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GaltMachine

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  • mREITs: Volatility, Beta And Risk [View article]
    jimmy,

    Interesting Annaly got smoked in 2006. Was it just interest rates or bad credit or both?

    2008/09 is a weird period given we had ZIRP - now that's price fluctuation.

    I guess that whole "subprime will be contained" idea didn't play out that well for NLY in the latter part of 08/09 despite falling interest rates.
    Sep 10 02:15 PM | Likes Like |Link to Comment
  • mREITs: Volatility, Beta And Risk [View article]
    spanish,

    The dividend yield is based upon the price of the stock (dividend/price) so to get a 7% dividend on NLY any of the following would have to occur:

    1) The price doubles
    2) The dividend gets cut in half and the prices stays the same

    I suspect that option 1 seems unlikely at this point.
    Option 2 is more likely but the odds that the price won't fall when the dividend falls seems like a false hope.

    The price can fall a lot with a change in interest rates because earnings could get crushed which in turn lowers the dividend so since I focus on Total Return (Cap Gains + Dividends) that's why I care about the safety of the dividend.

    I hope that helps.
    Sep 10 02:03 PM | 1 Like Like |Link to Comment
  • General Motors (GM -0.4%) disputes a published estimate from Reuters claiming that the automaker loses $49K per Chevrolet Volt. At issue is if development costs of the program should be divided across the lifetime volume of Volts or the current number sold. [View news story]
    wjbrown,

    It became an inherently political conversation when the Government took over this car company, rewrote bankruptcy laws, screwed creditors, and rewarded the UAW so personally I can't separate the two.

    June 2, 2012 8:09 PM
    PRINT TEXT
    Electric vehicles fall drastically short of Obama's 1 million goal
    "(CBS News) WASHINGTON - The Obama administration invested $2.4 billion as part of its goal of putting one million electric vehicles on the road by the end of 2015. But that effort has, in part, stalled."
    Sep 10 01:08 PM | 1 Like Like |Link to Comment
  • General Motors (GM -0.4%) disputes a published estimate from Reuters claiming that the automaker loses $49K per Chevrolet Volt. At issue is if development costs of the program should be divided across the lifetime volume of Volts or the current number sold. [View news story]
    "At issue is if development costs of the program should be divided across the lifetime volume of Volts"

    I thought that kind of accounting was illegal but apparently not if you are a government entity.

    What's the hypothetical number? 10 million? LOL.

    They dispute but don't clarify now that's a typical government reaction.
    Sep 10 11:58 AM | Likes Like |Link to Comment
  • The rave reviews for Tesla Motors' (TSLA +2.9%) Model S aren't quite done pouring in after Motor Trend just returned from a Vegas-to-L.A. test drive that proved both the 265 mpg equivalent rating and zero-to-60 mph acceleration in under six seconds are valid. The company has the highly-anticipated Model X slated for 2014 if production wrinkles are worked out. As for cash burn, Elon Musk says as long as there aren't a "bunch of screw-ups," the automaker should be in good financial shape. [View news story]
    Nick,

    You are entitled to a wrong opinion :)

    Given your life's work I am not surprised by your perspective. I have no such limitations.

    http://bit.ly/U4G4Gv
    http://bit.ly/QzyZim

    "Including a wireless source of alternating current, electricity, from space, “dark energy” aka “radiant energy”, enough to power a car, a large ship, a train, it was limitless. This, and other things he did and spoke of, have given others the incentive to experiment and discover/invent things that no one would have thought of otherwise."

    "The flying machine of the future -- my flying machine -- will be heavier than air, but it will not be an airplane. It will have no wings. It will be substantial, solid, stable. You cannot have a stable airplane. The gyroscope can never be successfully applied to the airplane, for it would give a stability that would result in the machine being torn to pieces by the wind, just as the unprotected airplane on the ground is torn to pieces by a high wind. My flying machine will have neither wings nor propellers. You might see it on the ground and you would never guess that it was a flying machine. Yet it will be able to move at will through the air in any direction with perfect safety, at higher speeds than have yet been reached, regardless of weather and oblivious of 'holes in the air' or downward currents. It will ascend in such currents if desired. It can remain absolutely stationary in the air even in a wind for great length of time. Its lifting power will not depend upon any such delicate devices as the bird has to employ, but upon positive mechanical action."
    Tesla

    Good luck!
    Sep 10 11:10 AM | Likes Like |Link to Comment
  • The rave reviews for Tesla Motors' (TSLA +2.9%) Model S aren't quite done pouring in after Motor Trend just returned from a Vegas-to-L.A. test drive that proved both the 265 mpg equivalent rating and zero-to-60 mph acceleration in under six seconds are valid. The company has the highly-anticipated Model X slated for 2014 if production wrinkles are worked out. As for cash burn, Elon Musk says as long as there aren't a "bunch of screw-ups," the automaker should be in good financial shape. [View news story]
    To all posters, I do apologize for stirring up your worlds and agitating you. I won't do it again.

    If the government wasn't involved in this company and it was privately funded, I wouldn't give a fig about what the car does or doesn't do and I would evaluate it purely from an investment point of view.

    For me, along with the VOLT, it acts as a metaphor for all that is wrong with the economic direction of this country.

    I wish you well and good luck with the investment.
    Sep 10 10:58 AM | Likes Like |Link to Comment
  • General Motors (GM) loses a staggering $49K on each Chevrolet Volt it builds, according to numbers dug out by Reuters. Though the loss per vehicle could shrink if the plug-in hybrid program is built to scale, the automaker faces an uphill battle with rivals seeing better success with their own electric and hybrid vehicles. (Related: Tesla firing on all cylinders?[View news story]
    Energy,

    Buy the Chevy Cruze, the vehicle the Volt is based upon which can get up to 43 MPG on highway, pocket the difference, and put a nice down payment on a college fund.

    There is no way to come up with a positive cost benefit for the consumer on this product. The only real benefit is the emotional one of "doing something for the environment or saving the world" or some other such nonsense.
    Sep 10 10:54 AM | 4 Likes Like |Link to Comment
  • The rave reviews for Tesla Motors' (TSLA +2.9%) Model S aren't quite done pouring in after Motor Trend just returned from a Vegas-to-L.A. test drive that proved both the 265 mpg equivalent rating and zero-to-60 mph acceleration in under six seconds are valid. The company has the highly-anticipated Model X slated for 2014 if production wrinkles are worked out. As for cash burn, Elon Musk says as long as there aren't a "bunch of screw-ups," the automaker should be in good financial shape. [View news story]
    "In 1887, Tesla constructed a brushless alternating current induction motor based on a rotating magnetic field principle, which he demonstrated to the American Institute of Electrical Engineers (now IEEE) in 1888 and patented that same year.[62] Until the development of induction motors, AC's advantages for long distance high voltage transmission were counterbalanced by the inability to operate motors on AC. Tesla claimed that he conceived his induction motor in 1882 although the claim had no independent verification.[63] The paternity of the invention remains controversial, since rotating magnetic fields and a prototype induction motor were demonstrated in Europe in 1885 by Galileo Ferraris.[64][65][66][67] Ferraris published his findings in 1888.[68] Also in 1897 Tesla developed the principles of his Tesla coil."
    http://bit.ly/QztZdC

    A battery powered car (DC) would have been an abomination for the man who fought the "energy war" for AC energy delivery vs. Thomas Edison. A giant battery on wheels would not have been his conception of the automobile.

    I think a company named after Tesla would have actually produced something revolutionary rather than working on improving a technology that already existed a 100 years ago but that's just me.

    I truly admire the engineering prowess of the vehicle, the elegance of design, and the visionary leadership of Elon Musk in making this happen but in the end it is still just a Rube Goldberg device solving a problem that doesn't need solving.

    I don't blame the company for building this product since the market price signals have been so distorted by government intervention (tax credits, EPA policy, destroying the coal industry) and fraudulent global warming science.

    With the financials they have and the obvious limits in the state of battery technology is this company ever going to turn a profit before it runs out of money?

    At the current rate of burn, this company will need to raise a lot of money to keep going.

    Good luck with your investment!
    Sep 10 10:48 AM | Likes Like |Link to Comment
  • mREITs: Volatility, Beta And Risk [View article]
    Joseph,

    That's a great article. Excellent research.

    It seems mREITS trade a lot like bonds and therefore the risk factors are slightly more bondlike - credit risk, interest rate risk, pre-payment risk, and economic risk.

    Have you any insights into how these would behave in a rising interest rate environment? Can it be modeled?

    NLY is one I am interested in for obvious reasons but I am still puzzled by what a 1% rise in short-term interest rates would do to their underlying business and as a result the equity. The dividend gives a cushion but it's a double-edged sword because the dividend is dependent upon a low interest rate environment.

    So in a rising rate scenario, I assume that margins would be squeezed which implies the dividend could be cut which in turn also impacts the price of the stock especially if the long end of the curve remains anchored at current levels. Certainly a very convoluted process.

    Seems like we need a different concept than beta for this asset class something more along the lines of duration.

    Do you have any insights into how we would model this?

    Thank you.
    Sep 10 10:23 AM | Likes Like |Link to Comment
  • General Motors (GM) loses a staggering $49K on each Chevrolet Volt it builds, according to numbers dug out by Reuters. Though the loss per vehicle could shrink if the plug-in hybrid program is built to scale, the automaker faces an uphill battle with rivals seeing better success with their own electric and hybrid vehicles. (Related: Tesla firing on all cylinders?[View news story]
    Gives new meaning to the phrase "loss-leader".

    So the goal is to lose money on every car and make it up it in volume which sounds suspiciously like a typical Obama economic policy.

    So instead of selling SUV's which are profit cows for GM they promote this POS which is exactly what you expect from a company taking its orders from the Government.
    Sep 10 09:05 AM | 5 Likes Like |Link to Comment
  • Mortimer Zuckerman digs into the jobless numbers and finds that "they're even worse than they look." The headline rate may have fallen, but there are 5.2M "long-term" unemployed, while 8M have no job but are not counted as they've not looked for work in the past four weeks. Add in involuntary part-time workers, and Zuckerman reckons that the real unemployment rate is closer to 19%, as it was almost a year ago[View news story]
    Drew,

    He voted for Obama (and Dems) before he was against him. At least he is intelligent and humble enough to admit he made a mistake.

    I'm guessing he employs more people than you do now and he sure helped employ a heckuva of a lot of people while building his businesses. The riches at the end are the end result of the hard work at the beginning and are never fore-ordained.

    Too bad the President doesn't understand this aspect of our economy and how it works.
    Sep 9 11:24 PM | 1 Like Like |Link to Comment
  • Food stamp cuts are bad for business, warns incoming Kraft (KFT) CEO Tony Vernon, who says a minimum one-sixth of company revenue comes from program usage. Proposals floating around Congress would cut funding for food stamps as health advocates point out the program is a corporate subsidy to the nation's processed food giants. [View news story]
    "CEO Tony Vernon, who says a minimum one-sixth of company revenue comes from program usage. Proposals floating around Congress would cut funding for food stamps as health advocates point out the program is a corporate subsidy to the nation's processed food giants."

    Funny this blurb answers the question it poses in a nice concise way.
    Sep 9 11:12 PM | 2 Likes Like |Link to Comment
  • The rave reviews for Tesla Motors' (TSLA +2.9%) Model S aren't quite done pouring in after Motor Trend just returned from a Vegas-to-L.A. test drive that proved both the 265 mpg equivalent rating and zero-to-60 mph acceleration in under six seconds are valid. The company has the highly-anticipated Model X slated for 2014 if production wrinkles are worked out. As for cash burn, Elon Musk says as long as there aren't a "bunch of screw-ups," the automaker should be in good financial shape. [View news story]
    http://1.usa.gov/OjYczf

    Coal, natural gas, and nuclear are the electricity grid power sources. Coal is by far the number 1 source of fuel for electricity so therefore all EV vehicles are powered largely by coal or other fossil fuels by definition.

    No way around that, although I have to admit the President's War On Coal is working.

    Nat Gas is growing like crazy which is a good thing, but unlike Nancy Pelosi, I actually do know that Natgas is a fossil fuel :)

    By the way, Nikola Tesla would have found the whole idea of a DC powered car abhorrent.
    Sep 9 03:40 PM | Likes Like |Link to Comment
  • The rave reviews for Tesla Motors' (TSLA +2.9%) Model S aren't quite done pouring in after Motor Trend just returned from a Vegas-to-L.A. test drive that proved both the 265 mpg equivalent rating and zero-to-60 mph acceleration in under six seconds are valid. The company has the highly-anticipated Model X slated for 2014 if production wrinkles are worked out. As for cash burn, Elon Musk says as long as there aren't a "bunch of screw-ups," the automaker should be in good financial shape. [View news story]
    "Morpheus: I imagine that right now, you're feeling a bit like Alice. Hm? Tumbling down the rabbit hole?
    Neo: You could say that.
    Morpheus: I see it in your eyes. You have the look of a man who accepts what he sees because he is expecting to wake up. Ironically, that's not far from the truth. Do you believe in fate, Neo?
    Neo: No.
    Morpheus: Why not?
    Neo: Because I don't like the idea that I'm not in control of my life.
    Morpheus: I know exactly what you mean. Let me tell you why you're here. You're here because you know something. What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad. It is this feeling that has brought you to me. Do you know what I'm talking about?
    Neo: The Matrix.
    Morpheus: Do you want to know what it is?
    Neo: Yes.
    Morpheus: The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window, or when you turn on your television. You can feel it when you go to work, when you go to church, when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth.
    Neo: What truth?
    Morpheus: That you are a slave, Neo. Like everyone else, you were born into bondage, born into a prison that you cannot smell or taste or touch. A prison for your mind. Unfortunately, no one can be told what the Matrix is. You have to see it for yourself. [Opens Pill box and empties the contents into his hands and outstretches his hands] This is your last chance. After this, there is no turning back. You take the blue pill [opens his right hand revealing a translucent blue pill], the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill [opens his left hand revealing a similarly translucent red pill], you stay in Wonderland, and I show you how deep the rabbit hole goes. [Neo reaches for the red pill] Remember: all I'm offering is the truth. Nothing more."
    Sep 9 03:31 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Will The Fed Disappoint Markets? [View article]
    Jeff,

    Thanks for the response. Your point would be stronger if the prior revisions had been positive but they were negative despite the prior ADP numbers. I get your point, however, it doesn't change the fact that the overall trend - declining workforce participation - is still going down and it is not due to demographics.

    Workforce participation in those over 55 has increased as have their share of the jobs so the older near retirement group appear to be pushing out the younger working age people.

    I am just looking at this with a straight forward, non-partisan viewpoint which is that there is no way to say the job market is strong at this point in the cycle when by all rights it should be.

    Clearly aggregate demand is stagnant. I am not sure why that is but I guess if you subscribe to the Balance Sheet Recession idea than this is the expected outcome - deflationary pressures - which explains the FED's obsession with liquidity.

    However, as we have all discovered, the markets are not the economy, and in terms of investing this suggests that there will clearly be no wage inflation pressure for a long time to come which means that corporate margins are not going to be under pressure from wage demands. This is obviously a powerful positive for corporate income statements but clearly a challenge for wage earners.
    Sep 9 12:35 PM | 2 Likes Like |Link to Comment
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