Thursday, March 14, 2019

A candidate that the media wants to love...

Beto O'Rourke has finally deigned to let us know that he is running for the Democratic Party nomination for President, essentially saying that it is his destiny.  After six years in Congress with few accomplishments of note, and a losing campaign against a man who has breached the bipartisan divide in the Senate as almost no one in either party likes Ted Cruz.  Beto wants to smile his way to the White House.  Does he want to visit every diner in America, a man of the people filming hotel lobbies across the country.  He comes across here as just odd.

In 2007 when Barack Obama began what at first seemed like an improbable run for the Democratic nomination, much of the allure was his skill at public speaking.  Whatever one's political persuasion, most could see that he was talented, capable of making seemingly impromptu remarks in complete sentences with extensive knowledge of issues and policy.  In 2019 when Beto speaks, that is not the case.  Maybe his good speeches or remarks must have been missed here, but what has been seen is a randomly strung together stream of consciousness rant, saying mostly good things in an incoherent way.  Has he done the work?

As is now known by those who follow the political news, he grew up in a wealthy politically connected Texas family.  He is an entitled rich boy who has nice locks and good teeth but that does not yet make him a Kennedy.  He is also not a scruffy upstart starting from scratch.  That he played in some sort of punk rock band does not make him a rebel and does not make him part of the cognoscenti. It's just his version of Bill Clinton playing the saxophone, the fat boy who couldn't play sports.

Obama may have been brilliantly calculating, but it was not that apparent in the beginning.  He came across as idealistic but genuine.  Beto's ploy seems almost grotesquely obvious.  He is joining the increasingly large pack of Democrats who believe that anyone can grow up to be President.  Note, not everyone can be President.  We still await Biden's announcement, and Hillary will stand by her phone if this turns into complete chaos by early 2020.  Bill de Blasio is still teasing us with his reticence, just waiting for Chirlane to tell him when the news cycle is right.

This has been a somewhat cynical ramble.  If polls are remotely accurate, Trump should lose.  Been there, done that haven't we.   More to come...

Monday, March 04, 2019

Is this real? The CPAC rant...

The Conservative Political Action Committee has become an event of consequence in these strange days.  There have been various parts of Trump's CPAC speech watched and the question that comes to mind is, "Is this really happening?"  Did the President of the United States really come out on stage and wrap his arms around the American flag, grinning like the Cheshire Cat.  My first thought was Groucho Marx.  All Trump needed was a stogie in one hand as he nodded his head up and down.

The two hour rant has been covered by everyone so no need to get into that sweaty mental breakdown that was visible to all.  Every personal slight felt over two years was reviewed.  Every falsehood repeated.  Yet, apparently 46% of polled voters probably liked it, maybe felt vindicated in some way.  How to understand it?  Resentment is unleashed?  Evangelical righteousness is rewarded?  The elites will be sent to the woodshed by some sort of virtuous billionaire, tax cheat, on and on it could go, But it does not matter in the least.

That 46% is from the latest NBC/Wall Street Journal poll of voters.  That's an approval rating that is close to a high for Trump and 5% higher than it was the week before the election in 2016.  Issues are not the issue.  It is deeper than that.

Many may think that this is containable, just routine politics roiled by an unpredictable character.  This is not routine.

Thursday, February 28, 2019

Explain this market?

First, is it possible that a major U.S. based company with $51 billion of shareholders equity versus $31 billion of long term debt could see its share price drop by 30% in one day due to a $10 billion writedown of intangible assets, meaning accounting but not cash items?  That's a stock price drop from $48 to $34.  Two, is it also possible that the Oracle of Omaha owns 26% of this in Berkshire Hathaway?  Three, is it also possible that this company owns many revered American and, yes, global brands like Jello, Cheez Whiz, Kool Aid, Velveeta, A-1 Steak Sauce, Oscar Mayer wieners, Grey Poupon, Tang, Clausen Pickles, all of those delicacies and many more, plus Heinz Ketchup?  The company obviously is KHC, the food conglomerate Kraft Heinz.

Almost unbelievable for those first two questions, but maybe not on that last one.  One could wonder how much more it would have collapsed without the always necessary ketchup.  There must have been those in the market who knew enough about this company's issues, but real securities analysts are hard to find these days.  At least a few who had done some old style research, like check the stores?  Guess not, and certainly the company must be credited for knowing how to keep a secret, although that's a double edged sword.

It has been a remarkably complacent market recently, but this was quite a rumble under the surface.  Why does the phrase "canary in a coal mine" come to mind?

Also in the day's market news, Square's earnings announcement this morning was met with derision and head shaking by pundits and news readers on CNBC, and traders(not investors) jumped on board.  The stock fell from its Wednesday close of $79.30 to $74.50 in the first half hour today.  After smarter folks studied and digested the numbers, the price rose to $82.70, and closed by the end of the day at $81.42.  That's an almost 10% trading range for the day, a big range especially when it's not one directional.

Complacent market?  One could wonder.

Sunday, February 17, 2019

"The Incendiaries", A Novel by R.O. Kwon

This is not a linear novel.  It can move between time periods from paragraph to paragraph.  Conversation is described rather than following the time worn convention of punctuation.  The three main characters have stream of consciousness descriptions of events that overlap with each other helter skelter.  Events backtrack. The future is foretold. Her first novel is a wonderful ride.

When first considering this book, I wondered if it could be like Suki Kim's first novel in 2003, "The Interpreter".  It was and it wasn't.  Kim's exceptional tale rang so true that it seemed almost like a memoir, not only explicit places and events but personal relationships as well.  As time would show, she never wrote another novel and while some of the events in "The Interpreter" were definitely fiction, others were unlikely to have been. It almost felt like I had met her.  Kim did and does continue to write non-fiction, both essays and journalistic reporting.

Kwon's book feels like it is based on experienced events as well, personal, watched, or extrapolated.  Well, I guess that pretty much fits the term for fiction but there are parts that seem precisely real.  For some reason, it reminded me of reading Jerzy Kosinski's "Steps" in 1973, sitting on a the veranda of a cliffside stone house in Grand Cayman owned by a Kentucky Senator.  Kosinski's seemingly random assemblage of short strange tales were incomprehensible in a way, viewed as written by a writer with an Eastern European sense of humor to charm the unknowing literary establishment.  Still, it was entertaining, and reading on that deck was also incomprehensible.

The writing by Kwon is exceptionally entertaining, turns of phrase that are completely unexpected but perfect show up regularly.  Insights are not forced on the reader.  They just happen.  So that's what I think, and this short book will be read again soon to see what it's like when not read in one night.




Friday, February 15, 2019

Amazon says goodbye New York, New York...

"Give us the three billion and we'll invest it" said Representative Alexandria Ocasio-Cortez earlier.  She was referring to the incentives that New York state and city had agreed to give Amazon to build an East Coast headquarters and hire 25,000 people in Long Island City, Queens.  The young activist media magnet was talking trash.  There is no three billion sitting around.  Those were primarily tax abatements related to future earnings of Amazon.  They don't exist without the deal.

The hugely ambitious State Senator Michael Gianaris, another major opponent of the deal said, "Even by their own words, Amazon admits they will grow their presence in New York without their promised subsidies."  Yes, they will, maybe as many as five thousand jobs in the coming years in Manhattan, Brooklyn, and Staten Island.  They are already in the Tribeca part of Manhattan and have a huge sorting facility on Staten Island.

Mayor Bill de Blasio, a well meaning and accomplished nitwit, said, to paraphrase, we gave Amazon the opportunity to work with the community and they threw it away.  What he actually said made less sense.

On January 31st, a post here on ENS, "Confused... equities, buildings, and jobs", briefly discussed the Amazon HQ opportunity and among other things said "Five minutes further out on the 7 Train there are tons of workers who would welcome these jobs."  That is unequivocally true. Many parts of Queens are not uniformly prosperous, as you survey a mosaic of Chinese, Dominican, Indian, Greek, Albanian, and many other Mets loving communities.

Governor Andrew Cuomo could not help himself, so disappointed that he told the truth, saying, "A small group of politicians and activists put their own narrow political interests above their community...", debatable opinion but a correct one.

When a major part of the outcry came down to a simple sound bite about one incentive being either the City agreeing to allow the rights for Amazon to build helipads on their buildings(NYT) or the City paying for the helipads(television commentators), small potatoes in the scheme of it all, the agreement became more troubled.  The thought here is that those politicos who opposed the deal and inflamed indignation saw it as a political win win.  Oppose, get recognition, claim responsibility for expected Amazon concessions, get national attention for standing up for the working people, and enhance their personal political futures.

Unfortunately it was not a game.  This is a huge lost opportunity.  That cannot be understated.  Young people growing up in the classic tenements in many parts of Queens and studying in the run down school systems have had a dream snatched away.  You can bet that their are more computer and tech savvy young workers in that area than anywhere near Arlington, Va. or Nashville, without question.

The enhancements were not unusual or grotesque.  They are an imperfect part of the process.  It could have worked.  Amazon decided that the harassment would not stop.  Game over.

Thursday, February 07, 2019

Bank merger classic, BBT and STI

In this placid environment for most banks, meaning one of reasonable earnings and limited credit risk, the merger of Atlanta based SunTrust and Winston Salem based BB&T is a confederate combination, not of dunces but of bankers.  The rationale is the classic expense reduction through reducing overlaps in personnel, locations, and functions. If there are locations of each bank near each other, now one can be a Kentucky Fried Chicken, a win win for customers, original or crispy.

BBT is acquiring STI, and both are benefitting in today's market, BBT up almost 4% as the acquirer and STI up around 10% as the acquired.  Both being up underscores market approval.  Both banks already pay a dividend above 3%.  The largest discretionary institutional holders of STI are multiple funds of L.A. based Capital Group, JPM Mid-Cap Value Fund, and Vanguard/Windsor II.  For BBT, the comparable large holders are San Francisco based Dodge and Cox, First Eagle Mgmt., and Delaware Group Value, as if they did anything else.

They chose a new headquarters location, in Charlotte, HQ home of BofA and a large part of Wells Fargo.  A new headquarters location is a bit unusual, but Charlotte has the critical mass of bank type employees, to draw from and fire into.  That will certainly be no solace to Winston Salem, whose tobacco imperialism has long been diminished.  Home prices are already dropping there, just a guess.

Another classic aspect of this merger is that one bank's CEO, that of BBT, will stay for two years and then be replaced by the STI CEO.  One major difference though.  The acquirer's CEO leaves after two years?  It's usually the other way around.  That may be age related but experience suggests that once the deal is closed, nothing about this is guaranteed, it's not legally required.  Experience suggests that this is cosmetic to alleviate the challenges of integration.  SunTrust folks, don't bet the ranch on your guy being in charge one day.

Then there's the issue of a new name.  SunTrust seems as if it could be a possibility for a southern bank, but being the acquired one means that cannot work.  Branch Bank and Trust lacks something of a cachet, everything in fact.  So what works?  SunBranch, of course not.  Bojangles, already taken.  Atlas Banking Corporation, there's one for Cato Institute fans who populate BBT.  Who knows?  Is that the most interesting thing about this merger?

Of course not, for shareholders of these two firms today's share price gains are extremely interesting.  Not one here.




Monday, February 04, 2019

Dueling op-eds in the NYT

On the surface, it may seem as if two op-ed's in the New York Times today, one by David Leonhardt and the other by Charles Schumer and Bernie Sanders, are both on the same track of creating a more fair economic system.  However, there are differences.  For starters, one is intelligently written and one is not.

Leonhardt discusses the tax system in his piece "It's Radical Not to Tax The Rich More."  A few of his arguments are questionable, but most are fact based.  He focuses on variables like education, healthcare, technological change, property tax, and the issue of minimally taxed generational wealth.  He addresses the societal implications of disparities that have become increasingly apparent.

Meanwhile, Schumer and Sanders begin their comment, "Workers Before Buybacks" by promoting the fantasy of the beneficence of the mid-20th century when enlightened CEO's and better regulation created a prosperous America for working people.  That is a preposterously broad based statement that ignores many facts about that time period. Starting the discussion of buybacks in that way undercuts what might have been a better discussion.  Stock buybacks can be beneficial but they can also be destructive.  Buybacks in the place of overpriced acquisitions are a great check on management hubris while buybacks instead of needed investment to grow a company can be harmful.

Companies that squander capital to aid a CEO's manifest destiny to be bigger and bigger often end up in the hands of hostile acquirers, who then come in and lay off workers, cut paychecks, reduce benefits, and streamline operations in a way that disrupts communities.  Just ask Wilbur Ross how to do that.  Buybacks would have been better in those situations so the Wilburs' don't attack.

The point is that the Schumer and Sanders piece is a massive oversimplification that panders to the public rather than informs.  Schumer is a career politician and Sanders admits his preference for a socialist approach that is not affordable without major disruption.  The facts that they point out about income and wealth disparities are correct, but their argument is not credible.

So step aside guys, you've done enough.  Let others have more exposure, and put your feet up.  It's cold outside, time for a toddy.

Saturday, February 02, 2019

"Danny Says", a music film worth watching

This film from 2016 had a limited release, suggesting that it was not a success.  Found on Netflix, it was worth a try.  It was not an especially well put together film, started without much of an introduction and ended abruptly.  There were references to sex acts and preferences, and frequent episodes of drug use, not blatantly explicit but there.  Those aspects may have contributed to its cool reception at theaters.  It's a terrific film, great footage of performances(a Martha and the Vandellas clip rocked) and low key humor throughout.

Danny Fields was an impresario of various offbeat 60's rock bands and 70's punk bands, the more startling the better.  He was part of the downtown Andy Warhol crowd and became a promoter and manager, as well as an almost partner in crime of many musicians.  Music was not his talent but he could recognize it in others, and push it further to the edge and have insight into how best to get attention.  There were Jim Morrison, Iggy Pop, The Stooges, Lou Reed, Nico, Patti Smith, MC5, Alice Cooper, The Ramones, The New York Dolls, and others, but he worked with some that were more mainstream like Judy Collins.  He was a close friend of era's favorite femme fatale Edie Sedgewick and was a longtime friend of Linda McCartney, having worked with her photography when she was Linda Eastman.

Fields is interviewed in a way that makes him the narrator of the film and, while never overtly cracking a joke, his descriptions of what was going on are entertaining, with a lower east side Jewish sense of humor that is hard to describe, is it the acceptance of the inexplicable.  Laughing when no one else is around can seem strange but this did it.

At first, it was not clear that this film was going to work, but patience was rewarded.  Fields is still out there, promoting an East London punk band at last report.  He would now be 79.

Thursday, January 31, 2019

Confused... equities, buildings, jobs...

---Amazon's choice of New York's Long Island City for a primary east coast location, split with D.C., continues to arouse opposition in that neighborhood and beyond, and on the New York City Council.  Demands for an agreement to recognize a union from the outset are rife.  With hourly wages at a minimum estimated by the company to be between $17 and $23 an hour, in an area of Queens that has few such jobs, shouldn't that be welcome.  Things will change.  The immediate area around Amazon will be developed.  But think about this.  Five minutes further out on the 7 train there are tons of workers who would welcome those jobs.  For the highly skilled tech jobs, many will live in Manhattan or close to the facility.  The pols want attention, their take.

---A city commission of unknown patricians wants to make The Strand a "landmark" building.  The owners of The Strand, the iconic New York City bookstore, want no part of it.  The actual building is typical of its area, at 12th street and Broadway.  The owner says "leave me alone".  Being a landmark building has significant burdens.  All construction or improvements of any type, interior or exterior, would need to be approved by this commission.  It is an incredibly tedious process.  Kathy's father owned a landmark building downtown.  When the area was not so safe, he put a steel door at the front.  The Commission objected.  He had tenants that he wanted to be safe and businesses there as well.  It was unpleasant, he was fined, but did not give in.  The harassment continued until the building was eventually sold.  Last I looked a few years ago, the new owners had not improved or touched the building, and there were no permanent businesses there at the time, a historic building in inventory.

---The stock market is befuddling, at least here that's the only clear thought.  Up today, what's next tomorrow.  Banks down today.  Visa down 4% and Master Card up 3%, two similar mid-cap tech stocks invested in a few months ago have been different, one up 40% since then, the other down 15%.  Five small to medium cap techs bought on a day in December when I was bored(DBX,  DXC, ON, SQ, SPOT) were in the aggregate down 30% two weeks ago and now are up 15%.  PYX, a recent addition mentioned here previously, bounces like a ping pong ball week to week, up 25% in the last two days, making it up 12% since purchased.

The point --- finding patterns here is difficult.  Finding value is not easy.  It was once said that value stocks were a value for a reason.  Famous investors and analysts always made their reputations by sifting out the best of that bunch.  Those types of leaders don't seem to be visible now, and the jabber on CNBC is no help.  Still trying, after all these years, and doing ok.



Postscript:  Fidelity index funds for Extended Market, Total Market, and S&P 500 were all up by 0.88%, absolutely identical, first time that has ever been seen.  Is this why they call it  programmed trading?

Saturday, January 26, 2019

A few passages from the book "Telex from Cuba".

In yesterday's comment on this book, I made a point of not including quotes, there were too many.  Some either linger, or on looking back seem interesting enough to repeat.  Well, I have time.

---"Anyone who buys a psychic telephone doesn't really believe it's going to work.  That all you need is $19.99.  Buy the machine.  Take it home.  Plug it in.  Dial a number and hear the living voice of someone dead and vanished.  People buy things for other reasons.  They weren't born yesterday.  They don't need the law to tell them that the equipment is faulty.
     Let the people learn for themselves:
     You don't call the dead.
     The dead call you."

And that is the end of the book.

---"That is incredible---our chauffeur, mayor of Preston!  But that's communism.  Ho Chi Minh started out as a fry cook at the Ritz."

---"He refused to believe that anyone who should be loyal wasn't.  Just as Batista wasn't capable of understanding that none of the girls was loyal... it was beyond the scope of what he deemed possible, even as he made himself aware of every last detail."

---"Mother had been a May Queen, and she was president of Kappa Kappa Gamma at DePaux.  I had to return her sorority pin when she died.  Harlan Sanders---that's Colonel Sanders---he was from Indiana, and had always been in love with Mother.  We were his guests at the Sanders Motor Court once on our way to Cumberland Falls. You could tell he had that fatal thing for Mother. His hands shook and his face turned red when he greeted us.  I think Daddy was amused."

---"Suppose you could speak to someone you love who's no longer living.  Would you cross a continent to speak to that person for just fifteen minutes?
     You would.
     When it's someone you love, the answer is that fifteen minutes is limitless if it means getting information about how to proceed without them.  The chance of a clue is worth the journey.  Because you don't know what that person will say to you.  You can't guess what you might be turning down."

---"He said he wanted the pictures for when he was old and depressed, Mrs. Carrington said.  To remind himself of the good times he's had.
    Her husband's secret catalogue of mistresses.  Mrs. Carrington seemed strangely proud of the photographs, as if they belonged not to Tip Carrington but to her.
    My husband loved life.  And she had proof."



Friday, January 25, 2019

"Telex from Cuba", Rachel Kushner

This book was published in 2008, but it is not dated.  The novel captures a time that is still a part of the history known here.  It is set in late 1950's Cuba, and focuses on the American families, mostly serial expats, who run the massive United Fruit Company sugar plantations, and their interactions with the locals.  The rise of the Castro brothers, from the prosperous upper middle class of the countryside, and the reign of the lower class leader Batista, are the backdrop.  Rural beatniks topple slavers.  It is based on history and well researched, and leads to a reality that is stranger than fiction story.  Fiction based on truth.

The book is like a collage.  Differing types of abstraction develop and ultimately turn into a coherent story.  Or to be more pedantic, at times it's like trying to look at a Bruegel painting without focusing on distinct parts.  Anxious reading does not work.  Read on.  It all comes together.

Rachel Kushner's writing is spectacular.  For no good reason her work had not been on my radar, which was obviously defective, troubling thought these days.  Good books are often read here with pen in hand or nearby, to mark a special passage and then dogear the page.  For picking the book back up here later, they may at some point be reminders.  For purposes of this comment, they are too numerous to be useful.  Some could lead back to me, not the best idea.

This is my type of book, real characters, real history, and believable fiction.  Just checking Wikipedia, she was born in 1968 so none of this is personal storytelling, it's cut from whole cloth.  The second paragraph's lead sentence on Wiki is "one of her influencers is American novelist Don Delillo."  That makes sense.


Thursday, January 24, 2019

Where is Mister Ed when we need him?

In one of his more bizarre interviews, speaking on CNBC this morning Commerce Secretary Wilbur Ross seemed to need Mister Ed's help.  Wil...Bur.  Feeling free to jabber without thinking about his role as a government spokesperson, he said that "we are miles and miles away from resolving the trade war with China...that is very complicated with lots and lots of issues."  This vague statement was casually said to highlight his importance but was not at all helpful to financial markets.  Why would Wilbur be remotely be aware of that?

More alarmingly, of federal workers not being paid he said, "I don't really understand why they are going to homeless shelters to get food... or why they can't get loans... borrowing from a bank or credit union is federally guaranteed."  People go to food banks, soup kitchens, and even homeless shelters because they are hungry, or need food for their families.  Sort of simple!  And what the f..k is he talking about?  Bank and most credit union deposits are insured by the FDIC, loans are not.  Loans are based on credit scores and credit history, and often cannot be obtained in a few days.  Credit cards can be used but many federal workers have only adequate salaries, and may not want to tarnish their credit scores for a short term event.  Or they may be maxed out.  Is Wilbur senile or callous may be the right question.  Maybe both, but the best answer seems to be that he is calculating, or call him wily Wilbur.

When filing with the Department of Government Ethics as he entered office, he listed assets of $700 million.  Huge of course, but he had always told Forbes Magazine, that "richest" list, that he was worth $3.7 billion.  The back story from Michael Lewis's recent book, "The Forbes reporters were accustomed to having rich people mislead them about the size of their wealth, but nearly all had been trying to keep their names off the list."  To quote a Forbes editor, "In the history of the magazine only three people stand out as having made huge efforts to get on, or end up higher than they belonged.  One was Saudi Prince Alwaleed.  The second was Donald Trump.  And the third was Wilbur Ross."  A former senior partner of Ross said, "Wilbur doesn't have an issue with bending the truth."

So why is he Commerce Secretary, a job he knows almost nothing about...








Tuesday, January 22, 2019

A few observations...

---The docudrama "Brexit" on HBO last night was not exactly stirring television, but it was revealing, saving its best punch for last.  Bypassing the standard political campaign system in the U.K. through data mining and digital/social media, an apolitical low key brilliant eccentric builds a successful nationalistic anti-immigrant campaign, with analysis from Cambridge Analytica and funding from Robert Mercer.  Could one then consider digital advertising and the exact same scenario in the U.S., adding in Steve Bannon with Facebook, Twitter, and Instagram.  Reflecting on this, the odd thing is that Clinton and Trump seemingly had no idea what was going on.  Clinton had no need to continue intense campaigning and Trump thought it was all about him.

---Fund manager Seth Klarman's letter to his investors has received significant attention today.  While he warned of increasing debt levels being built up by corporations and countries as others have, his characterization of the negative impact of growing wealth disparity separates him from other market watchers. He suggests that this situation will become unhealthy for markets and, while not being explicit, he clearly sees Trump as toxic for both global leadership and for the financial markets.

---Why are the Democrats putting Hakeem Jeffries into the spotlight?  He seems to be a somewhat inarticulate congressman with no distinguishing accomplishments.  At least he does not make us watch him go to the dentist, i.e. Beto O'Rourke.  Are the seeds already being sown to snatch defeat from the jaws of victory.

---The HBO program "True Detective" is now in its third season after a lengthy break from the first two.  Season One was watched with the thought that I obviously should like it, with its star cast and quirky approach.  I tried and did not.  Season Two was unwatchable, obviously just a personal observation.  That Season Three is now being watched is indicative of a need for late night entertainment, and it has my attention.  It's not a pretty story, but the script is incredibly well written.  Whether it eventually all hangs together is yet to be known.


Tuesday, January 15, 2019

My beef with the New York Times...

The New York Times is an institution.  "All the News That's Fit to Print" is there everyday top left, front page.  It is a daily part of life here, and has been for 39 years.  Certainly I don't admire every article or writer, and almost by definition some articles can seem to have an NYT slant, angle, some would say bias.  That's part of any paper not written by robots, and so far they have not been outfit with algorithms to do that.  Certain publishing conglomerates push an agenda.  That's a given and can be too apparent.  From this perspective the New York Times strives for fact based reporting, even if a point of view must be maintained for coherent articles.

Perhaps the most biased piece ever seen here in the Times was the obituary for Dodi Fayed.  It detailed the life of a simply horrendous playboy with absolutely no redeeming characteristics.  That may have been true, but in an obituary...  It was unfortunately or fortunately hilarious to read from that perspective.  The piece has long been buried by the Times, so to speak.  It can't be found, but reading it with Kathy at the kitchen table is a vivid memory.

But getting to my beef.  The NYT is a global, national, state, and city newspaper, but it's local and  even a personal one in a few aspects.  This week's Sunday Styles section is a prime example.  The lead story is about a divorce, headline "A Messy Split For All to See", another full page follows.  They were a power couple in the New York art world.  The patriarch of the husband's family, the Mugrabi's, "emigrated to Columbia from Jerusalem and made a fortune textiles, leading to a net worth of $5 billion", not including the current valuation of a huge number of paintings by famous artists, with more than 1,000 Warhol's, many Basquiat's, Koons', Hirst's, and on and on.  So how do you make that kind of money in Columbian textiles(?) and what else is Columbia famous for?  The article does not ask.

There is a photo of the divorcing wife that is one of the most alluring photos of a fully clothed individual ever seen in a newspaper, nothing straightforward like the "Sun".  The couple's stunning jet setting life is detailed.  The cause of the break up and divorce is also detailed, from skinny dipping at a packed party, to a liaison on a couch discovered in the early morning hours, to "an unreachable husband while she was shuttling between vacations in Sardinia and London".

This is in the newspaper that highlights "New York's Neediest Cases" each day.  Hey, obviously I read the article, but is there some incongruity here.  So that is one aspect of the Times that boggles some days, with the style section and at times with straight news articles about Manhattan.  The other local and personal areas are the wedding and obituary sections.  It is clear that being famous, highly talented, or from the upper east side of Manhattan play a big role in being included.  The wedding section has made huge strides at diversity, almost overdoing it at times perhaps, but those left out in the past do have some catching up to do.  The obituaries are the most puzzling.  Of course those very well known in politics, science, and the arts are often included.  There are also obits of people with seemingly few accomplishments.  It was written in a lengthy obit two days ago - "but the highlight was his annual croquet party that drew a huge crowd every year."  Notable northeast prep schools abound.  So do Palm Beach and Naples as final residences of Manhattanites.  Then there is The Frank E. Campbell Funeral Chapel, a mainstay of those who perish with an upper east side background that can qualify for Times publication.

So that's just the way it is and ever will be.  There was a perfect New York story, from Chinatown, to Francis Lewis Boulevard, to Long Island; from Queens public schools to Herricks school district, to Northfield, one of those prep schools, to Simmons and then Syracuse for a B.A. degree in three years, to Columbia for a Masters;  from a women's cooperative in Boston, an admin job in Palo Alto, back to Manhattan and Manufacturers Hanover and on to Goldman Sachs; from large family dinners in Chinatown, Little Italy, and Flushing:  all of these seemed like a real New York story.  It was not accepted.  A bit of a beef on that.



Sunday, January 13, 2019

"The Fifth Risk", perspective on current governance by Michael Lewis

The writing of Michael Lewis has been long followed here, but in recent years his work has not been as compelling as remembered.  "Flash Boys", in particular, was soft on any real insight, and what was meant to be provocative was old news.  "The Big Short" was not viewed as ecstatically here as by critics and most readers.  It was fact checked here as one of the main characters was known well to me during my career.  It was regulation that was either inept or corrupt,or both.  He did well for his investors and himself, and followed the rules as they were.  "His" humor and good nature was barely picked up, as predatory behavior seemed to be necessary for the book.  Oh well.

So reviews of  "The Fifth Risk" were read, and it was picked up months ago.  The fact that it did not directly have anything to do with finance was a big positive, so my inclination was not already set to be snooty.  Yet when I began reading it seemed familiar, and quickly it became clear that this had been read, yes in Vanity Fair articles that were terrific.  Finally the book was picked up again and reopened, realizing that the final chapter had not been published in the magazine, so would be new material to me.

The actual "Fifth Risk" is incompetent government leadership.  This is Lewis back to form, yet what seems ludicrous and in a way humorous is serious stuff.  The Prologue, Lost in Transition, sets the table for that fifth risk.  The first chapter, Tail Risk, is about the Energy Department, now led by Rick Perry, 'nuff said.  The second chapter, People Risk, is about the Agriculture Department, now led by Sonny Perdue, former governor of Georgia.  The third chapter is about the Commerce Department, now led by Wilbur Ross, a successful investor in bankrupt companies whose specialty was laying off large numbers of people and then cashing out.  There is much more that is appalling about each of these characters.

In each case, the new cabinet secretaries had no idea what their departments were responsible for, and reading this book it is clear that most people, myself included, have no idea of the breadth of responsibilities of these departments of the United States government.  It's fascinating reading until one realizes they too, based on knowledge, could have been appointed to one of these jobs.  Hey, "I know nothing too".

The department head then appointed Trump administration dictated assistants, and they appointed the leading workers.  To quote one example, "Into USDA(Agriculture) jobs, the Trump team had inserted a long haul truck driver, a clerk at AT&T, a gas-company meter reader, a country-club cabana attendant, a Republican National Committee intern, and the owner of scented candle company, with skills like "pleasant demeanor" listed on their resumes...  What these people had in common was loyalty to Donald Trump."

So you get the picture.  This book could be read twice if everything was to be internalized.  Nausea might ensue.  And I say again "Oh well", but things are not well, not when the book was written and not now.



Wednesday, January 09, 2019

Questions of the day...

---What is pushing this equity market up other than the lack of alternative investments?  Not complaining but some stability would now be reassuring.

---Why do I think of Stephen Miller as a canker sore on the Presidency?

---When they have the advantage, why do Democrats sabotage themselves with thoughtless far too broad characterizations ... see "deplorables" by Hillary Clinton and now "immoral" by Nancy Pelosi?Trump is completely amoral and his supporters favor his symbolic concrete wall, but they are not immoral for doing so, just sort of stupid, but don't say that either.

---This season's Ray Donovan has one more episode left and one thing is certain.  It seems impossible that everything could be resolved in this much darker New York City version of the series.  That means another season is in the works.  Will family "values" eventually override everything and Bridget become the new Ray?

---Is Marco Rubio still keeping his sights on the Presidency?  As a fabulist Trump apologist, he appears to be laying the groundwork with the Trump base while saving his supposed socially liberal thoughts for an eventual Trump tumble.  Or does he believe in anything at all other than political expediency?

"Asymmetry", a novel that befuddles, yet works

This book by Lisa Halliday was published 10 months ago and has been widely reviewed.  The reviews read here could be summarized like this.  "WTF, not to be a spoiler, I like this book."  Meaning that reviewers did not know what to do with this book, although knew that their review should be positive.  The two stories are to some extent incoherent stream of consciousness rambles that over time coagulate into something that makes sense.  The first story, Folly, has a quote to begin, "We all live slapstick lives under an inexplicable sentence of death...".   It does develop as a story line that has reasonable sequencing, almost like a play that works better on stage than in print.  The second story "Madness" has a starting point that quickly vanishes into a haze of disorienting events. Its initial quote is "Our ideas about the war were the war".

This is a book that is about the writing.  There are relationships, family issues, unexpected turns, political events, all of the components of many novels.  Done with sensitivity, irony, humor, yes humor for sure, and a touch of the roll out of destiny... Yes, my book reviewer imitation.  It recently was named one of the NYT book review section's ten best fiction books of 2018.

I like this book.

Monday, January 07, 2019

Volatility here to stay?

The U.S. equity market continues to gyrate or hesitate in fits and starts as if not knowing what to do.  There are many market analysts and pundits who speak of the market as if it were a person who thinks in some cohesive way, best understood by those suits speaking.  The truth seems to be that it is confounding to most.  Explaining a day, today at this moment only, when Google, Apple, and Facebook are down materially while Amazon, Nvidia, AMD, and Anet are decently up can be done, but not easily.  Also, various tech small caps bought here several weeks ago with seemingly precise bad timing are now erasing losses, even two of the five moving slightly to the plus side.  The dubious overall position in PYX is now moving into distinctly positive territory, albeit with a position that is now disturbingly large due to stubborn bottom fishing.  Even the almost preposterous JCP position began in November and doubled in December is now at par.  Should I get out, yes, will I, unlikely at the moment.

This volatility will continue until some base is established, if this is possible to find in these Trumpian times.  Earnings and risk drive stock market pricing, but completely random political chaos creates an environment that defies any confident speculation.  If one attributes the persistence of consumer spending partially to boomer wealth, that may slow as they do.  If analysts and commentators focus on low unemployment levels and the manufacturing index as positive indicators, that is close to folly.  Wages broadly are only rising modestly and manufacturing is far less important than the service industries.  The vaunted $15 minimum wage would yield an annual income of $31,200 dollars for a forty hour week, before Social Security taxes(that is what they are). That modest level exists almost nowhere, and across the United States my guessed at average of the minimum wage is $11.  Shortages of workers in some areas are only being met with modest wage increases, contradicting economic thought, because the problem is not only pay but qualifications to do the jobs.

Looking at annual performance here, not so swift but with the S&P down over 4.7% not horrible.  With a concentration of stocks buffered by bonds and money markets, the more aggressive account was down 7% and the other down 2%.  Accounts managed for family were both down 1%  So overall not so bad when considering that the often exceptional Fidelity Contrafund which was down 2% and the closely followed Dodge and Cox Stock fund down 7%. 

As this post was being written with breaks during the day, the market has continued to strengthen.  Money must be invested somewhere.  The outlook for the year is murky here, but nowhere to run to.  Still in with equity allocation toned down just slightly.




 

Friday, December 28, 2018

Rainy day thoughts...

--- "No collusion".  That is Trump's constant refrain about the Mueller investigation.  The media seems to follow his lead.  The primary purpose of the Mueller investigation was to determine if there had been any activity by any foreign government, principally Russia, to influence the 2016 presidential election in a corrupt or illegal manner.  His mandate is to follow the evidence where it leads.  Trump has not been charged with anything.  Yet the fact that his sole focus is on "collusion" could be telling.  In following his standard playbook, could he be confirming that he knew of campaign violations and actively participated in them, beyond the payoffs to silence his women acquaintances.  The media's focus on the lurid is not helpful.

---"Buybacks Come Back to Bite Firms" is the title of a WSJ article today.  It notes that with the market downturn, firms engaged in buying back stock are underwater on their purchase.  That's obvious and hardly newsworthy enough to be the headline on the Business and Finance section.  Buybacks can only be viewed from a longer term perspective. That major banks do this is routine in good times. Their business is to some regulatory extent fenced in, and appetite for any acquisitions has largely been sated.  That tech firms are increasingly joining is a fact worth thinking about.  If the era of reinvestment in new iterations of technology is waning, what has happened to the R&D.  What's next?  This is a reminder that buybacks are not a bump for the overall economy unless they lead to stock market increases that spur consumer spending and capital spending.  Old story dwelled on here many times before, perhaps worth a thought once again.

---The equity market leveled out today, relaxed before the weekend.  Time to think!

---Almost dark here at 4:25pm, a combination of the day's weather and the season.  Looking on the bright side, days will now gradually become longer.  More light is better.  For some that is a very good thing.  Friends who live in Florida, Texas, and Arizona are more enlightened at the moment, so to speak.



Thursday, December 27, 2018

"Educated", on the NYT best seller list for 44 weeks...

Curious about this book, it was finally picked up.  Now I am still curious.  This memoir has become one of those best sellers that won't let go.  Is that because it is a straightforward and easily accessible narrative that delves into a seldom seen world?  This story is about a survivalist family in rural Idaho, estranged from society by choice, attempting self sufficiency with home schooling and herbal medicines.  Rough behavior is the norm and women often come out on the short end of that.  The family is Mormon, but seemingly taking basic premises to mind boggling extremes.

Various reviews have been looked at post reading, and some seem apologetically to like the book while others fawn over it.  One commentary by Bill Gates was well written and interesting, and it put a human touch on the author, Tara Westover.  That was needed here, but still there are lingering thoughts.  The book often seems scripted, too much of a roller coaster ride, haunting beatings to school in Paris, desperate poverty to an education at Cambridge, binge watching the Walking Dead to hours spent reading Hume, Rousseau, and Mill.

This must all be accurate on the surface, but somehow I wonder.  Is the fact that J.D. Vance is the lead blurb praise on the cover saying something.  Did everything in "Educated" happen to somebody in a tableau of a life but is the memoir completely true.  It ends with what feels here like a "new age" take on psychology that makes perception of the self true by definition.

That's the question here, unclear.  And with that, the book was interesting, cringe worthy, and thought provoking.

Sunday, December 23, 2018

News flash...

---The two NFL games broadcast here at 1pm today were Jets/Packers and Giants/Colts.  Were there other games being played?  Both New York teams managed to lose again, although some say they had nothing to lose.  How about the coaches for a start, then GM's.

---Christmas cards were sent yet again, although the number continues to slip.  Yesterday two of those few sending cards here did duplicates, meaning two identical cards from the same person, yet in both cases slight differences in the signature.  Card base is aging.  As an aspiring card counter, that mistake probably was not made here, hope not but could I have sent...

---We enter the last few market days of the year with all major averages down, Nasdaq finally completing the trifecta only in the last few days.  Then there is the Russell 2000 down 7%, aggregate bond down as well, Gold down 4%, Oil down 15%, overall commodity index down 8%, Bitcoin down 76%, is there a theme here?  Maybe a bit of lost confidence in global growth?  Perhaps a rogue President?  Or could my investment choices have been wrong?  Get out the beanie babies, old vinyls, and baseball cards.

I think that a lament here several Sundays ago was ended with "at least there is a new Ray Donovan on tonight".  Ditto.

Friday, December 21, 2018

News and thoughts, our President and the market...

This comment was to be titled "news and thoughts of the day", but then realized it would encompass more than one day.  There is no shortage of topics, but brevity is the goal.

---The equity market has collapsed.  The timing is awkward.  On Monday there will only be a half day of trading so there will be no news there, just enough time to slip in and buy or sell discreetly.  Then a three day week of trading followed by the New Year's Day event, again Monday trading followed by Tuesday off.  For anxious market participants, that means it's unlikely for there to be any hint of relief or clarity until January 2nd begins a New Year.  For nail biters, get out the Polysporin.

---Our incoherent President is on a rampage.  There is no way for anyone to know what comes next.  The departure of Mattis is a big deal, the last adult in the room some would say.  Withdrawing from Syria and on to Afghanistan without any discussion with allies or with members of Congress, even those in his own Party, is without precedent.  It is simply an exercise of power that he uses to spite others.  It detracts attention from his other issues such as the Mueller investigation and the discomfort that Congress feels with his approach to the budget.  The "wall" is a simple concept, for a simple man. 

---For those inclined to believe the mantra "don't look at what he says, but what he does", your faith may be tested.  As Commander in Chief, what Trump tweets at 5:30am is policy.  He can tell the military to move 5000 troops to the border for no reason, or to leave a country as quickly as possible. On domestic issues his impact is not so immediate, but his opinions can be corrosive.  His one vaunted "success" was the tax cut bill, but its boost to the economy was designed to raise stock market prices and then lead to the old trickle down.  So that's done and wealth disparity, which is the biggest domestic problem, has seemingly widened.  Wage increases lag.  More facts will come in the next few months on those issues.

---There are two primary accounts here in my name, one at Fidelity and one at Schwab.  The Fidelity account is run for growth, and today was down 2.2%.  The Schwab account is more conservative and declined 1.1%.  That is just one day.  Taking the time to calculate the loss for the week might be disheartening, so why do it.  Truth is, I have been waiting for the real Trump effect to take hold.  This may be it.



Friday, December 14, 2018

Splat go equities...

U.S. equities ended the week in emphatic fashion, not in a stylish sense.  The major averages were down around 2% for the day.  There were some spectacular drops among well known names.  JNJ was down 10% on a report about the tainted talcum powder that has the trial bar salivating.  Adobe down more than 7% and Costco approaching 9%, both on disappointing results which did not appear to be any kind of disaster from this perspective.  A fragile market is unforgiving.  Techs broadly fell, with the QQQ down 2.5% and market favorites like Apple, Netflix, and Microsoft down more than 3%.  FB was an outlier, just down fractionally.  Other major stocks down 4% were Amazon and Pepsico.  This is not trivial.

The beleaguered transports were the surprise place to be, with autos and airlines stable, meaning dramatically outperforming.  Ford, GM, Southwest, American, and Delta were around flat, reassuring?  Banks did not fully participate in the collapse while healthcare definitely took its full measure and more.

There is no all clear.  Will cooler minds develop through the weekend or will panic build as investors look to year end reporting.  The market no longer rests on the holidays.  Certainly not this year.  Monday will be telling.

Wednesday, December 12, 2018

Reading John Grisham, a sign of the times?

Most readers are familiar with John Grisham, if not necessarily from reading his books but simply from seeing his name at the top of best seller lists for 30+ years.  Practically speaking he created his own genre of deep south novels about attorneys and crime.  Only a few have been read here, and not one in more than 15 years.  Needing to try something painlessly diverting, his new book "The Reckoning" was picked up.

His basic formula was evident early on, and the setting in Mississippi and surrounding areas continues to ring true in both superficial and very real ways.  The time frame is the 1940's, war time and after.  A main character goes to college at Hollins in Virginia.  She was a high achiever from a relatively well to do family.  It was the case that once Hollins was a Radcliffe of the south so to speak, just one of those "that's right" remembrances.  There is plenty of "safe sex" for readers who don't want to go too far and enough loathsome characters to create a dichotomy that further heightens the goodness of those who are redemptive.  Many of the seemingly irrelevant touches about life in that area are interestingly accurate for the period.

Coming with all of this is the simple writing, not "run Spot run" but an adult version of this.  In this book, there is an amazing tendency towards repetition, as if readers cannot be expected to remember the story from one chapter to the next. The entire focus is the story line and a tug of war between good and evil.  The legal aspects are, as always in his books, a central structure of the narrative.  In pulls everything else along with it.  As with some Grisham books, there is a second story within.  In "The Reckoning" it is the Bataan Death March, as the central character is a participant in that gruesome World War II event.  That part of the book is unequivocally a page turner, well researched and with much better writing, meaning less repetition and a relief from the languid pace of the book in the South.  Did I just write that. It's true.  Maybe Grisham was relieved to get a break from what was expected of him.

Grisham is part of that legion of writers today who write for a movie script.  There is no other way to describe how the story unfolds, with a near the end overseas side trip to London, Edinburgh, and Paris that would provide color and production value, as well as cost and adventure for film participants.  I am a natural target for that type of thing, and admit to enjoying recognizing hotel names, locations, and sites.  Grisham knows what an audience could want.

It is unlikely that another one of his books will be read anytime soon, but this one fulfilled its purpose here.  Once again, I've got it.  To note, there's a remembrance tied in here, as my mother the legal secretary and southerner, world traveler, and lover of New Orleans who was married to a WWII veteran whose theater was the Pacific, yes she was an avid Grisham reader.

Back to the less than upbeat news of the day

Tuesday, December 04, 2018

This dire market...

This will be a brief comment.  Over the last two months, opinions here on the U.S.equity market have been cautious.  It appears that the near term outlook is becoming dire.  Near term is three months, not Thursday or the next few weeks.  This is a time to both sell and buy here, and that is not a usual approach.  I endured and will not repeat all of the gibberish on CNBC today.  The "panelists" could be right, but they all say the same boring things, not to be repeated here. They all play it safe, and are just looking for personal exposure.

I will say few things about what was done here today.  Southwest Airlines was added to as oil prices are coming down and they are primarily domestic carriers.  UPS was sold.  Not a long term position and the Amazon ramp up of their delivery capabilities could have a big impact.  FEDEX has capital gains not factored into this year's tax planning, and they are a better run company so stayed with that.  Two recent positions, one banking and one retail, were sold.  My recent choice to invest in them was based on long ago personal knowledge, and if "Tariff Man" is really on a course  to punish investors with his pride and stupidity, no reason to hold them now, can always come back.  Also added to PYX. Maybe a crazed decision but they announced new cannabis positions this morning, and feel like the chance of some company buying them could be real.  They are cheap, and could be acquired for a relatively small amount that would not be small for existing shareholders, TOTALLY a BET here that I could lose.

Need some Tilray product after that.




Sunday, November 25, 2018

Brief mentions... Gianrico Carofiglio, Vivian Maier, New York sports...

--- Gianrico Carofiglio is an Italian crime novel writer who is a former Mafia prosecutor in Bari, Italy. Translations into English of his three notable books were published over ten years ago.  A new one, "The Cold Summer" has recently arrived here.  The deal with Carofiglio's writing is that the crime stories, while interesting, can have a routine template. They seem to be just a vehicle for his insights into how people behave, how they interact, and how they deal with stressful situations.  Just simple statements like "The fact is that most obvious solutions are usually the right ones", or "eventually the spouse always knows". and "as he was the senior person, the argument appeared unassailable, nobody felt up to objecting and the matter was settled", or the observation that "one of the unpleasant aspects of waking early, when it isn't yet light, is that you're confronted with you own anguish", all make sense in context of Carofiglio's writing and maybe a reader's individual perspective.  As this is a translation of a writer who has received awards in his home country, it is assumed here that there is more nuance in the original language.

--- "Finding Vivien Maier" is a documentary that was watched last night, courtesy of a find by Netflix.  It's the story of an eccentric woman who became a famous photographer posthumously.  In her life, her profession was as a nanny for many different families.  She never married, and seemed to have few if any close relationships, even with family.  When she died in 2009, a yard sale aficionado and art collector bought a large box of her negatives sight unseen, and began developing them.  He found other buyers from the same sale and bought everything that had been there.  There were thousands of rolls of undeveloped film as well as  many photos that had been processed.  The work compares well to other notable photographers from the 1950's and 1960's.  It is an interesting story with great photographs shown of people and places in New York, Chicago, and from a trip through Europe, Latin America, and parts of Asia at that time.

--- Wanting to be a New York sports fan can be difficult.  With all of the history of sports in this town,  the money that can be behind it,  and the media attention, how can there be teams this year like the New York Giants and New York Jets in football and the New York Knicks and Brooklyn Nets in basketball.  The Giants forgot to have an offensive line, the Jet's heralded the most boring new sport's "hero" Sam Darnold, the Knicks have no leaders, and the Net no stars, or vice versa.  How above it all are the management teams of these franchises, or just out it egos.  Here we get their games on television whether we want them or not. 

At least there is a new episode of Ray Donovan tonight.

Saturday, November 24, 2018

This market, CEO preening, "My Brilliant Friend"...

---The U.S. equity market had a tough week.  The goal of institutional investors yesterday seemed to be to sell as much as possible, but gently in a half day market that would have limited liquidity.  Keep reducing positions without causing a major downdraft.  That worked until the last hour when either margin calls or panicked retail investors let go.  It was not a good finish.

It's been a tough month and a half.  Since the end of September, the S&P is down roughly 10% and the Nasdaq 15%.  The bounce back that investors have become accustomed to is not happening.  Year end tax positioning among some gets in the way of rational investing, and the outlook for tech is clouded by regulatory uncertainty and questions about the consumer appetite for product upgrades in technology.  The implications of the Trump tax cut and its trickle down premise is looking suspect, as it did from the start.

Corporate earnings generally remain strong, but there is growing skepticism about the longer term.  The market discounts future returns, not a hunky dory now.  An increasingly unbalanced global economy is not positive.  Conclusion:  None.

---The latest Bank of America television advertisement is troubling.  It raises one of my most reliable red flags, that of a CEO promoting himself.  This ad begins with the statement "Listening to what matters most" while following Brian Moynihan getting into a cab, riding through Manhattan, his profile looking out, more Manhattan scenes, then the words "grow, innovate, own a home", Moynihan profile again then "The power to make a difference".  It ends with Moynihan getting out of the car and walking into a BofA office building with his voice overlay, "I am Brian Moynihan and I work for Bank of America".

This is solely a recitation of generic positive statements written by an ad agency, and a very personal promotion of Moynihan.  He seems to be a solid citizen but he is no genius.  This type of self promotion usually does not bode well for a company, and in this case may be red flag for the banking industry as well.  When has a downturn in the banking industry been "as expected".  Almost never, but hubris has almost always preceded it.

--- "My Brilliant Friend"on HBO is exceptional.  The portrayal of a point in time(1930's Italy) resonates as accurate and the child actresses are startlingly good.  As in, I like it and must watch for the next episode.

Sunday, November 18, 2018

A few comments...

---It seems here that there is no leadership to this equity market.  No idea here what tomorrow may bring, and that seems to be the case broadly when listening to market talk during the weekend.  Of note, few really smart analysts and investors are talking, and the ones that do appear to be cautious.  Generally that means that they are not positive about near term market direction, but don't want talk down their own existing holdings.  The view here is that there is too much money looking for a home, one that offers the potential for capital gains or an adequate yield.  This is all short term talk but, as has been said before, the long term is just a series of short terms.  With a strong economy right now, will we soon be looking in the rear view mirror?  The debate now is whether global growth is slowing as tariffs, failed cooperation agreements, and chaotic U.S. "diplomacy" are finally having an impact.

---As we approach year end, the solicitations from various charities begins to increase.  They are acutely aware that potential donors are looking at their capacity to give, and their tax accountant's ability to improve their tax position.  It's tax avoidance really, but the rules are there to be followed.  Especially beneficial can be the donation of appreciated stock, and it can be a windfall for both the charity and the donor.  So "Doing the Most Good", "Fighting Hate, Teaching Tolerance, Seeking Justice", and other good causes are filling the mailbox, and sending donors back to their records to remember what's already been done.  One received today gave the option of checking the donation box of  $2000, $3000, or $4000, as well as an "other" at least.  Pushing your luck folks, that comes off as beyond presumptuous.

---Today and yesterday, New York resident Andrew Stein has been in the print news and on cable.  It's been a while since this ambitious rich Kennedy wannabe tried to act important.  He never has been, but why stop trying now.  He is much older and has a new rug that can only be called comical, about the only change.  His father's cronies fed him viable issues for years that he would find a way to bungle.  He now heads an organization called "Democrats for Trump", and predicted in a New York Times Op-Ed written with, meaning by, Mark Penn saying that Hillary would be nominated by the Democratic Party in 2020.  Only the NYT would print something by this nitwit, but they deserve a weakness like this that shows up in various ways as they are a New York institution.

Oh well.



Postscript:  Just read a comment on Fidelity's website by Howard Marks of Oaktree Capital, a long time successful fund manager.  The title is "Time for Defense" and he suggests that it is more important now to worry about not losing money than missing opportunities.  That's straightforward at least.

Monday, November 12, 2018

Ugh, equity market has an ugly start to the week... GE's troubles...

Concerns about new Apple Iphone sales volumes being below expectations, a fiasco in Malaysia for Goldman Sachs, and gloom from the new GE CEO all contributed to a significant equity market decline today.  Bond markets were closed for the holiday.

GE keeps spiraling down.  CEO Culp was interviewed on CNBC this morning before the open.  There was one stunning statement that woke up this former banker.  Culp stated that GE had $40 billion in back-up bank lines and they had only dipped into them for $2 billion.  Back up lines are just that, meaning that they are in place to reassure creditors that a company will always be viable as a counterparty and all trade letters of credit guaranteed.  Any dip into these lines is a bright red flag.  I mean, how stupid is the CFO of this company to allow this to happen at all, or was it desperately needed.  Either reason is not good.  Culp made the mistake of talking about the stock price, rarely a good idea for a CEO.

Upon questioning Culp said all existing liabilities are manageable but being closely monitored.  That is code for Long Term Care Insurance, which GE capital was a leader in.  When divesting major parts of GE Capital, the company could not sell a significant part of this portfolio, and is managing it in-house.  The tail risk of this type of insurance is immeasurable, and seemingly always underestimated at GE.  Actuarial tables don't tell the story, as people who bought this type of relatively costly insurance generally had good reason to believe that it would be needed.

GE was once a uniquely successful conglomerate under the egomaniac Jack Welch's reign of terror.  Under Jeff Immelt, all investor goodwill accumulated under Welch was wasted through many flawed acquisitions that kept the attention seeking Immelt in the headlines.  Flannery was a bookmark.  Culp has a huge challenge.  At some point GE will be investable, not there yet.

Apple's news rippled through technology stocks broadly, and recently acquired "winners" here like ON, AMD, and ROKU did not fare well.  This type of activity in technology stocks does not bode well for Asia markets tonight.  No projections here, trading some but mostly just watching.


Thursday, November 08, 2018

"These Truths", Jill Lepore

If New Yorker writer Jill Lepore was not already viewed as prolific, now case closed.  This tome, subtitled "a History of the United States", clocks in at over 900 pages including the index.  This is not something that one would read on the subway or even in bed.  It's too heavy, in weight that is.  This is a project that seems based in what some might called inclusive history.  While undertaking the task of truth to  history, this retelling makes a clear point of highlighting the role of women, immigrants, and all minorities.  It is welcome reading, although at times it seems a bit forced as a chapter might be interrupted at length with a digression that is deemed inclusive.

At times it just reads as history, as other times it reads as history told with a perspective on today's events.  It is filled with current colloquialisms, nuances, and phrases.  Compared with traditional history books, from the Beards, to Spengler, Toynbee, Keegan, and those written as college texts that combine the efforts of many historians under the auspices of a publisher, that is a huge difference.  It does make the writing seem personal, which is not at all bad.

Reading the book piecemeal so far, the last chapter that takes the reader to the present, "America, Disrupted" is exceptional for the most part and the chapter "Efficiency and the Masses", that details the Gilded Age, Industrialization, and the lead up to World War I is packed with interesting details that were new here, or at least not remembered.  "The Face of Battle", a chapter about the Civil War, falls short from this perspective, still thorough but somehow not much new.

It may be a month before this book is on the bookshelf, as other more focused books will be welcome breaks, such as "The Library Book", now started, by Susan Orlean, yet another New Yorker writer.  And then there are the newspapers daily... some days are better than others.