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  • 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, 2012. 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, 2012. 12:35 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Will The Fed Disappoint Markets? [View article]
    "The household survey also showed a decline in jobs, although this series has fluctuated wildly. The decline in the unemployment rate was not statistically significant (after rounding) and mostly reflected a reduction in the labor force."

    I literally (yes Joe Biden) can't get over this factoid and yet we are in the "expansion" phase of the economic cycle. When the number first came out, I assumed that that household survey showed job expansion to account for the decline in the rate so this is really a horrific report.

    How bad does it have to be for people to actually give up looking for working in these astonishing amounts?

    The workforce should be increasing at this point in the cycle yet somehow we get more people added to foodstamps than found work last month. It's totally a bizarro world.
    Sep 9, 2012. 11:59 AM | 2 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]
    http://bit.ly/QwXsS7

    "Zuckerman, a long-time supporter of the Democratic party who cast his vote for Barack Obama in the 2008 presidential election, was critical of President Obama on several fronts. Following the downgrade of US treasury debt by Standard & Poor's in 2011, Zuckerman wrote in the Wall Street Journal: "I long for a triple-A president to run a triple-A country."[17] After initially supporting President Obama's call for heavy infrastructure spending to revive the economy, Zuckerman criticized the composition of the plan, stating "But if you look at the make-up of the stimulus program, roughly half of it went to state and local municipalities, which is in effect to the municipal unions which are at the core of the Democratic party."
    Sep 9, 2012. 11:48 AM | 5 Likes Like |Link to Comment
  • What might the troubles of "Sock City" - the Chinese boom town of Datang which last year produced about two pairs of socks for every person on earth - say about the rest of the economy? May's collapse of Anli Sock Group - which made 60M pairs annually - may prove to be "the Lehman Brothers of Datang," according to one government economist. "I'm very worried," says a surviving producer. "This year is much worse than 2008-09." [View news story]
    The Pets.com Sock Puppet mascot could not be reached for comment on this story.

    http://bit.ly/QsX0Kf
    Sep 9, 2012. 11:43 AM | 7 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]
    Rational,

    "Within a year, there will be superchargers on almost every major interstate that will fully recharge a Model S in about 40 minutes, just enough time to grab a bite to eat, stretch and proceed."

    So your argument against my rational observation on long family vacation driving is to cite a non-existent technology of the present and perhaps the future?

    Show me your link for this "supercharger" technology, its implementation plan, locations, cost, etc.

    45% of our electricity comes from burning coal and the rest from nuclear and other fossil fuels. A truly pitiful amount comes from "clean energy" *(gag) of which hydro-power is not included because whacko environmentalists think water power is bad for the environment.

    Auto reviewers, as in Product Placement pay for performance experts, like it. Wow. That's hilarious.
    Sep 8, 2012. 01:07 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]
    Wow. I got quite the pile on happening here. Thanks for all the positive thoughts.

    I thought I would cut and paste a previous comment on this subject since it seems appropriate here.

    To everyone above, I will state it plainly, these cars are inferior, more expensive, less safe, less reliable, and without government corporate welfare - $500 million dollar crony capitalist loan - wouldn't exist. This company wouldn't exist without the teat of government.

    Why subsidize the lifestyles of the rich and famous at the expense of the poor in this country?

    This is what you get when you build an industrial policy on the back of the lie of man-made global warming. Wasted resources, wasted money, wasted effort, and a lower standard of living for everyone in the world - burning food (corn) for fuel is just the ultimate manifestation of this stupid delusion which coincidentally has been exposed as the scientific fraud that it is. Perhaps you haven't heard yet.

    What you all fail to realize is that the car is part of an overall lifecycle from beginning to end and when these things end they pollute the environment to a far greater extent than any so-called benefit they provide while under operation - all those toxic batteries and the rare earths that need to be mined to get these toasters on wheels going doesn't do much to "save the world".

    The problem with Liberal ideas is they fall apart under the harsh light of logical examination.

    Now if this were a natural gas powered car then I would be interested.

    In case it isn't obvious, I am a rabid, nut-job, whacko, right-wing Randian who also happens to be an opinionated, knowitall a-hole :)

    Have a nice day!
    Sep 8, 2012. 01:00 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]
    Thom

    "There are pros and cons to each technology. Stop spreading your rhetoric like you know what you're talking about. You don't know shit."

    Well I know the substance when I see it and your comment certainly looks like it :)

    Apparently calculating a cost benefit is beyond your engineering acumen.

    Truthfully I fail to see the value proposition in electric cars. Usually when a product replaces another it is superior in all ways:

    Price
    Features
    Performance
    Reliability
    Resale
    Longevity
    Safety
    Etc.

    It fails on all of these criteria. Secondly I can't stand crony capitalists like this company who suck off the government teat so yes I have a problem with this company.

    Hybrids are already a superior solution and they cost less.

    By the way, you started it :)

    Have a nice day!
    Sep 7, 2012. 05:44 PM | 1 Like Like |Link to Comment
  • Market recap: Stocks edged higher to finish a big week, as the weak jobs report lent support to Bernanke’s assessment that the labor market remains a "grave" concern. Treasury prices rose and precious metals jumped as investors played the QE trade. Materials and metals stocks ripped higher as China unleashed a big infrastructure spending program. NYSE gainers topped losers seven to five. [View news story]
    "investors played the QE trade"

    "Investors" is an interesting choice of word for those doing this. "Gamblers" might be the better word.
    Sep 7, 2012. 05:11 PM | 1 Like 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]
    Thom,

    Only a moron would run out of gas but you can easily run out of battery power on a long trip.

    How about if you want to go let's say 336 miles in a day? How about 600 miles? What then?

    How long will that take you?

    I get bored pointing out the obvious but this line of transportation - coal powered vehicles - is no improvement to the current crop and is in fact inferior in all respects. Get a diesel golf and buy a college education for your kid with the savings.

    Not to mention the fact that the poorest among us are sponsoring the lifestyles of the rich and famous with that stupid tax credit for a a $100k car.

    Oh yeah, I am in fact against all corporate welfare for any company including those evil oil and gas companies.
    Sep 7, 2012. 04:59 PM | 1 Like 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]
    What happens when you run out of fuel for that toaster on wheels before you get where you are going?

    At least it doesn't burst into flames like its competitors :)
    Sep 7, 2012. 02:59 PM | Likes Like |Link to Comment
  • Why Caterpillar Is A Value Trap [View article]
    Patrick,

    You haven't provided a link or a date for that comment. This is what Doug said in August as reported on Aug 20th:

    http://bit.ly/P1T1Ps
    "The global economic outlook is more uncertain now than during late 2008, although the situation isn't as severe, Oberhelman told the Financial Times.

    "There's never been a more unpredictable set of tea leaves than right now. Even in 2008 and 2009, U.S. housing was already dying and had been for two years. We saw that," Oberhelman is quoted as saying in the Financial Times.

    "I don't think the situation is as grave as it was in 2008, but the uncertainty, the storm clouds are around things that none of us know about, like what will happen with the political situation in Europe," he said."

    It was these comments which started the pessimism on the stock particularly since he is generally a sunny optimist most of the time.
    Sep 7, 2012. 02:51 PM | Likes Like |Link to Comment
  • Earnings Disappointments Leave Corporate Bonds Vulnerable [View article]
    Bondsquawk,

    Thanks for the response and the excellent article. You are right to call attention to the actual risk of holding these bonds so nothing wrong there, rather I think the distinctions in the type of risks which predominate on a bond holding requires a little more detail to convey the challenges.

    On investment grade, I think interest rate risk is the more likely risk and duration is the key to understanding that. I think credit risk and payout risk is far less concerning unless we get a major and painful recession. Although absolute rates are low, the spread between treasuries is still historically pretty high although ZIRP makes it hard to compare to other periods. I still think the risk from investment grade is less than the risk of holding the underlying equity issue on a Sharpe ratio basis.

    On the junk side, I think the credit risk is the greater problem followed by duration. Junk is more akin to equity in the way it responds to economic factors and overall profitability and the earning's environment. People forget how great a buying opportunity junk was after the 2008 meltdown - the returns were amazing assuming you had the guts to buy.

    It would be really good if you could give us some insights into how to model the effects of a bad recession on the valuation of Junk as I believe people have grossly underestimated the risks of this asset class in their search for yield.

    I am not exactly sure whether a dividend from a blue-chip and the equity itself is more or less risky then the yield from a portfolio of junk like JNK and HYG.

    Thank you.
    Sep 7, 2012. 02:44 PM | 1 Like Like |Link to Comment
  • Earnings Disappointments Leave Corporate Bonds Vulnerable [View article]
    "Investment Grade Corporate bonds have had a tremendous run as evident by the decline in yields which has led to outperformance relative to Treasuries."

    The article doesn't distinguish between investment grade and junk corporates. I think there is a huge difference between the two. As long as there is ZIRP and endless liquidity, it would seem that the risk on the investment grade side is historically low.

    I can see dividends being put at risk if earnings fail to materialize because companies must pay their debt first before they can pay out a dividend.

    Honestly this article should have been about the risk to dividends from falling earnings rather than the risk of debt default.

    However, if the caveat were for junk then I can see that playing out. Most junk issuers don't pay a dividend.
    Sep 7, 2012. 10:28 AM | Likes Like |Link to Comment
  • Intel (INTC) -2.3% premarket after issuing downside guidance for Q3, lowering projected revenues ~7% to $12.9B-$13.5B from $13.8B-$14.8B due to "weaker than expected demand in a challenging macroeconomic environment." INTC sees customers reducing supply chain inventory, softness in the enterprise PC market segment, and slowing emerging market demand. [View news story]
    INTC & FDX major lowering of forecasts suggests that you can have a sell-off without a recession this time around simply due to earnings. Slowing growth might mean slowing profit growth and revenue growth for the market overall.

    Starting to look like those forward earnings estimates may be overly ambitious.
    Sep 7, 2012. 09:25 AM | 1 Like Like |Link to Comment
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