"Kennedy’s call to the corporate world generates big response" by Jon Chesto Globe Staff December 01, 2018
Joe Kennedy probably shouldn’t have been surprised.
The congressman says he didn’t expect such an outsized reaction to his New England Council speech on Monday, in which he urged business leaders in Boston to pursue what he terms “moral capitalism.” Put simply, Kennedy wants employers to balance investors’ demands with society’s needs.
Yes, it was unusual content for one of these business breakfasts, a sobering wake-up call after the long Thanksgiving weekend. The message obviously resonated, judging from the feedback he received afterwards -- calls, e-mails, shout outs on social media.
By coincidence, General Motors later that day disclosed it would cut 14,000 jobs. Kennedy seized on the opportunity after he was back in D.C., blasting GM on the House floor during a truncated version of his Monday speech. The GM announcement was reminiscent, on a much larger scale, of the recent Philips Lighting factory closure in Fall River.
Although Kennedy has often touched on these themes before, this was the first time he wove them together in his call for conscious capitalism. We live in an uncertain economy: The unemployment rate is relatively low, but mass layoffs continue and too many workers live paycheck to paycheck. Kennedy says the $1.5 trillion tax cut plan that Congress approved a year ago has largely benefited wealthy investors, in part through a wave of stock buybacks, and not the many people without 401(k) retirement plans.
Meaning the market is based on illu$ion (anything to keep those stock prices up and the $alaries growing).
If only Obama were $till president, 'eh?
Conservatives often argue that corporate tax cuts trickle down to the middle class, while many of Kennedy’s colleagues in the Democratic party say the best answer is to ratchet up taxes on the 1 percenters. Kennedy, meanwhile, says he takes a middle view: The problems this country faces can’t be solved on the backs of the wealthy alone; the corporate sector needs to step up.
So what’s next? Kennedy says he hopes to keep the conversation going, in part by translating the feedback into legislation now that the House will be under Democratic control. (The GOP-led Senate could still pose roadblocks, of course.) One idea: incentives for early childhood education, also a priority for a colleague in the Mass. delegation, Katherine Clark.
Her election to a leadership post was front page news, as well as the $peaker$hip, but it's a risky game at the center of the power and action unless you know how to cut a deal.
Related:
"Senator Edward J. Markey’s biggest liability: He is a white male incumbent who’s been in Congress since 1976. The 2018 midterm results showed that many Democratic voters are hungry for fresher faces, itching to topple longtime incumbents for upstart outsiders more in tune with their rock-the-boat mood. Look no further than Ayanna Pressley’s primary upset over Michael Capuano, a 10-term incumbent with a well-established liberal record and backed by the party establishment. Those same currents could threaten Markey, 72, who confirmed last month that he plans to run for reelection in 2020, say Massachusetts party insiders. Their circles have been buzzing with rumors and speculation about a race that’s still two years away....."
I'm tired of wasting time reading filler, although one possible replacement for Markey that has politicos salivating: Representative Joseph P. Kennedy III.
I can't imagine that makes Ed any happier.
His main point, though, is that the answer can’t just come from more government. He needs allies in the corporate world. This can be particularly tough for public-company executives, whose jobs essentially force them to think quarter to quarter, earnings call to earnings call.
Local business leaders, to some extent, are already paying attention to this issue. InkHouse CEO Beth Monaghan helped champion paid family leave and an equal-pay law for women, while Eastern Bank CEO Bob Rivers corralled corporate donations for a ballot-question campaign to protect transgender rights. Panera cofounder Ron Shaich has made it his cause to warn about the risks of quick-buck thinking. Seth Klarman, meanwhile, bemoaned Wall Street’s short-term mindset in a recent speech at Harvard Business School. It might seem odd for a hedge fund manager to complain about capitalism run amok, but Klarman says shareholders shouldn’t be the only constituency that matters. What about customers, employees, the planet?
Kennedy wants to see more of that thinking. He came to the New England Council seeking help, asking corporate leaders to join the front lines of this debate. Economic equity, he told them, and economic exceptionalism shouldn’t be mutually exclusive.....
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Did you see what kind of car he was driving?
Trump lashes out at GM as company announces plans to cut 14,000 jobs
My printed paper carried this New York Times slop.
"Global stocks rose Monday after taking big losses last week. Major technology companies recovered some of their recent losses, and retailers and travel companies climbed on the first full trading day of the holiday shopping season. Major indexes in the United States, Europe, and Asia all climbed. London’s main stock index jumped after the British government and the European Union agreed to terms governing Britain’s departure from the EU in March. It’s not clear if Parliament will approve the deal. Stocks have been in a steep downturn since early October, but that slump has included some substantial rallies. Banks rose Monday as interest rates turned higher after a two-week slide. The first full trading day of the holiday shopping period was a strong one for companies that sell goods and services to consumers. General Motors surged after saying it will lay off 14,000 workers and will focus more on autonomous and electric vehicles. Among retailers, Amazon rallied 5.3 percent to $1,581.33 and Nike rose 1.7 percent to $72.71. Companies in travel and leisure also surged. MGM Resorts rose 5 percent to $27.11....."
"Trump slams Fed chair, questions climate change, and threatens to cancel Putin meeting" by Philip Ruckerand Josh Dawsey Washington Post November 28, 2018
He mostly went after GM.
WASHINGTON — President Trump placed responsibility for recent stock market declines and this week’s General Motors plant closures and layoffs on the Federal Reserve during an interview Tuesday, shirking any personal responsibility for cracks in the economy and declaring that he is ‘‘not even a little bit happy’’ with his hand-selected central bank chairman.
You combine that with the recent announcements regarding troop withdrawals in Syria and Afghanistan, and I am very worried for the president's life.
Of course, I am of the belief that it won't be a take-his-head-off action. That message doesn't need to be sent to the Deep State fill-in and TPTB will never allow a character like Trump to ever approach a nomination again (sorry, Liz). Trump will be poisoned like a Pope, breaking news will have the somber-faced Lester Holt telling us Trump has been rushed to Bethesda, and after two hours or so we will be told he died of a heart attack and that Mike Pence has already taken the oath of office and is now the 46th President of the United States.
In a wide-ranging and sometimes discordant 20-minute interview with The Washington Post, Trump complained at length about Federal Reserve chairman Jerome ‘‘Jay’’ Powell, whom he nominated earlier this year. He argued that rising interest rates and other Fed policies were damaging the economy — as evidenced by GM’s announcement this week that it was laying off 15 percent of its workforce — though he insisted that he is not worried about a recession.
He should be.
‘‘I’m doing deals, and I’m not being accommodated by the Fed,’’ Trump said. ‘‘They’re making a mistake because I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me.’’
He added: ‘‘So far, I’m not even a little bit happy with my selection of Jay. Not even a little bit. And I’m not blaming anybody, but I’m just telling you I think that the Fed is way off base with what they’re doing.’’
Trump also dismissed the federal government’s landmark report released last week finding that damages from global warming are intensifying around the country. The president said that ‘‘I don’t see’’ climate change as man-made and that he does not believe the scientific consensus.
‘‘One of the problems that a lot of people like myself, we have very high levels of intelligence but we’re not necessarily such believers,’’ Trump said. ‘‘You look at our air and our water, and it’s right now at a record clean.’’
The president added of climate change, ‘‘As to whether or not it’s man-made and whether or not the effects that you’re talking about are there, I don’t see it.’’
The comments were Trump’s most extensive yet on why he disagrees with the dire National Climate Assessment released by his own administration Friday, which found that climate change poses a severe threat to the health and financial security of Americans, as well as to the country’s infrastructure and natural resources.
The recent over-the-top and hyperbolic push for that agenda has expo$ed it for what it i$, and thus we are with Trump on the issue as opposed to the Globe.
Sitting behind the Resolute Desk in the Oval Office, Trump also threatened to cancel his scheduled meeting with Russian President Vladimir Putin at a global summit this week because of Russia’s maritime clash with Ukraine. He said he was awaiting a ‘‘full report’’ from his national security team Tuesday evening about Russia’s capture of three Ukrainian naval ships and their crews in the Black Sea on Sunday.
‘‘That will be very determinative,’’ Trump said. ‘‘Maybe I won’t have the meeting. Maybe I won’t even have the meeting. . . . I don’t like that aggression. I don’t want that aggression at all.’’
What that looks like now -- and that is the wonderful thing about not blogging on a daily basis and letting the agenda-pushing propaganda play itself out -- was an attempt to blow up the bridge that connects Crimea to Russia, and if nothing else it allowed Petroshenko to declare martial law in preparation for an offensive on the Eastern Front.
Don't these guys ever learn?
Trump again questioned the CIA’s assessment that Saudi Arabia’s crown prince ordered the assassination of journalist Jamal Khashoggi, a contributor to the Post, and said he has considered Crown Prince Mohammed bin Salman’s repeated denials in his decision to maintain a close alliance with the oil-rich desert kingdom.
‘‘Maybe he did and maybe he didn’t,’’ Trump said. ‘‘But he denies it. And people around him deny it. And the CIA did not say affirmatively he did it, either, by the way. I’m not saying that they’re saying he didn’t do it, but they didn’t say it affirmatively.’’
The CIA has assessed that Mohammed ordered Khashoggi’s killing and has shared its findings with lawmakers and the White House, according to people familiar with the matter. Intelligence assessments are rarely, if ever, ironclad, and Trump has repeatedly stressed that there is no evidence that would irrefutably lay the blame at Mohammed’s feet, but the CIA based its overall assessment of Mohammed’s role on a number of pieces of compelling evidence, including intercepted communications, surveillance from inside the Saudi Consulate in Istanbul where Khashoggi was killed in October, and the agency’s analysis of Mohammed’s total control of the Saudi government.
In regards to that event, the entire narrative is falling apart. What has become clear is the overwhelming attention from the pre$$ on that one event signals a deeper agenda at work.
All we know is what we have been told by the ma$$ media and pre$$, none of which can be verified. We don't even known if the CIA asset went to the embassy. All we have is a video by an agenda-pushing pre$$ that they say verifies the whole thing. That is proof of nothing.
The further agenda appears to be forcing an overthrow within the House of Saud (ironically, that's how MbS got the job). One reason is certainly the control of oil production (backed up by the high-five at the G20 between Putin and MbS and the sale of the S-4000 air defense system to the regime). Another is the Kushner connection that the Deep State despises (despite the agenda dovetailing around Iran).
You ever get the feeling we are all being played?
Meanwhile, Trump said he had ‘‘no intention’’ of taking action to stop special counsel Robert Mueller III’s investigation of Russian interference in the 2016 election.
‘‘The Mueller investigation is what it is. It just goes on and on and on,’’ Trump said. When pressed whether he would commit to letting the probe continue until its conclusion, he stopped short of making an explicit pledge.
‘‘This question has been asked about me now for almost two years,’’ the president said, at which point counselor Kellyanne Conway chimed in, ‘‘A thousand times.’’
Trump continued: ‘‘And, in the meantime, he’s still there. He wouldn’t have to be, but he’s still there, so I have no intention of doing anything.’’
The president declined to discuss on the record the Mueller team’s accusation Monday that former Trump campaign manager Paul Manafort had breached his plea agreement by lying repeatedly to investigators.
Trump also floated the idea of removing US troops from the Middle East, citing the lower price of oil as a reason to withdraw.
‘‘Now, are we going to stay in that part of the world? One reason to is Israel,’’ Trump said. ‘‘Oil is becoming less and less of a reason because we’re producing more oil now than we’ve ever produced. So, you know, all of a sudden it gets to a point where you don’t have to stay there.’’
Well, you can't say he didn't give them fair warning and a heads up.
This guy is really treading on some dangerous ground.
Trump also called the killing of three US troops in a roadside explosion in Afghanistan this week ‘‘very sad.’’ He said he was continuing the military presence in Afghanistan only because ‘‘experts’’ told him the United States needed to keep fighting there.
Looks like he is tired of listening to them.
The president said he was considering visiting troops in the region soon, perhaps before Christmas.
‘‘At the right time I will,’’ Trump said of a war-zone visit, which would be his first as president.
Yeah, then the "enemy" could kill him and we could be off to war again!
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I wouldn't ride in any open cars if I were you, Mr. President.
"Trump raises prospect of import car tariff after GM cutback plan" by Ryan Beene Bloomberg News November 29, 2018
WASHINGTON — President Trump has raised the prospect of slapping a 25 percent tariff on imported cars in response to General Motors Co.’s announcement of plant closures this week in a move that would hit key allies such as the European Union and Japan hardest.
In a pair of Twitter posts Wednesday, Trump pointed to a longstanding US tariff on imported pickup trucks that has helped US-based automakers dominate that market. He argued that a similar import tax on cars would have prevented GM’s move to close plants in the US.
“The reason that the small truck business in the US is such a go to favorite is that, for many years, Tariffs of 25 percent have been put on small trucks coming into our country. It is called the ‘chicken tax,’ ” Trump said on Twitter.
A 25 percent duty on imported light trucks was applied in the 1960s by President Lyndon Johnson in retaliation to West German tariffs on US poultry. Other products were included in those American levies initially but have since been eliminated. The pickup tariff, which also applies to work vans, has remained and has been a major contributor to US-automaker dominance in the domestic pickup market.
More cars would be assembled in the US if the same tariff were applied on imported autos, Trump said, adding in a second tweet that “GM would not be closing their plants in Ohio, Michigan & Maryland.”
Trump’s intervention comes as his administration is mulling whether to apply fresh tariffs on imported autos under national security grounds, as it did on steel and aluminum imports this year. The main targets of such a move would be cars from the EU, Japan, and South Korea.
Some administration officials have been arguing that hitting allies such as the EU and Japan with tariffs at the same time as Trump is soliciting their help in taking on China would be counter-productive. The EU and Japan, in particular, have also drawn promises from Trump that he would not proceed with the auto tariffs as long as they are engaged in trade negotiations that are due to get underway in earnest early next year.
The issue is particularly salient this week as Trump prepares to meet with China’s Xi Jinping on the sidelines of this weekend’s Group of 20 summit in Buenos Aires. His administration is eager to preserve the backing of the EU and Japan as it takes on Chinese trade practices that are of concern to companies in all three economies.
Related: "Stocks climbed again Friday as President Donald Trump and President Xi Jinping of China prepared to meet and discuss trade, a meeting investors hope will start to resolve the two nations' trade dispute. The U.S. market jumped this week after falling to a six-month low the week before. That drop reflects investors' pessimism that the U.S. and China will resolve their differences without causing damage to the global economy. The two sides have been sparring for months. "The outlook for the global economy in 2019 does depend on some peace in the trade dispute between the U.S. and China," said David Kelly, chief global strategist for JPMorgan Funds. He said global stocks will probably jump if the two leaders announce the framework of a deal and fall if they don't....."
Given the results for December, it's falling faster than a WTC tower on 9/11.
Canada and Mexico, two other major sources of US auto imports, are set to be exempted from any tariffs as a result of the new version of the North American Free Trade Agreement negotiated by Trump.
Administration officials have been putting the final touches on a report laying out the conclusions of a Commerce Department study of auto imports that has to be presented to Trump by February. Once the report is submitted formally to him, Trump would have 90 days to take action.
Automakers, dealers, and suppliers have come out against any new tariffs, arguing that they would hurt even US-based companies and the US’s international competitiveness. GM, which attributed its move this week to changing consumer tastes and declining sales, has said that the tariffs on steel and aluminum had already cost it $1 billion in profits.
Economists are also worried about the broader consequences for what would be a major escalation in Trump’s trade wars. US imports of new passenger vehicles and parts were worth more than $340 billion last year.
The International Monetary Fund warned on Wednesday that the auto tariffs represented a major risk to the global economy. If the US went ahead with auto duties and its trading partners responded in kind it would take as much as three quarters of a percentage point off the global growth forecast that IMF economists now expect to be 3.7 percent next year.
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Look who is riding to the rescue:
"Tesla Inc. chief executive Elon Musk told CBS’s “60 Minutes” that he may be willing to buy some of the five factories General Motors Co. will idle next year, making him the second rival in two days to step up with possible job-creating moves as GM takes political heat for cutting workers. Musk made the statements in an interview with Leslie Stahl that will air Sunday. CBS released excerpts Friday. GM CEO Mary Barra was in Washington the past two days meeting with members of Congress about her plans to close five factories in North America and lay off 14,700 workers. She is under pressure to keep some of those facilities opened. While Barra was speaking with legislators on Thursday, Fiat Chrysler Automobiles NV said it will reopen one of its idle engine plant in Detroit and build a new Jeep, intensifying the irritation in Congress over GM’s plan to cut jobs. Tesla makes the all-electric Model S, Model X, and Model 3 at its sole auto plant in California, which it bought from a joint venture operated by GM and Toyota Motor Corp."
Since then he has either gone underground or into deep space.
GM says it has 2,700 jobs for workers slated to be laid off
I'm generally sick of thi$ $hit, and no longer have the energy for it:
"GE plunges again as analysts double down on the bear case" by Courtney Dentch Bloomberg News November 30, 2018
General Electric Co. shares sank after two analysts sounded more alarm bells around the company’s liquidity, and a report said former GE employees were being questioned by federal investigators about its troubled insurance business.
Deutsche Bank analyst Nicole DeBlase slashed her price target on the stock by more than a third amid continuing questions on the beleaguered multinational’s liquidity outlook. J.P. Morgan’s Stephen Tusa, a longtime bear on the company, said commentary from GE’s partner Safran SA supported his view that profit and cash flow growth at the aviation segment would be below consensus expectations.
The other blow came as the Wall Street Journal reported that several former GE employees have said the company’s insurance business failed to internally acknowledge worsening results over the years. The employees also said that they were interviewed by government lawyers.
Shares were down 5.54 percent to $7.50 after dropping as much as 6.4 percent earlier in the session. The stock has remained below $8.00 per share over the past two weeks, a level it last saw in March 2009 at the financial crisis’ market bottom.
In analyst DeBlase’s base case model, GE will probably be able to build up its balance sheet next year with cash flow from its industrial units to around 34 cents a share, assuming economic headwinds don’t worsen in the next three years and debt comes down, she said. Still, the scenario supports a lower price target on the stock, prompting a cut to $7.00 from $11.00, compared with the average of $11.38, according to data compiled by Bloomberg. She rates the stock a hold.
A more bearish case assumes earnings at the power unit continue to decline and GE’s other business units are hit by a modest downturn. DeBlase sees the industrial units facing a cash burn of about 21 cents per share next year. Yet she doesn’t see the company facing a liquidity crisis, “even in this drastic scenario.”
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"The $15 billion money pit dragging General Electric down" by Katherine Chiglinsky Bloomberg News November 29, 2018
Jack Welch built it, Jeff Immelt milked it, and John Flannery failed to fix it.
Now Larry Culp must figure out what to do with the troubled remnants of GE Capital, the finance arm that nearly sank General Electric Co. a decade ago.
And if he doesn't, you know whom to blame.
With anxiety over GE running high on Wall Street, Culp, the new chief executive, has a lot of work to do. So far GE, once the quintessential American conglomerate, just keeps stumbling from bad to worse, but perhaps Culp’s most formidable challenge is the gaping hole inside the financial unit. A big part of the trouble has to do with GE’s book of long-term care insurance, a vestige of GE Capital that backs policies that pay for things like home health aides and nursing-home stays. Once little more than an afterthought, the portfolio has turned into a money pit that threatens to complicate efforts to turn around GE as worries grow over a funding shortage.
Thankfully, taxpayers across this country are kicking in billions in tax subsidies.
While GE has tried all year to offload the liabilities, and while Culp said no issue at the finance arm gets more attention, few see any easy answers. The problem is twofold. As medical costs soar and Americans live longer, GE’s assumptions about what it will have to pay out are proving to be too rosy. This year, the firm said it will need an extra $15 billion to cover future claims, but unloading them on a would-be buyer would probably come at a very steep price. Past deals have suggested that transactions of this type are often prohibitively expensive, analysts at Evercore Inc. have said.
Do you have enough energy to say bailout?
Insurers including Athene Holding, backed by private equity firm Apollo Global Management, have expressed interest in GE’s insurance assets, but talks have cooled under Culp, according to people familiar with the matter. GE has also held talks with Warren Buffett’s Berkshire Hathaway Inc. about absorbing its insurance liabilities, two people said.
‘‘It’s very difficult to sell’’ these types of policies, said GB Taglioni, North American leader of Boston Consulting’s insurance practice, who declined to talk about GE specifically. ‘‘There have been a lot of sellers, and there have been, up until now, very few buyers.’’ A GE spokeswoman declined to comment beyond recent filings and public comments, while Athene and Apollo also declined to comment. A Berkshire representative didn’t respond to requests for comment.
Who wants to buy a black hole of a money pit?
The situation has become all the more pressing as worries about GE’s finances deepen. In the past year, the company’s woes have wiped out more than $90 billion from its stock market value, called into question the sustainability of its debt burden, and cost Flannery his job.
The insurance business itself came to the fore in spectacular fashion earlier this year after GE disclosed a $6.2 billion charge for the fourth quarter of 2017. It led to an ongoing investigation of GE’s accounting practices and shined a light on how precarious GE Capital’s situation was, and just this week, Gordon Haskett analyst John Inch flagged a potential trouble spot within one of the more profitable parts of the finance unit, GE’s aircraft leasing arm. The division, which Inch sees as vulnerable to a pullback in the energy industry following a rival’s bankruptcy, has been the subject of intensifying deal speculation.
While GE is hardly alone when it comes to the headaches caused by long-term care policies, it stands out because of the sheer size of its reserve deficit. Complicating matters is the fact that, as a reinsurer of 300,000 long-term care policies, GE is on the hook for payouts tied to those policies but has no power to increase rates itself and must rely on the primary insurers to raise them.
GE has a plan to plug the deficit. It will set aside the $15 billion it needs over seven years and has already contributed $3.5 billion of that this year. A sustained jump in interest rates could reduce GE’s deficit. Blackstone Group and Guggenheim Partners have expressed interest in managing its insurance assets, people familiar with the matter said, which could also help GE narrow its shortfall if they can produce higher returns, but the worry is that the liabilities will just keep growing as America’s health care costs outpace those of every other developed nation. GE has warned that there’s a risk the amount of its contributions could change. The open-ended nature of the obligations could ultimately stand in the way of a potential deal.
Industry insiders say they expect GE will need to cover a substantial part of its hole before buyers entertain any serious offers over price.
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I'm so glad the $tate and Bo$ton were suckered into getting them here!
Time to break them up!
"UTC, GE breakups are a sign of the times" by Jon Chesto Globe Staff November 28, 2018
The conglomerate is dead. Long live the conglomerate!
First, let’s have a moment of silence for the United Technologies Corp. corporate umbrella as we know it. Hedge fund manager Dan Loeb pushed this breakup concept. Unsurprisingly, CEO Greg Hayes didn’t mention the activist investor in his call with analysts this morning, but conglomerates have been falling out of favor for years. They were once seen as a way to protect against downturns in specific industries and to pool management expertise for varied businesses.
BU finance professor Mark Williams says investors have long found more efficient ways, such as exchange traded funds, to hedge against sector-specific problems, and they often can do without all the corporate overhead. The era of “horizontal conglomerates,” Williams says, is over, but “vertical conglomerates,” as he calls them, are another story.
Hartford-based Aetna originally tried to buy Humana, another health insurer, but that ran into antitrust trouble. Instead, Aetna sold itself to CVS. Because of the limited overlap, only a minor concession to regulators was needed. One business case: Aetna could divert members into lower-cost CVS clinics for routine care. Now, rival Walgreens is reportedly weighing an arrangement with Humana, and insurer Cigna is still working on its purchase of pharmacy benefits manager Express Scripts.
AT&T recently gobbled up Time Warner, much as Comcast did with NBCUniversal, and Amazon, of course, is trying to reach into all corners of the retail world and is tiptoeing into the health care sector.
No one can stand in their way.
This breed of conglomerate makes a case that the whole is worth more than the sum of the disparate parts — an argument that old-school conglomerates GE and UTC eventually lost.....
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Related:
"Another small Boston-area bank is getting gobbled up, in an all-stock deal valued at about $327 million. There aren’t many options for banks looking to expand in the Boston area through acquisitions. In September, Rockland Trust’s parent company agreed to buy Blue Hills Bank for $730 million, a deal that will make it the largest independent bank in Massachusetts based on in-state assets. (Berkshire Bank is bigger when out-of-state assets are included.) Banking in Greater Boston is dominated by big banks such as Bank of America, Citizens, and Santander. Chase Bank has made an aggressive move into the local market with plans to open 50 branches here....."
Looks like the wor$t is over:
"GE stock surges as grumpiest bear says worst just may be over" by Courtney Dentch and Richard Clough Bloomberg News December 13, 2018
General Electric Co. soared Thursday as the stock’s biggest bear finally had something positive to say about the crisis-stricken manufacturer.
Steve Tusa, the JPMorgan Chase analyst who has had a “sell” rating on Boston-based GE for more than two years, upgraded the shares to “neutral” and said the ‘‘known unknowns’’ weighing on the balance sheet are now better understood. It’s possible, he said in a note to clients, that GE can pull off a recovery without another major stumble.
The unexpectedly upbeat sentiment sent the shares up as much as 12 percent, the biggest intraday gain in a month. A separate announcement from GE about a reorganization of its digital business also buoyed the stock.
The company has struggled to get its arms around problems from financial liabilities to cash-flow shortages to a slumping power market in what has become one of the most severe slumps in its 126-year history. GE ousted chief executive John Flannery in October and appointed Larry Culp to speed up the turnaround.
The new boss took a big step Thursday as GE said it would form an independent company for its software business, allowing GE to remain focused on building core products such as jet engines and gas turbines.
I hope it doesn't turn out like the in$urance biz.
The company will retain ownership of the operation, which will have its own board, a new brand, and about $1.2 billion of existing software revenue, according to a statement. GE Digital’s leader, Bill Ruh, will step down ‘‘to pursue other opportunities’’ as part of the revamp.
The company also agreed to sell a majority stake in ServiceMax, a software provider it bought two years ago for $915 million, to the technology investment firm Silver Lake. Terms weren’t disclosed.
The moves mark a shift from what had been a key pillar in GE’s growth strategy in recent years. Under former CEO Jeffrey Immelt, GE invested heavily to build a software business that would complement the manufacturing operations. GE has developed an operating system called Predix to help run industrial equipment more reliably and efficiently.
GE Digital became an official unit in 2015, as the leaders boasted that the company could become a top 10 software provider by 2020 with as much as $15 billion of sales. Immelt even adopted the moniker ‘‘digital industrial company’’ to describe GE.
After Immelt stepped down last year, Flannery scaled back GE’s digital ambitions, saying it would be focused tightly on products related to GE’s industrial markets.
The company may bring on additional investors for the digital operations, but it has no plans to sell the business, according to a person familiar with the matter who asked not to be identified.
The ServiceMax deal may require balance-sheet writedowns if GE sold it for less than it originally paid, according to Gordon Haskett analyst John Inch, who rates GE the equivalent of “sell,” and as GE unloads other assets, the latest move is ‘‘another perhaps troubling data point supporting the notion that GE is scrambling to sell everything it can as quickly as it can’’ to mitigate liquidity issues, he said in a note.
Now the bad news.
GE still faces a number of challenges, including the need to reduce debt and pension liabilities, restructure the power business, and improve free-cash flow, JPMorgan’s Tusa said in his note, which came out prior to GE’s digital announcement. An equity capital raise would help address the leverage issues and protect the balance sheet from a potential downturn, he said.
Still, he warned that a reset in free-cash-flow expectations may be necessary, even as it could provide a bottom for the stock.
Tusa had been a longtime bear on GE’s stock, carrying the equivalent of a “sell” recommendation since May 2016. He still holds the lowest price target on Wall Street, $6 a share, compared with the average of $11.33, according to data compiled by Bloomberg. Nine analysts rate GE a “buy,” 13 call it a “hold,” and two say “sell.”
Thursday’s surge saved GE — at least temporarily — from a dismal milestone. This week, the shares briefly fell to $6.66, matching the nadir during the 2009 recession.....
The shares dropped to 666, huh?
There has to be some $ort of poetic ju$tice and irony in that $omewhere.
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Not $o fa$t:
"A decadelong rally on Wall Street looks like it’s ending" by Marley Jay Associated Press December 22, 2018
After almost 10 years, Wall Street’s rally looks like it’s ending.
Another day of big losses Friday left the US market with its worst week in more than seven years. All of the major indexes have lost 16 to 26 percent from their highs this summer and fall. Barring huge gains during the upcoming holiday period, this will be the worst December for stocks since 1931.
What more is there to $ay?
There hasn’t been one major shock that has sent stocks plunging. The US economy has been growing since 2009, and most experts think it will keep expanding for now, but it’s likely to do so at a slower pace.
The money managers are slowly letting the air out of the balloon.
As they look ahead, investors are finding more and more reasons to worry. The United States has been locked in a trade dispute with China for nine months. Economies in Europe and China are slowing, and rising interest rates in the United States could slow its economy even more.
Dysfunction in Washington isn’t helping the situation, with another Trump administration cabinet member announcing his resignation this week and the government Friday night on the brink of a partial shutdown.
Stocks are now headed for their single worst month since October 2008, when the market was being battered by the global financial crisis.
What does that tell you?
December is generally the strongest time of the year for US stocks. Traders often talk about a ‘‘Santa rally’’ that adds to the year’s gains as people adjust their portfolios in anticipation of the year to come, but not this year.
Going to be a lot of $crooges in richer homes this year as they $hit their Chri$tma$ britches.
Technology’s huge popularity during the recent boom years made it even more vulnerable as investors’ moods turn sour. Amazon, Facebook, Apple, Netflix, and Google’s parent company, Alphabet, have seen their market values fall by hundreds of billions of dollars.
‘‘If you live by momentum, you die by momentum,’’ said Sam Stovall, chief investment strategist for CFRA.
The Nasdaq composite, which contains a high concentration of tech stocks, has sunk almost 22 percent from its record high in late August. Several big technology companies, notably Facebook and Twitter, have also suffered as a result of scandals over matters such as data privacy and election meddling, and traders worry that the industry will face greater government regulation that could increase costs and affect their profits.
The major US indexes fell 7 percent this week and they’ve sunk more than 12 percent in December.
Investors around the world have grown increasingly pessimistic about the global economy’s prospects over the next few years. It’s widely expected to slow down, but traders are concerned the cooling might be worse than they previously believed.
The price of oil has also fallen sharply in recent weeks, down 40 percent from the high it reached in October, amid concerns over a glut in the market.....
And you-know-who is controlling that!
The low prices also undercut U.S. shale operators!
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Looks like I broke my silence on a Bad Friday.
Yeah, Meng’s arrest came as a jarring surprise after Presidents Trump and Xi Jinping agreed to a trade truce last weekend in Buenos Aires, Argentina, and China has responded by taking a couple of hostages of their own to teach Canada a lesson.
"Revised internal forecasts show that Sears Holdings Corp. will bleed hundreds of millions of dollars more than it expected over the coming weeks, casting new doubt on whether the bankrupt retailer can avoid liquidation. ‘‘There’s no place in the world for a retailer who can’t produce cash flow during Christmas,’’ said Noel Hebert, a credit analyst who covers Sears for Bloomberg Intelligence. ‘‘It’s very difficult to envision a scenario where liquidation isn’t the end game.’’ The revised budget is ‘‘a clear indicator that sales are worse than they were six weeks ago,’’ said Burt Flickinger, managing director of Strategic Resource Group, a retail-advisory firm. ‘‘They’re not selling hard goods, they’re not selling soft goods, and they’re not selling consumables. They’re in a free-fall.’’
It's epidemic!
Related:
"Employees of Sears Holdings Corp., inspired by the hardship fund for workers affected by the collapse of Toys ‘‘R’’ Us Inc., are asking chairman Eddie Lampert and the firms involved in the chain’s bankruptcy to preserve jobs and stores as well as guarantee severance pay and pensions.
Little did you know he meant their own.
‘‘While we understand that Sears and Kmart must make changes to survive, we do not believe it is fair that financial firms stand to profit from Sears’s bankruptcy while employees like us are asked to sacrifice,’’ the workers said in a letter addressed to Lampert. It was signed by 62 current and former employees. Sears says it has no plans to liquidate after filing for Chapter 11 court protection in October, but it has been closing stores and cutting jobs as part of that process. It’s still working to keep several hundred outlets alive as part of Lampert’s plan to buy the company out of bankruptcy. KKR & Co. and Bain Capital, the two buyout firms that took Toys ‘‘R’’ Us private, said earlier this month that they will each kick in $10 million to a fund for workers who lost their jobs when the retailer collapsed last year. Those contributions followed months of pressure from former employees and their representatives, including the Organization United For Respect and its Rise Up Retail campaign, which are now teaming up with the Sears employees.
That's where my print copy stopped payment on the check.
Isn't it nice to know that Bain and KKR are looking out for the workers they put out of jobs?
Sears won a second round of bankruptcy financing this week, and says it will need another $239 million in order to keep operating 505 stores beginning next year. Lampert is teaming up with investor and debtholder Cyrus Capital Partners to make the bid to buy and operate those stores, Bloomberg has reported. ‘‘We want Sears and the bankruptcy court to be more aware of the effect this is having on workers. This isn’t just about dollars, we are people,’’ Sheila Brewer, a former Kmart employee, said in a separate news release from Rise Up Retail....."
Did you $ee jwho is in charge of the fund?
"Kenneth Feinberg, the administrator of the $20 million fund established for workers laid off in the Toys R Us Inc. collapse, said he hopes the program receives additional contributions so that it can provide more meaningful support. The Toys R Us employees would probably receive payouts ranging from $200 to $13,000 based on a formula, Feinberg said."
This is the same guy who paid of the victims of GM, the Boston Marathon, 9/11, Katrina, etc. Feinberg is the bag man they send to shut people up by paying them off.
Also see:
Toys ‘R’ Us demise has ‘created a monster’ as retailers scramble to fill the void
That's why you are getting shoes this year:
"Payless taught fashion influencers a lesson about shoes by opening a fake store that sold Main Street shoes at Madison Avenue prices. Payless ShoeSource held a launch party in Los Angeles for the bogus label Palessi and invited the fashionistas to sample the merchandise. Payless posted a video of what happened on Facebook. The VIP shoppers paid as much as $645 for shoes that sell from $19.99 to $39.99 at Payless. The store rang up $3,000 insales before Payless came clean with the reveal. One shopper exclaimed, ‘‘Shut up! Are you serious?’’ The pranked shoppers got their money back and were allowed to keep the shoes. Their reactions will be featured in a series of commercials."
You can put it on the shelf with the rest of the fake news coming from the ma$$ media!
"Dorchester loses two discount department stores, leaving a gaping hole behind" by Janelle Nanos Globe Staff December 07, 2018
The shoppers who wandered the aisles weren’t celebrating as they scored their holiday deals.
The store closings have come as a shock to local residents, as both stores were performing well and had loyal customers, but the parent companies of both chains are now restructuring as they face bankruptcy proceedings.
The closings were a double whammy for Anngolia Rice. She lost her part-time job at National Wholesale Liquidators when the store closed, and she’s a frequent customer at Fallas.
An empty storefront can be a Rorschach test in a rapidly changing neighborhood. When news of the closings broke on Twitter, realtors wondered if a Trader Joe’s might slot itself into the empty Fallas space, and a Dorchester Reporter editorial envisioned a mixed-use development on Morrissey Boulevard, and proposed a new MBTA station, which it said could “transform this part of the neighborhood that is thirsty for alternative transit options and renewed commercial development.”
With the South Bay shopping center’s recent addition of new retail and housing, and the mixed-use Dot Block complex breaking ground in Glover’s Corner, pro-development advocates are hoping for the same type of commercial infusion that has come to other redeveloped pockets of the city, but the rapid succession of discount store closures also has many residents concerned about what stores might come to fill in those gaps, and whether they’ll continue to offer affordable options for the working-class and low-income families who live nearby.
See: Dot Block project gets new team, new look
“It’s going to affect the neighbors,” said Cora Foster, who was shopping at Fallas on Tuesday morning. “Christmas is coming, and they can’t afford the higher ticket items.”
With online sales skyrocketing, retailers of all stripes have experienced tumultuous times, and store closings have become as familiar to shoppers as Labor Day sales, but discount and off-price retailers have managed to maintain an edge, as reflected in the soaring stock prices and rapid growth of retailers like Dollar General and the TJX Cos, and economists are finding that lower-income shoppers are demonstrating more consumer confidence this holiday season, thanks to the strong job market and lower gas prices, but even those who cater to the lowest end of the discount spectrum — serving low-income shoppers for whom deals aren’t a fun surprise, but a necessity to make ends meet —still need a strong business model to survive, says Sucharita Kodali, a retail analyst with Forrester Research.
What we used to call a run-on sentence.
“The reason why some of these companies may be doing not as well is related to bad merchandising,” she said. “Yes, it can be cheap stuff, but there’s a lot of cheap stuff out there these days. You can get very affordable on-trend merchandise at Target and Kohl’s, and you can get all of your cleaning supplies in Dollar General.”
Some low-end retailers are losing ground to Target and other aesthetics-conscious competitors because their stores are “not that appealing of an environment,” she said, and low-income shoppers are increasingly finding deals online and shopping with their mobile phones.
!!??!!
That’s forced many discount retailers into evolving digitally as well, said Katherine Cullen, the director of industry and consumer insights for the National Retail Federation. The Dollar General and Family Dollar chains recently launched mobile apps, and the website Hollar is attempting to become the dollar store of the Web.
“They recognize that consumers’ expectations are changing, whether they’re shopping at discount or full-price stores,” Cullen said. “They’re looking ahead at how the consumer is changing and anticipating that.”
So there’s a strong likelihood that more financially solvent discount chains will take interest in the empty storefronts in Dorchester, said Scott Hoyt, who tracks consumer behavior for Moody’s Analytics.
“The fundamentals for the lower-end consumer right now are probably as good as they’ve been since before the financial crisis,” he said, citing the strong labor market as a major driver of consumer spending within that income bracket.....
WTF?
The same section is also telling me we are sliding back into recession of the worst month since the Great Depression.
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"Talking Points AM/Larry Edelman The jobs report is good news — but Wall Street is still freaking out" by Larry Edelman Globe Staff December 07, 2018
So here’s where the market is at: Investors have gone from celebrating the benefits of tax cuts early in the year — rising stock prices and a boost to economic growth — to trying to determine just when everything is going to fall apart. Every potentially negative headline sends them into sell mode. That means we are in for continued sharp swings in prices.
Meanwhile, what about that report out of Washington this morning?
He gives you the numbers, then says:
Six months ago, traders would have cheered this report, but that’s what markets turn on: psychology, and the pros would say that sentiment has shifted decidedly bearish. The glass is half empty. Hunker down and prepare for the worst, but is that the reality of the economy? Unfortunately, at times like these, it’s perception, not reality, that matters.....
Which accounts for the total slop I read everyday!
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"Dow sheds 500 points on weaker economic outlook for China" by Thomas Heath Washington Post December 14, 2018
WASHINGTON — US stocks forfeited their gains from the week on Friday, dropping after worrisome data came in overnight from China.
The Dow Jones industrial average slid 496 points, or 2 percent, to finish the session at 24,100. All 30 Dow stocks took losses, with health giant Johnson & Johnson suffering a 9 percent decline on a Reuters report that said the company knew for decades that there sometimes were small amounts of asbestos in its baby powder.
It's okay; they already planned on it.
The Dow, down 550 points at its Friday low, and the S&P were on pace for their worst quarter since 2011. The tech-heavy composite Nasdaq is straddling break even for the week, but it is up slightly on the year. It is on track for its worst quarter since 2008.
The retreat came on steep losses in Asia. US investors were reacting to news that the Chinese economy may be weakening. China’s retail sales are growing at the slowest pace in 15 years, according to November data. Industrial production is down as well.
Sam Stovall, chief investment strategist at CFRA, said, ‘‘China contributes to the earnings growth in US companies. If the second-largest economy in the world begins to stumble, it will have a ripple effect around the globe.’’
That's why globali$m $ucks.
Stovall said the Chinese economy is expected to grow 6.6 percent this year, while slowing to 6 percent growth in 2019.
‘‘Many are now wondering if that 6 percent forecast is too optimistic,’’ Stovall said.
Markets lurched around all week, with the Dow bouncing hundreds of points a day as nervous investors unpacked every piece of news, looking for clues on which to trade.
Sentiment swayed by the minute as news poured out about Brexit, China, oil prices, tweets and a wild Oval Office a tense exchange between President Trump, and the Democratic House and Senate leaders, Representative Nancy Pelosi of California and Senator Chuck Schumer of New York......
Whatever.
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I think I'm going to cancel these Weekly posts:
"The Weekly Standard, pugnacious to the end, will cease publication" by Michael M. Grynbaum and Jim Rutenberg New York Times December 15, 2018
(A smile breaks across blog editors face as a war-mongering rag will be no more!)
The Weekly Standard, a primary voice of conservative Washington that found itself out of step with the Republican Party’s turn toward Trump, is ceasing publication after 23 years, its owners announced Friday.
The cause of death was financial, ideological, or personal, depending on who was doing the telling.
The magazine’s parent company, Clarity Media Group, cited a steep decline in subscriptions and revenues, but editorial leadership had clashed with ownership in some instances over its critical coverage of President Trump and the hard-right views of his defenders.
The Standard’s editor-in-chief, Stephen F. Hayes, pronounced himself “profoundly disappointed” by the decision Friday to cease publication. The editor of Commentary magazine, John Podhoretz, who was a co-founder of The Standard in 1995, described the closing as a “murder” and “an entirely hostile act” perpetrated by malevolent owners.
The hyperbole must be a qualification for the job.
Clarity Media, which is controlled by billionaire conservative businessman Philip F. Anschutz, has devoted resources to another publication, The Washington Examiner, that provides cozier coverage of the president. Talk of selling The Weekly Standard was floated, but the company decided against it.
Someone has to balance off the daily ma$$ media assaults on the guy.
At an all-hands meeting Friday, the chief executive of Clarity Media, Ryan McKibben, disputed reports that the closure was related to the tenor of Trump coverage, instead citing poor financial performance, according to an attendee who spoke on the condition of anonymity to share sensitive conversations.
The attendee said that it remained the overwhelming view of The Standard’s staff and leadership that Anschutz did not, in the end, want to own the leading Trump-skeptical publication in conservative media.
The acrimonious end was perhaps in keeping with a publication that was proudly heterodox from the start, eager to buck the prevailing values of conservative dogma and forge its own provocative point of view.
Heterdox means unorthodox, and the Weekly Standard was pushing Wars for the Jews and the Project for the New AmeriKan Century.
Started by Podhoretz and William Kristol, both scions of establishment conservative figures, The Weekly Standard offered an alternative to the National Review-led hegemony of right-wing publications. (The third founder, Fred Barnes, remains as executive editor; Rupert Murdoch initially provided financing.)
It grew into the dominant organ of neoconservatism and a leading voice in favor of intervention in Iraq, helping to define politics in the George W. Bush era. Among its star alumni were Tucker Carlson, Matt Labash, and David Brooks.
Now Tucker is an anti-interventionist!
Sold in 2009 to Anschutz, The Standard remained influential, but the Trump phenomenon posed a challenge. Originally denounced by Republican thought leaders like Kristol, who declared himself a supporter of the “Never Trump” movement, the president has since been embraced by his party — and by right-wing news outlets that are thriving with a diet of pro-Trump coverage.
As opposed to most of the Globe's readers who thrive on a diet of anti-Trump hatred.
The Weekly Standard took a different tack. The editors supported Trump’s Supreme Court picks and tax overhaul, but the magazine’s free marketeers did not cheer trade tariffs, and its foreign interventionists lamented the president’s retreat from a central role in global leadership.....
And now he is getting out of Syria and Afghanistan!
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I'm told "some members of the magazine’s staff say they have heard that Kristol and Hayes are in touch with wealthy investors who could back a similar publication under a new banner, but in the meantime, the final issue of The Weekly Standard is to be published Monday," so you better rush out and buy a copy as a Chri$tma$ present for the war-monger you love!
UPDATE:
"The Weekly Standard may live to fight another day. The conservative political and cultural magazine’s future appeared imperiled this week by its owner’s consideration of a restructuring plan that might restructure it out of existence. The Standard’s owner, Clarity Media Group — which is, in turn, owned by billionaire Philip Anschutz — wants to expand its other Washington-based conservative publication, the daily Washington Examiner, a move that may leave no room for the money-losing Standard. However, the Standard’s founding editor, Bill Kristol, said Thursday that reports of the publication’s demise had elicited a ‘‘gratifying outpouring of support and, actually, offers to buy or help buy’’ the magazine. “So that’s nice,’’ he said."
