Bought 50 FFBC @ 16.85/Sold 100 PBI @ 22.88/Added 50 DFY @ 25.06 & 35 JNK @ 40.72 in the Roth/FFIC CBL

We have heard rumors here at HQ that word may have leaked out about HQ's intent to acquire Canada, all of it, and to rename it Northern Tennessee, which may have spurred some of the Canadian visitors in late October, no doubt concerned about Headknocker's intentions. Progress toward this objective has been retarded some by the Fed's Jihad against savers, which is likely to restrain capital expansion here at HQ for some time. So for now, the Canucks are safe with there Red Maple Leaf flag. It will not be a big transition for them to the Tennessee flag which is of course also red with no blue at all, Tennessee State Flag, HK, known as generous to a fault, may even allow a Maple Leaf to be immersed in the Tennessee red. And this is one RED STATE now. Of course, to pacify the natives in the Volunteer State, it will be necessary to eliminate all of that government healthcare provided in Canada now.

In a widely anticipated move that had probably been priced into both the bond and stock market, the FED launched round two of quantitative easing yesterday with an announcement that it will buy 600 more in longer term U.S. treasuries by the end of the second quarter of 2011. FRB: Press Release--FOMC statement--November 3, 2010 The pace of those purchases will be around 75 billion a month. This will be in addition to purchases of about 35 billion per month from the redemption of the FED's mortgage securities acquired during QE 1.

If a financial autopsy could be conducted on Wilmington Trust (WL), I wonder whether management of that bank was ever forthcoming with its shareholders about the extent of its losses. The market was certainly surprised by the take under by M & T that proved that the potential losses are actually much greater than investors have been told even recently. In a post from August I made a salient point about banks with reference to the continuing saga of Wilmington's disclosure issues:

"The only way for me to have known about the problems in southern Delaware, where the bank apparently made a large number of bad loans to finance vacation and retirement homes, was to visit the area. I would need to go the register of deeds and find out exactly where Wilmington was making loans and how much was being borrowed by developers. Then I would need to eyeball all of the property and talk to real estate professionals in the area. Then, I might be able to make an informed judgement in early 2010 whether or not Wilmington was adequately recognizing actual and potential bad loans. Obviously, analysts do not do that and that is their job. And, I am in no position to do any of that kind of research. Instead, I have to work off instinct and whether something smells right. For Wilmington, something did not smell right after the 2009 4th quarter report was released so I dumped the shares. This kind of approach may end up being premature or just wrong, based on subsequent events, but it falls under the LB motto of "better safe than sorry"." Item # 2 Construction Loans & WL

1. CBL & Associates Properties (own common): I was buying common shares of CBL Properties, an owner of retail malls including the Cool Springs complex near HQ, during the Near Depression period as LOTTERY TICKETS. One of the buys, which I discussed briefly in a November 2008 post, was a purchase of 40 shares at $3.7 in what I called then a scatter gun buy using cash flow from dividends and interest payments received during the prior week. LATE DAY TRADES: GCI, CBL, FR, SLG, NYT, NWSA I later had a purchase of 10.365 shares with a reinvested dividend at $3.10 on 4/15/2009, whereupon I changed my distribution option to cash. After slashing the quarterly dividend to as low as 5 cents, CBL raised it to 20 cents in February 2010, a pleasant surprise. Item # 4 CBL. The stock is now trading at over $16 per share and I still own all of the shares previously purchased, now totalling over 170. I have sold one of CBL's cumulative equity preferred shares on two occassions, and no longer own one of its preferred stocks. REIT CUMULATIVE PREFERRED LINKS IN ONE POST/Advantages & disadvantages

CBL reported an FFO of 47 cents for the third quarter. Occupancy increased to 91% from 89.2% as of 9/30/09. The company raised its full year FFO to a range between $1.93 to $1.99, up from its prior estimate of $1.87 to $1.9.

CBL rose 80 or 4.85% in trading yesterday to close at $17.28.

2. Sold 100 Pitney Bowes (PBI) at 22.88 (see Disclaimer): Since purchasing 100 shares of PBI at 21.9 last January, I have not been pleased with a single earnings report. (e.g. see Item # 3 PBI). Pitney Bowes reported another lackluster quarter, with GAAP earnings per share falling to 43 cents per share from 50 cents in the Q/E 9/2009. Revenue declined 1% to 1.35 billion. The adjusted earnings per share, which excludes a number of items, was reported at 55 cents unchanged from the year ago quarter. While the Non-GAAP number beat expectations by 3 cents, it is impossible to overlook the decline in revenue and the lack of earnings growth.

Free cash flow was 221 million during the quarter which exceeded the dividend payments of 77 million in cash. The main reason for owning PBI is its generous dividend which generates around a 6.7% yield at a price of $22.2. That dividend is still PBI's only attraction.

I elected to dispose of my 100 shares at $22.88 for a small profit plus a few dividend payments.

2. Bought 50 FFBC at $16.85 (Regional Bank Stocks' basket strategy)(see disclaimer): This is basically the replacement for SUSQ & BNCN, which were sold last Monday. First Financial Bancorp reported earnings after the close on Tuesday. Third quarter net income was 15.6 million or 27 cents per share. But those numbers included a charge of 8 million or 9 cents per share relating to the early repayment of 232 million in advances from the Federal Home Loan Bank. (SEC Filed Press Release) I would add that number back to the GAAP number which results in earnings of 36 cents per share. The consensus estimate by 8 analysts was for an E.P.S. of 26 cents. As of 9/30, the net interest margin was at 4.34%; the allowance for losses to NPLs was at 86.54%; NPLs to total loans was at 2.88%; the total capital ratio was at 19.91%; and the Tier 1 ratio was at 18.64%. There was no government preferred stock on the balance sheet. The bank operates in Ohio, Indiana, Kentucky and Michigan with 113 banking centers in 75 communities. As noted in the last filed 10Q, the bank has been expanding with FDIC assisted acquisitions. (pages 6-7 10Q for Q/E 6/2009)

After selling 6.4 million in shares at $15.14 in February 2010, resulting in net proceeds of 91.2 million, FFBC paid back TARP (80M) (page 40 & SEC Filed Press Release).

FFBC closed at $17.37 yesterday, up 6.37%.

The regional bank basket had a decent day yesterday rising $420.89 or .97%. As of the close yesterday, the unrealized gains totaled $3,786. I have realized gains from this basket of $2,812, which are being tracked in Item # 3, 2010 Realized Gains Regional Bank Stock.

3. Added 50 DFY @ 25.06 in the Roth IRA (see disclaimer): DFY is a senior bond from Delphi Financial, an insurance company, with a 8% coupon and a $25 par value. It has been discussed in a number of posts, along with a junior bond DFP from the same issuer. Bought DFY at 22.48 Bought 50 DFP at $17.10 & Sold 50 DFY in Roth at $24.45 Bought 50 DFY at 24.36 Bought 75 DFY @ 25.31 Bought 60 DFY @ 25.32 IRA Bought 100 DFP at $17.1 Sold 50 of the 150 DFP Added 50 DFP at 19.75 Sold 50 of 150 DFP at 21.7 Sold: 50 DFP @ 23.10 and @23.17

This brings me up to 150 shares in the Roth IRA and 60 shares in the regular IRA. Delphi has performed two partial calls of DFY so far this year, retiring 75 million in principal amount of this senior bond. Thus, I would not want to pay much more than par value plus accrued interest for it. Those calls will save Delphi, according to its CEO, about 5 to 6 million in pre-tax interest expense annually.

This security makes quarterly interest payments and is rated investment grade. When I buy this kind of security in the Roth, I view it as equivalent to a tax free investment grade municipal bond in a taxable account. And we all know that no such bond, yielding 8%, exists. If it did, it would be yielding 8% for less than a nano second.

Prospectus: e424b5

Exchange Traded Bonds:

Delphi reported operating earnings of 83 cents per share for the Q/E 6/2010: 10q For the last quarter, Delphi reported a operating E.P.S. of 86 cents and net income of 83 cents: SEC Filed Press Release The common stock symbol is DFG. The current consensus estimate is for an E.P.S. of $3.41 in 2010 and $3.67 in 2011.

4. Added 35 of the ETF SPDR Barclays Capital High Yield (JNK) in the Roth IRA (see disclaimer): I ran out of money in the IRA with just a 35 share buy of this junk bond ETF. It just seemed to the LB yesterday, after mulling a few million variables and considering a few thousand alternate scenarios, that QE 2 would be a positive for the junk bond market. Possibly if QE 2 does spur more robust economic activity, then that would help the credit risk profile of these securities. And, given a continuation of the FED's JIHAD against savers into 2011, anything with a yield will start to look even more like an ocean of fresh water to investors dying of thirst. I previously bought 50 of JNK in a taxable account and discussed it in that post: Bought 50 of JNK at 40.25 Dividends are paid monthly and the expense ratio is .4%. SPDR Barclays Capital High Yield Bond ETF www.spdrs.com _9.30.2010a.pdf This is a link to the annual report, and the list of holdings begins at page 142: Annual Report for the period ending 6.30.10 in pdf

I have also bought recently 100 shares of another high yield (JUNK) fund in both a taxable account and in the regular IRA. Bought 100 PHB at 18.15 100 PHB @ 18.5

5. Flushing Financial (own-regional bank basket): After the bell yesterday, Flushing Financial Corporation (FFIC) increased its previously reported net income figure for the 3rd quarter due to a tax law change recently passed in NY. This change resulted in an increase in 3rd EPS to 48 cents from 30 cents. I discussed the 3rd quarter report, as originally released, in item # 1, FFIC. The stock closed yesterday at $13.24. Bought 50 FFIC at 12.18 Added 50 FFIC at 11.05

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.

Sold: 100 VZ @ 32.75, 50 AMAT @ 12.4, Sold EMR @ 55.42 /Added 30 EXC @ $41

Headknocker wants to complement the LB, compliment #3 over the past 59+ years, for recognizing early the problems at Wilmington Trust and selling HK's shares for a nice profit at $14.13. Modification of Regional Bank Strategy: Sold 100 Wilmington Trust (WL) at $14.13 Wilmington shares fell 40.79% yesterday to close at $4.21, after accepting a take under offer from M & T. TheStreet The volume was over 52 million shares.

The ISM index for manufacturing for October rose to 56.9 from 54.4 in September. The consensus expectation was for a reading of 54. New orders increased 7.8% from September to 58.9. The employment component rose to 57.7.

I received yesterday the redemption proceeds for DKI, a trust certificate containing a Sprint Capital bond, that was called by the call warrant owner.

My regional bank basket took a mild hit yesterday, falling .84% as the major averages managed to eke out a gain.

I also received yesterday the quarterly dividend from SCEDN on my 50 shares. BOUGHT 50 SCEDN AT $84 The amount was $69.13. This one turned into a floater with no guarantee earlier this year. The float is based on a spread of 1.45% over the highest of the 3 month LIBOR, 10 year CMT U.S. treasury, or the 30 year CMT U.S. Treasury. Prospectus Supplement The 30 year would produce the highest rate now. If I annualized that quarterly payment, then the yield would be around 6.58% at my cost of $84. I see no reason to take a profit on this security which is now trading near its $100 par value. The penny rate for SCEDN was $1.5125 per share for the quarterly dividend that went ex on 7/1. Due to the decline in the 30 year bond since that payment, the penny rate declined to $1.3825 for the payment received yesterday. The shares closed yesterday at $99.8.

HPF, a bond CEF, declared its regular monthly dividend of $.124, John Hancock Closed-End Funds Declare Monthly Distributions

The London PM fix for gold was $1354.50 on 11/1. At least MOL has some excitement attached to it, and the OG wakes up long enough from his afternoon nap just long enough to check on the P.M. London fix.

1. Low Relative Strength and High Risk Grade Ratings: An article, published at Seeking Alpha, appealed to the naturally contrarian views, and cautious instincts, of the LB. The author screened stocks using two criteria. The first was to find stocks that were oversold based on a relative strength rating below 40. The other criteria was to include only those "oversold" stocks that had "low levels of risk" using the RiskGrade ratings of the RiskMetrics Group. Twenty-five stocks were selected using those criteria. From that list, I own the common shares of Exelon, FirstEnergy and Hudson City Bancorp. I have recently sold another, Kimberly Clark: SOLD KMB at 66.49 I also own an equity preferred stock issued by Aspen Insurance. Bought 50 AHLPRA at $19.75 Added 100 AHLPRA at 22.54 Bought 50 AHLPRA at 22.35 I was thinking about adding 30 shares to my 100 share of Exelon anyway, as an average down, and this article just pushed me in the direction that I was already leaning.

2. Added 30 Exelon at $41 on Monday (see Disclaimer): I am reinvesting the dividends received from EXC and this last purchase of just 30 shares was an average down from the 100 shares purchased in February at 44.25. That 100 share purchase was classified as a new addition to my core electric utility portfolio. The stock has slid some since recently announcing its third quarter earnings due in my opinion to the continued sluggish outlook for EXC's merchant power business. The regulated retail operations, which are quite large, appear to be doing fine. Item # 4 EXC Since my original purchase, the stock has been mostly in a slight downtrend, Exelon Corporation Common Stock Stock Chart | EXC A high of over $90 was reached in 2008. The current dividend yield at is around 5.14% with the next ex dividend date on 11/10. Exelon Corporation, EXC

One problem with Exelon now is the negligible earnings growth predicted by the consensus earnings estimate from the $4 per share in 2010 to just $4.10 in 2011. EXC Analyst Estimates This may very well be a reasonable estimate, considering the slow pace of the U.S. economic recovery, which is probably viewed by most investors as continuing into 2011 while others look for a double dip. Such outlooks do at least suggest the possibility of a surprise, when and if the U.S. economy performs at better than expected levels in 2011, which may be more likely than the more pessimistic forecasts allow for at present.

3. Consolidated Edison (own)(core electric utility): ED is my largest electric utility holding, bumping closer to my exposure limit for one company. I am reinvesting the dividends. My last open market purchase was in February 2008. Con Edison reported earnings from continuing operations of $1.32 per share, beating the consensus estimate for $1.21. ED raised its outlook for 2010 to a range of $3.4 to $3.5 a share. The previous forecast made by the company was for earnings between $3.25 to $3.45 per share. Con ED recently completed the sale of 6.3 million shares of its common stock. Form 8-K

4. Sold 100 Verizon at 32.75 (see Disclaimer): This limit order was placed soon after the market opened yesterday and was filled as the stock went up to $32.77 in early morning trading. The LB, firmly in control of the trading desk, is not capable of thinking long term and is focused on generating trading profits in what it calls a long term bear market in an Unstable Vix Pattern. This VZ trade was a good one, with the shares bought at $26.74 in July.

5. Sterling Bank (STL)(own common and a TP) & HopFed (HFBC)(Regional Bank Stocks' basket strategy) :

Sterling Bancorp reported a net loss of 3.3 million or 12 cents per share after "accelerating" the "resolution" of non-accrual loans, "principally in lease financing" which resulted in net-charge offs of 15.9 million. This caused the level of non-accrual loans to fall by two-thirds to .47% of total loans. The allowance for non-accrual loans rose to total loans rose to 289.5%. Non-GAAP income for the 3rd quarter was 10 cents per share, in line with estimates. STL Analyst Estimates | Sterling Bancorp As of 9/30, the total risk based capital ratio was at 14.7% (10% well capitalized); the tier 1 risk based ratio was at 13.63% (6% well capitalized); the tangible common equity ratio was at 7.05%; tier 1 leverage ratio was 10.35% (5% requirement); and net interest margin was 4.11%. Bought 50 STL at 6.58 The TP has a 10 dollar par value and a 8.375% coupon. Bought 50 of the TP STLPRA at $8.99 Added 50 STLPRA at 8.69 Bought 100 STLPRA at 8.87 Sold 100 of the TP STLPRA at 10.25 Bought 100 STLPRA at 10.05 (prospectus: sec.gov). Sterling closed down 7 cents yesterday to close at $9.32.

HopFed Bancorp (HFBC), a small bank headquartered in Hopkinsville, Kentucky, reported earnings of 21 cents per share, compared to a loss of 80 cents in the 3rd quarter of 2009. The consensus estimate from two analysts was for 21 cents. I am near break-even on my shares in HFBC, which closed at $8.97 yesterday, down 3 cents.

As of 9/30, NPLs to total loans was at 1.28%; tangible book value per share was $13.9; the total risk based capital ratio was at 19.04% on a consolidated basis and at 15.87% for the bank; and the net interest margin was 3.15%. HopeFed reduced its cash dividend from 12 cents to 8 cents in the last quarter and then added a 2% stock dividend. Press Release I would not view the stock dividend as equivalent to the cash dividend, but apparently the management of this bank thought that something was necessary as a sop to individuals who would otherwise be unhappy about the cash dividend cut.

6. Sold Remaining Shares of Emerson Electric at 55.42 and Sold 50 AMAT @ 12.4, both on Monday (see Disclaimer): I pared my position in Emerson at $53.31 in late September. The sale on Monday encompassed my remaining shares, mostly bought during the Near Depression period at around $33.5. 

2010 Sold 52+ EMR +$600.68

The LB is in a profit taking mode. Headknocker just said that he takes back compliment # 3 previously made and wants the LB to pay the tax on all of these short term gains taken by it during 2010. The HK then observed that the OG, despite his many faults, is at least capable of thinking long term, and even act with long term goals in mind, until he suffers the shakes of course. No one really appreciates the management hurdles that HK has to overcome daily with the staff here at HQ.

The LB can become easily bored with a stock that does not move. So, it sold yesterday the 50 shares of AMAT for that reason, and no other, at $12.4. This stock has been traded for small profits on several occasions this year.

My much older brother, who lacks an abundance of hair, unlike our Stock Stud LB, as proven beyond any doubt by the current profile picture, inquired whether Headknocker was a harder case than the LB. I replied with a historical analogy to an event known in our family. Many years ago, my father was by himself in a construction trailer and a former employee who had been fired for cause entered the trailer with a gun, pointed it at my father and threatened to kill him if he did not hand over some money. My father said no. At about the same time, a carpenter entered the trailer, saw what was happening, and told the former employee that he would put a hammer into his head if he pulled the trigger. That seemed to simmer things down, and no report was made to the police, as the matter was peacefully resolved. HK would have said no again even if he had been shot and survived, whereas the LB might have said yes just before the trigger was pulled, after giving the matter further consideration and mulling over the alternate scenarios and likely outcomes. Left Brain & Right Brain Decision Making

The remaining trades from Monday will be discussed in the next post.

Sold: 100 of the 200 XKK at 9.96, 151 GIW @ 9.26, 100 DHS @ 38.16, 100 DEW @ 42.51/Bought 100 VV at 54, 50 BCBP @ 8.82

Alan Abelson, who was bullish on stocks for about 10 minutes in the early 1980s, has now turned against bonds. Maybe this perma bear, the glass is perpetually empty or full of raw sewage kind of guy, believes in the 3 month T Bills yielding .13% as a worthwhile investment for the Old Geezer crowd, where a million dollars will generate $1300 a year in income. The belief that the long term secular bull market in bonds will soon end may even be close to a consensus opinion now. The bond market has yet to cooperate with such a prediction, thereby drawing ever increasing amounts into bond funds at abnormally low rates.

For the most part, Abelson relies on and quotes from a recently published missive by Bill Gross. Run Turkey, Run I would certainly agree with Bill's opinion that both political tribes are equally adept at running up big deficits, though they manage to do it in somewhat different ways. It is nothing but a "big con" as noted by Gross.

Roubini said in an interview on CNBC that the U.S. is headed for a fiscal train wreck. In his opinion, both parties are contributing to the coming fiscal crisis, and I do not see how any sensible person could disagree with that opinion. Of course, sensible persons exclude by definition all True Believers (and others capable only of thinking in cliches), ideologues, virtually all politicians, and those incapable of distinguishing fact from fiction or unwilling to even make that effort.

David Stockman referred to the both parties as delusional, and the GOP as engaging in "rank demagoguery", in an interview last night on 60 minutes. CBS News

Ultimately, the printing of vast sums of money by the Federal Reserve to buy a huge supply of debt issued by the U.S. treasury, used to finance the nation's propensity to live far beyond its means, will result in troublesome inflation. The end game is viewed as inevitable here at HQ, though not entirely unavoidable. Only the timing can not be predicted with any precision.

I have been using some of my Canadian dollar position to buy Canadian bond ETFs on the Toronto exchange. Ishares also has a number of bond ETFs containing European government and corporate bonds offered on the London exchange. Examples of a few that I monitoring include the following: iShares Barclays Capital Euro Corporate Bond ex-Financials 1-5 (EEX5); iShares Barclays Capital Global Inflation-Linked Bond (IGIL) | Holdings; and iShares Barclays Capital Euro Corporate Bond ex-Financials (EEXF). Before dipping into those kind of funds, I will need a much stronger USD and higher interest rates, however.

1. Sold 100 of the 200 XKK at 9.96 on Thursday (see disclaimer): XKK is a trust certificate containing a junk rated senior bond from Goodyear tire, which has been the subject of several posts. The par value is $10 with a 8% coupon. During the Near Depression, this security could have been bought at less than $5 on several occasions, producing a greater than 16% yield for any such purchase (e.g. see post from 12/2008, Goodyear Tire TC XKK). The pricing on this TC has at times been more than just a little crazy: XKK Historical Price I mentioned buying some shares in this blog as low as $3.8 in March 2009, and that was not even the low price for that day. Buys of CPB LQD SYY XKK/Regressive Taxation-Cap & Trade Of course, as long time readers are aware, RB had engineered a coup d'etat, dethroning the NERD as Head Trader, in early March 2009, which explains the frenzy of buy orders noted in March 2009. On the day of the flash crash, XKK fell to $5. I have been trimming by stake in XKK and I am now down to owning just 100 shares.

The reasons for selling the 100 shares on Thursday includes simple profit taking and a risk/reward evaluation of continuing to hold shares rather than selling at near par value. Part of that evaluation was the recent loss reported by Goodyear Tire for the 3rd quarter. 10q

2. Sold 151+ shares of Wilber (GIW) at $9.2623 on Thursday (Regional Bank Stocks's basket strategy)(see Disclaimer): I gradually came to the conclusion that I was spending too much time trying to decide what to do with my Wilber shares. Wilber agreed to be acquired by Community Bank Systems (CBU) in a mostly stock deal. I bought the shares in Wilber in two lots: Bought 100 GIW at 7.03 Added 50 GIW at 6.55

3. Added 50 to BCBP at $ 8.82 on Thursday (Regional Bank Stocks' basket strategy)(See Disclaimer): After selling Wilber, I decided to add to my 100 share position in BCBP by buying another 50. BCB Bancorp is about the same size as Wilber, except it is located in NJ rather than NY. BCBP recently completed a merger with another small bank called Pamrapo Bancorp on 7/6/2010. Form 8-K The Board of BCBP recently declared a quarterly dividend of 12 cents per share. At a total cost of $8.82, the yield would be about 5.44% at that rate for 1 year.

4. Sold 100 DHS at 38.16 and Bought 100 VV at 54 in a satellite account on Thursday (see disclaimer): The ETF DHS was recently bought at 35.32. I have bought and sold VV, a low cost ETF from Vanguard: BOUGHT VV at $41.45 Sold 102 VV at 49.43 I sold those shares after reinvesting some dividends to buy another stock ETF, OEF, for the S & P 100 pursuant to the Large Cap Valuation Strategy. The reason for selling DHS and buying back VV was different. I wanted to keep my stock ETF exposure roughly the same but to switch more of the stock ETF holdings to Vanguard ETFs bought through Vanguard. First, I do not pay commissions for those Vanguard ETFs bought in my Vanguard Brokerage account. The Vanguard ETFs and mutual funds also count towards the account balances necessary to receive a reduced commission rate for me. I also sold the WisdomTree ETF DEW, noted in Item # 5 below, for the same reason as DHS.

The expense ratio for VV is lower than the WisdomTree funds at .12%: Vanguard - Large-Cap ETF - Overview Dividends are paid quarterly.

5. Sold 100 DEW at $42.51 on Thursday (see Disclaimer): I bought 100 DEW at 38.82 around 8/18/2010. The reason for selling those shares is the same as discussed in number 4 above. I have decided to start buying Vanguard stock ETFs directly from Vanguard. Most likely, I will replace this one with either VEU, previously bought and sold at lower levels, or VT. BOUGHT 100 VEU at $29.8 Sold 100 of the ETF VEU at 38.6 I am in no hurry to do so. VEU is an index ETF for world stocks excluding the U.S. and has an expense ratio of .25% and has around 2257 stocks. Vanguard - FTSE All-World ex-US ETF VT is the Vanguard ETF for the world stock market and has a .3% expense ratio. Vanguard - Total World Stock ETF - Overview

DEW 100 Shares +$354.45EE

6. SOLD 100 DTN at $45.86 on Friday (See Disclaimer): This stock ETF was bought in July at 42.45 and sold for the same reason as DEW and DHS.

7. Provident Financial (PFS)(own-Regional Bank Stocks' basket strategy): Provident Financial Services reported net income of 13.5 million or 24 cents per share, in line with estimates and up from 15 cents per share earned in the 3rd quarter of 2009 . As of 9/30, the net interest margin was 3.5%; NPAs to total assets stood at 1.61%; NPLs to total loans was at 2.38%; and the allowance for loan losses to non-performing loans was at 66.43%.