Lemley Yarling Management Co
309 W Johnson St
Madison, WI 53703
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29 April 2023
Markets closed the week higher in the face of the Fed meeting next week. The Repubs passed a debt ceiling bill that the Dems said was dead at the senate on arrival. Same old same old- but worrisome none the less.
JPMorgan Chase and PNC Financial Services Group are in the running to buy First Republic as the troubled lender stares down impending receivership, The Wall Street Journal reported.
The Federal Deposit Insurance Corporation (FDIC) is preparing to put First Republic in receivership, outlets including The Journal and Reuters reported Friday.
On Thursday we decided to repurchase several bank stocks because with the further collapse in the share price of First Republic Bank it seemed probable that over the weekend the FDIC, the FED and the Treasury would be resolving the First Republic crisis with a solution similar to, but not the same, as the Bear Stearns take under in 2008.
(On March 16, 2008, Bear Stearns, the 85-year-old investment bank, narrowly avoids bankruptcy by its sale to J.P. Morgan Chase and Co. at the shockingly low price of $2 per share. Bear Stearns seemed to be riding high with a stock market capitalization of $20 billion in early 2007.)
The difference this time is that First Republic needs to go into receivership so the banks (J P Morgan and friends) that deposited $30 billion in FRC a few weeks ago can get their value back. (If a business has a secured loan with a creditor and defaults on payment, the creditor may have the right to appoint a receiver to recover their money. The business then goes into receivership when a receiver gains possession of the business's assets and liquidates them to recoup money owed to the secured creditor.)
The resolution of the FRC crisis this weekend should place a bid (give stability at present prices) under bank stocks. Coupled with the strength of earnings in the large cap fancy stocks this past week the markets seem capable of rallying into mid-May. And so, we committed funds to some of our usual trading stocks. Our cash positions remain substantial after these trading purchases.
We currently own at prices below where last we sold: IBM, Disney, Cisco, Pfizer, Apache Oil, Western Digital, AT&T, Southwest Air, the Regional Bank ETF (KRE), The Large Regional Bank ETF (IAT), Truist Financial, Us Bank, Fifth Third, Key Bank, Macy's, Nordstrom, and the Gap.
We still plan on selling most in May and going away.
21 April 2023
The markets ended basically unchanged for the week as did our accounts. We traded AT&T for a scratch when it dropped 10% on disappointing cash flow numbers. We added GM, Ford and Verizon as trades into next week.
The markets continue to worry about the debt ceiling brouhaha and the Feds stance on interest rates. With the ‘sell in May and go away' period approaching as well as more earnings reports in the next few weeks there seems to be little incentive for markets to move substantially higher. With our accounts up 10% and more for the year coupled with last year's -much better than versus the major market measures-results we feel no need to be heroes and so are remaining on the sidelines with a few less risky trading positions and lots of Treasury ETFs.
It snowed last weekend and is doing so today. UGH!
The Imperial Valley — a wedge of desert farmland in Southern California on the Mexican border — uses more of the Colorado River than the states of Utah, Wyoming, Nevada and New Mexico combined. To its critics outside California, it is a logical place to cut: The roughly 400 farms served by the Imperial Irrigation District consume the single largest share of a river that is needed by 40 million people. Some of their major crops, such as alfalfa, require lavish amounts of water and are sold for animal feed, including outside the United States.
The Interior Department last summer dropped a bomb on the seven states that depend upon the Colorado River for water. It declared an emergency over the two-decade drought that was parching the West and instructed these states, already scrambling to conserve water, to come up with a plan to cut consumption of as much a four million acre-feet, an amount equal to about one-third of the Colorado's annual flow…….. One opportunity is clear: About 80 percent of Colorado River water delivered to Arizona and California goes to irrigating alfalfa, grain for animal feed and winter vegetables. There is still plenty of room for more efficient water use there.
This is a no brainer. Raising feed for cattle can take place elsewhere. Too bad for the landowners which are mostly large holders. It's the same as for folks who built their homes on the outer banks or in the forests and canyons of California that are wracked by fire.
10% of voters in Montana are 18-24. Another 12% are 25-34.
Montana's legislature has passed a statewide ban on TikTok
The bill, known as SB 419, effectively bans TikTok from all personal devices and also bars app stores from offering TikTok within the state. According to the bill, each discrete violation of the ban will result in a $10,000 fee, plus an additional $10,000 for each day the violation continues.
Parents arrested for letting 7 & 9-year-olds walk alone to Dunkin Donuts.
It was Super Bowl Sunday in February 2019. Cynthia Rivers and her husband decided that their kids, ages seven and nine, deserved a long-promised treat for cleaning their rooms: the right to walk to Dunkin' Donuts by themselves. (Reason has changed her name to protect the family's anonymity.)
This was in Killingly, Connecticut, a suburban town in the northeast part of the state. The Rivers' lived near an elementary school, library, state police barracks, sidewalks, crosswalks, many Victorian-style homes, and the aforementioned donut shop. The kids gathered $7, and off they went.
A few minutes later, the River's parents heard a knock at the door. It was the police……
But whatever the rationale, the officers proceeded to charge Rivers' husband with risk of injury to a minor. They charged Rivers separately for the same thing. Then they arrested her husband and took him away.
The parents should move to Missouri where 7 & 9-year-old kids are allowed to open carry AR 15s.
In a turn of events that absolutely defies logic, the Republican-controlled Missouri House of Representatives voted on Wednesday to reject an amendment that would have banned minors from being allowed to openly carry guns on public land without adult supervision. Which, thanks to a 2017 law, they are currently free to do.
The NFL has sponsorship arrangements with gambling enterprises.
the NFL's gambling policy prohibits anyone in the NFL "from engaging in any form of gambling in any club or league facility or venue, including the practice facility." The league said it found no evidence that "any inside information was used or that any game was compromised in any way."
Breaking news alert! Lions players suspended for placing bets while on site at the Lions facility in the MGM Grand training room. League officials, in between meetings on new Caesars on-field advertisements, confirmed the suspension today. Vegas odds brought to you by DraftKings have the over/under of successful appeal at +300.
14 April 2023
We broke even on our trading this week booking profit twice in Nordstrom and once in The Gap. We earned a scratch profit in KBE when it rallied Friday morning on good big bank earnings but then closed lower on the day giving us the possibility of another trade next week as other bank earnings are announced.
We eliminated AT&T and Verizon for scratch losses on Friday to raise cash as the markets turned down, reversing Thursday's gains, to close lower on the week.
Our two holdings are Macy's and The Gap (which we repurchased on Thursday lower than our Tuesday sale). We are now mostly cash and comfortable.
80 degrees the last three days and snow flurries predicted for Monday. April weather never is boring.
Even Repubs say hands off Social Security and Medicare. Don't see any sending the money back
The Demand Progress poll is by no means an outlier. As Kerry Eleveld reported last week, a recent Fox News poll showed the same support for the program just as it is. In fact, a whopping 82% of respondents in that poll are opposed to raising the retirement age. Overall support for the program has grown in the past decade, according to Fox News polling, with 71% agreeing that it is more important to fund the program with no changes than to reduce the deficit (26%).
"When Fox asked the question in 2013, just 54% said ‘keep the programs untouched,' while 40% prioritized reducing the federal deficit," Eleveld wrote. "That's a net turnaround of roughly 60 points in the last decade toward the position that Democrats hold on continuing to fully fund the programs."
New York City didn't even make a list of 65 cities with the highest homicide rates based on 2019 data. In Jordan's home state of Ohio, Dayton was number five, Cleveland was 10, Cincinnati was 19, Akron was 49, and Toledo was 57, with a murder rate of 12.43 per 100,000 residents. New York's homicide rate per 100,000 residents was 3.5 in 2018.
In 2020, New York was one of the five states with the lowest gun death rates. The five states with the highest gun death rates were Mississippi, Wyoming, Louisiana, Alaska, Missouri, and Alabama.
Living in the past:
The coronation regalia, which normally resides at the Tower of London under armed guard, will include three crowns, an orb, scepters, golden bracelets, two maces and five swords, according to new details released by Buckingham Palace. The oldest object is a 12th-century spoon, which will be deployed to anoint Charles with holy oil. And in a nod to modernity, the palace released a bespoke crown emoji, inspired by St. Edward's Crown, the 4.9-pound colossus that will be placed on Charles's head.
The palace also confirmed that Camilla, the Queen Consort, will hold a scepter made of ivory — despite Prince William's campaigning for years against the ivory trade. (As previously announced, another controversial item in the Crown Jewels, the Koh-i-Noor diamond, will not make an appearance. Instead, Camilla will wear Queen Mary's Crown, set with jewels that other nations aren't clamoring to get back.)
Maybe too many folks have security clearance- Ya think!!
According to the most recent figures published by the Office of the Director of National Intelligence, there were 1.25 million people with clearance and access to read top secret material in the US government in 2019. The figures have not been made public since then, but nothing suggests they have significantly diminished. The Pentagon has said it is reviewing its access policy.
Numbers that big make it almost a statistical certainty that, at some point, incredibly damaging top-secret material will fall into the hands of someone willing to leak it, perhaps for ideological reasons, like Edward Snowden, in the case of his revelation of US mass surveillance.
The great weight-loss revolution is here — but only for those rich enough to afford it.
Darrell's primary insurance is a Medicare Advantage plan, the privatized version of the traditional federal health-insurance program for seniors, sold by UnitedHealthcare. The company, the country's biggest and richest health insurer, wrote in memos reviewed by Insider that it denied coverage for Wegovy because Medicare didn't cover weight-loss medications by law and Darrell's private plan didn't offer the drug as an extra benefit. Without insurance, Darrell can't afford Wegovy's price tag of over $1,300 a month. He appealed the decision and sought help from state insurance regulators, but it made no difference: UnitedHealthcare refused to reverse its decision. The insurer didn't respond to multiple requests for comment.
Our note: United Health Care is the insurance company for AARP. We've always thought that AARP is a sales tool for UNH.
7 April 2023
Markets were positive for the week as Treasury yields declined on mildly positive (less) inflation news.
Stock markets were closed Friday. And so, they didn't react to the monthly Employment Report that Nonfarm payrolls grew by 236,000 for March, compared to the Dow Jones estimate for 238,000 and below the upwardly revised 326,000 in February. The unemployment rate ticked lower to 3.5% amid an increase in labor force participation, against expectations that it would hold at 3.6%. Average hourly earnings rose 0.3%, pushing the 12-month increase to 4.2%, the lowest level since June 2021.
We decided to exit our bank stock holdings to await earnings this month. While the stocks are historically cheap, we will await the market reaction to future earnings forecasts. We also traded out of HAIN, and our 2 speculative stocks LYFT and Snap for scratches.
We repurchased AT&T and Verizon slightly higher than last sold as they both moved higher on reducing Treasury yields. VZ yields 6.5% and AT&T 5.5%. We repurchased Macy's and The Gap 12% lower than we sold.
Larger accounts are 70% cash or short Treasury ETFs that are yielding over 4% annually rate.
What we learned this week.
Bribes. If you receive a bribe, include it in your income. Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.
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