Another work week and another calendar month is in the books.
Author: thependulumswings staff
Work Week Nine? Check. Now Time for Beer and Wine.
We Heard You Mr. Cummings.
In the last seven days passion has come to the fore. Robert Kraft news kicked it off as we learned of his passion for massages (cheap ones at that) and women of the Asian persuasion. President Trump (who loves the ladies quite a bit as well) was passionate in his attempt to get North Korea to denuke. Never be afraid to walk from a deal that doesn’t get close enough to your ask, never. Michael Cohen was passionate in his hate for his former client Donald Trump. Maybe he was too passionate as he likely will face additional charges for again lying to the House of Representatives. Elijah Cummings passionately implored America to do better than this!
We heard Mr. Cummings. After a week of too much misdirected, failed, or ill-advised passion we decided to end it on a somewhat lighter note that allows us to forget for a bit all of the above. Sports. Now that’s passion directed in the right direction 24/7. Combatants on any field, arena, or track of competition bring out the love of the game in all of us. Their actions and subsequent achievements are plenty enough to gain a sense of the love for their chosen filed of dreams. But, sometimes their passion spills over into their words as well. Below we offer to you in no particular order some inspirational quotes from some intense sport folks.
1. “You can’t always control circumstances. However, you can always control your attitude, approach, and response. Your options are to complain or to look ahead and figure out how to make the situation better.” ― Tony Dungy
2. “If you can believe it, the mind can achieve it.” – Ronnie Lott
3.“The more I practice, the luckier I get.” – Gary Player
4. “Believe me, the reward is not so great without the struggle.” – Wilma Rudolph
5. “Excellence is not a singular act but a habit. You are what you do repeatedly.” – Shaquille O’Neal
Perhaps Shaq should have practiced free throws repeatedly. But we, otherwise, couldn’t agree with him more. This weekend I am repeatedly going to try to be excellent at having fun. The passion of the real world necessitates the escape to the fun.
Stocks Slump Despite Good Data
Independent Investment Management designed to protect and grow your wealth.
JIM CARLTON
Managing Director
Chief Investment Officer
Friends
This morning’s GDP release was quite a pleasant surprise. With most analysts expecting a number south of 2% for the 4th quarter of 2018, it was a bit of a stunner that we saw 2.6% growth in the quarter. Even more surprising was how business investment contributed to the strong number, as did consumer spending. Along with that surprisingly good news, we got a robust and much better than expected Chicago PMI number. So, though we do seem to be in a bit of a slowdown, and almost assuredly a slowdown in corporate earnings (after the massive increase the past two years), the bulls can hang their hat on the fact that the slowdown sure doesn’t look like a recession- at least not at this point.
Despite the good economic data, stocks slumped, perhaps partially due to the lack of a deal with the North Koreans, but more likely we simply have run up against resistance in the middle of very overbought conditions. In other words, it wouldn’t be bad if we took a breather. For the day, the Dow Jones Industrial Average was down 69 points to close at 25,915. The S&P 500 was down 7 points to close at 2,784. Gold was down $6 to trade at $1,315 per ounce, while oil was up $.25 to trade at $57.19 per barrel WTI.
Stocks have shown signs of fatigue this week. Let’s see how we close out the week tomorrow. Stay tuned.
Have a nice evening everyone.
Jim
Elijah and the Karaoke Singers Hit a Few Low Notes.
Infrequent visits to karaoke bars have all resulted in the same result for this writer. Friends, family, strangers, and bouncers alike all highly recommended that I “keep my day job.” Well, their point is understood to a point. Yesterday, if you had a day job good for you. Those job responsibilities hopefully kept you safely away from a live stream or TV and therefore from watching the U.S. House of Representatives Oversight Committee hearings.
The plea deal guilty Michael Cohen, aka Donald Trump’s decade long plus personal lawyer, took an oath to tell the truth to answer questions from blood thirsty Republican and Democrat Representatives. It was the same pledge he took a while back then summarily lied through his pearly whites.
His 30 minute long (unprecedentedly long some said) opening manifesto only occurred after a vote to postpone was rejected by the majority Democrats. It seems like the Republicans didn’t take too kindly to the prior night’s coaching and prepping session Cohen took part in with honorable reps, Adam Schiff among them. And so Cohen began his 1800 second assault on anything his attorney, Lanny Davis (the Clinton family’s honorable lawyer and confidant) and he could think about to poke, jab, and stab at President Trump. The speech touched on racism, womanizing, Stormy Daniels, hush money, repayments, son’s of Trump, Russian collusion (except he couldn’t call it collusion because of that silly under oath thing), payoffs, Trump Towers, and the like.
It even painted a picture of a Donald Trump picture, er portrait. Cohen orated that Trump instructed Cohen to insure that a straw bid occur at an auction where Trump’s portrait was up. As the last item in the auction a 60k bid secured the piece and secured the fact that it was the highest price paid for any portrait offered. Cohen told us in this rundown that Trump has a big ego. The hearings likely cost taxpayers far greater than 60k a minute. So America paid about 180k to learn that Trump has a high opinion of himself. Quite revealing isn’t that?
Then the fun really began. Democrats asked if Cohen knew of any Trump drug use. They asked if he ever provided money to any woman for “personal healthcare.” Each of the Republican reps spent their five minutes calling Cohen a convicted felon, known liar, jealous lawyer, and scorned “White House employee want to be.”
What substance came of all of it? Little. The Russian collusion theory should now be put to rest once and for all. But it won’t be. Trump reimbursed Cohen over 12 months for silencing Stormy days before the election. Shameful perhaps. Criminal? Nah. Paging the Mueller Investigation. Mr. Mueller what have you?
When it was all done Oversight Committee Chairman Elijah Cummings eloquently and passionately told the honorable committee’s rank and file, Cohen, and a worldwide TV audience that “WE ARE BETTER THAN THIS!” He also asked that we leave our democracy in a better place than we found it. It sounded like he wanted to Make America Great Again.
Was this entire day the first step, launched by the Lanny Davis aided Cohen speech towards finding something/anything to eventually vote to impeach Donald Trump? Perhaps. Perhaps.
And perhaps it is once again a loud, Cummings loud, reminder that votes really, really matter. The American people voted Trump into office in November 2016. The American people voted and enough Democrats won in November 2018 to flip the House to the Democrats. The Oversight Democrats voted to make disgraced and disbarred Michael Cohen their star witness to dig dirt on you know who. It was these same Democrats that voted to not postpone the hearings with the coaching so fresh in Cohen’s mind. If the House stayed red there would have been no Cohen testimony.
Will the next big vote that matters eventually be cast by the House to attempt to over throw Trump? Or will it be in the general election in November of 2020 to vote for or against Trump? Cohen warned us in his closing remarks that if it were the latter that he had concerns that the transition from Trump to “fill in the blank” could be accomplished peacefully. Over Cohen’s right shoulder Lanny smiled. Mission accomplished.
We looked carefully at how the committee conducted itself in its “day job.”
We hope that they can sing.
New York Makes an Amazonian Sized Mistake
It’s old news to you now that Amazon, Inc., try as it might to not, decided to pull the plug on their new New York headquarters #2. A year-long “contest” ended with Virginia and New York both winning the “Amazon please be thy neighbor” prize. But, then New York started acting like a petulant child. The new news is a peek behind the curtain that fascinates.
This link is an open letter from a NY official that details the why of the wow. Reading the details is like watching a train wreck in slow motion. Wow indeed!
Start spreading the news, New York, New York failed to deliver a huge, gift wrapped economic boost to its people.
Just, Just…..And the Beat Goes On.
Last week, riding its post All Star NBA weekend high, nike unveiled its latest technologically advanced, lightest weight, and most breathable basketball sneaker ever. Just Do It. It’s light weight was achieved by removing the entire outsole. With the entire bottom of the foot exposed the air circulation is second to none. It was quite the stage for the reveal as Duke was hosting North Carolina in a great ACC showdown. It was so unexpected just 18 seconds into the contest that Zion Williamson was unprepared for it and he sprained his knee as a result. Duke was so unprepared for it that they got hammered by NC in their own Cameron Area without Zion. We trust that nike was unprepared for it as well.
Meanwhile President Trump was busy selling and building a wall on the U.S. southern border. He was all in joining Nancy Reagan’s early 80’s campaign of Just Say No to drugs. Mr. Trump’s triumph in 2016 gives him the political clout to keep pushing. He says that amongst other things the wall will stop the massive amount of illegal drugs entering into our country on a daily basis. Half of America is so unprepared for it that they attempt to verbally tear it down as it’s being built.
Nike has been riding high due to its Just Do It campaign and great connection to basketball on all levels for over forty years. A wise owl told us that the combined market share of nike and Air Jordan sneaks command a combined 92 percent of the basketball shoe market.
Unfortunately America has been riding high for those 40 years and then some on drugs in spite of Mrs. Reagan’s Just Say no campaign and thousands of DEA and border agents best efforts.
It’s highly likely that the nike blowout on the hardwood will have little negative effect on their sales and gaudy market share numbers. While we write and while you sleep the sewing machines in China and beyond that forgot to sew Zion’s pair are busy 24/7 sewing millions of pairs.
It’s also highly likely that the Trump wall will have little negative effect on the abundant supply of drugs. Global weed growers and pill makers are likely busy 24/7 as well.
If the roles were reversed and the Just Do It slogan was used to help the wall and the Just Say No one was used to try slow nike sales we also doubt that either would have any negative effect. Demand is what it is for nike, and, for very different and unfortunate reasons, for illegal drugs.
Therefore, supply always attempts to satiate demand. Always. Money always wins out. Always.
Sonny and Cher sung the hit song “And the Beat Goes On“ way back in 1967.
And so it does.
Kraft Heinz and Kraft-Food for Thought.
As Thursday, February 21st faded into the evening like week-old roses, who knew what was in store for the dead of winter Friday, February 22nd? After all, on Wall St. what is known as the triple witching hour had already come and gone Friday a week prior. But, the world of business, sports, and life came together and had a triple witching hour all of its own.
Prior to the market’s open Kraft Heinz Corporation came clean about being dirty and bad. Kraft Heinz shocked investors Thursday when it posted a gigantic loss due to the write down of its Kraft and Oscar Mayer brands, slashed its dividend and disclosed an SEC probe into its accounting. Krafty accounting some say. Oh, and perhaps it forgot its most important mission-make tasty products that people actually want to buy and eat. Analyst’s note that increasingly food shoppers are headed to the healthier aisles including fresh, not processed, foods. This financial behemoth could have invested more wisely.
But, the Kraft Heinz revelation disgrace paled in comparison to the revelation that Robert Kraft, owner of the New England Patriots, had a warrant issued for his arrest for being dirty and bad too. Kraft’s name appeared on a list of “John’s” not “Robert’s” that were in trouble for solicitation of prostitution in a Jupiter, FL massage parlor. The Orchid’s of Asia Spa has a menu of services. You can pay by the half or by the hour. Apparently the financial transaction and the physical action is all caught on a police surveillance tape. Krafty cops some say. This financial behemoth could have invested more wisely.
Kraft becomes the first NFL owner to have six Super Bowl rings and one prostitution ring. It’s a dubious record that likely no one will ever break, nor will ever want to break. Perhaps Kraft, like Kraft Heinz, should have made healthier choices.
What is it about the Patriots and getting caught on tape? And, what is it about Jupiter, Florida, sports figures, and tawdry sex tales? Tiger Woods had a bit of trouble in this town a few years back. Town crier, ESPN “NFL Insider Expert,” Adam Schefter tweeted out that his sources state that Mr. Kraft isn’t the only big name that will be exposed (sorry) in this ongoing investigation. Salacious.
Five years ago Warren Buffet’s company bought Heinz. Then Heinz bought Kraft. Buffet rarely swings and misses so, especially with such a great brand name(s).
Roger Goodell is the commish over a great brand name too. It’s the NFL. Like it or not, he might have to take a swing on behalf of the league at Robert Kraft.
Kraft Heinz told Wall St. yesterday that they were guilty. Robert Kraft proclaimed his complete innocence yesterday through his legal team.
We’ll watch too closely like we do all train wrecks.
More Kraft Macaroni and Cheese please.
Done With Work Week Eight. Feeling Great!
You don’t need someone to put a gun to your head to take a couple of days off do you? Enjoy, Monday is just about 60 hours away……..59…….
Stocks Rally To Close Higher For The Week
Independent Investment Management designed to protect and grow your wealth.
JIM CARLTON
Managing Director
Chief Investment Officer
Friends
Stocks rallied today after yesterday’s modest selloff as hopes continue to build that a trade deal with China will eventually come to fruition. This, despite the continued weakening economic data and another disastrous earnings release from a large American icon Kraft Heinz. As we have mentioned, the weakening economy will surely keep the Fed on the sidelines for a while.
For the day, the Dow Jones Industrial Average was up 181 points to close at 26,032. The S&P 500 was up 17 points to close at 2,792. Gold was up $2 to trade at $1,330 per ounce, while oil was up $.25 to trade at $57.21 per barrel WTI.
Despite the less than perfect conditions, stocks posted gains for the week, as has been the case all year long. Every time the bears think they have an upper hand, the bulls sweep the carpet right out from under them. Let’s see if the bulls can keep the bears frustrated next week.
Have a great weekend everyone.
Jim
What Would Alexander Graham Bell Say?
Randall Stephenson, AT&T CEO, answered a wide range of questions yesterday in a back and forth with Maria Bartiromo while appearing on the Fox Business Channel. In ten minutes or so of air time Bartiromo had Stephenson cover his companies finances, outlook, debt, direction, long view of tv viewing, content, etc, etc.
We paraphrase the exchange. Their 2018 acquisition of Time Warner drove their debt up 40 billion to 173 billion last year. No worries he said. Free cash flow from operations would reduce the 40 billion by 75% by year-end 2019 and the dividend was safe. What does Time Warner bring to your business? Content. A 90 year library of goodies. Are you selling CNN? No, It’s an integral piece. Your subscriptions for Direct TV have slid 4 consecutive years, did you over pay for this mammoth division? Not at all he said. It gives us a platform to reach millions and a chance to convert them to our Direct Now streaming services. Plus its original content rich as well. People are getting their content from many other non conventional sources she stated such as YouTube TV, Roku, Netflix. He agreed and stated that the future looked to him like most households would use two or three different services and that AT&T was well positioned to be a provider of the means as well as the content.
In ten minutes not one word was spoken about the origins of the business, aka the phone, nor its outlook, nor its profitability. AT&T is the world’s largest telecommunications company, the second largest provider of mobile telephone services, and the largest provider of fixed telephone services in the United States through AT&T Communications. The phone biz is a cash cow farm. In short the phone biz is paying for the entertainment acquisition and endless repackaging of its content. The race for your money by winning your viewing pleasure is on yet again.
AT&T can trace its origin back to the original Bell Telephone Company founded by Alexander Graham Bell after his patenting of the telephone. One of that company’s subsidiaries was American Telephone and Telegraph Company (AT&T), established in 1885. AT&T eventually established the monopoly known as the Bell System, and during this period, AT&T was also known by the nickname Ma Bell. The former AT&T was the world’s largest phone company.
In 1982, U.S. regulators broke up the AT&T monopoly, requiring AT&T to divest its regional subsidiaries and turning them each into individual companies. These new companies were known as Regional Bell Operating Companies, or more informally, Baby Bells. AT&T continued to operate long distance services, but as a result of this breakup, faced competition from new competitors such as MCI and Sprint. AT&T was in the phone business and phone business only then, but no more.
Speaking of new competition, all of that brings us to this. Is your telephone and television quality of calls, service, and content any better than it ever was? On one hand the answer is a resounding yes. Phone communication is mobile/wireless now. TV is in 4k Ultra HD and headed to 5. The plethora of choices in live programming as well as recorded is head spinning. Watch programming on your phone or on your Ipad or Surface? No problem. You can watch what you want, where you want, on what you want, and when you want to.
On the other hand the answer on phones lies in still too many dropped calls, intermittent call clarity, background noisy air pods, tangled ear pods, low battery, dead battery, and lost chargers. On the other hand the answer on TV lies in much higher costs, satellite bad weather outages, blocked programming, local blackouts, ever-changing content companies, to stream or not, and how many providers do you want providing what you want. Oh, and there is this small matter of passwords.
AT&T has the word “telegraph” in its name for a reason. How far have we come? Very, very. We’ve come from Morse Code to Al Gore’s Internet at your door/car/phone.
How far and fast will these tied at the hip industries yet go? Our guess is very and very still.
WWAGBS? What Would Alexander Graham Bell Say? Our guess is that he would say one or two things. One, he would likely say “I would just like a damn phone that works.” And, two, “Roku this!”