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Kevin_T

Kevin_T
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  • Upcoming Headline Risk: Another U.S. Credit Downgrade [View article]
    "I don't believe a credible plan will be put into place. Like Europe, there is no political will "

    I agree with this, nothing of substance will be done. It also may very well be true there will be another credit downgrade. But credit downgrade last time did nothing to increase treasury bond yields and likely will not this time either. Markets will take a "been there, seen that before" attitude and it will be business as usual.

    Of course the debt really is a problem and eventually its effects will show up. You will know when the US debt begins to be a problem that can no longer be hidden because you will see signs that the Fed is having difficulty holding long rates low no matter what they do. Or you will see inflation edging higher and higher quarter after quarter due to the Fed policy needed to keep those rates low. The Fed may even start increasing its unofficial inflation target and print more and more money to "cover up" the advancing problem. When that happens the game will be about up, something will have to be done but by then the debt will be $trillions larger still and the medicine will be even more bitter.
    May 26, 2012. 02:47 PM | 2 Likes Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    The scary thing about Spain is the extreme level of unemployment. At well over 20% the longer this goes on the harder it will be to get those jobs back because more and more of the employers will have closed up shop permanently. One would think such a level would spur drastic action by the Spanish government on the regulatory and fiscal front to try to attract business and industry. But so far only small tweaks have occurred, nothing of the magnitude needed. Do they grasp the seriousness of having 20% unemployment go on and on?
    May 23, 2012. 12:07 PM | 1 Like Like |Link to Comment
  • Stop-Start Realities And EV Fantasies [View article]
    Only problem, here where I live the thieves are busy recycling copper that has not been taken out of service yet. Many unoccupied houses and commercial buildings are being stripped of their copper plumbing and wiring.
    May 23, 2012. 11:42 AM | Likes Like |Link to Comment
  • Stop-Start Realities And EV Fantasies [View article]
    Stop-start is a good technology if it is implemented properly. The worst thing that could happen is manufacturers rush it into production and then car owners find they have to shell out $700 or more every couple of years to replace the battery to keep it going. Or that people find the air conditioner starts blowing hot air in stop and go traffic, a major problem for those of us here in the South. Word gets around fast these days with the Internet and nothing will kill a good idea faster than it being implemented improperly making buyers reject it.
    May 23, 2012. 11:37 AM | 2 Likes Like |Link to Comment
  • Storm Warnings At A123 Systems [View article]
    I do not own the stock but very good analysis.
    May 17, 2012. 11:16 AM | 2 Likes Like |Link to Comment
  • Apple's Drop Now Too Large To Ignore [View article]
    A reasonable question is whether the stock market is the cause of Apple's recent slide. The answer is a fairly clear "no."

    I do not agree with this. Growth stocks, and AAPL is one of them, seldom escape a market correction and usually decline more than the market. It would be a lot more worrisome if the market were still soaring and AAPL was declining. If the broad market continues to remain under pressure I expect AAPL to decline further also. The same things affecting the broad market are affecting AAPL stock as well, namely the threat of recession in Europe and slowing in Asia that could depress Apple sales in those regions. When market correction ends, likely AAPL will reverse and go up, hopefully faster than broad market. Barring a general market meltdown or new US recession, I expect AAPL to make new highs prior to the next iPhone release, in anticipation. After that, as Jobs creative influence continues to fade and further new wildly successful products become necessary to retain momentum the future path of AAPL stock becomes much less clear.
    May 17, 2012. 10:52 AM | Likes Like |Link to Comment
  • Begun, The Retina Wars Have [View article]
    Laptops, TV's and monitors need something new to spur sales and product replacement, higher resolution displays might help. But on small screens there is limit where adding more pixels has diminishing returns due to resolution limit of human eye. More pixels does not guarantee better display, just like many current cheap digital cameras with 14 megapixels often do not produce noticeably better pictures than the 8 megapixel cams of a few years ago.On larger displays like large screen TV the difference could be striking but would have to be supported by higher bandwidth internet streaming and yet another higher resolution TV standard, things that will not come quickly.
    May 14, 2012. 04:12 PM | 1 Like Like |Link to Comment
  • Sell Ford, Even If You Are A Long-Term Investor [View article]
    Nothing against F products here, I have had a few, mostly trucks, and they served me well. However, as an investment you have to look at the hard facts. Ford is in a commodity business, you can get a vehicle that is not very different from a host of manufacturers foreign and domestic. Government emission, safety and fuel economy regs have conspired to make vehicles more and more alike. Despite cost cutting and restructuring, Ford still is at a cost disadvantage to its competitors in Asia. Ford has lots of debt, with liabilities exceeding 90% of assets. Ford still has a heavily unionized work force, they have to negotiate for years to close unneeded plants, move operations to reduce cost etc. Next recession (yes there will be another one) Ford will again suffer disproportionately to other companies in other industries that are more nimble, less indebted, non-unionized and able to respond more quickly. You have to ask yourself if, with all the other investment opportunities around the world, is Ford (or any other auto company) the best place to deploy your investment money? Is this the best potential for risk adjusted return you can find?
    May 10, 2012. 11:06 AM | Likes Like |Link to Comment
  • Yet Another One For The Materialists? [View article]
    Polls in Greece show people are against austerity by a wide margin but at the same time 70% are against leaving the Euro zone. Eventually either they have to become accepting of austerity or capitulate and decide leaving the zone is what they need. Until that is settled one way or another Greece will continue to spread crisis and uncertainty across Europe.
    May 8, 2012. 09:55 AM | 1 Like Like |Link to Comment
  • Gold: The Fate That Awaits Once Fed Stimulus Ends [View article]
    The end of "operation twist" hardly ends stimulus from the Fed. As long as short term rates are being held far below inflation, stimulus is alive and well. The current Fed has promised these low rates until at least 2014. That is inflationary and good for gold. It also crushes return on cash, a competitor to gold. If gold is going to be sold heavily investors have to have another safe-haven investment in mind, it is not clear what that would be. When or if rates are normalized then I will be bearish on gold, but that does not look likely to happen anytime soon and so the gold downside should be limited. Should a new financial crisis break out in Europe or Japan or USA in the meantime, a real possibility given debt levels and fragile economies, gold will likely make another run up on fear.
    Apr 23, 2012. 09:12 AM | 2 Likes Like |Link to Comment
  • Is The Stock Rally Over? [View article]
    As you infer, the thing to watch is the Fed. This rally has been based on easy money. Its future depends on continuation of easy money. The current Fed makeup is very dovish so it is highly likely any further perceived slowing of the economy or sharp stock market pullback or even increasing crisis in Europe will be quickly met with a new flood of dollars from the Fed. Also, the upcoming fall elections guarantee there will be no new taxes or cuts in spending until after 2012. So best guess is no big stock selloff at least for next few months although more gains could become increasingly difficult as valuations are becoming stretched.
    Apr 22, 2012. 11:24 AM | 1 Like Like |Link to Comment
  • "Every year for the past 40, the states without income taxes had faster output growth...than the states with the highest income taxes," write Arthur Laffer and Stephen Moore in the WSJ. The discrepancies are causing migration from high-tax to low-tax states, with Illinois losing a resident every 10 minutes since hiking rates in January.  [View news story]
    The problem is not the tax rate but the fact that, after taxes are sufficient to fund basic services like police, fire and roads the further increases in taxes are used to fund things that benefit fewer and fewer people as politicians buy votes from powerful unions and other special interests and ignore those very hard-working people in the private sector who they feel do not have the organization to matter. Those who are paying the taxes but not getting commensurate return begin taking their lives and businesses elsewhere. The losses to the economy are gradual because picking up one's life and business is not something that can be done overnight so politicians and people in general do not associate the losses to their economy with the increasing cost of government until major damage has been done.
    Apr 22, 2012. 10:17 AM | 3 Likes Like |Link to Comment
  • Retail Stock Ownership Rate At Its Lowest Level Since 1998 [View article]
    Retail investors, and many professionals too, look to the past when investing for the future. The returns on stocks have been poor to non-existent over the past decade, while the return on bonds have outperformed as the economy gradually worsened under pressure from growing public and private debt load, increasing regulation and strengthening competition from Asia. With bonds outperforming for such a long interval, it is no surprise that more and more investors have been attracted to bonds.

    With bond prices across the Western World near historic highs it seems unlikely they can continue to provide good returns in the next decade. The question is, will stocks step up and provide above-inflation returns? Or will we have a long period of stagflation where bond prices fall due to inflation while stocks continue to be constrained by weak economic growth?
    Apr 21, 2012. 11:21 AM | 2 Likes Like |Link to Comment
  • The Solar Bubble Has Officially Burst - Survivors Will Ultimately Capture More Market Share [View article]
    The classic failure mechanism of solar panels of all types (monocrystalline, polycrystalline, thin film) is gradual degradation and loss of output over time. Reduction of output to 80% or less typically occurs in 15 to 25 years depending on the type of panel. However, often other failure mechanisms occur well before the degradation of the wafers. These include complete sudden failure of some of the cells or whole panels because of thermal cycling. Moisture intrusion over time. Destruction from weather such as large hail or high wind. Vandalism, etc. The fact they have to be exposed to the elements outdoors to operate makes them subject to many types of hazard therefore installations may not approach their rated life before they have to be partially or wholly replaced for other reasons.
    Apr 12, 2012. 10:57 AM | 1 Like Like |Link to Comment
  • Handicapping The Obesity Race [View article]
    "Qnexa and Contrave are combinations of two generics. To what extent will doctors prescribe the generics"

    A physician could essentially prescribe Qnexa right now, by simply writing a prescription for both generics in the appropriate dosages to mimic Qnexa. Probably for a lot less money than Qnexa will cost if it is approved. Some informed bariatric physicians probably are already doing so.
    Apr 12, 2012. 09:30 AM | Likes Like |Link to Comment
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