Independent E.G.

Banks in Limbo = Financials in Trouble

Bankers are synonymous to Capitalists. The new trend is national capitalism. Look around, every system is going to look alike and compete with each other while watching each other closely.
If the political infrastructure support economy, we got tail wind, otherwise we'll create head wind. Facing Chinese system, we cannot afford to waste more time to hurt ourselves.
The shorters, some financial leaders, some unprofessional medias, your actions are not helping our economy, where is our good conscience? Why are we hurting the foundation of Capitalism? Short-term satisfaction is suicidal for the healthy well-being of national and international economies.
Cool down if you feel everything is so different, take responsibility if your action affects other people. Have a vision and enjoy life if you have positively contributed your bit to this World. Positively and constructively.
It's not that hard if everyone is working together to get this Flagship towards the same direction. We may have different opinions, but don't let that difference fume our anger and destroy our commonwealth. We are on this together. To create a new good economy is to every-one's best interest. Put our subjective difference aside, pull our collective force together. Take a deep breath, look back objectively, and start from fundamentals. We all have a dream. It's an American dream we all love after all!

Auto Advertising: Big Three Need an Attitude Adjustment

The title here is about "attitude adjustment". That really got my attention. The stereotype attitude for the Big Three is "proud". From those recent congress hearings, even the word "arrogant" was used and debated a few times. The proud will be humbled, and the humbled will be honored.
Right now, I believe they have been humbled, and it's time for them to be honored.
On the other hand, Asian auto manufacturers market their products with a very realistic truly humble attitude. They know, they cannot afford to lose their customers. Nowadays, especially in auto industry, too many competitions are wiping out almost all (if any) monopolies. The Big Three leaders really humbled themselves in front of the whole world at those Congressional hearings. In fact, it is those comments from some so-called "concerned" congressmen that really sound "arrogance" in its true sense. They made simplistic harsh offensive comments just to safe-guard their seats without fully understanding what impact will auto industry's operation have on the national economy.
Nothing wrong with being humble. Look at Japanese business world, the Chinese... humble is good in many ways.

The Case for Domestic Automakers

Detroit is also known as Hockey Town as well as Motor City (Motown). Puck on ice moves from one side to another in lightening speed, and before you know it, Red Wings got another Championship.
So, while your eyes are focused on one player, the other players are ready to score. They have so much going on, and before you know it, they'll score again.
So, what's lining up behind this Washington Tour? Tons of loaded arsenals: potential merger(s), pension, benefits, employee concessions. employee relationships, big changes in structures... you name it.
They know how to use your potential moves and will use what say or do to play a very impressive game. You'll soon find out to your surprise! They got the masters playing great games! With the help of "smart" media people and politicians in Washington and those paper-warmers on Wall Street, wake up and learn some strategies from Ice Hockey.

GM: An Alternative to Bankruptcy

Bad economy affects different industries like a bad storm. Its waves and tides cause damages in violent patterns and forms. This one is global. We are in it together. As a nation, united we stand. We need to be constructive and we need to take actions to solve problems. Action not only speak louder than words now, but also will buy us time and save lives. It's that critical. Now, anybody can give an example of an industry that won't be affected? Without necessary action, it's just a matter of time. The question is not whether we help or not, it's HOW can we help?
As the whole world is starting to see what a recession can do, each nation will take care of their own business first. Who else can we count on? Eventually, it's not the money. It's human capital! Human capital can multiply things. Use them well, they will save you. Otherwise, they can destroy you.
Auto industry is facing competitions from more countries than before. From high end, challenges come from Europeans, Japanese; and low end from Korea, China and India, the Big Three still position themselves on top strategically and market positioning-wise. That's not easy! To the rest of the world, they represent U.S. To American citizens, they deserve a lot more support than what we are giving them right now. All the other countries subsidize their auto in many ways to their advantages. Their citizen own their shares of stocks of their auto companies and Most Japanese drive Japanese car, most Korean drive Korean cars and same with Europeans...
If you are part of UAW, you are in a big family, you should start to own your own company, and act like a owner of your company. If every member, every employee starts to purchase your company stock, you don't need anybody to bail you out, your stock will soar!
The whole world is watching gas price, it's down. The pension is becoming a social issue, so is medical/insurance. The new president and new administration is going to handle that. What's left?
The structure. The structure need to adjust to the "New Production Infrastructure" which needs big organization to dominate their market and small (focused) operation to guarantee efficiency and performance.
So, the big three already have big organizations, they only need to release more power to their small units and provide support and R&D resources to these special units (divisions). You keep your company's big name, but each division is responsible for their performance. It's minor changes up to a big scope.
--Really Independent

Time to Buy Airline Stocks?

There shouldn't be any dispute that Mr. Buffet is a "big" investor. If you are a serious investor, you wouldn't think those "mutual funds" are getting anywhere near "big" returns. Mr. Buffet really believes in monopoly. It's allover in his investing philosophy and practices. That's an indisputable fact. The airlines are shaking toward that direction. Lots of volatility. The time-frame we are talking here is right now and "meanwhile". Not the 90's. That's a very different scenario.

Time to Buy Airline Stocks?

Airlines are important to modern society, very important. But they have to depend on oil for fuel. Oils are relatively scarce (comparing with hydrogen) and do get expensive (comparing $10/barrel). Next comes labor cost and everything else made up pretty much the last third of the cost. It may seem to be complicate or different with its unique characteristics but it falls in transportation and service categories. That shouldn't be the reason to scare people away, or does it? It share many common ground with other business, then what is it that really make people think they should stay away from airlines? If it's not the high oil price?

How Bad Is the Oil Shock of 2008?

1. Leadership. Leadership at all levels and in all walks of lives and communities.
2. Good conscience. Imagine if every citizen or resident proactively contribute his/her share, what's no to overcome?
3. Collective power. Why not utilize all these talents collectively? We have the largest pool of smart and practical brain power in the World, don't we? We need to pull these people together.
When the world changed after 911, when we are under attack in so many angles, the status changed. Don't surrender to this mess! Ask not what others can do for you, ask what you and your corporation can do for your own country!
Do we have that spirit? We used to.
When Asian financial crisis hit Asia a few years ago, Korean Airlines' flight attendants jointed other citizens at their airport in Seoul to ask people not to leave their own country so their money will be spent inside their own country.
Right now in Taiwan, the Mayor of Kaohsiung is offering free ride on all their public buses. The government in Taipei is offering 20% raise for their employee in helping them overcoming oil crisis.
And their citizens responding actively in efforts to reduce energy consumption.
Just to list a few. What are we going to do?

Time to Buy Airline Stocks?

Oil price will come down. The World will act together. Read and learn what's going on at G8+3 summit. 911 didn't kill US airlines and US economy, but the drivers behind the oil price are seriously trying. "All the airlines have to file for Chapter 11"? In your dreams!

Time to Buy Airline Stocks?

Big investors invest in monopoly which guarantees a lot. Look at those gas companies. Look at their profit level before and after their mergers. Those small gas stations were bought by bigger ones when you had a pro-merger government (congress and administration). Now the airlines are following the same pattern, only a little bit late. But airlines usually get on headlines a lot. If you can see the potential which means reduced capacity and higher price, reduced hedged whole-sale fuel price, reduced labor cost and service cost (what do they serve nowadays?), you will think very differently. Is airline important for business and society? Be objective in your reasoning even you don't like to fly and don't like their service. Can you imagine a modern economy without airline service?
On the other side, those experts and specialists really want to protect their territories because of its unique aviation "mysterious" nature of business. Airlines business is different in many ways comparing with other conventional business models. They have special regulations, they require special training, they are different from other transportation or service business. It's enough to keep Mr. Warren Buffet away from this field. But Mr. George Soro invested heavily in Chinese airlines and Jet Blue. And so do hundreds of private equities funds. They are in it with claimed "expertise". And they usually try to protect their claimed "territories". Meanwhile, Mr. Buffet is using his private jet and invest in railroads instead.

Buying Airlines as a Gold and Silver Hedge

What you see on surface is not what things really are under deep water. You are right in realising nothing last forever. What goes up has to go down! Same for gold and oil especially when you check the volume traded under the price jump. The volume is not there to indicate a demand. "The demand is not there." The OPEC spokesperson is saying that over and over when denying the need to raise production. George Soro and Warren Buffet are calling this oil price a "bubble", would that ring a bell? So the question is how long will this bubble last? It's easy to say nobody knows. But if it affects our economy, we need to take action to end it sooner. From the surface, we can see airlines use a lot of fuel. But we know it doesn't stop there. People pump gas into their cars everyday. So the auto industry. Actually, the whole transportation industry as whole. So why Mr. Buffet is betting on railroads? Because railroads use less oil or no oil-dependent energy. What about trucking companies, and shipping companies? They're hurt but not many got into headlines like the airlines. Cars made are getting smaller and with alternative energies. Airlines are merging and getting smaller. Is that the force behind the volatility? You bet! There's a deadline for the mergers to go through. Some has a shot, some don't. The new administration will have new procedures. The lame-duck's clock is ticking. Those merger-hopefuls don't want to pay a high price and don't really mind low share prices (and they all pay hedged fuel price anyway.) Those who cannot meet the deadline (six months at least) are making whatever they can to make it harder for their merging competitors but it seems that there're too many downward pressure since people who are leaving airlines general sell their shares which drives stocks down and many claim-holders cash in their shares plus shorters who are betting that the oil bubble will last longer. That's the danger for the shorters who are betting on bubble. Right now G8+3 is being held in St. Petersburg. Together the World's major nations/consumers will focus on OIL price issue and act together. Last time, it was Reagan's administration alone. This time: It's the WORLD acting together! Be aware: whoever is cooking the oil price.

Why Auto Stocks Are an Easy Short

The rest of the world are buying American products because of the weak dollar, believe it or not. You can check the sales records for GM & Ford, their sales outside of U.S. are better than their domestic sales. So weaker dollar really made way to exports which proved a classical economic theory. A new implication to this theory is we are paying debts with weaker dollar and very low interest rates. A side impact is to teach the world a lesson about dependency on oil. And the benefit of this lesson is long term non-dependency on oil and how to prepare for tough time. People talk about fear of recession with inflation and unemployment. The truth is the more "talk" people do, the less "action" they take. Looking back, Real Estate is the last frontier that was doing well for a long time until "sub-prime crisis". The mortgage companies got the crunch first from the lenders which disable these mortgage companies to pay their own debts. Then some financial companies which were shortening these mortgage companies start to sell them and "run" down companies like "New Century" in a little more than one day(from $40/per share down to today's $0.01/share. Now these profit takers (shorters) are facing the same fate in Wall Street. They are just hanging there while squeezing their customer as tight as they can. And some like B. Stern and W. Mutual are facing what their victims used to face....They shot themselves in their own feet. Finance industry and real estates are in an artery and vein relationship, they can co-exit but cannot hurt each other.
Financing and merchandising, any consumer products that need financing, be it automobile, appliances, etc. they co-exit or stop doing business. How does a lender make money if it doesn't lend money? It is the consequence of Wall Streets' own mess. Now I believe that the New Secretary of Treasure is a genious and just recently proposed a new plan to clear this mess. Will this plan go through? You guess it. There are so many ignorant blocks there at all levels. It takes a lot of effort to get everybody from different branches come to see the real picture. Until then, not only you can buy a car without "credit squeeze", but also people will be able to realize their dreams in their "American Homes" again. Let's hope it won't be long.

Why Auto Stocks Are an Easy Short

If you are reading Wall Street Journal and Barrens' recently, Ford is going to make profit in 2009 and the stocks is going to double according to their real progressive agenda and achievement. It's risky to short without solid base. We at Detroit just know too much more than a superficial "Taurus story". Tell your shorters to wake up and smell the coffee. Auto business reacts slowly to the market because of the huge changes for each design/model from the manufacturing side takes time. You just can't catch up with Airlines which is service-centered business. But once the changes are here, it will be significant. There will be little dependency on oil if at all. Please buckle up. It's happening as we speak.

Will Delta Agree to Northwest's Offer Without Pilot Consent?

Historically, there's Pan Am model: "Here comes the De--l."
Pan Am was chopped and employees were offered an opportunity to go through a rehiring process by Delta. Not many got hired. Many profitable routes were selected.
Next is TWA model. TWA had to declare bankruptcy to get DOJ & DOT's approvals; and only accept American as the acceptable bidder. You probably remember what happened to TWA people in the end.
Then the recent Merger of American West & US Airways. A lot went wrong due to a rush deal. Industry insiders have been criticizing the problems. Not many people are happy about the deal except the ambitious Mr. Doug Parker who was an ex-Vice President of NWA and tried to bid Delta and failed.
Across the ocean, as reflected by the previous comment that Air France & KLM merged but kept their separate operation. Many people think this might be a good way to end this deal between NWA & DAL. But not everybody wants to end it so easy and so soon. Reason? Attorneys, consultants, senior management and board members are paid by the time they serve. There's no benefit to rush unless some dramatic event occurs....
Why rush to pay all you share-holders at $26 or $29 a share? Let's think about it when the dollar is cheaper and before the stock price change directions.... Imagine all those guys wake up and do what United Airlines' emploees used to do and control 60% of the total stocks and hire or fire their CEO's, oops, NWA used to have FOUR board members from their employee groups...No longer.

Will Delta Agree to Northwest's Offer Without Pilot Consent?

Check out Today's FT. It's back to the table again between NWA & DAL. Very seriously. This means turbulence. You are right. The question again is: What can we do to benefit ourselves? Under the leadership of Ex-Exec from Boeing--Mr. Allan Mutally, stock of Ford is going to double next year. Yes, I know, UAW is complaining that he got paid too much, which is also true....while some people also say some union officers got paid too much too and did not produce much benefits for members either.... Again, it's about leadership again. Leadership at all levels.

Will Delta Agree to Northwest's Offer Without Pilot Consent?

After reading the heartfelt intelligent comments above, where we touched upon an important aspect , that is: Leadership in the industry and in unions are being questioned here objectively. How much can you count on them? They have to demonstrate capability by creating a legend or a mess. While they are doing that, employees should ask themselves as well: A legacy or a tragedy? Smart comments made here shows your capability to avoid bad decisions as you are proving on every flight you worked successfully. Why not take a look at Mall of America? The Teachers' Union invested together in this Giant successful project. Can you match up?