Economy:
US Jobs Report December 2019: 145,000 payrolls added, 3.5% unemployment rate The consensus estimate was for 165K new jobs. While the last two months of 2019 may be revised in the January and February employment reports, the monthly average job growth for 2019 now stands at 176K, the slowest pace since 2011. Notwithstanding the Fed's rate cuts and the GOP's tax cuts for corporations, payroll growth in 2019 fell to 2.1M positions from 2.7M in 2018.
The average work week remained unchanged at 34.3 hours.
Wage growth was disappointing at just 3 cents per hour. Wage growth has been slowing for several months. The Y-O-Y increase in wages was 2.9% through December 2019. During Trump's tenure as President, the high was hit last February at 3.4%.
Employment gains for October and November were revised down by 14K.
Employment Situation Summary
Annual Wage Growth (drifting down some since topping out at 3.4% in February 2019)
October 2019 3% Employment Situation News Release
August 2019: 3.2% Employment Situation News Release
July 2019: 3.2% Employment Situation News Release
June 2019: 3.1% Employment Situation News Release
May 2019: 3.1% Employment Situation News Release
April 2019: 3.1% Employment Situation News Release
March 2019: 3.2% Employment Situation News Release
February 2019 3.4% Employment Situation News Release
September 2018 2.8% Employment Situation News Release
July 2018 2.7% Employment Situation News Release
April 2018 2.6% Employment Situation News Release
January 2018 2.9% Employment Situation News Release
December 2016 2.9% Employment Situation News Release
The average work week remained unchanged at 34.3 hours.
Wage growth was disappointing at just 3 cents per hour. Wage growth has been slowing for several months. The Y-O-Y increase in wages was 2.9% through December 2019. During Trump's tenure as President, the high was hit last February at 3.4%.
Employment gains for October and November were revised down by 14K.
Employment Situation Summary
Annual Wage Growth (drifting down some since topping out at 3.4% in February 2019)
October 2019 3% Employment Situation News Release
August 2019: 3.2% Employment Situation News Release
July 2019: 3.2% Employment Situation News Release
June 2019: 3.1% Employment Situation News Release
May 2019: 3.1% Employment Situation News Release
April 2019: 3.1% Employment Situation News Release
March 2019: 3.2% Employment Situation News Release
February 2019 3.4% Employment Situation News Release
September 2018 2.8% Employment Situation News Release
July 2018 2.7% Employment Situation News Release
April 2018 2.6% Employment Situation News Release
January 2018 2.9% Employment Situation News Release
December 2016 2.9% Employment Situation News Release
+++++
Markets and Market Commentary:
This basket of dividend growth stocks can help your portfolio stand out in 2020 - MarketWatch Of the 12 stocks mentioned in that article, I currently have small positions in IBM and AT & T. I recently bought and sold two others: Macy's and Huntington Bancshares.
Middle-income households haven’t recovered since the Great Recession — here’s a reason why - MarketWatch
Weakness in several box retailers continues: Kohl's shares tank on dismal holiday sales results, lowered outlook; Bed Bath & Beyond Plunges on Earnings Miss, Withdrawn Guidance - TheStreet
Boeing messages reveal efforts to manipulate regulators of 737 Max One Boeing employee described the 737 MAX as an "airplane is designed by clowns who in turn are supervised by monkeys.” I can not rationally explain why the Stock Jocks are keeping BA's price near current levels. BA 5 Year Chart
Companies issue high grade debt at one of the fastest paces ever U.S. corporations sold $69B in investment grade debt last week. The world's parabolic increase in debt continues with the pedal to the metal.
Global debt surged to a record $250 trillion in the first half of 2019, led by the US and China This will not end well. And, there is no will to change the now inevitable debt bomb explosion. The only question is when will the debt bubble burst.
++++
Portfolio Allocation & Management:
The stock allocation remains at less than 10%.
As long as I am able to generate a 8% to 10% total return with a standard deviation less than 2.5, which I accomplished last year, then I am not going to become more aggressive unless the bottom falls out of the stock market that provides me with what I would consider a suitable cushion.
On a total portfolio basis, the stock allocation is currently close to 5% after selling two mutual funds this year and paring the allocation meaningfully last year.
The Fidelity taxable account is the most aggressive of 4 taxable brokerage accounts:
The short term allocation includes the money market account, CDs and treasury bills. About 25% of the portfolio is currently inhabiting a MM account earning about 1.25%. I would like to see stocks go down now by at least 20%, preferably 50%.
With this allocation holding steady for most of 2019, this account experienced a total return of 8.9%.
The 3 year standard deviation in the Fidelity taxable account was 2.41 through last December. The standard deviation over past 3 years for the iShares Core U.S. Aggregate Bond ETF (AGG) was 2.91% which produced annual average total returns of 3.99%, 3% and 3.65% over the past 3, 5, and 10 years respectively.
Standard Deviation and Risk
I estimate that the bond allocation has a weighted average rating of AA- (possibly A+). The CDs are FDIC insured from solid banks and are unrated by any credit agency which is the norm. For internal purposes, I assign them a AAA rating.
I sold a large number of intermediate corporate bonds last year and a number of bonds were redeemed early by the issuer. As I mentioned in a recent comment, it took 17 snapshots to capture the fixed income portion of this account. The number of snapshots would probably have been close to 30 before I started to pare my investment grade bond portfolio and net redemptions from corporate issuers during the year.
The weighting of the bond portfolio is in short maturities with the average weighted average maturity less than the Barclay's Aggregate U.S. Bond Index:
The non-investment grade bonds are holdovers from my junk bond ladder strategy. The unrealized gain in those bonds is close to $500.
The long term bond allocation is almost entirely in high quality Tennessee Municipal bonds.
I am increasing the risk in my smallest account which is a Fidelity Roth IRA. That account was almost entirely in short term corporate bonds last year. As those bonds mature, and lacking suitable yield investment in similar securities, I am turning toward small ball trading of high yielding common stocks. The general goal is to earn a total return in excess of the dividend yield. I am selling and buying small lots using the small ball trading rules.
I own Tennessee Municipal bonds in 3 taxable accounts.
These are the municipal bonds that I currently own in my Fidelity account (all of the following snapshots taken on 1/11/2020):
Chattanooga Electric: AA+ (Fitch), AA (S & P)
City of Kingsport GO: Aa2 (Moody's)
City of Knoxville Electric: Aa2 (Moody's); AA (S& P)
City of Knoxville Gas: Aa2 (Moody's); AA (S& P)
City of Springfield GO: Aa3 (Moody's)
Dickson County GO: AA (S & P)
Johnson City: Aa2 (Moody's)
Knox County GO: AA+ (S & P); Aa1 (Moody's)
Maryville GO: Aa3 (Moody's); AA+ (S & P)
Maury County GO: Aa2 (Moody's)
Memphis GO: AA (S &P); Aa2 (Moody's)
Memphis Water: Aa1 (Moody's); AAA (S & P)
Montgomery County GO: AA+ (S & P)
Nashville/Davidson County GO: AA (S&P) Aa2 (Moodys)
Shelby County-Methodist Le Bonheur Healthcare: A1 (Moody's); AA- (S & P)
Sumner County GO: AA+ (S & P)
Sullivan County GO: Aa2 (Moody's)
Washington County GO: AA (S & P); Aa2 Moody's
Williamson County GO: Aaa (Moody's)
+++
The standard deviation for my Schwab account is currently at 1.45:
I would estimate that the weighted average credit weighting for the fixed income securities is AA+. There is over a 30% weighting in U.S. treasury bills (all maturities within 12 months) and the largest weighting in CDs for any account. I assign those fixed income securities with AAA weightings.
The Tennessee municipals have a lower weighting in my Schwab account than the U.S. treasuries and consist of the following:
The price appreciation of this Harpeth Valley Utility bond is restrained by the optional call date. The issuer can call this 4% AA+ rated bond on or after 9/1/22. Optional call provisions will impact price.
The Rutherford County bonds are rated AAA. S & P assigns a AAA to Knoxville's water bonds.
The Vanguard taxable accounts has no individual common stocks and a common stock fund weighting of less than 1%.
I did not look at the weightings in my IB account which has the highest weightings in preferred stocks, high quality short term corporate bonds and REITs. I did increase my preferred stock weighting in that account during 2019 through purchases of Canadian reset equity preferred stocks.
All four taxable brokerage accounts were up yesterday with the S & P 500 declining .29%.
Overall my CD weightings are declining now since I am not reinvesting the proceeds into CDs given the decline in rates. At Fidelity, I would have to go out to a 2024 maturity to pick up a 2% yield. The highest CD rate is 2.5% and that one matures in 2035.
The lack of yield alternatives is one fuel source for the parabolic stock rise. Another fuel source is spending trillions per year of borrowed money.
Middle-income households haven’t recovered since the Great Recession — here’s a reason why - MarketWatch
Weakness in several box retailers continues: Kohl's shares tank on dismal holiday sales results, lowered outlook; Bed Bath & Beyond Plunges on Earnings Miss, Withdrawn Guidance - TheStreet
Boeing messages reveal efforts to manipulate regulators of 737 Max One Boeing employee described the 737 MAX as an "airplane is designed by clowns who in turn are supervised by monkeys.” I can not rationally explain why the Stock Jocks are keeping BA's price near current levels. BA 5 Year Chart
Companies issue high grade debt at one of the fastest paces ever U.S. corporations sold $69B in investment grade debt last week. The world's parabolic increase in debt continues with the pedal to the metal.
Global debt surged to a record $250 trillion in the first half of 2019, led by the US and China This will not end well. And, there is no will to change the now inevitable debt bomb explosion. The only question is when will the debt bubble burst.
++++
Portfolio Allocation & Management:
The stock allocation remains at less than 10%.
As long as I am able to generate a 8% to 10% total return with a standard deviation less than 2.5, which I accomplished last year, then I am not going to become more aggressive unless the bottom falls out of the stock market that provides me with what I would consider a suitable cushion.
On a total portfolio basis, the stock allocation is currently close to 5% after selling two mutual funds this year and paring the allocation meaningfully last year.
The Fidelity taxable account is the most aggressive of 4 taxable brokerage accounts:
 |
| As of 12/31/19 |
With this allocation holding steady for most of 2019, this account experienced a total return of 8.9%.
The 3 year standard deviation in the Fidelity taxable account was 2.41 through last December. The standard deviation over past 3 years for the iShares Core U.S. Aggregate Bond ETF (AGG) was 2.91% which produced annual average total returns of 3.99%, 3% and 3.65% over the past 3, 5, and 10 years respectively.
Standard Deviation and Risk
I estimate that the bond allocation has a weighted average rating of AA- (possibly A+). The CDs are FDIC insured from solid banks and are unrated by any credit agency which is the norm. For internal purposes, I assign them a AAA rating.
I sold a large number of intermediate corporate bonds last year and a number of bonds were redeemed early by the issuer. As I mentioned in a recent comment, it took 17 snapshots to capture the fixed income portion of this account. The number of snapshots would probably have been close to 30 before I started to pare my investment grade bond portfolio and net redemptions from corporate issuers during the year.
The weighting of the bond portfolio is in short maturities with the average weighted average maturity less than the Barclay's Aggregate U.S. Bond Index:
The long term bond allocation is almost entirely in high quality Tennessee Municipal bonds.
I am increasing the risk in my smallest account which is a Fidelity Roth IRA. That account was almost entirely in short term corporate bonds last year. As those bonds mature, and lacking suitable yield investment in similar securities, I am turning toward small ball trading of high yielding common stocks. The general goal is to earn a total return in excess of the dividend yield. I am selling and buying small lots using the small ball trading rules.
I own Tennessee Municipal bonds in 3 taxable accounts.
These are the municipal bonds that I currently own in my Fidelity account (all of the following snapshots taken on 1/11/2020):
Chattanooga Electric: AA+ (Fitch), AA (S & P)
City of Knoxville Electric: Aa2 (Moody's); AA (S& P)
Dickson County GO: AA (S & P)
Maury County GO: Aa2 (Moody's)
Memphis GO: AA (S &P); Aa2 (Moody's)
Nashville/Davidson County GO: AA (S&P) Aa2 (Moodys)
Shelby County-Methodist Le Bonheur Healthcare: A1 (Moody's); AA- (S & P)
Sullivan County GO: Aa2 (Moody's)
The standard deviation for my Schwab account is currently at 1.45:
The Tennessee municipals have a lower weighting in my Schwab account than the U.S. treasuries and consist of the following:
The Vanguard taxable accounts has no individual common stocks and a common stock fund weighting of less than 1%.
I did not look at the weightings in my IB account which has the highest weightings in preferred stocks, high quality short term corporate bonds and REITs. I did increase my preferred stock weighting in that account during 2019 through purchases of Canadian reset equity preferred stocks.
All four taxable brokerage accounts were up yesterday with the S & P 500 declining .29%.
Overall my CD weightings are declining now since I am not reinvesting the proceeds into CDs given the decline in rates. At Fidelity, I would have to go out to a 2024 maturity to pick up a 2% yield. The highest CD rate is 2.5% and that one matures in 2035.
The lack of yield alternatives is one fuel source for the parabolic stock rise. Another fuel source is spending trillions per year of borrowed money.
+++++++
The Unintended Consequences of Conflicts:
What can go wrong, will go wrong. Murphy's law - Wikipedia
Over the past 50+ years, civilian airplanes have been shot down as unintended consequences of conflicts. In two cases, the parties responsible knew that they were shooting down a passenger jet.
During the war between Iraq and Iran, the U.S. mistakenly shot down Iran Air Flight 655 killing all 290 people aboard. The U.S. acknowledged responsibility and paid almost $62M in compensation to the families. The U.S. denied "liability" for the reasons discussed in the previous link.
Iran initially claimed that it did not shoot down the Ukrainian passenger jet. Tehran official says reports that missiles downed Ukrainian flight 'a big lie'
The Unintended Consequences of Conflicts:
What can go wrong, will go wrong. Murphy's law - Wikipedia
Over the past 50+ years, civilian airplanes have been shot down as unintended consequences of conflicts. In two cases, the parties responsible knew that they were shooting down a passenger jet.
During the war between Iraq and Iran, the U.S. mistakenly shot down Iran Air Flight 655 killing all 290 people aboard. The U.S. acknowledged responsibility and paid almost $62M in compensation to the families. The U.S. denied "liability" for the reasons discussed in the previous link.
Iran initially claimed that it did not shoot down the Ukrainian passenger jet. Tehran official says reports that missiles downed Ukrainian flight 'a big lie'
Iran has now admitted that it "unintentionally" shot the plane down with missiles. Iran Says It Unintentionally Shot Down Ukrainian Airliner
I would characterize Iran's act as negligent homicide based on what is known now.
This tragedy would probably not have happened without the U.S. first deciding to kill an Iranian Major General Qasem Soleimani that set off a train of events that culminated in Iran negligently shooting down a passenger jet.
The attack on the Ukrainian passenger jet came just hours after Iran launched missiles aimed at two Iraqi bases housing U.S. troops in retaliation.
{Will there be 1 republican who will admit that that the chain of events started with the U.S. killing Soleimani? Maybe there is one somewhere. The chain of events does not excuse Iran's negligence of course. Civilians will die when nations clash militarily even when there is no intention to cause them harm.}
I will not be holding my breath waiting for Russia taking responsibility for the negligent homicide of 298 persons aboard Malaysia Airlines Flight 17.
After being confronted with overwhelming evidence that a Russian pilot shot down Korean Air Lines Flight 007, murdering 269 people, Russia admitted that he shot down the flight and then paid the pilot 200 rubles. The pilot knew that it was a passenger jet. Ex-Soviet Pilot on Shooting Down KAL 007-The New York Times Russia did not pay compensation to the families and did not apologize. The airline paid a settlement to some families after being sued in a U.S. federal court. (see The Downing of Korean Air Lines Flight 007: Yale Journal of International Law). I would describe this massacre of innocent civilians as first decree murder.
Libyan Arab Airlines Flight 114 - Wikipedia Israel shot down a passenger jet on a regularly scheduled flight in February 1973 that had accidentally entered airspace over the Sinai Peninsula which was then occupied by Israel.
Civilian Planes Shot Down: A Grim History - The New York Times
++
Russian warship 'aggressively approached' US destroyer in Arabian Sea
++
Trump:
Iraqi prime minister tells U.S. to prepare a troop withdrawal plan - MarketWatch Donald refused to discuss withdrawal. Trump administration refuses to heed Iraq’s call for troop withdrawal - The Washington Post
Iraq's request for a U.S. troop withdrawal is directly linked to Donald's killing of the Iranian Major General Qasem Soleimani on Iraqi soil. It would be politically disadvantageous for Donald to withdraw troops for the reason linked by the Iraqis.
Trump's evolving account of Soleimani's 'imminent threat' Trump is 100% untrustworthy. Soleimani may have been planning some nefarious deed against the U.S., but Donald's representations on this issue are worthless as proof. The same would go for Pompeo. That observation has nothing to do with political beliefs but entirely on fact based observations of their integrity.
FactChecking Trump's Iran Address-FactCheck.org Donald used this opportunity to pander to the republican base. The most memorable part of the speech was his lengthy attacks on prior U.S. administrations while claiming that Don the Magnificent was going to solve all of the problems. Parts of this address sounded like a campaign speech. Eight days after this speech, Donald started to claim at a campaign rally that Soleimani was planning to blow up 4 U.S. embassies. Trump now claims four embassies were under threat from Iran, raising fresh questions about intelligence reports - The Washington Post Donald lies all of the time about everything.
GOP support for constraining Trump on Iran fades in wake of Soleimani killing
I would characterize Iran's act as negligent homicide based on what is known now.
This tragedy would probably not have happened without the U.S. first deciding to kill an Iranian Major General Qasem Soleimani that set off a train of events that culminated in Iran negligently shooting down a passenger jet.
The attack on the Ukrainian passenger jet came just hours after Iran launched missiles aimed at two Iraqi bases housing U.S. troops in retaliation.
{Will there be 1 republican who will admit that that the chain of events started with the U.S. killing Soleimani? Maybe there is one somewhere. The chain of events does not excuse Iran's negligence of course. Civilians will die when nations clash militarily even when there is no intention to cause them harm.}
I will not be holding my breath waiting for Russia taking responsibility for the negligent homicide of 298 persons aboard Malaysia Airlines Flight 17.
After being confronted with overwhelming evidence that a Russian pilot shot down Korean Air Lines Flight 007, murdering 269 people, Russia admitted that he shot down the flight and then paid the pilot 200 rubles. The pilot knew that it was a passenger jet. Ex-Soviet Pilot on Shooting Down KAL 007-The New York Times Russia did not pay compensation to the families and did not apologize. The airline paid a settlement to some families after being sued in a U.S. federal court. (see The Downing of Korean Air Lines Flight 007: Yale Journal of International Law). I would describe this massacre of innocent civilians as first decree murder.
Libyan Arab Airlines Flight 114 - Wikipedia Israel shot down a passenger jet on a regularly scheduled flight in February 1973 that had accidentally entered airspace over the Sinai Peninsula which was then occupied by Israel.
Civilian Planes Shot Down: A Grim History - The New York Times
++
Russian warship 'aggressively approached' US destroyer in Arabian Sea
++
Trump:
Iraqi prime minister tells U.S. to prepare a troop withdrawal plan - MarketWatch Donald refused to discuss withdrawal. Trump administration refuses to heed Iraq’s call for troop withdrawal - The Washington Post
Iraq's request for a U.S. troop withdrawal is directly linked to Donald's killing of the Iranian Major General Qasem Soleimani on Iraqi soil. It would be politically disadvantageous for Donald to withdraw troops for the reason linked by the Iraqis.
Trump's evolving account of Soleimani's 'imminent threat' Trump is 100% untrustworthy. Soleimani may have been planning some nefarious deed against the U.S., but Donald's representations on this issue are worthless as proof. The same would go for Pompeo. That observation has nothing to do with political beliefs but entirely on fact based observations of their integrity.
FactChecking Trump's Iran Address-FactCheck.org Donald used this opportunity to pander to the republican base. The most memorable part of the speech was his lengthy attacks on prior U.S. administrations while claiming that Don the Magnificent was going to solve all of the problems. Parts of this address sounded like a campaign speech. Eight days after this speech, Donald started to claim at a campaign rally that Soleimani was planning to blow up 4 U.S. embassies. Trump now claims four embassies were under threat from Iran, raising fresh questions about intelligence reports - The Washington Post Donald lies all of the time about everything.
GOP support for constraining Trump on Iran fades in wake of Soleimani killing
Fort Bragg's 82nd Airborne deploys to the Middle East
'Insulting and demeaning': Lawmakers from Both Parties rip Trump administration after Iran briefing
++
'Insulting and demeaning': Lawmakers from Both Parties rip Trump administration after Iran briefing
++
The Trump and his Trumpsters are out in force claiming that the Democrats love terrorists.
I referenced a statement made by Nikki Haley in my last post, where she asserted that the only people mourning the death of Soleimani were Democrats.
The republican minority Chairmen of the House Judiciary Committee claimed that the democrats loved terrorists. GOP Rep. Doug Collins makes unfounded claim that Democrats are 'in love with terrorists'
Republican House Leader Blames Adam Schiff for Trump's Ordering of Soleimani Strike
Demagogue Don, our Great and Dear Leader, claimed earlier today that Democrats were defending the life of Soleimani:
I referenced a statement made by Nikki Haley in my last post, where she asserted that the only people mourning the death of Soleimani were Democrats.
The republican minority Chairmen of the House Judiciary Committee claimed that the democrats loved terrorists. GOP Rep. Doug Collins makes unfounded claim that Democrats are 'in love with terrorists'
Republican House Leader Blames Adam Schiff for Trump's Ordering of Soleimani Strike
Demagogue Don, our Great and Dear Leader, claimed earlier today that Democrats were defending the life of Soleimani:
The Trumpster congressman Paul Gosar (R-AZ) tweeted a fake photo of Obama shaking the hand of Iran's President Hassan Rouhani. The real photo has Obama shaking the hand of the Indian P.M. Manmohan Singh. GOP congressman tweets fake photo of Obama with Iran's president Gosar's six siblings opposed his reelection bid. Six siblings of GOP congressman endorse his opponent in viral campaign ad - CBS News Gosar represents a solidly republican rural district in Arizona that is about 89% white. He will win reelection comfortably notwithstanding his frequent outrageous acts and comments.
+++++
All trades are commission free unless otherwise noted.
1. Small Ball Adds, Pares and Eliminations:
A. Added 25 EAF at $11.27:
Quote: GrafTech International Ltd.
EAF | GrafTech International Ltd. Analyst Estimates
2018 Annual Report
Last Discussed: Stocks, Bonds & Politics:Item # 1.B. Bought 25 EAF at $11.72 (12/18/19 Post)
Last Sell Discussion: Item #3.C. Sold 25 at $14.48 (12/1819 Post)(profit snapshot = $125.38); Item # 2.A. Sold 110 EAF at $13.48 (11/20/19 Post)(profit snapshot +$61.69).
Dividend: Quarterly at $.085 per share ($.34 annually)
Last Ex Dividend: 11/27/19
Yield at Cost = 2.96%
Current Position: 50 Shares
Average Total Cost Per Share = $11.49
Maximum Position: 150 shares
Purchase Restriction: Small Ball Rule using 25 share lots
Small Ball Rules
Last Earnings Report: GrafTech Reports Third Quarter 2019 Results
A. Added 25 EAF at $11.27:
Quote: GrafTech International Ltd.
EAF | GrafTech International Ltd. Analyst Estimates
2018 Annual Report
Last Discussed: Stocks, Bonds & Politics:Item # 1.B. Bought 25 EAF at $11.72 (12/18/19 Post)
Last Sell Discussion: Item #3.C. Sold 25 at $14.48 (12/1819 Post)(profit snapshot = $125.38); Item # 2.A. Sold 110 EAF at $13.48 (11/20/19 Post)(profit snapshot +$61.69).
Dividend: Quarterly at $.085 per share ($.34 annually)
Last Ex Dividend: 11/27/19
Yield at Cost = 2.96%
Current Position: 50 Shares
Average Total Cost Per Share = $11.49
Maximum Position: 150 shares
Purchase Restriction: Small Ball Rule using 25 share lots
Small Ball Rules
Last Earnings Report: GrafTech Reports Third Quarter 2019 Results
I discussed the last earnings report in Item 2.A.
B. Added 10 TEF at $6.97:
Quote: TEF | Telefonica S.A. ADR Overview | MarketWatch
Last Discussed: Item # 1.A. Added 50 TEF at $7.15 (12/28/19)
I have nothing to add to my recent discussions.
Last Discussed: Item # 1.A. Added 50 TEF at $7.15 (12/28/19)
I have nothing to add to my recent discussions.
Current Position: 110 shares
Maximum Position: 150 shares
Purchase Restriction: Small Ball Rule
Average Cost Per Share = $7.22
I owned 50 shares on the last ex dividend date and received that dividend on 1/6/20:
Telefonica is domiciled in Spain. The tax treaty between the U.S. and Spain limits the withholding rate to 15% for U.S. citizens. US Senate ratifies Spain-US tax treaty protocol - EY - Global The withholding rate for my dividend was at 19% (.19% x $11.11 = $2.11) indicating that Fidelity did not claim my tax treaty rights as a U.S. citizen.
I owned 50 shares on the last ex dividend date and received that dividend on 1/6/20:
Telefonica is domiciled in Spain. The tax treaty between the U.S. and Spain limits the withholding rate to 15% for U.S. citizens. US Senate ratifies Spain-US tax treaty protocol - EY - Global The withholding rate for my dividend was at 19% (.19% x $11.11 = $2.11) indicating that Fidelity did not claim my tax treaty rights as a U.S. citizen.
C. Eliminated PFF-Sold 10 shares at $37.57:
Profit Snapshot: +$7.24
Sponsor's Website: iShares Preferred and Income Securities ETF | PFF
Expense Ratio: .46% viewed as high
Dividend: Monthly at a variable rate
Last Ex Dividend: 12/19/19
I prefer to own individual preferred stocks.
D. Added 10 SKT at $14.08:
Quote: Tanger Factory Outlet Centers Inc. (SKT)
As of 9/30/19, Tanger had "32 consolidated outlet centers in 19 states totaling 12.0 million square feet. We also had 7 unconsolidated outlet centers in 6 states or provinces totaling 2.2 million square feet. During March 2019, we closed on the sale of four non-core consolidated outlet centers for total gross proceeds of $130.5 million, and total net proceeds of approximately $128.2 million. The four properties were located in Nags Head, North Carolina; Ocean City, Maryland; Park City, Utah; and Williamsburg, Iowa and represented 6.8% of the Company’s consolidated portfolio square footage." Page 42 10-Q for the Q/E 9/30/19 The list of properties starts at page 43.
Last Buy Discussions: Item # 1.D. Added 10 at $14.6 and 10 at $14.29 (9/4/19 Post)
I also own 50 shares in my IB account where I will not buy more shares and will not reinvest the dividend. Item # 3.A. Bought 50 SKT at $14.44 (10/23/19 Post)
Last Sell Discussion: Item # 1.A. Sold 50 SKT at $16.85 (9/28/19 Post)(profit snapshot = $38.48)
10 Year Chart: Major Bear Market since mid-2016 (characterized by me as a widow maker chart)
Dividend: Quarterly at $.3555 per share ($1.42 annually)
Next Ex Dividend Date: 1/30/20
Dividend Reinvestment: Yes for the position held in this account
Current Position in this Account: 40+ Shares (I own 50 shares in another account where I will not reinvest the dividends or buy more shares: )
Current Average Cost: $14.59
This 10 share purchase reduced the average cost per share from $14.76 to $14.59.
Dividend Yield at average cost = 9.73 %
Maximum Position in This Account: 100 shares
Purchase Restriction: Small Ball Rule
Last Earnings Report (Q/E 9/30/19): Tanger Reports Third Quarter Results
Occupancy Rate = 95.9%
Expects to generate "nearly $95 million of free cash flow over and above" the 2019 dividend payments
Same store operating income decreased 1.8% "due primarily to the impact of tenant bankruptcies, lease modifications and store closures" The reasonable future forecast is a continuation of those problems as the dominant trend, though the negative impact will likely be lumpy IMO.
Weighted Average Interest Cost = 3.5%
As previously discussed many times, the straight line rent adjustment removes from FFO non-cash revenues created by the accounting profession. Pretend money is not available to support the dividend. Still, even with all of SKT's problems, the FAD payout ratio is comfortable at 76%.
With retail bankruptcies occurring frequently, it is not surprising that FFO per share declined some Y-O-Y.
Selling 4 outlet centers in May 2019 was a major reason for the Y-O-Y declines in FAD and FFO: "In March 2019, we sold four outlet centers for net proceeds of approximately $128.2 million, which resulted in a gain on sale of assets of $43.4 million. The proceeds from the sale of these unencumbered assets were used to pay down balances outstanding under our unsecured lines of credit."
In its earnings press release, SKT represented that those dispositions resulted in a $.04 per share dilutive impact to 2019 third quarter FFO.
Adjusting for that item, I increased the reported FFO per share of $.58 to $.62 which compares more favorably with the $.63 per share number from the 2018 third quarter.
SEC Filings
2018 Annual Report
10-Q for the Q/E 9/30/19 (debt discussed starting at page 22)
E. Sold 10 NRZ at $16.21:
Quote: New Residential Investment Corp. (NRZ)
Website: New Residential Investment Corp.
SEC Filings
2018 Annual Report (risk summary starts at page 13 and ends at page 56)
Last Buy Discussion: Item # 1.C. Bought 10 NRZ at $13.95 (9/4/19 Post)
Dividend: Quarterly at $.50 per share
Last Ex Dividend: 12/30/19 (after pare)
New Residential Investment Corp. Declares Fourth Quarter 2019 Common and Preferred Stock Dividends
Dividend Reinvestment: Yes
Dividend Yield at $15 Total Cost per share = 13.33%
There is a risk of a dividend cut for the reasons discussed below
Position Before Pare: Average Cost per share = $15.17
Position After Pare: Average Cost per share = $15
Profit Snapshot: $1.54
Generally, I view it to be a victory when I sell a high dividend stock like NRZ in excess of the unadjusted for ROC cost basis. I thought that was the case with this 10 share pare when I entered the sell order. I forgot to check the original cost basis which was $16.38. Item # 1.A. Bought 10 NRZ at $16.38 (3/15/18 Post) The tax cost basis had been reduced by ROC. This is just a mistake in my strict small trading rules.
The next highest cost lot was bought at $16.18 on 2/28/18 (shown as having a $15.87 cost basis in the previous snapshot)
NRZ Interactive Chart: Relatively narrow channel
Last Earnings Report (Q/E 9/30/19):
On the surface, this report looks okay. NRZ reported $.54 per share in net income and paid out its regular quarterly dividend of $.5 per share.
The dividend is being covered by the sale of securities and the gain "on settlement of securities":
In the last quarter, those two items contributed $255.293M. Of the $224.584M in GAAP net income reported for the quarter, the gain on the sale of mortgage loans was $100.541, which is not a recurring source of income. The gain from the year ago quarter was $45.732M.
SEC Filed Press Release
New Residential Investment's (NRZ) CEO Michael Nierenberg on Q3 2019 Results - Earnings Call Transcript | Seeking Alpha
The stock recently received a small boost when Argus initiated coverage with a buy rating and an $18 PT (12/30/19 report, available to Charles Schwab customers).
The only other brokerage report that I can access is from Credit Suisse which has a market perform rating and a $17.5 PT (10/30/19 report, available to Charles Schwab customers)
F. Pared FBIO-Sold 100 at $2.7:
Quote: Fortress Biotech Inc. (FBIO)
Profit Snapshot: net of $38.49
Category: Lottery Ticket Basket-Extreme Risk
In this pare, I sold my lowest and highest cost 50 share lots.
Fortress Biotech - Specializing in Acquiring, Developing and Commercializing Novel Pharmaceutical and Biotechnology Products
Pipeline
Marketed Products
Fortress Biotech Reports Third Quarter 2019 Financial Results and Recent Corporate Highlights
SEC Filings
10-Q for the Q/E 9/30/19
Prior Round-Trip: Item # 5.A. Sold 50 FBIO at $4.96 (3/19/18 Post)(profit snapshot = $20.29)
D. Added 10 SKT at $14.08:
Quote: Tanger Factory Outlet Centers Inc. (SKT)
As of 9/30/19, Tanger had "32 consolidated outlet centers in 19 states totaling 12.0 million square feet. We also had 7 unconsolidated outlet centers in 6 states or provinces totaling 2.2 million square feet. During March 2019, we closed on the sale of four non-core consolidated outlet centers for total gross proceeds of $130.5 million, and total net proceeds of approximately $128.2 million. The four properties were located in Nags Head, North Carolina; Ocean City, Maryland; Park City, Utah; and Williamsburg, Iowa and represented 6.8% of the Company’s consolidated portfolio square footage." Page 42 10-Q for the Q/E 9/30/19 The list of properties starts at page 43.
Last Buy Discussions: Item # 1.D. Added 10 at $14.6 and 10 at $14.29 (9/4/19 Post)
I also own 50 shares in my IB account where I will not buy more shares and will not reinvest the dividend. Item # 3.A. Bought 50 SKT at $14.44 (10/23/19 Post)
Last Sell Discussion: Item # 1.A. Sold 50 SKT at $16.85 (9/28/19 Post)(profit snapshot = $38.48)
10 Year Chart: Major Bear Market since mid-2016 (characterized by me as a widow maker chart)
 |
| As of 1/2/2020 |
Next Ex Dividend Date: 1/30/20
Dividend Reinvestment: Yes for the position held in this account
Current Position in this Account: 40+ Shares (I own 50 shares in another account where I will not reinvest the dividends or buy more shares: )
Current Average Cost: $14.59
 |
| Snapshot Intra-day 1/2/2020 |
Dividend Yield at average cost = 9.73 %
Maximum Position in This Account: 100 shares
Purchase Restriction: Small Ball Rule
Last Earnings Report (Q/E 9/30/19): Tanger Reports Third Quarter Results
Occupancy Rate = 95.9%
Expects to generate "nearly $95 million of free cash flow over and above" the 2019 dividend payments
Same store operating income decreased 1.8% "due primarily to the impact of tenant bankruptcies, lease modifications and store closures" The reasonable future forecast is a continuation of those problems as the dominant trend, though the negative impact will likely be lumpy IMO.
Weighted Average Interest Cost = 3.5%
 |
| Adjustments to FFO to Arrive at FAD (Funds Available for Distribution) |
With retail bankruptcies occurring frequently, it is not surprising that FFO per share declined some Y-O-Y.
Selling 4 outlet centers in May 2019 was a major reason for the Y-O-Y declines in FAD and FFO: "In March 2019, we sold four outlet centers for net proceeds of approximately $128.2 million, which resulted in a gain on sale of assets of $43.4 million. The proceeds from the sale of these unencumbered assets were used to pay down balances outstanding under our unsecured lines of credit."
In its earnings press release, SKT represented that those dispositions resulted in a $.04 per share dilutive impact to 2019 third quarter FFO.
Adjusting for that item, I increased the reported FFO per share of $.58 to $.62 which compares more favorably with the $.63 per share number from the 2018 third quarter.
SEC Filings
2018 Annual Report
10-Q for the Q/E 9/30/19 (debt discussed starting at page 22)
E. Sold 10 NRZ at $16.21:
Quote: New Residential Investment Corp. (NRZ)
Website: New Residential Investment Corp.
SEC Filings
2018 Annual Report (risk summary starts at page 13 and ends at page 56)
Last Buy Discussion: Item # 1.C. Bought 10 NRZ at $13.95 (9/4/19 Post)
Dividend: Quarterly at $.50 per share
Last Ex Dividend: 12/30/19 (after pare)
New Residential Investment Corp. Declares Fourth Quarter 2019 Common and Preferred Stock Dividends
Dividend Reinvestment: Yes
Dividend Yield at $15 Total Cost per share = 13.33%
There is a risk of a dividend cut for the reasons discussed below
Position Before Pare: Average Cost per share = $15.17
Position After Pare: Average Cost per share = $15
 |
| Snapshot 12/2/20 |
The next highest cost lot was bought at $16.18 on 2/28/18 (shown as having a $15.87 cost basis in the previous snapshot)
NRZ Interactive Chart: Relatively narrow channel
Last Earnings Report (Q/E 9/30/19):
On the surface, this report looks okay. NRZ reported $.54 per share in net income and paid out its regular quarterly dividend of $.5 per share.
In the last quarter, those two items contributed $255.293M. Of the $224.584M in GAAP net income reported for the quarter, the gain on the sale of mortgage loans was $100.541, which is not a recurring source of income. The gain from the year ago quarter was $45.732M.
SEC Filed Press Release
New Residential Investment's (NRZ) CEO Michael Nierenberg on Q3 2019 Results - Earnings Call Transcript | Seeking Alpha
The stock recently received a small boost when Argus initiated coverage with a buy rating and an $18 PT (12/30/19 report, available to Charles Schwab customers).
The only other brokerage report that I can access is from Credit Suisse which has a market perform rating and a $17.5 PT (10/30/19 report, available to Charles Schwab customers)
F. Pared FBIO-Sold 100 at $2.7:
Quote: Fortress Biotech Inc. (FBIO)
Profit Snapshot: net of $38.49
Category: Lottery Ticket Basket-Extreme Risk
In this pare, I sold my lowest and highest cost 50 share lots.
Fortress Biotech - Specializing in Acquiring, Developing and Commercializing Novel Pharmaceutical and Biotechnology Products
Pipeline
Marketed Products
Fortress Biotech Reports Third Quarter 2019 Financial Results and Recent Corporate Highlights
SEC Filings
10-Q for the Q/E 9/30/19
Prior Round-Trip: Item # 5.A. Sold 50 FBIO at $4.96 (3/19/18 Post)(profit snapshot = $20.29)
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.
Before publishing a post, I will generally proof read it only one time after writing it. Some typos go unnoticed.
ReplyDeleteI just corrected one since it was material. The total payroll growth was 2.1M in 2019 down from 2.7M in 2018. I previously had both numbers at 2.7M.
The 2019 number is not final yet since the reported December 145K job adds may be revised in the next report.
I do not yet view the slowdown in job growth and wages as a matter of concern. The current downward trend will become a matter of concern at some point when and if continues.
Job growth can continue up to a recession's commencement.
In October 2007, for example, job growth was reported at 166K and the unemployment rate was at 4.7%.
https://www.bls.gov/news.release/history/empsit_11022007.txt
The growth fell to +18K new jobs in December 2007. January 2008 was slightly negative and then the bottom started to fall out.
"Job growth can continue up to a recession's commencement.
ReplyDelete"
But there's nothing to trigger a recession right now. Rates aren't super high & economy heating up, so a slow down triggers and builds steam into a recession.
The bigger risks like trade wars did damage, but are frozen at this level of ongoing damage.
Land: It has been my experience that most investors do not see a recession coming or even know when one has commenced which is a classification attached by NBER months later. Nor will most investors be able to identify the causes of one in real time.
DeleteOn the flip side, there will be a large number of investors who are forecasting recessions on the horizon that do not happen.
The U.S. government's budget deficit was over $1 trillion last year or more than the entire U.S. debt in 1981.
The U.S. GDP for 2019 is currently estimated at $22 trillion. Do the math.
Over the long term the current trajectory of generating GDP growth by spending borrowed money will fail and cause considerable harm. For now, spending $1 trillion per year in borrowed money is a major stimulus to GDP growth, and that is not likely to change in 2020.
I do not see the Fed's rate cuts, going from one historically abnormal rate to a lower one, as having a net beneficial impact on the economy. Halting rate hikes was probably more beneficial. The main impact from recent FED monetary policies has been to juice the U.S. stock market, creating a conducive environment, along with corporate tax cuts, for a major expansion in P/E multiples which is what drove the market up last year.
There will IMO be no Phase 2 trade agreement this year. The primary benefit for the much hyped Phase 1 agreement is that it stalled an acceleration of the trade conflict.
Consumer spending remains supportive but consumers in the aggregate are funding more spending through increases in household debt.
U.S. household debt stood at $13.95 trillion as of 9/30/19.
https://www.newyorkfed.org/microeconomics/hhdc.html
Disposable U.S. household income was at $15.87 trillion as of 9/30/19. Disposable income is what remains after paying taxes. Real disposable income was at $15.109 trillion.
I would not label those numbers as worrisome yet, particularly given the low aggregate household debt service payments as a percent of disposable personal income:
https://fred.stlouisfed.org/series/TDSP
In other words, the abnormally low mortgage rates have allowed a tsunami of refinancings that have lowered the aggregate debt service cost:
https://fred.stlouisfed.org/series/MDSP
The trend of funding consumer purchases with more debt can last a long time before causing or contributing to an economic blowup. The first consumer Age of Leverage started around 1985 and did not blow up until 2008. The next cycle will be shorter since the starting point is significantly higher than the earlier cycle. A key variable will be the cost of servicing existing and new consumer debt. That issue depends on how long central banks can suppress short and intermediate interest rates below the inflation rate.
So no recession indicators are showing up.
DeleteNot sure what triggered the start in 1985. Low rates seem to really change the equation. Such as whether inverted rates mean much.
Land: There is nothing concrete economic data that I can identify indicating that a recession is on the horizon. My current thinking is GDP growth will continue this year provided consumers remain optimistic and continue to spend near current levels.
DeleteThis not not mean that the stock market can avoid a correction that resets multiples at a less elevated level than now.
Strong secular forces power the economy up, including low inflation and interest rates, the availability of credit, federal and state government deficit spending, and consumer demand.
The age of consumer leverage started during an economic expansion and a decision by banks to extend more credit to U.S. households through issuance of credit cards and other means.
Households started to see their income growth fall below the inflation rate and found it necessary to source spending from increased amounts of debt.
Between 1962 to 1985, the percentage of household debt to disposable income fluctuated in a narrow range, mostly between 58% to 63%.
Real wage growth was still occurring during most of that period and households could also increase their disposable income through risk savings.
Starting in 1985, this ratio started to turn consistently up, starting slowly at first and then gaining steam in the middle 1990s when it was around 87%.
By the 2018 first quarter, the number hit 134%.
https://fred.stlouisfed.org/graph/?g=17v
Once the powerful forces propelling GDP growth are identified and understood, then it is easier to identify when those forces are turning from tailwinds to headwinds.
Forced deleveraging is one of the most critical headwinds after a long debt expansion cycle.
An unexpected and persistent rise in inflation, which causes central banks, to raise rates could be another contributing cause to an economic downturn with the severity dependent on the extent and duration of those increases.
A debacle in the stock market can lead to a loss of consumer confidence and contribute to a significant decrease in spending that causes or contributes to a recession's onset.
The market has experienced bear markets in the past without a recession. One example is the bear market in October 1987 that came into being during one trading day.
A long term problem is that the next recession could more easily than in the past morph into a financial crisis given the extreme levels of debt now existing.
While many say the Fed and the U.S. government have tools to deal with the next one, I doubt it.
The ability to replace private demand with government spending will be substantially restrained by existing budget deficits and existing spending programs. After all, in the 11th year of a recovery, the budget deficit exceeds $1 trillion and would soar to over $1.5 trillion in a garden variety recession with no new spending to stimulate the economy.
The FED is already pushing on a string with its already low FF rate. Going to sub-zero will do more harm than good IMO.
So it's back to the problem that wages aren't growing like they had been. It creates a new environment when debt is rising. The economy needs to find new roots using the age of tech rather than wages being overwhelmed by it.
Delete134%. Yikes. I had no idea it was that unrealistic/impractical.
"The market has experienced bear markets in the past without a recession."
I forgot about that.
""next recession could more easily than in the past morph into a financial crisis ""
That is what might be "this time is different" on figuring out when to get back in... making it harder to get in and easier for slides to continue. That is on top of it being harder to jump start the economy with the battery fully topped up with debt so no excess money, but still running a negative charge as it's big solution.
Land: As to the 134% household debt to disposable income ratio, it is important to keep in mind that this is an aggregate number. About 1/3rd of U.S. households had no mortgage debt back in 2007, about where it is today as well.
DeleteThe problem was not so much that the aggregate was 134% but that there was a sizable population segment with the ratio exceeding 200% and another large segment between 100% to 200%. So a recession was going to magnified by forced deleveraging and the incineration of trillions in debt obligations.
The question with the Iranian flight is why were they allowed to take off from the airport, when part of the airport was being used by the military at the time.
ReplyDeleteOn the Israeli's flight, Wiki is missing key context.
The plane had wandered into a contested war zone. Pilots hadn't notified anyone of why. Multiple contacts with warnings were given, asking them to move. Sinai was controlled by Israel, since gained in a *defensive* war so it's not an occupation. Obviously tragic.
https://www.jpost.com/Features/In-Thespotlight/This-Week-in-History-IAF-shoots-down-Libyan-Flight-114
Land: Israel shot down a passenger jet. The pilots of the Israeli jet were close enough to signal the passenger jet's pilots with their hands.
DeleteThe Wiki article involving that attack provides the pertinent details in an unbiased manner, including Israel's acknowledgement that this action was an "error of judgment", and Israel paid compensation to the victim's families.
There was no war ongoing on 2/21/1973. The Yom Kippur War started in October 1973.
I have not seen any information that the Iranian military was using the commercial airport. I have read that the Iranian Revolutionary Guard has bases near the airport.
The Ukraine International Airlines Flight 752 was shot down shortly after leaving the Tehran Imam Khomeini International Airport and was in its designated flight path.
The missiles were launched shortly after Iran's missile attacks against the Iraqi airbases housing U.S. troops in retaliation for the U.S. killing one of Iran's top leaders.
I have no trouble assigning blame to any government including the U.S. when it is deserved IMO.
The loss of 176 civilians aboard Flight 752 would not have happen without the U.S. first setting in motion the conditions that made the error in judgment possible as I maintained earlier. The Canadian PM made the same observation yesterday.
This factual observation does not excuse of course the negligent homicide committed by the Iranians operating the missile battery and possibly others in the chain of command.
I have no trouble assigning blame to any government. Governments make mistakes. But with Israel, often context is left out, or even minimized so that the full story isn't what goes around and it gets more condemnations than other countries. Beyond the ones it legitimately deserves or sometimes it's the degree it deserves. That's a factor with any country that faces bigotry. That needs to be considered and added in. Israel is seen as the collective Jew by many, and judged as such by many with some bias. African countries that are blamed for being lazy or violent should have stories questioned before they are fully adopted, as well.
DeleteThis is an example. It's pilots shot down a passenger plane. But details are left out that give context to explain a lot. It doesn't make the country not responsible (nor responsible), but there was an effort made, more to say it simply out with callousness.
Hand signals weren't considered particularly useful during that time period. At the time passenger jets were hijacked and Israel in particular was targeted. They've since beefed up security methods and that's why there's less hijacking (some cool inventions were installed.) I as a young adult, got on planes and practiced a little Italian & hid my star (I have curly hair and can pass as Italian). We knew we as Jews were targets because we learned of targeted hijackings over and over, before so much of the USA paid attention. It was considered a context of heightened concerns of war. There was already belligerent moves and it was already considered a build up to war happening. The surprise of Yom Kippur '73 could have been earlier in the year too; and was being anticipated, the surprise was that it was on Yom Kippur. Paying victims did not come with admittance of fault. Israel accepts some error on their part, but also claims it was acting prudentially in the circumstances. That sounds about right - it wasn't black or white. Paying was the nice thing, the right thing to do. This is what makes concession gestures problematic, that they're seen as weak and admitting guilt. The world understood at the time and didn't condemn based on the circumstances. Since then lessons were learned for these types of situations and protocols are improved. That too isn't admitting guilt.
The wiki article does not include any of that context. I've read plenty on all sorts of topics in wiki, that aren't accurate or full enough to be accurate.
Did you read the Jpost article?
JPost is a journalism source. They're held to standards of journalism. They tend to be pretty good on stories of this nature. Lots of journalism is bias on all sorts of topics, so it always takes multiple reading to get any sense. However wiki is a user blog, last edit wins. On complex topics, it can be inaccurate and often lacks contexts. It can be no more accurate than Facebook or twitter.
Obviously the topic is important to me. I'm going to wind up talking about it more, than other topics, such as say, bias against Tennesseans. Doesn't mean it counts more than other topics.
On the Iranian plane and use of civilian airport, I don't remember the source from the last couple days. So I can't comment on how accurate I think my source was. It doesn't matter much to how much this was an error. While I don't object to killing Soleimani on general principle, Trump's method of going about it and follow up after, creates so much chaos that it creates dangerous situations. Nothing new there. I don't expect Trump to take any responsibility, but if we get a new president, wonder if we USA will. There'll be better info when the black box is assessed.
Land: I did read the J Post article. I found that the Wiki article was more complete and did not leave out any context IMO.
DeleteIf the Israeli pilots thought that the plane may have been hijacked, there was plenty of time to wait and see whether it changed course before leaving the Sinai desert.
The hand signals are only important in that they show the Israeli pilots were close enough to a passenger jet where they thought the hand signals could have been seen by the jet's pilots. That would mean that they could see the passengers and probably also see that everything appeared normal inside the plane.
I did not see any references to whether Israel knew there was no reports of a hijacking. None had been reported that day. The radar would have shown that the passenger jet was the only unidentified aircraft flying over the Sinai that day, so Israel knew that there was not an air assault coming at them from Egypt.
Paying compensation to the victims and acknowledging responsibility (yes we shot down the plane but we are not liable and were justified) is about all that governments will do when shooting down a passenger jet. That is all the U.S. government did when it negligently shot down the Iranian passenger jet. Russia will do neither.
I understand that you disagree with my assessment.
As to the killing of the Iranian Major General, I do believe based on reviewing recently revealed facts that Iran intended to kill U.S. personnel at the Iraqi airbases. If that had happened, we would probably be in a hot, though limited, war with Iran where civilians would die. That was foreseeable when the killing was authorized.
It was not reasonably foreseeable that IRAN would shoot down a civilian airliner just after takeoff believing that it was a U.S. cruise missile targeting a nearly military base. However, that tragedy would not have occurred but for the heightened tensions and raw nerves that started with the the Soleimani killing.
It is not like the republicans will take any responsibility for the deaths of 100K+ Iraqi civilians that resulted from the U.S. invasion and the maiming of countless more.
https://www.iraqbodycount.org/
So it is not surprising that no link will occur to them between Iran shooting down the passenger jet and the killing of Soleimani.
I would doubt that the reasonably assumption in 1973 was that a passenger jet would be hijacked and then used as a missile to attack a civilian population. It was reasonably foreseeable after 9/11.
DeleteList of hijackings and outcomes:
https://en.wikipedia.org/wiki/List_of_aircraft_hijackings
I agree on a lot about Iran so won't add. I concluded that their retaliation purposefully avoided killing. Their weapons used are pinpoint and aimed at areas that would be empty at that hour. If their goal was a kill, they likely would have continued until one was announced. One off the wall thought about their backing down that easily is, what deals did Trump offer? It's possible he did something, that we have no idea about.
DeleteOn flight 114, with a little more looking, more details come out. The pilot was not qualified to fly that type of Boeing. The plane's shutters were all down, so they couldn't verify what was happening inside, which was considered very odd since even with a movie normally some are up. There was an Israel-Lebanese interaction the day before, and reprisal was expected. The pilot had responded to hand gestures but didn't land nor indicate he had other plans nor make an SOS. Libya and Egypt were in belligerent mode at Israel, so communications back to those air centers were not available and wouldn't be trustable anyway, since potential for war was already lining up. Land distance in the area is much smaller than people outside it imagine. I came to a not black or white. That both parties, commercial pilots and airforce jets, both could have done more to clear it up. Changes were made to all airplane procedures, as recognizing that the current ones could lead to this.
https://books.google.com/books?id=d-VJBgAAQBAJ&pg=PT150&lpg=PT150&dq=flight+114+israel+shot&source=bl&ots=02FXDznXKV&sig=ACfU3U0I_EJON1zp5uLZaT4p4V0Ys0pERQ&hl=en&sa=X&ved=2ahUKEwjhjbG8lobnAhXo1FkKHRKpDEM4ChDoATARegQICxAB#v=onepage&q=flight%20114%20israel%20shot&f=false
https://books.google.com/books?id=QCjiD1gtW1EC&pg=PA314&lpg=PA314&dq=flight+114+israel+shot&source=bl&ots=RMg25UfAeM&sig=ACfU3U2DpD4RDCN1A7FfmR8Xd9fgzq0yHg&hl=en&sa=X&ved=2ahUKEwjhjbG8lobnAhXo1FkKHRKpDEM4ChDoATAQegQIChAB#v=onepage&q=flight%20114%20israel%20shot&f=false
(Those are the 1st two links with more details that I came across, (that aren't the known "wipe out Israel" sites.) I have no idea what more looking would produce. I did this quickly.)
con't
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DeleteThe contrast and what prompted me to comment to begin with, is in the two descriptions of USA and this incident.
USA accidentally shot down.... the tone and excuse is built right in. It sounds bad but reasonable.
Israel shot down a passenger jet that wandered into it's occupied area.... tone is with fault, no mitigating circumstances even hinted at. There were many mitigating circumstances. There was real fear that this plane was hijacked, without passengers, and intending harm to civilians on the ground heading to Tel Aviv or through spying.
The difference in tone, shows up all over the place. In major paper headlines (Israel killed the Palestinian... read article, turned out man with knife who'd just stabbed an old lady) in NYTimes.( WashPost is usually better, not 100%.)
So in both circumstances, the countries hold responsibility and made errors or could have used more caution before acting. In the Israeli case, a strong argument can be made that the pilots also made mistakes. (I haven't read the USA incident enough to know on that.) Yet the summary statements that are readily available didn't reflect that aspect of the story. I was adding context, because I've learned over time... there's almost always context that's missing and kind of shifts things (it doesn't just makes excuses, but changes the feel of the event from the headline's wordings.) Wiki uses the word occupied with opens a whole another huge topic, rather than a neutral word of control, that leaves that alone.
Loosely related to this, I remember there were hijackings where passengers were dropped off, and the acquisition of the plane was the goal. In one instance, something about needing fuel before they could continue (they were militants angry about something), was the big standoff negotiation with countries managing it. It was realistic before 9/11, to have fears, for those in the parts of the world that were regularly effected by this. There were computer games before 9/11 of planes hitting the towers and a comic book with that content too. For creepy minds, things enter their minds...
Wiki is a great place to start a search from, lots of good search terms and links to articles. On any controversial topic, I find it tends to not be good enough in the end, but very useful along the way.
I'm happy not to keep debating this. You're welcome to whatever conclusions you come to, and I don't need to change them. This is some of what I see when I look.
Menlo Therapeutics Inc. (MNLO)
ReplyDelete$6.15+0.55 (+9.82%)
As of 2:35PM EST.
https://finance.yahoo.com/quote/MNLO?p=MNLO
Foamix Pharmaceuticals Ltd. (FOMX)
$4.2245 +$0.2845 (+7.22%)
As of 2:42PM EST.
I have Lotto position in both stocks.
FOMX and MNLO are joined at the hip now due to MNLO acquiring FOMX in a stock exchange which IMO favored MNLO shareholders. That is why I bought MNLO shares after the announcement. MNLO shares plummeted after the announcement which did not make much sense to me.
Both stocks are responding to positive news today from FOMX.
https://www.prnewswire.com/news-releases/foamix-announces-amzeeq-minocycline-achievement-of-preferred-status-on-express-scripts-national-preferred-formulary-one-of-the-largest-commercial-formularies-in-the-us-300986316.html
At least FOMX has not screwed up its launch of the recently approved drug AMZEEQ "for the treatment of inflammatory lesions of non-nodular moderate to severe acne vulgaris in adults and pediatric patients 9 years of age and older."
The drug was reportedly delivered to pharmacies nationwide yesterday and was place on Express Scripts preferred formulary list as announced today.
FOMX has another compound that is pending a FDA decision expected in a few months.
https://www.prnewswire.com/news-releases/foamix-announces-fda-acceptance-of-its-new-drug-application-for-fmx103-minocycline-foam-for-the-treatment-of-moderate-to-severe-papulopustular-rosacea-300940656.html
The problem for FOMX shareholders is that MNLO has no approved drugs and no FDA submission has been made yet which creates an layer of uncertainty.
MNLO has a Phase 3 trial "for the treatment of pruritus associated with prurigo nodularis" whose results will be ready in a few months. If the trials are successful and the FDA approves that compound in late 2020 or early 2021, then the merger makes sense since the products of the combined company would be sold primarily to dermatologists.
Joint Statement: "Cost savings: by utilizing Foamix’s commercial organization and G&A infrastructure, the companies could save approximately $50 million per year versus the stand-alone estimated duplicate organization costs in future years."
https://www.globenewswire.com/news-release/2019/11/11/1944601/0/en/Foamix-and-Menlo-Therapeutics-to-Merge-Creating-a-Combined-Company-Focused-on-the-Development-and-Commercialization-of-Therapeutics-for-Dermatologic-Indications.html
But if the MNLO drug fails, that will likely make FOMX shareholders far worse off and the purported cost savings would be illusory. It is the FOMX announcement that is taking both stocks up today.
" Under the terms of the merger agreement, each share of Foamix stock will be exchanged for 0.5924 of a share of Menlo common stock and a contingent stock right (“CSR”)." Using the MNLO price set out above, that offer values a FOMX share at $3.64.
If one of the 2 Menlo Phase 3 trials fail, then FOMX shareholders will receive another .6815 MNLO share, but that will likely be of small consolidation. The shares would likely tank and even more so if both trials fail. The compensation for both trials failing is an additional 1.2082 Menlo share.
I am not impressed with this kind of arrangement as a FOMX shareholder unless I had a high decree of confidence that MNLO drugs will succeed in the trials and will be approved by the FDA. I assume that FOMX would not have agreed to this take under without having that factually based confidence, but I do not know one way or the other.
Or, put another way that is perhaps, the FOMX shareholders are bearing the risk of MNLO's drug failing in the Phase 3 trials.
DeleteFOMX shareholders can not be properly compensated for that risk, if it comes into being, by giving FOMX shareholders more MNLO shares in that eventuality. The pre-merger MNLO shareholders would receive the benefit of having at least 1 and probably 2 FDA approved FOMX drugs due to the merger.
+++
Rigel Pharmaceuticals (RIGL)
$2.6150 +$0.4450 (+20.51%)
At close: 4:00PM EST
This is another LOTTO TICKET that is a bungee jumper.
RIGL does have an approved FDA drug that it is marketing and 4th quarter sales came in better than expected.
https://www.prnewswire.com/news-releases/rigel-pharmaceuticals-provides-business-update-300985425.html
Total revenues were $15.4M vs consensus at $13.8M according to a Capital IQ poll.
RIGL also received a $20M milestone payment from Grifols (GRFS) after that the European Commission approved its marketing application for fostamatinib (the drug already approved in the U.S. and marketed under the name ofTAVALISSE).
The company also announced that it has enrolled some patient in a phase 3 trial for "warm autoimmune hemolytic anemia (AIHA)."
I have not seen the EU marketing authorization, but only the positive recommendation made by its scientists on 11/15/19. I believe the EU renders its decision usually within 70 days thereafter.
https://www.ema.europa.eu/en/medicines/human/summaries-opinion/tavlesse
STAG Industrial, Inc. (STAG)
ReplyDelete$31.50 -$0.52 (-1.62%)
Volume 3,903,068
Avg. Volume 1,054,457
52 Week Range 25.99 - 32.02
The stock closed at a 52 week high yesterday. The price closed at $31.5 last Thursday.
In that context, I would characterize the slight downdraft today as an overall positive reaction to a substantial stock offering launched today.
https://www.prnewswire.com/news-releases/stag-industrial-announces-upsize-and-pricing-of-public-offering-of-common-stock-300986184.html
It is aggravating that STAG did not specifically mention the offering price in that release, which is common. The company does provide the information that allowed me to calculate the offering price at $31.406.
I own a 102+ shares with an average cost near $17 on an out-of-pocket cost basis and $15 adjusted for ROC. There were a series of trades that culminated with keeping the lowest priced lots. I quit reinvesting the monthly dividends in 2018. My last reinvestment on an original 50 share lot in my Schwab account occurred in June 2018 with the original lot bought February 2016. The total taxable cost basis for that position is $15.15 unadjusted for any 2019 ROC. The other 50 share lot is in my IB account where I do reinvest the dividends.
I do view STAG as one of my higher quality REITs, but I am just not interested in buying more anywhere near the current price level.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2020/01/aple-nmfc-otcfx-peo-rlj.html