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GM Death Watch
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Author GM Death Watch
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PostPosted: Tue Jan 10, 2006 1:53 pm    Post subject: GM Death Watch Reply with quote

http://www.thetruthaboutcars.com/editorials.php

GM is up about 19% in the last couple of weeks, BUT fundamentals IMO have not changed.

http://www.thetruthaboutcars.com/editorials.php

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rffrydr
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PostPosted: Fri Jul 25, 2014 11:13 am    Post subject: Reply with quote

Economies of scale only seem to work in one direction with these guys: The Wall Street Journal.: $2.4 Billion, 29 Million Cars: The Numbers Behind GM's Year of Recalls. http://google.com/newsstand/s/CBIwsKvNwBo

Selling puts for reentry into dividend.
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PostPosted: Tue Apr 15, 2014 7:04 pm    Post subject: Reply with quote

The Goldman downgrade, right on cue. I really need to post that on the techniques" thread
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PostPosted: Fri Apr 11, 2014 10:06 am    Post subject: Reply with quote

Speaking of killer: Embarassed

http://www.fool.com/investing/general/2014/04/10/why-wall-street-is-turning-against-general-motors.aspx

Weakness last few days is all about hedge-fund positioning and margin calls on the little guys Shocked The Jonas downgrade is something of a crisis of faith. For those who know him over the years he's young and bought into the whole auto revival like myself.... only to see market indifference and CapEx profit swallowing, the promise of economies of scale always just over the horizon. Tesla changed that all around for him. No profits, perfect. A "disruptor," and J.C. himself at the helm. Paradise. Everything before, "the old me.".

He called out Ackerson at Europe bottom and was too smart to fall for "One Ford".... and in a fit of spitting pique, chooses to kick his old master while he's down. So much for the cold hard numbers in this biz.

Funny thing, one of the Class Action Suits is for "lost value" on the multi-million autos (lawyers understand economies of scale well) there has, in fact, been no lost value. Prices have been trending up on Cobalt et. Al

Meanwhile momo champ Tesla looks like a mountain peak--with Adam's worshipful $390 "target" right up there on top. Twisted Evil

Long, and while not strong, hoping to get exercised at 34 strike come June.
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PostPosted: Mon Mar 31, 2014 6:18 pm    Post subject: Reply with quote

Back in big....This options killer Wink
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PostPosted: Sat Mar 15, 2014 9:34 am    Post subject: Reply with quote

Well...the recall from hell--or the GM that wouldn't die Twisted Evil

Firstly, note that "The Center for Automotive Safety" IS all and only The Trial Lawyers Association and their "300 deaths" out yesterday would make a data miner blush. 40,000 die every year in autos in this expansive auto-loving country.

Secondly, this is NOT Toyota: there is no "ghost in the machine" (diabetic elderly who can't feel their feet and prone to panic) that comes to whisk all the right-thinking vegetarians off to the great beyond. And the keyring is no place to hang your life's work.

Thirdly, if they wanna play hardball they can just draw a BK line that none shall cross. It's interesting though, here in our reified, deified world of "LAW" , they are already being pressured to do just this, "in the name of the law." For, if they were to take on these liabilities, what would such "rulings" be rules for?

That said, and despite some considerable (but thankfully small) pain suffered here by yours truly, I will say GM now faces an identity crisis like never before--and that specifically includes the so-called bankruptcy; or, what internally get referred to as the "363 rinse." Meet the new and improved GM--same as the old GM. Yeah, they got a product focus now and they've cut the infamous Ross Perot "snake dilemma" down by a factor or three but the great re-org was really all about killing capital and extricating mortgage "mark-to-death." Labor may have taken some reform but we'll not know that probably for another half-decade and I'd be surprised if the two-tiered wage structure wasn't striked-threat'd away before then. Saturn took the fall, otherwise most Dealers now reinstated--as most should be. And, at the end of year, we're slated for one, count 'em, one closure in Germany at an extortionate 200K per/ worker. But, aside from shareholders, the one thing they did manage to kill was liability.

Now, there's product liability and then there's this elaborate multi-dimensional dance that is modern corporate guilt management. And it's done in pantomime, nary a word is whispered and all such conversation is structured around what is NOT talked about. And for this GM is quite well structured. If you read some of the big miner's quarterlies there is a word that makes its place at the head of every sentence and will not be qualified--at any expense, anywhere. "Safety." They'll be no more lawyers waxing on about impersonal uncaring mega-money and their contempt for the worker. This situation is magnified several factors with the automakers who must account for our every misdeed, our own proclivities to kill our innocent selves to the tune of 40,000K a year. Then there is the "accident," by definition....

Owner's manuals a hundred years ago were forthright in putting owner's responsibilities where they lay. Now they're forced to plaster advertising with small print even for driving in a straight line--even for special effect denials of gravity! On this score, GM is truly is Government Motors--as well as corporate america with its big fat ass sticking out in the open.

So the carmakers adapt and develop. They take refuge in complication (which auto engineering no doubt is); legal maneuvering and delays that exhaust claimants, non-disclosure settlements, and "demon alcohol" that burn many of the same at their own game. This at the old GM; this at the new GM. $500 for every car is reserved against future liabilities.

Now, knowing next to nothing of this ignition recall I feel I know everything. Ignitions are a rube-Goldberg contraption rapidly on their way out for the start button. The problem at root was a weak detent spring-- weak in the sense it might release is tugged about by twenty keys and a Mickey-Mouse head dangling on the end of it. As that describes the same people who can't really drive, the tiny tail of the statistical curve wagged the dog bigtime.

A "problem" like this is hard to locate, hard to describe, hard to account for in early data which is why it was thought "fixed" in 2004 and NHTSA's thorough (they're always thorough and fine fast) later down the road. I expect GM only "knew" it was in trouble late into the death count, and by then was heading for BK. In '08 they weren't running the escalator for cost of electricity. I expect somewhere then they also (NOT management) made the calculus that BK would put it all behind them in any case. Since, at root, the "defect" is ridiculous the whole evolution was colored by the same prejudice right up and til the oh xxx moment.

So now the "new GM" blames the old GM--but, wait, isn't this the timeless "Rock" they've been selling all along? In terms of their "brand" it would be unconscionable to say "it wasn't us."

It's gonna be well nigh impossible for the ambulance chasers to overturn that mammoth BK proceeding on "fraud"--the 363 transfer even came with an implicit blessing from the Supreme Court. This, even though I have no doubt there's some kind of fraud there at the end. But what a spectacle it would be, hunh?! So say, all ignition claims resolved at Lawyer's $1billion, what would be the implications of capital restored?! What could they "claw back" from me? --for me?! Twisted Evil

Sold June 33puts post dividend yesterday; this could be a beautiful setup for 2015.

"Leverage": it's always out there, somewhere:


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PostPosted: Thu Mar 13, 2014 7:42 am    Post subject: Reply with quote

We'll now see if adding Joint Force Admirals to the Board will do them any good.... Razz
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PostPosted: Thu Feb 27, 2014 9:05 am    Post subject: Reply with quote

Turns out there was a big dividend--a sop, because there was nothing else. Nothing eats CapEx like autos (and auto labor)!

If we can get over this "GM Kills" USA Today hit-piece we still got:

Quote:
And speaking of that global industry, Merrill Lynch reports that sales of light vehicles hit 84.4 million units last year, up 4.5% from the year before. That’s a lot of vehicles and does not include medium or heavy duty trucks, or busses. Merrill Lynch is forecasting that global light vehicle sales will hit 89.3 million this year. That’s an increase of nearly 5 million vehicles, or the equivalent of bringing nearly 20 new assembly plants online. At that rate, global production should hit 100 million by 2017.

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PostPosted: Mon Jan 13, 2014 8:51 am    Post subject: Reply with quote

“It’s really an honor,” she told the throng. “If I can motivate young women and young men to pursue a career in science” and technology area “that would be a huge win.”

--Mary Barra
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PostPosted: Wed Dec 04, 2013 10:05 am    Post subject: Reply with quote

I believe this.... just not now:

http://www.bloomberg.com/news/2013-12-04/hayman-s-bass-says-gm-is-most-compelling-risk-reward-situation.html

In the meantime selling ATM 3-mo calls on every rally; selling OTM puts on 5%+ pullbacks over at least one week. Will definitely be naked long into Dec earnings/DB Auto conference on pensions and BK cleanup. Warrants make.all this nicely efficient.

Plenty of overhead with Canada ownership and UAW dumping (VEBA)...and weak hands from Dec1 convertible exercise. Huge CapEX against heavy VEBA preferred gets us, at best, token dividend next spring and activist pressure likely not effective. 50%margins on 50% "minivans" and ill-fitting Cadillac doesn't challenge VW china margins and latter's vertical integration show profit quantities we'll NEVER get. Toyota is all about the YEN. $100B MarketCAP? Maybe in '15. Very much doubt it. I'd like to see 80-85B and a 3% div 2015.
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PostPosted: Thu Nov 28, 2013 8:46 am    Post subject: Reply with quote

Not only do we have the surprise buyback of the year (Jan) but now it's cash pile is in activist "play":

http://www.bloomberg.com/news/2013-11-26/gm-s-27-billion-in-cash-seen-luring-activists-real-m-a.html

Like the $5.5B buyback, there is less than meets the eye here... and more Wink
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PostPosted: Mon Sep 23, 2013 9:51 am    Post subject: Reply with quote

Moody's:

Quote:
GM is a holding company, with essentially all its operating assets and the vast majority of its liabilities held directly by its various subsidiaries. The notes being offered by GM are rated Ba1, one notch below the Baa3 CFR and two notches below the Baa2 secured credit facility. This notching differential results from the structural subordination of the unsecured notes to the considerable amount of liabilities at the operating subsidiaries. These liabilities include approximately $28 billion in under funded pension liabilities and $20 billion in trade claims. GM's secured credit facility is rated Baa2, one notch above the Baa3 CFR, due to its security package and to guarantees from GM's operating subsidiaries. In the event that this security is released or the subsidiary guarantees fall away, the facility will also rank junior to the claims at the operating company level and it is likely that the rating of the facility would be lowered to Ba1, the same level as the unsecured notes.

Further improvement in GM's ratings could be supported if the company is able to strengthen its profit margins in North America and to begin generating profits in Europe. The company would also need to maintain its solid position in China and a healthy liquidity profile. Metrics that could support additional positive rating action include: EBITA margin above 8%; debt/EBITDA remaining near 2x; and EBITA/interest approaching 6x.

Downward pressure on GM's ratings could result from a further weakening in European automotive demand, a decision to increase leverage as part of a more aggressive financial strategy, or a weak performance for the North American new product initiative. Metrics that might indicate pressure on the rating include: EBITA margin remaining near or below 5%; debt/EBITDA of approaching 3.0x; and EBITA/interest below 3.5x.

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PostPosted: Wed Sep 04, 2013 9:06 am    Post subject: Reply with quote

Now for something completely different:

Quote:
The California Air Resources Board has set a target that 15% of all auto sales in the state will be zero-emission vehicles by 2025. Is that goal realistic and do you agree with the policy?

It can be done, but it won't be easy. I applaud the effort from an environmental standpoint. It is hard to do, but we have to have those goals in place to move things forward for the greater future of our kids. It is healthy to have these goals and it drives us to be better. Can it be done by everybody in that timeline? It depends what [other automakers] have in their portfolio. I know our portfolio, and we can do it.


--Mark Reuss (Next GM CEO) in LAT
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PostPosted: Tue Jul 16, 2013 10:33 pm    Post subject: Reply with quote

...Make that 2 minutes! Got some off anyway. And of course this was leaked yesterday.

Good that Goldman made a point of the $6B shift in $28B underfunded world pensions--a convenient whipping boy for GM since IPO. Amazing that we are still getting this "rate cycle" analysis based on averages in the past. Sing it, Ben: "tapering is NOT tightening." Auto loans are tied to Prime....which ties to Fed short rate. Zero finance is still there for as far as the eye can see. And if three months of rally is all we can expect out of cycle out of depression, after two years living with the, yes, promise of another then who needs the Bull?!

This allusion to '94 et. al. took some grip today, considering the source. It should taken some grains of salt owing to its source, analysts.
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PostPosted: Tue Jul 16, 2013 7:33 am    Post subject: Reply with quote

Just made Goldman's "Conviction Buy" list--which means I have two weeks to get "delta-neutral." Twisted Evil
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PostPosted: Sat Jun 08, 2013 8:26 am    Post subject: Reply with quote

Quote:
This bearish attitude in the options pits is simply business as usual for auto giant. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.80 ranks higher than 95% of comparable 52-week readings, signaling traders have been picking up puts over calls at a near annual-high clip. Similarly, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.75 is just one percentage point shy of a yearly peak, meaning near-term speculators have rarely been more put-heavy toward GM during the past year.


--Shaeffers
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