Duude

GE (GE) "strongly disagrees with the premise" it is selling off assets in a desparate attempt to raise cash. But looking at recent deals, and GE's effort to dump NBC Universal's $2B in debt by selling it into a JV at way below market value, Daniel Fisher can't help but wonder: What then?

Of course, they're lying, but then what would you expect? They can't afford to see their equity/debt ratio fall. They've already received in excess of $160 billion in loan guarantees which afforded them extremely low interest rates, and they're still selling off assets below market value? The sale of NBC universal is a surprising move for another reason. They've leveraged their ownership of NBC to lavish praise upon the Obama administration. While it appears very political, it may be more about earning political favors from those with the power. So far, GE has not only received more bailout than just about any other company, but the terms are more favorable than anyone else received, and they managed to pull strings to block the early calls that they separate themselves from their banking unit but still not be under the thumb of the pay czar. Next we can expect huge government contracts in the field of alternative energy. Talk about cashing in political favors. And now GE has to sell off 1/2 of NBC universal for a below market price? No, they've got serious problems.

Single Family Homes Remain Oversupplied by Over 900,000 Units

Except your credit, of course.


On Nov 25 05:36 AM Moon Kil Woong wrote:

> With 3.5% FHA down payment loan and a $8,000 tax credit You can buy
> a $200,000 home and get $1,000 back. Thus it's no surprise that these
> houses get sold, especialy since those buying have negative skin
> in the game. If the houses drop it's the FHA and the taxpayer that
> pays. You can't even call it legalized gambling. You can gamble with
> absolutely nothing at all.

Ahead of Black Friday: Has Consumer Confidence Been Restored?

Restored? Its a mixed bag for most. Some will feel more comfortable that with all the layoffs they're still employed. These are those that might spend as they do every year. But for the unemployed, underemployed, and those still wondering if they will remain employed in 2010, we can expect little and last few days before Christmas shopping. Deep discounting will re-emerge as the weeks go by. Anyone value oriented will wait. I'm employed, and strategizing how I can spend as little as possible.

In a world where one man must fight to keep from being buried in debt ... Now appearing before your holiday movies: the Fed. The central bank is paying for 45-second ads to appear in 12 metro theaters, encouraging responsible credit-card use in the holiday shopping season.

Kind of like Bill Clinton doing ads in support of fidelity in marriage.

Obama will rise and fall with the dollar: The electorate is only as happy as the value of the greenbacks in their pockets.

I agree with bbro. But further down the road assuming jobs are created during his 4 year stint (probably a pipe dream), the weak dollar will likely lead to much higher import prices, followed by American companies willing to raise prices to almost match import prices, oil up over $100+, and interest rates back on the rise. But for now, and up till the 2010 election, its jobs, jobs, jobs, jobs till unemployment dips below 8% at least.


On Nov 26 04:47 AM bbro wrote:

> Correction...Obama will rise and fall with Jobs and the stock market......the
> common voter knows nothing about foreign exchange....

Being Thankful for Bullish Economic Data

Its pretty easy money in foreign countries. When Americans are abroad for any extended period of time, American holidays like Thanksgiving bring an inner desire to celebrate that tops those we have when we're back home. China, Britain, and any foreign grocery store cognizant of that fact knows they can gouge Americans abroad. Add to that the fact that turkeys are bred and raised here in the states with a rather large target supply for November thus creating both oversupply and competition among the store chains for the consumer, while supplies are much more limited abroad creating even more disparity in price.


On Nov 26 05:30 AM VK9141 wrote:

> $70 turkeys - same price in Whole Foods Market in London which was
> doing decent trade and seemed to be full of Americans yesterday.
> It had better taste good.

How to Trade the Rest of the Year - Goldman Sachs

Another way to look at it is that a more extended overbought condition is quite desirable if one is hoping to make the most of a reversal. While Goldman can find ways to make money in all market conditions, nothing is as good as a strong trend, whether on the upside or downside. The most overbought and oversold conditions are the most profitable times to reverse course for the big wins. Considering the fact that December has been an extraordinarily strong month in the past, the rise we've seen since March and the universal expectation of pathetic economic growth going forward, most all ducks are lined up in a row for a kickoff to a big first quarter reversal leading to a nice downtrending market. If only we can turn the current trend into a climactic overbought condition.

Current Rush to Judgment Against AIG and Its Counterparties Is Unhelpful

It remains to be seen whether AIG will ever have enough value in its existing assets to completely offset what is owed back to taxpayers. I see it as doubtful especially considering the fact that politics will continue to influence decision-making due to bubba populism that is akin to ready, fire, aim.

Huffington Challenges Newspaper Peers

"Arianna Huffington says she will not charge consumers for content...."
LOL ....as if she had worthy, credible content that would even be enticement enough for far left liberals to pay for.

"a pharmaceutical company could pay a premium to contribute relevant facts -- not sales pitches -- to real-time online reporting"

And I'm still waiting for her to pay me to log onto her website. Bidding for my viewership starts at $1000 a week.

"The Huffington Post retains most of the $37 million in invested capital available from Oak Investment Partners, Softbank Capital Partners and Greycroft Partners."

Make no mistake, these companies aren't investing to make money directly through Huffington's website. They invest with Huffington just like they invest with campaign contributions to far left political candidates alongside of Moveon.org.

U.S. Government's Size: The Slow-Motion Crisis

If government didn't keep thinking up new laws to add to the books, elected officials wouldn't be able to point at their work and make a show for not just being a simple bureacrat collecting his taxpayer provided paycheck. They feel if they don't make a case at election time someone else will have their job. Forget about what laws make logical sense as logic has nothing to do with it. Now a smart contender might point at that work and make a case for why mindless bureaucrats shouldn't make laws just for the purposes of making a resume entry. Unfortunately, local campaign funds are scant and qualified representatives are rare.

NABE Survey: Recovery Won't Remain Jobless Very Much Longer

Frankly, if we can't achieve 3% GDP in the 4th quarter and 1st quarter, all is lost. These are the last two 'gimme' quarter comparisons. 4th quarter 2008and 1st quarter 2009 fell off a cliff. This year's earnings growth is only due to speedy layoffs and the fact that more businesses were already tuned to 'just-in-time' inventory levels even before the credit crisis hit. The only credit available during these two quarters came from the Fed. We will only begin to see the more important comparisons when the June 2010 quarter concludes, and I'm not expecting much since business has already made all the cuts and revenues still stink.

Has Buffett Lost His Mind?

I was bewildered when he paid the premium he paid. Its not whether Berkshire will make a reasonable return on investment but how much and in what time frame? If the economy remains sluggish for the next few years, and if the current power in Washington keeps denying new coal mining permits while succeeding in passing a cap and trade bill, we can be assured a reasonable return won't happen in Buffet's life time. This all goes back to the time value of money. Is this the best strategy for Berkshire resources? I vote doubtful.

GE Is David Hartzell's Highest Conviction Holding - Here's Why

How can anyone attempt to analyze GE and skip their financial division entirely? It was their biggest profit center for years, but of course, its now a deep dark hole of despair. Leveraged to the gills and its fate resting with commercial real estate. If unemployment remains in double digit territory for long, properties will fall further underwater as cash flow decreases. Perhaps they can call the Obama administration up for another badkdoor bailout of $160 billion in government guarantees. Imagine if this bank had to go through the ugly cross-examination that TARP participants are going through. Could you see the pay czar cutting Immelt's pay? Might have been a win for shareholders if it led to Jeff leaving the company.
So back to why has the finance division been ignored? Oh yeah, it doesn't work well when you're really just looking to hype your own holdings.

Krugman on the Invisible Bond Vigilantes

Discounting future liabilities makes little sense when we add a cola to those same future liabilities. If our debt finds less demand in the future due to our incredibly weak currency, interest rates will have to rise on account of that lack of demand. As annual interest on our current debt rises faster, it makes unfunded liabilities along with current budget items subject to cut.


On Nov 20 04:09 PM American in Paris wrote:

> Afraid Mr. Altlasman is an ideologically driven political hack that
> distorts economics to support his radical right wing agenda.
>
> If Mr. Rolfe really knew finance, he would take the future liablities
> and discount them.
>
> Has Mr. Rolfe heard of present value?
>
> And why doesn't Mr. Rolfe just take the next 5 million years of future
> liabilities while he is at?
>
> Give me a break ....

Krugman on the Invisible Bond Vigilantes

US government debt doesn't price in the risk of default only. In the real world it also prices in the all-too-certain likelihood that the US dollar will buy far fewer goods and services in the future. But we're temporarily not in the real world. The Fed has taken it upon itself to buy up its own debt when demand is such that interest rates might otherwise climb to what might be deemed unmanageable in a weak economy. The other side of this is China and Japan buying US government debt so as to keep their own currencies undervalued. This is a policy that has left Japan with a long-term stagnant economy and China overextended in US debt. If the US consumer doesn't come back both countries will have less reason to buy US govies going forward leading to much higher interest rates due to lack of demand. That will make meeting our unfunded liabilities exponentially more difficult.


On Nov 20 05:18 PM Machiavelli999 wrote:

> The point that Krugman was making on his blog is that no market data
> agrees with your points of view. If the risk of default was really
> that high for government debt than it would cost a lot to insure
> against default, right?? Except, that the CDS on US Treasuries is
> microscopically low. You won't find too many things that are cheaper
> to insurance against than US defaulting. That's because the possibility
> of this is remote.
>
> And Winkler also fails to address another point Krugman makes. Again,
> if US was at such a high risk of default, then like other entities
> that issue junk debt, the rates on this debt would be high. In fact,
> they are at historic lows.
>
> I love the market because it takes stupid conservative theories and
> spits them out. And instead of acknowledging that their theories
> are wrong, conservatives act like cry babies and go "But my theory
> was so good. Why doesn't the stupid market understand that???"