Zee4Money

Chevy Volt Hybrid vs. BYD e6 Pure Electric

Does anyone have any recommendations on information sources for BYD.? There is very little information available since they don't seem to report periodic financial reports. I would like to know if the recent surge in the stock price is strickly speculative or is there an earnings improvement that would account for some of the jump.

What CIT's Troubles Really Mean

The wall street to main street connection is the key point. The government can't allow a sudden disruption of lending to small and mid sized business with the unemployment rate hovering at 10%. The economy and financial system are not able to absorb this blow without creating another set back. The request to move assets to the bank is not an unreasonable step to secure access to the fed discount window. With access to low interest money CIT has a chance of getting out of its hole due to the step learning curve and the associated higher earnings. The economy must stabilize for lending to become profitable.

Why High Inflation Will Not Take Hold

I think you are making an excellent argument. The higher US savings rate and lower US demand will improve our trade imbalance. This will be reflective in a stable and strengthening dollar. The dollar is not tanking like those that except higher inflation believe that it will.

Japanese Lesson for U.S.: Demographics Matter a Lot

If you extend the point to the world economy then economic growth is dependent on population growth. The question then becomes when do we reach the end of the earths ability to support an increasing population? This is the point when population and the economy will decline.

Rick's Announces Higher Revenue than Expected

Good update - very balance and informative. Buying on the earnings release may be a good move as the stock might drop with the news of the woeful earnings.

Ford a Likely Survivor of the Auto Industry Crisis

If the stock is to risky then buy the debt. Bonds can be purchased with yields of 15-20% and maturities within a year. I agree that the stock is to risky until the bond yields return to a more normal level.

Full disclosure: I am long Ford notes due 1 Feb 2011


On Feb 17 11:45 AM TB3 wrote:

> I agree that Ford is the strongest of the three (faint praise unfortunately)
> and that Mr Mulally is by far the best of the CEO's. However, as
> an investment, I wouldn't be putting my money in a company as laden
> with debt as Ford, at least not yet. Remember that debts need to
> be repaid, and with Ford's excessive overhead and very weak sales
> revenues, they are still burning through cash. Until I see a positive
> cash flow, equal to and better than their short term debt payments,
> I think I'll wait awhile.

GM and Chrysler: Is Avoiding Bankruptcy Avoiding the Inevitable?

I agree - They must keep GM alive for the country to establish a foothold in the small vehicle market. This is critical to reducing dependence on oil. Also, Ford has an impressive line up of new small cars. The company that should go is Chrysler. Ceberus is not willing to bail them out and from what I can see they have not invested in a small car line up.


On Feb 17 08:12 AM nyc female lawyer- bondholder wrote:

> I am happy about the progress with the bondholders. Shame on you
> for recommending bankrupcies. The large law firms take tremendous
> fees and the stockholders suffer in bankrupcies.Also,the GM workers
> would lose their jobs and the National unemployment will rise to
> 15%or 20 % due to a GM bankrupcy
>
> I pray for GM to get more TARP money and stay solvent. I looked at
> the gcars for 2009 and they had great hybrids and are working on
> an electric car. Instead of writing this kind of article I suggest
> you buy a GM car this year.

Rick’s: Still Entertaining or Ready to Slide?

Looking forward to seeing the quarterly numbers. The data is already old as the earnings are being reported as of 30 Sept. I have several concerns with RICKs. 1) Are margins going to be lower? Is the company having to provide incentives to keep sales up and are custmers going to be spending less and less as the economy continues to decline. 2) How are forward earnings going to be impacted by their method of financing growth. How much will guidance be lower. 3) How well is the company controling cost? I don't see much capability of management to control expense in a much more difficult environment. I will wait to see the earnings report and guidance to determine if I am confident that the company will be friendly to shareholders.

Auto Bailouts, Mortgage Debt and the Economy

Excellent comments - Where was this information in the recent hearings? I cannot imagine how Wagner was able to sit in hearing room and listen to misinformed Senators scream at him about corporate jets while he does not dare point out the gov'ts role in killing American auto manufacturing. - I really hope one misinformed Senator from Alabama is not allowed to kill three American companies. If he does in Americans that want to buy a Chevy will do so with a made in China label.

On Dec 11 09:09 AM Mike_I_N_Mich wrote:

>
> The following U.S. government policies, many of them having popular
> support, hurt the big three significantly relative to the foreign
> transplants:
> 1. Uneven union laws across states:
> a. The 1935 U.S. government Wagner Act granted the right of workers
> in the private sector to organize labor unions and take place in
> strikes. What this effectively meant was the labor unions were allowed
> to seize the plant and prevent its use until they got what they wanted.
> This created the ridiculous result in the US that workers are paid
> in proportion to the pain they can inflict by shutting things down.
> Trains, docks, garbage collectors, police, … get high pay. People
> in low capital or less critical to safety related industries like
> restaurants and retail get paid low paid. The relationship of pay
> to skill, work ethic, hazards goes away. Soon after the Wagner act
> the UAW took over the auto industry; GM and Chrysler in 1937; Ford
> in 1941. With no foreign competition the UAW monopoly flourished
> for about 30 years.
> b. The 1947 U.S. government Taft–Hartley Act tried to reign in the
> unions after a series of post-war strikes. While some provisions
> were national, the states were allowed to pass "right-to-work laws"
> that outlawed union shops. Such shops require workers to join the
> union and pay dues. Said state laws are serious impediments to union
> organization and viability because few people want to pay dues if
> not required.
> c. The vast majority of foreign owned plants are in right-to-work
> states providing huge advantages in labor costs and productivity
> relative to the big three.
> d. The big three would find it impossible to change the state laws
> where they are located due to union dominance of state governments.
> If they built in the South they have to accept the UAW because they
> would strike back in Michigan.
> e. No other country has this crazy system to my knowledge.
>
> 2. Promoted defined benefit packages and kept them in the company
> name. Did you ever consider how totally stupid it is to pin an employee
> retirement package, meant to last about 50-60 years from first hire
> until death, to the viability of their company? The top 10 companies
> in 1950 were very different than in 2000, with the railroads taking
> a big dive since then. And in 2020 it will be totally different again.
> Defined benefit packages were a bad idea, promoted by the US government
> till this day, and the big three are paying the price. If a company
> is in decline, due to the other items mentioned here, their retiree
> pool grows relative to gross income and number of active workers.
> Costs rise and competitiveness goes down, sales decline in a vicious
> spiral. Note also that while someday the transplants will pay pensions
> here in the US, the bulk of their corporate salary people (engineers
> for instance) back home get pensions from the government. Again,
> a totally crazy concept promoted by the Feds with widespread public
> support. And again, affecting the big three orders of magnitude harder
> than the foreign auto companies.
>
> In most western nations, if there is a defined benefit program, it
> is paid into a government fund and is divorced from the company.
> If the company fails, people don’t lose their pension. In the U.S.,
> the Pension Benefit Guarantee Company, a quasi-government / private
> company (like Fanny-Mae) supposedly fills in when the company goes
> belly up. But it is really a welfare program, with maximum limits
> far lower than promised pensions for many salaried workers. The airline
> pilots at United Air Lines, the current poster child of how wonderful
> chapter 11 will be for the big three, got screwed out of a large
> percentage of their “guaranteed” pension. Apparently the courts have
> ruled bond holders have first dibs on people’s defined benefits supposedly
> “held in trust”. What a travesty; only in the worse run country in
> the western world. These plans were in lieu of 401k plans. They are
> not deferred compensation as some say. There is a pot of gold with
> the employees names on it.
>
> See the PBS Frontline episode here for what happened at United.
>
>
> www.pbs.org/wgbh/pages.../
>
> All of you with defined benefit plans are in jeopardy. The Feds can
> fix these laws by simply making pension funding shortfalls first
> in line for bankruptcy allocations. Put the vulture chapter 11 lawyers
> and banks second in line after peoples pensions (which are essentially
> saving accounts).
>
> 3. No national healthcare. This is killing all US industry because
> we are competing with foreign companies with virtually no health
> care costs at home. Again, for transplants, the tens of thousands
> of such people at corporate headquarters are not in the U.S., but
> back home with free insurance. I’m basically a free market person
> but U.S. healthcare is so screwed up, and the employer based care
> creating such a competitive disadvantage, I give up – company paid
> healthcare must go and something needs to replace it. Watch for a
> future blog entry on that topic. Even though the transplants provide
> health care for their workers this is again an order of magnitude
> bigger problem for the big three because: 1) Corporate staff is back
> home with free health care, transplant workers are younger and therefore
> healthier, big three also pays health insurance for a million retirees.
>
>
> 4. Blunt instrument CAFÉ laws. The original purpose of CAFE was to
> reduce depletion of finite fossil fuel supplies and/or to reduce
> foreign imports. The Global Warming theory did not exist when CAFE
> was instituted but CAFÉ supports this as well. These same goals are
> achieved in almost all other Western counties via very high (on order
> of $3-$6 per gallon) federal gasoline taxes. That is the primary
> reason the cars are smaller in Europe and Japan. Our cowardly government
> did not want to be associated with taxes so instead wrote CAFE laws
> so the big three could do the taxing. I would argue that such laws
> fell, and continue to fall, disproportionately on the big three.
> The laws regulate an average fuel economy for a fleet produced by
> a given company. This forced the big three to abandon the cars they
> made money on, and build cars they don’t make money on, usually at
> a loss. The economics are simple: it takes as many overpaid UAW workers
> to put a door on a $14000 focus as a $30000 F150. So the bigger and
> more expensive the car the better the big three can compete. The
> above mentioned economic disadvantages of the big three are exaggerated
> on small, lower cost cars. And yes, people expect small cars to cost
> less. Screwed again by the feds! Ford, for instance, has trucks providing
> over 50% of sales. A rapidly increasing percentage of these trucks
> are used in the trades; try carrying a load of bricks or even a saddle
> in a Focus. Why does the Ford commercial truck have to go into a
> CAFÉ formula when a Mack Truck or Caterpillar dump truck does not?
> In the rest of the world, where gas taxes are used to reduce fossil
> fuel consumption, each company is allowed to compete in the part
> of the vehicle market where they do best. The customer takes the
> cost of gasoline with tax into consideration when he decides what
> size and features he needs, and then shops the brands that play in
> that market. With CAFÉ, the big three were forced at gunpoint to
> build and sell small cars at a loss just so they could meet the consumer
> demand for larger cars and trucks with their greater utility (carried
> more people for instance). The Japanese entered the market in the
> small car nitch where their low cost and experience from the sane
> countries with gas taxes gave them the greatest advantage. The Japanese
> became associated with small cars and better gas mileage, although
> for the same size car and performance there was no difference on
> average.
> It it were one or two of these items the big three might have competed
> better, but between the four the cost disadvantage in thousands per
> car and the hill too hard to climb. People seem to think Americans
> are superman, blessed with privilege, and the big three should have
> been able to overcome these odds against our oriental upstarts. In
> my opinion the big three did an amazing job lasting this long, as
> they are only mere mortals; doing the best they can given the stacked
> deck against them.
> In the end it is not the above items that are killing the big three
> right now. These items and the recent gas spike put the big three
> in a weak position, but they were recovering with the help of the
> UAW. Cars sell on credit, and there is no money available. Houses
> are also credit sensitive, but the housing industry doesn’t have
> the large capital equipment (factories, labs, buildings) and huge
> staffs (engineers…) to keep feeding when there is a drop in sales.
> And the housing industry is dominated by illegal alien workers which
> they just let go.
> This credit crisis in not of the big three’s making by any stretch
> of the imagination. The most likely biggest wrongdoers in the congress
> and the federal bureaucracy, will keep their jobs and pensions. The
> second biggest wrongdoers in the financial sector, are getting a
> trillion or so dollars of bailouts.
> The big three are asking for a 5% loan and all this hate comes out
> in the press and the web. The gap between perception and reality
> is staggering.

Will the Fed Target Long-Term Rates?

This is exactly what the economy needs to stabilize housing prices. Lower long-term yields should lead to lower mortgage rates, when combined with the Fed’s buying of mortgage-backed securities.

Shorting the Long Bond: The Obama Solution Meets China

You're concerns are right on target. However, one significant source of potential reduced spend must come from DoD. We are currently spending in excess of $750B a year on defense. In 2000 the DoD budget was $250B. A change in priorities for defense could be a big source of money. However, the earliest any significant changes will occure to spending will be FY10-FY12. Watch the future years budget to see if there is any hope for a return to fiscal responsibility, otherwise you are correct and long term rates are headed much higher. We simply can't grow fast enough to generate the revenue.

Some Thoughts on "The Plan"

I wonder if Cheney would still say, "deficits don't matter". Unfortunately the president was unable to control his vice.

Election Speculation: Steaks and Strip Joints

Why don't you grow up ya loser


On Sep 12 10:43 AM User 260719 wrote:

> Clinton handed over a busted economy that was well on it's way to
> depleting the supposed surplus. Bush inherited Greenspan's mess.
> Obama is a muslim, he's said it himself in freudian slip interviews.
> He is going to undermine the US with his tax policy, weak defense,
> and cohorting with the enemies. It is only a matter of time before
> you democratic blame layers are on your knees praying to mecca with
> a gun to your head.

Five Companies PEG'ed for Growth

I agree - I'm going to go buy stock in Altria


On Sep 17 01:11 PM Socialism cannot compete! wrote:

> "Naked girls are not as recessionary as many people think."
>
> Um, yeah...the addiction play. Thanks, but no thanks. I have zero
> desire to make money by promoting bad morals or worse yet, capitalizing
> on others' addictions. I think we can all do better than that.

Commercial Banking and Bank Failures

With credit contracting shouldn't the fed lower interest rates to help the profitability of banks so they can start lending?