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Latest Comments55 Comments
Coming Soon: The $600 Trillion Derivatives Emergency Meeting
The link below shows an overview of models, and lectures regarding most aspects of assigning value to risk. Depending on the investment or its type of exposure select the appropiate model to evaluate the course of its expected risk.
www.quantcode.com/modu...
Then based on this experience compare it to the quarterly review as provided www.bis.org/publ/qtrpd...
What Does Warren Buffett See in General Electric?
...unemployment rate could climb to "north of 9" percent, Gates told more than 1,500 alumni at the school's Centennial Global Business Summit.
........Going forward, Immelt said, GE could become a buyer of later-stage technology companies initially backed by venture capital. "I think there will be a great opportunity to scale up companies," he said.
www.boston.com/busines.../
Underscoring the daunting challenges confronting policy makers, Gates described a phone conversation he had Sunday night with his friend Warren Buffett, the legendary investor who was mentioned by both presidential candidates in last week's debate as a potential choice for treasury secretary in the next administration.
"I said, 'Well, I'm glad it was you and not me,' " Gates recalled, drawing laughter from the business school alums.
Regulation, Bonuses, and Politics
What Does Warren Buffett See in General Electric?
October 10, 2008
seekingalpha.com/artic...
......However, GE today is one of the most shorted stocks in the marketplace; three-month put options at $17.50 and $15 respectively are highly recommended.
The Short Case for General Electric
> All in all we end the third quarter with $170 billion of backlog
>diversified globally over the last few years and today 55% of our revenue comes outside the United States
>divested Mortgage Services, FGIC, the bond insurance business, primary insurance, mortgage insurance, re-insurance, mortgage distribution and our Japan consumer finance business
> accelerated our liquidity plan and we have clear protection now if the CP market remains under duress
>equity offering gave us more cash and now the back up lines plus cash are greater than CP.
> plan to maintain the GE dividend through 2009
>Capital Finance earned slightly over $2 billion
>backlog was up $8.5 billion versus a year ago
>wind commitments are $14 billion it’s up 90% from a year ago
>>segment profit up 36% coming from the great wind and gas turbine volume
>Oil & Gas -- Op profit was up 29%
>\>Hydro acquisition which is off to a great start. gt;Hydro acquisition which is off to a great start.
>Technology Infrastructure. Revenues of $11.5 billion were up 9%
>NBCU -- revenues of $5 billion up 35%
>> Cable continued to deliver great results. The segment profit was up 24% -- MSNBC had another great quarter
>Assets of $622 billion, they’re up 12% from a year ago
>Real Estate --ended the quarter with assets of $89 billion
>>30 delinquencies are only 0.6% of average net investments -- The portfolio is very strong
>Commercial Lending and Leasing, -- down 56%
>>over $400 million of the negative marks
>risk management/credit cycle/ higher delinquencies
>>higher losses in GE Money -- losses in the Americas - $800 million to $1 billion
>Corporate and Real Estate debt -- we basically shut off the equity originations
>Capital Solutions -- If we don’t have the returns we’re not putting the capital there -- ...We think the attractive pricing is obviously going to continue for the foreseeable future here.
pg.4 seekingalpha.com/artic...
>fourth quarter outlook -- funding a lot of high return stuff over $20 billion in Commercial Finance alone
> this week the Fed announced the CP funding facility for highly rated CP issuers!!!
>> amounts up to our outstanding August 2008 which is over $60 billion for GE Capital Corp and over $10 billion for GE
>>> our team is working with the Fed to make sure all the mechanics are in place to help support the confidence of our investors
>Quality of the Portfolio -- FQ3 we had $413 billion of Commercial assets and $209 billion of Consumer assets
>> 72% of the Commercial exposures are $100 million each, and 60% are under $50 million
>>> the top 20 exposures they’re to the airlines and railroads and a couple power plants. ---- All of them are senior and secured and collateralized by the assets. There’s no unsecured exposure in the top 20 of any size.
>We don’t have any SIVs, we don’t have any CDOs, we’ve never sold CDS, and we don’t have any exposure to counter parties
>mortgages are not US -- Seventy nine percent of the portfolio is outside the US ---- over 80% has mortgage insurance on it globally
> North American receivables the delinquencies on 30 days are up to 6.2% -- loss provisions are up 34% -- total year estimates is up $800 million to $1 billion -- loss provisions are growing faster across the globe than our write offs
>> we’re putting up more provisions than the losses we’re experiencing and we’re ready for the future here
>2008 would include up to $6.6 billion of pre-tax provision losses
So $6.6 billion this year will be a big increase several billion dollars over last year and next year could be $7.5 to $9 billion and that would bring our total credit losses somewhere between 1.4% to 1.7% which would be very close to the peak and I think that’s important because when you look down on the left what’s different about the portfolio from ’90-’91 to day is dramatic.
In ’90-’91 we had very limited geographic diversity we were very US focused.
pg. 5
seekingalpha.com/artic...
>Infrastructure is about 50% of GE’s earnings in 2008 -- substantial future growth just based on the backlog because the products drive energy efficiency
>> oversold positions which give us I think some buffer for volatility
>>$15 to $20 billion of raw materials they are driven by steel, nickel, aluminum, things like that
> the environment is volatile but GE is executing
> We’re going to return $13.5 billion to investors in 2009 through dividends
Where We Go from Here: Best and Worst Cases
Money is stated to be used as storage of wealth, a means of exchange, a unit of measure. Its value as a tool is of course debatable. How though do you ascertain the future solution of our solvency by comparing today's economic hardship to past experiences?
Liquidity and solvency directed to the future means of sustainability are more apt to engage a future presence of time. An order to realize today, a value of money required to initiate (green) change leaving behind areas as the deconstructive component that now has stopped in place the common ways and means of borrowing and lending.
Auto manufacturers ask for massive loans from govt. in order to retool for a new era. They prepared for a disposable car by 2014, and now they must also provide a clean vehicle. Or that, an alternative renewable energy solution is taken upon all parts of society to prevent further deterioration.
It would seem more appropriate to put forth a coming of age and a new era, than to step back to a time when discovery and hope were mere shadows of horses and buggies.
There is greater potential than has ever been realized and mortgaging the future to realize this gain was a passive mistake to seek knowledge that new accomplishments in the way we live are not where we live, but how we live.
*Breaking News 10/10/08 7 pm
U.S. will buy stock in banks, Paulson says
Last time similar program was used was during the Great Depression
Friday's Bond Outlook: Bursting of the Treasury Security Bubble? (Update)
Nation's Debt: It's Not Being Rescued, It's Being Moved Around
VIX Options as Portfolio Insurance
Positive Divergences Continue to Stack Up
www.geconsumerproducts...
Compact Fluorescent Lighting (CFLs) is only the beginning...
Analysts See Value In CPST
At present they are nearing 50% production capacity meaning they have more space to utilize to reach the limit of how many units they can turn out. Only the “actual sales” that were delivered against, or are in current production schedule were reported as earnings in 1st Qtr 09. The back orders however, equal the sales of the current production cycles.
Vendors are being asked to deliver materials in shorter cycles and that is why the back log has occurred.
Coupled with the need for robotic welders and innovation, they have also added additional shifts to the production line. The units are sold through distributors’ world wide.
The utility of diversification as to how the micro-turbine co-generator (CHP) can be configured has more potential than it is currently most widely used for. www.capstoneturbine.co...
You would buy these units today to meet and solve the energy crisis of tomorrow. They are green, lean and quiet. All units utilize very few moving parts and are NYC building certified for indoor or outdoor installation. They have a significant presence in and around NYC.
www.officepowerllc.com...
Used units and technical background knowledge in addition to installation procurement is available through Microturbine online.
www.globalmicroturbine...
There is limited residential application and most notably is offered for commercial office building spaces. Still though, many units are stand alone used on offshore oil platforms, or remote oil and gas fields. Units co-generate heat, a/c, or electricity. They are efficient when installed in series or parallel to grid application. Some have griped that the electrical output could be greater. In this regard, one should expect progress to be made when using natural gas as its fuel source. Otherwise, they are multi-fuel friendly and easily maintained with excellent uptime.
Units are running in public transportation mass transit systems. Another area of further business elaborations.
The stock does not move with "good news." Though, Capstone should be recognized as an able and well managed company that could likely withstand higher degrees of mass production staffing, and be managed more like a mini-United Technologies than a manufacturing facility. They continue to face growing pains.
Accumulate/long CPST
How Obama and McCain Would Fix Wall Street
“You worry too much,” Mr. McCain would respond, the official said.
McCain's Economics
At issue is Question 1, which would eliminate the state income tax. It would save the average taxpayer about $3,600 a year. Annual revenue from the tax is about $12.5 billion, roughly 45 percent of the state’s budget of about $28 billion.
Bailout or Savvy Investment?
One option would be to have a new sort of ecommerce business that could facilitate the functional value of the mortgage so that payments were kept current and the house was not dormant. Ideally, you could buy the house and keep the former homeowner…
So far, we’ve rented with the option to buy that allows the rent to be applied as down payment, or that it is surrendered as rent if the option to buy is not exercised. Such tenants if Indian tribal members have alternative means to secure down payment from the local tribe….
The second problem is the no-show, sub prime owner at the condominium building in Fl, because the association fees are not maintained and the cost falls onto the occupants in more ways than one. In truth, no one has ever seen any of the sub prime paper owners… The foreclosures allow however, for the units to be rented in lieu of the association fees until a new owner has contracted to purchase the unit. Fl property taxes are hellacious as are its drug traffickers.
Bill Gross Will Work For Free, Kind Of
Investment Outlook
Bill Gross | September 2007
www.pimco.com/LeftNav/...
Bill Gross Wants A PIMCO Bailout / August 27, 2007
seekingalpha.com/artic...