epeon

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+13 / -2

42 Comments

    • Wed Nov 19th 08:12 AM | Rating: +1 0
      Commented on:
      Paulson's Message to Detroit: Drop Dead
      Bailing out the big 3 by giving them cash is like bailing out an alcoholic with vodka. The big 3 are not businesses, they are social institutions designed to maximize employee returns, not stockholders and nor customers. And, that is the problem. Until these companies are fundamentally restructured, meaning that the UAW contracts are relegated to the dustbin of history, these companies will not be profitable. Giving them money will only delay the inevitable, it will not prevent it.
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    • Thu Nov 13th 09:22 AM | Rating: +2 0
      Commented on:
      Could Capital Injections Save the Auto Industry?
      Restructuring GM and F? Isn't that what chapter 11 is all about? If you give them $25 billion without restructuring, all you are going to do is to reward their current, clueless behavior. I believe that they have to go into chapter 11 first before you give them any money. Otherwise, you will just be throwing good money after bad.
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    • Wed Nov 12th 08:10 AM | Rating: 0 0
      Commented on:
      DHL, GM: Does Failure Have Consequences?
      It is interesting that the government is calling for executive bonus limits and nothing else. The generous retirement and health plans for the rank and file are not mentioned. Gee, could it be that the government (i.e. soon to be completely democrat controlled) does not want to do anything that might be negative for the UAW?

      Of course, by not making the UAW cut anything, all they are going to do is to insure that about a year down the road GM will need more money, and then a year down the road some more money, and then another year down the road.....

      The current structure of GM is unsustainable. I agree that Waggoner and the board need to go. They presided over this mess and there does need to be consequences. However, unless you tear up the union contracts, there will be no longterm fix.
      View article »
    • Mon Nov 10th 11:01 AM | Rating: +8 -1
      Commented on:
      Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?
      As far as the big 3 paying $70/hr who cares? They simply put it into the price of the car and the consumer has to pay for it. Except, oooppps, the consumer isn't paying for it are they?

      The root of the problem is that the big 3 are not making vehicles that the consumer is willing to pay for. Some of this is price, but a lot of it is quality. I had a disucssion with a salseman at best buy and it went like this:

      "So, what kind of car do you have?" I asked.

      He said, "I own a Honda civic."

      "You don't own a domestic?"

      "I have a 2001 mercury cougar. I loan it to my brother. I couldn't keep it on the road, it kept breaking down."

      "Is your Honda good?"

      "Oh yeah, the Honda is perfect."

      "So you wouldn't consider a domestic?"

      "No, their just nightmares. My Honda is solid, so when it is time to buy another car I'll just get a Honda."

      "I'm told that the domestics are better, now"

      He shrugged his shoulder, "Maybe, but why take the chance? The Honda's are good."

      and, by the way, this kid is about 30. He basically will never even consider a domestic. Basically, the big 3 have soured their customer base. They aren't coming back. That is the real problem.
      View article »
    • Mon Nov 10th 08:52 AM | Rating: 0 0
      Commented on:
      Ford, GM Conference Calls: Same Problems, Different Outlook
      I was in best buy yesterday and I was talking to a relatively young salesman. We were talking about this and I asked him, "what kind of a car do you have?"

      He said, " I have a Honda civic."

      "Did you consider a domestic?"

      He said, "I have a 2001 Mercury cougar. Can't keep it on the road. Still have it, but it is very unreliable. The Honda never fails."

      "So", I said, "you basically won't even look at a domestic anymore?"

      "Yeah, that's pretty much the way it is, I guess. I can't deal with the maintenance problems. Domestic cars are just awful."

      As I walked away, the thought that occurred to me was this: here you have a best buy manager/salesman who is I would guess 30 and he is now never going to consider a domestic. Honda took care of him and they have a loyal customer. In the final analysis, all of this liquidity stuff is really just a symptom of the problem. You don't take care of your customer and they go away. No matter how much you try to convince them you now have the quality religion, a car is such a big, but infrequent purchase that customers just are not going to take the chance.
      View article »
    • Mon Nov 10th 08:45 AM | Rating: +1 0
      Commented on:
      Don't Let Bulk Shippers Sink Your Portfolio... For Now
      The problem I have with an article like this is that the bad news is already in the stock. Take DSX. It is currently at 14 and pays over 25% dividend. Of course the market is saying the dividend is not sustainable. That is why the price is so low. But, so what? Let us say that the dividend gets cut 30%. It goes to 17%? This is still a great investment. Even if it gets cut in half, still pretty good.

      So, the question to me is this: not where DSX has been, but where is it going? And, frankly, this article does not answer that at all.
      View article »
    • Wed Nov 5th 09:10 AM | Rating: 0 0
      Commented on:
      Eight Monthly High-Yield Dividend Stocks
      you have to be very careful about these recommendations. For example, HGT pays 13.2% but that is based on earnings over the last several months in which crude was high. Very unlikely to see that going forward.

      Also, these are trusts which means that there yield of crude, over time, is going down.
      View article »
    • Wed Nov 5th 08:17 AM | Rating: +1 -1
      Commented on:
      The Perversion of American Capitalism
      I believe the author totally misunderstands the dynamic nature of capitalism. Yes, the US does not do the manufacturing that it once did. This was not a plot or moral failing, rather it was the invevitable consequence of a world in which semi-skilled labor is cheap. How can you do labor intensive manufacturing in the US when you can find Chinese to do it for $1/hr?

      This, of course, will change over time. If the US model does not work, then US labor rates will go down (probably via devaluing of the US dollar versus Chinese currency). Then labor intensive manufacturing in the US will make economic sense.

      As far as the welfare programs, etc. Again, when the costs become apparent, we shall see.
      View article »
    • Tue Nov 4th 11:01 AM | Rating: 0 0
      Commented on:
      'Big Three' Badly in Need
      I think bankruptcy is really the only way that the UAW pension and healthcare albatros will every be removed from GM's neck. This is not going to happen any other way.
      View article »
    • Tue Nov 4th 10:10 AM | Rating: 0 0
      Commented on:
      JPM: No Trick, All Treat, for Troubled Homeowners
      Man, I am such a fool for making my mortgage payments. I should stop paying them immediately. Then the bank will give me a sweetheart deal.

      By the way, don't laugh. This is exactly what is happening now in California. They have figured out the system.
      View article »
    • Wed Oct 29th 09:10 AM | Rating: 0 0
      Commented on:
      Valero Energy's Insane Valuation
      One issue that is never mentioned is that this great cashflow never really goes to the stockholder. With that much earnings you would think that valero would have a decent dividend. Yet, it never does. I always look for a decent dividend to make a stock a core ownership in my portfolio. VLO does not have that. They simply don't pass the wealth to their stockholders.
      View article »
    • Sun Oct 26th 00:26 AM | Rating: 0 0
      Commented on:
      The Recession Is Already Priced Into Stocks
      I believe people are vastly over-reacting. I do not know much about credit default swaps and I suppose financials still have risk. But, many basic industries are trashed, too. For example, I own ARLP. It pays 9% dividend, its pe is about 10. I mines coal for the utilities. Its business is mostly in longterm contracts. Are we going to stop using electricity? I don't think so. Yet, it has gotten trashed.

      Major oil has gotten trashed. BP is paying, what 8% and has a pe of less then 6. Every time majors have approached that, they have been excellent buys. We going to stop using oil? and, do you really think the price is going to stay at $65/bbl?
      View article »
    • Fri Oct 24th 08:20 AM | Rating: 0 0
      Commented on:
      GE's Rollover Risk Supports Short Trade
      Wow! This is entirely self-serving for the shorty. And, perhaps, he will make money. GE is trading like a bank, albeit a good one like BAC. If you plot them, over the last year they have traded very similarly. However, financials are about 50% of GE. The other half is an industrial machine. The other half has, so far, not done badly. Certainly, not badly enough to be done nearly 50%. So, I think this devaluation of GE is over-done. I think Ge should be down about half of a bank, or 20 to 25%. I, consequently, think the bad news is already in the price.

      Of course, this morning, futures are way down. So, maybe the market is telling me something different.
      View article »
    • Thu Oct 23rd 08:20 AM | Rating: 0 0
      Commented on:
      Energy Financing Is Gone with the Wind
      This is, of course, completely expected. These alternative energy projects are marginally economical. They really only make sense with big tax subsidies and even then, just barely. With the cost of conventional fuels dropping, politicians are loosing interest. So, just like oil shale in the 70s and ethanol in the 90s, these trending types of power will slowly perish.
      View article »
    • Wed Oct 22nd 15:17 PM | Rating: 0 0
      Commented on:
      California: Canary in the Economic Coal Mine
      I lived in California till January, 200y. My wife and I are engineers and we worked in the bay area. We were paying over $1000/month in income taxes and $1800/month for a two bedroom apartment. We moved to Texas and we have no income taxes and we own a very nice home with our total payment (including taxes, insurance, etc) for $1432/month.

      California has become a one word IQ test and the correct answer is Leave.
      View article »
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