Bought: 100 CAR-UN.TO @ 17.35, 50 MWA @3.04, 100 VEU 47.73/Sold: 101 ENY @ 17.93, 100 NDAQ @ 21.53, 50 SUSQ @ 7.5, 50 BNCN @ 9.7, 102+ AT&T @ 28.96

I am just glad that I will not be bombarded with false and misleading political ads for at least another year. Yes, lying works in politics, and apparently being truthful and straight with the voters are not among the conservative values practiced by those who profess to be conservative.

One GOP ad, which ran throughout the nation in various forms, was an attack on Democrats who voted to restrain the growth of Medicare spending. PolitiFact | Republican exaggerations about cutting Medicare Apparently, as noted recently by David Stockman, entitlements are off the table for both parties.

I do not recall hearing or seeing any specific proposals from a republican on how they intend to restrain spending going forward in any meaningful way. As I have said, it is just a fact that interest on the debt, social security, defense, medicare and medicaid, and benefits to federal retirees and veterans account for 74% of the 2010 budget. I then added in a prior post the following: "If I add other safety net programs like unemployment insurance, food stamps and school meals, the total becomes 88%. The remainder goes to education (2 %), transportation and infrastructure (3%), scientific and medical research (2%), international security (1%), and other (4%). The interest on the national debt will most likely become a far more serious problem soon, as the total debt has increased dramatically due in large part to the Near Depression, caused in significant part by the negligence and malfeasance of both political tribes, and the interest rate on that ballooning balance will eventually increase to levels that many can not imagine now. So, where are the 1.3 or 1.4 trillion dollars in annual cuts going to take place? Will the GOP cut defense? Is there some kind of emerging political consensus among either party to slash social security and medicare? Isn't the cost of servicing the national debt ultimately controlled by the market rather than politicians? Maybe the GOP wants to dramatically reduce expenditures for education and infrastructure improvements or to eliminate school meals for the needy children. In the last analysis, the American people do not want to pay for what they believe are entitlements somehow connected with their birth as citizens, and politicians know that the road to their early retirement would be to say no in any meaningful way." Center on Budget and Policy Priorities

Since political ads are either outright lies or at best misleading, or contain nothing of substance, the only way for responsible citizens to deal with them is to change the channel with the remote whenever one starts, which means keeping the remote in one's hand during the election season. The ads sponsored by political action committees with pleasant sounding names, funded by special interests or the rich wanting to avoid taxes and regulations, are just reprehensible and disgusting.

Two of my best years as an investor have been in 2009 and this year. And, the worst year was 2008. When the Beanpole was sworn in as President on 1/20/2009, the S & P 500 was at 805.82, ^GSPC Historical Prices. The S & P 500 closed yesterday at 1,193.57 or a gain of 48.13% during the Obama Presidency so far. I have done much better than the market averages. I also did very well during the Clinton years. On 1/19/2001, the S & P 500 closed at 1342..54, ^GSPC Historical Prices, and declined 40% after 8 years.

1. BOUGHT 100 CAR-UN.TO at 17.35 CAD on Monday (see Disclaimer): CAR-UN.TO is the Yahoo Finance symbol for a Canadian apartment REIT known as Canadian Apartments Real Estate Investment Trust. Capreit - Investor Relations This REIT pays monthly dividends, currently at 9 Canadian cents per month. At that rate for an entire year, the yield would be around 6.22%, before the 15% Canadian withholding tax, based on a total cost of $17.35 CAD.

I view this investment as primarily a means to earn a return on my Canadian dollars, which are part of a long term investment strategy. As with all of the securities purchased on the Toronto exchange, I take the distributions in Canadian dollars.

I did not spend much time looking at this one. I did note reading the last shareholder report that it owns a large number of apartments in Canada, see pages 4-6 phx.corporate-ir.PDF The occupancy rates at page 10 look good to me. The average monthly rent is starting to trend up (page 14).

2. Added 50 MWA at $3.04 on Monday (LOTTERY TICKET category)(see Disclaimer): This last purchase of MUELLER WATER PRODUCTS (MWA) was an average down from a prior LT at $3.74. I was able to slightly exceed the $300 limit on LT purchases due to the prior profit realized from an MWA trade, which can be added to the maximum under current LT rules, LB noted. Bought 50 MWA as a Lottery Ticket at 3.62 Sold MWA at $5.61 For MWA to work, there will need to be an economic recovery in U.S., particularly in the construction industry. Price to sales is currently around .34 and price to book is close to 1. MWA Key Statistics The company is expected to lose 20 cents per share in its fiscal year ending in September 2010, with a return to profitability expected in FY 2011. Debt is viewed as a serious issue and a matter of concern: MWA Balance Sheet Mueller did recently float 225 million of 8.75% senior bonds maturing in 2020. Form S-4 MWA Closing of $225 Million of 8¾% Senior Notes Due 2020

The lack of earnings and the debt level justify the LT classification. There is recovery potential, assuming the economy cooperates. The stock did sell at over $18 in July 2007. MUELLER WATER PRODUCTS The company lost 2 cents per share in the Q/E 6/30, an improvement over the 16 cents lost in the Q/E 6/09. Form 10-Q MWA is paying a small dividend, which produces a decent yield of over 2% at the currently depressed share price. Morningstar does rate MWA four stars: Morningstar Water infrastructure products account for about 67% of sales. A recent analyst presentation can be found at SEPTEMBER 28, 2010 PRESENTATION.

MWA closed at $2.96 on Tuesday. After the close yesterday, Mueller Water Products reported its fiscal 4th quarter results for the Q/E 9/2010. The company reported a net loss of 5 cents, and an adjusted E.P.S. of zero. Net debt decreased 70.2 million in the quarter. Excluding 2 divisions that were divested, net sales for the 4th quarter increased by 1.1% year over year.

3. Sold 101+ of the ETF ENY at $17.93 (see Disclaimer): This ETF was sold at a small profit. The shares were bought at $17.56. The shares started to slide thereafter, closing at $15.27 on 8/25. ENY Historical Prices | Guggenheim Canadian Energy The shares were bought in one of the satellite brokerage accounts where preservation of capital is a primary objective. Stock investments in the two satellite accounts are viewed as temporary income generating vehicles for a part of those funds normally allocated to bank CDs, money market funds, and a savings account.

4. Fauquier (FBSS)(own- Regional Bank Stocks' basket strategy): I was surprised by a substantial dividend cut by FBSS in September, as the Board slashed the dividend by 40% without providing any explanation. I did not see anything in that press release suggesting belt tightening by the bank, or a reduction in executive salaries and perks. The one analyst who has an estimate for this small bank based in Virginia predicted earnings for the 3rd quarter of 29 cents. Fauquier Bankshares reported earnings of 27 cents per share. As of 9/30, the net interest margin was 4.14%; NPLs decreased to .44% of total loans; the allowance for loan losses as a percent on NPLs was at 276.84%; and the total risk based capital ratio was at 12.34%.

The regional bank basket rallied yesterday to close up $565 or 1.35%.

5. Sold 100 NDAQ at 21.53 (see Disclaimer): LB became impatient with the stock performance of The NASDAQ OMX Group, Inc. and sold Headknocker's shares for about a $100 profit. Bought 50 NDAQ at $19.98 Added to Nasdaq Omx at $20.17 The last earnings report from NDAQ was better than expected at 50 cents per share versus the consensus estimate of 46 cents. Average share volume for U.S. listed equities fell to 7.55 billion from 9.31 billion a year ago.

NDAQ closed at $21.5 on Tuesday.

6. Sold 50 SUSQ at $7.50 and 50 BNC Bancorp (BNCN) at $9.7 (Regional Bank Stocks' basket strategy) (see Disclaimer): I was sufficiently disappointed with the lack of earnings progress from Susquehanna Bancshares that I elected to sell my 50 shares bought at $5.85 slightly over a year ago. My discussion of SUSQ's last earnings report can be found at ITEM # 1, SUSQ

I was not pleased with the earnings report from BNC Bancorp and sold my 50 shares bought at 9.99 for a small loss.

7. Sold Remaining 102+ shares of AT & T shares at 28.96 (see disclaimer): After this sale, I no longer have a any position in the common stocks of either AT & T or Verizon, but still own their senior bonds in TC legal form. I previously sold 100 shares of AT & T common at 28.69. The profit on Tuesday's sale was over $300: Bought 50 AT & T at 25.45 Added To AT & T at 24.75

8. Bought 100 of the Vanguard ETF VEU at 47.73 (see disclaimer): This purchase was the tail end of a process that involved selling three WisdomTree stock ETFs and buying two Vanguard stock ETFs in my Vanguard brokerage account, for the reasons discuss in a prior post. Item # 4 Sold 100 DHS @ 38.16, 100 DEW @ 42.51/Bought 100 VV at 54 I have previously bought and sold VEU at lower prices: BOUGHT 100 VEU at $29.8 Sold 100 of the ETF VEU at 38.6 VEU is the Vanguard ETF for world stocks outside the U.S., and it has a .25% expense ratio: Vanguard - FTSE All-World ex-US ETF - Overview As of 9/30, about 26.6% of the portfolio was in emerging market stocks, 44.5% in Europe, and 22.8% in the Pacific region. The remainder would be Canadian and S.A. companies.

Canadian Energy Trusts/ MSFT/WL/Bought 100 DFP at $17.1/Added to CEF JDD at $9.45/Sold LT TRAD and Bought 50 NDAQ at $19.98

1. CANADIAN ENERGY TRUSTS (OWN ERF, PVX & PWE): Yesterday, my holdings in Canadian Energy Trusts received a boost when a Korean firm agreed to acquire Harvest Energy Trust at a premium, causing a 30%+ spike in HTE's share's yesterday. These firms have been struggling over the past year or so due to the fall in natural gas prices and the Canadian government's decision to start taxing them as regular corporations starting in 2011. The ones that I own pay monthly dividends, though the fall in energy prices has forced them to cut their dividends. Enerplus for example was paying around 4.66 Canadian in 2007, and is now on a yearly rate of about 2.16 Canadian. In 2008, Penn West paid about $3.84 Canadian in dividends, and is currently at a run rate of 15 cents per month Canadian or 1.8 CAD annually. Historically, these trusts were able to pay generous dividends since there was no Canadian tax at the corporate level. This would be similar to the way REITs or BDCs are treated now for a U.S. shareholder. When the Canadian government starts taxing earnings at the corporate level, I would anticipate further declines in dividends, though the timing is not certain. I have not bought any of the Canadian energy trusts in 2009, but I did buy 50 shares of an ETF, ENY, which contains them along with other energy companies located in Canada. Bought 50 ETF ENY at $13.6 I sold my 100 shares of Harvest Energy yesterday (see disclaimer).

Some of prior discussions of these trusts from last year include:

Canadian energy companies:

Add of PWE Last Week

INZ AND PVX

For these companies, I rely on reports from Morningstar which does have research reports on PWE, ERF and PVX. Value Line covers only PVX.

2. Bought 100 DFP at $17.1 Yesterday (See Disclaimer) : This is a junior bond issue from Delphi Financial, an insurance company. The purchase yesterday was sort of a rule violation in that the maturity date for this security could be in 2067, about 27 years beyond the limit for bond purchases. And, if Headknocker is alive then no doubt he would be a spry 116 years old, and a much older though perhaps wiser Old Geezer. I think that the record age is 122 held by a French woman. But this rule violation was offset to some degree by the sell of another one, also a rule violation, for a profit.

I could have bought a senior exchange traded bond from Delphi, DFY, for around $23.5 but that would not have satisfied my yield hunger from yesterday. The junior bond is yielding about 2 1/4% month more than the senior bond, and both pay quarterly dividends.

I said the maturity could be in 2067. This is about to become a little complicated. Delphi has to redeem the security on May 15, 2037 but only to the extent it has raised sufficient proceeds from the issuance of "qualifying capital securities" (Page S-2: e424b2) Delphi has to use "commercially reasonable efforts" to raise that replacement capital. So this may not be a rule violation in that the securities may be redeem under this provision in 2037. There is no way now to place odds on that happening.

There is another practical reason for a redemption. DFP is one these fixed to floating rate securities. Delphi pays a fixed coupon of 7.376% until May 15, 2017. At a total cost of $17.1, this results in a yield of about 10.78%. The security then become a floating rate bond, paying interest tied to a 3.19% float over 3 month Libor. So if that becomes too onerous with a very high LIBOR rate, and assuming further Delphi can refinance at a lower rate with a long term fixed rate bond, then those kind of circumstance could conceivably cause it to redeem the security prior to maturity.

Some characteristics of this security are worse than other junior bonds. For example, interest may be deferred up to 10 years rather than the standard 5. It looks to me like the company has to attempt to pay any deferred interest after five years, or after making a single coupon payment, using an Alternative Payment Mechanism. (S-18) Deferred payments do earn interest at the coupon rate. Delphi is paying a common dividend and there is a standard type stopper provision on deferral of payments on this junior bond as long as payments are made on the common stock. (S-19). The alternative payment mechanism is described at page S-20. I would not be concerned about any of this until Delphi eliminates the common dividend.

I did review the Morningstar report on Delphi, and the most recent quarterly report: e10vq A description of the firm's business can be found at page 21. This is a link to its SEC filing of the press release for the 2nd quarter earnings report: exv99w1 Most likely, this security will be traded on a pop. I have been scraping the bottom of the barrel for weeks now. Most of the exchange traded bonds that I would have some interest in buying have risen too far in price and no longer provide the yield cushion that I demand to take on the risk.

I found this one in the Quantum table for exchange traded debt securities: Exchange-Traded Debt Securities Table - QuantumOnline.com

3. East West Bancorp (EWBC): This is another one of the bank Lottery Tickets that I have bought and I did not cringe reading its earning release yesterday which caused the stock to shoot up about 20% to around 10 bucks. My purchase was in April at $5.7: Buy of 50 EWBC as Lottery Ticket

4. SOLD Tradestation (TRAD) Lottery Ticket at $8.3 and Bought 50 Nasdaq OMX Group at $19.97 Yesterday (NDAQ) (see Disclaimer): TradeStation reported earnings of 9 cents, down from 20 cents in the year ago quarter, and guided down for the 4th quarter. Reuters I sold my LT bought at $7.26 for a negligible profit. Bought Lottery Ticket in TRAD I bought 50 of Nasdaq OMX, having noticed that NDAQ has not experienced any kind of rally since early March. On March 10, 2009, the stock closed at $22.54. The current price is close to 10 times the earnings forecast of $2.04 for 2010. NDAQ: Analyst Estimates for The NASDAQ OMX Price to book is around .9. Price to sales is 1.07. The five year P.E.G. is expected at .71. All of those kind of statistics can be found in the "Key Statistics" page at YF: NDAQ: Key Statistics for The NASDAQ OMX Group, Inc. I always check this page when doing research. I reviewed several analyst reports prior to making this purchase, and the most recent annual and quarterly reports filed with the SEC: Form 10-Q Form 10-K Morningstar has it rated 4 stars. VL has it rated 3 for timeliness but currently has a forecast of $2.35 for next year. S & P rates it 4 stars with a $25 target. As of its June report on NDAQ, Barclays had it overweight with a $27 target.

5. Added to JDD in Roth at $9.45 (see disclaimer): This was an average up from my purchase of 100 shares at $8.4 in August. Bought 100 JDD in Roth One quarterly dividend has been paid since that purchase. Part of the increase in share price has been due to the narrowing of the discount to Net Asset Value for this closed end fund. The discount was 16.76% when I purchased the first 100 on August 7th, and stood at 11.92% based on data from 10/21. JDD - Nuveen Diversified Dividend and Income Fund I would simply refer to my early post for the description of this CEF. At the current distribution rate, which is subject to change, the yield is around 9.25% at my cost for this latest purchase, and higher for the August purchase at over 10%: See Item # 6 Jobs Report-Better than Expected/Recession Kaput/POM, BAM/Bought 100 JDD in Roth Based on yesterday's closing price of $9.46, the NAV was $10.95 as of 10/22 and the discount to NAV expanded to 13.6%.

6. Pepco (POM)(owned): I noticed that J P Morgan downgraded Pepco to underweight from neutral, based on that analyst's views of continuing problems at Pepco's unregulated subsidiary, Conectiv Energy. That subsidiary has been a major problem for almost a year now. I will stay with my shares, provided Pepco does not reduce the dividend. I will also continue to reinvest the dividend to buy additional shares, which I am doing with Duke and Consolidated Edison, but not with my other utility holding such as Progress Energy and Pinnacle. POM did declare yesterday its regular quarterly dividend of 27 cents per share.

7. Christine Romer Prediction on Unemployment: Romer, chairwoman of the White Counsel of Economic Advisors, expects the unemployment rate to top out at over 10% next year, and to recover slowly, staying at elevated levels throughout 2010. NYT www.whitehouse.gov/ .pdf

8. Wilmington (WL- Owed Lottery Ticket Category): This LT was bought in March at $9.98 as a LT. /BOUGHT 30 WL=Lottery Ticket WL reported a loss of 15 cents caused by losses in the bank's securities portfolio that reduced earnings by 34 cents per share. About 87% of total loans as of 9/30/09 were to clients in Delaware. The loan loss reserve ratio stood at 2.24% at the end of the quarter. Loan losses declined from 54 milion in the 2nd quarter to 38.7 million. On an operating basis, the bank was profitable with operating net income of 17.8 million or 19 cents per share. This beat the consensus forecast of 7 cents. Book value was listed at $14.29. Tier 1 risk based capital ratio was 9.95%. Tangible common equity to assets ratio was 5.6. Due to the $300 limitation on LTs, I was only able to buy 30 shares.

9. Microsoft (owned): The remaining 50 shares of MSFT that I own were bought at $17.79 in January. ADD 50 MSFT/ Microsoft reported before the bell diluted earnings per share of $.40 on 12.92 billion in revenues. The 40 cents figure excludes 12 cents of deferred income representing Windows 7 sales before general availability. While the 40 cent number beat the forecast of 32 cents, it was still less than the 48 cents earned in the same quarter a year ago. Revenues beat the forecast of 12.31 billion.