Economy:
US National Debt Passed $23 Trillion, Jumped $1.3 Trillion in 12 Months | Wolf Street (take a look at the chart in this article)
Jim Cramer is 'suspicious' of the 'trade truce happy talk' with China Skepticism is warranted.
U.S. may roll back tariffs on $112 billion in Chinese imports: report - MarketWatch The U.S. is "considering" removing tariffs on $112B of China's exports in exchange for some kind of concession from China, possibly "tougher intellectual-property protections for U.S. companies." Note the vagueness starting with the word "considering".
U.S. may roll back tariffs on $112 billion in Chinese imports: report - MarketWatch The U.S. is "considering" removing tariffs on $112B of China's exports in exchange for some kind of concession from China, possibly "tougher intellectual-property protections for U.S. companies." Note the vagueness starting with the word "considering".
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Markets and Market Commentary:
Morgan Stanley Predicts Dismal Returns For The Next Decade
The ‘mother of all bubbles’ could blow up the economy if profits don’t improve, warns Blackstone strategist - MarketWatch The "mother of all bubbles" is not a reference to the stock market but to sovereign debt.
The Marketwatch article is referring to this commentary which is worth reading: Joe Zidle: Recession Signals - Still Time for Outperformance - Blackstone I would agree with Mr. Zidle that abnormal central bank monetary policies are not the solution for anemic growth now.
Those policies were helpful for several years after the Near Depression but are a net negative for growth now.
Morgan Stanley Predicts Dismal Returns For The Next Decade
The ‘mother of all bubbles’ could blow up the economy if profits don’t improve, warns Blackstone strategist - MarketWatch The "mother of all bubbles" is not a reference to the stock market but to sovereign debt.
The Marketwatch article is referring to this commentary which is worth reading: Joe Zidle: Recession Signals - Still Time for Outperformance - Blackstone I would agree with Mr. Zidle that abnormal central bank monetary policies are not the solution for anemic growth now.
Those policies were helpful for several years after the Near Depression but are a net negative for growth now.
Warren Buffett's Berkshire Hathaway reports a $128 billion cash pile
There are a number of governance issues among cannabis companies. This is just one recent example: Cronos paid $300 million for a small CBD company, and CEO’s private-equity firm stands to collect $120 million of it - MarketWatch; Cronos gets US foothold by buying CBD beauty brand Lord Jones
There are a number of governance issues among cannabis companies. This is just one recent example: Cronos paid $300 million for a small CBD company, and CEO’s private-equity firm stands to collect $120 million of it - MarketWatch; Cronos gets US foothold by buying CBD beauty brand Lord Jones
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Trump:
At a UFC event, Trump receives second round of boos in a week To be fair, a UFC event is likely to have a lot of Trump fellow travelers in attendance. The Duck did receive some cheers, unlike what happened at the World Series game when there was nothing but boos and a brief chant "Lock Him Up".
What kind of White House press secretary calls her boss’s critics human scum? Stephanie Grisham.
At a UFC event, Trump receives second round of boos in a week To be fair, a UFC event is likely to have a lot of Trump fellow travelers in attendance. The Duck did receive some cheers, unlike what happened at the World Series game when there was nothing but boos and a brief chant "Lock Him Up".
What kind of White House press secretary calls her boss’s critics human scum? Stephanie Grisham.
Trump calls Chicago ‘embarrassing to us as a nation’- MarketWatch (Trump:“It’s embarrassing to us as a nation. All over the world they’re talking about Chicago. Afghanistan is a safe place by comparison.”) Chicago's main sin in TrumpWorld is that it has not accepted Donald as the savior.
Smugglers are sawing through new sections of Trump’s border wall Donald has assured us that the wall is impenetrable.
In Trump’s Twitter Feed: Conspiracy-Mongers, Racists and Spies - The New York Times
Trump’s Twitter Presidency: 9 Key Takeaways
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Impeachment Inquiry:
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo - The New York Times
The raving hypocrite Lyndsey Graham (R-SC) claimed in an interview that he would support impeachment provided there was proof of a quid pro quo. What it would take for Graham to consider impeachment
Graham said he would not even bother to read the deposition transcripts, having decided that they were a "bunch of B.S.". Graham Won’t Read Transcripts | Talking Points Memo
Arguably, Trump committed "bribery", one of the specific grounds for impeachment listed in the Constitution, based on the Founding Father's definition of that term or even the definition contained in the federal criminal statute. Self-Dealing in Ukraine: The Core of the Impeachment Inquiry - Lawfare (refers to the U.S. criminal statute codified at 18 U.S.C. § 201. The Founding Fathers had a broader definition of bribery that had no limitation to a "thing of value". The impeachable offense Trump may have committed-The Washington Post
4 takeaways from Gordon Sondland’s and Kurt Volker’s testimonies
Top national security aide Robert Blair won't citing White House order
Just more stonewalling built on a frivolous legal argument. 4 White House officials won't testify in Trump impeachment probe Monday
U.S. career diplomats testify that State Department was misused for domestic politics Republicans are okay with that provided Democrats are the ones being targeted, even when the result is contrary to the national security interest, but their outrage would know no boundary when and if a Democrat President used the State Department to further a personal political agenda that could interfere with the national security interest. The hypocrisy is just stunning and omnipresent.
The republican politicians who are supporting Donald's version of what happened will lose their credibility among non-brain washed voters capable of forming fact based opinions.
The more sensible approach for republican incumbents who may lose to a Democrat in 2020 would be acknowledge what actually happened; call Donald's action "inappropriate"; then argue "no harm, no foul" and express a willingness to vote for a censure resolution rather than impeachment as the remedy for what actually happened.
For that strategy to work in 2020, Donald would have to lay off attacking them, but those at risk republicans know that Demagogue Don would berate them endlessly for being "traitors" and having committed "treason". Caught between a rock and hard place, they will continue supporting Donald's alternate reality, lose their credibility among many non-brain dead voters capable of forming fact based opinions who voted for them in the last election and will go down in defeat in 2020 for embracing and coddling Donald no matter what he does.
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Conspiracy Theory-Ukraine Hacked the DNC Computer:
The Republican mind is particularly susceptible to conspiracy theories.
Those who hatch the conspiracy theories may be Russian intelligence operatives or Americans who have discovered that considerable sums can be earned from peddling them through media outlets (FOX, Alex Jones) or in book form.
Russia is the most likely source of the conspiracy theory accepted by Donald that it was Ukraine rather than Russia who hacked the DNC's email server. This convenient for Russia conspiracy theory has no evidentiary basis and is counter to the facts discovered by U.S. intelligence.
Facts can not kill conspiracy theories since the True Believers almost invariably prefer reality creations to facts and are far more likely to disbelieve what is true and believe in what is demonstrably false. (e.g Poll: Two-Thirds of Trump Backers Think Obama Is Muslim; Poll: Persistent Partisan Divide Over 'Birther' Question - NBC News-Only 27% of republicans believed that Obama was born in the U.S.)
Trump asked Zelensky to investigate this claim in the 7/25 telephone conversation.
A recent news story indicated that it was Paul Manafort who tried to convince Trump initially that it was Ukraine rather than Russia. Manafort pushed conspiracy theory blaming Ukraine for election hacking as far back as 2016
In Trump’s Twitter Feed: Conspiracy-Mongers, Racists and Spies - The New York Times
Trump’s Twitter Presidency: 9 Key Takeaways
++
Impeachment Inquiry:
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo
Sondland Updates Impeachment Testimony, Describing Ukraine Quid Pro Quo - The New York Times
The raving hypocrite Lyndsey Graham (R-SC) claimed in an interview that he would support impeachment provided there was proof of a quid pro quo. What it would take for Graham to consider impeachment
Graham said he would not even bother to read the deposition transcripts, having decided that they were a "bunch of B.S.". Graham Won’t Read Transcripts | Talking Points Memo
Arguably, Trump committed "bribery", one of the specific grounds for impeachment listed in the Constitution, based on the Founding Father's definition of that term or even the definition contained in the federal criminal statute. Self-Dealing in Ukraine: The Core of the Impeachment Inquiry - Lawfare (refers to the U.S. criminal statute codified at 18 U.S.C. § 201. The Founding Fathers had a broader definition of bribery that had no limitation to a "thing of value". The impeachable offense Trump may have committed-The Washington Post
4 takeaways from Gordon Sondland’s and Kurt Volker’s testimonies
Top national security aide Robert Blair won't citing White House order
Just more stonewalling built on a frivolous legal argument. 4 White House officials won't testify in Trump impeachment probe Monday
U.S. career diplomats testify that State Department was misused for domestic politics Republicans are okay with that provided Democrats are the ones being targeted, even when the result is contrary to the national security interest, but their outrage would know no boundary when and if a Democrat President used the State Department to further a personal political agenda that could interfere with the national security interest. The hypocrisy is just stunning and omnipresent.
The republican politicians who are supporting Donald's version of what happened will lose their credibility among non-brain washed voters capable of forming fact based opinions.
The more sensible approach for republican incumbents who may lose to a Democrat in 2020 would be acknowledge what actually happened; call Donald's action "inappropriate"; then argue "no harm, no foul" and express a willingness to vote for a censure resolution rather than impeachment as the remedy for what actually happened.
For that strategy to work in 2020, Donald would have to lay off attacking them, but those at risk republicans know that Demagogue Don would berate them endlessly for being "traitors" and having committed "treason". Caught between a rock and hard place, they will continue supporting Donald's alternate reality, lose their credibility among many non-brain dead voters capable of forming fact based opinions who voted for them in the last election and will go down in defeat in 2020 for embracing and coddling Donald no matter what he does.
++
Conspiracy Theory-Ukraine Hacked the DNC Computer:
The Republican mind is particularly susceptible to conspiracy theories.
Those who hatch the conspiracy theories may be Russian intelligence operatives or Americans who have discovered that considerable sums can be earned from peddling them through media outlets (FOX, Alex Jones) or in book form.
Russia is the most likely source of the conspiracy theory accepted by Donald that it was Ukraine rather than Russia who hacked the DNC's email server. This convenient for Russia conspiracy theory has no evidentiary basis and is counter to the facts discovered by U.S. intelligence.
Facts can not kill conspiracy theories since the True Believers almost invariably prefer reality creations to facts and are far more likely to disbelieve what is true and believe in what is demonstrably false. (e.g Poll: Two-Thirds of Trump Backers Think Obama Is Muslim; Poll: Persistent Partisan Divide Over 'Birther' Question - NBC News-Only 27% of republicans believed that Obama was born in the U.S.)
Trump asked Zelensky to investigate this claim in the 7/25 telephone conversation.
A recent news story indicated that it was Paul Manafort who tried to convince Trump initially that it was Ukraine rather than Russia. Manafort pushed conspiracy theory blaming Ukraine for election hacking as far back as 2016
Manafort is about as trustworthy as Donald, meaning both are 100% untrustworthy.
The interesting angle is that it was Manafort pushing this conspiracy theory.
Manafort lost his best paying gig when the Russian sponsored leader of Ukraine, Viktor Yanukovych, was forced to leave. How Paul Manafort Helped Elect Russia's Man in Ukraine | Time
Manafort also had numerous links to Russia. The more relevant question is whether Manafort was pushing this conspiracy theory to Donald at some Russian's request.
The Russian Konstantin Kilimnik, a long-time associate of Manafort, who is identified as a Russian intelligence agent by U.S. intelligence, was identified as a source for this conspiracy theory. (Manafort also delivered internal Trump polling data to this Russian-Mueller believes Manafort fed information to Russian with intel ties - CNN)
+++
Trump insults the intelligence and knowledge of his cult members on a daily basis.
The following tweets were published last Sunday:
The interesting angle is that it was Manafort pushing this conspiracy theory.
Manafort lost his best paying gig when the Russian sponsored leader of Ukraine, Viktor Yanukovych, was forced to leave. How Paul Manafort Helped Elect Russia's Man in Ukraine | Time
Manafort also had numerous links to Russia. The more relevant question is whether Manafort was pushing this conspiracy theory to Donald at some Russian's request.
The Russian Konstantin Kilimnik, a long-time associate of Manafort, who is identified as a Russian intelligence agent by U.S. intelligence, was identified as a source for this conspiracy theory. (Manafort also delivered internal Trump polling data to this Russian-Mueller believes Manafort fed information to Russian with intel ties - CNN)
+++
Trump insults the intelligence and knowledge of his cult members on a daily basis.
The following tweets were published last Sunday:
Maybe Donald does need to read the call summary to the American public in real time-a fire side chat just like the ones FDR used to give the public during the Great Depression. Trump may read summary of Ukraine call in 'fireside chat': interview - Reuters;
In a recent rally, the True Believers were outfitted with "Read the Transcript" T-shirts and situated behind the Duck during his fact free rants to the faithful. Kentucky Trump Rally Features 'Read the Transcript' Shirts - Rand Paul Goes After Whistleblower
Of course, anyone with internet access can read the document in a few minutes and compare Trump's false version of it with the real thing.
Of course, Donald never had any intention of drawing more attention to that summary by reading it on national television.
He was just trying to convince the brain dead that his willingness to read the summary proved somehow that the call was, as he has repeatedly claimed ad nauseam, "perfect".
The tweets do shown one of Demagogue Don's most effective persuasion techniques-constant repetition of demonstrably false statements.
In the most recent poll asking voters about Trump's honesty, 68% of republicans said he was extremely, very or moderatley honest. Assessing Trump’s Performance | APNORC.org | APNORC.org Overall, 56% of voters classified him as either not very honest or not at all honest (85% of democrats and 62% of the independents).
Donald is clearly and unarguably "not at all honest". He has negative credibility without question which simply means that the reasonable assumption is that he is lying until proven with reliable evidence, as distinguished from reality creations and bad faith arguments, that he is telling the truth.
+++++
1. Canadian Reset Equity Preferred Stocks:
A. Bought 50 SLFPRJ at C$13 (C$1 IB Commission):
Prospectus Excerpt:
Prospectus documents | Sun Life Financial (see series 9QR)
Ratings: Investment Grade:
Dividends: Non-Cumulative and Paid Quarterly
Par Value: C$25
Coupon: 1.41% Spread to the Canadian 3 month T Bill
Resets: Every 3 Months
Last Ex Dividend: 8/27/19
The yield will fluctuate with the 3 month bill rate.
If I assumed by way of illustration only that this bill's yield remained constant at 1.5%, the coupon would be 2.91% which produces a 5.6% dividend yield of at a C$13 total cost per share. (C25 par value x. .0291%= C$.7275 annual dividend per share ÷ $C13 total cost per share = 5.6%).
If I raise the constant 3 month Canadian T Bill yield to 4%, the yield at a C$13 total cost per share would become 10.4%. (C$25 par value x. 0541% coupon = C$1.3525 annual dividend per share ÷ C$13 total cost per share = 10.4%)
Here is the way that I look at it. This security is only interesting to me given its huge price discount to par value which will juice the yield numbers.
The current yield is decent for an investment grade preferred stock.
There is of course some risk that the three month bill will continue to fall lower which explains the current large discount to par value.
There is also a potential benefit that the rate will rise that would increase the coupon.
The reset equity preferred stocks that I have been discussed have been pummeled in price due (1) to the decline in Canadian government interest rates (3 month bill or 5 year bond as the case may be) and (2) to the consensus perception that the decline will at best remain at or near present levels or more likely fall further. The recent small uptick in prices is probably related to some doubts about the consensus perception about the future being too pessimistic.
This kind of security, when bought at a deep discount to par value, is a hedge against unexpected inflation that forces the Bank of Canada and other central banks to raise their benchmark rates which will flow through into short term government bill yields.
2. Bought Back 100 CJREF at $3.73-Commission Free:
Quotes:
Corus Entertainment Inc. Cl B NV (U.S. Pink Sheets)
Corus Entertainment Inc. Cl B NV (Canada: Toronto)
Closing Price Yesterday: CJREF US$3.9100 +$0.0295 +0.76%
CJREF is the ordinary shares, rather than an ADR, that trades on the U.S. pink sheet exchange and is priced in USDs. Any symbol that ends in a "F" indicates that the security is a non-ADR foreign stock priced in USDs. A symbol ending in "Y" would indicate a foreign ADR traded on the pink sheets or the grey market.
Website: Corus Entertainment
Dividend: Quarterly at C$.06
Dividends - Corus Entertainment
Next Ex Dividend Date: 12/17
Last Sell Discussion: Item # 5.A. Sold 100 CJREF at $4.35 (10/16/19 Post)(Profit Snapshot = $60.99)
I received one quarterly dividend payment on that 100 share lot and bought the shares back before the next dividend ex date at a prior lower than my prior purchase. In Small Ball, that is viewed as a win.
The current yield is decent for an investment grade preferred stock.
There is of course some risk that the three month bill will continue to fall lower which explains the current large discount to par value.
There is also a potential benefit that the rate will rise that would increase the coupon.
The reset equity preferred stocks that I have been discussed have been pummeled in price due (1) to the decline in Canadian government interest rates (3 month bill or 5 year bond as the case may be) and (2) to the consensus perception that the decline will at best remain at or near present levels or more likely fall further. The recent small uptick in prices is probably related to some doubts about the consensus perception about the future being too pessimistic.
This kind of security, when bought at a deep discount to par value, is a hedge against unexpected inflation that forces the Bank of Canada and other central banks to raise their benchmark rates which will flow through into short term government bill yields.
2. Bought Back 100 CJREF at $3.73-Commission Free:
Quotes:
Corus Entertainment Inc. Cl B NV (U.S. Pink Sheets)
Corus Entertainment Inc. Cl B NV (Canada: Toronto)
Closing Price Yesterday: CJREF US$3.9100 +$0.0295 +0.76%
CJREF is the ordinary shares, rather than an ADR, that trades on the U.S. pink sheet exchange and is priced in USDs. Any symbol that ends in a "F" indicates that the security is a non-ADR foreign stock priced in USDs. A symbol ending in "Y" would indicate a foreign ADR traded on the pink sheets or the grey market.
Website: Corus Entertainment
Dividend: Quarterly at C$.06
Dividends - Corus Entertainment
Next Ex Dividend Date: 12/17
Last Sell Discussion: Item # 5.A. Sold 100 CJREF at $4.35 (10/16/19 Post)(Profit Snapshot = $60.99)
I received one quarterly dividend payment on that 100 share lot and bought the shares back before the next dividend ex date at a prior lower than my prior purchase. In Small Ball, that is viewed as a win.
Last Buy Discussion: Item # 1.B. Bought 100 CJREF at $3.74 (9/7/2019 Post)
Category: Lottery Ticket Basket Strategy/Small Ball Trading
Last Earnings Report (Q/E 9/30/19): Corus Entertainment Announces Fiscal 2019 Fourth Quarter and Year End Results
The market reacted negatively to the last earnings report. While I initially agreed with the negative reaction, a second review of the earnings report which focused on free cash flow rather than GAAP E.P.S. resulted in this LT purchase.
"Net income attributable to shareholders for the fourth quarter of fiscal 2019 includes business acquisition, integration and restructuring costs of $6.8 million ($0.02 per share, net of income taxes). Adjusting for the impact of this item results in an adjusted net income attributable to shareholders of $27.9 million ($0.13 per share basic) for the quarter."
3. Small Ball Pares- All Commission Free Trades:
I am in an exceptionally strong capital preservation mode. I have no financial need to take any risks.
Small ball trades are primarily designed to preserve capital, recognize some trading gains as I reduce my average cost per share and thereby increase my dividend yield.
The trading is highly structured and disciplined by strict rules to lessen losses during the next market meltdown or to have ample capital to invest during the next Catastrophic Event in the stock market.
While the foregoing profits are insignificant, short term trading profits do add to be a meaningful sum during the course of the year and are viewed as a supplement to my dividend and interest income.
I will likely step up my short term trading when the market is overvalued, as it is now IMO, and my risk exposures will be small and managed tightly within narrow price ranges.
I am not concerned in the least about missing another major jaunt higher having participated meaningfully already in the stock bull market that started in March 2009.
I am only concerned about having meaningful amounts of money incinerated by another stock market Catastrophic Event.
When that happens and it will happen, then I will have more of a cushion than I have now and will become more adventuresome.
I am resisting the temptation to reduce my stock allocation by at least 50% and then simply wait for the next Catastrophic Event.
A. Sold 10 IDV at $32.05 (highest cost lot):
Quote: iShares International Select Dividend ETF
Sponsor's Website: iShares International Select Dividend ETF (expense ratio =.49%
Profit Snapshot: +$12.14
Item # 1.A Bought 10 IDV at $30.82 (11/25/18 Post)
The 10 share lot which was sold generated 4 quarterly in the total amount of $1.81 per share.
Lowest Cost Lot = $28.3
Purchase Restriction: Small Ball Rule
Last Discussed: Item # 4.A. Added 5 IDV at $29.65; 5 at $29 and 5 at $28.3 (12/29/2018 Post)
Last Sell Discussion: Item # 5 Sold 51+ IDV at $33.58 (2/15/18 Post)
Maximum Position: 100 Shares
Dividends: Quarterly at a variable rate
Last Ex Dividend Date: 9/24/19
B. Sold 15 LRGF at $32.47:
Sponsor's Website: iShares Edge MSCI Multifactor USA ETF | LRGF
Expense Ratio: .2%
Profit Snapshot: $14.34
Item 5.B. Bought 5 LRGF at $30.68 (5/18/19 Post); Item # 3.B. Bought 10 LRGF at $31.93 (5/1/19 Post)
Buy Back 15 Shares Range: $28.5-$29
C. Sold 10 EWL at $38.53:
Quote: iShares MSCI Switzerland ETF Overview
Profit Snapshot: $28.96 (about a 8.13% return)
Item # 4.B. Bought 10 EWL at $35.64 (4/20/19 Post)
D. Sold 20 QQQX at $23.38:
Quote: Nuveen NASDAQ 100 Dynamic Overwrite Fund
QQQX Nuveen NASDAQ 100 Dynamic Overwrite CEF-Morningstar
Sponsor's Website: QQQX - Nuveen Nasdaq 100 Dynamic Overwrite Fund | Closed-End Fund | Nuveen
QQQX Page at CEF Connect
Profit Snapshot: $34.37
Item # 3.A. Bought 20 QQQX at $21.63 (11/21/18 Post)
This was a dividend harvest buy where any profit on the shares would be viewed as a victory.
The strategy was based on this CEF's performance during 2018 when I bought this lot, which suggested that a trading strategy may be needed to harvest a total return in excess of the dividend. Nuveen NASDAQ 100 Dynamic Overwrite (QQQX) Total Returns | Morningstar
I received 4 quarterly dividends which came to $1.59 per share or $31.8 for 20 shares. The total return was $66.17 or 15.34% based on my total cost in less than 1 year.
Dividend: Quarterly at $.39 per share, reduced from $.42 when I bought this lot.
4. Short Term Bond/CD Ladder Basket Strategy:
I mentioned that I was not going to buy any more treasury bills at auction since the yields were too low. I went ahead and participated in Monday's auction to my dismay. Now I am done-hopefully.
This kind of change is precipitated by constant disputes among the 3 Head Traders here at HQ: Old Geezer, Left Brain and Right Brain.
The OG is in control now and is simply chanting "preserve capital, preserve capital, preserve capital".
The LB correctly responds that capital is not preserved at these yields but is slowly being incinerated through inflation and taxes, whereupon the OG continues chanting "preserve capital, preserve capital".
There is an important distinction between preserving a nominal capital amount and the purchasing power of capital adjusted for taxes and inflation.
A. Bought at Auction 3 Treasury Bills Maturing on 2/6/2020:
1.551% IR
B. Bought 2 Treasury Bills Maturing on 5/7/2020:
1.573%IR
Auction Results:
Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.
