We knew folks were buying General Growth Properties (GGWPQ) in bulk he last couple weeks, now the news as to who is coming out. Hat Tip reader Mark for the information
Ackman’s Ira Sohn Presentation on General Growth
Disclosure (“none” means no position):Long GGWPQ
Let start out with the premise that we as American’s love convenience and anything that saves us time. We love it for our coffee, our lunch and our prescriptions. A liquor store near me actually has a drive thru window. Anything that saves us from getting out of the car we like and will use anytime we can.
So, why not drive thru retail? If I can go online and order soap, shampoo, water, soda and other household items and then go to the store and have them bring them out to my car, can anyone tell me why I would rather wander around the store and get them myself? I mean think about it. I have 4 kids, all under 6. As relaxing and fun as you might think taking all 4 of them to the store to buy household items is, I am finding it really hard to wonder why I would rather not have someone just bring them out to my car for me when I pull up. To be even more honest, I’m finding it hard to think of a reason why I would not do that even if I did not have the kids with me.
A recent study found that convenience is becoming almost as important as price for consumers today.
Enter Sears Holdings (SHLD) concept Mygofer:
Brenda Storch, a spokeswoman for MyGofer and Sears Holding said:
“Our goal is to make life easier for customers and to offer options that were not available before, all designed to save customers time and money. The Joliet store will feature a large online assortment and will cater to shoppers seeking both convenience and value, from the busy parent with three kids in the back seat to the person who needs a last minute gift, the DIY’er or the host that needs to throw a party with very little notice.”
Another way MyGofer provides convenience, she pointed out, is by carrying a broader assortment of products and brands than a traditional retailer including appliances, bed and bath, baby essentials, daily consumables including food, electronics, sporting goods and workwear. “Our customers can browse our expanded assortment which includes thousands of products and trusted brands to meet a variety of budget ranges,” she added. “Over time we will be able to tailor our assortments based on the needs of our customers in a given market.”
Order and pick up are designed to be convenient, too. Customers put together an order at www.mygofer.com, by phone, or at terminals in the store’s showroom lobby, then select when they’d like to receive their merchandise. They can pick up their MyGofer order immediately – or at least within a few minutes – at some other point in the day or days later. Joliet visitors retrieve their products through a drive-thru, via in-store pick-up or by shipment. “MyGofer offers its customers more flexibility than ever before, more choices, more shopping options, and we will save them valuable time on top of that,” Storch said.
Think about it. Family cookout coming this weekend and the wife give you a list Friday night of everything she wants from plastic plates, napkins, soda chips etc. Would you just go online that night, place the order and then go have it brought out to your car in the morning? Or would you rather trudge around the store on a Saturday morning? To me it is a no-brainer.
The service also lets you creates lists so that you can simply 1-click a list rather than searching for all the items each time.
The stores that have it available are listed on this link
We American’s love saving time. If Sears does this right, meaning they have plenty of staff available so it is truly convenient and time saving, this could catch on very easily. But, because it is a new retail concept, execution from day one has to be seamless, otherwise the negative word of mouth will cause the idea to flame out.
Disclosure (“none” means no position):Long SHLD
Hosuing, Bankruptcy, Harvard, Fat Pitch
– 10 cities bucking the trend
– This is big news folks
– Agreed
– Great job George
Disclosure (“none” means no position):
Have been tracking the jobs information since last August. Three categories are paramount for me. Non-farm payrolls (the total), private and government. What interests me the most of the three is not the total number each month of job declines but the percentage change that number represents from the total employed the month before.
Why? If we have a firm that employees 10 people and lay off one, we have laid of 10% of the workforce. If we double employment to 20, then lay of 2, we have still laid off 10% BUT, people would also be accurate in saying “layoffs have increased 100% (from 1 to 2)”. In this case, simply looking at the total number skews reality. For that reason I want to know what percent of the total who had a job the month before lost it. Then I want to know how that percentage is trending. I also want to know this for the private sector and government.
Here is the datat from the (BLS all numbers seasonally adjusted where applicable):
The number do show an improvement in the rate of decline since the Dec./Jan. highs.
The key point to note is the April numbers. Without the highly abnormal hiring done by the government (72k jobs for temporary census workers), the improvement in April would have been roughly halved. Noting that does place a large dose of doubt as the the “improvement” in the job situation. May estimates are for -532k non-farm job loses in May (to be released 6/5).
My thought is that number is too low. I think -575k or greater is more likely unless the government hired another 72k people like it did in April. Assuming the government employment changes are normalized, then I think a spike is in order…
Again, what is of more importance is how government hiring effects this number and does the rate of decline in private sector jobs abate. True growth will only come from the private sector. Government can only grow payrolls and pay for them either through increased borrowings or increase takings of private capital (taxes). Neither is conducive to growth. We cannot keep losing a greater percentage of private jobs that the overall picture would lead us to believe and hope the economy improves soon.
That also goes to earnings. Q2’s earnings were better than many of the reduced expectations. BUT, it was not due to top line sales growth but increase cost cutting (jobs). If we have sales declining but cut costs ahead of them, then we can improve the earnings picture. Now, this is not to say this is a bad thing, but it is reality.
Disclosure (“none” means no position):
For those who do not wish to peruse the whole presentation (your insane if you do not) there are two slide that bear a close watch. The whole sub-prime has been exhausted. It is the Alt-A mortgage storm that is the cause of then next wave down.
What is an Alt-A loan? Current slang terms for them are “liar loans”, “no doc”, “teaser”, “pick a pay” etc. In short, these loans, whose use exploded in 2005-2008 and the next bane of housing’s existence. The largest problem comes from the resets over the next 2-3 years. These are loans that allowed the payee to “pick a payment”. They could choose the full payment, interest only, or the “minimum”. The minimum choice then allowed the bank to add the rest of what would have been a full payment onto the existing loan which caused it to “negatively amortize” or grow larger rather than shrink over times.
After a preset period, usually 3-5 years, the loans “reset” with a new payment (no more pick a pay) based on current interest rates and a current loan amount. Do we think folks who paid less than the full payment before will now be able to afford a new, far higher amount on a home worth less than the loan? Me either.
So the question then is, when do they reset? How much more pain is in store?
The next question is, “how big is this market”?
Yeah, big…
Please check out the presentation especially if you are either think of buying or selling a home. It may save you a fortune on either side…
T2 Partners Presentation on the Mortgage Crisis-4!3!09 3
Disclosure (“none” means no position):none
Moore, Bloggers, Reich, Leftist
– Don’t get the joy here
– This is exciting news
– Even the home team is turning on the administration
– It is funny how definitions change over time
Disclosure (“none” means no position):
AutoNation’s (AN) Mike Jackson was on CNBC this am as GM (GM) files for bankruptcy protection. Since Jackson sells cars from every dealer, he is probably the best guy out there to comment on both the industry and the auto makers.
Regular readers know how high we hold Jackson here. He has his pulse on the consumer and credit markets. Not sure if he was asked to be the “car czar” or not but if he wasn’t, huge fail on the government. If he was, my guess is that he turned it down because he seems to lack the ability to tolerate the garbage that goes on in Washington. Good for him (and shareholders)
Part 1: Banks are not lending…
Part 2:
Were they managed for the unions?
Part 3: What the industry will look like in 5 years
Disclosure (“none” means no position):Long AN
Talking about oil (USO), natural gas (UNG), General Growth Properties (GGWPQ) and Phillip Morris International (PM).
See more video at Wall St. Media
Disclosure (“none” means no position):
Funny, Newspaper, Horror, WTF???
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Disclosure (“none” means no position):
We all know how reliable these tend to be…not very. But, if you are an investor in oil or gas, you will want to know what is being said. It has been a few years since we have had a significant storm so I think it may tend to be “more likely than not” we see something this year..
I am long both natural gas (UNG) and oil (USO) through both the ETF’s and options in them.
Disclosure (“none” means no position):
Here is the original post from 12/26/2008
Here are the predictions:
1- Oil again reaches in excess of $100 a barrel from the $40 it sits at today
update: Oil today sits in excess of $66 after having its best month is a decade….we’ll see on this one..
update: The dollar rallied into March this year but has since given it all back and today sits roughly 4% below Jan. 1 levels.
update: Gold has fluctuated between $900 and $1000 an ounce and has made another run at $1000 the past two weeks. While the “most of the year” part seems to have passed, $1100 is very reachable
update: This looks to be as close to “in the bag” as possible after a -5.7% final Q1 number and a Q2 that does not look much better.
update: In January Jobs did take a “leave” for health reasons and now rumors are in June, he retires
update: Rod was indicted and faces trial. After failing to be allowed to go to Puerto Rico to film a reality series (really!!), he has been quiet. More to come on this
update: In May President Obama gave Iran “until the end of the year” to alter its stance on the nuclear issue. Israel will not wait that long as the rhetoric out of Iran grows increasingly hostile almost daily.
update: Turns out Obama’s new antitrust Chief has previously linked Google to antitrust issues. We’ll see if anything happens before 12/31
update: On 6/1 the Dow stood at…8500
Disclosure (“none” means no position):
Zell makes some interesting comments on commercial real estate (CRE).
“Well, there’s been a lot of speculation and a lot of journalists have written about the impending demise of commercial real estate,” he said. “First of all, I think that the fact that interest rates are as low as they are means that even if people are under water in commercial real estate, they still can carry it. And if you’re under water and you can carry it, the last thing you’re going to do is sell it, because you don’t get anything.”
“So therefore, that’s why we have no transactions,” he said. “And I think it’s going to take two or three years before we start seeing that happen.”
While I wholly disagree with Zell on residential real estate (RRE), on the CRE side, his comments do make a level of practical sense. While it is true that there will be a few implosions, a housing style bust may not be in the offing. A simple reason may be the string of payments. Unlike a homeowner who loses their job then their home, the owner of CRE has a buffer. First the rents of the tenants pay the loans, and only when they are not enough to cover, do the owner then dip into their own pockets.
In short, the risk/payment responsibility is dispersed among several parties. Again, this is not to say that there will not be defaults, many of them or that REIT’s will not suffer, it is just the widespread and pervasive losses we are seeing in RRE may not be in the cards (losses here are defined foreclosures on CRE).
Disclosure (“none” means no position):
This is a long read but a must read none-the-less.
Disclosure (“none” means no position):
Some minor news in a few items not enough for full posts but noteworthy none the less.
USO Calls
– Had a tight trailing stop on the OLL AI calls in USO (USO). Oil has its best month in a decade and did not want to catch a downdraft. That being said, got stopped out at 8.10 each for a 47% gain in 3 weeks. Still am holding USO AO at an unrealized gain of 41% (same time frame). Have a tight stop there also to guarantee the gains.
If I get stopped out of this, I will wait before getting back in for oil to pull back a bit. I have been more active here than normal but large price spikes demand so type of action when the economies underlying fundamentals don’t quite justify it.
Natural Gas
– Still hold UNG calls UNE JP and are down 13%. These are October calls so there is no rush or worry here.
News Corp (NWSA)
News Corp got twin upgrades last week. From Streetinsider.com
Earlier, a JPMorgan analyst upgraded News Corp. (Nasdaq: NWSA) from Neutral to Overweight. The analyst also raised JPMorgan’s price target on News Corp from $9 to $12, saying the “market is improperly assigning a negative value to several News Corp. businesses”.
JPMorgan’s raised price target represents potential price appreciation of 25% from current levels.
The JPMorgan analyst points out that the negative market sentiment comes despite positive cash flow generation in each of these divisions. Specifically, the analyst believes News Corp.’s Cable Networks branch deserves “a higher premium than competitors due to potential expansion opportunities in international markets”. JPMorgan also sees the media-giant’s Film business rebounding following this year’s “trough year”.
Traders may also be buying shares of News Corp. on the back of new coverage over at Wunderlich Securities. The firm started News Corp. at Buy, also citing the cable programming and film segments.
Readesr here will be thinking…….”no kidding JP Morgan..where you been”? About 3 weeks late on this call
RHI Entertainment (RHIE)
In a bid to strengthen its ties with the Hollywood creative community and expand into the TV-series production business, RHI Entertainment has opened a programming office in Los Angeles, to be led by Tom Patricia and Elizabeth Stephen.
Tom Patricia, the executive VP of movies and mini-series, and Elizabeth Stephen, executive VP of series, will be responsible for production and development as well as co-financing opportunities, working closely with RHI’s New York creative team, including company founder and head creative executive, Robert Halmi, Sr., and senior VP of development, Lynn Holst.
“While RHI has always had a high profile in Hollywood, this new programming arm will enable us to ramp up our West Coast development and production efforts even further,” said Robert Halmi Jr., the president and CEO of RHI. “Tom and Elizabeth are extremely talented executives who have the key relationships and know how to get projects greenlit and produced. They will have an immediate and far reaching impact on RHI’s creative output.”
Patricia is an Emmy-nominated producer whose credits include Homeless to Harvard for Lifetime Television and the mini-series The Gathering. He served as senior VP for Michael Ovitz’s Artists Television Group, where he was head of the television movie and mini-series department. He also headed up TV movies and mini-series at Mandalay Entertainment. Stephen most recently was president of Mandalay Television, and served as executive producer of the Showtime series Brotherhood.
I love it when holdings, in the midst of a severe recession make smart moves to expand their business. While other are retrenching, RHI is smartly and cheaply setting up shop in LA. Many feel the move is a precursor to them getting into the “regular TV lineup” shows from the current mini-series/TV movie format they have.
I like the move as the company has a great reputation in their current format so attracting talent and getting serious looks at projects for the TV genre ought not be too difficult.
Disclosure (“none” means no position):
For those thinking we have enough oil and gas, you may want to take a gander at the data Mr. Simmons has put together. I am solidly in the “there is not enough” camp.
When do we feel the pain of that? We’ll, consider two successive quarters of -6% GDP growth in the US (and a third that looks only marginally better), the consumer of 25% of all the World’s energy and we still have $66 a barrel oil (USO). What happens to the price of oil when we actually begin to grow? $90?? $100??? $150??
Please take a close look at this…
Simmons “Two Oxymorons: Energy Independece, Security”
Disclosure (“none” means no position):