Economy:
China strikes back with new tariffs in trade dispute with US
Donald responded to China announcing additional tariffs effective on 9/1 and 12/15 to coincide with new U..S tariffs going into effect on those two days. Trump heaps another 5% tariff on Chinese goods in latest tit-for-tat escalation - Reuters
Donald continues to insist that China pays the U.S. tariff tax on imported products from China. 'China is not paying for it': Trump tariffs hit US small businesses
Donald's plan is to keep tightening the noose until China capitulates and accepts his demands. Maybe this will work but I doubt it.
China has made it clear that it will not agree to those U.S. demands which only causes Donald to impose even higher tariff taxes on American consumers and businesses.
While opinions differ, China's leadership is unlikely IMO to accept those demands for a variety of reasons, including an unwillingness to appear weak, and will do whatever possible to retaliate which will go beyond using the tariff trade weapon.
While China's economy will be hurt more, that nation's threshold for pain is higher; and China's president is not facing a 2020 election where the communist party could lose control over the government due to a weaker economy.
Trump: 'Trade wars are good, and easy to win' (March 2018 tweet)
Trump tweets: 'Who is our bigger enemy,' Fed's Powell or China's Xi?
Powell Highlights Fed’s Limits. Trump Labels Him an ‘Enemy’ - The New York Times
Trump ‘hereby’ orders U.S. business out of China. Can he do that?
Trump says he's ordering American companies to immediately start looking for an alternative to China
Just a Crazy, Mean Spirited Know Nothing, but we already knew that.
Arturo Estrella: Chances of a recession are 'pretty high' (Estrella is the economist who first documented the predictive power of yield inversions)
Manufacturing sector contracts for the first time in nearly a decade I discussed that report in a previously published comment.
Job Gains Were Weaker Than Reported, by Half a Million - The New York Times The BLS revisits its job numbers annually. Last week, it issued a preliminary revision based on my complete data, finding that it had overestimated the job force by 501,000. CES Preliminary Benchmark Announcement This simply means that the job gains for the year ending in March 2019 were significantly less than the original estimates. I discussed that report in a previously published comment.
China strikes back with new tariffs in trade dispute with US
Donald responded to China announcing additional tariffs effective on 9/1 and 12/15 to coincide with new U..S tariffs going into effect on those two days. Trump heaps another 5% tariff on Chinese goods in latest tit-for-tat escalation - Reuters
Donald continues to insist that China pays the U.S. tariff tax on imported products from China. 'China is not paying for it': Trump tariffs hit US small businesses
Donald's plan is to keep tightening the noose until China capitulates and accepts his demands. Maybe this will work but I doubt it.
China has made it clear that it will not agree to those U.S. demands which only causes Donald to impose even higher tariff taxes on American consumers and businesses.
While opinions differ, China's leadership is unlikely IMO to accept those demands for a variety of reasons, including an unwillingness to appear weak, and will do whatever possible to retaliate which will go beyond using the tariff trade weapon.
While China's economy will be hurt more, that nation's threshold for pain is higher; and China's president is not facing a 2020 election where the communist party could lose control over the government due to a weaker economy.
Trump: 'Trade wars are good, and easy to win' (March 2018 tweet)
Trump tweets: 'Who is our bigger enemy,' Fed's Powell or China's Xi?
Powell Highlights Fed’s Limits. Trump Labels Him an ‘Enemy’ - The New York Times
Trump ‘hereby’ orders U.S. business out of China. Can he do that?
Trump says he's ordering American companies to immediately start looking for an alternative to China
Just a Crazy, Mean Spirited Know Nothing, but we already knew that.
Arturo Estrella: Chances of a recession are 'pretty high' (Estrella is the economist who first documented the predictive power of yield inversions)
Manufacturing sector contracts for the first time in nearly a decade I discussed that report in a previously published comment.
Job Gains Were Weaker Than Reported, by Half a Million - The New York Times The BLS revisits its job numbers annually. Last week, it issued a preliminary revision based on my complete data, finding that it had overestimated the job force by 501,000. CES Preliminary Benchmark Announcement This simply means that the job gains for the year ending in March 2019 were significantly less than the original estimates. I discussed that report in a previously published comment.
CBO expects deficit to grow more than projected, warns tariffs could harm growth (The CBO estimates that U.S. budget deficits will average $1.2 trillion per year between 2020 and 2029)
One county's RV industry points to recession around the bend (significant decline in recreational vehicle sales can be a leading indicator of an upcoming recession)
Robert Shiller says the Fed's rate cut had the opposite intended effect, sparked recession alarm
The Federal Reserve’s math problem with interest-rate cuts - MarketWatch The problem is that a recession will happen and the FED will be near a zero FF rate when that happens. The capacity of the federal government to combat recessionary conditions through fiscal stimulus will be the most strained in U.S. history. As federal revenues plummet and safety net spending accelerates, as it will during a recession, the budget deficit would likely soar well over $1.5 trillion without any new fiscal stimulus program. And, it needs to be emphasized that the government has huge unfunded social security and medicare future liabilities.
It is just astounding that interest rates are at Great Depression levels and annual federal government budget deficits are likely to exceed $1 trillion dollars in the tenth year of a U.S. economic expansion.
Here’s what a payroll tax cut would cost the government - MarketWatch ($300B + interest for one identical to 2011-2012 which was later reimbursed by the government) If done, the government would be digging itself an even bigger debt hole, possibly bringing the annual budget deficit closer to $1.5 trillion)
Trump says the Fed is the 'only problem' with economy, calls Powell 'a golfer who can't putt'
Fed: Rate cut was 'recalibration,' not part of 'pre-set course'; The Fed - Monetary Policy: Minutes for July Meeting
Kansas City Fed's Esther George says July rate cut was not needed She will probably vote against an additional .25% cut next month along with Eric Rosengren. Two Fed officials disagree with decision to cut interest rates (7/31/19 article)
Boris Johnson hits EU wall: three takeaways on what this means for Europe’s economy - MarketWatch There is cosmic justice as shown by Boris now having to deal with the consequences of his own prior Brexit support and the knowingly false misrepresentations that he made.
Trump says Europe will give in: 'All we have to do is tax their cars' (8/21/19)
The Federal Reserve’s math problem with interest-rate cuts - MarketWatch The problem is that a recession will happen and the FED will be near a zero FF rate when that happens. The capacity of the federal government to combat recessionary conditions through fiscal stimulus will be the most strained in U.S. history. As federal revenues plummet and safety net spending accelerates, as it will during a recession, the budget deficit would likely soar well over $1.5 trillion without any new fiscal stimulus program. And, it needs to be emphasized that the government has huge unfunded social security and medicare future liabilities.
It is just astounding that interest rates are at Great Depression levels and annual federal government budget deficits are likely to exceed $1 trillion dollars in the tenth year of a U.S. economic expansion.
Here’s what a payroll tax cut would cost the government - MarketWatch ($300B + interest for one identical to 2011-2012 which was later reimbursed by the government) If done, the government would be digging itself an even bigger debt hole, possibly bringing the annual budget deficit closer to $1.5 trillion)
Trump says the Fed is the 'only problem' with economy, calls Powell 'a golfer who can't putt'
Fed: Rate cut was 'recalibration,' not part of 'pre-set course'; The Fed - Monetary Policy: Minutes for July Meeting
Kansas City Fed's Esther George says July rate cut was not needed She will probably vote against an additional .25% cut next month along with Eric Rosengren. Two Fed officials disagree with decision to cut interest rates (7/31/19 article)
Boris Johnson hits EU wall: three takeaways on what this means for Europe’s economy - MarketWatch There is cosmic justice as shown by Boris now having to deal with the consequences of his own prior Brexit support and the knowingly false misrepresentations that he made.
Trump says Europe will give in: 'All we have to do is tax their cars' (8/21/19)
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Markets and Market Commentary:
These 10 ‘grey swan’ events could conspire to imperil global economy and markets - MarketWatch
Negative-yielding debt poses major risks for investors
Negative-yielding debt poses major risks for investors
Cheap money could deliver big fourth quarter for stocks, but it’s just delaying the inevitable, strategist warns - MarketWatch
The quantum revolution is coming, and Chinese scientists are at the forefront
'Everything seems like a trap,' Cramer says of mixed market signals
White House trade adviser says it’s a ‘certainty’ bull market lasts through 2020 - MarketWatch
Tencent shares: Billions wiped off market value following Q2 earnings
The quantum revolution is coming, and Chinese scientists are at the forefront
'Everything seems like a trap,' Cramer says of mixed market signals
White House trade adviser says it’s a ‘certainty’ bull market lasts through 2020 - MarketWatch
Tencent shares: Billions wiped off market value following Q2 earnings
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Trump:
Trump Accuses Jewish Democrats of ‘Great Disloyalty’ - The New York Times; Trump's remarks about 'disloyal' Jews highlight the tribalism of his politics - Los Angeles Times
Trump, frustrated by unpopularity with Jews, thrusts Israel into his culture war; Trump's 'Disloyalty' Claim About Jewish Democrats Shows He Doesn't Get How They Vote : NPR
Trump tweets claim that he’s like ‘the king of Israel’ and ‘the second coming of God’ - MarketWatch;
Trump quotes conspiracy theorist claiming Israelis ‘love him like he is the second coming of God’ - The Washington Post
‘I am the Chosen One,’ Trump proclaims as he defends trade war with China
So now I see why Donald enjoys overwhelming support among U.S. evangelicals. Evangelicals told Trump he was "chosen" by God. Now he says it himself
Donald is Jesus Christ, which also explains why he is such an Extremely Stable Genius and a truth teller extraordinaire.
How did I fail to see Donald's divinity after reviewing so studiously his good works, bible school and church attendance every Sunday, his frequent meetings with religious scholars, and overall religious devotion prior to announcing his candidacy for president.
After Denmark refused to sell Greenland to Donald or to the U.S. whatever the case may be in the Duck's mind, Donald decided to take his marbles and go home. President Trump Cancels Trip to Denmark After Greenland Spat - The New York Times Denmark is a Nato ally and strategically positioned on the Baltic Sea.
Denmark's Prime Minister, Mette Frederiksen, called Donald's interest "absurd".
Donald was offended that a woman even dared to call his brilliant idea absurd. He called Ms. Frederiksen's remark "nasty", which is one of his favorite insults directed at any women who offends the five year old brat sensibilities of the Extremely Stable Genius.
I understand the Duck's frustration.
I made a tender offer for Switzerland but was rebuffed as some kind of flake or cuckoo bird.
Instead of making a tender offer for Switzerland, I am saving up to buy Canada and rename it Northern Tennessee. So the Canadians can blame Switzerland's "nasty" rebuff for what will happen.
Donald recently appointed as U.S. ambassador to Denmark Carla Sands whose qualifications include failing as an actress, promoting conspiracy theories and a decree from a chiropractic college ("Life University") that was recently placed on probation Carla Sands: U.S.-Denmark Relations Are Now in the Hands of a Conspiracy-Loving, Climate-Denying Ex-Actress; Carla Sands - IMDb; Donald Trump: Ambassador Carla Sands humiliated by Denmark, Greenland saga Donald of course selects only the best people as he has represented to us numerous times.
After the most recent mass shootings, Donald made some sounds about strengthening background checks.
He then received a call from the NRA and now he has not backtracked from that commitment. After Lobbying by Gun Rights Advocates, Trump Sounds a Familiar Retreat; N.R.A. Gets Results in One Phone Call With the President He changes his tune on background checks almost on a daily basis showing once again that coherency and consistency are not traits found in Extremely Stable Geniuses.
So I guess everyone in the U.S. needs to go into therapy-the NRA's solution reduced to its core absurdity-in order to be confident that we reach those who may become mass shooters, but even then those who are likely to follow that path would probably not be cured from having those impulses by that therapy.
Trump Accuses Jewish Democrats of ‘Great Disloyalty’ - The New York Times; Trump's remarks about 'disloyal' Jews highlight the tribalism of his politics - Los Angeles Times
Trump, frustrated by unpopularity with Jews, thrusts Israel into his culture war; Trump's 'Disloyalty' Claim About Jewish Democrats Shows He Doesn't Get How They Vote : NPR
Trump tweets claim that he’s like ‘the king of Israel’ and ‘the second coming of God’ - MarketWatch;
Trump quotes conspiracy theorist claiming Israelis ‘love him like he is the second coming of God’ - The Washington Post
‘I am the Chosen One,’ Trump proclaims as he defends trade war with China
So now I see why Donald enjoys overwhelming support among U.S. evangelicals. Evangelicals told Trump he was "chosen" by God. Now he says it himself
Donald is Jesus Christ, which also explains why he is such an Extremely Stable Genius and a truth teller extraordinaire.
How did I fail to see Donald's divinity after reviewing so studiously his good works, bible school and church attendance every Sunday, his frequent meetings with religious scholars, and overall religious devotion prior to announcing his candidacy for president.
After Denmark refused to sell Greenland to Donald or to the U.S. whatever the case may be in the Duck's mind, Donald decided to take his marbles and go home. President Trump Cancels Trip to Denmark After Greenland Spat - The New York Times Denmark is a Nato ally and strategically positioned on the Baltic Sea.
Denmark's Prime Minister, Mette Frederiksen, called Donald's interest "absurd".
Donald was offended that a woman even dared to call his brilliant idea absurd. He called Ms. Frederiksen's remark "nasty", which is one of his favorite insults directed at any women who offends the five year old brat sensibilities of the Extremely Stable Genius.
I understand the Duck's frustration.
I made a tender offer for Switzerland but was rebuffed as some kind of flake or cuckoo bird.
Instead of making a tender offer for Switzerland, I am saving up to buy Canada and rename it Northern Tennessee. So the Canadians can blame Switzerland's "nasty" rebuff for what will happen.
Donald recently appointed as U.S. ambassador to Denmark Carla Sands whose qualifications include failing as an actress, promoting conspiracy theories and a decree from a chiropractic college ("Life University") that was recently placed on probation Carla Sands: U.S.-Denmark Relations Are Now in the Hands of a Conspiracy-Loving, Climate-Denying Ex-Actress; Carla Sands - IMDb; Donald Trump: Ambassador Carla Sands humiliated by Denmark, Greenland saga Donald of course selects only the best people as he has represented to us numerous times.
After the most recent mass shootings, Donald made some sounds about strengthening background checks.
He then received a call from the NRA and now he has not backtracked from that commitment. After Lobbying by Gun Rights Advocates, Trump Sounds a Familiar Retreat; N.R.A. Gets Results in One Phone Call With the President He changes his tune on background checks almost on a daily basis showing once again that coherency and consistency are not traits found in Extremely Stable Geniuses.
Donald Trump says Democrats distorted his visit at Dayton hospital. Here's what they actually said | PolitiFact (rated demonstrably false)
Justice Dept. Under Fire For Allegedly Sending Staff Link To White Nationalist Site; The Justice Department Sent Immigration Judges A White Nationalist Blog Post With Anti-Semitic Attacks; Justice Department Newsletter Included Extremist Anti-Semitic Blog Post - The New York Times The U.S. Justice Department has already been Trumpified.
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1. Equity REIT Common and Preferred Stock Basket Strategy:
I eliminated a small DEA position in my Schwab account and pared the position in my Fidelity account that is subject to the small ball purchase restriction.
Any further adds will be in that later account using commission free trades.
I no longer have commission free trades at Schwab and do not intend on acquiring any.
A. Pared DEA-Sold 10 at $19.81-Used Commission Free trade:
Profit Snapshot: +$11.63
Quote: Easterly Government Properties Inc.
Closing Price Last Friday: DEA $20.33 -$0.28 -1.36%
Website: Easterly Government Properties, Inc.
SEC Filings
2018 Annual Report
10-Q for the Q/E 6/30/19 (property list starts at page 21, debt listed at page 28)
DEA Before Pare: Average cost per share at $17.36
DEA After Pare: Average cost per share at $16.95
Last Substantive Buy Discussion: Item # 4.A. Bought 10 DEA at $17.4 and 10 at $15.74-Used Commission Free Trades (1/9/19 Post)
Dividend: Quarterly at $.26 per share ($1.04 annually)
Dividends | Easterly Government Properties, Inc.
I am not expecting a dividend increase for the foreseeable future.
Dividend Yield at Total Average Cost Per share = 6.136%
Next Dividend Date: 9/11/19
Reinvestment: I previously reinvested the dividend but will turn that option off when the likely reinvestment price is over $21.
Last Purchase Discussion: Item # 4.A. Added 10 DEA on Ex Dividend Date at $17.43 and 10 at $15.74-Used Commission Free Trades(1/19/19 Post)
Last Sell Discussions: Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)
Last Stock Offering: Easterly Government Properties Announces Pricing of Common Stock Offering (priced to the public at $19.25)
Last Earnings Report: The market reacted favorably to this report.
Note that DEA does deduct from FFO cash used for tenants improvements and routine capital expenditures (i.e. maintenance) to arrive at cash available for distribution ("CAD"). The CAD per share number for the second quarter was $.253, a significant improvement over the $.2037 per share CAD reported for the 2018 second quarter.
DEA is one of the few non-triple net lease REITs that IMO properly reports AFFO using the NAREIT definition.
Generally, for triple net lease REITs, the tenant is responsible for routine maintenance so CAD and FFO will be relatively close. That is not the case for REITs that own office buildings, hotels, and apartments where the REIT is generally responsible for making those routine cash expenditures.
One of the main reporting problems is that routine capital expenditures are not deducted from FFO to arrive at AFFO. A related issue in most other REIT reports is that there is no way to calculate with any decree of certainty the cash available for distribution number. When cash flow is properly disclosed in a report, AFFO and CAD are one and the same.
Current Position: 31+ Shares
Maximum Position: 100 Shares
Purchase Restriction: Small Ball Rule (each purchase has to be at the lowest price in the chain except for shares bought with dividends)
Lowest Price In Current Chain: $15.74 (12/21/18)
Last Sell Discussions: Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)
B. Eliminated DEA in Schwab Account-Sold 62+ at $19.87:
Profit Snapshot: +$62.75
This account had higher cost shares that I could sell profitably after the recent share price rise.
1. Equity REIT Common and Preferred Stock Basket Strategy:
I eliminated a small DEA position in my Schwab account and pared the position in my Fidelity account that is subject to the small ball purchase restriction.
Any further adds will be in that later account using commission free trades.
I no longer have commission free trades at Schwab and do not intend on acquiring any.
A. Pared DEA-Sold 10 at $19.81-Used Commission Free trade:
Quote: Easterly Government Properties Inc.
Closing Price Last Friday: DEA $20.33 -$0.28 -1.36%
Website: Easterly Government Properties, Inc.
SEC Filings
2018 Annual Report
10-Q for the Q/E 6/30/19 (property list starts at page 21, debt listed at page 28)
DEA Before Pare: Average cost per share at $17.36
DEA After Pare: Average cost per share at $16.95
Last Substantive Buy Discussion: Item # 4.A. Bought 10 DEA at $17.4 and 10 at $15.74-Used Commission Free Trades (1/9/19 Post)
Dividend: Quarterly at $.26 per share ($1.04 annually)
Dividends | Easterly Government Properties, Inc.
I am not expecting a dividend increase for the foreseeable future.
Dividend Yield at Total Average Cost Per share = 6.136%
Next Dividend Date: 9/11/19
Reinvestment: I previously reinvested the dividend but will turn that option off when the likely reinvestment price is over $21.
Last Purchase Discussion: Item # 4.A. Added 10 DEA on Ex Dividend Date at $17.43 and 10 at $15.74-Used Commission Free Trades(1/19/19 Post)
Last Sell Discussions: Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)
Last Stock Offering: Easterly Government Properties Announces Pricing of Common Stock Offering (priced to the public at $19.25)
Last Earnings Report: The market reacted favorably to this report.
Note that DEA does deduct from FFO cash used for tenants improvements and routine capital expenditures (i.e. maintenance) to arrive at cash available for distribution ("CAD"). The CAD per share number for the second quarter was $.253, a significant improvement over the $.2037 per share CAD reported for the 2018 second quarter.
DEA is one of the few non-triple net lease REITs that IMO properly reports AFFO using the NAREIT definition.
Generally, for triple net lease REITs, the tenant is responsible for routine maintenance so CAD and FFO will be relatively close. That is not the case for REITs that own office buildings, hotels, and apartments where the REIT is generally responsible for making those routine cash expenditures.
One of the main reporting problems is that routine capital expenditures are not deducted from FFO to arrive at AFFO. A related issue in most other REIT reports is that there is no way to calculate with any decree of certainty the cash available for distribution number. When cash flow is properly disclosed in a report, AFFO and CAD are one and the same.
Current Position: 31+ Shares
Maximum Position: 100 Shares
Purchase Restriction: Small Ball Rule (each purchase has to be at the lowest price in the chain except for shares bought with dividends)
Lowest Price In Current Chain: $15.74 (12/21/18)
Last Sell Discussions: Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)
B. Eliminated DEA in Schwab Account-Sold 62+ at $19.87:
Profit Snapshot: +$62.75
This account had higher cost shares that I could sell profitably after the recent share price rise.
Total DEA Realized Gains to Date: $223.68 ($120.3 in prior Trades)
2. Intermediate Term Bond Basket Strategy:
A. Sold 2 Church & Dwight 2.45% SU Maturing on 8/1/22-In a Roth IRA Account:
Profit Snapshot: +$25.71
FINRA Page: Bond Detail
Issuer: Church & Dwight Co. (CHD)
Sold at 99.75
YTM at 99.75 = 2.536%
I also own 2 CHD 2.45% SU bonds maturing on 12/15/19 that I will keep until redeemed by the issuer. Item # 2.A. Bought 2 CHD SU Maturing on 12/15/19 at a T.C. of 99.569(9/9/18 Post)(YTM then at 2.725%)
3 Sold 50 IAU at (commission free for Vanguard customers) and Added $100 to PRPFX at $39.84:
IAU Profit Snapshot = +$36.99
Quote: IAU | iShares Gold Trust Overview
IAU Closing Price Last Friday: IAU $14.62 +$0.28 +1.95% (enjoyed a flight to safety trade after Donald did his crazy routine)
Sponsor's Website: iShares Gold Trust | IAU
SEC Filing (portfolio as of 4/1/19)
Last Substantive Discussion: Item # 3.B. Bought 30 IAU at $11.47-Commission Free For Vanguard Customers (9/26/18 Post) Those shares have been sold.
My last purchase price for this gold bullion ETF was $13.63. I will consider a repurchase at below that price.
PRPFX: Permanent Portfolio Overview
PRPFX Position: 192+ shares
Closing Price Last Friday: PRPFX $39.80 -$0.11 -0.28% compared to S & P 500 at 2,847.11, down -75.84 or -2.59%
Last Discussed Item # 4 (7/10/19 Post)
Sponsor's Website: The Permanent Portfolio Family of Funds
While understandable, the rally in gold's price since May 2019 seems stretched to me. Precious metals have been in a bear market since 2011. While it is uncertain and ultimately unknowable, the rally in PM prices since May through July 2019 appears more consistent IMO with a short term cyclical bull market within the confines of an ongoing long term secular bear market.
PRPFX has a gold and silver bullion allocation near 25% of total assets.
If gold and silver prices continue to move higher, I can participate in that move through PRPFX.
Unlike a gold bullion ETF, PRPFX at least pays a dividend.
4. Regional Bank Basket Strategy:
A. Pared FHN-Sold 25 Shares at $15.92 (used Commission Free Trade):
Closing Price Last Friday: FHN $15.32 -$0.43 -2.73%
Profit Snapshot: +$8.89
Item # 3.B. Bought 25 FHN at $15.56-Used Commission Free Trade (11/4/18 Post)
Net Realized Gains Regional Bank Basket = $51,157.05 (Snapshots at end of post) The start date was in the 2009 spring. Trades are invariably in small lots, mostly 100 shares or less.
Quote: First Horizon National Corp. (FHN)
Last Discussed: Item # 1.A. Bought 10 FHN at $14.59 and 10 at $12.62-Used Commission Free Trades (1/5/19 Post)
FHN SEC Filings
1 Year Chart
FHN Consensus Analyst E.P.S. Estimates
Dividend: Quarterly at $.12 per share
First Horizon Declares Quarterly Dividends
Next Ex Dividend Date: 9/12/19
Dividend Reinvestment: Yes
Position Before Pare: Average Total Cost Per Share = $14.67
Position After Pare: Average Total Cost Per Share = $13.62
A. Pared FHN-Sold 25 Shares at $15.92 (used Commission Free Trade):
Closing Price Last Friday: FHN $15.32 -$0.43 -2.73%
Profit Snapshot: +$8.89
Item # 3.B. Bought 25 FHN at $15.56-Used Commission Free Trade (11/4/18 Post)
Net Realized Gains Regional Bank Basket = $51,157.05 (Snapshots at end of post) The start date was in the 2009 spring. Trades are invariably in small lots, mostly 100 shares or less.
Quote: First Horizon National Corp. (FHN)
Last Discussed: Item # 1.A. Bought 10 FHN at $14.59 and 10 at $12.62-Used Commission Free Trades (1/5/19 Post)
FHN SEC Filings
1 Year Chart
FHN Consensus Analyst E.P.S. Estimates
Dividend: Quarterly at $.12 per share
First Horizon Declares Quarterly Dividends
Next Ex Dividend Date: 9/12/19
Dividend Reinvestment: Yes
Position Before Pare: Average Total Cost Per Share = $14.67
Position After Pare: Average Total Cost Per Share = $13.62
Dividend Yield at $13.62 = 3.52%
Current Position:
Maximum Position: 100 Shares plus shares purchased with dividends
Purchase Restriction: Small Ball Rule
Lowest Price in Chain (ex dividend purchases) = $12.62 (12/27/18)
Last Earnings Report: I viewed this report favorably but my bearish view of the regional bank sector overrides and takes precedence. The efficiency ratio is too high IMO:
Charge off ratio: .07% (excellent)
NPL Ratio: .69% (okay but moving in the wrong direction Y-O-Y)
ROA: 1.11% (Okay)
Adjusted ROA: 1.32%
ROE: 11.78% (okay)
Adjusted ROE: 18.19% (see report for adjustments)
First Horizon Reports Second Quarter Results and Highlights
5. Added 100 JRI at $16.83-Used Fidelity Commission Free Trade:
Quote: Nuveen Real Asset Income & Growth Fund Overview
Closing Price Last Friday: JRI $16.71 -$0.12 -0.71%
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund | Closed-End Fund | Nuveen
I now own 300 shares with 200 held in my Fidelity taxable account.
Data Date of Purchase (8/21/19):
Closing NAV Per Share = $18.9
Closing Market Price: $16.8
Discount = - 11.11%
Sourced: JRI Nuveen Real Asset Inc & Growth CEF Connect
Last Discussed: Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Leveraged: 29.48% as of 7/31/19-Significant
Borrowing cost is based on a .65% spread to the 1 month Libor rate.
Bonds & Rates (scroll to Libor rates)
Dividend: Monthly at $.106 per share ($1.272 annually with some ROC support)
Last Ex Dividend: 8/14/19
Average Cost Per Share this Account: $16.71
Dividend Yield at Total Average Cost = 7.61%
Dividend Reinvestment: Yes
I mentioned in a recent comment that I may add to my JRI position given the lack of yield opportunities.
This CEF owns securities (common and preferred stocks + some bonds) issued by REITs, energy infrastructure, utility and telephone companies.
SEC Filing: Holdings as of 3/31/19
Last SEC Filed Shareholder Report: Nuveen Real Asset Income and Growth Fund (Annual report for the period ending 12/31/18; the semi-annual report should be filed soon)
Rated 4 stars by Morningstar
6. Short Term Bond/CD Ladder Basket Strategy:
A. Early Redemption by Issuer of 6 Ventas 2.75% SU Bonds Maturing on 4/1/20:
I owned this bond in 4 accounts.
Profit Snapshots: +$44.09
This bond had a short maturity when bought. Most of the realized gains care concentrated in intermediate term bonds. Ventas paid a $2.75 per bond make whole premium to par value in addition to the accrued and unpaid interest.
Equity REITs are in a sweet spot at the moment, particularly those who can refinance debt and have rent increases tied to an inflation measure. CPI is remaining relatively steady as the weighted average debt cost comes down as the economy remains healthy.
Ventas recently sold $650M SU bonds maturing in 2030. The proceeds are being used to retire early most of a 4.25% SU bond maturing in 2022. While VTR had to pay a premium to par value to pry those 4.25% loose from their owners, the company will make that back in short order with the interest rate savings and locked in a historically low rate until 2030 as well. Ventas Announces Expiration and Results of Tender Offer for 4.25% Senior Notes Due 2022
B. Sold 1 Morgan Stanley 2.5% SU Maturing on 4/21/21:
Profit Snapshot: $15.92
Item # 2.E. Bought 1 MS 2021 at a Total Cost of 97.982 (9/20/18 Post)
Finra Page: Bond Detail
Issuer: Morgan Stanley (MS)
MS Analyst Estimates
Sold at 100.469
YTM at 100.469 = 2.214%
C. Bought 5 Treasury 56 Day Bills at Auction-Maturing on 10/15/19:
1.989% IR
Auction Results:
Current Position:
Maximum Position: 100 Shares plus shares purchased with dividends
Purchase Restriction: Small Ball Rule
Lowest Price in Chain (ex dividend purchases) = $12.62 (12/27/18)
Last Earnings Report: I viewed this report favorably but my bearish view of the regional bank sector overrides and takes precedence. The efficiency ratio is too high IMO:
Charge off ratio: .07% (excellent)
NPL Ratio: .69% (okay but moving in the wrong direction Y-O-Y)
ROA: 1.11% (Okay)
Adjusted ROA: 1.32%
ROE: 11.78% (okay)
Adjusted ROE: 18.19% (see report for adjustments)
First Horizon Reports Second Quarter Results and Highlights
5. Added 100 JRI at $16.83-Used Fidelity Commission Free Trade:
Quote: Nuveen Real Asset Income & Growth Fund Overview
Closing Price Last Friday: JRI $16.71 -$0.12 -0.71%
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund | Closed-End Fund | Nuveen
I now own 300 shares with 200 held in my Fidelity taxable account.
Data Date of Purchase (8/21/19):
Closing NAV Per Share = $18.9
Closing Market Price: $16.8
Discount = - 11.11%
Sourced: JRI Nuveen Real Asset Inc & Growth CEF Connect
Last Discussed: Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Leveraged: 29.48% as of 7/31/19-Significant
Borrowing cost is based on a .65% spread to the 1 month Libor rate.
Bonds & Rates (scroll to Libor rates)
Dividend: Monthly at $.106 per share ($1.272 annually with some ROC support)
Last Ex Dividend: 8/14/19
Average Cost Per Share this Account: $16.71
Dividend Yield at Total Average Cost = 7.61%
Dividend Reinvestment: Yes
I mentioned in a recent comment that I may add to my JRI position given the lack of yield opportunities.
This CEF owns securities (common and preferred stocks + some bonds) issued by REITs, energy infrastructure, utility and telephone companies.
SEC Filing: Holdings as of 3/31/19
Last SEC Filed Shareholder Report: Nuveen Real Asset Income and Growth Fund (Annual report for the period ending 12/31/18; the semi-annual report should be filed soon)
Rated 4 stars by Morningstar
6. Short Term Bond/CD Ladder Basket Strategy:
A. Early Redemption by Issuer of 6 Ventas 2.75% SU Bonds Maturing on 4/1/20:
I owned this bond in 4 accounts.
Profit Snapshots: +$44.09
This bond had a short maturity when bought. Most of the realized gains care concentrated in intermediate term bonds. Ventas paid a $2.75 per bond make whole premium to par value in addition to the accrued and unpaid interest.
Equity REITs are in a sweet spot at the moment, particularly those who can refinance debt and have rent increases tied to an inflation measure. CPI is remaining relatively steady as the weighted average debt cost comes down as the economy remains healthy.
Ventas recently sold $650M SU bonds maturing in 2030. The proceeds are being used to retire early most of a 4.25% SU bond maturing in 2022. While VTR had to pay a premium to par value to pry those 4.25% loose from their owners, the company will make that back in short order with the interest rate savings and locked in a historically low rate until 2030 as well. Ventas Announces Expiration and Results of Tender Offer for 4.25% Senior Notes Due 2022
B. Sold 1 Morgan Stanley 2.5% SU Maturing on 4/21/21:
Finra Page: Bond Detail
Issuer: Morgan Stanley (MS)
MS Analyst Estimates
Sold at 100.469
YTM at 100.469 = 2.214%
C. Bought 5 Treasury 56 Day Bills at Auction-Maturing on 10/15/19:
1.989% IR
Auction 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.
What has the FEd done with rates this year? Or this and last year?
ReplyDeleteThey cut .25% in July.
Before that? I thought raised 2xs.
Land: The Fed cut by .25% so far this year. There were a series of .25% hikes, starting in December 2015, that took the federal funds range from near zero to 2.25-2.5%.
Deletehttps://www.macrotrends.net/2015/fed-funds-rate-historical-chart
The range was 0% to .25 starting in late October 2008 until December 2015, a 7+ year period labelled as ZIRP. (Zero Interest Rate Policy)
https://www.cato.org/publications/commentary/pitfalls-federal-reserves-zero-interest-rate-policy
ZIRP was in effect a forced confiscation of income from risk free savings that would otherwise exist in a more normalized monetary policy.
I was frustrated for a long time that our gov't was making saving a non-beneficial choice.
DeleteSo it was only the one cut so far.
I personally would not give 100% bet that they will cut again. It's not going to fix the signal of the inverse. The signal is a signal, not a cause. So erasing the signal, doesn't change the cause.
The economy hasn't slowed enough to justify it. Not yet. So unless they bend to Trump pressure, they may think economically it's not the better choice. Especially with a recession possible, and so few tools left to work with.
If they don't, though, I assume the market will tank for a few weeks. Then right itself with the idea that the Fed doesn't see the economy as sinking...
Question is how much they get scared of Trump. Which I don't get at all, all of the people who have acted scared of him.
I agree, that China won't be one of those.
(I think I have the various convoluted circles of thoughts laid out right...)
Land: The 100% probability of a .25% cut at the September FED meeting comes from the federal funds future market.
DeleteThe FED has done nothing to dissuade the market about that probability assignment. I view it as done deal which is already reflected in the short term rates. There will be two no votes on that increase but Powell has the votes for another cut.
The FED may need to see more weakness before cutting again after the September meeting.
The odds of a .5% lower federal fund range on or before the December meeting is at 78.7% which feels about right based on a continuation of the trade war, a market pullback that will sap consumer confidence, recessions or near recessions developing in several foreign nations particularly in Germany and the U.K. and a continued slowdown in U.S. GDP. If those assumptions or most of them prove to be wrong, and growth picks up, then the odds will come down.
Notwithstanding the FED's PR that FF rate cuts are merely a mid cycle adjustment, suggesting that the economy has a multi-year economic expansion with no recession, the signal actually being sent by the FED's rate cut last July and the one which will happen next month is that the economy is weak and likely to lose steam, which only confirms the Bond Ghouls' opinion as expressed in the yield curve and the abnormally low nominal and real treasury yields. So in that view, the rate cuts are more likely than not self-defeating as is Trump's conflicting messages that the economy is the best ever and in need of a massive monetary jolt by the FED.
The main problem longer term, other than savers being deprived of a real return on risk free assets before taxes for an extended period measured in decades, is that monetary policy is unlikely to change anything, may even make matters worse, and will not provide much assistance in pulling the nation out of a worldwide recession.
It is interesting that Trump's order for corporations to pull out of China is probably the most socialistic statement made by any politician this year including those liberal democrats running for congress. Trump is basically issuing a government order commanding and controlling business decisions which is a defining characteristic of a government run economy. The "order" is also the most authoritarian statement made by any modern president but just more of the same from Donald.
I know the market is giving 100% bet. But I expect this might not happen. It logically shouldn't. And logic might win out at the Fed.
DeleteMy guess is someone else with big money is thinking this. And at some point, right before the decision, something will change the picture and make it less likely. However, I'm not placing my own money on this bet.
Cutting rate will lead to more slow down by reducing economic confidence.
Tanger Factory Outlet Centers Inc. (SKT)
ReplyDelete$13.88 -$0.275 -1.94%
Last Updated: Aug 26, 2019 at 2:35 p.m. EDT
https://www.marketwatch.com/investing/stock/skt
Tanger is continuing to prove that it is a toxic REIT.
Today's downdraft is probably due to a NY Post story that Ascena Retail Group, a major SKT tenant, was not returning their lenders calls.
https://seekingalpha.com/news/3494483-reply-lenders-ascena-retail-report
Link to NY Post Story:
https://nypost.com/2019/08/26/dressbarn-and-ann-taylor-owner-not-returning-lenders-calls/
Note that the lenders claim that they were to entitled to receive last May the $210M realized by ASNA when it sold its minority stake in Maurices, a discount chain, but ASNA still has the money according to this NY Post article.
The assumption that I am making is that Ascena (ASNA), whose stock is now selling for about $.25 per share, will filed for bankruptcy protection soon as a means to get out of its lease agreements for stores that it wishes to close including the 650 Dress Barn outlets.
Ascena Retail Group Inc
https://www.marketwatch.com/investing/stock/asna
Ascena is trying to convince their landlords to release them without penalty from those lease obligations after the company makes a few more lease payments. The ASNA appears to be using the threat of BK as a negotiating tactic to convince the landlords to let them out of those leases.
It remains to be seen how fast Tanger can re-lease the stores once they are reacquired from ASNA.
J.M. Smucker Co. (SJM):
ReplyDelete$102.76 -$10.17 -9.01%
Last Updated: Aug 27, 2019 at 11:51 a.m. EDT
https://www.marketwatch.com/investing/stock/sjm
The SJM slide is due to an ugly earnings report which is taking down consumer food stocks.
https://seekingalpha.com/news/3494901-food-stocks-crumble-weak-earnings?mod=mw_quote_news
SJM missed the non-GAAP consensus E.P.S. by $.17 and revenues missed by $100M.
I do not own any shares and have recently pared my small position in GIS and K.
++
The Stock Jocks are reassessing today their hard to explain gullibility in believing Donald's positive spin on the China trade negotiations yesterday. I would not bet any of my money on Donald being truthful or accurate.
The market's been moving tweet by tweet. It's hard to believe. But there it's been for a couple days now.
ReplyDeleteLand: Once an investor accepts the obvious fact that Donald lies all of the time about everything, then it is no longer rational to invest money based on his representations.
DeletePossibly when euphoria is created in the stock market relating to his representations, some selling into a price pop may be considered but that would be my only response.
Donald has reached the point where anything he says is assumed to false and/or misleading until proven otherwise by clear and convincing undisputed facts. I call that condition, which is rare, "negative credibility".
Once a person is properly classified as a liar, and Donald is one of the worst of the worst, then there is no longer any credibility.
The positive spin on the trade negotiations with China occurred during a news conference, where he made several demonstrably false statements and was incoherent and rambling as usual.
The positive spin occurred just a couple days after Donald called Xi an enemy, slapped an additional 5% tariff tax on China's exports and ordered U.S. firms to leave China.
I will discuss this subject in my next post.
The 30 year treasury bond is now trading near 1.96%:
ReplyDeletehttps://www.marketwatch.com/investing/bond/tmubmusd30y?countrycode=bx
The one month treasury bill is at 2.08+%:
https://www.marketwatch.com/investing/bond/tmubmusd01m?countrycode=bx
I will probably participate in the one month treasury bill auction on Thursday since the yield is higher than the MM sweep account yield in both my Fidelity and Schwab accounts.
As of 12:55 P.M CST
3 month T Bill 1.987%
2 year treasury note 1.526%
10 Year treasury note 1.483%
I haven't looked at 3mo to 10yr in a few weeks. It looked better in July. It's now -47pts! That hasn't had the swings to normal which the stock pops have implied were the happy state.
ReplyDeleteWhen I backtested inversion on 3m/10y,often it was a short dip, recovery, then something like this. It didn't take that long for the downturn. It's popular to say average 18 or 22 months, but in 2 out of last 3, it was 1-2 months instead. Only 2007 saw a big market upswing before the crash.
I want to sell a few things. I need a stickum or alarm that convinces me to do so when the inevitable euphoric rise happens again.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2019/08/observations-and-sample-of-recent_28.html