T-Rex

Fact Set Dividend Increase: Not Gigantic, But Still Encouraging

This stock looks pricey.

20x earnings and a small dividend. Analysts have a target price on this one about $10 lower than where it it trading...this looks very top heavy.

I'm a seller at $55 and a buyer at $40 on this one.

Short-Selling Hedge Funds Started the Fire

Shorting a stock does not cause a firm to collapse- they sold their position in the stock when the IPO. The only ones affected by stock price performance are shareholders...and execs who have options.

You can try to short a stock all the way to zero...and it won't affect a company's income statement or balance sheet.

What caused the downfall was a change in the value of assets that these firms owned. When the assets lost value, they had to sell...which further depressed the prices...when assets fell far enough bond holders got worried about payments and CDS started moving...which required payment bu firms guaranteeing the losses. What started this domino effect...in 2007, there was a small quant effect which was fairly isolated to firms that employ that strategy. In 2008 the real estate marker affected everyone...mortgage backed securities and derivatives on them...as well as outright real estate ownership. Lehman was leveraged to the hilt on their Manhattan office building which they financed with short term noteds rather than a long term mortgage.

So yes, real estate bubble caused this...everything else is the effect of that.

Why Is Pepsico Buying Its Bottlers?

Pepsi has done very well with acquisitions- Quaker/Gatorade, Stacys' Chips, foreign juice companies, foreign snack companies...etc.

They know beverages- not just cola, they know snacks (and moving to healthy snacks), and they know the importance of distribution.

This clears them to partner with more beverage companies to distribute their products while considering whether to but them out. Pick any energy drink company, any healthy beverage company...and Pepsi can put them on the map, reap rewards of distributing them...and have first chance to buy them out.

Forget about pinching pennies vending their own products, this is bigger than that. This is about expanding distribution and gaining more brands through further acquisitions.

This could be huge for them.

Warren's (Ridiculous) Prescription for Banks: Wipe Out Shareholders, Fire CEOs

Chrisvnerd:

In a word- wrong.

As usual when someone makes broad allegations they are frequently wrong. Citadel and GS (among others) did receive payment on CDS exposure from AIG.

But:

A. Citadel and GS are in no danger of going under- and as such suggesting they were bailed out via CDS is ludicrous. The pittance in TARP money GS took can easily be repaid in short order...do no lump all firms into AIG's boat. Neither GS or Citadel is the next Lehman, Bear, or AIG to suggest that is ridiculous. GS has all ready publicly stated that they hedged this all ready...and Citadel was paid a paltry 200 mil- big deal. GS did take aTARP money, so you can state they took federal money- but you can not make an argument that CDS payments equate to a bailout.

B. Yes AIG's CDS debts were paid. Same as rent, heat, lighting, employee salaries, copier leases...were all these firms bailed out because AIG paid a bill? You going to pick and choose what debts get paid? Without paying the CDS debt- AIG is out of business and nobody will help them trade out of anything. Try winding down that business when you can't exit a trade. I'd miss my payment on company cars and office equipment before I miss a payment on a trade.

Getting paid on a debt owed does not equate to being bailed out.


On Apr 08 05:02 PM Chrisvnerd wrote:

> Yes, they were all bailed out.
>
> They didn't directly take the government's money, but without it,
> they're as dead as AIG. Just because AIG defaulted on the CDS's,
> doesn't mean it's solely their fault for the breakdown, just like
> how the defaulted mortgages themselves aren't solely the fault of
> the people who couldn't pay their mortgage. I'd ask both the mortgage
> lenders and the buyers of CDS the same thing: "What the hell did
> you expect would happen when you made the deal?'
>
> On Apr 07 09:00 AM MidwestGuy wrote:

Warren's (Ridiculous) Prescription for Banks: Wipe Out Shareholders, Fire CEOs

On Apr 07 04:31 AM TJB wrote:

> Maybe several of these banks did not ask for TARP money. But they
> didn't turn down the bailout by proxy from AIG. The last time I checked
> Credit Default Swap counterparties are not supposed to be federally
> insured. The mismanagement of these firms almost created a global
> catastrophe, and the public's growing suspicion of Goldman Sach's
> and Morgan Stanley's manipulation of and profiteering in the oil
> market (to bankrupt Semgroup Holdings amongst other things), not
> to mention suspicous involvement in the demise of Lehman Bros., lends
> creedence to the argurment that a complete house cleaning is in order.
> Then maybe the public will begin to trust the U. S. financial system
> again.

Why on earth would these banks turn down payments on their CDS? They were owed this money, and accepted payment due them...nothing illegal, wrong, or immoral here. You may questions by a bankrupt AIG paid out the money- but you can not fault Citadel, GS...etc for accepting their payment. You going to criticize AT&T for accepting payment from AIG for their cell phone bill? Kodak for receiving payment from AIG for their copier lease? CDS is no different- it is payment due on a contract.

Nice of you to lump all management together- surely all bank managers did not cause this crisis.

Oil trading conspiracy- no doubt that speculation drove prices higher. But to blame GS and MS specifically is ludicrous. Many hedge funds had positions, many mutual fund managers bought up oil stocks, many individuals bought into this as well.

Do you think there is a global cabal with GS and MS and a few others that secretly control gold, oil, money supply, world politics??? Please stop watching conspiracy theory movies there is no secret society that controls everything.