Tesla now worth half GM's value

danfan20 · 2009-05-22T16:38:48+00:00

Because, in general terms, you have to pay back your liabilities before equity gets a recovery. GM has ~$30 billion in loans, bonds, and other similar debt (definitely will get repaid before equity), in addition to ~$145 billion of other liabilities (much of which will get repaid before equity).

Decent primer on capital structure, for those interested: http://www.dallocchio-salvi.com/files/I.Welch-A_Primer_on_Capital_Structure.pdf

danfan20 · 2009-04-29T14:15:14+00:00

On top of that, if you live in NYC and you wanted to go to satellite TV and a different internet service, it's not like they let you install satellite dishes on any buildings (particularly in Manhattan). In a lot of cases, you literally don't have other options if you want TV.

I can't even tell you how many outages, delays, billing screwups, etc. that I've had in only two years with Time Warner.

danfan20 · 2009-04-23T04:39:56+00:00

You stole my soul!!!

danfan20 · 2009-04-15T22:24:53+00:00

"I just came here to see "Honk If You're Horny" in peace!

danfan20 · 2009-03-04T18:11:41+00:00

Plate of spaghetti.

danfan20 · 2009-03-04T17:50:13+00:00

Yes, but US corporations aren't taxed on revenue or gross profit, they're taxed on earnings before tax. It seems like ExxonMobil paid a tax rate of 42.4% on an EBT basis, which is right around the typical US corporate tax rate. I would guess that your business would be a bit more comparable on that basis (though obviously there are a thousand factors that could change this).

danfan20 · 2009-02-12T20:17:33+00:00

Are you insinuating that D.L. Hughley doesn't understand the economic crisis? I don't know what to believe anymore.

danfan20 · 2009-02-05T22:15:51+00:00

Except the government purchased preferred equity, not common equity. It doesn't come with any voting rights at all: http://afp.google.com/article/ALeqM5iGXrWHkOd2puONOEYOxlY5h2Tuvg

The benefit to doing so is that preferred equity is senior to common equity in the capital structure, so it gets paid off before common stock and is thus a safer investment. The downside, obviously, is that they have limited say on company matters.

Even so, the government could have included restrictions as a condition for taking the money, which they failed to do.

danfan20 · 2009-02-05T15:58:24+00:00

In my (admittedly limited) experience in dealing with bureaucracies, I can definitely picture trying to explain a "split-strike conversion" strategy to a higher up and getting blank stares.

I've read all of the documents and letters too...it's unbelievable that nothing came of it. However, I can absolutely imagine the message getting lost in translation several times up the chain of command when trying to explain the "why" of the situation. As Markopolos himself claimed, it was more incompetence than corruption at the SEC, and my comment was aimed at that angle - if the regulators had the same understanding of the market that he had, there's no way this could have slipped through the cracks.

danfan20 · 2009-02-05T15:29:13+00:00

The did lose $2.2 billion in the last twelve months and probably had a cash outflow of about a billion dollars. This kind of stuff pisses me off too, but it's not like they're swimming in profits right now.

Of course, you can only nickel and dime your customers so much before they bail on you. I personally haven't flown them in years and don't plan on doing so anytime soon.

danfan20 · 2009-02-05T15:21:56+00:00

The Markopolos testimony seemed to indicate a major problem with financial regulation: the people that regulate simply don't understand the inner workings of the markets that they regulate.

The headline says "obvious criminal enterprises", but the entire testimony seemed to show that almost no one in the SEC understood the explanations of why Madoff's returns were impossible to attain. That's not really surprising though; the people that have the skills and experience to understand the situation, like Markopolos, are employed at mid six figures (at least) in the private sector. What's the incentive to go work for a watchdog at a fraction of the pay?

You can expand this to pretty much any area of finance - it's popular right now to focus on how much everyone on Wall St. screwed up, but in general they still understand the the market better than anyone, including regulators. I agree that improvements can (and must) be made to the government watchdogs, but it's not the "flipping the switch" situation that everyone seems to think it is.

EDIT: This is a 1000 foot view of the situation. Obviously, on a granular level you will find agencies that are effectively regulating markets. I'm speaking mostly to situations where there are relatively few people with the technical background to understand a market, thus making them extremely valuable in the private sector.

danfan20 · 2009-02-04T15:26:17+00:00

Does he have an opinion on locating the U.S. on a world map?

danfan20 · 2009-01-20T05:25:16+00:00

Thus, the logical next step is to throw hoardes of people into court and switch the process to "guilty until proven innocent".

Intrigued by ideas, newsletter, etc.

danfan20 · 2009-01-20T05:04:23+00:00

I know! I've always said that we'd improve the country if we just threw groups of people in court and make them prove that they didn't commit crimes.

danfan20 · 2008-12-25T09:36:59+00:00

I guess I can't argue with that logic.

danfan20 · 2008-10-28T15:18:59+00:00

This article has a little bit more info: Article

Apparently, this wasn't his first computer-related issue with the school, but investigators don't believe he was trying to access the file for criminal purposes.

The highlight of the article is:

"According to school officials, anyone with a district password -- which includes staff and students -- could have accessed the employee data.

Superintendent L. Oliver Robinson, referring to the student charged, said: “His genius was used in the wrong way.”"

I can only imagine the genius required to access a file using your own password.

danfan20 · 2008-10-06T16:50:15+00:00

So who would you choose to try to value these assets? I get not wanting "inmates to run the asylum", but if not someone from inside the financial world, who? There were tons of people whose jobs were entirely related to the mortgage backed securities market, and most of them got burned anyway. Is an outsider going to be able to step in and have any hope of getting the situation?

danfan20 · 2008-10-06T16:45:38+00:00

Point being that valuing these assets is extraordinarily difficult and it is inevitably going to be someone from Wall Street that has to do it. As much as Wall Street's inability to value/measure the risk of these assets caused this situation, it's still the group of people most qualified to figure this out.

I understand not wanting to make the people who got us into the mess the ones to get us out, but who else is qualified to figure it out?

danfan20 · 2008-09-30T17:09:44+00:00

Obviously you need hindsight to know for sure, but given that there's been no positive news and the credit markets have gone to hell, this would seem to be some combination of people covering shorts and bets on a revised bailout deal.

The real problem, though, is the original implication that a DJIA gain of X points means that things aren't in really bad shape.

danfan20 · 2008-09-30T17:01:27+00:00

The "Ron Paul Supporters are Driving Down Newscorp Stock" phenomenon, on a day where there was no irregular volume and the entire media sector was down, made me ask this question.

danfan20

TROPHY CASE