FIE:CA, GNL, HSEPRC:CA, ICLN, MGC, PBA, VHT, VWO

Economy: 

U.S. productivity falls revised 0.2% in third quarter — first decline since 2015 - MarketWatch

Productivity and Costs, Third Quarter 2019, Revised 

AAR: November Rail Carloads down 7.5% YoY, Intermodal Down 7.4% YoY

Santoli: It's possible the US economy is not 'late cycle' Just about anything is possible when talking about the future. 

El-Erian: Europe 'Flashing Red' on Recession Risk (Video)-MarketWatch He believes that U.S. consumer spending will continue to support GDP and job growth, but Europe's economy is in stall mode which he defines as less than 1% GDP growth. The European governments, particularly Germany, are not pursuing fiscal stimulus policies that are necessary to spur growth, a point where I agree with him. Those governments in his view are relying on the ECB to stimulate growth and that reliance is misplaced. I would agree that the ECB's negative nominal benchmark rate and more QE will not stimulate growth and will more likely retard growth IMO rather than stimulate it.   

According to several news reports, China and the U.S. are trying to reach an agreement that would suspend the implementation of new tariffs scheduled to go into effect on 12/15.  Trump administration plans to delay Dec. 15 China tariff hikes Donald will make the final decision on whether China has offered enough to secure a short term delay. The new 15% tariffs are directly applied to consumer products including toys, phones and laptops. These tariffs were originally scheduled for September, but Donald had enough sense to delay them until the Christmas buying season for U.S. retailers was over.  

CPI rose a seasonally adjusted .3% in November. Without seasonal adjustments, the annual increase through November was pegged at 2.1%. Consumer Price Index Summary

There are investors, including Jeff Gundlach, who believe that the FED wants to keep treasury rates below the inflation rate in order to make it easier for the U.S. to finance $1 trillion dollar annual budget deficits. That is certainly a plausible motive, or at least one of the main ones, for the extremely abnormal monetary policies designed to drive real rates of return for U.S. treasury debt below zero. 

Gundlach also pointed out in a recent interview that U.S. GDP would immediately turn negative if the federal government did not increase spending over current levels which currently means deficit spending of nearly $1 trillion per year. 

U.S. government's annual budget deficit largest since 2012 - Reuters ($984B in the F/Y ending 9/30/19; the deficit would have gone over $1 trillion without the increased tariffs paid by U.S. companies and individuals or the interest paid to the treasury by the Federal Reserve on its bonds and mortgage backed securities purchased with money that it created); Fed Payments to Treasury and Rising Interest Rates | St. Louis Fed; The Fed's Effect on Deficits and Debt | Committee for a Responsible Federal Budget.

And whenever you hear quantitative easing, the correct terminology IMO is debt monetization. 

Ray Dalio: Debt Monetization - YouTube

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Markets and Market Commentary: 

JP Morgan sees S&P 500 rising 8% in 2020 as economy 'reaccelerates'

Home Depot forecasts 2020 sales growth below expectations

Amazon blames Trump for losing JEDI cloud contract; Amazon files lawsuit claiming Trump launched ‘behind-the-scenes attacks’ over JEDI cloud contract - The Washington Post I believe that Trump did abuse his power by interfering in the normal contracting process. It remains to be seen how much proof Amazon can present establishing that unlawful interference. 

Amazon's redacted complaint over JEDI award to Microsoft - The Washington Post

What Amazon is really accusing Trump of doing in JEDI deal - MarketWatch

Trump expressly stated that he wanted to punish Amazon because Jeff Bezos personally owned the Washington Post. Retribution Against Washington Post is Trump’s Gravest Abuse 

Pentagon Pauses $10 Billion JEDI Cloud Contract; Amazon, Microsoft Are Finalists: NPR (Trump: "I'm getting tremendous complaints about the contract with the Pentagon and with Amazon; they're saying it wasn't competitively bid," Trump told reporters on July 18. "I will be asking them to take a look at it very closely to see what's going on because I have had very few things where there's been such complaining.")

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Trump: 

House Judiciary Report: Constitutional Grounds for Presidential Impeachment.pdf This report is more of a history lesson.  

The hypocrite Senator Lindsey Graham (R-SC) is facing his toughest senate opponent in 2020, Jaime Harrison, who graduated from Yale and earned a J.D. decree from Georgetown. Challenger takes on S.C. Senate race with rags-to-prominence story, record fundraising - The Washington Post I made a donation to Harrison's campaign primarily based on Harrison's qualifications and my increasingly negative opinion about Graham's obnoxious hypocrisy and total embrace of Trump and Trumpism. I expect Graham will win reelection.   


The Russification of the Republican Party: 

A CBS poll taken in 2018 found that 59% of republicans viewed Russia as a U.S. ally or friendly to the U.S. Poll Question # 6: Trump's handling of Putin meeting at Helsinki Summit, Russia election meddling and U.S. intelligence agencies - CBS News

FBI director says 'no indication' of Ukraine interference in 2016 That factual statement may get him fired. Trump attacks FBI Director Christopher Wray over IG report, Russia

Donald Trump’s talking points on Crimea are the same as Vladimir Putin’s - The Washington Post; Trump Told G7 Leaders That Crimea Is Russian Because Everyone Speaks Russian In Crimea

Fox News’ Tucker Carlson says US ‘should take the side of Russia over Ukraine’ in defense of Vladimir Putin | The Independent

The republican Senator John N. Kennedy (R-LA) is just one of many republicans who are disseminating Putin's talking points. No evidence Ukraine president helped Hillary Clinton, as GOP senator claimed | PolitiFact Prior to the election, Ukraine's leaders were concerned that Trump was pro-Russian based on numerous public comments made by him. As it turned out, Ukraine needed to be concerned about Donald and the modern day GOP who parrot Russian talking points about Ukraine repeatedly through U.S. mass media outlets.

Another republican senator, Ted Cruz, parroted Russian propaganda last Sunday: Cruz promotes conspiracy that Ukraine "blatantly interfered" in U.S. election - Axios  The Putin's talking points echoed by republicans is that Ukraine "blatantly interfered" in the 2016 election when a few government officials criticized Trump's comment that he might recognize the legitimacy of Russia's forced annexation of Crimea. That is not election interference. Republicans look both ridiculous and foolish advancing that claim.  

The Republicans have become the party of Russia. This makes me sick. - The Washington Post This is an opinion column written by Max Boot who emigrated from Russia and joined the republican party because he thought then it had "moral clarity".

Impeachment Is Pushing Republicans Closer to Russia - The Atlantic

Republicans senators go all in on Russian disinformation - Vox

Giuliani is continuing to spread Russia's disinformation about Ukraine and is currently working on a TV program that will disseminate Russian propaganda. The far right network One America News will air the broadcast. As impeachment tide swirls around Trump, Giuliani drops anchor in Ukraine; Rudy Giuliani’s Ukraine ‘Investigation’ on OAN Stars Some of Kyiv’s Most Dubious Characters 

The Indispensable Man: How Giuliani Led Trump to the Brink of Impeachment

Giuliani has interviewed so far a pro-Russian Ukrainian politician that once forwarded a "peace" proposal to the U.S. whereby the U.S. would lift all Russian sanctions and recognize the legitimacy of Russia's forced annexation of Ukraine's Crimea territory. 

Other Giuliani sources include former prosecutors who were fired for corruption and a Ukrainian lawmaker who studied at the KGB academy in Moscow.  

Donald claims that Giuliani wants to testify before impeachment investigators and will make a report to AG Barr and Congress on his findings. Trump says Giuliani will give Ukraine info to Justice Dept., and Congress Giuliani had previously refused to cooperate with the investigation. Mike Pence, Rudy Giuliani won't cooperate in US House impeachment inquiry; Rudy Giuliani Says He Won't Cooperate WIth Adam Schiff-Led Ukraine Investigation  

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The Growing Authoritarianism of the Republican Party and its Cult of Personality:

Pew Research Poll: Republicans Back Giving President Trump More Power at Expense of Congress, Courts ("The percentage of Republicans who think it would be too risky to give presidents more power has sunk from 70 to 51 percent in a year. Since 2016, that number has fallen 31 points.")

Mueller Report Illustrates Trump’s Authoritarian Rhetorical Tactics - Just Security Republicans are extremely receptive to those rhetorical tactics.

There is no reasonable doubt possible that Trump admires authoritarians leaders like Putin, much preferring autocrats over leaders in western democracies.

15 times Donald Trump praised authoritarian rulers; 

The Personality Cult of Donald Trump-Medium

How Trump's Embrace Of Authoritarian Rulers Has Impacted The World: NPR; 

Donald Trump has always loved authoritarians, but we didn't listen; 

The Tyrannical Mr. Trump – Foreign Policy

Trump’s Delight for Putin, Duterte, and Mussolini - The Atlantic

Is Donald Trump an authoritarian? Experts examine telltale signs

The Authoritarians

After Stephen Miller's white nationalist views outed, Latinos ask 'where's the GOP outrage?' The acceptance and growth of White Nationalist policies and language within the GOP is another indication of an accelerating authoritarian culture, as are the frequent attacks on the free press, the embrace of demonstrably false narratives (the reason for the press attacks) and voter suppression. 


The republicans have their own version of Putin TV with Fox, which is not a news organization, but a political propaganda outlet for Trump. 

Demagogue Don is the GOP's unchallenged and unchallengeable leader, another indicia of an authoritarian mind set.  

The cult of personality, wholeheartedly embraced by the GOP, is another indicia of strong authoritarian leanings. 

Criticism of Donald, no matter how justified and factually based, is not allowed in the modern day GOP unless the person voicing the concern wants to pay a steep political price. Trump has as much control over republican politicians as a dictator who can use lethal force against critics with impunity.   

The Europeans recently canceled a conference when the U.S. tried to block a scholar, Stanley Sloan, from speaking. NATO Conference Is Canceled After U.S. Ambassador Barred a Trump Critic  

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Trump's toilet claim: Americans need to flush '10 times, 15 times' I am glad that Donald is instructing our children on how to flush toilets.  

Does this sound like an Extremely Stable Genius: Trump's New Toilet Initiative - YouTube

Trump Slammed For Insisting 'Killer' Real Estate Jews Will Back Him To Save Their Wealth

5 questions about President Trump’s use of undocumented workers - The Washington Post

How two housekeepers took on the president — and revealed that his company employed undocumented immigrants - The Washington Post

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All trades are commission free except as otherwise noted.  

1. Bought 100 PBA at $34.34: 

Quotes:

USD Priced Shares: Pembina Pipeline Corp. (U.S.)
CAD Priced Shares: Pembina Pipeline Corp.  (Canada: Toronto) 

Closing Price Yesterday: PBA $35.40 +$0.04 +0.11% 

The USD will reflect the price of the CAD priced shares as converted into USDs. 

Pembina Pipeline Corp Key Developments | Reuters

Recent Material News: Pembina Pipeline Corporation Receives Canadian Competition Bureau Approval for the Proposed Acquisition of Kinder Morgan Canada; Pembina Pipeline Corporation to Acquire Kinder Morgan Canada and the Cochin Pipeline for C$4.35 Billion and Increase Dividend ("The Transaction will be immediately accretive to adjusted cash flow per share and increases the Company's fee-for-service and take-or-pay component of adjusted EBITDA. The assets being acquired in the Transaction are expected to generate adjusted EBITDA of approximately $350 million in 2019. Through the integration of these assets with the Company's existing businesses, Pembina estimates that incremental run-rate adjusted EBITDA of $50 million can be realized within five years with nominal capital investment. In addition, Pembina expects the assets could generate an additional $50 million of run-rate adjusted EBITDA through expansion opportunities.")

Pembina Pipeline Corporation Provides Kinder Morgan Canada Update (expected to close 12/16/19)

Pembina Pipeline Corporation Announces Closing of $1.5 Billion Public Note Offering

Operations Map:

Pembina - Our Operations

Website: Pembina - Home

Prior Round-Trip: Item # 5 Sold 100 PBA at 33.19 (10/3/13 Post)(profit snapshot $383.72)- Item # 3 Bought 100 PBA at $29.22 (2/20/13 Post)

Dividend: Monthly at C$.2 per share

Pembina Pipeline Corporation Declares Common Share Dividend

The actual dividend for those who own PBA will depend on the CAD/USD exchange rate on the payment date. The dividend will be subject to the 15% Canadian withholding tax since this position is owned in a taxable account.

Before the Canadian tax, the dividend yield would be slightly over 5% at the current exchange rate.

The Morningstar analyst predicts a 5% average annual increase in the dividend over the next 5 years "while maintaining a comfortable distributable cash coverage ratio that averages 1.45 times".

Recent Annual Dividends in CADs:

2018: 2.24
2017: 2.04
2016: 1.90
2015: 1.80
2014: 1.72
2013: 1.645
2012: 1.605
2011: 1.56

Foreign Tax Credits: I am generally able to recover foreign dividend taxes as a dollar for dollar tax credit. Rules are complex when the investor goes over $300 in foreign taxes for an individual or $600 for a couple filing jointly since exceeding those limits require filling out IRS Form 1116 which I have to do every year. Claiming Foreign Taxes: Credit or Deduction? | Charles Schwab I do not like doing it either.   

Last Earnings Report (Q/E 9/30/19): Pembina Pipeline Corporation Reports Third Quarter Results

Goal: Realized annual average total return of 6%+

Analyst Report: I only have access to one. 

Morningstar: 3 stars with a fair value of $37, assigned a narrow moat.   

2. Eliminations and Pares: 

A. Eliminated MGC-Sold 8 at $108.64:

Quote: MGC Fund - Vanguard Mega Cap ETF Overview

Closing Price Yesterday: MGC $108.79 -$0.11 -0.10% 

Profit Snapshot: +$83.23

Item # 1.C. Bought 1 MGC at $95.78 (6/2/19 Post); Item # 4.C. Bought 2 MGC at $97 (5/15/19 Post); Item # 4.A. Bought 5 MGC at $99.23 (4/14/19 Post)

Sponsor's Website: MGC - Vanguard Mega Cap ETF | Vanguard

Expense Ratio: .07%

B. Pared GNL-Sold Highest Cost 50 Shares at $20.05: 

Quote: Global Net Lease (GNL)
Website: Global Net Lease
SEC Filings
Property Type Diversification | GNL

Closing Price Yesterday: GNL $20.49 -$0.06 -0.29% 

As of 9/30/19, GNL's "portfolio consisted of 264 net lease properties located in seven countries and is comprised of 28.9 million rentable square feet leased to 120 tenants across 45 industries at September 30, 2019."  

"52% Office, 43% Industrial / Distribution and 5% Retail (based on an annualized straight-line rent)"

"99.6% leased with a remaining weighted-average lease term of 8.0 years."

Management: External, a major negative

Position Before Pare-Average Cost Per Share =$19.39

Position After Pare-Average Cost Per Share=$18.92 

Snapshot Closing Price 11/25/19

Profit Snapshot: +$1.42

When in a strong capital preservation mode, which is the case now, the goal is to earn any total return on a high yielding stock in excess of the dividend. The odds of accomplishing that goal become more likely by selling my highest cost lots on price pops which lowers my average cost per share and increases my dividend yield on the remaining shares.  

For GNL, I took the stock out of my small ball purchase restriction when I made my last buy trades. My only restriction now is that any future purchase must lower my average cost per share. 

GNL Chart Since IPO (as of 11/25): 

GNL Information (as of 11/25): 

Last Buy Discussions: Item # 1.C. Added 30 GNL at $19.31 and 10 at $18.84 (10/19/19 Post); Item # 1.C. Added 10 GNL at $17.28 (1/20/19 Post) 

Dividend: Quarterly at $.5325 or $2.13 annually (currently, not covered by cash flow)

I am concerned about a dividend cut since this REIT is not covering its current payout with cash flow. I may consequently wait to purchase additional shares until after the dividend is cut. 

Last Ex Dividend Date: 10/10/19 

Dividend Yield at TC = 11.26%

Last Earnings Report (Q/E 9/30/19): Another motivating factor for the pare is my slightly negative opinion about this report. 

FFO and AFFO Calculations: 

Global Net Lease Reports Third Quarter 2019 Results

Purchase Restriction: None, previously removed from small ball purchase restriction. 

C. Pared FIE:CA-Sold Highest Cost 100 Shares at C$7.33 ($1 IB Commission): 

Quote: iShares Canadian Financial Monthly Income ETF

Closing Price Yesterday: FIE.TO C$7.18  +C$0.01 +0.07% 

Sponsor's Website: iShares Canadian Financial Monthly Income ETF

Profit Snapshot: +C$3

Item # 1.A. Bought 100 FIE:CA at C7.28 (4/12/18 Post)

Remaining Position: 500 Shares with an average cost per share of C$6.91

Buy Discussions on Remaining 500 Share Position: Item # 1 Bought 100 FIE:CA at $6.74 (9/21/19 Post); Item # 1: Added 100 FIE:CA at C$ 6.84 (7/13/19 Post); Item # 2. Bought 100 FIE:CA at C$6.92(4/7/19 Post); Item # 4.B. Added 100 FIE:CA at C$6.9 (12/23/18 Post); Item # 1 Bought 100 FIE:CA at C$7.12 (11/7/18 Post)

Last Sell Discussions: Item # 5. Sold 300 FIE:CA at C$7.64 (11/26/17 Post)(profit snapshot = C$160); Item # 5. Sold 300 FIE:CA at C$7.64 (11/26/17 Post) (profit snapshot=C$35)(contains snapshots of prior round-trip trades= USD$391.32 for 1500 shares and USD$58.07 for 300 shares; C$166 for 200 shares) All trades were in CADs but the profit snapshots for trades made at Fidelity are calculated using USD values)  I quit trading stocks on foreign exchanges at Fidelity due to its much higher cost compared to Interactive Brokers, both the commissions for currency exchange and for trades. 

Dividends: Monthly at C$.04 per share

Dividend Yield at Average Cost Per Share = 6.95%

The price downdraft since this pare is attributable in part to less than stellar earnings from Canadian banks including the egg laid by Toronto Dominion (TD). Canadian banks expect subdued 2020 after dismal quarter wipes $15 billion of value - Reuters 

D. Eliminated VHT-Sold 8 at $185.94: 

Quote: Vanguard Health Care ETF Overview

Profit Snapshot: $122.15

Item # 3.C. Bought  2 VHT at $168.75 and 1 at $160.81(5/1/19 Post)Item # 5.A. Bought 5 VHT at $173 (4/3/2019 Post) 

Sponsor's Website: VHT - Vanguard Health Care ETF | Vanguard

Expense Ratio: .1% 

E. Eliminated VWO-Sold 10 at $42.61: 

Quote: Vanguard FTSE Emerging Markets ETF Overview

Closing Price Yesterday: VWO $42.58 +$0.09 +0.21% 

Profit Snapshot: $34.06

Item # 3.B. Bought 5 VWO at $38.89 (12/5/18 Post); Item # 4.B. Bought 5 VWO at $39.52(11/18/18 Post)

Sponsor's Website: VWO-Vanguard FTSE Emerging Markets ETF

Expense Ratio: .14%

F. Sold 60 ICLN at $11.01: 

Quote: ICLN | iShares Global Clean Energy ETF Overview

Closing Price Yesterday: ICLN $11.09 -$0.08 -0.72% 

Profit Snapshot: +$10.29

Item # 4.B. (11/20/19 Post);  Item # 4.A.  (10/11/19 Post)

Sponsor's Website: iShares Global Clean Energy ETF | ICLN

3. Canadian Reset Equity Preferred Stocks: 

A. Added 50 HSEPRC at C$16.15: 

Husky Energy Inc. 4.5% Cumulative Pfd. Series 3 Overview

I discussed this C$25 par value security in my last post.  Item # 4.A. Bought 50 HSEPRC at C$16.57  (12/7/19 Post)

I bought 50 just prior to the 11/29 ex dividend date and round the lot up to 100 shares with this purchase shortly after that date. 

The coupon just reset for five years. The new coupon is 4.636%. 

Average Total Cost 100 Shares = C$16.38 

Yield at C$16.38 = 7.08% (.04636% x. C$25 par value = C1.159 annual dividend per share ÷ C$16.38 Total Cost = 7.08%)

4. Issuer Optional Redemptions-Corporate Bonds: 

I am losing on average 2 corporate bonds to early issuer redemptions. Some of those are occurring 1 month prior to maturity which allows the issuer to avoid a make whole payment. 

Others are redeemed early even though the issuer has to pay a premium to par value. 

Last week, for example, I lost 2 Packaging Corporation 2.45% SU bonds that would have matured on 12/15/20. 

The issuer paid a $7.69 premium per bond as a make whole payment. That is in addition to the $1000 par value plus accrued and unpaid interest: 

Profit: $30.24

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.