Observations and Sample of Recent Trades ( ELC, MPW)

Economic Reports: 

CPI rose .2% in April on a seasonally adjusted basis with core CPI increasing .1%.  Core CPI was unchanged when combining March and April. 

On a non-seasonally adjusted basis, CPI was up 2.2% Y-O-Y.   

Consumer Price Index Summary

Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category

Energy costs have contributed to Y-O-Y inflation numbers for several months, but that is about to change. West Texas Intermediate is currently range bound between $46 to $50 per barrel which would be basically flat Y-O-Y starting with the May 2016 numbers: Cushing, OK WTI Spot Price FOB (Dollars per Barrel)

The Atlanta Fed's GDP model is currently forecasting a robust rebound in the second quarter: GDPNow - Federal Reserve Bank of Atlanta

Retail sales picked up in April from an upwardly revised March number. Retail sales rose a seasonally adjusted .4% in April. March was revised to up .1% from down .2%. There was a big jump in gasoline sales based primarily on a price increase.  And, note the decline in general merchandise sales and the surge in nonstore retail sales. (see table 1) 

Overall, last week's economic reports were positive.

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China's economic activity widely slows in April - MarketWatch

Oil Jumps as Saudis, Russia Favor Extending Output Deal to 2018 - Bloomberg

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Mostly Politics: 

Obstruction of Justice and the Impeachment Clause of the U.S. Constitution: 

Trump gave the following rationale for terminating Comey in an NBC interview:  


“In fact, when I decided to just do it, I said to myself, I said, ‘You know, this Russia thing with Trump and Russia is a made up story, it’s an excuse by the Democrats for having lost an election that they should have won.’”

Trump said he was thinking of Russia controversy when he decided to fire Comey - The Washington Post; Partial transcript: NBC News interview with Donald Trump - CNN 

One of the few impermissible reasons for firing Comey was the one given by Trump. The reason given is relevant evidence to a criminal obstruction of justice charge against Trump.  

Another possible event relevant to a criminal obstruction of justice charge would be asking the FBI Director for loyalty under the then existing circumstances. Trump denies that he made such a request. 

Trump asked James Comey to pledge his loyalty to him - CBS News; Trump says James Comey "better hope that there are no 'tapes'" of conversations - CBS News

18 U.S. Code Chapter 73 - OBSTRUCTION OF JUSTICE; Does firing James Comey put Trump in legal jeopardy? - CBS News  

Lawrence Tribe, a professor of constitutional law at Harvard, argues that there are already grounds for impeachment. Trump must be impeached. Here’s why. - The Washington Post 

That argument is a moot point. 

There is not a single republican member of the House Judiciary Committee that would even request the initiation of an inquiry, let alone actually vote for impeachment. 

Unless Trump starts to publicly hang Journalists on the White House lawn, with Trump giving the thumbs down on nationwide TV with 100+ nuns as live witnesses, each of whom personally viewed and tousled the orange hair to confirm his identity, the GOP will not start impeachment proceedings against Trump.  

Remember that the republicans voted to impeach Bill Clinton for obstruction of justice even though he was never charged with that felony. A precedent was then set by the GOP that requires a far lower standard of proof for impeachment compared to a criminal conviction. That kind of effort, which was doomed in the Senate, only creates a more dysfunctional government ruled by hyper partisanship for political gain and power. 

It goes without saying that the GOP would never even consider applying the same impeachment standard to a republican President that they applied in the Clinton impeachment proceedings. 

Most republicans in the House Judiciary Committee refused to impeach Nixon even when it was shown beyond any reasonable doubt that he had committed felonies while exercising Presidential powers.  

The obstruction of justice charge against Clinton dealt with his efforts to cover up his sexual relationship with Monica Lewinsky while he was President. House impeaches Clinton - December 19, 1998 The GOP did a good job of setting him up knowing he would lie about it.  

Experts: Trump's Alleged Conversations With Comey Improper - NBC News

Current and Former FBI Officials Dispute Trump Account of Meeting With FBI Director - NBC News

President Trump Unleashes on Fired FBI Director James Comey and 'Fake Media' - NBC News

Trump Offers New Account of Firing ‘Showboat’ Comey-The New York Times; Trump calls Comey 'showboat,' acting FBI chief contradicts president | Reuters

If Comey is a "showboat" and a "grandstander" as Trump claims, what does that make Trump, easily the most bombastic, egomaniacal and narcissistic President in U.S. history? Trump Told He Would Not Be Greeted Warmly at FBI: Officials - NBC News Donald, as stated on the ancient Greek Temple at Delphi, "Know Thyself". Know Thyself | Psychology Today

FBI Acting Chief Disputes Trump on Comey -Bloomberg;

FBI Russia investigation: "There's a whole lot of interfering going on" - CBS News


Poll: Majority of Americans Think Comey's Dismissal Was Not Appropriate - NBC News (79% of republicans believe it was appropriate)


National (US) Poll - May 10, 2017 - U.S. Voters Send Trump Approval to Near Record Low- Quinnipiac University Connecticut  

There was a question in the Quinnipac poll that asked what is the first word that comes to mind when you think of Donald Trump. Idiot was at # 1, followed by incompetent and then liar. My first response would be "liar" though "asshole" would be a close second. 

AP Analysis: Trump thrusts US presidency into perilous area - The Washington Post

NBC/WSJ Poll: Just 29 Percent Approve of Trump's Firing of James Comey - NBC News

Michael Hayden, a 4 star retired general and a CIA Director appointed by Bush Jr., made the following recent comments about what has happened so far under the titular head of the republican party: 

"In 110 days, the president has fired a national security adviser, an acting attorney general and the director of the FBI. This kind of behavior is not normally associated with a mature Western democracy. It's associated with autocratic populist states I have lived enough in the world. .... I have seen how thin the veneer of civilization is. You just have that concern. People, be careful. We're not guaranteed this kind of life that we have experienced for the last period of time."

Ex-CIA Chief Michael Hayden: 'America as Nicaragua'

George Will noted that Trump suffers from a "dangerous disability". Trump is not only ignorant and ignorant of his ignorance, but he also does not "know what it is to know something".  Trump’s ‘Dangerous Disability’? It’s the Dunning-Kruger Effect - Bloomberg

Political chaos in Washington is a return on investment for Moscow - The Washington Post

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Trump Establishes Vote Fraud Commission - NBC News; Trump Is Said to Pick Voter ID Advocate for Election Fraud Panel - The New York Times

With the nomination of Kris Kobach to be the Vice Chairman of Trump's voting fraud commission (Pence is the Chairman), the clear signal being sent is that the Commission's real purpose is to rubber stamp Trump's fictional claims of voting fraud in order to impose more restrictive voting requirements and thereby to further undermine that fundamental right for those who do not vote the right way including college students and the poor.  

Facts do not matter to either Kobach or Pence, so both are ideal choices for the GOP to lead this so-called republican controlled voting fraud commission: 

Kris Kobach is a big fraud on Kansas voter fraud | The Kansas City Star; 

Trump pick of Kobach for voter fraud panel sparks outrage | McClatchy Washington Bureau

Trump's bogus voter claim just got deadly serious (Opinion) - CNN

Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression

As ID Laws Fall, Voters See New Barriers Rise - The New York Times

The greatest danger to America's Democracy is internal and involves the deliberate and long standing efforts to undermine institutions and processes that are essential to a properly functioning Democracy.  

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More than 8 out of 10 republicans believe that Hillary's email problem was worse than the crimes committed by Richard Nixon. Morning Consult; Revisiting Clinton and Classified Information - FactCheck.org     

Trump: 'Maybe I'll Release' Tax Returns After Leaving White House - NBC News

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It is certainly possible that Trump will become so radioactive and toxic that the republican's agenda will bog down. There is an intersection where politics can have a non-temporary influence on stock prices. Most of the time, stock prices are governed by powerful economic forces that are largely immune from the Washington circus. 

Looking at a 100+ year chart of the DJIA, it would not be possible to predict stock prices based on the political tribe then in power or the periods when there was a division in power. Possibly the only conclusion that could be drawn is that catastrophic stock market declines occur when a republican is President. (1929-1932, 1974, 2000-2002, 2008)  

Historical Chart Gallery-StockCharts.com (bear markets are readily identifiable in that chart and will generally show a roller coaster ride, with one catastrophic phase, that goes nowhere for an extended period) 

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Snapshots of Income Received 5/15/17-One Taxable Account: 

My investment strategy is based in part on creating a steady flow of income from an extremely diversified portfolio of assets. The following two snapshots are from my Fidelity taxable account and do not include the monthly distributions paid by my Canadian REITs on 5/15/17. 

I had one short term bond mature on the 15th. I have already reallocated the proceeds from all short term bonds and CDs, which mature between 5/1/17 through 9/30/17, to the purchase of Tennessee municipal bonds maturing in 10+ years. The total reallocated from short to longer term maturities was $120K.  It will be several weeks before I mention here all of those purchases. 

I have discussed so far the following ($50K): 

Stocks,Item # 4.A. Bought 5 Knoxville Water Bonds 

Stocks, Bonds & Politics: Tennessee Municipal Bonds (Bought 5 Knox County Tennessee 3% General Obligation (GO) Bonds; Bought 5 Chattanooga Tennessee 4% Electric Utility Revenue Bonds; Bought 15 Wilson County Tennessee 3.5% GO Bonds; Bought 15 Williamson County Tennessee 2.5% GO Bonds; Bought 5 Maury County Tennessee 2% GO Bonds)

The second snapshot above shows that I received the annual dividend paid by Zurich Financial, a company based in Switzerland. I bought the USD priced ADR in February 2012. The ordinary shares are priced in Swiss Francs. Switzerland withheld a 15% tax on the last dividend payment. That is the first dividend tax paid to Switzerland since I first bought shares. Previous distributions were not sourced from earnings but from capital surplus. Those dividends were not taxed by either Switzerland or the U.S. and were classified as return of capital which lowered my per share cost basis by the amount of the dividend. 

The $1K par value bond positions shown in the preceding snapshots are either 1 or 2 bond positions. All of the $1K par value bonds referenced in those snapshots, with two exceptions, pay interest semi-annually. 

One exception is the 2 National Rural Utilities Cooperative Finance SU bonds that make monthly interest payments. I recently discussed buying 1 bond from this issuer that has a 3% coupon and a 2026 maturity:  Item # 1.C.

There is also a one SU note issued by Goldman Sachs that pays interest monthly that I discussed buying here.

The two WFC CDs that are referenced above also pay monthly. Most of the owned WFC CDs, all of which make monthly interest payments, are in my Schwab taxable account. 

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1. Intermediate Term Bond/CD Ladder Basket Strategy:

A. Bought 2 Eversource 3.35% Senior Unsecured Bonds Maturing on 3/15/26:

Issuer:  Eversource Energy

ES Eversource Energy Page at Morningstar 

FINRA Page: Bond Detail (prospectus not linked)

Credit Ratings: 

Moody's at Baa1

S & P at A-
Fitch at BBB+ Fitch Upgrades CL&P, PSNH, and WMECO; Eversource Outlook to Positive 

ES Credit Ratings.pdf

YTM at Total Cost (99.051) =  3.474%

Last March, Eversource sold $300M in 2.75% senior notes maturing on 3/15/22. 

Eversource 2017 First Quarter Report  ES Analyst Estimates
Eversource Energy 2016 Annual Report 
ES 2016 4th Quarter Earnings Report

B. Added 1 Northern States Power 2.6% First Mortgage Bond Maturing on 5/15/23:

Issuer: Wholly Owned by Xcel Energy Inc. (XEL)
FINRA PAGE: Bond Detail (prospectus linked)

Credit Ratings:

Moody's at Aa3

S & P at A

YTM at Total Cost (99.541 ) = 2.682%

I now own two of these bonds. The other purchase was mentioned here.

Xcel 2017 1st Quarter Earnings Report 

2016 XCEL Annual Report

C.  Bought 2 DuPont 2.8% Senior Unsecured Bonds Maturing on 2/14/23: 

Issuer:  E.I. DuPont de Nemours & Co.
DD E.I. du Pont de Nemours & Co Page at Morningstar
FINRA Page: Bond  Detail (prospectus linked)

Credit Ratings: 

Moody's at A3
Moody's affirms DuPont's A3 ratings; changes outlook to negative

S & P at A-

YTM at Total Cost (99.496 ) = 2.894%

In late April, Dupont sold $1.25B in 2.2% notes maturing on 5/1/20. 

DuPont 2017 First Quarter Earnings Report 

DD Analyst Estimates
2016 Annual Report
Dupont SEC Filings

D. Bought 2 Ameren 2.7% First Mortgage Bonds Maturing on 9/1/22:

Issuer: Ameren Illinois, a subsidiary of Ameren Corp. (AEE)
AEE Ameren Corp Page at Morningstar
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A1
Moody's upgrades Ameren Corp. and Ameren Illinois; affirms Union Electric; outlooks stable
S & P at A

YTM at Total Cost  (101.079) = 2.474%

AEE Analyst Estimates
Ameren 2016 Annual Report
AEE SEC Filings

E. Bought 1 Southern California Gas Company 2.6% First Mortgage Bond Maturing on 6/15/26:

Issuer: An Indirect Subsidiary of Sempra Energ (SRE)
Finra Page: Bond Detail (prospectus linked; make whole provision starts at page S-7)
Credit Ratings:
Moody's at Aa2
Moody's upgrades Sempra utility subsidiaries; outlooks stable
S & P at A+

YTM at Total Cost (97.656) =  2.893%

SEMPRA 2016 Annual Report

2. Long Term Bond Strategy-Immaterial Allocation: 

A. Bought 1 TIP 1.375% Coupon Maturing on 2/15/44- A ROTH IRA Account:

Price = 110.85938
Inflation Factor = 1.04306
Original Principal Amount =$1,000
CPI Adjusted Principal Amount = $1,043.06
Premium Over Adjusted Principal = $113.27
Referenced CPI on Dated Date of 2/15/14: 233.059
Referenced CPI On Settlement Date = 243.09367
Purchase Date 4/10/17 (one day settlement)
Break-Even Inflation Rate Date on Settlement Date (4/11/17) = 2.02%

I become slightly more interested in long duration TIPs, only as trades, when the break-even inflation rate is slightly above 2% or lower.

This bond was sold at auction in February 2014.  TIPS/CPI Query Results

30-year Breakeven Inflation Rate Chart-St. Louis Fed

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

Stocks, Bonds & Politics: Advantages and Disadvantages of Treasury Inflation Protected Securities (9/25/2009 Post):

An Example of How TIPS Work

B. Added 50 ELC at $22.88-Used Commission Free Trade:

This purchase was an average up.  

Data on Security Provided by Schwab:

Quote: Entergy Louisiana LLC First Mortgage Bonds 4.875% Series due 2066 Stock  (ELC)

I bought 30 ELC shares at $21.2. I discussed that purchase here.

Prospectus

Entergy Louisiana has the option to "redeem the bonds prior to maturity, in whole or in part, at any time on or after September 1, 2021, at a redemption price equal to 100% of the principal amount of the bonds being redeemed plus any accrued and unpaid interest thereon to, but not including, the redemption date."

If not redeemed early at the issuer's option, this first mortgage bond matures in 2066. 

My first purchase of an Entergy Louisiana first mortgage bond was in December 2008: 

The coupon was 7.6%. That bond has been redeemed by the issuer at par value. ITEM # 8: Stocks, Bonds & Politics: EHL Redemption

The potentially long duration first mortgage bonds are trades.

3. Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy:

A. Sold 50 MPW at $13.93-A Roth IRA Account: 

Quote: Medical Properties Trust Inc (MPW)

Profit Snapshot: $69.99

MPW History in this Roth IRA Account:

One major problem with MPW is that management is engaged in empire building which requires a constant stream of stock offerings to implement. I have discussed that problem in several posts linked below. 

Shortly after I sold this last remaining lot, MPW's underwriters sold 37.5M shares at $13.25, with an underwriters' option to acquire an additional 5.625M shares. Medical Properties Trust Announces Pricing of Public Offering of Common Stock ("The Company intends to use the net proceeds from the offering to fund the cash purchase price payable by MPT in connection with its acquisition of eight hospitals in Florida, Ohio and Pennsylvania from Steward Health Care System LLC (the “Steward Transactions”), the purchase of two acute care hospitals located in the Ohio Valley Region from Alecto Healthcare Services LLC (the “Alecto Acquisition”), the purchase of the St. Joseph Medical Center in Lewiston, Idaho, and Lourdes Health in Pasco, Washington, from RCCH HealthCare Partners (the “RCCH Acquisition”), with the balance of the net proceeds to be used to repay borrowings under the Company’s revolving credit facility.") 

The proceeds to MPW after the underwriters' discount and before its expenses amounted to $12.72 per share. Prospectus 

There is a lot of uncertainty now about the future health insurance coverage for over 20 million people. If 20M+ people lose their insurance coverage over the next few years, that will have an adverse impact on MPW's tenants. 

One of MPW's major tenants, Adeptus Health (AH), has recently filed for bankruptcy. Prior to that filing, Deerfield Management bought up AH's debt and signed  an agreement in principle with MPW that was viewed favorably by investors. MPW would just take a one time rental credit of $3.1M over a 12 month period commencing when AH leaves bankruptcy. Medical Properties Trust, Inc. Describes Plans for Restructuring of Adeptus Health, Inc. Leases 

Links to Some Prior Discussions: 

3. Sold 52 MPW-Highest Remaining Cost Lot in a Satellite Taxable Account: Update For Equity REIT Basket Strategy As Of 6/24/16 - South Gent | Seeking Alpha

Item # 1. Sold 250 of Remaining 550 MPW: Update For Equity REIT Basket Strategy As Of 5/19/16 - South Gent | Seeking Alpha

Item # 4. Added 50 MPW at $9.84-Satellite Taxable Account: UPDATE For Equity REIT Basket Strategy As Of 2/12/16 - South Gent | Seeking Alpha

Item # 3. Averaged Down: Bought 100 MPW at $10.42: Update For Equity REIT Basket Strategy As Of 1/21/16 - South Gent | Seeking Alpha

3. Averaged Down: Bought 50 MPW at $11.4-Satellite Taxable: Update For REIT Basket Strategy As Of 9/8/15 - South Gent | Seeking Alpha

South Gent's Comment Blog # 4 (12/20/16 comment): 

Total MPW Trading Profits to Date: $1,334.83 (Snapshots in Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy  

Part of my MPW trading strategy is based just on reviewing a 2 and 5 year price chart. MPW Interactive Stock Chart 

The stocks has repeatedly topped out near $14. When the price approaches that level, I start to expect a stock offering. 

As a result of the recent stock offering, the price once again crashed below its 50 and 200 day SMA lines using a YT one year chart. MPW 

Any MPW stock purchase is classified at the time of purchase as a trade. For the time being, I am on the sidelines.  

Medical Properties Trust, Inc. Announces First Quarter 2017 Financial Results 

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.