Trump's Time Magazine Interview:
Time interviewed Donald about "truth and falsehoods" that was part of its recent cover story Trump Truth: The President With False Claims Faces Reality | Time.com
Trump Interview on Truth and Falsehoods | Time.com
Trump wanted to know what he said in the past was wrong. He then proceeded to give demonstrably false and misleading information in response to the interviewer's questions. Fact-checking Trump’s TIME interview on truths and falsehoods | PolitiFact; All of the untrue things Trump said in his Time interview about truth - The Washington Post
Maybe I did not understand TrumpCare. Donald stated throughout his campaign and earlier in his presidency that his plan would be “unbelievable,” “beautiful,” “terrific,” “less expensive and much better,” “insurance for everybody.” Garbage just flows out of his mouth as if being pumped directly out of a landfill.
+++++++++++
New Car Sales:
New car sales may have peaked near prior recovery peaks.
New cars are taking longer to sell than they have since 2009 - MarketWatch
Light Weight Vehicle Sales: Autos and Light Trucks-St. Louis Fed
++++++++
Consumer Debt:
There are cracks appearing in the consumer debt market.
Bank Card Default Rate Hits 42 Month High in January.pdf
Just Released: Subprime Auto Debt Grows Despite Rising Delinquencies Liberty Street Economics (NY FED)
Auto loan delinquency numbers from NY Fed - Business Insider; Some 6 million Americans are delinquent with auto loans and it’s going to get worse - MarketWatch
Overall, consumer credit delinquencies remain benign, though the S&P/Experian Consumer Credit Default Composite Index has risen from .81 (May 2016) to .94 last month. The ten year high was at 5.51 in May 2009.
The preceding link also has information on the bank card default which was at 3.22. The low was hit at 2.49 in December 2015 and has been trending up. The high was hit at 9.15 in April 2010.
++++++++
U.S. Debt Ceiling Limit: Out of the Headlines and Apparently Forgotten:
The federal government has to have a new debt limit. The Treasury is once again using extraordinary measures to pay the government's bills. What's the debt limit and why is Congress about to raise it again?
Is there going to be smooth sailing with no government shutdown or government default? That appears to be the current consensus assumption. The problems in securing an increase started with Newt Gingrich and the GOP back in 1994-1995 which resulted in government shutdowns. There were two debt ceiling conflagrations during the Obama Administration. The first was in 2011 and the last one in 2013. The government went into a partial shutdown in October 2013.
The GOP will generally act irresponsibly on debt ceiling increases when there is a Democrat in the White House. Fitch may be right that a crisis may be more unlikely this year since the GOP owns the debt limit increase and may consequently behave in a responsible manner. I doubt that will happen. If I am right, bad vibes will start to appear in the summer. My pessimism about such matters has been exacerbated by reading this book: It's Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism - Kindle edition by Thomas E. Mann, Norman J. Ornstein. So far, I am about half way through this book, and my disgust is at an elevated level.
Moody's: U.S. Debt Limit Not Doomsday Scenario...Yet | Fox Business
+++++++++++
Last week, I mentioned that I was done paring my stock allocation. That proved to be a premature statement. I sold into the rally today. My stock allocation remains significant, however. I have continued to purchase every day high quality investment grade bonds. I may take about 4 to 6 weeks before I get around to discussing today's bond buys and stock sells.
I have added small positions to higher yielding REITs that have come down in price.
++++++++
1. Intermediate Term Bond Ladder Basket Strategy:
Time interviewed Donald about "truth and falsehoods" that was part of its recent cover story Trump Truth: The President With False Claims Faces Reality | Time.com
Trump Interview on Truth and Falsehoods | Time.com
Trump wanted to know what he said in the past was wrong. He then proceeded to give demonstrably false and misleading information in response to the interviewer's questions. Fact-checking Trump’s TIME interview on truths and falsehoods | PolitiFact; All of the untrue things Trump said in his Time interview about truth - The Washington Post
Maybe I did not understand TrumpCare. Donald stated throughout his campaign and earlier in his presidency that his plan would be “unbelievable,” “beautiful,” “terrific,” “less expensive and much better,” “insurance for everybody.” Garbage just flows out of his mouth as if being pumped directly out of a landfill.
+++++++++++
New Car Sales:
New car sales may have peaked near prior recovery peaks.
New cars are taking longer to sell than they have since 2009 - MarketWatch
Light Weight Vehicle Sales: Autos and Light Trucks-St. Louis Fed
++++++++
Consumer Debt:
There are cracks appearing in the consumer debt market.
Just Released: Subprime Auto Debt Grows Despite Rising Delinquencies Liberty Street Economics (NY FED)
Auto loan delinquency numbers from NY Fed - Business Insider; Some 6 million Americans are delinquent with auto loans and it’s going to get worse - MarketWatch
Overall, consumer credit delinquencies remain benign, though the S&P/Experian Consumer Credit Default Composite Index has risen from .81 (May 2016) to .94 last month. The ten year high was at 5.51 in May 2009.
The preceding link also has information on the bank card default which was at 3.22. The low was hit at 2.49 in December 2015 and has been trending up. The high was hit at 9.15 in April 2010.
++++++++
U.S. Debt Ceiling Limit: Out of the Headlines and Apparently Forgotten:
The federal government has to have a new debt limit. The Treasury is once again using extraordinary measures to pay the government's bills. What's the debt limit and why is Congress about to raise it again?
Is there going to be smooth sailing with no government shutdown or government default? That appears to be the current consensus assumption. The problems in securing an increase started with Newt Gingrich and the GOP back in 1994-1995 which resulted in government shutdowns. There were two debt ceiling conflagrations during the Obama Administration. The first was in 2011 and the last one in 2013. The government went into a partial shutdown in October 2013.
The GOP will generally act irresponsibly on debt ceiling increases when there is a Democrat in the White House. Fitch may be right that a crisis may be more unlikely this year since the GOP owns the debt limit increase and may consequently behave in a responsible manner. I doubt that will happen. If I am right, bad vibes will start to appear in the summer. My pessimism about such matters has been exacerbated by reading this book: It's Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism - Kindle edition by Thomas E. Mann, Norman J. Ornstein. So far, I am about half way through this book, and my disgust is at an elevated level.
Moody's: U.S. Debt Limit Not Doomsday Scenario...Yet | Fox Business
+++++++++++
Last week, I mentioned that I was done paring my stock allocation. That proved to be a premature statement. I sold into the rally today. My stock allocation remains significant, however. I have continued to purchase every day high quality investment grade bonds. I may take about 4 to 6 weeks before I get around to discussing today's bond buys and stock sells.
I have added small positions to higher yielding REITs that have come down in price.
++++++++
1. Intermediate Term Bond Ladder Basket Strategy:
A. Bought 1 Ventas LP 3.5% Senior Unsecured Bond Maturing on 2/1/25:
Issuer: Ventas Limited Partnership, a wholly owned operating partnership of Ventas (VTR)
Fully and Unconditionally Guaranteed by Ventas, Inc.
VTR Ventas Page at Morningstar
Finra Page: Bond Detail (prospectus linked):
Credit Ratings:
Moody's at Baa1
S & P at BBB+
Fitch at BBB+
Moody's affirms Ventas's Baa1 senior debt rating; stable outlook
Credit Ratings | ventasreit
YTM at Total Cost (97.484) = 3.873% ($1 Commission)
Company Website: Welcome | ventasreit
Ventas Reports 2016 Fourth Quarter and Full-Year Results
B. Bought 1 Ventas LP 3.25% Senior Unsecured Bond Maturing on 10/15/26:
Moody's affirms Ventas's Baa1 senior debt rating; stable outlook
Credit Ratings | ventasreit
YTM at Total Cost (97.484) = 3.873% ($1 Commission)
Company Website: Welcome | ventasreit
Ventas Reports 2016 Fourth Quarter and Full-Year Results
B. Bought 1 Ventas LP 3.25% Senior Unsecured Bond Maturing on 10/15/26:
FINRA Page= Bond Detail
YTM at Total Cost (95.074) = 3.871% ($2 commission)
Ventas SEC Filings
2016 Annual Report (senior notes listed on page 114)
YTM at Total Cost (95.074) = 3.871% ($2 commission)
Ventas SEC Filings
2016 Annual Report (senior notes listed on page 114)
C. Bought 2 Baltimore Gas & Electric 2.8% Senior Unsecured Maturing on 8/15/22:
Issuer: BG&E is a wholly owned subsidiary of Exelon Corp. (EXC:NYSE)
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A3
S & P at A-
Fitch at A-
Fixed Income Investors - Investor Relations
Fitch Rates Baltimore G&Es Senior Notes 'A-'
YTM at Total Cost (99.46) = 2.908%
Sourced From Page 279: 2016 Exelon Annual Report
Exelon has lower credit ratings largely due to its ownership of Exelon Generation Company, LLC.
D. Bought 2 Commonwealth Edison 3.15% First Mortgage Bonds-ROTH IRA:
Issuer: Commonwealth Edison is a wholly owned subsidiary of Exelon (EXC)
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A2
S & P at A-
Fitch at A
Fitch Upgrades Commonwealth Edison First Mortgage Bonds to A from A- YTM at Total Cost (99.384) = 3.191%
E. Bought 1 AvalonBay 2.85% Senior Unsecured Bond Maturing on 3/15/23:
Issuer: Avalonbay Communities Inc (AVB:NYSE)-A REIT
AVB AvalonBay Communities Inc Page at Morningstar
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A3
S & P at A-
Moody's upgrades AvalonBay to A3, outlook stable
YTM at Total Cost (97.712 ) = 3.273%
I previously discussed buying 1 AVP SU maturing in 2026: Item # 1.C.
Issuer: BG&E is a wholly owned subsidiary of Exelon Corp. (EXC:NYSE)
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A3
S & P at A-
Fitch at A-
Fixed Income Investors - Investor Relations
Fitch Rates Baltimore G&Es Senior Notes 'A-'
YTM at Total Cost (99.46) = 2.908%
Exelon has lower credit ratings largely due to its ownership of Exelon Generation Company, LLC.
D. Bought 2 Commonwealth Edison 3.15% First Mortgage Bonds-ROTH IRA:
Issuer: Commonwealth Edison is a wholly owned subsidiary of Exelon (EXC)
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A2
S & P at A-
Fitch at A
Fitch Upgrades Commonwealth Edison First Mortgage Bonds to A from A- YTM at Total Cost (99.384) = 3.191%
E. Bought 1 AvalonBay 2.85% Senior Unsecured Bond Maturing on 3/15/23:
Issuer: Avalonbay Communities Inc (AVB:NYSE)-A REIT
AVB AvalonBay Communities Inc Page at Morningstar
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A3
S & P at A-
Moody's upgrades AvalonBay to A3, outlook stable
YTM at Total Cost (97.712 ) = 3.273%
I previously discussed buying 1 AVP SU maturing in 2026: Item # 1.C.
F. Bought 2 Boston Properties 3.125% Senior Unsecured Bond Maturing on 9/1/23:
Bought 1 in a Taxable Account ($1 commission)
Issuer: Wholly Owned Operating Partnership of Boston Properties (BXP)-A REIT
Fully and Unconditionally Guaranteed by BXP
BXP Boston Properties Page at Morningstar
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at Baa2
S & P at A-
Fitch at BBB+'
Fitch Rates Boston Properties' Senior Unsecured Notes Due 2026 'BBB+'; Outlook Stable
YTM at Total Cost (99.088) = 3.283%
Bought 1 in a Roth IRA Account ($2 Commission):
Boston Properties Website
2016 Boston Properties Annual Report
Earnings Report Q/E 12/31/16
I previously discussed buying 1 BXP SU maturing in 2026: StockItem # 1.A.
2. Small Cap Biotech Lottery Ticket Basket:
A. Added 50 SPHS at $2.43 (commission free trade):
This brings me up to 150 shares. I recall discussing this stock somewhere, but do not remember where or when.
Success or failure depends on one compound currently called PRX-302 (topsalysin):
Sophiris Bio Reports Successful Results from Completed Phase 2a Study of Topsalysin in Localized ("The one-time administration of topsalysin was well tolerated with no serious adverse events and no new safety signals being reported. Topsalysin demonstrated an ability to ablate tumor cells in 50 percent of patients (9/18 patients) six months after treatment in a patient population with pre-identified, clinically significant prostate cancer. ... Two men experienced complete ablation of their targeted tumor with no evidence of any tumor remaining at 6 months .... Seven men experienced a partial response, defined as either a reduction in the maximum cancer core length or a reduction in Gleason pattern... Nine patients had no response to treatment.")
The drug is injected directly into the prostate.
The company used the price spurt to sell 7.475M shares and related warrants to buy .75 shares per warrant at $4 per share at a combined price of $4. 10-Q at page 14
That offering sent the shares spiraling down.
The next important event is the release of more tumor biopsies, sometime in the second half of this year, in the ongoing Phase IIb trial for prostrate cancer.
"Topsalysin has also successfully completed a Phase 3 clinical study for the treatment of the symptoms of benign prostatic hyperplasia (BPH), and is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects seen with existing treatments."
That was one of two necessary Phase 3 trials for that indication.
The company stated in its 10-Q for the Q/E 9/30/16 that it is "currently not planning on pursuing a second Phase 3 trial in BPH, unless we secure a development partner to fund such new clinical trial or obtain other financing. There can be no assurance that such funding or a development partner will be available on acceptable terms or at all. For that reason, we cannot currently estimate when the clinical development required to seek the regulatory approvals needed to commercialize topsalysin for the treatment of the symptoms of BPH will be completed" (page 19).
Subsequent to my purchase, SPHS reported results for the 2014 4th quarter: Sophiris Bio Reports Fourth Quarter and Full Year 2016 Financial Results and Key Corporate.
3. Continued to Pare Stock Allocation:
A. Sold 50 of 171+BBT:
Position Snapshot Before Pare:
Sold 50 Shares at $47.24-Highest Cost Lot Bought at a total cost of $35.37 on 9/23/15:
Profit Snapshot: +$586.45
Quote: BB&T Corp. (BBT)
I discussed that purchase here:
Item # 3. Bought 50 BBT at $35.23-Satellite Taxable Account: Update For Regional Bank Basket As Of 9/23/15 - South Gent | Seeking Alpha
Some of the remaining lots were acquired in exchange for my National Penn shares. BB&T closes National Penn acquisition
I discussed buying 50 shares, which I still own, here:
Item # 3. Added 50 BBT at $32.35-Satellite Taxable: Update For Regional Bank Basket Strategy As Of 2/20/16 - South Gent | Seeking Alpha
BB&T - Dividends and Stock Splits
BBT Analyst Estimates
When I sold this highest cost lot, the consensus E.P.S. estimate for 2016 was $2.95 and $3.45 next year. The P/E on the 2018 estimate at a $47.24 price is 13.69. While that sounds reasonable and may happen, I have my doubts that this bank can generate that kind of Y-O-Y earnings growth. There are a lot of optimistic assumptions baked into that 2018 E.P.S. estimate including a meaningful net interest margin expansion, less regulations and probably a lower tax rate.
I doubt that GOP will be able to deliver on material changes in Dodd-Frank. Whatever rules are repealed, I suspect that they will involve small community banks. I am not seeing conditions yet favorable NIM expansion. Instead, the yield curve is flattening as the FED raises short term rates and intermediate term rates start to trend back down. As to a meaningful corporate tax cut, I will believe it when I see it.
Subsequent to my purchase, SPHS reported results for the 2014 4th quarter: Sophiris Bio Reports Fourth Quarter and Full Year 2016 Financial Results and Key Corporate.
3. Continued to Pare Stock Allocation:
A. Sold 50 of 171+BBT:
Position Snapshot Before Pare:
Sold 50 Shares at $47.24-Highest Cost Lot Bought at a total cost of $35.37 on 9/23/15:
Profit Snapshot: +$586.45
I discussed that purchase here:
Item # 3. Bought 50 BBT at $35.23-Satellite Taxable Account: Update For Regional Bank Basket As Of 9/23/15 - South Gent | Seeking Alpha
Some of the remaining lots were acquired in exchange for my National Penn shares. BB&T closes National Penn acquisition
I discussed buying 50 shares, which I still own, here:
Item # 3. Added 50 BBT at $32.35-Satellite Taxable: Update For Regional Bank Basket Strategy As Of 2/20/16 - South Gent | Seeking Alpha
BB&T - Dividends and Stock Splits
BBT Analyst Estimates
When I sold this highest cost lot, the consensus E.P.S. estimate for 2016 was $2.95 and $3.45 next year. The P/E on the 2018 estimate at a $47.24 price is 13.69. While that sounds reasonable and may happen, I have my doubts that this bank can generate that kind of Y-O-Y earnings growth. There are a lot of optimistic assumptions baked into that 2018 E.P.S. estimate including a meaningful net interest margin expansion, less regulations and probably a lower tax rate.
I doubt that GOP will be able to deliver on material changes in Dodd-Frank. Whatever rules are repealed, I suspect that they will involve small community banks. I am not seeing conditions yet favorable NIM expansion. Instead, the yield curve is flattening as the FED raises short term rates and intermediate term rates start to trend back down. As to a meaningful corporate tax cut, I will believe it when I see it.
4. Continued to Pare Potentially Long Duration Exchange Traded Bonds:
A. Sold 50 ELJ at $24.93-Roth IRA:
Profit Snapshot: $61.48
I discussed this purchase here.
Par value is $25. The issuer has the option to redeem on or after July 1, 2017. If not redeemed early at the issuer's discretion, the bond matures on 7/1/2052.
Definitive Prospectus Supplement
5. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 Merchants Bank .65% CDs Maturing on 5/2/2017:
B. Bought 2 Bank of Baroda .95% CDs Maturing on 6/27/17:
Bank of Baroda - India's International Bank
Bank of Baroda Financials (59.24% owned by the State of India, line 17 (i))
Recently, this bank has been providing the highest short term CD rates among participating banks that offer CDs at Schwab and Fidelity. This CD is issued by Bank of Baroda, USA.
This is what this CD looks like on my account page which identifies the issuer:
C. Bought 2 Bank of Baroda .8% CDs Maturing on 5/30/17:
In the cluster list shown below, there is listed 1 Bank of Baroda .65% CD maturing on the same day, 5/30/17 or .2% less than the one bought on 3/17/17. I had bought the .65% CD on 2/24/17:
The intervening event between those two purchases was the FED hiking the FF range by .25% to .75% to 1%. Banks respond more slowly to increasing their short term deposit rates after a FED rate hike. Many banks have not yet responded in their CD offerings.
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
