Observations and Sample of Recent Trades: (ARESF, DRG.UN:CA, TDIV)

Trump and Sessions:

Trump continued his assault of the Attorney General last week with multiple tweets. Sessions may rue the day that he accepted the appointment. 

No President has criticized his Attorney General in this way. 

No President has demanded that the Attorney General indict his former opponent.

Donald Trump's public bullying of Jeff Sessions is embarrassing - CNN

Trump: I'm 'just looking at' firing Sessions | TheHill

Scaramucci: Trump "probably" wants Sessions gone - Axios; Scaramucci: Trump ‘probably’ wants Sessions gone – video | US news | The Guardian

Trump Steps Up Attacks on Sessions, Calling Recusal Bad for the Presidency - The New York Times

Trump's Attacks on Sessions Are Angering His Base in Deep-Red Alabama - Bloomberg

Trump's desire to fire Mueller went into overdrive after Mueller reportedly started to look into Trump's finances. 

The path to firing Mueller would be easier by first firing Sessions and appointing a Trump loyalist as Attorney General in a recess appointment that will last until the end of this year, which does not require the Senate's consent. Trump talks privately about the idea of a recess appointment to replace Sessions - The Washington Post

Prior to the election, Trump led chants to lock up Hillary, apparently after a trial, but that was not expressed as a precondition to her imprisonment.

After the election, Trump stated that he had no interest in prosecuting Hillary. Trump says he's not interested in pursuing case against Clinton - POLITICO 

His mind changed recently after disclosures about previously undisclosed contacts between top aides and the Russians.

As President, Trump has and will likely continue making statements that a defeated opponent is guilty of crimes before there is even an indictment. That is of course highly inappropriate for a President, but is in keeping with Trump's personality and past history. He is a Demagogue and that is what Demagogues do.  

Back to Trump's tweet reproduced above that accuses Hillary once again of committing crimes. 

Without a doubt, the republicans have been successful in demonizing Hillary, and will continue their efforts, possibly stopping when most Americans no longer know the name, even though she is highly unlikely to run for office again.

House Republicans call for a second special counsel-to investigate Clinton, Comey and Lynch (the House GOP would have already voted out articles of impeachment against Clinton if she had won)

Perhaps, Trump will cause Session or a new Attorney General to prosecute Hillary, and then she can at least have her day in court. That result will inflame the Democrats of course, many of whom view the GOP efforts directed at her as just another politically motivated hit job. The republicans like sending Democrats into apoplexy, which is a most pleasurable form of entertainment for them.  

The problem for the GOP now is that Trump is rapidly losing the independents who voted for him, according to several polls, and they may turn against the GOP  in 2018 and/or 2020.

It remains to be seen whether independents will hold GOP politicians accountable for Trump, separating Trump in their minds from other GOP politicians as if they are distinct and unrelated animals when casting their ballots which is obviously not the case. That appeared to have happened in the special elections held earlier this year. 

There is IMO no daylight between Trump and the modern republican party. Trump and his 40% or so share of the voters are now the heart, soul and essence of the republican party and all republican politicians need to be held accountable for what their party has become and the Demagogue who leads it.  


And why is Trump so upset with the leakers as noted in the aforementioned tweet.  

The leaks that have angered Trump so much have provided information that contradicts false statements made by Trump and his minions related to the Russian investigation. (e.g. the false statements that Flynn did not discuss sanctions with the Russian ambassador during Obama's term or the more recently disclosed meeting to acquire dirt on Hillary from the Russians) 

What Trump can not stand is a free press that contradicts his reality creations and lies with facts. 

Trump stated again on Tuesday that he would not have appointed Sessions if he knew that the Attorney General was going to recuse himself, viewed as a proper decision by GOP senators who have expressed an opinion so far. Republican senators express support for AG Sessions - CNN; Republican lawmakers rally around Sessions as Trump intensifies pressure: Reuters 

Maybe Sessions needs to fire the DOJ attorneys involved in this matter:DOJ: Ex-Manafort Associate Firtash Is Top-Tier Comrade of Russian Mobsters - NBC News Donald may lighten up on him.

What is Trump really saying? 

It is crystal clear that Trump wants an Attorney General that would never have allowed an independent investigation and would be willing to stop now the special counsel's investigation into Russia's interference and Trump's possible collusion in that effort.

Trump's statements that the FBI Director should report directly to him is consistent with his effort to undermine the independence of Justice Department and to create a system where Trump, his family and associates are above the law and not answerable to it.

Trump's repeated attacks on Sessions, the first GOP Senator to support him, would be consistent with Trump's ongoing obstruction of justice efforts. 

Since Trump may be setting the stage for firing Sessions and then Mueller, it is important to note that only 48% of voters believe Mueller's ouster would be inappropriate. The number should be a resounding 100%

While demanding servient and unquestioning loyalty from others, Trump's history demonstrates that he is almost invariably disloyal to others. Trump the Disloyalist--POLITICO Magazine  

26 hours, 29 Trumpian false or misleading claims - The Washington Post (does not matter to Trump voters of course and would not be accepted anyway as accurate, irrespective of the evidence, by them)

+++++

Scaramucci Attacks Priebus and Bannon: 


Mooch looks like he has become tired of being Trump's Communication Director after a few days on the job and apparently wanted to become Trump's Chief of Staff: War Inside the White House: Scaramucci Takes On Priebus Over 'Leaks' - NBC News; Scaramucci: If Reince Priebus 'wants to explain he's not a leaker, let him do that' - CNN 

Unfortunately our Dear Leader fired Priebus and anointed John Kelly.  

Trump Replaces Priebus as Chief of Staff With DHS Chief Kelly - Bloomberg

Kelly has proven to be manifestly servile to Trump as Homeland Security Secretary. Time will tell whether closer association with Donald will work out for Kelly. My advice to Kelly is that it may prove prudent to go ahead and lawyer up now.

Scaramucci made the following comments in an interview with the New Yorker: 

“Reince is a fucking paranoid schizophrenic, a paranoiac.” 

“I’m not Steve Bannon, I’m not trying to suck my own cock.  I’m not trying to build my own brand off the fucking strength of the President." 

There were more crude comments made in that interview. 

Scaramucci referred to a POLITICO article about his finances and claimed that Priebus had leaked the information as an "illegal" act of retribution. The Politico reporter responded that the information in her article was publicly available at the Export Import Bank.  

Anthony Scaramucci Called Me to Unload About White House Leakers, Reince Priebus, and Steve Bannon | The New Yorker

Bob Schieffer calls Scaramucci interview "embarrassing" - CBS News

Anthony Scaramucci apparently calls Reince Priebus “Reince Penis.”

The Mooch has been busy deleting his past negative comments about Donald. Read Anthony Scaramucci’s old tweets. You’ll understand why he deleted them. - The Washington Post 

Trump's personal lawyer allegedly made these comments to a reporter: 

 “I will make sure that you and I meet one day while we’re in the courthouse. And I will take you for every penny you still don’t have. And I will come after your Daily Beast and everybody else that you possibly know. So I’m warning you, tread very fucking lightly, because what I’m going to do to you is going to be fucking disgusting. You understand me?  ... I’m going to mess your life up… for as long as you’re on this frickin’ planet… you’re going to have judgments against you, so much money, you’ll never know how to get out from underneath it” Ex-Wife: Donald Trump Made Me Feel ‘Violated’ During Sex

+++

Interior Secretary Ryan Zinke Threatens Alaska's Senators and Alaska:  

Report: Interior secretary called Alaska's senators to threaten them over health care vote - CBS News

Alaska Senators Pressured by Trump's Team Over Obamacare Votes - Bloomberg ("Interior Secretary Ryan Zinke has threatened Alaska’s senators with retribution on major energy and public lands decisions because one of them voted against repealing Obamacare, according to one of the lawmakers."); GOP senator: Trump official threatened my state; Lisa Murkowski says Zinke contacted her in wake of health care votes - CNNPolitics.com

+++++

GOP's Repeal and Replace Plan:

'Skinny' Obamacare repeal may leave 16 million more uninsured, CBO estimates: CNBC (the repeal of both the individual and employer mandates would cause premiums to skyrocket by 20% as healthy people leave the insurance market)

After 7+ years of deep thought, a few GOP senators came up  with an Obamacare repeal and replace plan at lunch last Thursday. The plan was released to other Senators Thursday night shortly before 10 P.M. E.S.T. The Senators shortly thereafter cast their votes. 

McCain decided to join Collins (R-Maine), Murkowski (R-Alaska) and all Democrats to defeat this plan which Senator Lindsay Graham (R-SC) called a fraud before voting for it. Health care debate: GOP Obamacare repeal bill fails - CNN; Graham: 'Skinny bill' a disaster, a fraud (video included); Senate Rejects Slimmed-Down Obamacare Repeal as McCain Votes No - The New York Times

What Trump could do to make Obamacare ‘implode’ - MarketWatch

How the G.O.P. Sabotaged Obamacare - The New York Times
The GOP’s Obamacare sabotage continues - The Washington Post
10 ways the GOP sabotaged Obamacare
The costs of Trump's sabotage of Obamacare already are showing up in rate hikes - LA Times
Trump’s Sabotage of Obamacare Is Working: New York Magazine
Republicans Raised Your Health Care Premiums, Not Obamacare | Policy Dose | US News and World Report 
How Republicans quietly sabotaged Obamacare long before Trump came into office 
Killing Obamacare Softly - The New York Times

The GOP has no intention of joining with Democrats to fix Obamacare and will continue their efforts to sabotage it: 

Blaming the Democrats may not work with independents, particularly if the Democrats launch a well funded and national ad campaign explaining exactly what the GOP has done to sabotage Obamacare and how they refused to work with Democrats to fix its well understood and serious problems: Majorities Across Parties Say Pres. Trump and Republicans Are Responsible for ACA Problems Moving Foward | The Henry J. Kaiser Family Foundation

A recent poll found that only 12% of voters approved of the GOP's main repeal and replace plan: Senate health care plan: Poll shows just 12% of Americans support it 

Yet, notwithstanding that condemnation, the GOP tried to cram it down everyone's throat. 

++++

Data showing Republicans could lose House majority puts pressure on Trump, GOP for tax reform: CNBC

In One Day, Trump Administration Lands 3 Punches Against Gay Rights - The New York Times (Trump is using these actions to draw attention away from his problems and to fire up his base. Sessions is doing what Trump wants in this area)

Boy Scouts official apologizes for 'political rhetoric' of Trump speech - CNN

Trump claims America has 'the highest taxes in the world: CNBC ("one of his most repeated falsehoods"); 

For the third time, Donald Trump, U.S. is not 'highest taxed nation in the world' | PolitiFact; 

Is the U.S. the Highest Taxed Nation in the World? | Committee for a Responsible Federal Budget

Ignorance is bliss and viewed now as a virtue by tens of millions. Majority of Republicans Say Colleges Are Bad for America (Yes, Really)

Sooner or later, this chaos, hostility to institutions necessary for a properly functioning Democracy, and rampant Demagoguery and lying will bleed into the real economy. I think the Bond Ghouls and the Currency Traders see the dangers, having dramatically shifted from positive to negative opinions about Donald's likely impact on the economy early in 2017. It is not possible to precisely identify now the  event or events that will trigger major adverse repercussions that can no longer be ignored by informed investors.  

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GDP Second Revised Report for the 2017 Second Quarter: 

I would characterize this report as just more of the same. Nothing has changed from 2016, notwithstanding Donald accomplishing more than just about anyone in American history or so he says. 

The first quarter has been weak for several years in a row now, with some spring in the economy appearing in the second quarter: 

The 2017 first quarter was revised lower in this report to 1.2% from 1.4%. 

The current government estimate is that real GDP grew 1.9% during the first six months of 2017 compared to 2.2% during the first six months of 2016. 

The government's second estimate for real GDP growth in the second quarter was 2.6%, below the 2.7% consensus estimate. U.S. Economic Growth Rebounds, But Breaking Out Is Hard to Do - Bloomberg (“The economy is moving along at a pace that’s unexciting but not worrisome,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. ")

The PCE price index is declining which gave the Bond Ghouls solace last Friday: 

"The price index for gross domestic purchases increased 0.8 percent in the second quarter, compared with an increase of 2.6 percent in the first quarter...The PCE price index increased 0.3 percent,compared with an increase of 2.2 percent. Excluding food and energy prices, the PCE price index increased 0.9 percent, compared with an increase of 1.8 percent." 

News Release: Gross Domestic Product

Closing Prices Last Friday (7/28/17):

Ten Year Treasury Yield: 2.3% Daily Treasury Yield Curve Rates
Ten Year TIP Yield: .47% Daily Treasury Real Yield Curve Rates
Average Annual CPI Over the Next Ten Years Estimate: 1.83% (Break-even inflation rate)
IEF $106.82 +$0.18 +0.17%: iShares 7-10 Year Treasury Bond ETF
TLT $123.89 +$0.73 +0.59% : iShares 20+ Year Treasury Bond ETF
ZROZ $114.43 +$1.00 +0.88% : PIMCO 25+ Year Zero Coupon U.S. Treasury ETF
LQD $121.11 +$0.32 +0.26% : iShares Investment Grade Corporate Bond ETF

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1. Intermediate Term Bond/CD Ladder Basket Strategy: 

A. Sold 2 Kimberly Clark 2.4% SU Bonds Maturing on 6/1/23:

Profit: $25.04 

Issuer: Kimberly-Clark Corp. (KMB) 

FINRA Page: Bond Detail

Sold at 99.6

YTM Then at 2.473%

Current Yield at 2.41%

Net at 99.5 ($2 Commission)

B. Sold 2 Amgen 2.25% SU Bonds Maturing on 8/19/23:

Profit Snapshot +$46.3

Issuer: Amgen Inc.  (AMGN)
AMGN Analyst Estimates
Finra Page: Bond Detail

Sold at 98.1
YTM Then At 2.589%
Current Yield at 2.29%

Bought at a Total Cost of 95.685
ITEM # 1.B.
YTM Then At 2.982%
Current Yield at 2.35%

C. Bought 1 Discover Financial 3.2% SU Bond Maturing on 6/15/23: This was a new offering, but I bought it on the secondary market rather than through Fidelity's corporate notes program.

Issuer: Discover Financial Services (DFS)
Finra Page: Bond  Detail (prospectus is not linked)
Prospectus
Credit Ratings:
Moody's at Ba1
S & P at BBB-
Fitch at BBB+ Fitch Affirms Discover Financial Services at 'BBB+/F2'; Outlook Stable
Discover Financial Services - Investor Relations - Debt Investor Info - Credit Ratings Summary

Yield to Maturity at Total Cost (99.15)= 3.36%
Current Yield at 3.23%
Bought at 99.050

DFS Analyst Estimates
2017 First Quarter Earnings Report

D. Bought 1 Discover Financial Services 4% SU Bond Maturing on 11/15/25:

FINRA Page: Bond Detail (prospectus linked)

Relevant Excerpt From Short Form Prospectus:

Bought at a Total Cost of  99.926
YTM at Total Cost 4.1%
Current yield at 4%

The Discover bonds will be difficult to sell given the relatively small number of bonds that are outstanding.

E. Added 1 Citigroup 3.4% SU Bond Maturing on 5/1/26:

Issuer: Citigroup Inc.  (C)

Finra Page: Bond Detail (prospectus linked)
C Analyst Estimates
Bought at a Total Cost of 99.145
YTM Then at 3.513%
Current Yield at 99.145 = 3.43%
Purchased at 99.045 ($1 Commission)

2017 Second Quarter Earnings Report

Net Outflow: $1K

2. Short Term Bond/CD Ladder Basket Strategy: 

I continue to anticipate gradual increases in short term CD rates and have been increasing the size of my short term basket. As  CDs mature, I have received incrementally higher yields which are satisfactory to me given my preservation of capital objective and what I view as heightened risks associated with stocks and longer duration bonds (i.e. greater than 3 year maturities).

I am knocking down somewhat my intermediate term bond exposure and plowing the net proceeds into short term CDs along with the proceeds from stock dispositions.

I am picking up some additional current yield with intermediate term bond buys as shown above. I am assuming more credit risk with the purchases compared to the bonds being sold. I have no credit risk IMO with the short term FDIC insured CDs.  

As of last Friday, the Bond Ghouls forecasted a 49.1% chance of one more .25% increase in the FF rate on or before the 12/13/17 meeting: Countdown to FOMC: CME FedWatch Tool The odds increase to 70% on or before the June 2018 meeting. The probability of two .25% hikes on before the June meeting stands at only 24.7%. The foregoing has some impact in constructing my short term CD ladder. 

A. Bought 2 Merrick Bank 1.7% CDs (monthly interest) Maturing on 7/22/19: 

B. Bought 3 Bank of India 1% CDs Maturing 8/24/17:

This one month CD is replacing a one month Bank of Baroda .9% CD that matured on 7/21/17:

C. Bought 2 Bank of East Asia 1.1% CDs Maturing on 9/21/17:

D. Bought 2 Bank of India 1.25% CDs Maturing on 10/17/17:

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

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

A. Sold 500 Dream Global REIT (DRG.UN:CA) at C$10.95 and Converted Proceeds into USDs: 

The exchange rate of .776896 shown in the preceding snapshot is adjusted for a 1% fee paid to Fidelity in addition to the C$19 commission.

Profit Snapshot: USD +$127.43 (Adversely Impacted by the Decline in the CAD/USD)

Quotes: USD Priced Shares Grey Market Listing: Dream Global Real Estate Investment Trust (U.S.: OTC)

CAD Priced Shares Toronto Listing: DRG.UN -Dream Global Real Estate Investment Trust (Canada: Toronto)

Distributions are paid monthly at C$.06667 per unit.

When Fidelity reports profits for Canadian stocks, that firm will use the symbols for the U.S. OTC markets, either the symbols for the U.S. Grey Market or the U.S. Pink Sheet Exchange, as the case may be. 

The symbol shown in the preceding snapshot, DUNDF, is for the USD priced ordinary shares that trade in the U.S. Grey Market. I did not buy or sell those shares. Instead, I bought shares on the Toronto exchange using CADs. 

The IRS will, of course, require U.S. taxpayers to report gains or losses in USDs so the Canadian values for purchases and dispositions have to be converted for tax reporting purposes into USDs. Brokers do a good job, as far as I can determine, in tracking these reportable transactions. 

In addition to the decline in the CAD/USD for some of my lot purchases, the profit was adversely impacted by Fidelity's 1% currency conversion fees and the multiple C$19 commissions.  

As previously noted, I have fired Fidelity as my international broker in favor of Interactive Brokers. Whenever I sell a Canadian security held in my Fidelity account, I will immediately convert the proceeds into USDs since I will not be using the CADs for future purchases in that account.

The price subsequently dropped after the company made this announcement: Dream Global REIT Announces Transformational Acquisition in the Netherlands for $903 Million and $300 Million Public Offering of Units

Investor Presentation of Netherlands Transactions

Sourced from Page 24 of the 2017 First Quarter Report

I may buy back shares when and if the price sinks to C$9.5-$C9.75.


B. SOLD 100 Dream Global REIT (DRG.UN:CA) at C$10.34 (proceeds received in CADs):

I took the proceeds in CADs since this position was held in my IB account where I am now conducting all trading on foreign stock exchanges. 

The CAD proceeds are assigned a USD cost basis for tax reporting purposes. 

When I sell those CADs to buy a CAD priced security in Toronto, I will recognize a reportable gain or loss on the currency transaction based on the then conversion rate. 


Profit Snapshot: C$121

At a total cost of C$10.34 per unit, the dividend yield is about 7.74%. Given my current objectives, I view that kind of yield in today's low interest rate environment plus a profit on the shares as a victory. 

The CAD has been showing significant strength against the USD since early May 2018. 

XE: CAD / USD Currency Chart. Canadian Dollar to US Dollar Rates (use one year chart)

Using FIFO accounting on the currency transactions, I would probably recognize about a 10% gain when selling CADs to buy a CAD priced security now. 

I have not discussed this security much. Some prior discussions can be reviewed in these posts: 

Added 200 DRG:CA At C$8.92 - South Gent | Seeking Alpha

Item # 4 Bought: 300 Dundee International REIT at C$9.27 (3/17/14 Post)

C Sold 100 of 300 ARESF at $10.4-Highest Cost Lot in my Schwab Account:

Position Before Pare:

Sold 100 Using FIFO at $10.4 (used Commission Free Trade):

Profit Snapshot: $22.37

USD Priced Ordinary Shares-Pink Sheet Exchange: Artis Real Estate Investment Trust (ARESF)

CAD Priced Ordinary Shares-Toronto: AX.UN Stock Price

Artis REIT Website

Dividends are paid monthly at C$.09 per unit. Distribution History The C$.09 monthly distribution has remained unchanged since it was adopted in June 2008.

Sourced from ARTIS Investor Presentation May 2017

FFO has been close to flat for awhile:

Sourced from page 5 of the  2017 First Quarter Report

Sourced from Page 12 of 2016 Financial Report

Part of the stagnation has been due to properties located in Alberta. Artis has been trimming its exposure in that region.

Artis Real Estate Investment Trust Provides Update on Property Dispositions Year to Date

Artis Real Estate Investment Trust Announces Disposition of Eight Industrial Properties and One Retail Property in Alberta

Other News:

Artis REIT Announces Acquisition of U.S. Office Portfolio, $100 Million Equity Offering, Proposed Redemption of Series F Debentures and Provides Update on Other Recent Developments (June 2016 Press Release)

Artis Real Estate Investment Trust Announces Closing of  Equity Offering for Gross Proceeds of C$115M Priced to the Public at C$13.2

While I have bought the ordinary shares using USDs on the U.S. pink sheet exchange, most of my transactions have been in Toronto using CADs: 

Item # 1 SOLD 300 AX-UN:CA at C$15.71 (9/26/14 Post)
Item # 3.A. Pared Artis REIT: Sold 200 AX-UN.CA at C$12.94 

4. Added 50 TDIV at $31.28-Vanguard Account ($7 commission):

Quote: Technology Dividend Index Fund ETF
Sponsor's Page: First Trust NASDAQ Technology Dividend Index Fund (TDIV)
Expense Ratio: .5%

Holdings

Last Discussed: 

Item # 5. Pared Trade Generated by Boredom: Sold 50 ROBO at $33.11 and Bought 50 TDIV at $31.7: Stocks, Bonds & Politics: Observations and Sample of Recent Trades: 4/29/17 (SCEPRJ, TDIV WTBA): The GOP's Alternate Reality Universe/S & P 500's Gain Since September 2012 Mostly Due to Multiple Expansion

I now own 150+ shares.

Perhaps, I am bored with my bond and CD purchases. I sold 50 shares at $32.50 in a Vanguard account (6/2/17):

The profit barely exceeded my $14 in round-trip commissions. I only held onto the ETF for about a month, having bought that lot at $31.91.

Roth IRA: +$15.47

There was an intervening quarterly dividend of $.2387 per share Distributions I received that dividend on two 50 share lots own in different brokerage accounts (Schwab & Fidelity)

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.