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Testification Tuesday – Let the Impeachment Begin!

Image result for trump i am not a crook"Here we go!

After months of nonsense, the public Impeachment Hearings finally begin next week and, just to be clear, this is just a show for the public because the witnesses have, for the most part, already testified in closed-door meetings and will now be asked to repeat the highlights of their testimony for public consumption.  That's not a knock on the Democrats – that's just how these things work.  

Later on, there will be fresh testimony from people closer to the top of the Trump Food Chain – as well as from people who are, even now, attempting to block being forced to testify so they can (hopefully) avoid being charged as co-conspiritors, enablers or traitors.  During Nixon's impeachment, we had testimony from:

James McCord: One of the Watergate burglers who used to be in the CIA and the FBI.  Security officer for the Committe to RE-Elect the President (CREEP).  McCord wrote a letter to Judge Sirica claiming the defendents had pled guilty under pressrue and committed purjury.  In January 1973, WH Security Liaison Caulfield had told McCord the White House would grant him clemency, money and a job if he accepted his prison sentence and didn’t testify against members of the administration. When McCord relayed he had been offered clemency “from the highest levels of the White House” before the Senate Watergate committee on May 18, 1973, Nixon’s ties to the efforts of the White House to break into Democratic National Committee Headquarters finally surfaced.

John Dean: Former WH Counsel pled guilty to obstruction of justice in Oct, 1973.  Spent 4 months in jail.  Barred from practicing law (as Guilianni will be), Dean became an author and does well as a guest and speaker post-Watergate.  

HR Halerman:  Nixon's Chief of Staff.  A tape revealed the President discussing with Haldeman a plan to have the CIA divert the FBI from the probe because it involved national security. Haldeman resigned in April 1973 and was jailed for 18 months.  Halderman went to work for David Murdock's Real Estate Company.  

Alexander Butterfield: Nixon's Deputy Chief of Staff who revealed the existence of the taping system in the first place saying “When Don Sanders, the deputy minority counsel … asked the $64,000 question, clearly and directly, I felt I had no choice but to respond in like manner.”  After Watergate, Butterfield became the Administrator for the Federal Aviation Administration.

Donald Segretti:  Known widely for his smear tactic campaigning against Democrats in 1972 while serving on CREEP. Segretti spent four-and-a-half months in prison in 1974 for spreading illegal political campaign literature (the 1974 version of Fake News).  He left public life after that.

Jeb Magruder: Deputy Director of CREEP spent 7 months in prison for perjury and conspiracy to obstruct justice. He left politics to become a Presbyterian Minister.

Image result for nixon angry"John Ehrlichman: A military analyst who was Nixon’s assistant for domestic affairs from November 1969 through May 1973.  Ehrlichman leaked the Pentagon Papers to the press, helping to end the Vietnam War but he served 18 months in prison for conspiracy, obstruction of justice and perjury.  Ehrlichman said something of Nixon that is very much like the vibe we get from Trump:

"There were many times that you simply did not call Richard Nixon in a situation like that if you wanted to continue to do business with him. He could freeze you out. So they were being very politic, I guess, and letting him spout off. That was the Queen of Hearts syndrome, we called it, “off with their heads.”"

Image result for nixon angry"

There are a lot of parrallels between Nixon and Trump.  After 10 years of Kennedy and Johnson, Nixon was the Conservative Savior of his time and could do no wrong as far as the party was concerned but, nonetheless, he was ultimately impeached and it DID, eventually, affect the stock market.  Even Clinton, who was impeached over saying he didn't have sex with an intern (because a President telling a lie was an impeachable offense back then) saw the S&P drop 25% as the hearings heated up.


So far, despite 13,434 "false or misleading claims" by the current President (as of last month), the market has not taken much notice of what's about to happen and we're up again today and maybe Impeachment doesn't matter – but I'd rather wait and see.

Nonetheless, I will be on Money Talk tomorrow and we will have at least two picks to start our new Money Talk Portfolio – just let's watch out for bombshells from the impeachment testimony – in case the market finally hears something they take notice of.


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  1. Interesting comparison for people leaving CA to move to TX for tax reasons:

    I guess it makes sense if you are in the top 20%. Or better yet the top 5%! The bottom 80% really getting screwed in Texas. 

  2. Probable reason for /NG slump :

    Prices dropped following a report from the National Oceanic Atmospheric Administration that forecast warmer than normal weather over the next 8-14 days.

    Most of the Midwest is covered with bitter cold temperatures, but expectations are for a warming trend afterwards.

  3. Good Morning! 

  4. Texas Taxes/StJean – I suspect that's deliberate policy by Texas. So many examples, all the way from Enron ripping off Grandma in California, to Whole Foods ripping off yuppies in California. Personally, the wealthy can have Texas; Altadena is a fine place to live.

  5. I'll bet if you check most states it would show the same type of patterns.

  6. The impeachment is political farce. Let's put it to a vote and impeach today, Senate acquits tomorrow, and they can all get back to work  

  7. Back to work? 

    Seriously, Nothing gets done until the orange clown goes down…. 


  8. Yes it is nothing but a farce and then we can have a dictator in chief who can "rule" for the rest of his life and do anything he damn well pleases-every sick disgusting thing you can possibly think of and no one can do anything when Putin takes over our country. Isn't it just "making America great again?"

  9. Good morning!

    Big Chart – Maybe we need to have 10% increments?   Actually, still waiting for NYSE (and RUT) to confirm.

    Texas/StJ – They actually advertise their low tax rate to get people to move.  The bad news for Republicans is they are draining all the CA Conservatives and putting them in a state that's already red – especially the ones who blindly make decisions based on an ad they see on TV and don't fact-check before making life-changing decisions.  In other words, the perfect GOP voter!

    /NG/Albo – It's all about the number of "home heating days" forecast over a period.  

    Accuweather doesn't have their useful maps anymore (maybe you have to pay now?) but here's a few:

    Week 3-4 Outlooks - Temperature Probability

    Short-term we have the cold front but then global warming re-asserts itself:


    Meanwhile, I wouldn't worry about that.  Worry about this:

    A GIANT asteroid measuring more than 4,100ft in diameter risks striking the Earth on December 28, 2019, if it suddenly veers off-course, NASA's asteroid trackers have warned.

    • The asteroid is currently thought to be hurtling towards the Earth at a speed of 43,200km/h or 26,843mph.
    • Because of this, NASA believes the asteroid packs a devastating impact force of 260,000 Megatons (Mt).
    • The asteroid’s course could be further influenced by natural a phenomenon known as the Yarkovksey effect.
    • The effect occurs when the gentle force of sunlight edges an asteroid either way of its natural course.

    At least we won't have to worry about global warming!  cheeky

    Farce/Dawg – The Dems don't expect Trump to get out of office but exposing the overall hypocrisy in the GOP will help them dislodge enough Senators to take back control so President Warren can make some real changes in 2020.

  10. Trump seen likely to delay European auto tariff decision

    • European Union officials say they expect Pres. Trump later this week will announce another delay in making a decision whether to slap tariffs on cars and auto parts imported from bloc.
    • The Trump administration has set a Thursday deadline to decide whether to impose threatened "Section 232" national security tariffs of as much as 25% on imported vehicles and parts under a Cold War-era trade law.
    • While a six-month delay is likely, Trump is expected to keep the threat of car tariffs as leverage as the U.S. and E.U. pursue trade negotiations, the consensus thinking goes.
    • U.S. Trade Representative Lighthizer and E.U. Trade Commission Malmstrom are said to have spoken more often and in a more positive tone in recent weeks.

    • Disney (DIS +1.7%) says consumer demand for the new Disney+ streaming service has exceeded its high expectations.
    • The company is working to resolve the technical issue that popped up for some users this morning.
    • Although the Disney+ launch has been on the calendar for a long time, shares of Netflix (NFLX -0.7%) are underperforming market averages on the day. In a nutshell, Disney+ subscribers can also bundle the new service with Hulu and ESPN+ for $12.99 per month, which happens to be the same price as Netflix's most popular plan. Some analysts think most families will pay for both, while others have forecast that Disney's strong kids programming will lure some family subscribers away.
    • Anheuser-Busch InBev (BUD +0.7%) trades slightly higher after reversing course and deciding to acquire Craft Brew Alliance (BREW +121.4%) in full.
    • The beer company expects to pay for the deal in cash and sees a closing date of sometime in 2020.
    • By appearances, Anheuser-Busch may have struck an opportunistic deal after BREW's share price sank in September and October when the beer giant let an option to buy the company expire. There's also the value of the new brands. "Kona is a scarce asset whose value is partially obscured by declines with Widmer and Red Hook brands," noted MKM Partners analyst Bill Kirk a few months ago. "We estimate that Kona alone is worth ~$350mn to equity holders, or ~80% upside to the current share price. This unrealistically implies significant negative value for Widmer and Red Hook," he calculated. Those numbers are unlikely to have changed much and make the upside potential intriguing.
    • A-B picks up Redhook, Widmer Brothers Brewing, Kona Brewing Company, Omission Beer, Square Mile Cider Company, Appalachian Mountain Brewery, Cisco Brewers and Wynwood Brewing with the acquisition.
    • Aiming to be a player in the global cannabidiol (CBD) market, China is moving quickly to ramp up production of cannabis, mainly hemp since it has been cultivated there for thousands of years.
    • The vast majority of production will be exported, however, due to strict regulations. For example, plants are not allowed to contain more than 0.3% THC, the psychoactive component of weed. CBD extraction facilities are outfitted with security cameras and are monitored by local police.
    • The production and availability of marijuana is a non-starter since authorities consider it a dangerous narcotic. Trafficking in THC can lead to a life sentence in prison or even the death penalty.
    • According the the Hemp Business Journal, China accounted for ~11% of the $800M global CBD market in 2018, trailing Europe and the U.S.
    Not hearing a case means the lower court ruling stands:  Supreme Court ruling could impact gun manufacturer liability
    • The Supreme Court will not hear a case filed by family members of Sandy Hook victims members against Remington in a development that allows the case to move forward.
    • The case hinges on the marketing efforts by Remington with the AR-15 style weapon.
    • The SCOTUS ruling could open the door for more lawsuits against gun manufacturers.
    • Related stocks: Sturm, Ruger (RGR -0.6%), American Outdoor Brands (AOBC -0.7%).
    • CenturyLink (NYSE:CTL) subsidiary Level 3 Financing plans to offer fixed-rate senior secured notes in a private offering.
    • The net proceeds will be used to repay or retire some of the $4.611B senior secured Tranche B 2024 term loans under the subsidiary's existing senior secured credit facility.
    • CTL shares are down 3% to $14.60
    • Stocks eke out slim gains in front of President Trump's speech today at the Economic Club of Detroit, in which he is expected to talk about trade and economic policy but could venture into other areas; Dow flat, S&P 500 and Nasdaq both +0.2%.
    • European bourses are higher amid hopes the U.S. will delay EU auto tariffs, with Germany's DAX +0.5%, U.K.'s FTSE +0.4% and France's CAC +0.3%; in Asia, Japan's Nikkei +0.8% and China's Shanghai Composite +0.2%.
    • In U.S. corporate earnings news, Rockwell Automation +13.6% after posting better than forecast quarterly results along with upbeat guidance, while Advance Auto Parts -6.3% on disappointing same-store sales.
    • An early look at the S&P sectors shows materials (+0.6%), health care (+0.3%) and information technology (+0.3%) leading the market higher, while the financials group (-0.1%) is the only loser so far.
    • U.S. Treasury prices are little changed, with the two-year yield up a basis point to 1.67% and the 10-year yield flat at 1.93%; U.S. Dollar Index +0.1% to 98.29.
    • WTI crude oil +0.7% to $57.24/bbl.
    • Macau casino stocks are trading relatively flat amid more troubling news out of Hong Kong. Police in Hong Kong fired tear gas in the financial district today and at two university campuses to break up pro-democracy protests. One of the busiest intersections in Hong Kong was brought to a standstill.
    • The Hong Kong headlines are believed to be holding back investor enthusiasm for Las Vegas Sands (LVS), MGM Resorts (MGM -0.1%), Melco Resorts & Entertainment (MLCO +0.1%) and Wynn Resorts (WYNN +0.1%).
    • Cronos Group (CRONQ3 results (C$): Revenues: 12.7M (+234.2%).
    • non-GAAP EBITDA: (23.9M); Net Income: 786.9M; EPS: 0.53; CF Ops: (102.4M) (-207.5%).
    • 3,142 kg of cannabis sold (+511%); Net Product Revenue / Gram Sold: 3.75.
    • The company closed Redwood U.S. hemp-based products platform and Cronos fermentation facility acquisitions.
    • Cronos also launched PEACE+, a new hemp-derived U.S. brand.
    • Previously: Cronos Group EPS of C$0.53 (Nov. 12)
    • CBS (NYSE:CBS): Q3 Non-GAAP EPS of $0.95 beats by $0.02; GAAP EPS of $0.85 misses by $0.07.
    • Revenue of $3.3B (+1.2% Y/Y) misses by $70M.
    • Shares +1.45% PM.
    • Press Release

    NFIB small business optimism up in October

    • D.R. Horton (NYSE:DHI) jumps 2.5% in premarket trading after its guidance for fiscal 2020 revenue of $18.5B-$19.0B compares with average analyst estimate of $18.6B.
    • Also sees home closed at 60,000-61,000 homes during the year ending Sept. 30, 2020; compares with FY2019 actual home closings of 56,975.
    • Fiscal Q4 EPS of $1.35 beats the average analyst estimate of $1.25 and up from $1.22 in the year-ago quarter.
    • Q4 revenue of $4.91B exceeds the consensus estimate of $4.86B and rose from $4.44B a year earlier.
    • Homes closed during the quarter ended Sept. 30, 2019 increased 9% Y/Y to 16,024 homes and homebuilding revenue  increased 10% to $4.76B .
    • Q4 net sales orders rose 14% Y/Y to 13,130 homes and 16% in value to $4.0B.
    • Q4 cancellation rate of 23% fell from 26% in the year-ago quarter.
    • D.R. Horton had 27,700 homes in inventory at Sept. 30, 2019.
    • Conference call at 8:30 AM ET.
    • Previously: D. R. Horton EPS beats by $0.10, beats on revenue (Nov. 12)
    • Dean Foods (NYSE:DF) announces that it's initiated Chapter 11 reorganization proceedings in the Southern District of Texas.
    • The food company intends to use the bankruptcy process to protect and support its ongoing business operations and address debt and unfunded pension obligations while it works toward an orderly and efficient sale.
    • Dean Foods says it's in advanced discussions with Dairy Farmers of America regarding a potential sale of assets.
    • Shares of Dean Foods are halted.
    • Source: Press Release
    • Chipotle (NYSE:CMG) is extending offering carne asada at restaurants through the end of this year and into Q1 of 2020, according to CNBC.
    • Chipotle execs stated on the company's Q3 earnings call that sales of the limited time offering accelerated in September when carne asada was introduced, although they also noted that the premium meat puts pressure on food costs as a percentage of sales.
    • Chipotle earnings call transcript
    • Juul (JUUL) is expected to announce today plans to slash nearly $1B in spending next year, including cuts in marketing and government affairs spending.
    • The company hopes to earn trust by reducing and preventing underage vaping and investing in scientific research.
    • Altria (NYSE:MO) holds a 35% stake in Juul.
    • "There's no point for them to do it," former Fed Chair Alan Greenspan told Caijing’s annual economic outlook conference, saying national currencies are backed by all the financial resources of a nation, known as sovereign credit, and central bodies won’t ever be able to match that.
    • "The fundamental sovereign credit of the United States is far in excess of anything Facebook can imagine," he added.
    • Philly Fed President Patrick Harker was quoted in early October saying it is "inevitable" that central banks will issue digital currency, and while he felt his view was "in the minority" at the Fed, his staff is researching the issue.
    • Final figures from Alibaba's (NYSE:BABA) 24-hour Singles' Day event showed that sales hit a record $38.4B, more than Amazon's haul last quarter from online store sales.
    • The news didn't move the stock, however, ending the day down 0.2% at $186.71/share.
    • Analysts appeared focused on sales growth for the festival, which eased to 26% (from 27% in 2018), and marked the weakest expansion since the annual shopping blitz began in 2009.
    • While Alibaba has spent big to diversify its business, it still earns over four-fifths of revenue from e-commerce.
    • Capitalizing on the rollout of its Impossible Whopper in the U.S., Burger King (NYSE:QSR) today is launching a vegetarian burger in more than 20 markets across Europe.
    • The Rebel Whopper, made with patties from Unilever-owned (NYSE:UL) The Vegetarian Butcher, will be available in more than 2,500 locations across the continent.
    • Boosted by the success of the Impossible Whopper, Burger King’s U.S. same-store sales grew by 5% during the third quarter, its biggest jump since 2015.
    • PG&E (NYSE:PCG) is offering $13.5B in compensation to the victims of wildfires sparked by its power lines as part of a restructuring plan, Bloomberg reports.
    • The amount is the same that a group of creditors led by Pacific Investment Management and Elliott Management has agreed to pay victims in a rival reorganization proposal, according to the report, although the two sides are at odds over how to structure the payout and how much should come in the form of cash and stock.
    • California's Gov. Newsom has threatened a government takeover if the company cannot come up with a viable reorganization plan soon.

    NFIB small business optimism up in October


  11. Asteroid / Phil – That would be another perfect excuse for lowered earnings guidance in conference calls I am sure… And for Trump to ask for lower Fed rates.

  12. pirateinvestor – thanks for the input yesterday as well.  I didn't get a chance to reply last night.  It's a much as an investment in our family as it is in real estate.  It's at the beach where there is plenty of price appreciation, and we are there 7 or 8 times a year already.  As the kids get older and closer to college we really want a place the will always come back to.  And we'll eventually retire down there so knowing the market will be a benefit as well.  We have maintenance and cleaning in place, and from what I calculate we should be able to cover our carrying costs, and if we fall short it's no big deal.   Of course, whether it will actually be there in 20 years may be the real question…

  13. Phil/asteroid - NASA NEO tracker says nothing bigger than 620m diameter and nothing closer than 3.9 LD in the next 60 days. 1 LD = 239k miles. Probably no need to cancel your plans for New Years. 

  14. After boost from Perry, backers got huge gas deal in Ukraine

  15. SPWR – Up nicely today.

    Phil – Good call on them !

  16. LOL StJ!  And the Futures would be up 1%….

    Image result for asteroid earth animated gif"

    Beach/Rperi – If you can get a place where you can have a locked closet or locked room to keep your stuff when you rent it – that's ideal.  I used my Killington Place for 35 years so the use wasn't an issue – just other things I could have done with $80,000 1985 Dollars….

    Asteriod/Dawg – Hey, I just read the headlines….  wink  Aliens are more likely than asteroids…

    SPWR/Albo – Well that's nice but I wanted to announce it TOMORROW!  

    Speaking of announcing things:  I'm leaving at 2 for the Hemp Boca Show and meeting after that so back late.  Tomorrow, we will do a Webinar but then I have Money Talk (7pm show) so we need two trades for that – SPWR is almost certainly one.  Also, on Money Talk, I will be announcing officially that we are now going to be writing over at The Street – starting with the Money Talk Portfolio but, moving on, we will be adding more content over there.  

  17. Phil: SPWR

    Don’t forget the renaming/company split that is supposed to occur 2qtr. 2020.  Could make for messy options.

  18. rperi-I understand on making your investment useful for the family and I have done that and it is incredibly handy to have a house with 4 bedrooms for them to get into WHEN they want to visit. However, the college kids are MIA basically because of schedules, working summers etc but planning on using useful after retirement makes sense. Phil's right about having a place separate for you own personal belongings. I have a huge RV garage that holds anything for when I rent the house out. So many of the renters are very careless especially with children so you do have repairs constantly. Latest is the grandfather clock that was messed with even though a sign was on it to not touch. Some children are controlled many are not. Have very good insurance too. That's mandatory and plan on taxes going up every year.

  19. Phil I started a play with R but already at 49.95 but still pays a 4.15 % div

  20. SPWR/DC – Oops, I did forget that part but we can deal with it.  In the very least I want to sell puts but we could also do the bull spread and shut down and restart down the road. 

    Taxes/Pirate – When I bought my house in NJ in 1998, taxes were $4,000/yr.  Last year they were $23,500!   I feel so bad for people who think that they have a plan to pay off a home in 30 years and retire but, by the time they retire, the taxes are more than their mortgage used to be.  Also, the rising taxes then detract from the resale value of the property – so the Government is robbing you twice!  

    R/Yodi – You should do a portfolio for us!  R is a nice, boring company with slow, dependable growth though income has been lagging for a few years.  $3Bn in market cap is probably 20x but it's fair as they could have a good year and make $300M very easily.  Debt is a bit much at $7.6Bn against $75M in cash – that's the part that bothers me..

    So I just had a CC with the street and, for now, they are not ready enough so we'll likely start for real next Q but, for now, the Money Talk Portfolio will be at  

    Trump has been going on for over an hour – says China trade is making progress.  

    This is a good line by him:


    BUSTED: CNN reporter tracks down 10 times Trump met with Giuliani’s indicted Ukraine henchmen

    WATCH: At a NYC economic forum, President Trump says he meets with kings, queens, prime ministers, presidents and dictators: "Anybody who wants to come in — dictators, it's OK — come on in, whatever's good for the United States."

  21. I have to go do the radio show:

  22. Oops, it's 2:30-3:30 – Jean and Chris just got back from Thailand so should be interesting hearing about our CBD venture there.

  23. Phil, 

    Quick question, on the dividend portfolio you have shown total return including dividends at current returns.  Should we take the cash dividend or set it up to auto-reinvest?  In your T example it looked sounded like it would be a semi-permenant position and the dividends should be reinvested but just wondering your take… I usually just reinvest dividends (I have held some REITS for 20 years and obviously most of the gain has come from the divident reinvest)

    Thanks in advance

  24. Dividends/Bentonck – I have done examples where I illustrated the value of re-investing the dividends over time – it makes a huge difference as you compound the end result so yes, I'm in favor of it but auto-reinvest does not optimize your purchase price and also, until you buy 100 units – you can't sell another option so it's hard to line things up quarter-to-quarter.  

    My preferred strategy is to simply take the increase in cash and then decide, at least annually, which position I can best deploy it in.  For example, last year MO took a big hit while T went higher and higher so, if I were sitting on $4,000 come September, I would have rather bought 100 shares of MO than 100 shares of T or 50 of both, right?  Of course that also depends on if I think MO is going to recover but we did so it makes more sense to intelligently decide where to put your profits than to just blindly re-invest them in whatever stock they popped out of at whatever arbitrary price it happens to be at in the cycle.

    Of course, if we are spread over a dozen positions – there's almost always going to be something on sale.

    Markets turned down a lot since the close.  

    That 3,100 line is still a good short on /ES.

    Tariffs on China Imports Emerge as Hurdle to Trade Deal

    Tariffs are emerging as the main stumbling block in efforts by the U.S. and China to come to a limited trade deal, a month after the two countries called a truce in their trade war.35

    House Democrats this week hold the first two in a series of open hearings that aim to build public support for one of the gravest actions Congress can take: the removal of a president.48326 minutes ago

    A federal health regulator has opened an inquiry into Google and Ascension’s “Project Nightingale,” a partnership amassing the detailed information of millions of patients.134