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2MuchDebt

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  • Though September's auto sales came in a bit on the sluggish side for GM and Ford, analysts still see the annualized rate of 14.9M as a bright spot in the economy. Moody's Mark Zandi notes the overall economic recovery would be "much weaker" without auto sales charging hard. [View news story]
    Depends on who's buying the automobiles; government or consumer. Also, the credit strength of the purchaser is important as well.
    Oct 3 08:27 AM | Likes Like |Link to Comment
  • The Troika has rejected as much as €2B in budget cuts and tax reforms proposed by the Greek government, according to a finance ministry official. "The creditors are fed up with empty promises," says an official close to the Troika. "This time around the cost-cutting must be solid and proven." [View news story]
    "This time around the cost-cutting must be solid and proven." Lol. So before it didn't.
    Oct 2 11:11 AM | Likes Like |Link to Comment
  • August Durable Goods: -13.2% vs. -5.0% expected, +3.3% prior (revised). Ex-transport -1.6% vs. +0.2% expected, -1.3% prior (revised). [View news story]
    Haha, good one.
    Sep 27 09:41 AM | Likes Like |Link to Comment
  • Netflix (NFLX) CEO Reed Hastings says Europe will be a major focus of the company over the next two to three years as he sees the company's streaming service eventually landing in nearly every nation on the planet with the possible exception of the always-problematic China. He takes on the threat of Amazon head on, noting that Netflix spends 3X what Amazon does on content to the benefit of customers and calling Amazon Prime a "confusing mess" with an algorithm that isn't as clever as that of Netflix. [View news story]
    Thanks for the post. A lot of good info.
    Sep 26 08:22 AM | Likes Like |Link to Comment
  • Spanish austerity measures coming Thursday will include restrictions on early retirement, PM Mariano Rajoy tells the WSJ, and a new tax authority - including taxes on stock transactions? - as well as job-training programs. They'll still resist a bailout, but if debt interest rates were "too high for too long" the chances of a bailout rise to "100%." [View news story]
    I have to hand it to you Terry330. No one likes you or your asinine comments on this site and yet you still post something almost every day.
    Sep 26 08:18 AM | Likes Like |Link to Comment
  • Netflix (NFLX) CEO Reed Hastings says Europe will be a major focus of the company over the next two to three years as he sees the company's streaming service eventually landing in nearly every nation on the planet with the possible exception of the always-problematic China. He takes on the threat of Amazon head on, noting that Netflix spends 3X what Amazon does on content to the benefit of customers and calling Amazon Prime a "confusing mess" with an algorithm that isn't as clever as that of Netflix. [View news story]
    Tough words from Reed. Anybody correct me if I'm wrong or chime in, but isn't Amazon Prime cheaper and doesn't it have a better/larger selection?
    Sep 26 08:15 AM | Likes Like |Link to Comment
  • General Motors (GM -1.7%) appears set to launch a $10B revolving credit facility, according to Thomson Reuters. If the company draws down on the reported $5B revolvers at 3-years and 5-years, pricing is anticipated to be at 250 bps over Libor. [View news story]
    Pricing is above market considering GM is a well-established, publicly traded company.
    Sep 24 10:22 AM | Likes Like |Link to Comment
  • Market preview: Chinese PMI, eurozone PMI and U.S. weekly jobless claims - they all tell a depressing story and they're all weighing on EU shares and U.S. futures, with the S&P benchmark -0.25%. Back in the corporate world, early earnings results are starting to dribble in, sending ConAgra +6% but Bed Bath -5.7%. Later: Consumer Comfort, Fed Speak, Oracle earnings. [View news story]
    @ American in Paris: The first round of fiscal and monetary stimulus was helpful because there was a lack of confidence in financial markets. In other words, there was an actual NEED for the stimulus. Now that companies are making money and the financial markets and companies are flush with cash, the effectiveness of further stimulus (whether fiscal or monetary) is significantly diminished and the costs significantly outweigh the benefits. A lot of companies are operating lean and do not want to hire more workers. They can just squeeze additional productivity from current employees. Also, companies don't know what the current administration will do next in terms of fiscal policy/regulation which is quelling investment in capital (both human and otherwise). The current monetary policy actions will eventually have negative consequences on the inflation front and the fiscal policy actions over the last few years have had negative consequences in relation to the labor market (ie: food stamps, rising number of people dropping out of the labor force, inhibitors to hiring, etc). You'd be blind not to see it.
    Sep 21 08:49 AM | Likes Like |Link to Comment
  • And this guy is a hawk? Minneapolis Fed President Kocherlakota suggests last week's FOMC statement didn't go far enough. What's needed is a liftoff plan where the FOMC promises ZIRP until unemployment falls below 5.5%. Prices? They may become pesky, but the FOMC can just raise its inflation target to perhaps 2.25%. [View news story]
    These morons don't get that the Fed has a dual mandate; STABLE prices and maximum employment. Since they can't fix the current employment situation (which is blatantly obvious), why not go 0 for 2 and cause serious inflation (or dramatically inflate inflation expectations) in the meantime. I'm glad I'm currently working hard to earn money that will be seriously devalued in the future. The talk emanating from the Fed Presidents is really becoming scary in my opinion. Someone needs to put a hardness on these lunatics.
    Sep 20 04:21 PM | Likes Like |Link to Comment
  • The Bloomberg Consumer Comfort Index rises to -40.8 from -42.2 last week, despite a poor jobs report and continuing hikes in pump prices. A separate forward-looking gauge shows 34% see the economy getting worse, a sharp 11 point drop from last month, and only 8 points more than those seeing an improvement - the narrowest gap since May. Partisanship rules, with Democrats having a far better opinion of the economy than Republicans. [View news story]
    That's interesting that Democrats have a far better opinion of the economy than Republicans (generally speaking).
    Sep 20 09:55 AM | Likes Like |Link to Comment
  • Something's up in the Spanish bond market, where yields are shooting higher, the 2-year +24 bps to 3.19%, the 10-year +18 bps to 5.81%. ECB bond purchases won't begin until Spain submits to a bailout, and Spain won't submit to a bailout as long as bond yields remain contained, ergo, another peripheral bond panic almost certainly lies ahead. [View news story]
    Exactly. There is zero risk in the markets now. Everybody should be 100% stocks. Central banks are the solution to all of our woes. We won't have to worry about any problems in the future. Rally on!
    Sep 14 11:30 AM | Likes Like |Link to Comment
  • In an indication of just how broad demand for cars in the U.S. has become, even luxury sport car sales are on the rise. The U.S. importer of Porsche cars says U.S. sales soared 39% in August and now stand up 9% YTD compared to last year. [View news story]
    This is probably primarily driven by the 1% who are seeking to use some of their cash before Obama steals a large portion of it (it's only fair!). Tack: when did Porsche sales ever dictate boom and bust cycles? This has very little to do with the strength of the underlying economy. An increase of 840 Porsches surely shows the U.S. is booming! ha
    Sep 4 12:23 PM | Likes Like |Link to Comment
  • Bernanke may not deliver tomorrow, says Bill Gross, but further QE is coming "relatively soon." Don't expect much reaction though, he contends, as even The Chairman recognizes each new bout of stimulus brings smaller and smaller benefit. Gross (BOND) is a major holder of MBS, which presumably would be the target of the next round of asset purchases. [View news story]
    I respectfully disagree Tack. The stock market today is driven just as much by worthless hearsay than it is by economic data. There are way too many hands in this market manipulating asset prices. There are just as many economic indicators that are worsening/showing no growth than there are economic indicators showing slight improvements. The truth is the primary, sustainable drivers of economic growth (jobs, income and income growth) are stuck in a rut. I know capital flows into equities have been weak, but if that is the main reason driving your call that "there isn't any big downside looming" I'd be careful. Most, if not all, of the gains this year have already been made so if you weren't in before this run-up you missed out. I think we will have a correction heading into election time with the fiscal cliff becoming more of a realization as the year end approaches. I'm sure our current administration will try to kick the can down the road as much as possible, but there will inevitably be some tax increases and spending cuts which will further dampen our already weak growth.
    Aug 30 11:18 AM | Likes Like |Link to Comment
  • July Employment Trends Index: +5.9% Y/Y to 108.11, vs. 107.68 in June. (revised). The report states slow employment growth is likely to continue in the next few months and July pace of job growth (163,000) is unlikely to be sustained  [View news story]
    “There is no reason to expect employers to rapidly expand their workforce in the current economic environment, and the July pace of job growth (163,000) is unlikely to be sustained.” Certainly not positive for future non-farm payroll figures (including both hiring and income trends).
    Aug 6 10:35 AM | Likes Like |Link to Comment
  • Trading as low as 6.61% pre-ECB, Spanish 10-year bond yields (Italians too) soar higher, now at 7.24%. 2-year yields remain lower by 10 bps at 4.83% as Draghi indicated bond purchases - should they come - would be focused on the short end of the curve.  [View news story]
    Well... it was worth a try! This is blatant manipulation. Although if someone was dumb enough to buy into the hype they should lose out on this reversion to reality.
    Aug 2 11:59 AM | Likes Like |Link to Comment
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