Economy:
The government estimates that real GDP grew 1.9% in the third quarter. The consensus estimate was for 1.6%. This is the first of several estimates. Gross Domestic Product, Third Quarter 2019 (Advance Estimate) Personal consumption expenditures increased at a 2.9% annualized rate, down from 4.6% in the second quarter. Equipment investment decreased at a 3.8% annualized rate while investments in non-residential structures decreased 15.3%.
Quotes from GDP Press Release:
"The PCE price index increased 1.5 percent, compared with an increase of 2.4 percent. Excluding food and energy prices, the PCE price index increased 2.2 percent, compared with an increase of 1.9 percent."
Personal saving was $1.34 trillion in the third quarter, compared with $1.32 trillion in the second quarter. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 8.1 percent in the third quarter, compared with 8.0 percent in the second quarter."
I view the personal savings rate at 8% to be a positive compared to the long term trend that started in 1981:
Personal Saving Rate- St. Louis Fed
ADP reported the economy added 125K private sector jobs last month. Mark Zandi noted that the job "growth has throttled way back over the past year". ADP National Employment Report® - October 2019 (see chart)
The government estimates that real GDP grew 1.9% in the third quarter. The consensus estimate was for 1.6%. This is the first of several estimates. Gross Domestic Product, Third Quarter 2019 (Advance Estimate) Personal consumption expenditures increased at a 2.9% annualized rate, down from 4.6% in the second quarter. Equipment investment decreased at a 3.8% annualized rate while investments in non-residential structures decreased 15.3%.
Quotes from GDP Press Release:
"The PCE price index increased 1.5 percent, compared with an increase of 2.4 percent. Excluding food and energy prices, the PCE price index increased 2.2 percent, compared with an increase of 1.9 percent."
Personal saving was $1.34 trillion in the third quarter, compared with $1.32 trillion in the second quarter. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 8.1 percent in the third quarter, compared with 8.0 percent in the second quarter."
I view the personal savings rate at 8% to be a positive compared to the long term trend that started in 1981:
ADP reported the economy added 125K private sector jobs last month. Mark Zandi noted that the job "growth has throttled way back over the past year". ADP National Employment Report® - October 2019 (see chart)
Calculated Risk: Case-Shiller: National House Price Index increased 3.2% year-over-year in August; S&P CoreLogic Case-Shiller Home Price Indices Indices - Real Estate - S&P Dow Jones Indices After seasonal adjustment, the 20 city index posted a .2% decrease in price. U.S. house prices drop 0.2% in August - MarketWatch
US consumer confidence for October comes in at 125.9, vs 128 expected September was reported at 126.3.
US consumer confidence for October comes in at 125.9, vs 128 expected September was reported at 126.3.
++++++
Markets and Market Commentary:
The probability that the FED will cut the FF rate by .25% later today is currently at 98.3%, so call it 100%.
Countdown to FOMC: CME FedWatch Tool
Charting a break to ‘clear skies’ territory, S&P 500 tags all-time highs - MarketWatch
The signals are ‘loud and clear’ — a new bull market is underway, strategist says - MarketWatch
I would treat the claims made in the previous two links with caution.
The probability that the FED will cut the FF rate by .25% later today is currently at 98.3%, so call it 100%.
Countdown to FOMC: CME FedWatch Tool
Charting a break to ‘clear skies’ territory, S&P 500 tags all-time highs - MarketWatch
The signals are ‘loud and clear’ — a new bull market is underway, strategist says - MarketWatch
I would treat the claims made in the previous two links with caution.
‘Carnage awaits’ investors, if this chart is anything to go by - MarketWatch (chart of S&P index and earnings show the largest divergence since 2000)
After new record, these are the stocks Wall Street thinks will lead the next market leg higher
Alphabet earnings miss (E.P.S. at $10.12 vs. $12.42 consensus); Alphabet tumbles on earnings, but traders see a buy
The trailing 12 month GAAP P/E for the S & P 500 is currently close to 24. The P/E on estimated non-GAAP earnings for the next 12 months is currently 18.25. P/E & Yields Those are high values by historical standards.
++++
Portfolio Management:
A month ago, I bought 7 CDs with a 2.05% coupon that matured today in a Roth IRA account. I am not going to redeploy the proceeds into another CD or a treasury bill or bond. I will gradually deploy the proceeds into stocks, CEFs, and ETFs using commission free trades.
Success will be defined as any annual average total return in excess of 4%.
Call 1.5% the current risk free return and another 2.5%+ as the minimum necessary to assume risk.
Buys will not be discussed here and will be in very small baby odd lots. A stock selling between $10 to $20 would be restricted to a 10 share purchase as an example.
Another requirement is that the weighted average yield has to exceed 5%. Assuming the end result is no net loss on the shares, and a weighted average yield of 5%+, I will achieve the 4%+ total annual average return objective.
Even though it will be meaningless, I will try to improve on the total return number through some light trading of the baby odd lots.
Prior to the brokers implementing commission free trades in all accounts including retirement accounts, I would not have been able to implement this version of small ball in a IRA account since there was no way to secure commission free trades.
Vanguard Brokerage Accounts:
Vanguard has not gone to zero commissions for online trades of U.S. stocks. I am currently paying $7 per trade. Vanguard ETFs can now be bought at other brokers commission free. Vanguard charges a $2 per bond commission whereas I can buy bonds at other brokers for a $1 per bond commission. I have noted also that Vanguard's order books for bonds frequently have less advantageous prices for small lot orders compared to Fidelity or Interactive Brokers.
In other words, Vanguard has become by far my most unappealing broker. I see no reason to pay a $7 commission to buy stocks (common or preferred) and CEFs.
Still, the Vanguard MM funds pay more than the ones available at other brokers, and I am able to buy Vanguard mutual funds on a NTF basis. Over 1700 ETFs can be purchased commission free. While commission free ETFs are no longer an advantage for Vanguard, it does provide me with a low cost option when I decide to take on more risk.
I will gradually redeploy funds out of my Vanguard taxable account when and as needed in other brokerage accounts or as a source of funds for expenses.
+++
Interactive Brokerage Account:
Another loser IMO in the commission free era is IB who charges US$1 for online trades in U.S. listed securities.
IB requires their customers to pay for real time quotes which are free at brokers who now charge no commission. Subscription considerations for U.S. market data (Non-Professionals) | IB Knowledge Base (far too complicated IMO) I have never done so. Instead, I will open either my Schwab or Fidelity account, where I have free quotes, and use their quote data when placing trades at IB.
Moreover, IB requires specialized software that I had to purchase as an intermediary for downloads into Quicken. I still have to manually fill in certain information.
When I look at my account at IB, many of the securities have no quotes.
Online Statements do not provide information about lot costs but only the total cost.
While IB is offering a new account with no commission for online U.S. trades of stocks and ETFs, that account comes with several drawbacks that makes it even less desirable for me.
For now, I will be keeping the IB account primarily for bond and international trading.
International trading and currency conversions are cheaper at IB compared to my other brokers. Bond commissions run at $1 per bond which is better than Vanguard and Schwab (only for less than 10 bonds), but no different than what I pay at Fidelity.
Alphabet earnings miss (E.P.S. at $10.12 vs. $12.42 consensus); Alphabet tumbles on earnings, but traders see a buy
The trailing 12 month GAAP P/E for the S & P 500 is currently close to 24. The P/E on estimated non-GAAP earnings for the next 12 months is currently 18.25. P/E & Yields Those are high values by historical standards.
++++
Portfolio Management:
A month ago, I bought 7 CDs with a 2.05% coupon that matured today in a Roth IRA account. I am not going to redeploy the proceeds into another CD or a treasury bill or bond. I will gradually deploy the proceeds into stocks, CEFs, and ETFs using commission free trades.
Success will be defined as any annual average total return in excess of 4%.
Call 1.5% the current risk free return and another 2.5%+ as the minimum necessary to assume risk.
Buys will not be discussed here and will be in very small baby odd lots. A stock selling between $10 to $20 would be restricted to a 10 share purchase as an example.
Another requirement is that the weighted average yield has to exceed 5%. Assuming the end result is no net loss on the shares, and a weighted average yield of 5%+, I will achieve the 4%+ total annual average return objective.
Even though it will be meaningless, I will try to improve on the total return number through some light trading of the baby odd lots.
Prior to the brokers implementing commission free trades in all accounts including retirement accounts, I would not have been able to implement this version of small ball in a IRA account since there was no way to secure commission free trades.
Vanguard Brokerage Accounts:
Vanguard has not gone to zero commissions for online trades of U.S. stocks. I am currently paying $7 per trade. Vanguard ETFs can now be bought at other brokers commission free. Vanguard charges a $2 per bond commission whereas I can buy bonds at other brokers for a $1 per bond commission. I have noted also that Vanguard's order books for bonds frequently have less advantageous prices for small lot orders compared to Fidelity or Interactive Brokers.
In other words, Vanguard has become by far my most unappealing broker. I see no reason to pay a $7 commission to buy stocks (common or preferred) and CEFs.
Still, the Vanguard MM funds pay more than the ones available at other brokers, and I am able to buy Vanguard mutual funds on a NTF basis. Over 1700 ETFs can be purchased commission free. While commission free ETFs are no longer an advantage for Vanguard, it does provide me with a low cost option when I decide to take on more risk.
I will gradually redeploy funds out of my Vanguard taxable account when and as needed in other brokerage accounts or as a source of funds for expenses.
+++
Interactive Brokerage Account:
Another loser IMO in the commission free era is IB who charges US$1 for online trades in U.S. listed securities.
IB requires their customers to pay for real time quotes which are free at brokers who now charge no commission. Subscription considerations for U.S. market data (Non-Professionals) | IB Knowledge Base (far too complicated IMO) I have never done so. Instead, I will open either my Schwab or Fidelity account, where I have free quotes, and use their quote data when placing trades at IB.
Moreover, IB requires specialized software that I had to purchase as an intermediary for downloads into Quicken. I still have to manually fill in certain information.
When I look at my account at IB, many of the securities have no quotes.
Online Statements do not provide information about lot costs but only the total cost.
While IB is offering a new account with no commission for online U.S. trades of stocks and ETFs, that account comes with several drawbacks that makes it even less desirable for me.
For now, I will be keeping the IB account primarily for bond and international trading.
International trading and currency conversions are cheaper at IB compared to my other brokers. Bond commissions run at $1 per bond which is better than Vanguard and Schwab (only for less than 10 bonds), but no different than what I pay at Fidelity.
++++++
Trump:
Donald is building a wall along Colorado's border with Mexico. Who knew? Trump: ‘We’re building a wall in Colorado’ After someone pointed out to the Duck that there is no common border, Donald claimed he was kidding rather than just being plain ignorant about U.S. geography.
Former VA Secretary David Shulkin speaks out about 'shadow government' under Trump The Inspector General recently issued a report on how Trump's appointees to the VA's Office of Accountability and Whistleblower Protection took steps to put whistleblowers in more danger of retaliation. Veterans Affairs Whistleblowers Weren't Protected Under Trump, IG Says: NPR
Since college students are voting in increasing numbers, and a majority are not voting for right way, republicans are stepping up their efforts to make it more difficult for students to vote. The Student Vote Is Surging. So Are Efforts to Suppress It. - The New York Times This is to be expected and is a tried and true method used to win close elections.
I mentioned this potential abuse of power in my last post: Trump told Mattis to "screw Amazon" out of Pentagon cloud contract JEDI
Trump thanks Kurds for role in U.S. operation that killed ISIS leader Abu Bakr al-Baghdadi
++++
Trump and the Ukraine:
Army Officer on White House Staff Reported Concerns on Trump’s Ukraine Dealings LT. Colonel Alexander S. Vindman of the Army, the top Ukraine expert on the National Security Council, listened in real time to Trump's call with the Ukraine. Vindman, who has personal knowledge, testified that it was not "proper to demand that a foreign government investigate a U.S. citizen, and I was worried about the implications for the U.S. government’s support of Ukraine." Impeachment Inquiry: Read Lt. Col. Alexander Vindman's Written Testimony: NPR
Vindman testified that Trump's linkage of military aid to an investigation of the Bidens undermined U.S. national security in his opinion.
Vindman's also directly implicates Sondland in the quid pro quo:
If Sondland testified under oath that he did not know that Trump wanted the Ukraine to investigate the Bidens, Vindman's testimony and probably others as well will subject him to possible perjury charges.
Numerous witnesses have direct knowledge of Sondland's quid pro quo in these July meetings occurring prior to Trump's telephone call with Zelensky. Two volatile meetings at the White House have become central to the impeachment inquiry (Ukraine knew about the quid pro quo and knew that it was being pressured before the telephone call)
Gordon Sondland claims he was unaware of Rudy Giuliani’s widely publicized Ukraine-Biden efforts; Sondland’s Ukraine Alibi: I Was the Dumbest Diplomat Ever; This central claim in Gordon Sondland’s testimony just doesn’t add up - The Washington Post
He also conveyed his concerns to national security officials including, on two occasions, to "John A. Eisenberg, the top lawyer at the National Security Council."
Since Vindman's testimony is not favorable to Donald, Fox "News" has already started a campaign to smear him. Laura Ingraham called Vindman a double agent "who is advising Ukraine while working inside the White House, apparently against the president’s interests.” The republican lawyer John Yoo, who provided Bush with a memo claiming torture was consistent with international law including the Geneva convention, replied “I find that astounding, and some people might call that espionage.” Torture Memos - Wikipedia; The Torture Memos, 10 Years Later - The Atlantic'
Note how Ms. Ingraham conflates the president's interest in linking military aid to an investigation of the Bidens, which is only in the Duck's personal political interest, to the nation's interest.
Trump smeared Vindman in usual fact free way. Trump and allies try to undermine impeachment witness Vindman's credibility; Fox show claims Alexander Vindman, who's spent his life in U.S. military, is Ukrainian spy - The Washington Post Vindman immigrated to the U.S. with his family when he was 3.
The following are some of Trump's tweets, published in rapid succession yesterday, attacking Vindman and others who dared to tell the truth:
One republican politician did express concern about the constant republican attacks on patriotic Americans who have served the U.S. in uniform and throughout their adult lives:
Liz Cheney (R-WY): "It is shameful to question their patriotism, their love of this NATION." In Trump's America, that is what stands for a brave statement since it is not brazenly servile to Donald's reality creations and demonstrably false narratives and statements.
"Have You No Sense of Decency, Sir?"-YouTube (refers to what Joseph Welch said to Senator Joseph McCarthy) If that question involved Donald Trump, the answer would be a resounding "no". Trump is just a thoroughly disgusting and repulsive human being.
The conservative commentator David French observed that the "sheer number of American vets the Trumpists will insult, slander, and mock for the sake of their corrupt, draft-dodging dear leader is just astonishing.”
The republicans, their obedient and never questioning propagandists at Fox "News", and Trump's cult members will try to smear anyone with false assertions who dares to contradict the Duck's lies with truthful testimony made under oath.
+++
Donald, his GOP Enablers and Impeachment:
Republicans are not telling the faithful that their members are attending the closed depositions and are asking questions.
Their questions during those depositions do not reflect any interest in developing the facts, but on trying to unmask the first whistleblower, who has now been attacked by Donald over 40 times, and to ask foolish questions about their pet conspiracy theories. In impeachment inquiry, Republican lawmakers ask questions about whistleblower, loyalty to Trump and conspiracy theories
Devin Nunes, his staff advisor Derek Harvey, and the GOP bomb thrower Jim Jordan are in attendance. Harvey was fired by General McMaster from the NSC and landed a job with Nunes.
The republicans have gone rogue in their defense of Trump: Nunes Aide Is Leaking the Ukraine Whistleblower’s Name, Sources Say
Trump has accused the whistleblower of "treason" and "almost a spy". Trump: “You know what we used to do in the old days when we were smart with spies and treason, right? We used to handle it a little differently than we do now.” Whistleblower: Donald Trump says source of complaint is 'almost a spy': USA Today
Even though the whistleblower's was spot on describing the conversation between Trump and Zelensky, which was confirmed by the summary of the call released by the Duck and several witnesses, Donald continues to assert the whistleblower's account of his "perfect" call was fraudulent and biased.
Trump's Inaccurate Claims About His 'Perfect' Call- FactCheck.org;
Whistleblower under fire by Donald Trump and anti-impeachment allies: USA Today
Trump escalates attacks on whistleblower | TheHill
Nunes and Jordon are among the most vitriolic Trumpsters in the House. “Idiots,” “Anarchists,” and “Assholes”: John Boehner Unloads on Republicans in Post-Retirement Interview | Vanity Fair
John Bolton, welcome to the Resistance? Bolton's testimony could be devastating to Donald, but that will not matter to the republican politicians and the Trumpsters. Impeachment inquiry: John Bolton is in talks to testify - Vox
Just more rants from Delusional Don: Trump Threatens to Sue Democrats and 'Shifty Adam Schiff' for Fraud Over Impeachment In TrumpWorld, the alleged fraud committed by Schiff was to describe the substance of Trump's telephone call with Zelensky as revealed by the summary released by Donald.
CollegeReaction.com-Poll: 75% of college students support impeachment
++
John Kelly and Trump:
'I feel bad that I left': John Kelly warned Trump he would be impeached; John Kelly says he told Trump a 'yes man' would get him impeached
Donald responded to that quip: White House: John Kelly 'was totally unequipped to handle the genius of our great President' - CNN I bet that was dictated by the Duck himself-certainly sounds like it.
The bottom line is that there is no one left who will restrain Trump from violating the law and abusing his power.
++
Republican Complaints About the Impeachment Process:
Trump lawyer claims lack of due process in House impeachment. 3 reasons the law doesn’t back him up | PolitiFact
Republicans storm impeachment inquiry deposition in House Intel hearing room This political stunt delayed the testimony of Laura Cooper, a deputy assistant secretary of defense who had been ordered by Trump to disobey the House subpoena as part of his obstruction of justice efforts. Pentagon official testifies about withheld military aid to Ukraine - POLITICO
The House parliamentarian ruled that they had no right to be in the Intel hearing room. Further, the republicans broke House rules by bringing their cell phones in that secure facility, refusing to remove the devices after being warmed by the sergeant at arms.
Impeachment deposition delayed after Republicans storm proceedings - POLITICO This is what Donald wanted them to do but only a couple dozen complied with his demand.
What Trump and his compadres fail to note is that republican members of the House committees are attending the depositions and asking questions.
Republicans crash secure room, disrupt testimony in impeachment probe
House Democrat says all Ukraine witness transcripts will be released after being scrubbed for classified Information - Axios
In a grand jury investigation, deliberations are kept secret in part to prevent witnesses from knowing, prior to giving testimony, what other witnesses have said about the same subject matter.
The purpose is to prevent as much as possible witness collaboration which results in consistent but false or misleading testimony.
The same underlying principle takes place in civil trials where non-party witnesses are sequestered and not allowed to attend the hearing until called upon to give their testimony.
The republicans want to focus on the process rather than the substance of the inquiry; and there are reasons why that is the case. The facts do not support their case.
Their complaints about the process have no merit but serve to distract from the substance being revealed.
The House will hold public hearings. House Democrats release resolution detailing next steps in impeachment inquiry Republican and Democrat staff counsel can question each witnesses for up to 45 minutes. The President's counsel can participate. Republicans are not happy that they will not be able to subpoena conspiracy wingnuts and turn the hearings into a circus.
The Democrats will want the public to see and hear the key witnesses and republicans will have a chance to grandstand and act wrap themselves in victimhood during the hearings.
I would note that Senator Graham, who is one of the biggest, in-your-face hypocrites in Washington, is the Chairman of the Senate Judiciary Committee. If he wants to hold hearings and subpoena witnesses, he can do so. He has the power to hold public hearings on the matters being investigated by the House.
Republicans believe that lying about the evidence is going to help them resist impeachment and that will work on millions of their tribe members who will believe them, notwithstanding the proof.
The problem with that approach is that they will lose credibility among voters who are aware of what they are doing and find it disgusting.
Losing those independent and marginal republican voters would not matter in strong republican districts and states, but could easily swing elections to Democrats in swing states and districts. Trump will carry Tennessee, for example, no matter how many egregious acts that he commits.
++
2020 Senate Elections:
The Democrats have the advantage in picking up seats in 2020, whereas the GOP had the advantage in 2018.
In the 2020 senate races, the following republicans are vulnerable now to losing: Collins (Maine), Ernst (Iowa); Gardiner (Colorado), McSally (Arizona), and Tillis (North Carolina).
A few others may find their reelection efforts more difficult than currently anticipated by them, provided the Democrats field a viable candidate, but will most likely win nonetheless: Cassidy (Louisiana), Cornyn (Texas), Cotton (Arkansas), Danes (Montana); McConnell (Kentucky) and Rounds (South Dakota). To have a chance in those elections, the Democrats will need a viable candidate and ongoing recession on election day. Of the mentioned in this paragraph, the one that is most likely to flip to a Democrat senator first is Arkansas IMO. Cotton may be too far right for Arkansas.
The only vulnerable Democrat senator in 2020 is Jones (Alabama).
{There is not yet a viable candidate running against Cotton (R-AK). Senator Cassidy (R-LA) beat a Democrat incumbent in 2014. McConnell is facing a potentially viable candidate in Amy McGrath. A major problem in South Dakota is that independent candidates make it difficult for a Democrat to win, with 2 independent candidates taking 20.1% of the vote when Rounds won in 2014. Rounds won the election with 50.4% of the vote. SD has elected democrats as senators, with the two most widely known being George McGovern and Tom Daschle}
United States Senate elections, 2020 - Ballotpedia
Although I voted for republicans in the past, that will not be repeated anytime soon since IMO the entire republican party needs to be punished for embracing and nurturing Donald Trump.
++++
GOP Hypocrisy About Insults:
Donald is building a wall along Colorado's border with Mexico. Who knew? Trump: ‘We’re building a wall in Colorado’ After someone pointed out to the Duck that there is no common border, Donald claimed he was kidding rather than just being plain ignorant about U.S. geography.
Former VA Secretary David Shulkin speaks out about 'shadow government' under Trump The Inspector General recently issued a report on how Trump's appointees to the VA's Office of Accountability and Whistleblower Protection took steps to put whistleblowers in more danger of retaliation. Veterans Affairs Whistleblowers Weren't Protected Under Trump, IG Says: NPR
Since college students are voting in increasing numbers, and a majority are not voting for right way, republicans are stepping up their efforts to make it more difficult for students to vote. The Student Vote Is Surging. So Are Efforts to Suppress It. - The New York Times This is to be expected and is a tried and true method used to win close elections.
I mentioned this potential abuse of power in my last post: Trump told Mattis to "screw Amazon" out of Pentagon cloud contract JEDI
Trump thanks Kurds for role in U.S. operation that killed ISIS leader Abu Bakr al-Baghdadi
++++
Trump and the Ukraine:
Army Officer on White House Staff Reported Concerns on Trump’s Ukraine Dealings LT. Colonel Alexander S. Vindman of the Army, the top Ukraine expert on the National Security Council, listened in real time to Trump's call with the Ukraine. Vindman, who has personal knowledge, testified that it was not "proper to demand that a foreign government investigate a U.S. citizen, and I was worried about the implications for the U.S. government’s support of Ukraine." Impeachment Inquiry: Read Lt. Col. Alexander Vindman's Written Testimony: NPR
Vindman testified that Trump's linkage of military aid to an investigation of the Bidens undermined U.S. national security in his opinion.
Vindman's also directly implicates Sondland in the quid pro quo:
Numerous witnesses have direct knowledge of Sondland's quid pro quo in these July meetings occurring prior to Trump's telephone call with Zelensky. Two volatile meetings at the White House have become central to the impeachment inquiry (Ukraine knew about the quid pro quo and knew that it was being pressured before the telephone call)
Gordon Sondland claims he was unaware of Rudy Giuliani’s widely publicized Ukraine-Biden efforts; Sondland’s Ukraine Alibi: I Was the Dumbest Diplomat Ever; This central claim in Gordon Sondland’s testimony just doesn’t add up - The Washington Post
He also conveyed his concerns to national security officials including, on two occasions, to "John A. Eisenberg, the top lawyer at the National Security Council."
Since Vindman's testimony is not favorable to Donald, Fox "News" has already started a campaign to smear him. Laura Ingraham called Vindman a double agent "who is advising Ukraine while working inside the White House, apparently against the president’s interests.” The republican lawyer John Yoo, who provided Bush with a memo claiming torture was consistent with international law including the Geneva convention, replied “I find that astounding, and some people might call that espionage.” Torture Memos - Wikipedia; The Torture Memos, 10 Years Later - The Atlantic'
Note how Ms. Ingraham conflates the president's interest in linking military aid to an investigation of the Bidens, which is only in the Duck's personal political interest, to the nation's interest.
Trump smeared Vindman in usual fact free way. Trump and allies try to undermine impeachment witness Vindman's credibility; Fox show claims Alexander Vindman, who's spent his life in U.S. military, is Ukrainian spy - The Washington Post Vindman immigrated to the U.S. with his family when he was 3.
The following are some of Trump's tweets, published in rapid succession yesterday, attacking Vindman and others who dared to tell the truth:
One republican politician did express concern about the constant republican attacks on patriotic Americans who have served the U.S. in uniform and throughout their adult lives:
Liz Cheney (R-WY): "It is shameful to question their patriotism, their love of this NATION." In Trump's America, that is what stands for a brave statement since it is not brazenly servile to Donald's reality creations and demonstrably false narratives and statements.
"Have You No Sense of Decency, Sir?"-YouTube (refers to what Joseph Welch said to Senator Joseph McCarthy) If that question involved Donald Trump, the answer would be a resounding "no". Trump is just a thoroughly disgusting and repulsive human being.
The conservative commentator David French observed that the "sheer number of American vets the Trumpists will insult, slander, and mock for the sake of their corrupt, draft-dodging dear leader is just astonishing.”
The republicans, their obedient and never questioning propagandists at Fox "News", and Trump's cult members will try to smear anyone with false assertions who dares to contradict the Duck's lies with truthful testimony made under oath.
+++
Donald, his GOP Enablers and Impeachment:
Republicans are not telling the faithful that their members are attending the closed depositions and are asking questions.
Their questions during those depositions do not reflect any interest in developing the facts, but on trying to unmask the first whistleblower, who has now been attacked by Donald over 40 times, and to ask foolish questions about their pet conspiracy theories. In impeachment inquiry, Republican lawmakers ask questions about whistleblower, loyalty to Trump and conspiracy theories
Devin Nunes, his staff advisor Derek Harvey, and the GOP bomb thrower Jim Jordan are in attendance. Harvey was fired by General McMaster from the NSC and landed a job with Nunes.
The republicans have gone rogue in their defense of Trump: Nunes Aide Is Leaking the Ukraine Whistleblower’s Name, Sources Say
Trump has accused the whistleblower of "treason" and "almost a spy". Trump: “You know what we used to do in the old days when we were smart with spies and treason, right? We used to handle it a little differently than we do now.” Whistleblower: Donald Trump says source of complaint is 'almost a spy': USA Today
Even though the whistleblower's was spot on describing the conversation between Trump and Zelensky, which was confirmed by the summary of the call released by the Duck and several witnesses, Donald continues to assert the whistleblower's account of his "perfect" call was fraudulent and biased.
Trump's Inaccurate Claims About His 'Perfect' Call- FactCheck.org;
Whistleblower under fire by Donald Trump and anti-impeachment allies: USA Today
Trump escalates attacks on whistleblower | TheHill
Nunes and Jordon are among the most vitriolic Trumpsters in the House. “Idiots,” “Anarchists,” and “Assholes”: John Boehner Unloads on Republicans in Post-Retirement Interview | Vanity Fair
John Bolton, welcome to the Resistance? Bolton's testimony could be devastating to Donald, but that will not matter to the republican politicians and the Trumpsters. Impeachment inquiry: John Bolton is in talks to testify - Vox
Just more rants from Delusional Don: Trump Threatens to Sue Democrats and 'Shifty Adam Schiff' for Fraud Over Impeachment In TrumpWorld, the alleged fraud committed by Schiff was to describe the substance of Trump's telephone call with Zelensky as revealed by the summary released by Donald.
CollegeReaction.com-Poll: 75% of college students support impeachment
++
John Kelly and Trump:
'I feel bad that I left': John Kelly warned Trump he would be impeached; John Kelly says he told Trump a 'yes man' would get him impeached
Donald responded to that quip: White House: John Kelly 'was totally unequipped to handle the genius of our great President' - CNN I bet that was dictated by the Duck himself-certainly sounds like it.
The bottom line is that there is no one left who will restrain Trump from violating the law and abusing his power.
++
Republican Complaints About the Impeachment Process:
Trump lawyer claims lack of due process in House impeachment. 3 reasons the law doesn’t back him up | PolitiFact
Republicans storm impeachment inquiry deposition in House Intel hearing room This political stunt delayed the testimony of Laura Cooper, a deputy assistant secretary of defense who had been ordered by Trump to disobey the House subpoena as part of his obstruction of justice efforts. Pentagon official testifies about withheld military aid to Ukraine - POLITICO
The House parliamentarian ruled that they had no right to be in the Intel hearing room. Further, the republicans broke House rules by bringing their cell phones in that secure facility, refusing to remove the devices after being warmed by the sergeant at arms.
Impeachment deposition delayed after Republicans storm proceedings - POLITICO This is what Donald wanted them to do but only a couple dozen complied with his demand.
What Trump and his compadres fail to note is that republican members of the House committees are attending the depositions and asking questions.
Republicans crash secure room, disrupt testimony in impeachment probe
House Democrat says all Ukraine witness transcripts will be released after being scrubbed for classified Information - Axios
In a grand jury investigation, deliberations are kept secret in part to prevent witnesses from knowing, prior to giving testimony, what other witnesses have said about the same subject matter.
The purpose is to prevent as much as possible witness collaboration which results in consistent but false or misleading testimony.
The same underlying principle takes place in civil trials where non-party witnesses are sequestered and not allowed to attend the hearing until called upon to give their testimony.
The republicans want to focus on the process rather than the substance of the inquiry; and there are reasons why that is the case. The facts do not support their case.
Their complaints about the process have no merit but serve to distract from the substance being revealed.
The House will hold public hearings. House Democrats release resolution detailing next steps in impeachment inquiry Republican and Democrat staff counsel can question each witnesses for up to 45 minutes. The President's counsel can participate. Republicans are not happy that they will not be able to subpoena conspiracy wingnuts and turn the hearings into a circus.
The Democrats will want the public to see and hear the key witnesses and republicans will have a chance to grandstand and act wrap themselves in victimhood during the hearings.
I would note that Senator Graham, who is one of the biggest, in-your-face hypocrites in Washington, is the Chairman of the Senate Judiciary Committee. If he wants to hold hearings and subpoena witnesses, he can do so. He has the power to hold public hearings on the matters being investigated by the House.
Republicans believe that lying about the evidence is going to help them resist impeachment and that will work on millions of their tribe members who will believe them, notwithstanding the proof.
The problem with that approach is that they will lose credibility among voters who are aware of what they are doing and find it disgusting.
Losing those independent and marginal republican voters would not matter in strong republican districts and states, but could easily swing elections to Democrats in swing states and districts. Trump will carry Tennessee, for example, no matter how many egregious acts that he commits.
++
2020 Senate Elections:
The Democrats have the advantage in picking up seats in 2020, whereas the GOP had the advantage in 2018.
In the 2020 senate races, the following republicans are vulnerable now to losing: Collins (Maine), Ernst (Iowa); Gardiner (Colorado), McSally (Arizona), and Tillis (North Carolina).
A few others may find their reelection efforts more difficult than currently anticipated by them, provided the Democrats field a viable candidate, but will most likely win nonetheless: Cassidy (Louisiana), Cornyn (Texas), Cotton (Arkansas), Danes (Montana); McConnell (Kentucky) and Rounds (South Dakota). To have a chance in those elections, the Democrats will need a viable candidate and ongoing recession on election day. Of the mentioned in this paragraph, the one that is most likely to flip to a Democrat senator first is Arkansas IMO. Cotton may be too far right for Arkansas.
The only vulnerable Democrat senator in 2020 is Jones (Alabama).
{There is not yet a viable candidate running against Cotton (R-AK). Senator Cassidy (R-LA) beat a Democrat incumbent in 2014. McConnell is facing a potentially viable candidate in Amy McGrath. A major problem in South Dakota is that independent candidates make it difficult for a Democrat to win, with 2 independent candidates taking 20.1% of the vote when Rounds won in 2014. Rounds won the election with 50.4% of the vote. SD has elected democrats as senators, with the two most widely known being George McGovern and Tom Daschle}
United States Senate elections, 2020 - Ballotpedia
Although I voted for republicans in the past, that will not be repeated anytime soon since IMO the entire republican party needs to be punished for embracing and nurturing Donald Trump.
++++
GOP Hypocrisy About Insults:
The Trumpsters were really upset when Hillary called 1/2 of them "deplorables", a totally inept and politically incompetent comment made by her, and she quickly apologized for saying one-half after the damage to her winning the election was done. Hillary Clinton Said 'Half' Of Trump Supporters Are In A 'Basket Of Deplorables' : NPR
There are undesirable people who support candidates of every political persuasion.
The Trumpsters are not upset, however, when Donald asserts that Democrats are unpatriotic as he did last week. Instead of booing those kind of remarks, the Trumpsters cheer. Trump, In Texas, Bashes Democrats as 'Crazy' and Unpatriotic | Time
What is the difference? Trump's pejorative and inflammatory comments about Democrats occur almost daily while Hillary's absurd comment was made once.
Just the other day, Donald called republicans who do not support him "human scum". Donald Trump describes Republican critics as 'human scum': USA Today This is normal for the current President of the United States.
Trump has repeatedly slimed William Taylor, who has served the U.S. for 50 years as a dedicated and non-partisan public servant, because the Duck was angry about anyone daring to tell the truth and disobeying his order to refrain from testifying. The White House resorts to character assassination of courageous public servants - The Washington Post ("After graduating from West Point, he was deployed for six years as an infantry officer, including with the 101st Airborne Division in Vietnam. Later he worked at NATO and as a State Department diplomat in Afghanistan, Iraq, Israel and Ukraine, where he was first appointed ambassador by George W. Bush.')
Fact-check: Despite Trump's claim, there's no proof diplomat Bill Taylor is a Never Trumper
Bill Taylor defended as a 'man of honor' and 'public servant' by three veterans who served with him
At age 72, Taylor had been asked by Pompeo to become the acting U.S. Ambassador to Ukraine after Donald fired Marie Yovanovitch for doing her job. How Former Ambassador Marie Yovanovitch Became A Target In Ukraine : NPR
I view myself as an independent and have barely managed-on very rare occasions - a hardly detectable, tepidly lukewarm response to any politician. I have voted for republicans in the past.
My general response is that I like none of the candidates but the decree of dislike will vary-sometimes substantially which is the case with Trump. Some of you may have guessed that I am not a Trump fan.
I do believe it is appropriate to be critical of anyone who views Donald as honest and a role model for their children; and/or who accepts his reality creations and unsubstantiated wingnut conspiracy theories as facts; and/or who fails to recognize Donald's malignant narcissism, strong authoritarian tendencies, demagoguery, viciousness and persistent efforts to enhance the political divide.
This does not mean that those persons are "deplorables" or anything close, but their judgment, common sense and knowledge can legitimately be questioned. They need to do better in their roles as citizens but I would not hold my breathe on that one.
When I was growing up, blue color men and women voted predominantly for Democrats, recognizing correctly IMO that the GOP was more concerned with advancing the interest of their employers and the rich who supported their political campaigns in exchange for lower tax bills.
A majority of those workers now support Trump and the republicans. Analysis: Trump Leans on a Changed GOP for Support
Two common themes that contributed to that political transition was a shared belief that the Democrats "looked down on them" and were far more willing to help those who did not work than those he did.
The republican policy objectives have not changed over the years.
The focus is to reduce taxes for their wealthy individual and corporate benefactors; to reduce environmental regulations; to reduce spending on social programs including Medicare and programs that primarily benefit their rural voters; and to increase defense spending as a percentage of overall federal spending.
What has changed is that the GOP has convinced working class voters that those policies are actually for their benefit.
Some of those workers will switch back and forth between the two major parties. Many did vote for Obama and Trump.
For the vast majority of them who do not base their vote on certain social issues like abortion or gay marriage, there will need to incontrovertible proof that the GOP has sold them a bill of goods as a precondition for a non-temporary political party realignment.
Trickle down economics was never meant to benefit them and never did.
But that is not obvious at the current time with the economy still producing jobs and some GDP growth.
Perhaps a few eyes will be opened during the next recession or financial crisis that results in another Near Depression or Great Depression. During the last Great Depression, people understood that tax breaks for the wealthy were not going to solve the problem.
There are undesirable people who support candidates of every political persuasion.
The Trumpsters are not upset, however, when Donald asserts that Democrats are unpatriotic as he did last week. Instead of booing those kind of remarks, the Trumpsters cheer. Trump, In Texas, Bashes Democrats as 'Crazy' and Unpatriotic | Time
What is the difference? Trump's pejorative and inflammatory comments about Democrats occur almost daily while Hillary's absurd comment was made once.
Just the other day, Donald called republicans who do not support him "human scum". Donald Trump describes Republican critics as 'human scum': USA Today This is normal for the current President of the United States.
Trump has repeatedly slimed William Taylor, who has served the U.S. for 50 years as a dedicated and non-partisan public servant, because the Duck was angry about anyone daring to tell the truth and disobeying his order to refrain from testifying. The White House resorts to character assassination of courageous public servants - The Washington Post ("After graduating from West Point, he was deployed for six years as an infantry officer, including with the 101st Airborne Division in Vietnam. Later he worked at NATO and as a State Department diplomat in Afghanistan, Iraq, Israel and Ukraine, where he was first appointed ambassador by George W. Bush.')
Fact-check: Despite Trump's claim, there's no proof diplomat Bill Taylor is a Never Trumper
Bill Taylor defended as a 'man of honor' and 'public servant' by three veterans who served with him
At age 72, Taylor had been asked by Pompeo to become the acting U.S. Ambassador to Ukraine after Donald fired Marie Yovanovitch for doing her job. How Former Ambassador Marie Yovanovitch Became A Target In Ukraine : NPR
I view myself as an independent and have barely managed-on very rare occasions - a hardly detectable, tepidly lukewarm response to any politician. I have voted for republicans in the past.
My general response is that I like none of the candidates but the decree of dislike will vary-sometimes substantially which is the case with Trump. Some of you may have guessed that I am not a Trump fan.
I do believe it is appropriate to be critical of anyone who views Donald as honest and a role model for their children; and/or who accepts his reality creations and unsubstantiated wingnut conspiracy theories as facts; and/or who fails to recognize Donald's malignant narcissism, strong authoritarian tendencies, demagoguery, viciousness and persistent efforts to enhance the political divide.
This does not mean that those persons are "deplorables" or anything close, but their judgment, common sense and knowledge can legitimately be questioned. They need to do better in their roles as citizens but I would not hold my breathe on that one.
When I was growing up, blue color men and women voted predominantly for Democrats, recognizing correctly IMO that the GOP was more concerned with advancing the interest of their employers and the rich who supported their political campaigns in exchange for lower tax bills.
A majority of those workers now support Trump and the republicans. Analysis: Trump Leans on a Changed GOP for Support
Two common themes that contributed to that political transition was a shared belief that the Democrats "looked down on them" and were far more willing to help those who did not work than those he did.
The republican policy objectives have not changed over the years.
The focus is to reduce taxes for their wealthy individual and corporate benefactors; to reduce environmental regulations; to reduce spending on social programs including Medicare and programs that primarily benefit their rural voters; and to increase defense spending as a percentage of overall federal spending.
What has changed is that the GOP has convinced working class voters that those policies are actually for their benefit.
Some of those workers will switch back and forth between the two major parties. Many did vote for Obama and Trump.
For the vast majority of them who do not base their vote on certain social issues like abortion or gay marriage, there will need to incontrovertible proof that the GOP has sold them a bill of goods as a precondition for a non-temporary political party realignment.
Trickle down economics was never meant to benefit them and never did.
But that is not obvious at the current time with the economy still producing jobs and some GDP growth.
Perhaps a few eyes will be opened during the next recession or financial crisis that results in another Near Depression or Great Depression. During the last Great Depression, people understood that tax breaks for the wealthy were not going to solve the problem.
+++++++++++++
Directional Change in Intermediate and Long Term Interest Rates from Down to Up:
The rationale for paring both JRI and DPG, discussed below, is the recent directional change in longer term interest rates; and my hyper sensitive approach to accomplishing my primary objective of capital preservation.
The directional change in the ten year treasury yield from down to up started on 10/4/19. 2019 Daily Treasury Yield Curve Rates The reason for a pare rather than an elimination is that the duration and significance of the directional change remains uncertain.
The JRI and DPG CEFs are highly leveraged and own stocks and other securities that are sensitive to directional changes in interest rates. Those securities have also enjoyed a substantial rally in price as interest rates fell throughout this year.
The cost of leverage, which is tied to short term rates, continues to move down.
Directional Change in Intermediate and Long Term Interest Rates from Down to Up:
The rationale for paring both JRI and DPG, discussed below, is the recent directional change in longer term interest rates; and my hyper sensitive approach to accomplishing my primary objective of capital preservation.
The JRI and DPG CEFs are highly leveraged and own stocks and other securities that are sensitive to directional changes in interest rates. Those securities have also enjoyed a substantial rally in price as interest rates fell throughout this year.
The cost of leverage, which is tied to short term rates, continues to move down.
1. Pares-All Commission Free Trades Except for JRI:
A. Sold 100 JRI at $17.51 ($1 IB Commission):
Quote: Nuveen Real Asset Income & Growth Fund Overview
Sponsor's Website: JRI
JRI Nuveen Real Asset Inc & Growth CEF Connect
Closing Price Yesterday: JRI $17.72 +$0.07 +0.40%
Profit Snapshot: +$100.41
A. Sold 100 JRI at $17.51 ($1 IB Commission):
Quote: Nuveen Real Asset Income & Growth Fund Overview
Sponsor's Website: JRI
JRI Nuveen Real Asset Inc & Growth CEF Connect
Closing Price Yesterday: JRI $17.72 +$0.07 +0.40%
Profit Snapshot: +$100.41
Item # 4 Bought 100 JRI at $16.47 (IB Account)(6/26/19 Post)
I have decided to trade this one due to its high expense ratio excluding interest expenses.
Last Sell Discussion: Item # 4 Sold Highest Cost 100 share JRI lot at $17.23 (10/2/19 Post)(profit snapshot = $40.45)
This leaves me with a 100 share lot bought in my Fidelity account and shares purchased with the monthly dividends. Item # 4 Bought 100 JRI at $16.59
Dividend: Monthly at $.106 (some ROC support), raised to $.1170 effective for the 11/15/19 ex dividend date.
Nuveen Real Asset Income and Growth Fund Announces Adoption of Managed Distribution Policy and Increase in Distribution Rate
This dividend increase will probably be sourced from ROC, though it is possible that realized capital gains may lessen the ROC support periodically.
I have decided to trade this one due to its high expense ratio excluding interest expenses.
Last Sell Discussion: Item # 4 Sold Highest Cost 100 share JRI lot at $17.23 (10/2/19 Post)(profit snapshot = $40.45)
This leaves me with a 100 share lot bought in my Fidelity account and shares purchased with the monthly dividends. Item # 4 Bought 100 JRI at $16.59
Dividend: Monthly at $.106 (some ROC support), raised to $.1170 effective for the 11/15/19 ex dividend date.
Nuveen Real Asset Income and Growth Fund Announces Adoption of Managed Distribution Policy and Increase in Distribution Rate
This dividend increase will probably be sourced from ROC, though it is possible that realized capital gains may lessen the ROC support periodically.
Last Ex Dividend: 10/14/19 (before this pare)
Next Ex Dividend: 11/14/19 (new penny rate effective)
Expense Ratios: The fund computes two expense ratios.
One calculation is based on the costs as a percentage of "shareholder capital":
The other calculation is based on "total investment capital" which includes securities bought with debt:
The fund is leveraged at close to 30%. If you remove the assets bought with borrowed money, the expense ratio, excluding interest expense, is too high IMO.
I discuss the risks associated with CEF's that use significant leverage in this post. Update For Closed End Fund Basket Strategy As Of 8/14/15 - South Gent | Seeking Alpha (scroll to General Risk Discussion for Leveraged Bond CEFs); see also: Introduction to 5/8/17 Post.
The risks related to buying securities with borrowed money are obvious.
Buying assets that go down in price with borrowed money will not produce favorable results.
If the assets decline sufficiently in price, the leveraged CEF may have to sell assets at the worst possible time to reduce debt, which happened to several of them during the Near Depression period and its immediate aftermath.
The cost of the borrowings could go up, narrowing or eliminating (or worse) the spread between what the fund has to pay on the borrowed funds and the amount received in dividend and/or interest payments on the assets bought with borrowed money. The narrowing of that spread could lead to a dividend cut.
B. Sold 13 AT & T at $38.49- Commission Free at Fidelity Now:
Closing Price Yesterday: T $38.06 -$0.43 -1.12%
Profit = $74.41
I sold the shares that had a cost basis over $32 (my highest cost lots) which reduced my average cost per share from $30.19 to $29.39.
Small Ball Trading Rules
The main goal in small ball trading is capital preservation, achieved in part by selling dividend paying stocks into rallies and buying dips.
Other capital preservation techniques, broadly categorized as risk management, are (1) baby lot buys which results in limited at risk cash exposure; (2) on and off dividend reinvestment based on price levels; (3) tightly controlled buying mostly in high yield stocks or stocks with a long history of dividend increases; and (4) buying only when the price is at the lowest price in the chain other than the dividend reinvestment price.
The secondary goals are to generate income and to harvest some capital gains by selling the highest cost lots which reduces my average cost per share and increases my dividend yield.
For higher yielding stocks like AT & T, I define victory as avoiding a net loss on the shares. So far, I have been successful in realizing modest profits on my highest cost lots and in reducing my average cost per share.
Average Cost Before Pare: $30.19
Average Cost After Pare: $29.39
 |
| Snapshot Taken During Trading Day 10/18/19 |
AT&T Inc.
Current Dividend Yield at $29.39 = 6.94%
With modest annual dividend increases, the dividend yield will go up since my average cost per share will remain constant until I restart dividend reinvestment or buy additional shares at below $26.95, the lowest purchase price in the current chain.
Dividend Reinvestment: No above $35
Last Earnings Report (Q/E 9/30/19): Released after pare
Adjusted E.P.S. = $.94, one cent better than the consensus
GAAP E.P.S. - $.50
Free Cash Flow = $6.2B
3 Year Outlook: compound annual revenue growth of 1% to 2%; modest dividend increases, and paying off debt from the Time Warner acquisition by 2022.
C. Sold 100 DPG at $15.71:
Quote: Duff & Phelps Global Utility Income Fund Inc. (DPG)
Sponsor's Website: Duff & Phelps Global Utility Income Fund Inc.
SEC Filings
Closing Price Yesterday: DPG $15.47 -$0.04 -0.26%
Profit Snapshot = $42.37
Item # 6 Bought 100 DPG at $15.29 (9/1/19 Post)
I received 1 quarterly dividend of $35. Most of that dividend has been tentatively been classified as ROC. That may change depending on whether the fund realizes capital gains to reduce or eliminate the ROC support.
Last Ex Dividend Date: 9/13/19, paid on 9/30/19
Leveraged: Yes, significantly.
I still own shares in my Schwab taxable account and in my Vanguard Roth IRA. I am reinvesting the dividend in those accounts. Item # 5 Added 50 DPG at $12.87 in a Roth IRA Account (1/9/19 Post)
I have elected to trade this CEF in other accounts using a dividend harvest strategy.
When utilizing a dividend harvest strategy for leveraged CEFs, timing of trades will depend on a number of factors, including the length of time to the next ex dividend date, the discount to net asset values at the time of purchase and sell compared to historical numbers, and investor interest or disinterest in the securities owned by the CEF.
When I bought this 100 share lot, the discount to net asset value per share was at -9.54 and had narrowed to -5.59% on sell date.
The 3 year average historical discount as of 10/21 was at -11.2%.
Those numbers would justify selling the position at a profit after harvesting just one dividend and then to look for another re-entry point prior to the next ex dividend date.
Data Date of Sell (10/21/19)
Closing Market Price: $15.71
Closing Net Asset Value Per Share: $16.64
Discount: -5.59%
Sourced: Duff & Phelps Global Utility-CEF Connect
D. Sold 112+ SRET at $15.28:
Quote: Global X SuperDividend REIT ETF Overview
Sponsor's Website: SuperDividend® REIT ETF
Closing Price Yesterday: SRET $15.31 +$0.06 +0.36%
Profit Snapshot: +$58.38
I kept the position in my Fidelity account where I am reinvesting the monthly dividend payment. Item # 1.B. Bought 50 SRET at $14.8 Used Commission Free Trade (5/17/18 Post)
Dividends: Monthly
Last Ex Dividend: 10/3/19 (received)
Last Sold: Item # 1. B. Sold 50 SRET at $14.79-In A Roth IRA Account-Commission Free for Vanguard customers (4/3/19 Post)(profit snapshot $45.49)
2. Short Term Bond/CD Ladder Basket Strategy:
November 2019 Maturities:
SU = Senior Unsecured Bond ($1K par value per bond)
FM = First Mortgage Bond
CD = Certificate of Deposit ($1K par value per CD)-FDIC Insured
MI = Monthly Interest Payments
Treasury: U.S. Treasury Debt ($1K par value per bill, note or bond)
IR: Investment Rate for Treasury Bills Bought at Auction
Secondary Market: Commission Free Bond Market Purchase at below Par Value
Secondary Market: Commission Free Bond Market Purchase at below Par Value
2 Constellation Brands 2% SU 11/1 (bought 1/18)
3 NASB 2% CDs 11/4 (1 month CD)
5 Treasury 56 D Bills 1.999% IR 11/5 (bought at auction)
1 Treasury 1 Year T Bill 2.737% IR 11/7 (bought 11/18)
5 Treasury 3MO T Bill 2.033% 11/7 (bought at auction)
5 Hancock CDs 2% 11/8 (1 month CD)
5 Treasury 6MO T Bill 2.449% IR (bought at auction)
2 Merrick BK 1.75% CDs MI 11/8 (2 Year CDs)
2 Wells Fargo 1.% CDs MI 11/8 (2 Year CDs)
10 Treasury 56 Day Bill 1.958%IR 11/12 (bought at auction)
10 Treasury 3Mo Bills 2.003%IR 11/14 (bought at auction)
1 MB Financial 1.75% MI 11/15 (2 Year CDs)
5 Treasury 1% 11/15 (secondary market)
4 Associated Banks 2.75% SU 11/15 (bought 6/18; 3/19)
4 Walgreens 2.7% SU 11/18 (2/18 and 6/18)
3 Valley National 1.95% CDs 11/18 (2 month CDs)
2 Bank of China 2.4% CDs 11/19 (5 month CDs)
2 Treasury 2.407%IR 6MO Bills 11/21 (bought at auction)
5 Treasury 1.941% IR 91 day bill 11/21 (bought at auction)
2 Abbott Labs 2.35% SU 11/22 (bought 1/18)
1 Wells Fargo 2.65% CD MI 11/26 (13 month CD)
2 Merrick BK 1.85% CDs MI 11/29 (2 Year CD)
5 Treasury 3MO T Bill 11/29 1.992%IR (bought at auction)
3 Treasury 1.75% 11/30 (secondary market)
2 Treasury 1% 11/30 (secondary market)
9 Treasury 1.5% 11/30 (secondary market)
$101K
* I lost 2 SU bonds, issued by Scripps Networks (now part of Discover), that would have matured this month, to an early redemption occurring last June.
A. Bought 2 Wells Fargo 1.8% CDs (monthly interest payments) Maturing on 11/18/20:
B. Bought 2 Bank of China NY 1.85% CDs Maturing on 4/29/20:
10 Treasury 56 Day Bill 1.958%IR 11/12 (bought at auction)
10 Treasury 3Mo Bills 2.003%IR 11/14 (bought at auction)
1 MB Financial 1.75% MI 11/15 (2 Year CDs)
5 Treasury 1% 11/15 (secondary market)
4 Associated Banks 2.75% SU 11/15 (bought 6/18; 3/19)
4 Walgreens 2.7% SU 11/18 (2/18 and 6/18)
3 Valley National 1.95% CDs 11/18 (2 month CDs)
2 Bank of China 2.4% CDs 11/19 (5 month CDs)
2 Treasury 2.407%IR 6MO Bills 11/21 (bought at auction)
5 Treasury 1.941% IR 91 day bill 11/21 (bought at auction)
2 Abbott Labs 2.35% SU 11/22 (bought 1/18)
1 Wells Fargo 2.65% CD MI 11/26 (13 month CD)
2 Merrick BK 1.85% CDs MI 11/29 (2 Year CD)
5 Treasury 3MO T Bill 11/29 1.992%IR (bought at auction)
3 Treasury 1.75% 11/30 (secondary market)
2 Treasury 1% 11/30 (secondary market)
9 Treasury 1.5% 11/30 (secondary market)
$101K
* I lost 2 SU bonds, issued by Scripps Networks (now part of Discover), that would have matured this month, to an early redemption occurring last June.
A. Bought 2 Wells Fargo 1.8% CDs (monthly interest payments) Maturing on 11/18/20:
B. Bought 2 Bank of China NY 1.85% CDs Maturing on 4/29/20:
C. Bought 2 Bank of China 1.85% CS Maturing on 1/29/20:
This ends my CDs purchases for now. The yields are just too low.
D. Bought at Auction 5 Treasury Bills (56 day) Maturing on 12/17/19:
IR = 1.697%
Auction Results:
I mentioned in a recent post that I would not be buying another treasury bill at such a low yield, but I forgot that I had already bought this one when I made that statement.
It may be possible to generate more income using substantially less money with a mix of other securities.
At current valuations and a possibility of a recession staring next year, I am unwilling to assume much risk just to increase income when relatively small declines in price can wipe out a year or more of income payments.
Instead, I will simply try to generate more income through short term trading that produces income taxable in the same manner as interest payments. So I am in a more hyper trading mode than usual.
3. Canadian Reset Equity Preferred Stocks:
One sector where I am picking up some yield is the Canadian reset equity preferred stocks which I have been purchasing with my idle CADs.
A. Bought 50 CPXPRE at C$17.63 (C$1 IB Commission):
Quote: Capital Power Corp. Cumulative Preferred Series 5
Closing Price Yesterday: CPX-PE.TO C$17.59 + C$0.03 +0.17%
D. Bought at Auction 5 Treasury Bills (56 day) Maturing on 12/17/19:
IR = 1.697%
I mentioned in a recent post that I would not be buying another treasury bill at such a low yield, but I forgot that I had already bought this one when I made that statement.
It may be possible to generate more income using substantially less money with a mix of other securities.
At current valuations and a possibility of a recession staring next year, I am unwilling to assume much risk just to increase income when relatively small declines in price can wipe out a year or more of income payments.
Instead, I will simply try to generate more income through short term trading that produces income taxable in the same manner as interest payments. So I am in a more hyper trading mode than usual.
3. Canadian Reset Equity Preferred Stocks:
One sector where I am picking up some yield is the Canadian reset equity preferred stocks which I have been purchasing with my idle CADs.
A. Bought 50 CPXPRE at C$17.63 (C$1 IB Commission):
Quote: Capital Power Corp. Cumulative Preferred Series 5
Closing Price Yesterday: CPX-PE.TO C$17.59 + C$0.03 +0.17%
Issuer: Capital Power Corp. (Canada: Toronto)
Last Earnings Report (Q/E 9/30/19): Capital Power reports solid third quarter 2019 results
Security: Equity Preferred Stock
Par Value $25
Dividends: Cumulative and Quarterly
Last Ex Dividend Date: 9/16/19
Coupon: 3.15% spread to the 5 year Canadian Bond
Resets: Every 5 Years until redeemed at issuer's option
Last Reset: April 2018
Reset Coupon: 5.238% paid on C$25 par value
Effective Dates for 5.238%: 6/30/18 + 5 years
Yield at C$17.63 = 7.43%
Prospectus Excerpt:
My last transaction in a CPX preferred stock was to sell 100 CPXPRA at C$16.72. Item # 2.A. Sold 100 CPXPRA at C$16.92 (1/15/18 Post)(profit snapshot = C$670)- Item # 3 Bought 100 CXPRA at C$10.2 Update For Exchange Traded Bonds And Preferred Stocks Basket Strategy As Of 4/14/16 - South Gent | Seeking Alpha
CPX.PRA | Capital Power Corp. Pfd. Series 1 Overview | MarketWatch That one will reset in December 2020 at a 2.17% spread to the five year Canadian bond. I do not have a position at the moment.
I also have a prior round trip in CPXPRC:
South Gent's Comment Blog # 8: Sold 50 CPXPRC at C$19.08 (bought at C$14.54. Item # 2 That one reset in December 2018 at a 3.23% spread to the five year Canadian government bond.
CPX Preferred Stocks Trading Profit to Date = +C$895
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.
Last Earnings Report (Q/E 9/30/19): Capital Power reports solid third quarter 2019 results
Security: Equity Preferred Stock
Par Value $25
Dividends: Cumulative and Quarterly
Last Ex Dividend Date: 9/16/19
Coupon: 3.15% spread to the 5 year Canadian Bond
Resets: Every 5 Years until redeemed at issuer's option
Last Reset: April 2018
Reset Coupon: 5.238% paid on C$25 par value
Yield at C$17.63 = 7.43%
Prospectus Excerpt:
My last transaction in a CPX preferred stock was to sell 100 CPXPRA at C$16.72. Item # 2.A. Sold 100 CPXPRA at C$16.92 (1/15/18 Post)(profit snapshot = C$670)- Item # 3 Bought 100 CXPRA at C$10.2 Update For Exchange Traded Bonds And Preferred Stocks Basket Strategy As Of 4/14/16 - South Gent | Seeking Alpha
CPX.PRA | Capital Power Corp. Pfd. Series 1 Overview | MarketWatch That one will reset in December 2020 at a 2.17% spread to the five year Canadian bond. I do not have a position at the moment.
I also have a prior round trip in CPXPRC:
 |
| 2017 CPXPRC 50 shares +C$225 |
CPX Preferred Stocks Trading Profit to Date = +C$895
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.
Kellogg Company (K)
ReplyDelete$63.00 +$0.13 (+0.21%)
As of 10:23AM EDT
I mentioned in a comment yesterday that the Stock Jocks had a favorable opinion of Kellogg's earnings report. I was able to contain my excitement which was easy to do since I was not excited about it.
I was interested in one part of the part that was discussed in the earnings call at page 6:
https://seekingalpha.com/article/4300049-kellogg-company-k-ceo-steve-cahillane-q3-2019-results-earnings-call-transcript?page=6
While I have not read all of Kellogg's earnings report and my memory is not as good as it use to be, I do not recall another occasion when management broke out the revenue results for its Morningstar "fake meat" segment, which has been around for decades.
"In Q3 for instance, MorningStar Farms grew consumption by 20% in poultry alternatives almost 6% in breakfast meat alternatives and more than 30% in hotdogs alternatives. We even grew 2% in frozen burger alternatives the segment that has seen the most competition from new refrigerated entries."
Analysts also asked questions about that division for the first time that I can remember.
When I discussed buying some shares a few weeks ago, the Morningstar business was one of the primary reasons for taking a position.
Item 1
https://tennesseeindependent.blogspot.com/2019/07/observations-and-sample-of-recent_20.html
I should be buying. I hope this is a sell on news moment with the rate cut and GDP numbers... so I can more comfortably buy. I don't know if that hope is realistic?
ReplyDeleteI just don't feel like shopping today.
"US consumer confidence for October comes in at 125.9, vs 128 expected September was reported at 126.3. ""
ReplyDeleteThis change in numbers doesn't seem big. Since customer confidence is key, is it a big deal or a just minor variation?
GDP beat expectations, but that's less than it's been? A slowing?
ReplyDeleteLand: Real GDP growth is slowing.
DeleteYou can see a bar chart table starting in the 2015 4th quarter in the press release that I cited:
https://www.bea.gov/news/2019/gross-domestic-product-3rd-quarter-2019-advance-estimate
The 1.9% number for the third quarter will be revised. I am expecting real GDP growth for Trump's 4 years to be about the same as the last 4 years in Obama with the total deficit spending being higher in Trump's first term.
Average Annual Real GDP Growth Rate 2013 through 2016 = 2.355%
2017 2.80%
2018 2.52%
2019 is trending at a lower number than 2018
Recession possible in 2020
The Bond Ghouls probably have it right by taking interest rates down a notch today.
U.S. 10 Year Treasury Note
1.806% -0.033
Last Updated: Oct 30, 2019 at 1:06 p.m. EDT
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx&mod=home-page
There were some weak numbers that I mentioned. While consumer spending did fall from the strong pace in the second quarter, the first estimate for the third quarter is not concerning.
Overall, several sectors of the economy (not all) are causing a slowdown.
Consumer spending remains key. The slight decline in consumer confidence is not material yet IMO.
Okay... thanks!
DeleteI didn't have to check to know by market was happy with the Fed. Looks like the under 2% was correct. I'm surprised. Glad. Cutting wouldn't solve anything.
I missed it - Oct 10th the inversion stopped. Hum.
In my back looking, that didn't change the prediction by initial inversion of later recession.
Bonds bringing rates down... may force Fed's hand for next time. Though that down will probably be too temporary for that.
As expected, the FED cut the FF rate by .25%.
ReplyDeleteThe new range is 1.5% to 1.75%.
Powell did signal that there will not be another rate cut unless there is a material change.
“We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook.”
“Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a preset course.”
Standing pat now makes sense. I doubt there will be another cut this year.
If weakness accelerates, the FED will interpret that as a sign that more rate cuts are needed and will not conclude that the rate cuts so far have been a net negative and have done nothing meaningful to stimulate economic activity.
The problems are not going to be solved by moving from one abnormally low short term rate to another slightly lower one.
And, I would roughly estimate that the cuts so far have deprived U.S. households of about $80 to $90 billion per annum in interest income through their risk free savings which income is no longer available to spend, pay down higher cost debt or to save for future expenses.
I mentioned earlier that the savings rate has gone up recently. A lot of the savings will be in those risk free instruments. Savings accounts alone have over $9.6 trillion.
The data can be found in the FED's H.6 money stock measures that are released weekly. This is a link to the latest release dated 10/24/19:
See Tables 3 and 4:
https://www.federalreserve.gov/releases/h6/current/
Table 4 has the savings account, small denomination time deposits (CDs) and retail money market funds.
Neither of those tables would include other risk free instruments including treasury bills, short term treasury notes, high quality short term corporate bonds, etc.
Lol, I read an article that talked about cautious words for rate cuts but didn't say it was cut! Well that wasn't very useful. I got it off of fizviz's news list.
DeleteThe market's response wasn't nearly as much as I'd have expected off a cut.
Why would saving accounts be increasing as rates are going down?
Land: A large part of the population is risk adverse. To the extent they take on stock market risk, it will be in retirement accounts for most households that own stocks.
DeleteAfter the FED initiated ZIRP in late 2008, savings account rates went to almost zero and stayed near zero for over 7 years, barely moving up when the FED first abandoned ZIRP with a .25% increase in FF and nudging slightly higher with each subsequent increase until falling back down this year.
During the ZIRP period, savings accounts deposits skyrocketed as shown in this chart.
https://fred.stlouisfed.org/series/SAVINGS
Near the end of bull stock cycle in October 2007, the total was near $3.8+B and had risen to $8.18+B when the FED finally increased the FF range above ZIRP late in 2015.
Effective Federal Funds Rate
https://fred.stlouisfed.org/series/FEDFUNDS
Error substitute "T" for "B" in the numbers in the last paragraph. The savings account totals are in trillions not billions.
DeleteSo as the Fed cuts, households take that as cautionary... and start moving out of the market.
DeleteThat's what it sounds like.
This all must be another small pressure towards recession as family's have less to spend in interest. And the market has less buoying it.
Though in the past, less in the market, meant another strong rally up on FOMO.
Land: There are a combination of factors contributing to a persistent rise in savings account balances, with the most important being risk aversion.
DeleteMany households can not afford to take risks with their savings, which may not cover a significant expense or last more than a few months when a job is lost. Even many well off investors who can afford to take risks prefer safety.
More interest income is important to most households IMO since that income funds some spending.
The major beneficiaries of risk assets, when both bonds and stocks are in long term bull markets, are the top 5% who in the aggregate will not spend most of their income generated in taxable accounts. Consequently favorable tax treatment on capital gains and lower tax rates has a relatively insignificant impact on consumer spending. If economic growth is the goal, the focus needs to be from the bottom up rather than from the top down.
There are investors who have pulled money out of the stock market into risk free savings. The reasons vary but concerns about the next blowup will contribute to that reallocation from stocks to risk free savings.
The FED is giving an inconsistent message. The FED is basically saying that the "economy is in a good place" and that is why we lowering interest rates back toward zero. For some investors, the message which is received is that everything is not fine and that is why the FED is lowering rates from one extremely abnormal level by historical standards to an even more extremely abnormal level.
So the weakness message is coming through... just not as headline news.
DeleteThe earnings reports that matter to the Stock Jocks have generally been favorable
ReplyDeleteApple and Facebook are trading up in after hours trading based on their reports released after the bell.
Facebook Inc. Cl A
$197.65 +$9.43 +5.01% After Hours
Last Updated: Oct 30, 2019 at 5:50 p.m. EDT
https://www.marketwatch.com/investing/stock/fb
Apple Inc.
$247.50 +$ 4.24 +1.74% After Hours
Last Updated: Oct 30, 2019 at 5:51 p.m. EDT
https://www.marketwatch.com/investing/stock/aapl
Jernigan Capital (JCAP), a recent buy, reported after the close. This report will take some time to digest, but it looks okay at first glance:
https://www.businesswire.com/news/home/20191030005931/en/
I did not find the book value per share number as of 9/30/19. The press release for the last quarter did have the book value number early in the press release which was $19.12 as of 6/30/19.
https://www.sec.gov/Archives/edgar/data/1622353/000162235319000015/jcap-20190731ex991bc4e9a.htm/'
I would draw a tentative negative conclusion from the failure to include that information in the last release.
One stock to watch tomorrow is Tanger Factory Outlet Centers that reported a less bad than expected earnings report after the close.
ReplyDeletehttps://seekingalpha.com/news/3511969-tanger-gains-1_5-percent-q3-beat-guidance-boost
SKT was ex dividend today and is a high yielder given its huge share price decline since topping out at over $41 per share back in October 2016.
I started to trade SKT this year and have made one round trip so far.
My last buy was a 50 share lot bought at t
Wednesday, October 23, 2019 Post
Item # 3.A. Bought 50 SKT at $14.44:
https://tennesseeindependent.blogspot.com/2019/10/observations-and-sample-of-recent_23.html
The stock did rise during after hours trading but the volume was sufficiently light that I would not draw any hard conclusions about what will happen tomorrow except that the stock will likely rise.
After Hours:
$17.45 +$1.04 +6.34%
After Hours Volume: 10.9K
https://www.marketwatch.com/investing/stock/skt
I own that 50 shares in my IB trading account so I have a hair trigger for that lot, while keeping 30 shares bought in my Fidelity account in 10 share lots using small ball trading rules (lowest cost lot in chain at $14.24)
Apple's quarterly net income numbers are declining Y-O-Y. Percentage increases in revenue growth are anemic.
ReplyDeleteThe company is able to produce slightly positive Y-O-Y E.P.S. only by buying back a lot of stock which is not cheap at its current price given the revenue and net income growth numbers.
I characterize the foregoing as early onset IBM Syndrome where E.P.S. growth is achieved only through massive share buybacks.
Net Income 3rd Quarter:
2019 : $13.686B
2018: $14.125B
Diluted E.P.S. 3rd Quarter
2019: $3.03
2018: $2.91
SEC Filed Press Release
https://www.sec.gov/Archives/edgar/data/320193/000032019319000117/a8-kexhibit991q4201992.htm
Analysts are pleased by the revenue numbers which beat estimates but the consensus revenue estimate was $63B, barely higher than the year ago quarter number of $62.9B, with the actual number reported at $64.04B. Who cares when the headline says "beat" the consensus.
Apple is running up against the law of large numbers in an increasingly competitive market for its products.
None of the foregoing matters to the Stock Jocks now or for the foreseeable future.
If the negative trend continues, with even larger sums needed to buy back shares to generate positive E.P.S. numbers, then at some point the IBM analogy will take hold.
Money managers know that Apple is a must own stock and has been for years for anyone who uses SPX as a benchmark for performance.
The current consensus E.P.S. is $12.79 for 2020. The after hours price is currently at $248.18 which results in a 19.4 forward P/E using those numbers. How much shareholder capital will have to be spent at that or higher prices to generate a positive Y-O-Y E.P.S. number in the 4th quarter?
Apple can continue in the IBM way of E.P.S. manipulation through massive share buybacks for a long time given its strong cash position but debt has increased substantially as well over the years.
Long term debt stood at $91.807B as of 9/28/19. The number was at $53.32B on 9/26/15.
Apple lost it's ship-righter. If it find another, it will soar.
DeleteBut "early onset IBM Syndrome" makes sense.
This comment has been removed by the author.
DeleteI deleted an earlier comment about what Apple spent on buybacks during the last fiscal quarter since the information was erroneous and was corrected by Marketwatch.
DeleteApple Inc. "disclosed Thursday that it spent $17.9 billion to buy back 92.6 million shares during the fiscal fourth quarter ended Sept. 28" which compares with the $17.0 billion Apple spent in the previous quarter, and the $49.2 billion spent over the previous three quarters.
https://www.marketwatch.com/story/apples-spends-79-billion-to-buyback-stock-in-q4-nearly-5-times-what-it-spent-in-q3-2019-10-31?mod=mw_quote_news
The basic point that I am making about early stage IBM Syndrome is unchanged by the correction. Apple will have to spend an increasing amount of money to buyback shares near or above current prices to show Y-O-Y E.P.S. increases and some of the money used for those purchase will come from debt since outlays for the buybacks and dividends will substantially exceed net income.
Garrison Capital Inc. (GARS)
ReplyDelete$6.67 -$0.11 -1.62%
Last Updated: Oct 31, 2019 EDT
I own a few shares with about a $70 unrealized loss having averaged down in several small lots using commission free trades.
The quarterly dividend, which has been cut, is currently at $.23. Assuming no further cuts, which is not an assumption that I would make, the dividend yield at $6.67 is about 13.79%.
GARS has not reported results yet for the last quarter.
For the Q/E 6/20/19, net asset value per share was at $10.3.
https://www.sec.gov/Archives/edgar/data/1509892/000156459019031259/gars-10q_20190630.htm
There is news today. Clear Harbor Asset Management sent a letter to GARS arguing that the best option for shareholders would be for the company to liquidate its holdings and deliver the proceeds to shareholders.
https://www.prnewswire.com/news-releases/clear-harbor-delivers-letter-to-the-board-of-garrison-capital-highlighting-concerns-and-a-need-for-change-300948794.html
I would agree given the company's history, but Clear Harbor only owns 1.25% of the outstanding shares which simply means it has no clout unless it convinces other major shareholders to join in its recommendation.
There are a number of underperforming BDCs where the best interests of shareholders would be a liquidation before the external managers incinerate even more assets.
The incentive of the external managers is to collect its fees on all assets, including those purchased with debt, and to collect "incentive fees" for results even though performance is worse than mediocre. Their interest is to continue managing the fund since failure is still richly rewarded.
Is the market down over anything today?
ReplyDeleteThe vote happened, but that hasn't bothered the market before.
During Nixon - did GOP make statements as completely wrong and gaslighting as McCarthy is today? Such as calling this till now "Soviet style" proceedings?
Or is this constant gaslighting new?
I wasn't old enough to remember anything about Nixon hearings.
Jez, now Cheney is beating up on the process. Rather than her defense yesterday finally of servicemen's reputation. It's all lies.
Trump put a metal on a dog. He wasn't being silly or cute. Servicemen were testifying against him. Their service is their credibility. He's using this to reduce their credibility, and be "over" them. I wish media would consult with sociopathy experts. This stuff is very obvious, but they miss it. They had instinct to be bothered, but couldn't report why it was a problem.
Land: There is nothing wrong with the impeachment process. From a fact gathering perspective, it was important for some witnesses to testify without knowing what other witnesses were saying on the same subjects. Republican House members and their staff were allowed to ask questions during those closed depositions and the depositions will be made public after any redactions of classified information which was another reason for initially restricting access to the depositions.
DeleteThere is no amount of evidence supporting the passage of articles of impeachment that would cause a republican House member to vote in favor. The vote that occurred today on the rules for the public hearings will be almost identical to vote on the articles with no republican yes votes and a few democrat no votes for political reasons.
The Senate will not convict and the vote will be on party lines. At most, no more than 3 republicans will vote to convict.
Even with more damning evidence on abuse of power, republicans will not abandon Donald because republican voters are still behind him as the personification of the modern day GOP and a representation of that tribe's core values and policies.
I do not think the market is reacting at all to the impeachment news since the outcome is certain and nothing much is going to pass through Congress with the Democrats controlling the House. So stalemate until November 2020 for anything that is remotely controversial.
The market may have been reacting to the Bloomberg report that China was not hopeful of a long term deal for as long as Donald was President. Trump is 100% untrustworthy and that is an understandable reaction to him. Before the ink dries on anything that Donald signs, he will be demanding something else and negotiating with him raises the specter of what I call the Munich Syndrome (giving Hitler something at Munich in 1938 was tantamount for him wanting more).
The earnings reports have been relatively solid and the Stock Jocks still have faith in the Duck working things out and the FED providing a put to elevated stock prices by lowering rates which they believe for reasons best known to them will generate growth.
The European statistical agency, Eurostat, reported negligible real GDP growth for the 3rd quarter with negative nominal rates. The Eurozone inflation report which was also released today helped the real GDP number since it was so low.
Land: I believe there are a lot of similarities to the GOP's support for Joe McCarthy and their defense of Donald Trump now. One of the key overlaps is fact free attacks using pejorative demagoguery on career public servants including members of the military.
DeleteWhat is not remembered about McCarthy era, which is being repeated now, is the GOP attacks on the military during what is known as the "Army–McCarthy hearings"
That is when Joseph Welch confronted McCarthy which marked the beginning of the end for that Trump like politician.
McCarthy at one time enjoyed the support of over 1/2 of the country:
https://www.pbs.org/wgbh/americanexperience/features/eisenhower-politics/
Interesting
DeleteHadn't thought of that era. I can see some Nixon to Trump similarity on the sociopathic, bigotries, abuse of power, corrupt behavior to gain/keep power, but Nixon was competent at policy, at least some policy. He was an incessant thief of money (that I know of.) Agnew covered that crime.
So McCarthy's attack on the service men... before Vietnam after WWII's coming together behind them...was what finally broke the hold.
McCarthism makes sense. That from what I've read, was a time of real cult style taking over. Doesn't give me any piece of mind. I consider McCarthy era worse than Nixon era. It was more insidious on civilians.
STAG Industrial Inc. (STAG)
ReplyDelete$31.5 +$0.05 +0.16%
Last Updated: Oct 31, 2019 at 12:32 p.m. EDT
That looks good compared to the DJIA at the moment:
26,934.19 -252.50 -0.93%
After the close yesterday STAG reported okay results for the third quarter.
https://www.prnewswire.com/news-releases/stag-industrial-announces-third-quarter-2019-results-300948516.html
REIT investors are not picky about FFO growth in higher quality REITs at the moment:
"Achieved $0.46 of Core FFO per diluted share for the third quarter of 2019, an increase of 2.2% compared to the third quarter of 2018."
"Achieved an Occupancy Rate of 94.8% on the total portfolio and 95.6% on the Operating Portfolio as of September 30, 2019."
STAG has been in a bull cycle since bottoming near $15 in February 2016.
The company has been growing its portfolio of industrial properties and FFO per share is trending up, though at a snail's pace.
The tailwind for a stock like STAG is that it pays monthly dividends, the yields on fixed income investments are low, and the company is viewed as blue chip REIT in a REIT sector which is currently looked upon favorably.
Most of my discussions are probably in my SA blog. I currently own 100+ shares with an average cost near $16. I traded down to my lowest cost 50 share lot in two accounts.
I quite reinvesting the dividends in my Schwab account after the 2018 second quarter payment. The total average cost for 52+ shares held in that account is $15.97.
I discussed buying that lot in this SA blog:
https://seekingalpha.com/instablog/434935-south-gent/4766346-update-equity-reit-basket-strategy-2-12-16
I am not reinvesting the dividend in my IB account and the shares remaining in that account have a similar cost basis.
At some point, I will reach a decision that I would prefer booking the unrealized gain rather than to continue collecting the monthly dividend, but I am not quite there yet.
Trade snapshots in my Equity REIT Common and Preferred Basket strategy can be found here:
https://tennesseeindependent.blogspot.com/2014/10/gateway-post-equity-reit-common-and.html
I do not see a STAG sell before 2016. There were a number of sells in 2016. I did not see any sells after 2016 which indicates that I reached my comfort level with 100 shares after booking about $800 in profits during 2016 and working the position down to my lowest costs lots.
Maybe blue chip... but that doesn't feel like it with a slow FFO.
DeleteI don't own any REITS. So have no real judgement. Just reading along.
Land: STAG, like a lot of REITs that are in a growth mode, will have FFO increases as a number while FFO per share is stagnant or barely growing. The reason is that growth is being financed in part by new share offerings.
DeleteDuring long bull markets in real estate, the capitalization rates move steadily down as confidence that real estate prices continuing higher increase.
The end result is that real estate companies will end up overpaying for properties in the last phases of a bull cycle.
The same underlying principle applies to other asset classes including stocks.
Prices reach a level when the next new purchase is hard to justify as a reasonable longer term value.
Or put another way, the current value already reflects the likely reasonable future valuation a decade or so in the future.
I give an example of how this happens with stocks in this May 2010 post. Item # 3:
https://tennesseeindependent.blogspot.com/2010/05/sold-100-hma-at-928spain-large-cap.html
Jernigan Capital Inc. (JCAP)
ReplyDelete$18.97 $0.25 $1.34%
https://www.marketwatch.com/investing/stock/jcap
The price faded somewhat from its intra-day high into the close. I mentioned earlier that I was fine with the earnings report.
The problem is that JCAP's independent directors are now considering a proposal from the external management company to buyout its contract or a process called internalization.
In other small cap REIT internalizations, the buyout of the management company is generally recouped over a period of years with lower expenses. However the payment is a drain on capital initially and does not earn a return compared to using the funds to buy properties that can be rented out to produce cash flow.
During the conference call, there was some discussion from the managers that the dividend would be "right sized" after internalization, meaning there will be some kind of cut at least initially.
" Our Board and management collectively believe a rightsizing of our dividend will be in order in the coming months, and while we're not yet ready to determine the magnitude of such rightsizing, we will focus on an orderly and timely progression to a covered dividend as our outstanding portfolio of self-storage properties stabilizes."
Page 2
https://seekingalpha.com/article/4301013-jernigan-capital-inc-jcap-ceo-john-good-q3-2019-results-earnings-call-transcript?page=2
I last discussed adds in Item # 1.A:
Added 10 JCAP at $18.9 and 30 at $18.78
https://tennesseeindependent.blogspot.com/2019/10/observations-and-sample-of-recent_19.html
I originally discussed the internalization process in Item # 3:
https://tennesseeindependent.blogspot.com/2019/07/observations-and-sample-of-recent_27.html
The independent directors may make a counter offer and the the buyout price will have to be approved by them and an independent expert. Then the shareholders have the right to vote the termination fee up or down. The likely payment will be in operating units of the partnership which would be an equity interest.
If consummated with an equity issuance to the external manager, then the funds available to pay the dividend will be spread out further so a dividend cut may be necessary to pay for the internalization at least initially until it is earned back through lower expenses.
If the cut is from $.35 to $.25, the dividend yield would become 5.27% at today's closing price of $18.97. It is too early to guess what the payment will be since the entire process may go off the rails based on an ability to agree or shareholder's voting it down.
While JCAP is not a PSA, the common stock yield for PSA owners is about 3.59% at today's closing price:
https://www.marketwatch.com/investing/stock/psa
When properly done in the shareholder's interest, the long term value of the company should improve compared to a continuation of an external management agreement indefinitely.
Also, once the external manager is dumped, the possibility of a buyout offer from a larger storage REIT does arise.
Note that the managers claimed in the conference call that their first offer was accretive to shareholders.
"The internalization, we expect to be very accretive to the earnings of the company and it all, I think, feeds into a desire to be really a conforming company when you think about us compared to the rest of the REIT world."
Page 4 SA Transcript linked above
He did not mention the time period required for accretion.
I posted a comment with a question about Nixon and a few other items that I don't specifically remember. Did it disappear?
ReplyDeleteOn nixon i'm curious (if you happen to remember), did gop get up and gaslight and say things as obviously false as mccarthy did today?
I'm not old enough to remember if that is usual or new to now.
Land: It is published above. There were a number of republicans in the Senate and the House who supported Nixon's removal in office. The modern day GOP would have stood 100% behind Nixon. The proof against Donald will actually end up being far more compelling for removal than the Watergate coverup evidence and stone walling. Yet, the modern day republican party will stand in unison with Donald no matter how much proof is produced showing that his removal is warranted.
DeleteThere were clowns in the GOP then and now who attacked everyone who came forward with evidence during the Nixon impeachment hearings. Gaslighting when the facts are not with you is what politicians do and Donald does it everyday about just about anything since that is who he is at his core-a gaslighter.
https://www.nbcnews.com/video/president-trump-s-tactic-of-gaslighting-66864709733
I was refreshing the page and searching for Nixon, and not finding it. Chalk it up to all the brain bobbles that are currently happening.
DeleteSo there were clowns then too. Glad it's not totally new. How do they lie with a straight face so much?
News last night included that many GOP senators are considering signing onto the quid pro quo. I can't figure out their logic yet, or maybe should say, their plan.
Add projection to his gaslighting and Between the two, it's 98% of the words out of his mouth, fingers, and where ever else he pulls them from.
Hey, NBC finally is talking about with the label attached. Only took 3-4 years.
Land: Your comment about Nixon was posted on October 31, at 11:33 A.M.
DeleteThere are always politicians who engage in clownish behavior.
The more fundamental questions involve the recurring opinions that find fertile soil in the U.S., notwithstanding their lack of factual support, their inconsistency with common sense, their incompatibility with basic human decency, and/or their clear indicia of poor judgment.
Examples: Invading a Middle Eastern country that has not attacked the U.S.; the Vietnam War; the McCarthy era; the internment of Japanese Americans during WWIl; Donald Trump; slavery, Obama’s birthplace and countless other baseless conspiracy theories; widespread discrimination based on sex, religion, national origin and skin color.
The underlying causes are basically the same and include ignorance, stupidity, an unwillingness to learn and to challenge existing opinions with reliable new information, and poor judgment.
Those causes will remain so the question is always in a Democracy whether there are sufficient number of voters who can defeat the sizable minority who have those failings as citizens. For most of my life, that has not been the case.
Yes a few GOP senators are starting to consider the possibility that they need to recognize the incontrovertible.
The spin that they are considering placing on the quid pro quo is probably more asinine than rejecting there was one.
Fidus (FDUS) reported after the close:
ReplyDeletehttps://www.globenewswire.com/news-release/2019/10/31/1939112/0/en/Fidus-Investment-Corporation-Announces-Third-Quarter-2019-Financial-Results.html
I recently bought some shares.
The report is summarized at SA:
https://seekingalpha.com/news/3512813-fidus-investment-q3-nii-misses-nav-rises
Net asset value per share increased to $16.47 from $16.29 as of 6/30/19.
Adjusted NII per share was reported at $.35, below the $.39 quarterly dividend which is a problem longer term if the deficit continues.
For now, the deficit between the quarterly dividend rate and NII per share is covered by using spillover income which FDUS estimates at $.69 per share as of 9/30/19.
Subsequent to the quarter's close, FDUC sold some warrants for a $2.9 profit. That will help with the dividend coverage.
FDUS declared its regular quarterly dividend of $.39 per share plus an additional special dividend of 4 cents per share.
++++
I was skeptical of SKT's rise in after hours trading yesterday based on what was a less bad than expected report. The underlying problems which are well known are still there.
Tanger Factory Outlet Centers Inc.
Close 10/31/19: $16.12 -$0.29 -1.77%
https://www.marketwatch.com/investing/stock/skt
++
I owned 15 shares of Ryder that was under a small ball purchase program. I eliminated the position on the day of its earnings report at $50.49 since I had a strong negative reaction to it which I will discuss in a subsequent post. The realized gain was $69.15.
Ryder Report 3rd Quarter:
https://www.businesswire.com/news/home/20191029005397/en/
Since I am a bottom feeder and a dumpster diver, the negative reaction that I had to the earnings report will not prevent me from restarting a small ball program, provided the price is lower than my lowest purchase price ($45.18) by at least 5%. In other words, I need more of a cushion.
Item # 1.B. Bought 10 R at $46.25 and 5 at $45.18:
https://tennesseeindependent.blogspot.com/2019/09/observations-and-sample-of-recent_4.html
The Stock Jocks slammed the price the on the day of the report and the day after, but it stabilized today which indicated that they have a less negative view of the report than I do.
Ryder System Inc.
$48.63 +0.19 0.39%
https://www.marketwatch.com/investing/stock/r
New Senior Investment Group Inc.
ReplyDelete$7.36 +$0.32 +4.55%
Last Updated: Nov 1, 2019 at 11:05 a.m. EDT
https://www.marketwatch.com/investing/stock/snr
I discussed in a comment yesterday trading STAG until I ended up owning my lowest cost lots.
I successfully traded SNR several times but was caught in a downdraft holding some shares, whereupon I started a small ball trading program. Today's rise brings me back to break-even and a positive total return.
Without going into details which I have discussed in the past, SNR has issues including what I would call an unjustified payment to internalize management and exposure to one of the most disfavored property sectors.
The rise today is justified in my opinion based on SNR announcing that it would sell its assisted living and memory care property portfolio for about $350M, recognizing about a $27M gain before selling costs. The proceeds will be used to reduce debt which is another problem that will be alleviated with this transaction.
https://seekingalpha.com/news/3512948-new-senior-investment-sell-assisted-living-memory-care-portfolio
Press Release:
https://www.businesswire.com/news/home/20191101005161/en/
SNR will be left with senior living property portfolio which is a disfavored sector due in large part to overbuilding. I may sell the shares somewhere in the $7.5 to $8 range.
Dominion Energy, Inc. (D)
ReplyDelete$83.27 +$0.72 (+0.87%)
At close: 4:04PM EDT
https://finance.yahoo.com/quote/D/?p=D
The market reacted favorably to Dominion's third quarter earnings report released prior to the market open.
https://www.prnewswire.com/news-releases/dominion-energy-announces-third-quarter-earnings-300949424.html
I started a small ball program with a 10 share buy at
Item # 1.B. at $74.9
Given the small ball purchase restriction, I was not able to buy more since the price went up.
+++
Foamix Pharmaceuticals Ltd. (FOMX)
3.8600+0.3500 (+9.97%)
At close: 4:00PM EDT
Someone with money has been buying this one lately. When I last discussed FOMX in a comment here, which was a few days ago, the price was near $2.8 as I recall.
The market initially yawned when FOMX received FDA approval for its acne drug.
Then when FOMX announced that it had selected a manufacturer for that drug and the one that is currently being reviewed by the FDA for rosacea, the stock went down.
Maybe investors were disappointed that FOMX was actually proceeding toward self marketing rather than selling itself or choosing a large pharmaceutical company to manufacture and market.
Whatever the concern may have been, something changed after the stock closed at $2.81 on 10/28. Volume started to spike on 10/30.
I have a small Lottery Ticket position (100) shares.
A recent article published at SA discusses the company which is not yet behind a paywall.
https://seekingalpha.com/article/4301145-foamix-pharmaceuticals-fda-application-accepted-review-catalyst-laid-ahead
+++
Chatham Lodging Trust
$18.29 $0.24 +1.33%
https://www.marketwatch.com/investing/stock/cldt
The market responded favorably to ho-hum results released on 10/31, the day after the stock went ex dividend for its monthly distribution.
Press Release
https://www.businesswire.com/news/home/20191031005103/en/
Hotel REITs have been out of favor this year probably due to fears relating to an economic slowdown and competition. A more positive vibe about the economy may provide a lift to this beaten down sector.
My goal for CLDT is to harvest some dividends and sell for a profit.
I bought 50 shares at $16.88
September 11, 2019 Post Item # 2.B.
https://tennesseeindependent.blogspot.com/2019/09/observations-and-sample-of-recent_11.html
Just another purchase in my bottom feeding, dumpster diving style.
On my blog, D was popular and still being bought.
DeleteFor utility, with their slow growth my understanding is to always buy at a low PE.
I was under the impression safety stocks like utility were already bought up. This wasn't a studied detailed look. Just glanced through a few over time.
It would help my diversification and div returns. But i haven't bought in.
Land: When I decided to buy a few shares in electric utility stocks, I viewed the entire sector as overvalued on a P/E basis and relatively unattractive on dividend yield even in a low inflation/low interest rate environment.
DeleteI started small ball programs in 3 that had yields over 4% and lower P/E ratios than a utility index fund, both at my purchase prices.
Those 3 stocks, which are still owned, are Dominion (D), Centerpoint (CNP) and Duke (DUK).
I have not bought more shares in those stocks since to do so would violate the cardinal principle of the small ball trading rules-each purchase has to be the lowest price in the chain.
This rule prevents me from following the momentum herd and is primarily a capital preservation technique that recognizes the inevitability of major price corrections in individual stocks, sectors and major indexes.
The electric utility sector is one where restraint at current price levels is warranted IMO.
The same would be true for sectors and stocks that are in bear markets of unknowable depth and duration.
The flip side of the electric utility stock sector which is in a bull cycle mode is the energy sector which is currently in a long term bear market. From my perspective, both require restraint in new purchases.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2019/11/observations-and-sample-of-recent.html