Observations and Sample of Recent Trades: GYB, PRPFX, SNR

Economic Reports:

A. Jobs Report: 

The government reported a better than expected 209K increase in jobs last month. The average workweek was unchanged at 34.5 hours. Over the past 12 months through July, wages have increased by 2.5%. 

Jobs in "food services and drinking places" rose 53K. Health care employment increased by 39K. Mining added 1K.  

B. Coal and Renewable Energy Jobs: 

Coal is gradually been phased out as a fuel for baseload generation in favor of combined cycle plants that use gas turbines. Coal mining jobs decreased by 200 between June and July.  Trump is doing what he can to encourage more coal mining on public lands and to reduce the royalties payable for those mining rights. A good expose was recently published in the NYT: Under Trump, Coal Mining Gets New Life on U.S. Lands - The New York Times

Employment Situation Summary

The U-6 number was unchanged at 8.6%. Table A-15. Alternative measures of labor underutilization

Solar jobs growing 17 times faster than US economy - May. 24, 2017; Fact Sheet: Jobs in Renewable Energy and Energy Efficiency (2017) | White Papers | EESI

Natural Gas Accounted for 42 Percent of U.S. Capacity in 2016 - Power Engineering; Natural Gas: The New Face of U.S. Power Generation - Power Engineering; Combined-Cycle Power Plant – How it Works | GE Power Generation; Coal plant retirements will continue despite Trump’s EPA pick

Five charts that show why Trump can’t deliver on his coal promises

C. Foreign Ownership of Treasury Debt: 

Foreign ownership of U.S. treasuries went from $6.21+ trillion as of May 31,2016 to $6.12+ trillion as of May 31/2017, the latest data available from the treasury.   

U.S. government debt was at $19.2654+ trillion on 5/31/16 and had increased to $19.8459+ trillion as of May 31/2017 or about $580 Billion. Debt to the Penny (Daily History Search Application)

The Federal Reserve owns over $2.4 trillion in  U.S. treasury debt and has indicated that it will soon quit reinvesting the proceeds from maturing treasuries. Consequently, the debt that matures without being reinvested will have to be bought by another buyer. 

As the Federal Reserve reduces its holdings of treasury debt, the amount of the U.S. government debt continues to increase, and foreigners remain on the sidelines, what will happen to U.S. treasury yields? My best guess now is that they will go up materially, with the magnitude of the impact in part influenced by the ECB's decision to continue or terminate its QE program late this year or early in 2018. 

One great concern is that interest rates will soon start rising to average historical levels. 

As rates go up, the burden of servicing the debt, which is also growing, can only increase and be financed by using more debt to pay the increased interest costs. 

At historically low interest rates, far below normal, the government paid $432.649+ billion in interest in the 2016 fiscal year ending last September and is currently at $404.3+ billion in the 2017 fiscal year through July. Government - Interest Expense on the Debt Outstanding 

It is reasonable to predict that the interest payments on the national debt will exceed $1 trillion per year at some point within the next 7 to 10 years and those payments will have to be financed with more debt. The total U.S. debt was less than $1 trillion in 1981: Government - Historical Debt Outstanding - Annual 1950 - 1999

Another important number is U.S. government debt to GDP which is also rising and will spike again when the next recession hits. National Debt by Year: Compared to GDP and Major Events During recessions, the federal government's revenues decline and spending rises due to a variety of factors including increases in safety net program spending.

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Market Commentary: 

3 reasons a stock-market correction is coming in late summer or early fall - MarketWatch

There's a 99% chance stock market returns will be subpar from here: CNBC ("Analysts at Goldman Sachs Asset Management pointed out that annualized returns on the S&P 500 10 years out were in the single digits or negative 99 percent of the time when starting with valuations at current levels.")

A 'meaningful' market correction is close, says widely followed strategist: CNBC

Beneath the glow of stock-market records, darkly bearish trends are lurking - MarketWatch

Invest in cash to hedge against future market corrections: CNBC

The stock market’s historically worst 2 months are dead ahead. Time to worry? - MarketWatch (October in particular can be a nasty month)

Market crash still two years away but a 'nasty' 10 percent correction in the offing, says strategist: CNBC

Jeremy Siegel sees Dow 24,000 this year but on one Trump condition: CNBC (the caveat is lower taxes and "tax reform")

There is no reason to cut and run in this market—commentary: CNBC (global chief strategist for Blackrock says do not try and time the market)

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Trump: Golf As A Much Needed Rest Period from Watching TV and Tweeting:

Trump, America's Boy King: Golf and Television Won't Make America Great Again: Newsweek

Trump Kicks Off 17-Day Stay at His New Jersey Golf Club - NBC News

Tracking President Trump's Visits to Trump Properties - NBC News

Donald criticized Obama for playing golf rather than working.

All the Times Trump Mocked Obama for Taking Vacations: People Magazine

One of my favorites from Donald the Hypocrite is this tweet:

Hypocrisy is one of Donald's more favorable character traits.

Trump also frequently criticized the cost of Obama's secret service protection.

Congress Allocates $120 Million for Trump Family’s Security Costs - The New York Times

Secret Service vacates Trump Tower command post in lease dispute with president’s company - The Washington Post (Donald has sent the Secret Service into a trailer  located on a sidewalk)

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Mueller and Trump: 

I suspect a review of Trump's financial transactions, something that he wanted to hide by refusing to release his tax returns, will turn up some shady connections including possible money laundering for Russian oligarchs and borrowing from Russian banks through intermediaries like Deutsche Bank. Deutsche Bank expects subpoenas over Trump-Russia investigation-The Guardian; Deutsche Bank Is Turning Over Information on Trump | Vanity Fair

One year into the FBI's Russia investigation, Mueller is on the Trump money trail - CNN

Report: Mueller Convenes Grand Jury in Russia Investigation - NBC News

Grand jury issues subpoenas in connection with Trump Jr., Russian lawyer meeting: sources: Reuters;

Mueller Plunges Across Trump's Red Line - The Atlantic.

One year into the FBI's Russia investigation, Mueller is on the Trump money trail - CNN

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Trump and New Hampshire:

Trump argues he won New Hampshire because it is a 'drug-infested den' - CNN; Trump Calls New Hampshire a 'Drug-Infested Den,' Stoking Outrage - NBC News

I am not sure why drug addicts supported Trump. Maybe their brains have been scrambled to the nth degree and actually believed in what Donald was telling them.  

I would also note that Donald did not win New Hampshire. New Hampshire Election Results 2016: President Live Map by County, Real-Time Voting Updates - POLITICO

At least we have a bunch of generals managing Donald now. But isn't the President as Commander-in-Chief supposed to be managing the Generals rather than the Generals managing him?

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Trump and the Press: 

Donald does not like anyone who provides facts that contradict his reality creations which is generally the case for any Demagogue. 

A key GOP strategy, which started to gain traction during the Nixon Administration in the late 1960s, has been to convince tens of millions to regard everything published or broadcast by responsible journalists as being false. That strategy is in full bloom now with Trump. 

Donald's latest twitter tirade against the press occurred early today: 

Later today, he continued his tirade against the NYT: 

  If Donald makes a true statement, it is most likely accidental, something like he meant to make a false statement but thought that the accurate factual statement was the false one.

Are there over $4 trillion of untaxed corporate earnings offshore, as Donald Trump said? | PolitiFact

False: Trump's claim about illegal immigration under past administrations | PolitiFact

In Youngstown, Trump incorrectly says he has achieved historic increase in defense spending | PolitiFact

Did he or didn’t he? Trump contradicts himself on whether he knew Steve Bannon | PolitiFact (pant's own fire)

Links to other pant's on fire rated falsehoods: All Pants on Fire! statements involving Donald Trump | PolitiFact

Links to statements made by Trump and rated by Politifact as false or mostly false: All False statements involving Donald Trump | PolitiFact; All Mostly False statements involving Donald Trump | PolitiFact

836 Trump False Claims Since Inauguration through 7/19/17 Listed: The Fact Checker’s tally of Trump’s false claims since becoming president - Washington Post

+++++++

Trump Gives Himself Multiple High Fives for Anemic Economic Numbers: 

FactChecking Trump's West Virginia Rally - FactCheck.org

Trump is pumping up a 2.6% GDP growth during the last quarter, calling it 3% growth. I wonder whether he will round down 2.4% to 2%.   

Donald also stated that 2.6% real GDP growth was a "number that nobody thought they’d see for a long period of time.” Real GDP growth was higher than 2.6% in eight of the last 18 quarters including a 2.8% Real GDP growth rate in the 2016 third quarter that Trump dismissed as modest, while calling the preliminary 2.6% number for the 2017 second quarter as an "unbelievable number". Fact check: Donald Trump’s puffery on GDP growth (noting that Trump continues to claim credit for some economic numbers that occurred during Obama's administration)

The True Believers cheer his false statements with much enthusiasm.  

During Obama's 8 years, the economy experienced 2.6% or greater real GDP growth in 14 quarters and 8 of those exceeded 3%. Trump Does Not Appear to Understand Basic Economics | Vanity Fair; Trump is fooling himself with the Dow: Politico; Real Gross Domestic Product- St. Louis Fed

The average monthly job gains this year are at 184,000 compared to 187,000 in the first seven months of 2016. 

As the economy grows larger, real GDP growth will be harder to generate and spending borrowed money to generate growth will have less and less of an impact (i.e. more spending of borrowed money by consumers and governments is progressively required to move the needle by the same amount as in the immediate past)

While the S & P 500 is up about 18% since the election, there has been no detectable improvement yet in the U.S. economy.  

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1. Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 2 Reliant Bank 1.15% CDs (Monthly Interest) Maturing on 10/30/17 (3 month CDs): 

Reliant Bank is the operating subsidiary of Commerce Union Bancshares (CUBN) based in Brentwood, TN. 

CUBN Stock Price - Commerce Union Bancshares 

2017 First Quarter Report 

2016 Annual Report SEC Form 10-K

B. Bought 3 Volunteer State Bank TN 1.35% CDs (monthly interest) Maturing on 3/16/18:

Five Star Ratings from Bankrate: VOLUNTEER STATE BANK Review

C. Bought 2 Bank of China 1.4% CDs Maturing on 2/15/18:

D. Bought 2 Bank of the West 1.45% CDs Maturing on 5/1/18 (9 month CDs):

This bank has over 600 U.S. branches, and is a wholly owned subsidiary of BNP Paribas.

E. Bought 2 Bank of China 1.25% CDs Maturing on 11/15/17 (3 month CD):

$11K Inflow into Short Term Ladder Basket

2. Continued to Pare Stock Allocation: 

I include the Permanent Portfolio mutual fund as part of my stock allocation even though it is a balanced fund.

A. Pared PRPFX: Sold 125+ Shares in Vanguard Taxable Account:

Profit Snapshot: +$308.84

I still own 154+ shares in my Schwab taxable account. Schwab has a minimum buy order of $1 whereas Vanguard requires a $1K minimum. I would prefer to buy $100 to $500 at a time rather than $1K.

I last eliminated PRPFX in 2015:

2015 PRPFX 251+ Shares +$590.26

Most of that position originated from a 2005 purchase. PRPFX was one of the few mutual fund positions that I kept going into 2008.

Dividends: In 2013 through 2015, the fund paid out $10.21 per share in dividends. I do not recall whether I reinvested some or all of those dividends. As shown in the snapshot above, Fidelity only grouped totals together using the average cost method of accounting.

Most of those gains were attributable to long term capital gains that the fund had to harvest as investors withdrew money. This fund maintains a large allocation to gold and silver bullion which started an unmistakable bear market in 2011. Another large allocation is in natural resource stocks that have been in a bear market since 2014. The fund also maintains a substantial allocation in high quality bonds, mostly U.S. treasuries with some corporate bonds, that have generated miniscule amounts of income during the 2012-2016 period. Most of the corporate bonds mature within two years. 

The fund maintains a large allocation to sectors that are in bear markets. The fund maintains close to a 25% allocation to gold and silver bullion.

Natural resource stocks which have been in a bear mode since the 2014 summer have somewhere close to a 8% constant weighting. Performance in this sector has also been hurt by poor stock selection IMO:

There is also a large allocation to low yielding and short term investment grade corporate bonds, U.S. treasuries and Swiss government bonds.

SEC Form N-Q for the Period Ending 4/30/17

3. Intermediate Bond/CD Ladder Basket Strategy:

A. Bought 2 Capital One 3.75% Junior Bonds Maturing on 7/28/26:

This bond is subordinated to Capital One's senior unsecured notes.

Issuer:  Capital One Financial Corp.  (COF)
FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at Baa1
S & P at BBB-

YTM at Total Cost (98.933): 3.892%
Current yield at 3.79%

COF Analyst Estimates

COF's second quarter earnings report was good and caused the common stock to pop. The stock closed at $81.01 on 7/20/17 and at $87.94 the next day. The results were released after the 7/20 close:

Capital One Reports Second Quarter 2017 Net Income of $1.0 billion, or $1.94 per share

4. Synthetic Floaters:

A. Sold 50 GYB at $22.86:

Quote:

PROFIT: +$99.96

I discussed this purchase here.

GYB Realized Gains to Date: $1,631.28

Snapshots can be found in Trust Certificates: New Gateway Post.

My last sell was at $21.9: Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 7/13/16 - South Gent | Seeking Alpha

Discussions of most prior trades are linked in Item # 3 (2/21/15 Post). The largest single gain was $691.71 realized on a 100 share lot sold in 2010 and owned in an IRA. 

GYB is a Synthetic Floater in the Trust Certificate form of ownership, a category of Exchange Traded Bonds.

GYB makes quarterly interest payments at the greater of 3.25% or .85% above the three month Libor rate on a $25 par value. As with other exchange traded synthetic floaters, there is a maximum coupon of 8.25%: Prospectus Interest payments are made quarterly.

SEC Filings for GYB

The underlying bond owned by the trust is a trust preferred issue from Goldman Sachs Capital I maturing on 2/15/2034 with a 6.345% fixed rate coupon. That is a $1K par value bond that is traded in the bond market: Bond Detail

In effect, the underlying security is a junior bond from GS. The coupon rate of the underlying bond will not be received by the owners of GYB unless the swap agreement terminates.

It is the swap agreement with a brokerage company that creates the rate paid by this security. The trustee receives the interest payments from Goldman Sachs for the 6.345% fixed coupon securities owned by it and then swaps that amount with the brokerage firm for the amount due the owners of GYB

The owners of GYB will be entitled to receive $25 per trust certificate on 2/15/2034, assuming GS survives of course. If GS goes bankrupt, I would expect this security to be worthless.

I would anticipate the 3 month Libor rate to increase when the Fed raises the federal funds rate. I would expect a slightly greater increase in the 3 month Libor rate.

This short term rate would have to rise above 2.4% during the relevant computation period to trigger an increase in the 3.25% minimum coupon (2.4% + .85% spread still equals the 3.25% minimum).

There is a potential problem for all instruments that pay a coupon based in whole or in part on Libor. Libor Funeral Set for 2021 as FCA Abandons Scandal-Tarred Rate - Bloomberg; The scandal-hit libor rate used to set mortgages will end in 2021: CNBC

The prospectuses for these securities generally provide a backup rate in the event Libor quotes cease to exist, but I could not find a reference to what happens in the GYB prospectus in that event. There was a brief reference to using the last Libor rate for the preceding period: 

"provided, however, that if the banks selected as aforesaid by the calculation agent are not quoting as mentioned in this sentence, LIBOR for such index maturity will be LIBOR determined with respect to the interest accrual period immediately preceding the current distribution date."

Sourced at Page S-29 of the Prospectus

The prospectus is 108 pages long and I may have missed a provision dealing with using an alternative rate when Libor is no longer available.  

And if no payment is made by the counter-party, the Trustee could terminate the swap agreement and start paying to the GYB owners the amounts paid to the trustee by GS.

While far from clear IMO, that proviso  seems limited to using only last quoted rate only once.

As a consequence, and given the uncertainties, I will no longer buy GYB, GYC or any other security that pays a coupon based on Libor that matures after 2020.

The other synthetic floaters that I own, other than 50 shares of GYC which I intend to sell, use the 3 month U.S. Treasury Bill as the referenced rate: GJP, GJS, GJT.  


5.  Equity REIT Common and Preferred Stock Basket Strategy:

A. Sold 100 SNR at $10.44- Highest Cost Lot Fidelity Taxable Account (Used Commission Free Trade):

Quote: New Senior Investment Group Inc.  (SNR) (one of the top ten largest owners of private pay U.S. senior housing properties with 148 properties; 90 properties are managed and 58 have triple net leases)

Fidelity Account Position Prior to Pare:

Profit Snapshot: + $50.77

Realized Gains To Date: $468.18

Snapshots in Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy

Shortly after this transaction, SNR released second quarter earnings that investors did not like: 

Closing Price 8/3/17: SNR $9.40 -$0.95 -9.18% 

There wasn't anything to like about that report. 

New Senior Announces Second Quarter 2017 Results 
CEO Susan Givens on Q2 2017 Results - Earnings Call Transcript | Seeking Alpha

Note that the quarterly dividend rate exceeds funds available for distribution ("FAD"). Unless there is a material increase in FAD soon, the dividend will have to be cut. I would recommend cutting the dividend rate by at least 3 cents per share now.  

The problem is concentrated in SNR's "managed" portfolio rather than its triple net lease properties. Drilling down further, the independent living (IL) segment is outperforming the assisted living (AL) segment. A large party of the decrease in operating income originated from properties operated by Holiday, an entity that is majority owned by affiliates of SNR's external manager Fortress. SNR blamed a change in Holiday's operating model for the decrease.  

SNR summarizes risks and other matters relating to Holiday in its 2016 Annual Report at pages 3, 16-17,  26 (conflict discussion), 82, and 88-89.

Labor costs increased by 3.7% during the quarter, more prevalent in markets with new supply and concentrated in the AL segment as one would expect. 

Operating Model Explained: 

Page 9  2016 Annual Report

Other problems that I have discussed in the past include external management, property purchases from an entity controlled by the external manager and excessive debt. Those issues are also discussed by Brad Thomas in his most recent article: A Private Pay Health Care REIT That Yields 10% - New Senior Investment Group (NYSE:SNR) | Seeking Alpha A SA post published today highlights the negative issues as well: New Senior: Where To Go From Here - New Senior Investment Group (NYSE:SNR) | Seeking Alpha

Some debt was repaid in the last quarter:  

"In June, the Company completed the sale of two properties for $33.0 million, realizing a gain on sale of $18.3 million. In connection with the sale, the Company repaid $13.2 million of debt."

I still own shares in three other accounts in addition to the shares remaining in this Fidelity account.

Remaining Positions: Snapshots Using Price as of 7/28/17 except for the following which was taken on 8/1/17:

Capital One: Average Cost Per Share = $9.54

IB:  Average Cost Per share = $8.34

Vanguard Roth IRA History: Last Purchase at $9.8 (11/14/16)/Last Sold at $12.3 (9/6/16)

Schwab Taxable: Average Cost Per Share = $8.03

Links to Some Prior Discussions: 

Item # 6 Sold 100 SNR at $11.76 and Item # 7 Sold 50 SNR at $11.85: Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha

Item # 5 Added 50 SNR at $8.41+: UPDATE For Equity REIT Basket Strategy As Of 2/12/16 - South Gent | Seeking Alpha

Item # 1. Added 50 SNR at $9.1: Update For Equity REIT Basket Strategy As Of 11/16/15 - South Gent | Seeking Alpha

Item # 2. Bought Back 50 SNR at $10: Update For Equity REIT Basket Strategy As Of 11/5/15 - South Gent | Seeking Alpha

Bought Back 100 SNR at $ 10.17: South Gent's Comment Blog # 2 (noting a 50 share sell transaction at $12.3 on 9/16/16 in a Vanguard Roth IRA, see previous snapshot)

SNR is a speculative REIT that has a very high dividend yield, but has a host of issues. I view the dividend as likely to be cut within the next 12 months. My strategy has been to buy the dips and sell the pops. My last sell was at $10.44 which indicates that my sell range has been lowered from $11 to $12.50 to $10 to $10.5. I will consider buying 50 shares at less than $9. 

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.

Observations and Sample of Recent Trades: (GMTA, MPW, RMT)

Economic Reports:

A. Automobile Sales: Trending Down:

U.S. car sales continue to skid, drop 5.7% in July - LA Times

AutoNation earnings slide 21% as sales slow - MarketWatch

July 2017 Auto Sales: A Slow Slide, As Expected | Automobile Magazine

B. ADP July Private Sector Jobs Report:

+178K vs. 173K Consensus

June Revised to 191K from 158K

ADP-NATIONAL-EMPLOYMENT-REPORT-July2017-Final-Press-Release.pdf
Private-sector continues to see strong job gains in July, ADP says - MarketWatch

C. Personal Consumption Expenditures ("PCE") for June 2017:

The government's Personal Income and Outlays Report for June reinforced the downward trend in consumer expenditures compared to 2016. PCE increased .1 in June. Real PCE was flat with the prior month.

The numbers for the first six months of this year are materially weaker than the comparable period in 2016 and the last six months of 2016.

% Change from Preceding Period
Table 13, Line 17 News Release.pdf

REAL PCE

June-December 2016

+.4%, +.2%, +.1%, +.5%, +.1% +.3%, +.4%

January-June 2017

-.1%, 0, .7%, .1%, .2%, 0

D. ISM Services PMI: Marked Slowdown in July:

The ISM's non-manufacturing index fell to a reading of 53.9 last month, the lowest since August 2016, from 57.4 in June. ISM - ISM Report - July 2017 Non-Manufacturing ISM® Report On Business®

The new orders component decline to 55.1 from 60.5.  The employment component declined from 55.8 to 53.6.

E.  S & P/Experian Consumer Composite Default Index Drops to 1 year Low in June

The Bond Ghouls and Currency Dopers do not see a robust economy but a weakening one.

U.S. 10 Year Treasury Note -MarketWatch
DXY Charts - U.S. Dollar Index (DXY) Interactive Chart
BBDXY Quote - Bloomberg Dollar Spot Index - Bloomberg Markets

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Trump dictated son’s misleading statement on meeting with Russian lawyer - The Washington Post

According to that report, Trump deliberately tried to mislead the public about the reasons for that meeting that was called specifically to receive damaging information about Hillary from the Russians.

Since Don Jr.'s emails were released by him, I have listened to a number of Trump voters claim there was no proof of collusion between Russia and the Trump campaign.

The emails show an unmistakable intent to collude.

Quote From First Email Sent to Donald Trump Jr.:

Good morning

Emin just called and asked me to contact you with something very interesting.

The Crown prosecutor of Russia met with his father Aras this morning and in their meeting offered to provide the Trump campaign with some official documents and information that would incriminate Hillary and her dealings with Russia and would be very useful to your father.

This is obviously very high level and sensitive information but is part of Russia and its government's support for Mr. Trump - helped along by Aras and Emin.

What do you think is the best way to handle this information and would you be able to speak to Emin about it directly?

I can also send this info to your father via Rhona, but it is ultra sensitive so wanted to send to you first.

Best

Rob Goldstone   (emphasis added)

Donald Trump's Reply:

Translation: I can't wait to get Russia's help in the election, so my Daddy can defeat Crooked Hillary. 

Read the Emails on Donald Trump Jr.’s Russia Meeting - The New York Times

In the President's Alternate Reality Universe, the subject of the meeting was "not a campaign issue" even though that is explicitly why the meeting was called: 

Prior to the publication of this WP article, Trump's personal attorney, Jay Sekulow, made the following statements: 

"CHUCK TODD: You were very careful to say the president didn’t draft the statement. That isn’t what I asked. Did the president get a heads-up on the statement? Did he sign off on the statement? Was he asked to read the statement before it was given to the New York Times on Air Force One?

SEKULOW: No, I mean, I can’t say whether the president was told the statement was going to be coming from his son on that. I didn’t have that conversation and let me say this — but I do want to be clear — that the president was not involved in the drafting of the statement and did not issue the statement. It came from Donald Trump Jr. So that’s what I can tell you because that’s what we know. And Donald Trump Jr. has said the same thing. That it was, in fact, from him and I believe it was his lawyer was in consultation — I’m sure his lawyer was in consultation."(emphasis added)

Sourced Meet the Press - July 16, 2017 - NBC News

Sekulow claimed that the WP story was inaccurate but would not answer specific questions presented by the WP: “Apart from being of no consequence, the characterizations are misinformed, inaccurate, and not pertinent.” 

Trump's new Press Secretary had a different take than Mr. Sekulow:  Trump 'weighed in' on Don Jr.'s statement about meeting Russian lawyer, Sanders says - MarketWatch There is no way to reconcile Mr. Sekulow's comment that the "president was not involved in the drafting of the statement" with either the Post story or the White House's admission that Trump "weighed in".  

++++

The Heavy Weight Champion of Chaos-The One and Only Mr. Donald Trump, President of the United States:

What will historians say in a 100 years?    

The Mooch lasted 10 days as Trump's Communications Director, the shortest stint in U.S. history, but that is not unusual in Trump's first few months as President. Trump denies there is chaos.   

It looks like the Mooch's talents, whatever they may be other than mooching of course, were not fully appreciated by John Kelly, the newly installed Chief of Staff and a retired 4 star Marine general. Or maybe, the Mooch did not tell Donald that he loved him more than fifty times. 

Kelly probably saw little humor in the Mooch's off-color remarks including his somewhat dubious claim about an anatomically impossible task.   

Anthony Scaramucci out as WH communications director - CNN 
Harvard accidentally lists Scaramucci as dead in alumni directory - CBS News

I looked at Mooch's hedge fund performance. His fund is known as Skybridge Multi-Advisor HF Portfolios G. Mooch just selected other hedge funds to own in his fund. He is attempting to sell his hedge fund to a Chinese company called HNA Group, a mysterious private company: The Conglomerate That Troubles China - Bloomberg

The five year total return through 7/31/17 was 36.81%. Barron's Market Lab Table - Barrons.com The five year total return of SPY through 7/31/17 was 98.72%. DRIP Returns Calculator | Dividend Channel The Vanguard Star Fund (VGSTX), a fund of funds which includes a significant allocation to bond funds, had an annualized total return of 9.61% over the same period which handily beats the 36.81% total return for that Skybridge fund. Vanguard Star Fund Investor Shares (VGSTX) Fund Performance and Returns

Apparently, General Kelly did not agree with Trump's decision to fire Comey who Trump called a nut job when conversing about the matter with the Russians.

The House Republicans want the Justice Department to hire a special prosecutor to investigate Comey who provided unfavorable testimony about the GOP's Leader. The GOP and their apparatchiks will go after anyone providing damaging testimony about President Donald. 

Kelly called Comey to express anger over firing, sources say - CNN 

Maybe the General will be able to damp down some on the lunacy and chaos that have been the dominant traits that blast out of the Trump White House daily.   

Trump's approval rating slumps to new low - CBS News

National (US) Poll - August 2, 2017 - Trump Drops To New Low, Close | Quinnipiac University Connecticut (62% say Trump is not honest; so SAD that the number is not 100%) 

Who plays more golf: Donald Trump or Barack Obama? | PolitiFact

Trump Says U.S. 'Losing' Afghan War in Tense Meeting With Generals - NBC News ("Over nearly two hours in the situation room, Trump complained about NATO allies, inquired about the United States getting a piece of Afghan’s mineral wealth and repeatedly said the top U.S. general there should be fired. . . . The focus on the minerals was reminiscent of Trump's comments early into his presidency when he lamented that the U.S. didn't take Iraq's oil when the majority of forces departed the country in 2011.")  

Sanders forced to revise Trump's claim about conversations with heads of Boy Scouts, Mexico - CBS News

Transcript shows Trump asked Pena Nieto to stop saying Mexico wouldn’t pay for wall - MarketWatch (WHY, so Trump could keep telling the True Believers that Mexico would pay for the wall)

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More Than Disgusting If True: 

Lawsuit: Fox News concocted Seth Rich story with oversight from White House - Aug. 1, 2017

Suit alleges Trump reviewed draft of Fox story about murdered DNC aide Seth Rich - MarketWatch

Seth Rich Case: Fox News Made Fake News to Protect Trump, Lawsuit Alleges - NBC News

DNC Staffer's Murder Draws Fresh Conspiracy Theories - NBC News

A copy of the complaint is available at Scribd: Fox Lawsuit 

Cuomo grills Butowsky over retracted story

Fox concocted a story that a DNC staffer leaked their emails to Wiki and was - thereafter-  murdered by the Democrats to shut him up. The purpose of this particular Fox reality creation was to come up with an alternative to the consensus opinion formed by the intelligence agencies that Russia interfered in the U.S. election to help Donald.

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1. Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 3 Fidelity National 1.15% CDs (monthly interest) Maturing on 10/27/17 (3 month CD):

B. Bought 2 Washington Federal Bank 1.3% CDs (monthly interest) Maturing on 2/12/18 (6 month CD): 

C. Bought 2 Blue Hills 1.2% CDs Maturing on 11/30/17 (4 month CD):

D. Bought 2 Merrick Bank 1.45% CDs (monthly interest) Maturing on 7/27/18 (1 Year CD):

E. Bought 3 Peoples National Bank 1.05% CDs Maturing 9/11/2017 (one month CDs): 

$12K Inflow into Short Term Bond/CD Basket

Hopefully short term rates will continue to meander up. 

2. Long Term Bond Basket Strategy: 

A. Sold 50 GMTA at $26.69 (used Commission Free Trade):

Profit Snapshot: +$222.84

This lot was purchased at $22.23 (11/14/2016).

Quote: GATX Corp. 5.625% Senior Notes due 2066 (GMTA)

GMTA is an exchange traded senior baby bond that matures in 2066 unless redeemed earlier at the issuer's option. The issuer may call on or after 5/30/21 Prospectus The optional redemption right and the potentially very long duration creates asymmetric interest rate that disfavors the bond owner and is lopsidedly in the issuer's favor.

Stocks, Bonds & Politics: Exchange Traded Baby Bonds
Baby Bonds - South Gent | Seeking Alpha
Stocks, Bonds & Politics: Exchange Traded Bonds: New Gateway Post

My last transaction was to sell 40 shares at $25.53: Stocks, Bonds & Politics: Item # 2.A.  (profit snapshot of $124.75). Prior to that sell, I sold 20 shares using a commission free trade at $25.13 that had been purchased at $22.95: Stocks, Bonds & Politics: Item # 3.A.

I no longer have a position and will simply wait for a significant price downdraft before considering a new purchase.

3. Continued to Pare Stock Allocation:

A. Sold 274+ Shares of RMT at $8.9:

Profit Snapshot: +$45.41

Quote: Royce Micro-Cap Trust Inc. (RMT)

I took a loss of $49.21 on a 200 share lot purchased on 7/15/15 and a $64.48 profit on a 50 share bought at $7.61 total cost per share. I realized also a gain on all shares purchased with reinvested dividends but did not reinvest the quarterly dividends paid in March and June of this year and the $.61 per share distribution made in December 2015.

Royce Micro-Cap Trust (RMT)

This transaction eliminates RMT from my portfolio. I will consider buying back shares when and if the discount to net asset value per share is greater than 15% and after a 20% correction in the Russell 2000.

Closing Data Date of Trade: 
Closing Net Asset Value Per Share:  $9.91
Closing Market Price: $8.9
Discount:  -10.64% 
Average Discounts: 
1 Year: -13.84%
3 Years: -13.4%
5 Years: -12.85%

This fund was frequently trading at over a 15% discount in the 2016 4th quarter and occasionally over 16%. 

RMT Royce Micro Cap Trust, closed-end fund summary - CEF Connect 

RMT Trading Profits to Date: $2,461.36

Last Sell Transaction:  Stocks, Bonds & Politics: Item 3.A. 

2016 Annual Report 
RMT Royce Micro Cap Trust CEF Page at Morningstar 
SEC Filings for Royce Micro-Cap Trust

Item # 2 Sold 433+ RMT at $12.76-Average Cost Per Share $7.91 (snapshot of profit=+$2,057.88 including profits for all shares bought with reinvested dividends)

Earlier in 2014, I sold 126 RMT shares bought with dividends and realized a $149.91 profit on those shares. Item # 6 Sold Taxable Account: 126 RMT at $12.6 (7/12/14 Post)

I will frequently harvest profits in shares bought with dividends in order to improve the dividend yield of those distributions. Many investors may prefer to leave matters alone.

Snapshots of RMT round-trip prior to 7/28/15 can be found in the Appendix section to this post: Update On Closed End Fund Basket Strategy As Of 7/28/15 - South Gent | Seeking Alpha

Links to Some Prior Discussions: 

Item # 1. Added 100 RMT at $7.77: Update For CEF Basket Strategy As Of 8/28/16 - South Gent | Seeking Alpha

Item # 1. Averaged Down-Added 100 RMT at $7.71: Update For CEF Basket Strategy As Of 11/18/15 - South Gent | Seeking Alpha

RMT Total Returns with Dividends Reinvested: Feast and Famine

10/9/2007 to 3/9/2009: -69.33%

3/10/2009 to 12/31/14: +348.38% or an average annualized total return of 29.45%

1/1/15 to 12/30/15:  -16.64%

1/1/16 to 7/21/17: +40.49%

4. Intermediate Bond/CD Ladder Basket Strategy: 

A. Bought 2 WFC 1.85% CDs (monthly interest) Maturing on 7/28/20 (3 year CDs): 

This CD was at the tail end of my three year period for the short term ladder.


5. Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy: 

On a net basis, I am significantly reducing my exposure to equity REITs and have adopted a more aggressive trading posture. 

The primary concerns are (1) valuations for most of them; (2) a potential downdraft in major stock indexes which will take REIT stocks down as well; and/or (3) a significant move up in interest rates. I have also trimmed Canadian REITs recently, partly due due to the rise in the CAD/USD that allowed me to sell some position in my Fidelity account profitably and to immediately convert the proceeds into USDs as I transition away from Fidelity. 

A. Reinitiated Taxable Account Position in MPW with a 50 Share Buy at $12.85 (used commission free trade):

Closing Price Day of Purchase (7/24/17): MPW $12.88 -$0.22 -1.68% 

MPW Stock Price - Medical Properties Trust Inc. 
Medical Properties Trust Website

Medical Properties Trust, Inc. Reports First Quarter Results:

Note the significant non-cash revenue item included in normalized FFO. At least MPW correctly makes the straight line rent adjustment to FFO in order to arrive at AFFO which is more than I can say for Omega Healthcare (OHI).

The current quarterly dividend is $.24 per share. At that rate, the dividend yield is about 7.47%.

My last transaction was to sell 50 shares at $13.93: Stocks, Bonds & Politics: Item # 3 (5/15/17 Post) That post contains several links to prior discussions. 

Since I exited my position, MPW's underwriters sold to the public $43+M shares at $13.25, with the proceeds going to fund the cash portion of MPW's acquisitions of eight hospitals from Steward Health Care Systems, 2 hospitals from Alecto Healthcare, and 2 hospitals from RCCH Healthcare. Prospectus; Medical Properties Trust Announces Pricing of Public Offering of Common Stock  

Medical Properties Trust, Inc. to Invest $1.4 Billion in Ten Acute Care Hospitals and One Behavioral Health Facility (MPW "has signed definitive agreements to acquire the real estate interests of ten acute care hospitals and one behavioral health facility currently operated by IASIS Healthcare (“IASIS”) and to be operated by Steward Health Care System LLC (“Steward”) when the transaction is completed. The $1.4 billion real estate transaction will be immediately accretive to normalized FFO per share by approximately $0.10 (and to net income by $0.05 per share) in 2018 assuming all debt financing. Steward and IASIS separately announced a simultaneous merger transaction, completion of which is a condition of MPT’s investment.")

The company ran into some problems with one of its tenants as described in this press release: Medical Properties Trust, Inc. Describes Plans for Restructuring of Adeptus Health, Inc. Leases 

MPW is a serial acquirer and its management and Board can be properly classified as empire builders. One problem with that approach is that MPW will often do a big deal when the stock is doing well; and the subsequent common stock offering stops the rally in its tracks and causes a sharp decline in the stock price. MPW also incurs more and more debt with these acquisitions that will have to be refinanced and refinanced, potentially at much higher rates than now. 

There is also an abundance of risks associated with government reimbursements to MPW's tenants. While those risks may not materialize over the near term, they will materialize.  

Trading Profits to Date: $1,334.83 (snapshots in Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy)

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.