Jim Kingsdale's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/147830/comments http://seekingalpha.com/article/127329-sqm-reports-revenue-growth-for-eighth-consecutive-year?source=feed#comment-436464 436464 Mon, 23 Mar 2009 10:16:55 -0400 http://seekingalpha.com/article/125210-china-may-have-the-lead-in-developing-the-next-generation-of-cars?source=feed#comment-421915 421915 Wed, 11 Mar 2009 12:39:05 -0400 http://seekingalpha.com/article/125210-china-may-have-the-lead-in-developing-the-next-generation-of-cars?source=feed#comment-421910 421910
Anyone who wants the U.S. governement to invest more money behind the management of G.M. and Chyrsler, sans bankruptcy, does not seem to appreciate that historical failure by a management team is a pretty goodpredictor of future results (it's one basis on which successful investors make decisions) and also fails to appreciate that only a bankruptcy can re-align the disfunctional legal constraints on G.M. and Chrysler in both manufacturing and distribution.

It does seems strange that the C-M study concluded that a 40 mile all electric range is not cost effective and yet the BYD PHEV is said to have a much greater range. I can't explain that unless the BYD battery's weight/performance characteristics are much different from the C-M assumptions or unless the final BYD export vehicle will be different from the one described.

I completely agree with comments pointing out the history changing consumer perceptions of quality of other countries' exports, especially cars. Anyone who thinks the Chinese could not become known in the U.S. for producing high-quality, high-value cars is an idoit...er idiot. ]]> Wed, 11 Mar 2009 12:35:36 -0400
Anyone who wants the U.S. governement to invest more money behind the management of G.M. and Chyrsler, sans bankruptcy, does not seem to appreciate that historical failure by a management team is a pretty goodpredictor of future results (it's one basis on which successful investors make decisions) and also fails to appreciate that only a bankruptcy can re-align the disfunctional legal constraints on G.M. and Chrysler in both manufacturing and distribution.

It does seems strange that the C-M study concluded that a 40 mile all electric range is not cost effective and yet the BYD PHEV is said to have a much greater range. I can't explain that unless the BYD battery's weight/performance characteristics are much different from the C-M assumptions or unless the final BYD export vehicle will be different from the one described.

I completely agree with comments pointing out the history changing consumer perceptions of quality of other countries' exports, especially cars. Anyone who thinks the Chinese could not become known in the U.S. for producing high-quality, high-value cars is an idoit...er idiot. ]]> http://seekingalpha.com/article/119362-battery-wars?source=feed#comment-385391 385391 Thu, 12 Feb 2009 09:28:04 -0500 http://seekingalpha.com/article/115553-does-wealth-equal-money?source=feed#comment-361548 361548 Wed, 21 Jan 2009 01:15:42 -0500 http://seekingalpha.com/article/112844-can-deflation-be-avoided?source=feed#comment-345054 345054
Someone misunderstood my point about stocks and deflation. I did not mean that risings stock prices would cause the economy not to go into deflation (although rising stock prices would help improve consumer spending). What I meant is that rising stock prices would be a predictor that the economy is not falling into deflation.

A problem with my suggestion that we might use stock prices to predict deflation (or anything else) is what period to look at. For example, stock prices could well rise for a few months then fall back again so that the temporary rise would be only a correction in a bear market. Do you look at the rising period or the longer term trend?

It might take so much time for a true bullish trend in stock prices to emerge (a series of higher highs and higher lows that conclusively breaks the downtrend line) that by then it might also be clear from the rear view mirror that deflation was not prevailing.

]]> Sat, 03 Jan 2009 20:49:24 -0500
Someone misunderstood my point about stocks and deflation. I did not mean that risings stock prices would cause the economy not to go into deflation (although rising stock prices would help improve consumer spending). What I meant is that rising stock prices would be a predictor that the economy is not falling into deflation.

A problem with my suggestion that we might use stock prices to predict deflation (or anything else) is what period to look at. For example, stock prices could well rise for a few months then fall back again so that the temporary rise would be only a correction in a bear market. Do you look at the rising period or the longer term trend?

It might take so much time for a true bullish trend in stock prices to emerge (a series of higher highs and higher lows that conclusively breaks the downtrend line) that by then it might also be clear from the rear view mirror that deflation was not prevailing.

]]> http://seekingalpha.com/article/112844-can-deflation-be-avoided?source=feed#comment-343586 343586 www.energyinvestmentst.../

On the actual matter, I think John Lounsbury's point clarifies my own view of inflation and deflation and I should have been more clear and specific. Leading up to late 2007 we experienced conflicting trends of inflation and price declines. There was an asset inflation of enormous proportions in houses and stocks that lasted for many years. There was also some inflation in commodity prices based on real demand from the growth of the world economy. At the same time we experienced price reductions effectively in imports and real wages in the U.S. based on globalization. So any discussion of past or future "inflation" or "deflation" needs careful definitions which I did not provide because different parts of the economy can experience rising and falling prices simultaneously.

When I used the word "deflation" I was thinking about the term as defined by economist to refer to CPI, which, as has been pointed out, is still in positive territory. I'm not an expert on the CPI, but I'll accept it at face value for now. It seems to me as a general rule that if CPI turns negative for long enough the economy can be said to be in a period of deflation. I think that's what Rubini means and his caution about liquidity traps, etc. refers to that.

Clearly we can avoid such deflation while still experiencing the unwinding of the asset bubbles that created enormous increases in the prices of homes, stocks, and (though caused not by a bubble) commodities. The dangerous risk is not the fall in asset prices but a much more general fall in CPI that produces a self-reinforcing feedback loop that it is very hard for government to reverse and which basically emasculates the Federal Reserve because of the "pushing on a string" problem.

]]> Thu, 01 Jan 2009 15:03:16 -0500 www.energyinvestmentst.../

On the actual matter, I think John Lounsbury's point clarifies my own view of inflation and deflation and I should have been more clear and specific. Leading up to late 2007 we experienced conflicting trends of inflation and price declines. There was an asset inflation of enormous proportions in houses and stocks that lasted for many years. There was also some inflation in commodity prices based on real demand from the growth of the world economy. At the same time we experienced price reductions effectively in imports and real wages in the U.S. based on globalization. So any discussion of past or future "inflation" or "deflation" needs careful definitions which I did not provide because different parts of the economy can experience rising and falling prices simultaneously.

When I used the word "deflation" I was thinking about the term as defined by economist to refer to CPI, which, as has been pointed out, is still in positive territory. I'm not an expert on the CPI, but I'll accept it at face value for now. It seems to me as a general rule that if CPI turns negative for long enough the economy can be said to be in a period of deflation. I think that's what Rubini means and his caution about liquidity traps, etc. refers to that.

Clearly we can avoid such deflation while still experiencing the unwinding of the asset bubbles that created enormous increases in the prices of homes, stocks, and (though caused not by a bubble) commodities. The dangerous risk is not the fall in asset prices but a much more general fall in CPI that produces a self-reinforcing feedback loop that it is very hard for government to reverse and which basically emasculates the Federal Reserve because of the "pushing on a string" problem.

]]> http://seekingalpha.com/article/112069-investing-in-deflationary-times?source=feed#comment-337281 337281 1. Seeking Alpha left out the first sentence of my essay. For the original, see my website: energyinvestmentstrate....

2. For those who said that I didn't offer an investment conclusion: did I not specifically say that in a deflationary environment the two investments that make sense to me are bonds and cash? What could be more plain? That means "no stocks".

3. It's interesting to read what specific investments make sense to others. On Ford, I agree they look like the most likely survivor among the Detroit 3 at this point and they seem to have better management than GM or Chrysler (which does not say much). But please note that Ford is in debt up to and perhaps beyond its capacity to handle the debt. That capacity will tend to decrease in a deflationary environment when dollars buy increasingly more and are thus harder to come by. I don't think my first choice among equity investments would be a highly leveraged company. In a deflation you do not want to be indebted. It is only during inflationary times when debt is a good thing to have because it leverages the rising asset values that it finances. In deflation the asset values tend to fall - that's one thing that makes it a deflation - so debt just leverages the decline in value. You don't want to finance falling asset values with fixed amounts of debt. In fact, you don't even want to own assets. That's why cash is the preferred investment during deflation. ]]> Wed, 24 Dec 2008 01:57:44 -0500 1. Seeking Alpha left out the first sentence of my essay. For the original, see my website: energyinvestmentstrate....

2. For those who said that I didn't offer an investment conclusion: did I not specifically say that in a deflationary environment the two investments that make sense to me are bonds and cash? What could be more plain? That means "no stocks".

3. It's interesting to read what specific investments make sense to others. On Ford, I agree they look like the most likely survivor among the Detroit 3 at this point and they seem to have better management than GM or Chrysler (which does not say much). But please note that Ford is in debt up to and perhaps beyond its capacity to handle the debt. That capacity will tend to decrease in a deflationary environment when dollars buy increasingly more and are thus harder to come by. I don't think my first choice among equity investments would be a highly leveraged company. In a deflation you do not want to be indebted. It is only during inflationary times when debt is a good thing to have because it leverages the rising asset values that it finances. In deflation the asset values tend to fall - that's one thing that makes it a deflation - so debt just leverages the decline in value. You don't want to finance falling asset values with fixed amounts of debt. In fact, you don't even want to own assets. That's why cash is the preferred investment during deflation. ]]> http://seekingalpha.com/article/111651-rough-economic-seas-toss-many-boats-including-oil-price?source=feed#comment-334686 334686 Sat, 20 Dec 2008 14:56:36 -0500 http://seekingalpha.com/article/110635-gm-natural-death-or-suicide?source=feed#comment-329321 329321
That was the main point. The other point was to bring the Bloomberg history of GM to people's attention just because it may be of interest and is very well done, I think. ]]> Sun, 14 Dec 2008 16:47:39 -0500
That was the main point. The other point was to bring the Bloomberg history of GM to people's attention just because it may be of interest and is very well done, I think. ]]> http://seekingalpha.com/article/107449-lower-oil-prices-equivalent-to-300b-tax-cut?source=feed#comment-313302 313302
An oil price increase is not like a tax increase in that it's continuation is not assured, that is true. But it is worse than a tax increase in its immediate macro economic impact in a Keynesian sense because not only is the money taken away from consumers but instead of it going to their government and thus providing some benefits as is the case with a tax increase, with an oil price increase 2/3rds of it goes out of the country and has zero economic benefit to the U.S.

You might want to stick to factual analysis - ad hominem accusations don't help anyone. ]]> Sun, 23 Nov 2008 23:55:05 -0500
An oil price increase is not like a tax increase in that it's continuation is not assured, that is true. But it is worse than a tax increase in its immediate macro economic impact in a Keynesian sense because not only is the money taken away from consumers but instead of it going to their government and thus providing some benefits as is the case with a tax increase, with an oil price increase 2/3rds of it goes out of the country and has zero economic benefit to the U.S.

You might want to stick to factual analysis - ad hominem accusations don't help anyone. ]]> http://seekingalpha.com/article/103236-economic-anomalies-explained?source=feed#comment-295998 295998
That theory didn't work either because it turns out that the American public actually likes the programs that the government spends money on. Each and every program has its powerful and/or broad based constituency - even those awful earmarks.

Anyway, I believe that Reagan knew very well that the Laffer Curve was a joke and did not mind at all inflating the budget deficit. Reagan is a false god of the GOP, in my view. He was a great orator but actually a very ineffectual president with one important exception: he shifted the country away from a union stranglehold on the corporate cost structure.

That shift has continued ever since Reagan and has now unfortunately gone too far. This election will reverse the shift of wealth away from working people that Reagan began, assuming Obama is elected.

Incidentally, for those who thing Reagan brought down the Soviet Union through militiary spending, that is wrong. What brought it down, aside from its own corrupt and inefficient system, was low oil prices. It is true that Reagan's CIA helped engineer those low oil prices. ]]> Sat, 01 Nov 2008 23:20:51 -0400
That theory didn't work either because it turns out that the American public actually likes the programs that the government spends money on. Each and every program has its powerful and/or broad based constituency - even those awful earmarks.

Anyway, I believe that Reagan knew very well that the Laffer Curve was a joke and did not mind at all inflating the budget deficit. Reagan is a false god of the GOP, in my view. He was a great orator but actually a very ineffectual president with one important exception: he shifted the country away from a union stranglehold on the corporate cost structure.

That shift has continued ever since Reagan and has now unfortunately gone too far. This election will reverse the shift of wealth away from working people that Reagan began, assuming Obama is elected.

Incidentally, for those who thing Reagan brought down the Soviet Union through militiary spending, that is wrong. What brought it down, aside from its own corrupt and inefficient system, was low oil prices. It is true that Reagan's CIA helped engineer those low oil prices. ]]> http://seekingalpha.com/article/93421-the-long-case-for-canada-s-petrobank?source=feed#comment-268423 268423 Mon, 29 Sep 2008 10:58:20 -0400 http://seekingalpha.com/article/97699-hurricane-damage-impacts-oil-price?source=feed#comment-268417 268417 Mon, 29 Sep 2008 10:53:55 -0400 http://seekingalpha.com/article/97148-nordic-american-tanker-dividend-stock-analysis?source=feed#comment-264594 264594 Thu, 25 Sep 2008 08:46:57 -0400 http://seekingalpha.com/article/96313-gm-volt-dream-car-or-road-to-bankruptcy?source=feed#comment-260114 260114
1. Will GM have to go bankrupt or can its non-US operations salvage it? I have not done my homework on that but my reading says an awful lot of people who say they have done the homework think a bankruptcy is inevitable. More to the point, why would they be asking for a govt. bailout if they were not on the edge of insolvency? Bottom line: my suggestion of a likely GM bankruptcy is not unreasonable.

2. Will the Volt and its siblings work economically: as I said, it depends on the ultimate battery cost. There are mixed views. Clealy right now the li-on battery is too expensive, but things change with volume production and new technologies. Maybe GM is smarter than we give them credit for and maybe they can make money from the Volt at some point. I hope so, but a lot of people believe the bankruptcy will come before the Volt profitability does.

3. So, as Paul asks, why all the ads for the Volt since it won't be here for a couple of years and then not in enough volume to make much difference? I don't think it's unreasonable to speculate (which is the point of my article) that the real reason GM is hyping the Volt now is to give Congress the cover it needs to bail GM out from a likely bankruptcy by making sure everyone in America knows GM's future could be a lot more interesting and worthwhile than its miserable past. If Americans have a reason to keep GM alive other than to line the bulging pockets of top management, they will be a lot more foregiving of the Congress that wants to do just that. The Volt may be GM's hope for that reason that Americans might want GM to be saved.

In other words, the Volt is now as much about politics as it is about business. Sure that's just a guess on my part. But it seems not unreasonable and generally consistent with most of the commentary above. ]]> Sat, 20 Sep 2008 13:43:44 -0400
1. Will GM have to go bankrupt or can its non-US operations salvage it? I have not done my homework on that but my reading says an awful lot of people who say they have done the homework think a bankruptcy is inevitable. More to the point, why would they be asking for a govt. bailout if they were not on the edge of insolvency? Bottom line: my suggestion of a likely GM bankruptcy is not unreasonable.

2. Will the Volt and its siblings work economically: as I said, it depends on the ultimate battery cost. There are mixed views. Clealy right now the li-on battery is too expensive, but things change with volume production and new technologies. Maybe GM is smarter than we give them credit for and maybe they can make money from the Volt at some point. I hope so, but a lot of people believe the bankruptcy will come before the Volt profitability does.

3. So, as Paul asks, why all the ads for the Volt since it won't be here for a couple of years and then not in enough volume to make much difference? I don't think it's unreasonable to speculate (which is the point of my article) that the real reason GM is hyping the Volt now is to give Congress the cover it needs to bail GM out from a likely bankruptcy by making sure everyone in America knows GM's future could be a lot more interesting and worthwhile than its miserable past. If Americans have a reason to keep GM alive other than to line the bulging pockets of top management, they will be a lot more foregiving of the Congress that wants to do just that. The Volt may be GM's hope for that reason that Americans might want GM to be saved.

In other words, the Volt is now as much about politics as it is about business. Sure that's just a guess on my part. But it seems not unreasonable and generally consistent with most of the commentary above. ]]> http://seekingalpha.com/article/94839-maxwell-s-oil-analysis?source=feed#comment-251574 251574 Thu, 11 Sep 2008 10:44:26 -0400 http://seekingalpha.com/article/94839-maxwell-s-oil-analysis?source=feed#comment-250451 250451 The problem will be producing enough plug in hybrid to satisfy demand and make a difference. Another problem is getting a cost effective efficient battery - not totally here yet.
So bottom line is that plug in hybrids won't solve the oil price crisis we will face around 2013. ]]> Wed, 10 Sep 2008 11:16:12 -0400 The problem will be producing enough plug in hybrid to satisfy demand and make a difference. Another problem is getting a cost effective efficient battery - not totally here yet.
So bottom line is that plug in hybrids won't solve the oil price crisis we will face around 2013. ]]> http://seekingalpha.com/article/94294-charlie-maxwell-to-barron-s-300-oil-is-inevitable?source=feed#comment-247902 247902 www.energyinvestmentst.../]]> Sun, 07 Sep 2008 22:34:22 -0400 www.energyinvestmentst.../]]> http://seekingalpha.com/article/93401-opportunities-in-energy-storage-stocks?source=feed#comment-243317 243317 Mon, 01 Sep 2008 14:23:51 -0400 http://seekingalpha.com/article/91442-transocean-an-opportunity-in-falling-oil?source=feed#comment-233881 233881 Tue, 19 Aug 2008 09:52:29 -0400 http://seekingalpha.com/article/90330-study-u-s-has-118-year-supply-of-natural-gas?source=feed#comment-228154 228154 Mon, 11 Aug 2008 17:05:05 -0400 http://seekingalpha.com/article/90119-oil-demand-should-continue-to-fall?source=feed#comment-227345 227345 Sun, 10 Aug 2008 18:50:17 -0400 http://seekingalpha.com/article/88028-slow-start-for-lithium-ion-hybrids?source=feed#comment-219610 219610
Incidentally, I love SQM's product line. But the stock doesn't seem cheap at somewhere around 25 -30 times projected earnings.]]> Thu, 31 Jul 2008 16:05:40 -0400
Incidentally, I love SQM's product line. But the stock doesn't seem cheap at somewhere around 25 -30 times projected earnings.]]> http://seekingalpha.com/article/84529-rbc-upgrades-canadian-natural-resources-downgrades-nexen?source=feed#comment-203043 203043 Fri, 11 Jul 2008 11:44:56 -0400 http://seekingalpha.com/article/82668-upside-to-oil-stocks?source=feed#comment-193155 193155 Thu, 26 Jun 2008 09:14:33 -0400 http://seekingalpha.com/article/82445-keeping-alternate-energy-in-perspective?source=feed#comment-191680 191680
Second, the greatest new source of savings in electricity in the short term is conservation. For example, if we changed out all the light bulbs to CFL's or, better, LED's (which are not quite here yet on a competitive price basis but soon will be), we could save about 15% of all the electricity now used. That is huge.

Third, it's been estimated that we could power some 80% of cars with electricity just by using hybrid efficiencies and, more important, by refueling during nightime off-peak load periods when there is plenty of spare electrical capacity.

The focus on sources of energy is not getting us anywhere. We need to focus on transforming our transportation system to electricity. In my humble opinion, of course.]]> Tue, 24 Jun 2008 09:41:18 -0400
Second, the greatest new source of savings in electricity in the short term is conservation. For example, if we changed out all the light bulbs to CFL's or, better, LED's (which are not quite here yet on a competitive price basis but soon will be), we could save about 15% of all the electricity now used. That is huge.

Third, it's been estimated that we could power some 80% of cars with electricity just by using hybrid efficiencies and, more important, by refueling during nightime off-peak load periods when there is plenty of spare electrical capacity.

The focus on sources of energy is not getting us anywhere. We need to focus on transforming our transportation system to electricity. In my humble opinion, of course.]]> http://seekingalpha.com/article/81531-saudi-oil-meeting-scenarios?source=feed#comment-187026 187026 Tue, 17 Jun 2008 10:09:33 -0400 http://seekingalpha.com/article/78798-crude-oil-prices-bears-will-soon-win-out?source=feed#comment-174008 174008 Mon, 26 May 2008 11:15:11 -0400 http://seekingalpha.com/article/78798-crude-oil-prices-bears-will-soon-win-out?source=feed#comment-174006 174006 Mon, 26 May 2008 11:11:15 -0400