Thursday, August 17, 2017

Stocks fall as unhinged Trump finally rattles markets

The market has been incredibility resilient this year in the face of Donald Trump's rants and tweets, but today it noticed.  With the collapse of two business advisory counsels of CEO's and Trump's inability to stay on the message of his economic plans, the skepticism that he can deliver anything to investors of consequence is growing.  If there is no tax plan and no infrastructure spending plan, and with anything of consequence in healthcare already sidelined, the administration is in trouble.  Trump is more focused on trading insults with real and imagined adversaries than in governing.  His reaction to the events in Charlottesville has been disheartening even to many of his Republican supporters, and an embarrassment to this country in general.

Among stocks followed closely here, only Pepsi, Berkshire Hathaway,  Boeing, McDonalds, Proctor and Gamble, and Costco escaped with just minor losses.  Otherwise it was a broad and significant sell-off for a day.  Without any major economic event as an accelerant, it is expected that equities will steady tomorrow but that the Trump dump will be in place for now.  If he cannot calm the ugly Trump down, the decline could continue in a meaningful way next week.

Kenneth Frazier's notable courage

Before the moment completely passes, it is appropriate to recognize the first CEO to demonstrate backbone by action and not just words and confront Trump by resigning the American Manufacturing Council after the President's heinous remarks about the Charlottesville events.  Early Monday morning, Kenneth Frazier of Merck stepped into a spotlight that his Board, his employees, and his clients would share whether they wanted to or not.  He could not know at the moment he did that what the response would be.

Almost immediately Trump went to Twitter and blasted Frazier, apparently thinking that this prominent black CEO was out there on his own, wink, nod.  He was not and others followed slowly at first and by Wednesday the Council was collapsing, as was the so-called Strategy and Policy Forum.  Steve Schwartzman made an effort to salvage what he could for his long term business contact Trump, but being the amoral realist that he is quickly gave up and reported the facts to Trump.  Trump then pretended to disband the councils of his own volition.

Frazier had a stellar background of legal public service before his business career, and he took a risk that could have been magnified by his background.  He was quickly and unequivocally vindicated.


Postscript:   It should be noted that Elon Musk resigned from the Strategy and Policy Forum earlier in the year, in a less charged atmosphere, due to Trump's withdrawal from the Paris climate accords.  Who can forget seeing Trump outside of the White House reading a script written by Bannon about which he obviously had no understanding, as the withdrawal was announced to a group of sycophants on the lawn.



Wednesday, August 16, 2017

Generals in place

When Trump began appointing military generals to top positions in his administration, the first reaction was that doing so just bolstered his maladjusted macho ego.  To have these experienced senior officers reporting to him was proof of his omnipotence perhaps.  Their qualifications for the nuanced responsibilities that they were given was hard to discern.

Now with General Kelly as Chief of Staff, General McMaster as head of the NSA, and General Mattis as Secretary of Defense, it can be viewed as reassuring.  Their military training and ingrained obedience to chain of command had been a worrying aspect of their appointments at first but now they could be, it is hoped that they are, a formidable layer of restraint for an embattled President.

While North Korea is off of the front page for a day or two, that issue has not gone away.  Should Trump decide to take the focus off of the self-inflicted chaos that keeps building on the domestic front by creating a crisis or worse in Asia,  it is expected that the generals will provide much tougher conversations than Ivanka, Jared, or Melania.  Whether they will need to step in and stop the President from some rash move is unknown, and they will certainly try to keep everything behind the scenes.  With these generals, there will be no hysterical "I am in control" speech as delivered by Reagan Secretary of State General Al Haig.

Their presense gives the impression of adult supervision, and hopefully that thought is correct.

Tuesday, August 15, 2017

"Sonny Boy" by Randy Newman

For those who receive "The Daily" e-mail from the New Yorker online, today's August 15 edition has a treat.  It's a music video of a song from Randy Newman's new album, "Dark Matter".  After watching the news, it lightened things up, and it's so nice to hear the familiar Randy Newman again.

Scaramucci and Colbert

Anthony Scaramucci's decision to be on Steven Colbert's show last night was an expression of his extreme confidence, cockiness, or recklessness.  While he noted at the outset that Colbert had promised that there would be no "gotcha" questions, Scaramucci was quietly humiliated by Colbert's straightforward approach.  It is unclear if Anthony realizes what happened, and maybe that attribute has been a is key to his success.

When Colbert asked direct questions about Priebus, Bannon, and issues related to his brief tenure as communication director, Anthony would begin to equivocate.  Colbert would interrupt and ask "but what would the Mooch say?"  Then a direct answer would follow.  Anthony made sure that he was known as the Mooch from the outset when his mixed reception at the start from the audience led him to say that those must be "Mooch" as opposed to the few boo's that they were.

Bizarrely Scaramucci engaged in a back and forth about his remark to Ryan Lizza that Bannon was hiding in his office "sucking his cock".  Colbert questioned whether Anthony could do that and how. It was an odd moment in the extreme with Anthony looking perplexed that Colbert could ask that, but then came back with an Eddie Murphy quote that showed he was prepared to deal with the comment. The quote --- "if I could do that I would never leave the house."

The worst moments of the Mooch's performance were when he praised Trump as a compassionate person, a wonderful person, in a tough situation as he had given up his life of luxury to be President of the United States.  Anthony surely thought he could schmooze his way through this interview, and some may think he did.  In this day and time when Donald Trump became President, it could be that Anthony was right.  He got that attention he wanted and among supporters the cred for showing up.

On the other hand, he could have been viewed as putty in Colbert's hands.  When asked at the end if he would encourage other Trump administration members to come on the show, he emphatically said yes.



Postscript 8/16   ---  On reflection, and knowing Anthony's resilience, could he like all of those who surround Trump have actually been speaking to Trump through his appearance on this program?  Will he be back?

Monday, August 14, 2017

Vice News on Charlottesville

The Monday Vice News tonight focused solely on the weekend events in Charlottesville, Virginia.  The continuity of a straight half hour of reporting was a relief from the piecemeal news accounts of the last 36 hours, both because a story was told and because it needed to be a program with no repetition.  Most of the news to date had really been less than ten minutes of footage.

There were interviews with a couple of rigidly alarming extremists, right wing zealots with guns.  It is a given that there are crazies in the white supremicists ranks, but as leaders proud to be interviewed?  The most interesting take from the Vice News program after everything that had already been digested here was how anti-semetic the thugs were.  It was clear from the outset that they were vehemently anti-black, but only through their constant chants could they underscore how much they hated Jews, blamed Jews, for whatever their miseries are and slights they have experienced.

Those interviewed professed in convoluted ways some sort of world views, and the best comparison to whatever they were trying to say was neo-Nazism.  They really seem like extreme fringe groups that should be monitored.  If they are not on the fringe, we have big issues.

Sunday, August 13, 2017

Michael Lewis writes in Vanity Fair about Trump's attempt to dismantle a cabinet department

In the current Vanity Fair, September issue, Michael Lewis is given 12 pages to detail what's going on at the Department of Energy under Donald Trump and Rick Perry.  It is a well done and incredibly important article, but for starters it must be said that neither Trump nor Perry have the slightest idea what they are doing.  That probably did not need to be said.

From this perspective Lewis's piece is a thorough description of the responsibilities of that department.  The extent of what falls under the umbrella of Energy is extensive.  Everything from protecting the electrical grid, guarding the nuclear arsenal, assessing the nuclear threats of North Korea and Iran, plus of course the important but in comparison more mundane regulation of oil, gas, coal, wind, sun, and water power sources.

There was almost no effort at a transition under the Trump/ Perry "leadership". Seven months in, the department is hugely understaffed, new appointees have few qualifications for their jobs, and the professional staff is either leaving or hanging on with low morale. The extent of the damage will only be known in a crisis and no knowledgeable observer wants to see that.  The exact title of Lewis's article is "The 5th Risk".

While what is going on in this department is frightening, this could be an example of what is happening in many departments.  Appointments in the State Department, even ambassadorships and senior consuls, have been taking place so slowly that it is unlikely that many positions will be filled by year end.  The only department that most agree is up and functioning is the Justice Department under Jeff Sessions as it aggressively cuts back on civil rights for many Americans.

Reading Lewis's article is suggested...

Sunday, July 30, 2017

A look at the past...Greece and Istanbul 1982, Part 1

In late 2016 a daughter asked that I write about some family history.  On 10/28, 10/29, 11/6, and 12/8 of last year that was done, but there's much more to tell about the days before children.

As a relief from the news of the day, this looks at a trip and by Kathy and me to Greece and Turkey in 1982, following a trip to Paris the previous year described in the 11/6/16 post.

We flew into Athens on a late summer day, had dinner in Piraeus after being almost assaulted by multiple restaurant employees trying to drag us into their restaurants as we walked through the harbor.  I did not remember that experience from 1971, but after all I did not look remotely prosperous at that time.  We had a wonderful meal.  The next day we did the usual and startling sightseeing and museum touring, plus Kathy did some jewelry shopping at a store near our hotel where the local silver jewelry enchanted her and was not expensive at all.  Without the pubs of London or the cafes of Paris or the chairs in shops, I stood outside and wondered why I was there.   The next day we took a short flight to Crete.

As I understand it, Crete and the rest of the Greek Islands are today overwhelmed by Brits on holiday, an unattractive phenomenon known especially in Greece and Spain.  In 1982 that was not an issue. Crete was a phenomenal place to visit.  We landed in Iraklion and found a nice small hotel with a fine restaurant.  Ordering dinner is when we realized that anything on this large island was affordable, as in cheap, by the standard of the American dollar at that time.  I am embarrassed to say now how much that freedom meant to me.  For those who know my background they know it was totally  new.

Renting a low mileage light brown Datsun the next morning we headed out.  First to Knossos, the supposed center of a great Minoan civilization that was viewed by some as the root of all spiritual knowledge or others as the lost civilization..  Nice ruins, no reawakening.  I adored seeing the place.

We drove east and stopped first in a village on a cliff over a beach.  The consummate shopper Kathy was overwhelmed with the shops of art objects.  Me too.  I bought a woven painting that was incredible and upon arrival home was promptly given to Kathy's sister by her mother... I remember that... and it is probably in a basement storage areas somewhere.

After that was the peaceful beach in Sitia in the east and then two days in Ieapetra, a beach town of sorts where as always our accommodations were fine, a marble encased place that was the only one like it.  It was strange but we were tired.  Our room had a large second floor balcony overlooking the sea.  We went out one night to one of the recommended restaurants in town where Kathy's fish was fine but my decision to order the most expensive steak was ruined when halfway through I learned that it was horse. Tough but ok with sauce.

All of this travel was done with a map but that didn't  mean that the red line on a map meant roads. In that part of Crete then it meant dirt and rock paths, sometimes fording small streams.  That Datsun was a workhorse, so to speak.  We have a wonderful photo of Kathy sitting on a rock over a great view on one of those paths.  I always thought that we were on the right path or else didn't care at all whether we were or not, and Kathy just trusted this travel style that she had never experienced.  I dealt with her shopping expeditions and expertise in the artistic and she dealt with my willingness to get lost.  Foreboding what...

More to come...




Saturday, July 29, 2017

McCain, and the Republican Health Care bill collapse

In fact, there were more than a handful of Republican senators other than Collins and Murkowski who had serious problems with the proposed health care bill but lacked the fortitude to cast a deciding vote.  Would anyone?  John McCain returned from his surgery and on the initial vote said yes to a continuation.  On the deciding vote despite "arm twisting by his peers, Vice President Mike Pence, and even President Trump could sway him"(NYT quote) and he voted no.  That did it.  Even Pence and Trump, Pence the mindless and Trump the malicious, couldn't put Humpty Dumpty back together again.

The big story is not the backbone and integrity of McCain, but that is one for the record books.  The real story is how spineless much of the Republican Congress is in the face of the bully Trump.  Who wants to risk the wrath of someone who has no limitation on what he might say about a fellow party member and who would clearly put at risk the state focused priorities of a member of Congress. Witness the attempt to intimidate Murkowski on the eve of the vote with threats from Trump's interior secretary about programs in her state.

Trump is projecting the demise of Obamacare as some of its programs collapse, and they will if there is no support of its funding.  Many Americans will be hurt while Trump will watch and gloat.


Friday, July 28, 2017

Scaramucci meltdown

In the post here on Tuesday, the ego fueled meltdown that Anthony Scaramucci had in an unsolicited conversation with Ryan Lizza of The New Yorker was not anticipated.  Less than a week into the White House Communications Director job he seems to have imploded.  While, as mentioned in the earlier post, I had at times regular neighborhood contact and in more recent years around town "hellos" occasionally with Anthony, I have not seen him in several years.  I clearly do not know him as well as I thought, or he has evolved in a strange way.  His background is different from Trump but his current behavior seems identical.  He is delivering the Trump message in a crude way that Trump himself would hardly dare to do in public.

More to come....

Wednesday, July 26, 2017

Equity market's smooth sailing for now...

There has not been much of note going on in the equity markets lately.  Still, watching each day is a mostly enjoyable habit and a requirement for responsible management.  Other than the ongoing modest slide upward, there is no overall market phenomenon underway.  Individual stocks can trade sharply up or down based on news specific to them, and industry groups, like financial firms recently, can move in tandem, in their case upward.

GE is one of the most notable stocks as it is a state of sustained languor.  Recent advertisements for the firm on national television have heralded the diversity of its workforce.  With a firm this size that would by necessity be true and seemingly that is all the Immelt controlled company can come up with.  He desperately needs some legacy.

The fate of individual stocks can be demonstrated of Boeing today and 3M yesterday.  Boeing reported unexpectedly strong results and is up 10% today, an almost unprecedented move for a mammoth firm.  3M's results yesterday met analyst expectations but the outlook was not a positive as expected, and the stock declined 6%, another big move for a large firm.

Those examples suggest that all is not as easy going with this market as it appears on the surface.

Looking for new investments is always interesting, but with the market's levels now, it is challenging. Time for a small cap dive.

Tuesday, July 25, 2017

The White House Communications Director

Was there formerly a White House Communications Director?  Maybe it was a behind the scenes management post but that is certainly not the case now.  Since the announcement that Anthony Scaramucci has been appointed to the role, it immediately became high profile.  Coverage of the appointment and of Scaramucci personally has been more widespread than for most of Trump's cabinet members.  Mike Pence seems to have vanished, which arguably is not much of a change, and a new man is in town who "loves Donald Trump".

There is no need here to detail Anthony's career, his many ups and few downs, his time at Goldman Sachs, his years starting and then selling a private banking focused hedge fund, his fund of funds success, and his SALT Conference which began seven or eight years ago in Las Vegas and to many became the most important hedge conference of the year.  All of this has been in major publications in the last week.

This has been watched closely as in the mid-90's Anthony and his family lived on a block of modest houses with, on average, 60 by 100 lots where we also lived at the time.  He was clearly an ambitious guy but also a gregarious family man.  The block was L shaped, with a stretch of approximately 10 homes on each side and then took a direct left where several more homes were located before it funneled into a busy main town road.  In effect the street was a modified cul-de-sac where all families with children knew each other well.  A basketball goal on a telephone pole faced the street, games were played there, small kids rode bikes, and the sidewalks and stoops were places where people chatted.

Anthony joined in and was especially respectful of some of the senior neighbors.  He would call his children at dinner time and at times yell "it's tortellini tonight", or whatever Italian food they were having.  Sounds idyllic in a way, and in certain aspects it was.  I would often see Anthony at the nearby LIRR station and he would always say something positive about the company that I represented, and then say that his fund owned it.  He never pressed me for information, not in the least.

Anthony and his family left that block at around the same time we did in 1997, he to a newly built unobtrusive mansion in a nearby neighborhood of expansive lots, but his was more or less invisible on a short cul-de-sac with many trees.  We moved into an existing house up the hill in the same direction.

To say that I am appalled by what Anthony is doing now is an understatement.  His political ambition had been apparent for years(he was an Obama supporter and fund raiser in 2008) but this is startling.  At the same time it is not surprising.  He is irrepressible.  Seven or eight years ago he self published a memoir of his Wall Street experience that wasn't half bad at times but became a bit too self adulating as it developed.  The local Italian deli with the best hero sandwiches in our little town had the book behind the counter next to a book by LLCoolJ and one about Boomer Esaison, other local residents.  At the time I wondered how Anthony showed up there.  Maybe it makes sense now.

Media reports suggest that Anthony and Trump are similar and maybe their careers and ambitions are to some extent.  As a person there is no comparison of the repulsive hostile oaf that Trump is to Anthony.  Unlike Trump and Bannon, crude, misogynistic, and hateful talk is not part of his vernacular.  Unlike Trump, Anthony started from scratch.  Whether Anthony's ambition and his disappointment over Obama's constant anti-Wall Street agenda lead him to facilitate Trump's poor agenda is a worry, because he could.  He is much more talented than most of the hacks and ideologues that surround Trump.  That makes Anthony either a hope or a substantial danger.

Next up, Scaramucci vs.Bannon.  One will fall.


Thursday, July 06, 2017

Trump to meet with Putin

Today Trump visited Poland and raised the issue of whether the West the "will have the will to defend our civilization."  This is a text obviously written by Steve Bannon to promulgate his nationalist agenda in a way that would appeal to Trump's macho needs.  Trump found time to bash CNN, defend his retweet of the CNN body slam video, trash NBC, and tell the world about "fake news".  Is he a class act or not?  Taking his ego on the road hardly fits in Air Force One.

Putin must relish his opportunity to meet with Trump.  There is no downside for him and every chance that he will tip Trump into making boastful statements plus declarations of his camaraderie with Putin and their shared ideals.  And that's just for starters.  Any actions that Trump may take related to North Korea will almost surely, hopefully surely, be restrained, yet the President will wave his big stick anyway with his small hands.  Don't hold your breath for any Putin compromises on Ukraine, Crimea, Syria, or for sanctions against North Korea.  Whatever Putin says, that Trump will use as a way to showcase his foreign policy chops, will not turn into any action.  If Trump even dares to bring up election tampering with Putin, he will apologize for doing so even as 17 U.S. intelligence agencies unanimously agree that it happened.  Trump said today that "nothing has been proved". That is certainly a supportive statement?

The mainstream press will rush to find away to be "balanced" in their coverage.  That Trump is a complete embarrassment to our nation will not be said.  That Trump is a danger to our way of life cannot be said.




Tuesday, July 04, 2017

"The Long Haul, a trucker's tales of life on the road"

This is a first book by Finn Murphy, who has been a long haul moving van trucker for many years.  At a little more than 200 pages and no deep content it is a quick read, and has its moments.  At times the thought occurred that maybe Murphy or his publisher looked at the amazing success of the thoughtful but somewhat pretentious "Hillbilly Elegy" and thought why not have another educated guy write a book about the working class life who actually dedicated to doing that work.

Murphy's "The Long Haul" does not dwell on a theme but puts down the tracks to consider the perspective of that life.  He writes "I had brilliantly managed to select a career where frustration was the norm...I had been angry so long I didn't know how to feel any other way".  As an aside he notes, "they say a well-balanced Irishman is a man with a chip on both shoulders."

In fact, Murphy enjoys the trucking life yet he doesn't subscribe to what he views as the generally accepted reputation of the profession.  "I'm dispatching a  couple guys from fucking Saskatchewan and they talk like the Dukes of Hazzard.  What is that?" says one character.  He follows saying, "They're perpetuating a myth... a way of looking at the world that doesn't exist, never did exist..."

That's one aspect of the book that is interesting but is by no means brow beaten into the reader. Overall the book is primarily a look at the life of the people who drive those huge trucks on the interstates, smaller highways, towns, and anywhere that someone is moving.  It is an unusual topic that mostly works.

Monday, July 03, 2017

Starz Cinema delivers

It is Channel 347 here and one of the Starz movie channels.  It often fills out evenings.  Tonight the film "Chocolat" was seen.  Released in 2000, it was obviously one of those films that came out during frenetic work years that were unhealthy in many ways as well as limiting as time to see movies.  With Juliette Binoche, Judi Dench, Johnny Depp, and others, it was a charming story set in a French village in 1959.  The setting, the music, and the acting all worked.  Last night there was the film "Elle" with Isabelle Huppert in a somewhat disturbing yet absorbing thriller.  It was directed by Paul Verhoeven and had the kinks to prove it. Huppert was special.

Both nights came after relatively full days with, as always, a heavy dose of reading and no television other than news.  Films help round out the day and 347 often does the job.  Now a half hour to read the current book and then sleep.


"Seeking New York"

The subtitle of this handsome paperback from Rizzoli is "The Stories Behind The Historic Architecture of Manhattan --- One Building At A Time".  There are  more than 50 buildings pictured and discussed, representing multiple areas of the borough from Chinatown to Harlem, Chelsea to Murray Hill, Gramercy to Times Square .  To those familiar with the area much may seem familiar, but as the city is a place where the focus when walking is often just getting from one place to another efficiently and safely, some of these building could go unnoticed.  There is simply too much to see.

This book is not a tour guide, but it could be helpful to those interested in slowing down and noticing detail.  There are hundreds more buildings that could have been chosen to represent the diversity of the city's architecture.  This is a perfect start for those with interest.  The stories attached to each building range from rambling historic gossip to tales of historical importance.  This is a book that can read piecemeal, like an attractive book for an end table that any visitor could pick up.

A building very familiar to us is one of  those featured, the Edward Mooney House at 18 Bowery.  It's nice to see.

"American Kingpin", a fascinating story tediously told by Nick Bilton

Among the taglines for this book are "The unbelievable true story of the man who built a billion dollar online drug empire from his bedroom --- and almost got away with it" and "The Epic Hunt for the Criminal Mastermind Behind the Silk Road".  The book is written in short chapters of three to seven pages.  At first the book flows well and focuses on Ross Ulbricht, a young man, with strong libertarian views, from Austin, Texas, who created the deep web bazaar for drugs with limited expectations.  As it grew he assumed the pseudonym The Dread Pirate Roberts and the momentum of the site, Silk Road, was unstoppable.  The ability of the site to exist more than two years and not penetrated by or even known by law enforcement speaks to the internet's many tentacles that remain untamed.

As the book develops more characters come into play, most from law enforcement.  Bilton attempts to turn these agents into interesting people like Ross and his girlfriend Julia, but they do not seem to be anything but normal hardworking people.  Trying to turn minor quirks and eccentricities into compelling characters is not easy to do, or to read.  While the accomplishment of writing any book and having it published is always viewed positively here, the writing is not too terrific.  Bilton's observations about life are mundane and familiar, not insightful.  His efforts at a literary style as the book develops stick out like a sore thumb.  Repetition from tiny chapter to the next is annoying.

Yet Bilton had interesting material and the first half of the book works.  He could not sustain it as the tale evolves.  It IS a fascinating story of our time and this book is worth checking out from the library but not a place on the bookshelf.

As to Ulbricht, he was caught, tried, and sentenced to life in prison.  None of the crimes he was convicted of were worthy of a life sentence.  Added up consecutively they are much more than that. While not tried for murder or conspiracy to commit murder,  none of which actually occurred even as agents for the DEA, Homeland Security, the Secret Service, and FBI faked false choices for Ulbricht to make that showed purpose if not action, there are some who think that the life sentence is too much and was handed down based on the entrapments planned rather than evidence.

The lead agents for the DEA and the Secret Service both were convicted  of stealing money from the Silk Road site which they had penetrated, about $750,000 each separately done, something they thought would not be noticed.  There were other questionable actions by law enforcement.  The future may hold some hope for Ulbricht, a former Eagle Scout.  In any event he is looking at a long stay in prison.

     

Friday, June 30, 2017

"Herb & Dorothy", a film worth watching

This documentary from 2008 was watched last night, and it was charming.  At times it is wondered whether other people with my background, proclivities, and interests have already seen films, read books, heard music, and discovered television programs that are only found here belatedly.  My relative isolation at times is wearing.  Yet, like last night, it is so rewarding to find something completely unexpected.

For those not familiar, or in my shoes until yesterday, Herb and Dorothy Vogel were art collectors who accumulated a collection of modern art of the minimalist and conceptual variety that was astonishing.  That he was a night time post office mail sorter and she was a librarian did not deter them from their life long shared interest in collecting work done by artists that they often found in the early stages of their productivity.  The Vogels lived in a one bedroom upper east side Manhattan rent stabilized apartment that was eventually somehow stuffed with thousands of paintings and other iterations of art.  They were hoarders with a distinct purpose and an interest.  Narrow pathways were the only open space in their living areas.

They eventually donated the majority of their collection to the National Museum in Washington, as well as giving portions to smaller museums in all 50 states.  The film was pleasant to watch.  The interaction between the Vogels and various artists was interesting.  Their relationship with each other was enviable, and even at times reminiscent.  Their dedication to art without any motivation for profit could only be from another era, but it was not.

Thursday, June 29, 2017

Tech vs. Big Banks---market slides as two industries diverge

Technology stocks did not fare well today.  That's fine.  They have been on a tear this year, so seeing Apple, Google, Facebook, Adobe, Paypal, Microsoft, and the QQQ decline between 1.5% to 2.5% today could be easily absorbed by investors, as opposed to traders.  It's probably a healthy sign.  Straight lines up can lead to straight lines down.  It is not anticipated that this is the beginning of a longer term retrenchment but there may well be further more modest declines heading into the weekend that will effectively end on Tuesday July 4th for many folks.

Bank stocks, especially those of the biggest banks, rose materially with, as examples, Citi and Standard Chartered up around 3% and Wells Fargo, Bank of America, and JP Morgan up close to 2%.  This is a one-off jump, as expected positive regulatory stress tests results will free up banks to buy back more stock and/or increase dividends.  Tomorrow in fact may see the excitement about that ebb.

Stocks in general did decline today, with some non-tech, non-bank outliers.  Visa was down around 2% and Kimberly Clark declined almost as much.  They have been good performers but action there needs to be looked at for understanding.

Before a holiday weekend, it is possible that there will be a broad defensive decline. That type of action has happened at times in the past.  That said, no fireworks are expected, at least in the financial markets.

Is all of that wishy-washy enough?


Wednesday, June 28, 2017

An unusual contact after 45 years

Yesterday an e-mail was received notifying me that there was a comment added to a post published here on January 11, 2016.  That post had meandered into a mention of Camp Carolina, where I was a counselor and tennis instructor in summers from 1968 to 1971.

It was an interesting surprise. A camper who is not clearly remembered had found me, and sent a note saying that his sons had been camp counselors from time to time and he used me as an example of the good influence that they could have on their campers.  Through Google it was found that he was now a 58 year old pastor at a Presbyterian church in Oxford, Mississippi.   How nice.

Tuesday, June 27, 2017

Kroger's dilemma

This morning while doing a few exercises, very few, I happened to see an interview with the CEO of Kroger, Rodney McMullen.  New to me, he is a native of small town Kentucky and a U.K. graduate, and has been a lifetime employee of the grocery company headquartered in nearby Cincinnati.  It did not look as if he relished this interview, in the least.

Kroger's stock has dived in the last two weeks from $30 to $23 as a result of a reduction in earnings guidance one day followed by the announcement of the Amazon acquisition of Whole Foods the next day, a double whammy that they could not have expected.

CEO McMullen said that he was focused on the long term and on the customer.  According to his commentary, virtually everything about Kroger was "great", even "incredible" in a few instances, and that the company was "proactive" on all fronts.  He noted that they had been in business for 130 years.  He did not answer any of the questions asked about the issues related to the new shape of the competition.  Clearly he stayed on a weak script and gave no evidence of being a humanoid.  That gave the impression to some that he was the product of a rigid corporate culture.

The company does have a credible following with three of its top shareholders being the respected discretionary investors Capital Research, Fidelity, and Janus.  That's impressive in these days of dominance by huge index funds investing in large companies. There actually must be some good management at work there since my last visit to one of their stores in hometown Virginia years ago. Unfortunately McMullen did not inspire anyone and his view that everything was "great" suggested that nothing could get better to some observers.

Then again and perhaps fortunately, it will give opportunistic investors a chance to evaluate the stock and decide if they can step in a at "great" price.

Saturday, June 24, 2017

A concern that is bigger than Trump

Seeking the attention he desperately needs, Trump went to Iowa on Friday for a rally.  It was no different from his campaign last year.  The audience was his, they were into his rants, they enjoyed his assaults on the media, they reveled in his attacks on the Democrats and anything that popped into Trump's mind.  The fact is that they enjoy the thought free and free theater.

The people that are enthusiastically at these rallies do not represent a majority of Americans, but they may represent a bigger percentage of people obsessed with one intuitive cause, however difficult to articulate, than any other block of citizens.

Are they more important than Trump?  Could this amorphous group  metastasize when Trump inevitably self-destructs?  Those are questions that need attention by smart people not on cable.

Saturday, June 17, 2017

Amazon and Whole Foods

Everything that can be written and said about this acquisition is probably already out there in the media and blogging world.  Two cents here...  it IS a big deal, but it should not substantially affect Walmart and Costco.  Why?

Walmart is by now a global company that is growing.  When a friend is vacationing in Mexico and mentions walking to Walmart to shop that is not trivial.  Walmart's distribution system is more extensive than Amazon and more local.  Costco is a unique experience, a place that is known for unpredictability as well as value.  The stores are destinations, not routine grocery outlets.

Target is more in danger from the combination as their stores have lost their once unique cachet, no matter how hard they have tried to recapture it.  The various "dollar stores" could be at some risk as well.  With all of the talk and reality in the market of retail contraction already,  this transaction was timed to get attention.  It did.

Watching golf

There were times when watching golf on television was somewhat entertaining on a lazy day.  That is seemingly no longer possible.  These anonymous chunky white men in their similar apparel with no apparent emotion are beyond boring.  It may be that trying to watch today before the closing holes on the final round is flagging the enthusiasm here, or it may be that golf is only an entertaining game when actually being on the course playing.  It can be said with certainty here that physically being at a tournament and watching is the ultimate torture, but in the past lying on the sofa and watching was relaxing.  No more.  Now it is just irritating.  It is on in the den now with an aide choosing to watch and care for K.  At least the volume is low.

Wednesday, June 14, 2017

Equity market too stable

It's hard to trust the U.S. equity market now.  That's not because there is any distinct trouble visible. The issue is the ongoing creep up that has no catalyst.  This past Friday, some of the major tech stocks and the Nasdaq broadly took a significant hit.  By Tuesday of this week all was well although less than half of the decline had been clawed back.  The decline had been accepted as normal, and in the context of the last year it could be.

For example, after years of loving Amazon the company but never finding another entry point since a short stint of ownership in the late 1990's, in early September 2016 I jumped in with both feet.  As of Thursday of last week before the next day's slide, the position was up almost 25% in the nine months since purchase.  How could there be any concern about a decline that had no determinable reason other than an institutional thought that these big tech names had gone up too much in an uncontested way.  Everything else in the market was behaving in a relatively normal way.

That all leads to the thought that the next two days could be interesting to watch.  Are we beginning to move back into the strangely stable market behavior that we have had over the last two months, or is there a reassessment underway that will lead to more volatility.  Today's notable events were weakness in small caps and many mid caps with stability in plain vanilla large caps.  Apple retreated somewhat more, while Walmart, Costco, and Target continued to edge up nicely despite huge market concern about overall retail sales.  They are in fact part of the ongoing reason that niche retailers and mall anchors are challenged.

As always, some pundits tried to turn the rate hike today into news and a Vice News reporter tonight surprisingly painted it as a controversial and ill advised move.  It is a necessary move to try to build some management flexibility for the Fed if a day comes when some unexpected dire event requires the Fed to demonstrate its might.  That's all this is.  There is little major impact expected.

Stay tuned, but in Trump time, sort of like dog years, every day can bring unexpected change quickly.  Somehow it is expected that the next two days will not be boring.






Tuesday, June 13, 2017

The departure of Immelt from GE was overdue

The industrial conglomerate GE is a sprawling behemoth of valuable and productive businesses.  The financial asset GE is a stock that has been a laggard for years.  Jeffrey Immelt inherited a tough situation from the highly regarded, hard charging egomaniac Jack Welch.  He became a custodian of the company more than a disruptive or energizing leader.  His major action was to remove GE from the financial services business but he did so in a way that reduced risk substantially while not creating any significant value in the disposition of those businesses.

Immelt clearly enjoyed his 16 years as CEO.  He became a major public figure and a sought after spokesperson for industry.  He devoted considerable time to public service and to charitable organizations.  Now GE is in need of a major overhaul from the perspective of many shareholders who have stayed the course due to GE's strong balance sheet and healthy dividend.

The new CEO will be John Flannery, a 30 year veteran of the company who has wide business line and international experience.  Is it possible that a hopeful comparison can be made to the succession of Satya Nadelli to CEO of Microsoft three years ago after Steve Ballmer's languid tenure.  Microsoft stock is up 60% since Ballmer's overdue departure.  That is the hope of investors who pushed GE's stock up 3.4% yesterday after the announcement, but backed off more than half of that gain today as Flannery's pure GE persona was focused on.  Can he shake up this conglomerate in a way that creates investor enthusiasm and reinvigorates businesses?  Is GE's capital might required for all of its huge businesses, or can some be broken out into still large stand alone companies that are more competitively focused?

That's the question.  A few shares were added here early yesterday to an already full position as a reflection of some optimism.  This change could be extremely positive.  We will see.  

Monday, June 12, 2017

Trump's cabinet meeting --- a bizarre one for the ages

Today, Donald Trump had a televised roundtable of required comments from each of his cabinet members and others attending the meeting.  He began by praising his own leadership and its historic significance, and then "graciously asked" everyone there to comment.  They did, and one at time praised Trump.  Priebus called it "a blessing" to work for him.  Pence, Sessions, Haley, DeVos,  Chao, and Price were each embarrassingly obsequious.  In fact, the unanimity of the group, many of whom were "thrilled", "honored", or "privileged" to have the leadership of Trump, was astounding.  What a surprise!  Only one member of the cabinet, one, maybe McMaster but not sure, said that he was benefiting from the team he inherited.

Maybe Trump is running the country like a business.  In 2001 when the company that I worked for was acquiring another company at a price that made me cringe, the Chairman decided to go around the table of executives and ask everyone attending what they expected the stock price would be after the deal was announced the next morning.  The stock was at $55 that day, and the Vice Chairman to his left who knew better started by drawling that it could go to $100.  Around the table the comments were exceedingly positive with only a few voicing some mild caution as they looked for only a small gain at first.  When my turn arrived, reflecting my less powerful role, I said that "we may not see the benefit immediately" and no more.  My boss the CFO followed and knew my extreme discomfort with the price.  She tried to echo my concerns with low key and politically cautious commentary. When the stock opened the next day it immediately went to $45 and did not reach $55 again for seven years.

That was then and this is now.  The dynamic is familiar.

Sunday, June 11, 2017

Sunday dinner, a melange from the frig

Tonight's meal will be a mixture of good food, some leftover and some purchased on Friday.  There will be a side order of Gino's linguini marinara not touched two nights ago, with three veal and pork meatballs from Cippolini Pronto, all with some Rao's pasta sauce added.  Microwaved on medium heat, longer but better.  In addition there is teriyaki salmon from North Shore Farms that is a staple of our diet weekly.  From last night's Pita Station dinner there is Greek rice and grilled vegetables, as well as a tomato, beet, feta, corn, and walnut salad that is large and never finished in one night.

Kathy will prefer the rice to the linguini, but will certainly try the meatballs as they are made her way. Pasta will be my focus for better or worse, and the meatballs will be my major source of protein as opposed to the more healthy salmon.  There's plenty of that for tomorrow.

That's an update from here that does not mention Trump...   darn, he slips in.

Wednesday, June 07, 2017

Comey's testimony tomorrow --- live television event

Former FBI Director Comey's testimony to the Senate Intelligence Committee will be widely broadcast tomorrow beginning at 10am.  While some of the media and political commentary of late has likened the current investigations into Trump's clumsy attempts at obstruction of justice as similar to Watergate may be exaggerated or at least premature, the attention that this hearing will receive is a reminder of the days in 1973 when a congressional hearing was television that had to be watched by many.  It will be interesting to see the tally of viewers during the panel.

It will be necessary for viewers to choke through the self serving questions posed and commentary made by some of the various Senators on the committee.  This is clearly their chance for national exposure, and rarely has anyone accused members of the Senate of being shy when it comes to publicity.  Still, the approach that they individually take will be interesting to see, especially relative to party line adherence and the states that they represent.

Stay tuned.

Thursday, June 01, 2017

Trump's withdrawal from Paris climate accords is now a fact

Decisions made by Donald Trump fuel his need to build his ego and reflect his power more than any thoughts of substance.  Many people know that.  After the usual appallingly obsequious introduction by Pence, Trump first praised his own management of the economy and stock market, as the lawn full of sycophants applauded politely.  Then Trump moved into his Make America Great Again and America First themed campaign comments.

His speechwriters, primarily Bannon it is presumed, had given him a litany of "facts" about the negative consequences of the Paris accords.  The source of these facts was one "institute" of unknown regard, and from whatever grab bag of sources that had been handed to him.   He repeatedly claimed that the largest polluters were not contributing to the accords while the burden largely fell on America.  Have his advisers shielded him from the fact that the U.S. is the second largest emitter of carbon dioxide emissions, after the much larger country of China, and roughly tied for the third largest emitter were India and Russia, both at around one/third of U.S. emissions.  How could his remarks essentially deny this?

After his comments that were mostly a list of either unsubstantiated or out of context claims about the agreement, Trump introduced the improbable head of the Environmental Protection Agency, Scott Pruitt, an unabashed climate change denier.  Pruitt picked right up from Pence's opening, expressing his gratitude for being able to serve the President and his admiration for him.

This was difficult to watch, but it feels like a necessary chore.  Once again Trump may be surprised at the country's reception to this.  He ignored the entreaties of many influential corporate leaders and their voices will be heard later today and tomorrow.  More activism is coming.  The majority of millennials are serious about this subject.  Many will speak up.