-Nothing But Blue Skies

All of the foregoing is irrelevant to the Stock Jocks who only see blue skies ahead. 

Trump's clear authoritarian tendencies and unwillingness to learn information that is not contained in a picture or a map will not be regarded as relevant until his many shortcomings as President have a discernible negative impact on the economy. The odds of negative consequences flowing from this bizarre character are currently given a zero probability by the Stock Jocks IMO. 

When it comes to intelligence briefings, 'the president likes maps' | MSNBC

Turmoil at the National Security Council, From the Top Down - The New York Times

Perhaps, someone needs to give him some crayons and a national security coloring book.  I sort of like coloring things myself. However, I would use my crayons to color parts of a real 6 page briefing memo rather than one dumbed down for Our Dear Leader. 

This is what Trump said about a Russian ship patrolling in international waters near the U.S.: 

" If we could get along with Russia, that's a positive thing. We have a very talented man, Rex Tillerson, who's going to be meeting with them shortly and I told him. I said "I know politically it's probably not good for me." The greatest thing I could do is shoot that ship that's 30 miles off shore right out of the waterEveryone in this country's going to say "oh, it's so great." That's not great. That's not great. I would love to be able to get along with Russia."  
Just a bizarre and incredible statement. If Obama or Clinton had made that statement, the millions of Trump Trolls would have lit the internet on fire with their poisonous venom.

Russia spy ship patrolling off U.S. East Coast - CBS News 

It is not difficult to imagine his conversations with world leaders such as the Australian P.M. and Mexico's President. 

I am continuing to move slowly down a long ramp leading to my bunker. 

1. Intermediate Term Bond Ladder Strategy- Underweighted

A. Bought 2 AT & T 2.45% Senior Unsecured Bonds Maturing on 6/30/2020

FINRA Page: Bond Detail

Moody's RatingBaa1 (08/29/2016)
Standard & Poor's RatingBBB+ (04/23/2015)
Fitch RatingA- (10/24/2016)

YTM at Total Cost (99.743) = 2.53%

I now own 4 of this 2020 AT&T bond.  

B. Bought 2 JPM 2.4% Senior Unsecured Maturing on 6/7/21

FINRA Page: Bond Detail

Moody's RatingA3 (06/02/2016)
Standard & Poor's RatingA- (06/01/2016)
Fitch RatingA+ (12/13/2016)

YTM at Total Cost (99.433) = 2.539%

C. Bought 2 Southern 2.375% Senior Unsecured Bonds Maturing on 6/1/20:

Finra Page: Bond Detail
Moody's RatingBaa1 (05/13/2016)
Standard & Poor's RatingBBB+ (05/15/2015)
Fitch RatingBBB+ (05/12/2016)

YTM Total Cost (99.954) = 2.389%

2. Continued Paring Stock Allocation:

A. Eliminated Umpqua (UMPQ): Sold 50+ at  $19.09+

Profit Snapshot: $194.75 

The 50 share lot was purchased on 11/8/16 and was discussed here. South Gent's Comment Blog # 4

The current 2017 E.P.S. estimate is $1.24. UMPQ Analyst Estimates The forward P/E based on a $19.09 share price and that consensus estimate is 15.39 which I view as being high for this bank.

I am also becoming more concerned that investors have made to many optimistic assumptions about regional bank earnings. 

There are already rumblings that Dodd-Frank will remain largely intact. Trump’s Top Legislative Goals Are Bogged Down - Barron's ("Even opponents of the law concede that chances are slim that it will be abolished, because this is a measure that would require 60 votes in the Senate.")

Yield spreads have not been expanding this year when you look at short term rates compared to the five and ten year treasury yields. Deposit costs on shorter term CDs are starting to reprice at higher levels. A .25% increase in the FF rate is likely on or before the July 2017 FED meeting. Countdown to FOMC - CME Group The odds as of last Friday were at 73.8% of at least one .25% move up and at 30.7% for more than one .25% increase. A .25% increase on or before the June meeting is currently at 67.4%.

3 Month Treasury Bill 

11/8/16 .43%
1/3/17  .53%
2/17/17 .53%

5 Year Treasury Note:

11/8/16 1.34%
1/3/17   1.94%
2/17/17 1.92%

10 Year Treasury Note

11/6/16 1.88%
1/3/17 2.45%
2/17/17 2.42%

2016 Daily Treasury Yield Curve Rates

2017 Daily Treasury Yield Curve Rates

I am not sure what regional bank investors are seeing this year in terms of net interest margin expansion. It is possible that a rise in the FF rate will cause yield compression which is what happened in 2004 when the Fed started to increase that rate from a 1% starting point. The first .25 increase was in June 2004:

I compressed this 10 year treasury chart to start in June 2004 when the 10 year was near 4.9%:

In June 2005, one year into the tightening cycle, the ten year yield was near 3.9%. The Federal Funds rate was then at 3% with the 3 month Libor near 3.4%. CPI had risen from 1.6% in 2002 to 3.4% in 2005.

10-Year Treasury Constant Maturity Rate-St. Louis Fed
Effective Federal Funds Rate-St. Louis Fed
3-Month London Interbank Offered Rate (LIBOR)-St. Louis Fed
Consumer Price Index, 1913- | Federal Reserve Bank of Minneapolis

I have bought and sold this stock several times as part of my regional bank strategy.

The lowest prices paid were $12.05 and $11.53 as a LT: Item # 2 Bought 50 UMPQ at $12.05 (10/22/12 Post); Item # 6 Bought 30 UMPQ as LT at $11.53 (5/4/11 Post)

Total UMPQ Trading Gains = $534.88


B. Sold 113+ Merck at $65.28

Profit Snapshot: +$741.19

The primary reasons for this sell were profit taking and the ongoing reduction in my stock allocation. 

One secondary reason is that Merck had yet another drug failure: Merck Announces EPOCH Study of Verubecestat for the Treatment of People with Mild to Moderate Alzheimer’s Disease to Stop for Lack of Efficacy 

Another secondary reason is that Merck's stock has been in a funk since hitting $95 in 2001: MRK Stock Chart 

Merck and Pfizer were amazing stocks starting in the early 1980s into the late 1990s. Peak prices were hit almost two decades ago. 

My 2016 MRK trading gain was smaller: 

2016 MRK 50 Shares +$183.54
3. Continued Paring Recently Bought Potentially Long Duration Exchange Traded Bonds

This pare leaves with 90 GMTA shares. 

A. Sold 20 GMTA at $25.17 (used commission free trade)

Quote: GATX Corp. 5.625% Senior Notes due 2066 (GMTA)

GATX is an Exchange Traded baby bond with a $25 par value. It is traded like a stock on the stock exchange.

I sold on the quarterly ex-interest date which was 2/13/17. The shares remained unchanged from the 2/12 close which simply means that they gained back the entire interest payment.  
Using FIFO accounting, this 20 share was the highest cost lot left in my Schwab account: 

Profit Snapshot  +$44.25

I also own 40 shares in a Roth IRA account bought at $21.76: 

I am inclined to keep those shares due to the tax free nature of the interest payments. The yield at $21.76 is about 6.45%. I discussed purchasing that lot here.

GMTA is a senior unsecured exchange trade bond that has a 5.62% coupon applied to a $25 par value.  Unless redeemed early at the issuer's option, the bond will mature on 5/30/2066. The issuer may elect to redeem at par value plus accrued interest on or after 5/30/21. 

GATX's senior unsecured bonds are rated at Baa2 and BBB. I am not currently concerned about credit risk. The potentially long duration creates an abundance of interest rate risk. The fact that the bond bull market started in 1982 is also a matter of concern. There is such an animal as a long term bond bear market and the last one lasted about 32 years. 

I consequently have a hair trigger on these long duration bonds where interest rate risk is asymmetric in favor of the issuer. 

If interest rates decline and it is advantageous for the issuer to redeem at par, then the bond's owners will have to accept a lower yield for a similar quality bond or invest the proceeds in lower quality bonds to achieve the same yield. 

On the other hand, if interest rates rise significantly, and the value of the bond goes down in price, the issuer will allow the owner to keep the bond. Heads the issuer wins, tails the issuer wins. 

The only interest rate protection in a ETB for its owners is the issuer generally can not redeem the bond within five years after the IPO.    

4. Short Term Bond/CD Ladder Basket Ladder Strategy

A. Bought 2 Great Southern .75% (monthly interest) CDs Maturing on 11/22/17

I am continuing to build a maturity cluster between 11/1/17-1/31/18 since I anticipate a .25% rise in the FF rate at the FED's December 2017 meeting.

B. Bought 2 Sterling Bank .75% CDs Maturing 9/11/17

C. Bought 1 Southern California Edison 1.25% First Mortgage Bond Maturing on 11/17/17

FINRA Page: Bond Detail (Prospectus Linked at Finra Page)

YTM at Total Cost = 1.081%

The prospectus contains a standard make whole provision that uses the comparable treasury rate plus 7.5 basis points.

This bond was issued in November 2014.

The issuer could redeem now, but would not be able to refinance another 3 year mortgage bond with a lower coupon and similar maturity. On the day of my purchase, a 3 year treasury was trading at a 1.54% yield.

The last preferred stock or bond sold by Southern California was last March, and that was the 5.45% fix to floating rate equity preferred stock SCEPRK.  I still own a similar security, SCEPRJ but may pare the position.

5. Continued Paring Recently Bought and Potentially Long Duration Equity Preferred Stocks:

A. Sold 50 DLRPRI at $26.67-$26.72

Stock Quote: Digital Realty Trust Inc. 6.35% Cumulative Preferred Series I Stock (DLR.PI) 

Digital Realty Announces Closing Of 6.350% Series I Cumulative Redeemable Preferred Stock Offering


I got an an odd fill on a limit order at $26.67:

Profit Snapshot: +$86.23

DLRPRI Trading History in this Account:

I discussed the purchase of that lot 

I had previously sold 100 shares in that account at $26.375, realizing a $181.55 gain:

I still own 50 shares of DLRPRI in a Roth IRA account:

I discussed that purchase here: 1. Bought 50 DLRPRI at $24.59-ROTH IRA: Update For Bond And Preferred Stock Basket Strategy As Of 9/10/15 - South Gent | Seeking Alpha

I also still own 50 shares of DLRPRF in the Schwab taxable account. 

I discussed that purchase here

DLRPRI Prospectus 

Digital Realty Trust Inc. 6.625% Cumulative Preferred Series F Stock (DLR.PF) closed last Friday at $25.49 which translates into a 6.5% yield at that price. DLRPRI has a lower coupon at 6.35% and closed at $26.32 last Friday. Both stocks are equity preferred stocks that pay cumulative dividends and have $25 par values. 

There is a reason for this anomaly. What is it?   

6. Sold 50 GJO at $21.52

 Profit Snapshot: +$81.06

GJO is a Synthetic Floater that pays a .5% spread over the 3 month treasury bill with a 7.5% maximum coupon on a $25 par value. The underlying bond in the GJO Trust Certificate is a WMT senior unsecured bond maturing on 2/15/30. Prospectus The Trust Certificates matures on the same day.

The current monthly interest payments are not going to help me with my nursing home expenses:

2/15/17 = $1.59

I have a history of trading this security in small lots.

Snapshots of round-trip synthetic floater trades are included in my Trust Certificate Gateway Post.

Stocks, Bonds & Politics: Trust Certificates: New Gateway Post

My net realized gains in this Exchange Traded Bond niche category now stands at $29,646.11, all in small lots. 

An exchange trade bond is traded on the stock exchange and trades flat which simply means that whoever owns the security on the ex-interest date receives the entire payment and does not have to pay accrued interest to the seller at the time of purchase.  

I may use the proceeds to buy another 50 shares of GJT, but not unless I can hit an ask price lower than $18. I currently own 150 shares. I last discussed that security here: Item # 2 Added 50 GJT at $17.55: Update For Exchange Traded Bonds And Preferred Stocks Basket Strategy As Of 4/14/16 - South Gent | Seeking Alpha

GJT is another synthetic floater that makes monthly interest payments at a .8% spread over the U.S. 3 month T Bill rate on a $25 par value. This security has a maximum coupon of 8%. The underlying security is an Allstate senior unsecured bond maturing on 4/1/36. With GJT, I have a .35% greater spread to the 3 month Treasury Bill and a lower price. The credit quality is not that much different, with Allstate senior debt currently rated at A- by S & P and A3 by Moody's. The owner of these synthetic ETB's bear all of the credit risk of the underlying bonds. 

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members