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geodan85

geodan85
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  • Walter Energy -11% premarket on gloomy BofA coal assessment [View news story]
    This call sounds late. It also interesting to see a bulge bracket firm talk about a price target ~80% lower and potential liquidity problems. I guess the investment banking area won't be pleased when pitching any deal to Walters to raise funds or advise on mergers/acquisitions.
    Mar 20 08:56 AM | 1 Like Like |Link to Comment
  • Industrial Metals' Dramatic Drops Show Miners Probably Have A Tough Road Ahead In 2014 [View article]
    sugarsail1, agreed Axiom Capital likely survives by serving hedge funds that short stocks, in this case CLF. I can't imagine any legitimate analyst actually saying Cliffs was in danger of bankruptcy. The recent sell off in iron prices are best described below (from The Sydney Morning Herald yesterday):

    "The liquidation of iron ore stock used in financial deals in China pushed the metal's price to an 18-month low early on Tuesday.

    In its biggest one-day loss in more than four years, iron ore slumped 8.3 per cent, or $US9.50, to $US104.70 a tonne, its lowest level since October 5, 2012.

    The sharp move was caused by the sale of iron ore that was collateral for financing arrangements, said Deltec chief investment officer Atul Lele. When collateral holders sell, it drives the price down, forcing others to get rid of their holdings."

    Can it go lower? Sure, but to not mention the financial side of the sell off or that recent Chinese data was influenced by the Lunar New Year holiday seems to be data mining to help a hidden agenda.
    Mar 12 09:28 AM | Likes Like |Link to Comment
  • Review Of 2013: Why My 9% Yield Excites Me More Than My 18% Total Return [View article]
    PF

    All good points about the Fed. I will add a few observations.

    First, given the current debt of the United States (and growing) and horrendous budget policy any move back toward normalized funding rates in the Treasury market could possibly trigger a devastating debt spiral. Government deficits would increase with rising interest payments that would require even more borrowing and likely see national debt growing faster than nominal GDP therefore creating a lack of confidence in the treasury market that would feed on itself creating further distress.

    I believe the current refinancing of U.S. debt at these lower interest rates will enable the U.S. to lower the average interest rate on all outstanding debt to below the nominal GDP growth rate, therefore allowing debt to shrink as a percentage of GDP. As long as budgets deficits are declining and hopefully balanced (unfortunately something seldom seen in the U.S.) it should help market conditions and confidence that allow uneventful refunding auctions.

    I also believe that given the unlikely event that government budgets are balanced, the Treasury debt being accumulated by the Fed will continue and eventually be cancelled or held to maturity (HTM), which is essentially the same thing since the Fed, by law, turns over their profits to the Treasury at the end of each year. In essence this money printing is bookkeeping (and inflationary more on this in my second point) and the risk is to the U.S. dollar if cancellation occurs, although given China (via currency pegs), Japan (Fed model), and the ECB (currently back door via guarantees, although outright bond buying seems on horizon) are all printing money as well, the risk to the dollar is likely not that great and less so given the reserve status. Once cancellation (or HTM) occurs U.S. debt will decrease and become much less as a percentage of GDP and make the fiscal situation look less threatening and allow for continued lower interest rates, even with the central bank eventually ending QE.

    My second observation is that the inflation risk is real, although some of the excess liquidity is being destroyed via the write-offs by the banking sector on the ludicrously high lending against real estate values in the mid part of the previous decade. Those valuations may never be seen again (certainly the case in subprime locations) or at least will take another decade or longer to see similar valuations and allow monetization at those levels which would create additional liquidity and inflation pressure.

    The real inflation threat lies in free reserves in the banking system (link below). As long as they continue to grow, inflation will remain subdued, however as those reserves shrink or drop quickly, the inflation rate will likely follow and rise slowly or rapidly if the reserves drop quickly. Interest rates would then also rise, which would further increase the incentive for banks to lend (increasing margins) which would likely quicken the decline in free reserves and add to inflation, sort of vicious circle. Of course, this scenario would be dependent on increasing loan demand (commercial and industry loan demand is just getting back to peak levels prior to great recession / second link below) as well as a relatively benign environment regarding lawsuits and or settlements/shakedowns of the banking system by the current U.S. administration. However, the current government in their never ending quest of wealth redistribution by the means of an arrogant we know better misuse of federal power seems unlikely to allow the that benign environment to take hold.

    Finally, the Chinese GDP growth rate and it's impact on inflation. Can anyone really believe that this is accurate or real? Our government data are best attempts to gauge economic activity and are suspect, subject to many revisions, and not controlled by a communist government that is focused with keeping civil unrest at bay and therefore self-preservation. China's only global impact currently is on commodity prices (cost push inflation) which are way down from the prices last decade. Some demand pull inflation (rising labor rates) will likely occur over time in China, but I don't see it influencing global inflation rates anytime soon.

    http://1.usa.gov/WFIQZQ

    http://bit.ly/11Q0M1C
    Feb 17 11:46 AM | 1 Like Like |Link to Comment
  • Review Of 2013: Why My 9% Yield Excites Me More Than My 18% Total Return [View article]
    WDC1

    Consider selling all or part (1/4, 1/3, 1/2) of your position if the appreciation is greater then three years worth of cumulative dividends/distributions. Usually, market cycles are anywhere from 2 to 5 years (cyclical not secular), which may allow you to buy back into these investments at lower prices and therefore increase total returns.

    Harvesting three or more years of dividends/distributions should also, in theory, give you the corresponding window of 3+ years to add the original investment capital back into these investments (or others) at potentially better entry points while utilizing the three or more years of income for expenses, if needed.
    Feb 17 10:12 AM | Likes Like |Link to Comment
  • Atlantic Power: Is Another Dividend Cut In The Cards? [View article]
    As stated by many, this company is in desperate need of new management. This company needs real utility industry executives, not semi-retired investment bankers who thought they could buy and sell generation assets, pay dividends in between deals and make themselves rich in the process.

    This new deal is interesting since it almost takes on a debtor-in-possession feel. The key will be who buys the majority of the debt. GS will likely price it attractively for themselves and their clients. It would be helpful to know who the clients are or at least what type of buyers, which of course we won't likely find out. BAML (B of A Merrill) is likely in the deal to stuff some of the debt to retail who will be along for the ride with the institutional/trade buyers.

    I believe the company will be sold eventually when a better market for IPPs develops. However, that may be some time given the current awful environment in power generation and a few mega utilities looking to sell generation assets as well.
    Feb 3 09:30 AM | 3 Likes Like |Link to Comment
  • Activist investors seek to paint coal as the new tobacco [View news story]
    JollyGreen

    Excellent point about Germany, Europe's largest economy, and an export machine. I have commented on other coal articles that German coal usage is Increasing as they move away from nuclear. The German move away from nuclear, in my opinion, is classic "knee jerk" reaction to the Fukushima disaster and likely misguided since Germany isn't prone to tsunamis and earthquakes.

    Of course, you never hear much from activist investors concerning energy use in the developing world since any complaints about the environment will be ignored (China) as growth and modernization usually win out over environmental concerns.

    Also, is it really better to build nuclear power in regions that are more prone to earthquakes/tsunamis (Asia)? And what about storage of the waste? Sure, you can move to natural gas fired plants which are less dirty, but that increase in build/usage will most certainly increase the price of natural gas over time and make coal the cheaper alternate for energy use in developed countries. Lower costs always win out in electricity and industrial use when individuals and/or businesses are given a choice, unless governments intervene with their arrogant "greater good" argument.

    How the current disaster in the U.S. government's involvement in healthcare will not be irrelevant (or forgotten) when they continue to "help" the country to cleaner energy use. A move away from coal will result in higher energy costs (removing a competing energy source and natural gas is still a depleting commodity) and even potential blackouts (pipelines down for example) since storing natural gas is more complicated than coal.
    Nov 21 09:30 AM | 1 Like Like |Link to Comment
  • Bank Of America Hammered By The United State's FHFA [View article]
    gwyn,

    You are certainly not an empty slate, nor did I ever imply that, evident by your ability to think independently using intelligent insightful reasoning. Living one's life to their own moral standards (as long as one respect's the right of others to have that same freedom / sort of the "golden rule" I guess) while maintaining an open mind to every situation and/or different convictions is admirable and unfortunately very rare in most of the world. If this approach to life were widely practiced it would provide solutions to a variety of contentious issues or even prevent many problems from arising. For example, individual morality triumphing over greed by both lenders and borrowers in last decade's real estate bubble would have prevented the financial crisis of 2008 (enforcing existing regulation may have helped as well).

    Your second question is rhetorical and clearly I agree that is why it does work. I also happen to agree with your approach to voting about non party alliance and voting for the best person, although often feel voting for president in the U.S. requires choosing the lesser of two evils, but I do vote since the right has been fought and defended with blood and failure to vote diminishes the sacrifices made by earlier generations.
    Nov 9 12:28 PM | Likes Like |Link to Comment
  • Bank Of America Hammered By The United State's FHFA [View article]
    gwyn, I believe the affordable healthcare act was signed by Obama (passed under a democratic controlled Congress), but not created by him. Ultimately, this new system will undergo many changes and hopefully be a better system than what proceeded it.

    I also believe it hurts the people least able to afford healthcare, since if they don't sign up and receive the subsidy, they will be taxed/penalty/fee (whatever they want to call it) by withholding the amount due by reducing refunds or tax credits (mainly to the so called 47%), which, ironically, may actually increase government revenue in the short term.

    If you are not pro big government, how can you justify universal all encompassing federal mandates that require action to be taken? Also, just as importantly how would non-compliance be enforced? If not by a big powerful central authority (unfortunately in our country, the IRS) then how? An honor system? In theory that would be utopian, but likely unrealistic.

    Beliefs/convictions are choices by individuals on how they conduct themselves in their lives (at least in free countries) and usually come to be reflected in political parties (especially when close to elections), although after elections are concluded, what you get from any party is not exactly as promised. Having no beliefs/convictions would indicate an empty slate, so to speak, and would be ripe for the brainwashing you speak of by the more manipulative and clever in any society therefore leading to more narrow views or as you say prejudices.

    Finally, it seems that any government that governs waiting for reality or just dealing with it, would be reactive rather then proactive. In order for that to work with any degree of success would require every government in the world to act the same without defined national interests, unfortunately that will never occur.
    Nov 8 12:42 PM | Likes Like |Link to Comment
  • Bank Of America Hammered By The United State's FHFA [View article]
    I am sorry about the link not working, but it does work here (in the U.S.) when I click on it. The short video is not bashing the ideals of the affordable care act, which are admirable (it discusses the philosophy behind it). Everyone in a rich industrialized country should have access to healthcare insurance (and healthcare) and at prices they can afford (the devil is in the details). However, it should be an individual's choice not a mandate from a government that believes they know what is good for you and everyone else.

    Also, you seem to have a slight hostile/condescending attitude towards the people in the U.S. with your comment about being brainwashed. My take, the fact that you state that indicates an arrogance and intolerance of views that you don't agree with, which of course makes you fit right in with the ultra liberal left in this country.

    However, please stay in Europe since they seem to have all the answers to most problems in the world today. Things are going well in Greece, Italy, Spain, Portugal and Ireland. I am sure Europe will lead the world out of the current mess with their enlighten views.
    Nov 8 10:40 AM | 1 Like Like |Link to Comment
  • Bank Of America Hammered By The United State's FHFA [View article]
    As mentioned earlier, most of these mortgages were originated by Countrywide and the government was grateful and encouraged BAC and other large banks to buy these failing institutions. The lawsuits against the banks are "no good deed goes unpunished" and clearly are holding back credit being extended more broadly in the economy.

    Also, it is ridiculous to actually think and say bubbles were/are knowingly created by a few to benefit themselves. For a bubble to grow it needs wide participation by multiple groups of investors/buyers and as far as I can see, no one was/is holding a gun to their head to participate.

    If you actually believe the recent actions of the DOJ is just, then you clearly are supporter of most incompetent administration this country has ever seen. If that is the case, please write about politics instead of investments/finance.

    To further show you the arrogance and absurdity of the current administration and their poisonous agenda, watch the link below. It sets a simple clear argument based on logic, responsibility and morality, all lacking in the Obama agenda and unfortunately in growing segments of our country that believe in his misguided vision.


    http://bit.ly/1954XZi
    Nov 8 09:21 AM | 1 Like Like |Link to Comment
  • FHFA demands $6B from BofA over mortgage bonds [View news story]
    This is classic "no good deed goes unpunished". The banks in question (JPM BAC as the two largest) made quick decisions (with government prodding) to buy these troubled failing banks to help stop the growing panic in financial markets.

    Why is DOJ doing this? I believe this administration is anti-business and their true colors are now showing since they no longer face re-election and will not need the funds usually obtained form business. These lawsuits/settlements they believe plays (likely correct) well to the their base of very left liberals and anyone new to entitlements this clueless administration hands out.

    Sadly, they miss the larger issue, which is a healthy financial sector lending and growing (not focused on building reserves for lawsuits/write offs etc..) will help generate more tax revenue in the economy on a sustainable basis rather then these onetime shakedowns could ever achieve.

    Oct 21 09:20 AM | 5 Likes Like |Link to Comment
  • Stay Away From This Sinking Ship [View article]
    As stated above, the VLCC rate is not applicable for NAT. The suezmax rate is the meaningful spot rate for NAT.

    NAT, as are all oil tanker shippers, are in difficult times, but they continue to show access to financing so it seems likely they will be a survivor. Real recovery in tanker rates still seems distant and according to John Fredriksen (likely the best investor/operator in this industry) probably won't occur until 2015 (link below).

    http://bloom.bg/189cB7H
    Sep 27 11:46 AM | 1 Like Like |Link to Comment
  • Chinese demand for coal is cooling [View news story]
    I believe the trillions is a typo or just showing that this article is an attempt to attack coal stocks, again.

    The U.S. I believe has the largest coal reserves in the world, estimated at 483 billion short tons (link below).

    http://1.usa.gov/18mKUJi

    Also, Germany is burning more coal as they attempt to move away from nuclear power after the Japanese disaster. I believe their coal consumption will not be replaced that quickly (if at all) since their natgas supply is almost exclusively from Russia and always a problem with regard to price and politics.
    Sep 24 09:05 AM | 1 Like Like |Link to Comment
  • Microsoft's Nokia Acquisition: Too Early, Too Cheap [View article]
    normcf

    Very good observation regarding branded versus unbranded phones for the lock-up period. Bringing back former Nokia employees, especially for design, to produce an adroid phone manufactured by a third party would keep them in the game as a niche player. This would keep them somewhat current in smartphones and potentially set-up a return of the Nokia brand in ~2.5 years. However, not sure they could ever return to be a major player again in the mobile phone market via this strategy.

    I like the observation mentioned earlier that Nokia, minus the phone division sold to MSFT, would be an ideal target for Samsung. After that acquisition, Samsung could buy ALU and really consolidate the network industry.

    Finally, I agree with the author that a lot remains to be seen how Nokia develops after this deal and the phone division was sold way too cheap, although further risk was removed from Nokia by the sale as evidenced by their bond price performance yesterday.
    Sep 4 08:37 AM | Likes Like |Link to Comment
  • Nokia estimated to have 87% of WP8 base; Bernstein downbeat about Q3 [View news story]
    This dependency should increase leverage for Nokia when dealing with Microsoft. Would still like to see Nokia manufacture some android phones to take some market share from Samsung. However, I believe the WP8 is a better operating system then android.

    Finally, I don't believe anyone really cares what Bernstein's analyst thinks, since he doesn't see the forest through the trees and seems to be one sided and closed minded. As more carriers sell lumia devices, market share for WP8 will continue to increase, albeit slowly it seems. Europe needs to recover more fully for Nokia to benefit with quicker market share growth..
    Aug 20 01:03 PM | Likes Like |Link to Comment
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