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- Host Hotels & Resorts, Inc. F3Q08 (Quarter End 09/05/08) Earnings Call Transcript
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- DragonWave Inc. F2Q09 (Qtr End 08/31/08) Earnings Call Transcript
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- Total System Services, Inc. Q3 2008 Earnings Call Transcript
- Tortoise Capital Resources F3Q08 (Qtr End 08/31/2008) Earnings Call Transcript
- Intraware, Inc. F2Q09 (Qtr End 08/31/08) Earnings Call Transcript
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Brian A. Davis
18 Comments
The Great Dollar Pump of 2008: A Doomed Central Bank Intervention
1. The U.S. government appears to support all government and quasi-government institutions...FDIC etc. (Pledged by the Full Faith of the U.S. Govt.)
2. Foreign Bond holders are happy receiving returns that for all intensive purposes are worth less the money invested.
3. G8 continues to pump the dollar...
But I would tend to agree with your long-term assessment
Financial Crisis: Our Founding Fathers' America
Thank you for your thoughts and comments.
Please feel free to visit usmegatrends.blogspot.....
Steve Benard, if you are reading this I am interested in emailing you but your website does not list any contact info.
Respectfully,
Brian A. Davis
P.S. Sorry about the spelling error.
BD
Lax Underwriting , Foreclosures, and Credit Crunch Stimulate Misery Industries
Thanks for your work in the real estate market, specifically for those who could well be the most under-represented in NY. I'm curious though if you note a market increase in financial woes for the corporations of residential real estate as well. I am convinced that commercial real estate is only starting to show its cracks.
Secondly, in several of my articles I have cited examples where lenders are "refusing" to foreclose on properties here in the Midwest, is that the case in NYC as well? Evidently, NOBODY wants additional losses on their books. Are there laws which which force a lender to reposes a property?
Last, I'm glad you are bringing the likes of Kiyosaki and Sheets to task. I believe both have both have gone into hiding since this mortgage meltdown has taken place. In one anecdote, a Sheets follower was single-handedly responsible for destroying Cleveland's Polish neighborhood when his 56 property dynasty collapsed.
Respectfully,
Brian A. Davis
P.S. jjason,
Deficit spending in general can be blamed when it comes to government. Both Republicans and Democrats have enough blame to go around. I am a social conservative, and really wish there was a viable third party candidate... Call me a swing vote at this juncture... Let's go back to a day when individual rights and responsibilities are preached, and everyone recognizes that we are all held by a social contract. One thing is certain, people (including myself) have lost faith in the current regime!
'Panics Do Not Destroy Capital'
Panics to not destroy capital. Panics simply put a lender on notice as to how many bad loans they have already made. For instance, in California when thousands and thousands of (bad) loans were made to high risk borrowers, that was the point where capital was lost. Now that the financial market is approaching the "Panic" stage (and things will get worse before they get better) lending institutions are simply realizing now how much capital that has been put into "unproductive works."
While some readers will contend that it is a good business to see their fellow American in a debt ridden situation, and finally relying on credit cards for necessities, it is a perilous position for the companies and borrowers who are involved in this practice.
Finally, I firmly believe credit card issuers (and any other loan originators for that matter) and their clients have a business relationship. However, should the clients fall upon hard times (see the state of the U.S. Economy) credit card underwriters are in an extremely unenviable position.
Respectfully,
Brian A. Davis
Capital One: A Different Short Case
Every knows that COF is set-up for the big fall. The amount of bad debt in the areas of credit cards and auto loans has received some attention.
That being said, you make some excellent points about relationship managers and the inflated numbers from the Hiberia Bank portfolio. The later sets up another perfect storm scenario for this befuddled institution.
Last, I think your third COF article may well be served by addressing the consumer confidence and the HORRIFIC unemployment numbers... and how they will drive COF's stock price down to Davey Jone's Locker.
P.S. You may consider BAC's heavy exposure to consumer credit lines as well.
Winners and Losers from the Mortgage Mess
Assuming that is the case, it seems the expectations of a boom or bust for credit card companies is in the works. Remember, credit card debt is not secured. Should a party fail to pay, go bankrupt, lose their house, etc. the credit card company will be left holding the bag.
Depending on inflation, it should also be noted that if... if credit card and other revolving debt is serviced, there is also a risk of being repaid in inflated dollars.
Last, Congress plans on addressing credit card issuers and other forms of loan sharking in the fall. At the end of the day, when re-election is near, it is easy to vilify credit card companies.
P.S. MBNA was sold for several reasons including the death of Al Learner President and Founder of the company... It would also appear that MBNA was sold when the getting was good... consider the performance of financials since MBNA was sold... at its premium price. Last, MBNA was not selective as to who was issued a card... BAC has not fostered the growth of that company, and does not understand the family values that Al Learner used to create the empire. The MBNA division of BAC is a mere shadow of what used to be. At the end of the day, more will shake out of credit card companies. This could very well be the next financial shoe to drop on Wall Street.
Merrill, Lehman Knew the Score Before: Inexcusable
www.senate.gov/
Merrill, Lehman Knew the Score Before: Inexcusable
house.gov
senate.gov
Financial-Dip Buyers Forget To Ask What's Next
Soon the euphoria will be over and the financials will not be allowed to celebrate "lower than expected losses"... and be treated like winners...
Let's not forget that credit cards are teh next shoe to drop...and BAC has the highest exposure in that area!!!
Homebuilders, Commodities and Diesel
The point that homebuilders are still "finding buyers" for homes is out-right scary. It sounds as though the homebuilding sector has become the equivalent of JD By Rider cards... And in the car business the old saying is "There's an ass for every seat!" I can only imagine some of the creative financing options that are now available...this will dry up soon. Dr. Mike is correct...After all, how many bottom feeders are really out there to pick up homes when gas is sky-high?
I'll make a prediction here about the gas prices. They will stay high, and spike a little more...creating another bubble in Green Energies... When the new Green Cars get put into production, oil companies will drop prices and crush the competition. We'll forget about Green Energies again...until it really hurts.
Maybe another side story in Africa would be infrastructure companies. Although GE is has not performed well lately, the infrastructure division was one of the most profitable.
The Triple Play: Oil Addicts, The Credit Crunch and Deflation
Yes, the first true fear is inflation...that will happen when prices go up and the buying power of the dollar does down. However, the true long-term concern would be deflation. Should wage increases slow for the other 99.5% of the population, this could be one of the catalysts that bring on a deflationary period as seen in the Great Depression. Here is a short excerpt from Wikipedia:
"In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas where commodity prices plunged, and in mining and logging areas where unemployment was high and there were few other jobs."
Respectfully,
Brian A. Davis
The Triple Play: Oil Addicts, The Credit Crunch and Deflation
Thank you for your excellent posts. I find a high degreee of irony to the degree which Big Oil...and to a lesser extent small oil is taking a verbal beating from the powers that be.
There have been a number of theories behind oil price. Three make the most sense:
1. The purchasing power of the U.S. Dollar (oil is priced in dollars) has lost its clout...George Soros would agree!
2. The emergence of China and India as consumers has caused an
exceedingly high demand. This is coupled with a less than Pro-American stance from countires in OPEC.
3. Last, is the manipulation of prices. While there is a slight degree of manipulation (because oil is a commodity), Congress may try to hang their hats on this issue...However, it is nothing more than an act of grandstanding...and taking the public's eye off problem #1 and problem #2.
Interestingly enough, John D. Rockefeller Sr. (Standard Oil) took a beating for producing the best and cheapest oil in the country. As a matter of fact, he was viewed as the original tycoon...Teddy Roosevelt vilifed Standard Oil and became the trust buster.
Interestingly enough, once the Trust was broken oil prices actually increased...as opposed to decreased. And John D. was seen as a bad guy...go figure. Leave it to politicans and media to form public opinion.
Domestic drillers should be the big winners here!
Respectfully,
Brian A. Davis
Tuesday Watch: More E&P Earnings
Do you have an exit point in mind?
Can you comment on the profit margins of domestic oil drillers v. foreign ones? Will we see better profit margins from the domestics?
Devon Energy Crushes 1Q08
Secondly, do you see an advantage for domestic oil when it is priced against foreign oil? Do domestics have better profit margins?
Big Ben's Credit Card Moves: The Good, the Bad and the Ugly
Continued growth of MA and V will be predicated on consumer demand.
MA and V, have excellent business models. Both companies have healthy stock prices as well. MA and V are based on consumer credit transactions (which should see weakness in coming months).
1. Over-spending
2. Inability to service debt
3. Default rates
4. Tighter underwriting standards
The ability for consumers to service debt will be tested. While this becomes more or less an issue for the underwriting banks, it will also effect the bottom line of MA and V. Furthermore, once a MA or V user defaults, then that customer is unable to continue transactions. Last, banks will continue to scrutinize customers with tighter underwriting standards. There will be come customers that banks will not want. These issues will effect the bottom line of MA and V.
Respectfully,
Brian A. Davis
P.S. I do not hold positions on MA and V at the time of this article.