Monday, November 20, 2017

Observations and Sample of Recent Trades: CPB, GE, SIR, VIAB

Economy

Goldman Sachs is predicting 4% real worldwide GDP growth in 2018. Goldman Sachs says 2017 was surprisingly good: CNBC 

This one chart sums up what’s happening to America’s ‘good’ jobs - MarketWatch


Goldman Sachs Sees Four 2018 Fed Rate Hikes as U.S. Growth Gains - Bloomberg


I am certainly positioned for four rate hikes in 2018. I doubt that there will be more than two. The Bond Bookies share that skepticism. The FED will increase the FF rate by .25% next month. That will create a new FF target range of 1.25% to 1.5%. 


As of 11/19/17, the following odds exist for hikes on or before 11/8/18.   




Countdown to FOMC: CME FedWatch Tool

As of last Friday, there was only a 83.6% chance of one rate increase next year. The probability of two increases was only 44.9%. 


Currently, I am predicting an 80%+ probability of two rate increases next year, which would take the range to 1.75% to 2% and a 30%-50% probability for 3. The odds of 4 would be less than 10% IMO. 

  
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Market Commentary


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Joint Committee on Taxation (JCT): Distribution Effects of GOP's Senate Tax Bill




The Secretary of the Treasury Mnuchin says the purpose of the tax cuts is to help the middle class. Republicans defend tax plan as a middle-class tax cut -The Washington Post 


Mnuchin and other republicans claim that the tax cuts for low and middle income taxpayers that are front loaded can be restored and enhanced several years from now when the U.S. deficits and debt are far worse than now. Deficits and the spiraling federal government debt only matter to republicans when the Democrats are in power. A House Republican explains why deficits don’t matter anymore-VoxRepublicans Rally Around Raising the Deficit-The AtlanticAccounting ‘Gimmicks’ in G.O.P.’s Tax Overhaul Mask Higher Cost, Deficit Hawks Say-The New York TimesNew Senate Tax Bill Hides Over $500 Billion of Gimmicks | Committee for a Responsible Federal BudgetThe GOP’s New Tax Plan Proves Republicans Never Cared About the Federal Deficit 

The lower and middle income Trump supporters will never even contemplate the possibility that Donald is going to raise their taxes over time while initially giving them a token tax cut. The JCT estimates that just the inflation measure change will increase individual taxes by $134B through 2027. That change alone increases individual taxes by $.8B in 2018 but that amount accelerates every year thereafter to $31.5B by 2027. It is one of the stealth means used by republicans to increase individual taxes.    

JCT Estimates: Amended Senate Tax Bill Skewed to Top, Hurts Many Low- and Middle-Income Americans 


Who wins and who loses in the GOP Senate tax plan | PBS NewsHour

G.O.P. Senator Explodes at Colleague Who Says Tax Cuts Help the Rich | Vanity Fair (Senator Hatch lives in his own reality creations, unable to digest factual information inconsistent with the cliches that form his thoughts. This remarkable, angry exchange between senators unmasks the GOP’s tax-cut lies-The Washington Post)  


CBPP’s Analyses of the Senate Tax Plan 


Repealing The Estate Tax Could Allow Heirs Of The Very Wealthy To Avoid Tax On Capital Gains | Tax Policy Center


Distributional Analysis of the Tax Cuts and Jobs Act as Passed by the House Ways and Means Committee | Full Report | Tax Policy Center


The comments made by Senator Collins (R-Maine) over the weekend suggests that she is a no vote unless modifications are made to the Senate's "tax reform" bill. Collins Says Tax Plan Passed by Senate Committee Needs Work-Bloomberg Senator Johnson (R-WIS) has already stated that he is a no vote unless tax reductions for small businesses are increased in the bill. Republican Sen. Ron Johnson comes out against tax bill-CNN 

If the GOP manages to pass a tax bill similar to the ones now being considered in the Senate and passed in the House, then their plan is not going to last for long. The Democrats will repeal key parts of it that apply to wealthy individuals and to corporations when they return to power. 


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Trump


The WP has updated its compilation of false statements made by Trump since his inauguration. The number stands at 1,628 as of 11/13/17.  The Fact Checker’s tally of Trump’s false claims since becoming president - Washington Post


If the GOP is a conservative party as republicans claim, which is clearly not the case, then telling the truth and avoiding intentionally misleading statements are no longer conservative values.  


A Panama tower carries Trump's name and ties to organized crime-NBC News


Russian elite invested nearly $100 million in Trump buildings: Reuters


Trump to Lavar Ball: 'I should have left them in jail!'-CNN 

Roy Moore accuser speaks out on TODAY: He ‘seduced me’ at age 14 - TODAY.com

+++++++++++


1. GAVE UP ON GE:


Management and the Board of Directors have run this company into the ground. I do not any faith in their ability to turn the company back to a growth path. The new CEO has a plan, sort of, but then Jeff Immelt had plans too. 


At best, the shares are probably dead money with a current dividend insufficient to support the share price.  In my opinion, the shares are likely to drift lower as more investors abandon the stock after two major dividend slashes since 2008. Even after slashing the dividend by 50%, the payout ratio using free cash flow rather than earnings is high. The 2009 dividend slash was at 68%, going from a quarterly dividend of $.31 per share to $.10. GE Dividend History 


The shares could easily decline sufficiently in the next recession, and those will happen, that my realized profit on this last Fidelity lot would no longer exist if I had continued to hold this 124+ share lot.  


A. Sold Remaining 124+ Shares in Fidelity Account at $18.25-Used Commission Free Trade:



Profit Snapshot: +$774.4





The preceding snapshot includes two earlier transactions this year where I sold at higher prices. Stocks, Bonds & Politics: Item # 3.A. Sold 40 GE at $28.76 (7/12/17 Post)Stocks, Bonds & Politics: Item # 3.A. Sold 80 GE at $29.69 (4/18/17 Post) My instincts to sell GE shares proved to be right while my gut instinct to keep 124+ shares, my lowest cost shares, and to buy 30 more in a Roth IRA was less than optimal. 


The $774.4 number only includes those shares sold on 11/15/17 plus the fractional share liquidated on 11/17. 


I am keeping the 30 shares bought in a ROTH IRA account at $23.9: Stocks, Bonds & Politics: Item # 2 (9/25/17 Post) 


Trading Profits 2007 to Date: +$4,353.8 (see snapshots and links in prior linked post)



2. Sold 50 Viacom at $26.14-Used Commission Free Trade


This lot was recently purchased and declined shortly after my purchase by more than 10% before rising again to change a 10+% loss into a small gain. That is not the optimal result for a trade and at least suggests a lower entry point is achievable. 


The intra-day low on 11/16/17 was at $22.13. From that low to the next day's close, the shares appreciated 18.17%.   


I will likely try again with a lower entry point than my last purchase.





Closing Price Day of Trade (11/17/17): VIAB $26.15 +$2.46 10.38% 


Profit Snapshot: $39.52





Stocks, Bonds & Politics: Item # 7.A. Bought 50 VIAB at $25.35 (10/11/17 Post)


The pop last Friday in price was probably due to reports that both Disney and Verizon were interested in Fox's entertainment content assets. Viacom might be a default choice for one or both of those companies. 

However, there is no publicly available report, to my knowledge, indicating that Sumner Redstone is willing to sell Viacom. It may not be prudent to do so, given his poor physical and mental condition which raises competency and other issues, the estate tax rules now in place that includes the stepped up cost basis to the FMV at the DOD, and the possible increases in the exemption amounts starting next year.  


The market reacted negatively to the earnings report released after my purchase. Viacom Sinks 9%: Trouble Even ‘Teen Mom’ Can’t Fix - Barron's (11/16/17 Post, referring to the intra-day price of $22.4)


Viacom Reports Fourth Quarter and Full Year Growth



While adjusted E.P.S. was 9 cents below the consensus estimate of $.86, I was not expecting much and was not disappointed by the results. There were bright spots in the report. I was contemplating buying more shares after the earnings fueled decline on 11/16, but forgot about it. 

Revenues did increase by 3.2% to $3.32B, beating the consensus estimate of $3.23B. Adjusted E.P.S. did increase 12% over the prior year's fiscal 4th quarter. International revenues increased 24% to $593M and 20% on a constant currency basis. 


The problems include cord cutting and giving distributors lower rates in contract negotiations that lead to lower domestic revenues. Domestic advertising revenues were flat. Affiliate revenue decreased by 1%. 


Earnings Report Discussed at 


Viacom's profit and outlook disappoint, and its Paramount Pictures suffers another loss-LA Times


Viacom expects distributor revenue to drop in 2018; shares sink: Reuters


Viacom Sees Declining Fees from Cable Operators, Sinking Shares - TheStreet


Viacom Earnings: Three Reasons to Still Stay Tuned - Bloomberg


A negative development after I bought the 50 share lot was the collapse of a film financing agreement between Paramount and Huahua Media that resulted in  Viacom taking a $43M loss in the quarter. I would call Paramount a struggling film studio that needs significant financing assistance from third parties.

3.  Sold 50+ CPB at $49.73+ Using Commission Free Trade


History in this Account: 



Closing Price Day of Trade: CPB $49.72 +$1.40 +2.90% 

Profit Snapshot: +$43.21




I realized a loss on the first lot purchased at $51; and a profit on the 20 share lot purchased at $45.71+ and the fractional share bought in one dividend. 


Stocks, Bonds & Politics: Item # 6.A. Added 20 CPB at $45.72 (10/16/17 Post) 


Item #2: Bought Back 30 CPB at $51


The fractional share lot was purchased with a dividend within thirty days prior to selling. Even though the fractional share (.369) purchased with the dividend was sold profitably, the wash sale rule was nonetheless triggered, but only for that fractional share amount rather than the loss associated with the 30 share buy at $51. The result was to deny only a few cents of the loss connected to that 30 share lot.     


AAII: The American Association of Individual Investors (Wash Sale Rules)


I will probably try again when and if the price falls below my last purchase price which could happen with another poor earnings report. CPB is scheduled to report its fiscal 2018 first quarter results on 11/21/17. While it is certainly possible that CPB will report better than expected results, the odds are more in favor of another disappointing quarter. 


Why Campbell Soup’s Fiscal 1Q18 Earnings Could Fall - Market Realist


CPB is yet another falling knife that I am attempting to trade. 


The next ex dividend date is early in January 2018. Campbell Declares Quarterly Dividend 


On 11/9/17, UBS reduced its price target to $42 from $46 and maintained its sell rating.  


4. Intermediate Term Bond/CD Ladder Basket Strategy:

A. Bought 1 Wells Fargo 2.4% CD (monthly interest) Maturing on 11/22/22 (5 year CD):




B. Bought 1 Capital One 2.15% CD (semi-annual interest) Maturing on 11/22/21 (4 year CD):




5. Short Term Bond/CD Ladder Basket Strategy

A. Bought 2 Pacific Premier Bank 1.4% CDs (monthly interest) Maturing on 8/29/18 (9 month CDs)




B. Bought 1 Treasury 1.5% Coupon Maturing on 12/31/18: YTM at 1.52%




C. Bought 1 Wells Fargo 2% CD (monthly interest) Maturing on 11/23/2020 (3 year CD):




D. Bought 2 Treasury 1.5% Coupon Notes Maturing on 1/31/19: YTM = 1.525%




This bond was originally sold as a five year note back in January 2014. The purchase was made in a Vanguard account. That broker does not charge a commission for U.S. treasury trades.


E. Bought 1 Treasury 1% Coupon Maturing on 9/15/18-a Roth IRA Account: YTM =1.452%




F. Bought 1 Whitney Bank 1.2% CD Maturing on 2/14/18-A Roth IRA Account (3 month CD):




The source of funds for this purchase was my Vanguard settlement account which is the Vanguard Federal Money Market Fund that has a .11% expense ratio.


The SEC yield for that fund was 1.01% as of 11/8/17, slightly lower than the 1.14% rate paid by the Vanguard Prime Money Market Fund.


I will keep more funds available for trading in the later fund, but will infrequently move excess funds from the Federal MM fund to the Vanguard Prime MM fund just to receive an additional .13%.


I also own the Vanguard Tax-Exempt Money Market Fund that had a tax free yield of .82% as of 11/8/17 with a .15% expense ratio. At a 25% tax bracket, the Prime MM fund has a slightly higher after tax yield at a 1.14% taxable yield (.8625%) than the Vanguard Municipal MM fund at .82%.

While I do not pay a Tennessee tax on CD interest payments, I currently have to pay a 5% tax on MM fund distributions and at 4% next year. Interest payments from the treasury are not subject to state taxation, so a 1.5% current yield which is free from the Tennessee state tax would beat the 1.01% Vanguard Federal MM yield by .49% and by .53% on an after a Tennessee state tax adjustment at the 2018 tax rate of 4%.


G. Bought 1 Anheuser 1.9% SU Bond Maturing on 2/1/19- A Roth IRA Account:





I recently had 4 BUD SU bonds redeemed early by the issuer. Those bonds had a 1.25% coupon and a January 2018 maturity date. 


This 2019 BUD SU bond was bought in a Roth IRA.  


While I bought this 2019 BUD bond below par value, my $1 commission took the cost number 19 cents over par value. 


Finra Page: Bond Detail


Issuer:  Anheuser-Busch InBev S.A. ADR (BUD) 

Q3 2017  Earnings Call Transcript-Seeking Alpha
Anheuser-Busch InBev reports Third Quarter and Nine Months 2017 Results_EN.pdf

Credit Ratings: 





YTM at Total Cost of 100.019 = 1.883% (bought at 99.919)

Current yield at Total Cost: 1.9% 

For a bond maturing in about 13 months, a tax free yield of 1.88% is acceptable for me in a Roth IRA account where preservation of capital is the paramount objective.


The issuer may elect to redeem this bond early as well. The make whole provision allows for an optional redemption at par value plus accrued and unpaid interest, within three months of the maturity date.


6.  Equity REIT Common and Preferred Stock Basket Strategy:


A. Sold 50 SIR at $25.48-Used Commission Free Trade:




I received one quarterly dividend.


Profit Snapshot: +$126.48




Stocks, Bonds & Politics: Item # 6.A. Bought 50 SIR at $22.95  (9/11/17 Post)


As I discussed in that post, there are a lot things to dislike about this REIT, so any purchase is at the outset intended to be a trade and a dividend capture. The main attraction is the dividend yield. The current quarterly rate is $.51 per share. Select Income REIT (SIR) Dividend History


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.

Friday, November 17, 2017

Observations and Sample of Recent Trades: CNCE, ENB, XRE:CA

Economy:

CPI increased .1% on a seasonally adjusted basis last month while core CPI rose .2%.


On a non-seasonally adjusted basis, CPI increased by 2% over the 12 month period ending in October and core CPI was up 1.8%.




Consumer Price Index Summary;


The government claims that health insurance costs rose .2% for the twelve month period. Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category (negative when seasonally adjusted). That kind of number calls into question all of the BLS numbers.


Nonetheless, the government's official CPI numbers are apparently viewed as credible by the Federal Reserve and will influence its monetary policy decisions. The official CPI numbers are also relevant in computing principal accretion for TIPs and a variety of other matters, including escalations in rent and social security payments. It is economically beneficial to the federal government to understate inflation. 


Core CPI picks up in October, giving green light to Fed hike - MarketWatch


Japan GDP growth streak extends to longest stretch in 16 years - MarketWatch


Foreclosures dropped to lowest on record, Fed data show - MarketWatch


Housing starts boom 13.7% in October - MarketWatch


++++++++


Market Commentary

The U.S. Yield Curve Is Flattening and Here's Why It Matters - Bloomberg


Stock market ‘not even close’ to pricing in tax cuts, says UBS - MarketWatch


There is no question that the GOP's tax reform plan will increase corporate profits and will benefit the shareholder class including foreigners who own about 35% of U.S. publicly traded stocks. Slashing Corporate Taxes: Foreign Investors Are Surprise Winners And, there is no doubt that the GOP's tax cuts for corporations will NOT pay for themselves and will add materially to the nation's burgeoning debt causing an acceleration of the Day of Reckoning.


The question is how much of that cash, saved in taxes, will "trickle down" to workers.


I doubt that it will ever even be possible to measure the amount.


Wages are already growing at close to a 2.5% annual clip using BLS data, and significantly higher using the Atlanta FED's wage  growth model. Competition for workers is accelerating with the nation at or near full employment. The wage/compensation gap between U.S. and foreign workers will still exist, making it more advantageous for U.S. firms to build plant and/or to hire in foreign countries for that reason and many others.


As to whether the market has fully priced corporate tax cuts into earnings, that is pure guesswork.


The more important factor IMO is a synchronized global economic recovery. Economies in Europe, Japan, and other foreign nations are not improving due to potential cuts in U.S. corporate tax rates.


I suspect that the market has not yet completely factored tax cuts for those publicly traded companies that will receive substantial benefits; since their effective tax rates are currently significantly higher than 20% while other corporations are already paying less than 20% due to tax loopholes. Some companies may even experience a tax increase since some loopholes are being closed in the GOP's tax bill. 


Earnings will accelerate significantly for those companies paying over 30% now. There will be some fiscally challenged states who will want to grab some of that cash however. 


+++++++


GOP's "Tax Reform":


Voters disapprove of Republican tax reform plan, Quinnipiac poll says: CNBCNational (US) Poll - November 15, 2017 


DoubleLine's Gundlach Attacks Break for Hedge Funds in Tax Plan - Bloomberg


Government analysis shows House tax bill would increase the cost of college by $71 billion over a decade - The Washington Post (the report is from the official scorekeeper, the Joint Committee on Taxation)

House Tax Bill: Passed 227 to 205 with no Democrats supporting and 13 republicans voting no

There was never any serious doubt that the House would pass a tax cut bill: House passes $1.5 trillion tax bill, cuts rates for individuals and businesses-NBC News The problem will be in the Senate: Senate tax bill cuts taxes of wealthy and hikes taxes on families earning under $75,000 by 2027-The Washington Post The study referenced is from the scorekeeper, the Joint Committee on Taxation, that must be obeyed. 


Most of the main provisions in the House bill, which I previously discussed, are still in the bill. 

All exemption deductions are repealed as the standard deduction is doubled to $12K for single filers and $24K for couples filing jointly. 


A number of deductions are repealed including payments made for state and local income taxes, moving expenses, student loan interest, alimony payments (divorce decrees after this year), tax preparation and medical costs. 


Property tax deductions are allowed up to $10K provided the taxpayer itemizes. 


The AMT is repealed in the bill. 


The estate tax exemption is doubled to $22M for couples and that tax is phased out altogether over a few years. 


The pass through income tax cap of 25% is complicated and limited to 30% of income with the rules inapplicable to service organizations. However, to overcome objections to the prior draft from small business organizations, there is a 9% tax cap on pass through income on the first $75,000 in income for business owners making $150,000 or less. However, that benefit is phased in over the next five years starting in 2018 and ending in 2022. 


The Family Flexibility Credit expires after 2022 which then causes a large percentage of taxpayers paying more in taxes than under current law. 


The inflation measure is changed after 2022 and that will negatively impact individual taxpayers as well. 


The mortgage interest deduction is capped at $500K.


Republican Yes Votes from 4 High Tax States


These congressman voted to increase taxes on a large number of their constituents. 


California: 

Calvert California's 42nd congressional district
Hunter California's 50th congressional district
Lamalfa California's 1st congressional district
McCarthy California's 23rd congressional district
Nunes California's 22nd congressional district
Royce California's 39th congressional district
Valadao California's 21st congressional district
Walters  California's 45th congressional district

New Jersey: 

MacArthur New Jersey's 3rd congressional district

New York
Collins New York's 27th congressional district
Katko New York's 24th congressional district
Reed New York's 23rd congressional district
Tenny New York's 22nd congressional district

Oregon: 
Walden Oregon's 2nd congressional district 

Most of those congressional representatives come from districts where the GOP candidate normally receives over 60% of the vote (California Election Results 2016: House Live Map by District, Real-Time Voting Updates - POLITICO;New York Election Results 2016: House Live Map by District, Real-Time Voting Updates-POLITICO) Tenny from the 22nd NY congressional won received only 47% of the 2016 votes. 


Outside of CA, NJ, and NY, only 1 republican voted against the bill and that was Jones from N.C. 


There are other high tax states where every GOP representative voted to abolish the state income tax deduction: State Individual Income Tax Rates and Brackets 2017 - Tax Foundation Those include the following where the top bracket is over 5%: Georgia, Idaho, Kansas, Kentucky, Iowa, Louisiana, Maryland, Michigan, Missouri, Montana, Nebraska, South Carolina, Virginia, West Virginia, and Wisconsin.


Senate Tax Bill: 



Senate tax bill boosts taxes on stock sales: CNBC (this involves requiring FIFO accounting for stock sales and eliminating specific identification, which I frequently use to lower my tax bill while reducing my average cost per share through selling my highest cost lot(s).) 

The Senate's plan currently makes the corporate tax cuts permanent, but the tax changes for individuals expire at the end of 2025Senate Plans to End Obamacare Mandate in Revised Tax Proposal-The New York Times


Every Tax Cut and Tax Increase in the House G.O.P. Bill and What It Would Cost - The New York Times


Tax experts have found a number of new loopholes created in the GOP's tax plan that will reduce revenue more than currently projected by the JCT. New tax avoidance schemes can legally be created out of several proposals. Haste on Tax Measures May Leave a Trail of Loopholes - The New York Times


The House’s Tax Bill Would Cut Taxes Mostly For The Highest-Income Households | Tax Policy Center

GOP tax plans have makings of suburban revolt against Trump (that headline needs to read "against the GOP" rather than just Trump)

Muni-Bond Market Braces for Borrowing Rush Ahead of Tax Changes - BloombergThere’s One U.S. Market That Loves the GOP Tax Bill - BloombergAffordable housing could lose big in Republican tax plan: CNBCMuni market blindsided by House GOP bond proposals | Bond Buyer


What the GOP does not discuss is that its "tax reform" legislation will cause a mandatory sequestration of spending to offset the loss tax revenue. Medicare spending is subject to that sequestration implemented by the OMB:  CBO Letter Dated 11/13/17 The cuts to Medicare would be limited to $25B in 2018.  Republicans’ tax bill could trigger a $25 billion cut to Medicare All non-exempt programs would be eliminated including some farm subsidies, border security, and student loan help.


Ryan has said that, as soon as he gets the tax bill passed, he will then move to "entitlement reform". In his last effort at "reforming Medicare",  the GOP wanted to double the annual premiums compared to traditional Medicare, a plan that he euphemistically called the "Path to Prosperity", meaning a path to more prosperity for the wealthy receiving massive tax cuts in that plan and a path to bankruptcy for the middle class in their golden years.




Stocks, Bonds & Politics:  GOP's Plan To Bankrupt the Middle Class (7/15/11 Post) Virtually every republican politician in Washington voted for replacing traditional Medicare with Ryan's reform plan. The purpose was to save the government money over the long term by shifting expenses to the elderly, particularly the increases in healthcare costs. 


CBO: Seniors Would Pay Much More For Medicare Under Ryan Plan | Kaiser Health NewsCBO Report 


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Trump


After Trump pulled the U.S. out of the Trans Pacific Trade Agreement,  the other participating nations are continuing to move forward to finalize the agreement without the U.S. Asia-Pacific forum sticks to free-trade gospel despite Trump-ABC NewsTrans-Pacific trade deal advances without United States


Trump made it clear in his recent visit to Vietnam that he wanted only bilateral trade agreements with Asian nations. 


Japan is not biting. Japan dismisses the idea of a two-way trade pact with the US, no matter what Trump wants: CNBC 


Japan, Canada, Mexico and Australia are planning to be parties to a revised Trans-Pacific trade deal.  


Trump’s ‘America first’ looks more and more like ‘America alone’-The Washington Post


Donald Trump Jr. corresponded with WikiLeaks during and after 2016 campaign - CBS News


The Secret Correspondence Between Donald Trump Jr. and WikiLeaks - The Atlantic

What Don Jr.'s conversations with WikiLeaks prove - CNN 


FBI probing Russian payments labelled 'to finance election campaign of 2016': report - MarketWatch


Russian Twitter Trolls Stoked Voter Fraud Fear Before Election - NBC News (as did Donald)


As more problems and issues emerge for Donald and the GOP relating to Russia's interference in the U.S. election, Trump and other republicans are resurrecting all of their claims about Hillary's alleged misdeeds. Jeff Sessions open to naming special counsel to probe Clinton Foundation - CBS News  


During the second Presidential debate, Trump vowed to demand that his Attorney General appoint a special prosecutor to investigate what he had determined were crimes committed by his political opponent:   


“I didn’t think I’d say this, but I’m going to say it, and I hate to say it. But if I win, I am going to instruct my attorney general to get a special prosecutor to look into your situation, because there has never been so many lies, so much deception.” Hillary responded “It’s just awfully good that someone with the temperament of Donald Trump is not in charge of the law in our country.” Trump then interrupted her and said: “Because you’d be in jail!” Transcript of the Second Debate-The New York TimesDonald Trump threatens to jail Hillary Clinton-CNN The main threat to our freedoms comes from within. 


Go ahead and launch multiple investigations into Clinton. It will backfire on the GOP since it reeks of an abuse of power under the circumstances. 


The Clintons volunteered their time and have not received any personal compensation from the Clinton Foundation, which does do charitable work. 


The Clintons take no salary from foundation


Fact-checking the Clinton Foundation controversy | PolitiFact


Where Does Clinton Foundation Money Go? - FactCheck.org 


I have previously discussed the GOP's false statements, which are repeated over and over, about the Uranium One matter. (e.g. The Facts on Uranium One-FactCheck.orgWhat you need to know about Hillary Clinton, Russia, and uranium | PolitiFact


Fox "News" viewers went into a fevered pitch when Shepard Smith told them the truth about the Uranium One story: Fox’s Shepard Smith defends Clinton, debunks Trump, angers viewers-MarketWatch
Fox News’s Shepard Smith debunks his network’s favorite Hillary Clinton ‘scandal,’ infuriates viewers - The Washington Post


You can't handle the truth! (Jack Nicholson) - YouTube 


And, the republicans will surely not mind the Democrats appointing a special counsel to investigate all of Trump's dealings and conduct when he is no longer President. It would seem that would make more sense  than investigating a defeated candidate. 


Might as well include an investigation into Trump's charitable foundation and his use of that foundation as a personal piggybank. How Donald Trump Shifted Kids-Cancer Charity Money Into His Business: Forbes; Trump used $258,000 from his charity to settle legal problems - The Washington PostDonald Trump's Foundation Admits to Violating 'Self-Dealing' Rule | Fortune


The Democrats could start the wide ranging investigation of Trump's actions by compelling the release of Donald's tax returns and then go from there to just about everywhere.  


Maybe that could be done while Donald is still President assuming the Democrats win control over either the House or the Senate in 2018. Broadcast the hearings live on TV-certain to be more entertaining than watching CNBC. Perhaps that investigation could lead to a successful impeachment before his term expires. 


That investigation can focus on how Trump's personal economic interests influenced his policy decisions as President. That is a legitimate inquiry for Congress. Trump denies that he will receive any benefit from the GOP's tax bill.
 “It’s not good for me. Believe me.” Trump and his family could save more than $1 billion under House tax bill - NBC News What do you think a thorough investigation into that area will reveal? 


Trump Shatters Longstanding Norms by Pressing for Clinton Investigation - The New York Times


Senate confirms Trump's controversial pick to lead mine safety - NBC News ("Senate Republicans voted on Wednesday to confirm the former leader of a coal company with a record of serious safety violations to become the country's top regulator of miner health and safety.")


For me, I can only say that I dislike Donald far more than I dislike Hillary.


++++


Republicans and Environmental Protection-The GOP Is the Pro-Pollution Party:


Trump pick for top environmental post. Hartnett White called belief in global warming a 'kind of paganism' - CNN ("There's a real dark side of the kind of paganism-the secular elites' religion now-being evidently global warming." Ann Coulter would be proud of Ms. White's  hyperbole and for what passes in certain circles as informed thought) 

Trump administration talks up fossil fuels at U.N. climate conference - CBS News


Thousands of scientists issue bleak 'second notice' to humanity


EPA's Scott Pruitt: Alarming climate report won't stop rules rollback: USA Today


A behind-the-scenes look at Scott Pruitt's dysfunctional EPA | Center for Public Integrity (most of the 46 political appointees are connected to the polluters regulated by the EPA and climate change doubters)


++++++


AT & T and Time Warner Merger-A Political Aroma Emerges:


There were several reports claiming that the Justice Department conditioned its approval of this merger on the sale of CNN and that Rupert Murdoch had called AT&T's CEO about buying CNN. Exclusive: Rupert Murdoch twice discussed CNN with AT&T CEO: ReutersFox’s Rupert Murdoch Called AT&T’s CEO About CNN - Bloomberg


Trump's hatred of CNN is well known. And, Murdoch's Fox news is a strong supporter of Trump and is the propaganda organ for the GOP. 


It would be an impeachable offense IMO if it was proven that (1) the government tried to condition its approval of the AT & T-Time Warner vertical merger on the sale of CNN; (2) Trump was involved in formulating that condition; and (3) the purpose of the condition was to enable a friendly media empire to acquire CNN and then to have that network undergo what is known as FoxificationAT&T Ready to Probe the White House’s Role in Time Warner Deal-Bloomberg 

The proposed acquisition is a vertical merger in that AT & T is a distributor of media content through DirectTV while TWX is a content provider and no longer competes at the distribution level. Bye, bye Time Warner Cable. Hello Charter - May. 18, 2016


In the past, the Justice Department has allowed vertical mergers to proceed without divestitures, though the department might place "conduct" conditions on its approval. 


Horizontal mergers among competitors, rather than vertical mergers, have in the past included a divestiture condition when the actual impact on competition between competitors is a meaningful issue. 


If the Justice Department changed this policy in order to require divestitures for the T-TWX merger, then that fact alone is certainly suspicious and suggests political intrigue at the highest level.    


Justice Department Has Explaining to Do on AT&T-Time Warner - Bloomberg


As an owner of a few AT & T shares and several AT&T senior unsecured bonds, I would be content to see an end to the merger. The market is saying now that the future for content providers is not bright. 


Moody's did say that a termination of the merger would be a credit positive for AT&T. Moody's says regulatory pressure on AT&T-Time Warner deal creates uncertainty, but a broken deal would be credit positive


++++++++++

Roy Moore:


GOP Senators Believe Roy Moore's Accusers But Not Donald Trump's (what's the difference? There are two key ones with the first being by far the most important. (1) Donald is a republican President who controls the republican base and has remade the GOP in his image, while Moore is an embarrassing Senate candidate for the GOP; (2) Donald has been accused of sexual predation of adult women while Moore is accused of being a pedophile, a bridge too far for some GOP politicians) 


Hannity may learn to choose his words more carefully in the future. Volvo pulls its ads from Hannity after Moore coverage 


Two more women describe Roy Moore's unwanted advances toward teens - MarketWatchTwo more women describe unwanted overtures by Roy Moore at Alabama mall - The Washington Post


Some folks in Gadsden, Alabama remember Roy being barred from entering the a mall since he was cruising for young girls to pick up. Locals Were Troubled by Roy Moore’s Interactions with Teen Girls at the Gadsden Mall | The New YorkerGadsden locals say Moore's predatory behavior at mall, restaurants not a secret | AL.com


Kayla Moore posts support from 50 pastors; 3 ask for their names to be removed | AL.com


New Roy Moore accuser: 'He didn't pinch it; he grabbed it' | AL.com


In Roy Moore’s Senate race, anonymous threats, deceptive texts, alternative facts (too be expected from the creepy crawler wingnuts)


News about men behaving badly has not been in short supply since the dam on Harvey Weinstein broke. (e.g. Woman alleges Senator Franken (D) groped, kissed her without consent - CNN) Donald scolded Senator Franken for his conduct:




Transcript: Donald Trump’s Taped Comments About Women - The New York Times:



When Has Trump Been Accused of Rape or Attempted Rape? Allegations Include a Child, His Wife and a Business Associate: Newsweek


Trump's Sexual Assault Accusers Demand Justice in the #MeToo Era: People Magazine;

Donald Trump sexual misconduct allegations - Wikipedia

++++++++

Orkla:


I received the annual dividend from my 100 share position in Orkla.




The $2.5 is paid to the ADR custodian. Norway withheld as a tax $9.17 which is 15% of the total dividend $61.12). 


The 15% withholding rate means that Fidelity did assert my tax treaty right to no more than a 15% tax rate under Article 10 of the U.S.-Norway Tax Treaty.  


I will generally be able, based on my tax situation, to recover the tax through a foreign tax credit. 


Orkla pays its dividend annually. However, this dividend was a special dividend connected with the disposition of Orkla's 50% stake in Sapa for $27B Norwegian Krone: Orkla to sell its interest in Sapa to Hydro The regular annual dividend is paid in the Spring: Dividends -Orkla 


2017 Third Quarter Results: Continued progress for Orkla 


Stocks, Bonds & Politics: Item # 5 Bought Back 100 ORKLY at $10.05 (9/21/17 Post) 


Orkla ASA ADR Stock Quote 


Orkla is one of several foreign stocks that I will attempt to harvest the annual dividend and then to sell for a profit. 


This ADR will reflect the price of the ordinary shares priced in NOKs converted into USDs. NOK / USD Currency Chart. Norwegian Krone to US Dollar Rates In recent days, the NOK has been losing value against the USD. 


ORK Stock Price - Orkla ASA Stock Quote (Norway: Oslo) 


++++++++


1. Equity REIT Common and Preferred Stock Basket Strategy:


A. Eliminated XRE:CA-Sold 150 Shares at C$16.61 (brokerage commission C$1.5):


Quote: iShares S&P/TSX Capped REIT Index ETF





Profit Snapshot: +C$47




Stocks, Bonds & Politics: Observations and Sample of Recent Trades: Item 1.D. Added 50 XRE:CA at C$16.04 (7/31/17 Post)

Stocks, Bonds & Politics: Observations and Sample of Recent Trades: Item #2.A Bought 100 XRE:CA at C$16.39 (7/19/17 Post)


This sell was motivated by a recent cut in the monthly dividend rate. Two components of this ETF, Cominar Real Estate Investment Trust Units and Dream Office Real Estate Investment Trust, have reduced their monthly distributions. I am not aware of a Canadian REIT that has increased its distribution to offset to those cuts.


Sponsor's Page: iShares Capped REIT Index ETF (monthly distribution cut from C$.07 to C$.061 last month)


2. Short Term Bond/CD Ladder Basket Strategy:

Note: All treasury purchases are commission free as are the CD purchases. I do not have to use commission free trades.


I staggered some treasury bill maturities with one bond coming due per month starting in July 2018 and ending in November 2018, as shown below.


A. Bought 2 Wells Fargo 1.5% CDs (monthly interest) Maturing on 12/24/18 (13 month CD):




B. Bought 1 Treasury 1.375% Coupon Maturing on 7/31/18: YTM 1.375%




C. Bought 1 Treasury 1% Coupon Maturing on 8/15/18: YTM at 1.399%




D. Bought 1 Treasury .75% Coupon Maturing on 9/30/18: YTM at 1.426%


E. Bought 1 Treasury .875% Coupon Maturing on 10/15/18: YTM at 1.475% (Better pricing than Schwab see Item F below):



F. Bought 1 Treasury 1.25% Coupon Maturing on 10/31/18: YTM at 1.448%




G. Bought 1 Treasury 1% Coupon Maturing on 11/30/18: YTM at 1.484%


H. Added 1 Royal Bank of Canada 1.625% SU Bond Maturing on 4/15/19


FINRA PAGE: Bond Detail

Credit Ratings: 



Debt Investors

Bought at a Total Cost of 99.658 

YTM Then at 1.871%
Current Yield at 1.631%

Issuer: Royal Bank of Canada (RY: NYSE)

RY Analyst Estimates


$9K inflow into Short Term Bond/CD Ladder Basket Strategy


3. Added 20 ENB at $36.5 ($1 Commission):  




This is yet another falling knife buyInteractive Chart The stock closed at $41.71 on 11/11/17. The stock did go ex dividend on 11/15.


Enbridge is Canada's largest energy infrastructure business and has recently expanded its U.S. presence through its acquisition of Spectra Energy. Home - Enbridge Inc.



Infrastructure Map-Enbridge Inc. (click Legend Tab to identify asset classifications)

This is an average down from a 30 share buy at $38.2 (6/8/17).   


USD Priced Share Quote: Enbridge Inc.

CAD Price Share Quote: Enbridge Inc. (Canada: Toronto)

I did a quick flip of a 40 share lot in my Schwab account, using commission free trades and holding the lot for less than a month. I sold at $40.2 on 6/27/17:




I kept the 30 share lot bought at $38.2 in my IB account and have now brought that position up to 50 shares. I will average down with a 30 share purchase at or below $34 and another 20 share lot purchase below $30. The first 30 share lot would be sold when and if the price goes over $40.


In my Fidelity account, I am buying 5 and 10 share ENB lots using commission free trades. I will buy up to 100 shares in that account. I am currently at 40 share with an average cost per share of $36.85.I bought 5 shares yesterday at $34.55. Currently, I have 330 unused commission free trades in that account: 





Over the past year, my Enbridge realized gains have been concentrated in two of its reset equity preferred stocks, neither of which are currently owned:


+C$2,793.25:








ENB Dividends Paid in CADs:




Enbridge is currently paying a quarterly dividend of C$.61 per share. The ex dividend date was 11/15, shortly after my last purchase. Enbridge Dividend History


Company Projected Dividend Growth:




The normal currency issues apply to this dividend paid in Canadian dollars to an owner of the USD priced ordinary shares. The dividend yield goes up when the CAD increases in value against the USD and down when it decreases, both compared to the prior dividend amounts and to the constant cost basis that reflects the exchange rate in existence at the time of purchase.    


I do not reinvest dividends in my IB account. I will be reinvesting dividends in my Fidelity account.   


Last Earnings Report


ENB missed expectations, and the market reacted negatively to this report. Enbridge -3% as Q3 earnings miss on lower natural gas volumes - -Seeking Alpha ENB reaffirmed its projection of C$3.6 to C$3.8 per share in 2017 cash flow. The USD priced ENB shares have also been negatively impacted by the recent decline in the CAD/USD conversion rate. 


Enbridge Inc. Reports Third Quarter 2017 Results


Q3 2017 Results - Earnings Call Transcript | Seeking Alpha


Better Buy: Enbridge Inc vs. Kinder Morgan, Inc.: Motley Fool (prefers Kinder to Enbridge)


In a report dated 11/3/2017, Morningstar ranks the stock at 4 stars with a $50 fair market valuation.


In a report dated 11/10/17, S & P gives ENB a 4 star rating with a $43 twelve month price target.


4. Small Cap Biotech Lottery Ticket Basket

A. Sold 20 CNCE (IB Trading Account: $1 Commission)




Profit Snapshot: +$127.33




Stocks, Bonds & Politics: Item # 3.D. Bought 20 CNCE at $13.42 (7/25/17 Post) 

Quote: Concert Pharmaceuticals Inc.


I have no insight into whether the drugs in development and undergoing trials will be successful. I do know that small biotech stocks have been smashed for several weeks now, causing some profitable positions to turn into unrealized losses. 



DisclaimerI 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.