The Iowa Tea Party was responsible for a billboard comparing Obama to Adolf Hitler and Lenin. Los Angeles Times
A large number of classified documents about the Afghanistan war have been leaked to an organization called WikiLeaks who in turn has allowed the NYT to review them. As suspected, Pakistan intelligence is providing widespread support to the Taliban's war effort against the U.S., including assisting in training of suicide bombers. The documents further show that Pakistan's intelligence service is providing the Taliban with a safe haven in Pakistan. WSJ.com
I was listening to a segment last night on sixty minutes narrated by Leslie Stahl that focused primarily on how large numbers of second and third generation Pakistani's in Britain supporting al Qaeda and terrorism. Toward the end of the segment, Stahl visited some students from the Peshawar and Swat Valley of Pakistan. She was peppered with questions from the Muslim versions of true believers such as why "does democracy lead to homosexuality" and why "do western countries want to destroy Islam". Some students claimed that al Qadea was created as a CIA plot and Osama bin Laden was instructed by the CIA to attack on 9/11 so that the U.S. could wage war on Islam. CBS News
The American True Believers have a "news" network devoted to catering to their beliefs. By definition, a person properly classified as a true believer is out of balance. What is meant by "balance"? I am not referring to having two unknown, generally uninformed people (one with faux blonde hair) present their differing warped views of reality during the same segment. Instead, balance refers to the desire to seek out all relevant and material information on a topic and to assess that information independent of any pre-existing belief system. A True Believer can not perform that simple task. It is just impossible for them.
Instead, the TB seeks out only information that conforms to a pre-existing ideology, formed with inadequate and inaccurate information, and dismisses any information inconsistent with that ideology as unreliable and/or erroneous. In practice, the TB makes a conscious effort to avoid any factual information inconsistent with the ideology, and large number of news outlets will consequently never be assessed by them. In the U.S. the TBs will watch only Fox, listen to the likes of Rush Limbaugh and read the articles written at Newsbusters. While they view themselves as conservative, there is almost nothing consistent with conservatism in their opinions. What is the Appropriate Political Label Distortion of Reality to Serve an Ideology Ideology and Facts: Coexistence Not Allowed Accurate Information is Not a Side to an Issue Going to War Decisions: Conservative or Liberal vs. Competent or Incompetent? Fail to Remember or Refuse to Learn?
The latest example of a lack of balance comes from the widespread dissemination of a heavily edited version of a speech given by Shirley Sherrod. The purpose of the editing, which was done by an unapologetic Andrew Breitbart mistakenly labelled a "conservative" by the NYT, was to deliberately mislead anyone watching it. Misleading Stories About Race Raise Questions - NYT Fox of course ran with the Breitbart video without checking the speech in its entirety, as any real journalist would do. Spreading malicious and untrue stories is not a conservative value. Peggy Noonan, the former speechwriter for Reagan, and a real conservative, wrote an excellent article in the WSJ titled about the The Power of Redemption that has intelligent comments about the speech actually given by Ms. Sherrod as opposed to the one fabricated by Fox and its ally Andrew Breitbart. WSJ's Peggy Noonan: Sherrod was "smeared by right-wing media"; victim of "high-tech lynching" | Media Matters for America
1. United Bankshares (UBSI-own- Regional Bank Stocks Basket Strategy): United Bankshares reported net income of 17.9 million or 41 cents for the 2nd quarter, up from 19 cents in the 2nd quarter of 2009. The consensus estimate was for 40 cents. The NPLs to total loans was 1.35%. UBSI mentioned in the press release that the Federal Reserve has NPLs to total loans at 4.37% for UBSI's peer group, as of 3/31/2010.
"United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 13.1% at June 30, 2010 while its Tier I capital and leverage ratios are 11.7% and 9.6%, respectively. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10%, a Tier I capital ratio of 6% and a leverage ratio of 5%." Net interest margin was 3.69%. I am satisfied with the report. The stock rose 79 cents to close at $25.62 last Friday.
My shares of UBSI were purchaed at $16.65. The dividend yield was almost 7% at that price and UBSI has been raising the dividend annually including 2008. The pace of the dividend rises is slow however. The Morningstar data shows 84 cents in 2000 and $1.17 in 2009. This slow pace would eliminate this bank for consideration under the dividend growth strategy and is one reason why I purchased only 50 shares. In retrospect, I made a mistake in not selling UBSI when the shares crossed $30 in April 2010 and would probably sell this stock if and when the price hits $30 again. That price is probably close to its potential for the five to ten year time frame of the regional bank basket strategy.
2. Kimberly-Clark (KMB)(owned-dividend growth strategy): Kimberly-Clark reported earnings per share of $1.20, seven cents better than expected, with only a 2.8% net increase in revenues (2% organic). KMB purchased 350 million in stock during the second quarter. Sales of consumer tissue products fell 5% in North America and Europe from the 2nd quarter of 2009. In the rest of the world, consumer tissue sales rose 6%. KMB did better in North America with sales of its consumer personal care products with a 7% increase, but sales of those products declined 5% (2% due to currency). Those products include Kotex, Huggies, Poise and Depend. KMB kept its 2010 profit forecast in a range of $4.8 to $5, but leans toward the bottom of that range. It did cut its sales forecast some which seems prudent given the 2nd quarter sales numbers.
3. Verizon (VZ)(owned-Large Cap Valuation Strategy Primary and Dividend Growth Strategy Secondary/And own senior bond in TC form-PJL): After Verizon's dividend yield rose to over 7% due to a decline in the price, I re-purchased 100 shares shares at $26.74. At that price and a yield over 7% in an interest rate environment where the ten year treasury was yielding less than 3%, it just seemed that there was little in the way of downside risk.
Verizon reported earnings of 58 cents excluding charges for the 2nd quarter, two cents better than the consensus estimate. Revenues missed the estimate declining .3% to 26.8 billion. Verizon Wireless added 665,000 contract customers. This handily beat the expectation of 570,000 net adds.
The market reacted favorably toward this report, sending the shares up $1.02 to $28.02. The shares are trading up about 25 cents in early morning trading today.
4. CPP (sold): A reader asked me why I sold this TP, originally issued by a Delaware Trust controlled by Countrywide. LB thinks too much is one reason, and RB just added "the best reason". Part of my reasoning is explained in my email response to that question: