"The United States and the enormous buying power of U.S. consumers will not be enough to drive earnings growth for big U.S. businesses in the decades ahead. The American consumer will always be important. But for the next 25 years, it's probably not going to be the engine of global growth. It's going to be the billion people joining the middle class in Asia, it's going to be what the resource-rich countries do with their newfound wealth."
Jeffrey Immelt, CEO, GE; Newly appointed economic adviser to the President
Showing posts with label General Electric. Show all posts
Showing posts with label General Electric. Show all posts
Wednesday, January 26, 2011
Friday, March 6, 2009
A Confession
I believe that the market bottom is quite a ways away both in time and in measurement of the indices. I'll stick with my 4750 DJIA target.
But, I must confess that I made three purchases this week. Here they are and why:
-General Electric (GE): Are you crazy? Are you aware that they just cut their dividend 66%? Are you aware that they might get their rating slashed? Yes to all of the above. I like their position in infrastructure in the Far East and Middle East. At $6.70 per share, I decided to make a pilot purchase.
-Ford (F): Now you're really smoking crack! Well, here's my theory. One auto company will survive. Automobiles are the pride of our nation. Ford is the healthiest and the Feds will prevent at least one from dying. More importantly, I believe that Bubba will always want his F150 to drive. I bought at $1.78.
-The United States 12 Month Oil Fund LP (USL): I have a large position (for this little guy) in USO, also an oil ETF, but recent articles regarding the contango in USO concerned me so USL appears to have a better method for rolling over oil contracts. Basically, I believe that fear, hoarding, and geopolitics will drive oil higher in the future......and supply/demand might play a factor also :)
But, I must confess that I made three purchases this week. Here they are and why:
-General Electric (GE): Are you crazy? Are you aware that they just cut their dividend 66%? Are you aware that they might get their rating slashed? Yes to all of the above. I like their position in infrastructure in the Far East and Middle East. At $6.70 per share, I decided to make a pilot purchase.
-Ford (F): Now you're really smoking crack! Well, here's my theory. One auto company will survive. Automobiles are the pride of our nation. Ford is the healthiest and the Feds will prevent at least one from dying. More importantly, I believe that Bubba will always want his F150 to drive. I bought at $1.78.
-The United States 12 Month Oil Fund LP (USL): I have a large position (for this little guy) in USO, also an oil ETF, but recent articles regarding the contango in USO concerned me so USL appears to have a better method for rolling over oil contracts. Basically, I believe that fear, hoarding, and geopolitics will drive oil higher in the future......and supply/demand might play a factor also :)
Tuesday, February 10, 2009
Marc Faber On The Economy
Marc Faber, author of the Gloom, Boom, and Doom Report made some interesting points last week. They might sound familiar:
Source: CNBC
'The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world's biggest economy risks turning into a banana republic, Marc Faber, author of the Gloom, Doom & Boom report, told CNBC's "Asia Squawk Box." "In the US, we have a totally new school, and it’s called the Zimbabwe school," Faber said. "And it’s founded by one of the great leaders of this world, Mr Robert Mugabe, that has managed to totally impoverish his own country. And that is the monetary policy the US is pursuing."
'The government's increased intervention in the economy is likely to slow down economic growth because history shows that every time the private sector shrinks to make way for the government sector, the economy suffers, he said. Asked whether the US risked being faced with 200 percent inflation, Faber answered: "Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate."
The Federal Reserve's policy of printing money and the government's intervention in the economy might undermine the US's economic and political clout, Faber warned. "Well, I wrote two years ago a report entitled 'Is America becoming a banana republic?' And there are some features that characterize banana republics- totalitarian states, very strong government intervention into the economy, and the polarization of wealth," he said.
"And we have all these trends occurring in the US. We are not yet there. And in theory it could be reversed, but I doubt it will be," Faber added. Because of these factors, US government and corporate bonds, including that of CNBC parent General Electric , should be downgraded, he said. "Yeh, I think GE should be a junk bond. But I also think the US government should be junk," Faber said, adding: "I don’t pay much attention to rating agencies. The rating agencies have totally failed over the last 3-4 years to identify sick companies."
Source: CNBC
'The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world's biggest economy risks turning into a banana republic, Marc Faber, author of the Gloom, Doom & Boom report, told CNBC's "Asia Squawk Box." "In the US, we have a totally new school, and it’s called the Zimbabwe school," Faber said. "And it’s founded by one of the great leaders of this world, Mr Robert Mugabe, that has managed to totally impoverish his own country. And that is the monetary policy the US is pursuing."
'The government's increased intervention in the economy is likely to slow down economic growth because history shows that every time the private sector shrinks to make way for the government sector, the economy suffers, he said. Asked whether the US risked being faced with 200 percent inflation, Faber answered: "Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate."
The Federal Reserve's policy of printing money and the government's intervention in the economy might undermine the US's economic and political clout, Faber warned. "Well, I wrote two years ago a report entitled 'Is America becoming a banana republic?' And there are some features that characterize banana republics- totalitarian states, very strong government intervention into the economy, and the polarization of wealth," he said.
"And we have all these trends occurring in the US. We are not yet there. And in theory it could be reversed, but I doubt it will be," Faber added. Because of these factors, US government and corporate bonds, including that of CNBC parent General Electric , should be downgraded, he said. "Yeh, I think GE should be a junk bond. But I also think the US government should be junk," Faber said, adding: "I don’t pay much attention to rating agencies. The rating agencies have totally failed over the last 3-4 years to identify sick companies."
P.S. I received more responses on my "puppy post" than any other. Are you guys trying to tell me something? Jerome says that most would rather read "warm fuzzies" than hear about the contraction of the world economy. Okay, here you go. Maybe I'll end every "serious" post with a warm fuzzy pic.
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