ZgartZ's Comments

Strange Inconsistencies in the $134.5 Billion Bearer Bond Mystery

Sat, 20 Jun 2009 22:13:04 -0400

For what it's worth, the event happened on the same date that the G* meeting ended in Italy!

Friday Options Update: C, GM, F, GE, CHK, AEM

Sat, 29 Nov 2008 16:10:56 -0500

Good analysis but too complicated. Try this.
Government takes over legacy liabilities.
GM declares bankruptcy.
Union contracts are kaput. Suppliers get paid under bankruptcy. Golden parachutes don't open.
All senior executives get pink slips. Some are rehired at "main street" wages.
The company has 2 years to return to profitability using GAAP rules.
I drive a Pontiac Montana. It's a good vehicle.

On Nov 28 04:41 PM Joey wrote:

> How to Fix GM – Plan One
> 1) Sell All of GMAC and the Insurance Business (Ditech)
> 2) Cut down from five regional offices to two. One in Atlanta (east
> of the Mississippi River)and one in LA (west of Mississippi River).
> That means Chicago, New York, and Dallas are closed. With about 250
> people working in each location (750 total) at an average of $100,000
> each, that is a yearly savings of $75 million. Operation cost (rent,
> equipment, etc.) at the three locations will save another $1.8 million.
> Benefits for the 750 employees will save another (at $20,000 each)
> another $15 million.
> 3) Next, there is an average of three offices per state (local offices
> in cities across the country), if we close them, that is another
> $3 million in office space.
> 4) Next, the District Managers work out of their house and the Zone
> Managers (or whatever term is given to them), could be let go. They
> make around $150,000 a year and there are about 75 of them. Again,
> a savings of $11.25 million. With benefits, a total of $12.75 million
> in savings.
> 5) Next, cut around 150 jobs at the Detroit GM Headquarters. A savings
> of around $18 million with benefits.
> 6) Next, cut Buick down to two cars (Enclave and Lucerne), cut Pontiac
> to one (G6), cut GMC to two (Yukon and Sierra), cut Saturn to one
> (Vue) – and put all cars to a new umbrella called “United GM”. This
> will save GM billions. Also cut back on two Chevy models and two
> Cadillac models.
> 7) Next, cut advertising in December, January, February, March, April,
> and May (with the exception of auto show advertising for a three
> week period during the show and its incentives). This will save GM
> around $1.4 billion.
> 8) Sell all five planes. This will save GM $100 million in sales
> and another $100 million in yearly travel expenses for a total savings
> of $200 million dollars.
> Plan Two on Fixing GM
> How to save GM
> 1) GM needs to cut their total car models to 25 (from 60). What they
> could do is get rid of all Buicks expect Lucerne and Enclave; get
> rid of all Pontiacs except G6; get rid of all GMCs except Sierra
> and Yukon; get rid of all Saturns except the Vue; get rid of Saab
> all together; get rid of at least three Chevy models; get rid of
> at least two Cadillac models.
> 2) Get rid of half the dealerships. Chevy seems to have the best
> distribution so change the Chevy dealerships to Chevy, BPG, Saturn,
> and Cadillac
> 3) Close at least three of the five regional offices
> 4) Close all Zone offices and have employees work out of their homes
>
> 5) Get rid of 50% or more of white collar workers in the field
6)
> The factories will close based upon which models will be discontinued
>
> 7) Have upper management take a 35% pay cut
> 8) Have middle management take a 20% pay cut
> 9) Cut advertising from $2.3 billion per year to $750 million
10)
> Get rid of advertising groups and have national advertising only
>
> 11) Get rid of co-op advertising dollars
> 12) Get rid of all promotional advertising
> 13) Cut all regional and national meetings that cost more than $100,000
>
> 14) No parties for auto shows
> 15) Have special cash incentives for cash only purchases
> 16) Once the Volt battery is discovered, convert at least half the
> cars and trucks left after the cut to Hybrid
> 17) Move 1/2 the engineers to be used to discover more fuel efficient
> standards and more alternative fuel / hybrid cars
> 18) Sell all five planes and travel coach (a $100 million savings
> from cost of planes and a $100 million savings in yearly air cost
> for a total savings of $200 million).
>

In Search of the Next Reserve Currency

Sat, 29 Nov 2008 15:59:49 -0500

All fiat currencies fail in time. If you want to see what money used to be I have put a picture and commentary on notesforinvestors.com/....
The next G20 meeting will stir the pot.

The Real Unemployment Numbers

Sat, 08 Nov 2008 16:39:59 -0500

Great report but maybe one factor you could add is the number of election oriented "jobs" that terminated on November 5 and the effect that has had over the past many months.
Canada employment numbers were released on Friday also. At least they tempered the rise in jobs - yes rise - by saying 40,000 election jobs kept the real economy rate lower than it otherwise would have been.
In the USA, it looks like about 400,000 "employed" folks will be heading for the UI office in November as most stats shown for Canada can be multiplied by 10 for the USA.

October's End: Reversal Patterns Are Global

Sun, 02 Nov 2008 14:30:02 -0500

Stock Market Salad with Window Dressing and Refunding Treats

Here it is the end of October and time to dress up the mutual fund values. Coincidentally short term interest rates have to be boosted too so that the foreign investors will buy their share of US treasury paper.

So ZgartZ likens it to a salad mixture of NYSE, AMEX, NASDQ, and some foreign sprouts all mixed together on CNBC so that they can be maneuvered higher for the month- end window dressing. This makes individuals’ statements more palatable even if they are only getting half a serving.

Of course we have two master chefs at work, namely Paulson and Bernanke and they will be pushing this menu next week. This will allow foreign sovereign funds and banks to taste elevated interest rates, all the while that the master chefs are getting ready to change the menu. However treats will be served just as they are in Las Vegas casinos and good sales are expected.

After November 4 Paulson will be on the disabled list and a new person will be hired to cook the books (oops I mean write a new recipe). The new fare will likely be burnt investment portfolios with higher inflation rates. The deflation menu is not popular with Washington elite and consequently they will demand a chef with inflationary skills. Bernanke has the recipes but he needs a fiscal sous chef to serve up the meal. There are lots of both Republican and Democratic qualified chefs with inflationary skills, several of whom graduated from The Barney Frank Institute of Monetary Cooking.

The one thing that could cause a problem in Washington and thus make the new cooks fail is an upcoming change of taste by foreigners around the world. Cooking the books could get a lot more difficult as the introduction of IFRS and ISA are introduced. What are these? They are new procedures for accounting and auditing that will make the cooking of books much more difficult. It’s sort of like changing from a barbeque to a convection oven. Things just won’t taste the same to the Wall Street and Washington crooks.

IFRS is the acronym for international reporting standards and ISA is for international standards on auditing. Most free market countries have agreed to conform to these new standards as the basis for accounting and auditing for publicly accountable enterprises in 2011. But wait – the USA chooses not to use these recipes. They haven’t held enough bureaucratic committee meetings and wasted enough money studying the effects. Oh well, when they have to buy oil with Euros or gold I guess they will either use the new recipes or go hungry. Let’s face it in the new one world economy the countries with the least debt and most gold will not only choose the recipes, they will tell others when and what they can eat!

At least that’s how ZgartZ sees it.

Is Gold A Sucker's Bet?

Sun, 12 Oct 2008 22:23:34 -0400

Alan has a catchy byline but he needs to look into the new world order.
90 day gold lease rates pay 10 times what 90 day US Tbills pay. Why sell when you can lease it out?
Also, the gold price my be dropping in $US terms but it surley is rising in other currency valuations.
This is not your run-of-the-mill market.

The Great Dollar Pump of 2008: A Doomed Central Bank Intervention

Sun, 07 Sep 2008 22:59:25 -0400

Elsewhere on Seeking Alpha I posted a comment "Unintended Consequences" and I could write another here. Mr. Conrad is bang on and all we have to do is look back to 1971 and 1973 when the US dollar was revalued twice. It will happen again as an unintended consequence of all these bailouts.
Central banks that are supporting the $US charade have to do so by expanding their own money supplies. The consequence? Inflation in their own backyards.

What Will Fannie / Freddie Mean for Monday?

Sun, 07 Sep 2008 22:13:23 -0400

Unintended Consequences

“It was just one of those things” as the song lyrics point out.

And ZgartZ thinks that one of those things that triggered the mortgage crisis in the USA could have been the crackdown on illegal immigrants. As 12 million (or more) illegals scampered to flee the INS they obviously vacated millions of housing units. And it was just a few months later that the cracks appeared in the housing demand.

As we all know now, if you had a driver’s license and a job, you could get financed. So as usual, government rules always have unintended consequences. Those housing units may not have been in the name of the illegal person but the illegal person created a demand. Thus a speculator could buy a unit with little or nothing down and rent it to the illegal person. Certainly Florida had its share of immigrants.

And who was speculating? Many real estate agents took on the “bargain” deals that would not be economically feasible without a tenant. I heard on a real estate program that the number of licensed agents in Florida dropped from 87,000 two years ago to 52,000 now.

Oh well, today the USA government (read taxpayers) bailed out Fannie Mae and Freddie Mac. Will there be unintended consequences? You can bet on that!

The Bedrock Case for the Return of the Gold Bull

Sun, 17 Aug 2008 16:12:41 -0400

Excellent report. Thanks.
Here in Florida, I see a noticeable increase in traffic on Hwy US41 this weekend. It doesn't take long for the public to feel good when gas drops to ONLY $3.68 a gallon. Ha! Little do they know that $5.00 a gallon is in the cards.

Barrick and Goldcorp: Analysts Adjust Price Targets on Earnings Announcements

Mon, 04 Aug 2008 08:52:32 -0400

I agree with GMiki. Useless predictions. Any precious metals company in a safe political jurisdiction will benefit from the rise in bullion price. Operating costs should lag increased sales price. So buy the dips (like right now).
Simply look at historical facts to see the future. Self serving politicians will want to expand social benefits before they take the pain of cutting costs.
The Federal Reserve System is simply a printing press to keep its members in business.

Talisman to Drill in Utica Shale; Questerre and Junior Explorers Up

Mon, 19 May 2008 09:17:53 -0400

The trouble will surface when the environmentalists (probably funded by OPEC offshoots) go into action. For a real time sample see the Financial Post article May 17 entitled An Environmental Quagmire by Claudia Catteneo.