Whitney really does a great job here explaining the what’s and the why’s as to how we got to where we are today.
Video:
It should be noted here that Tilson’s T2 fund has begun buying as he said “some of the most toxic mortgage assets a out there”. Nothing will help turn things around faster than private money coming into this market. Now if we can just get the gov’t out of the way.
Disclosure (“none” means no position):
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Berkowitz and Leucadia (LUK) hold almost 45% of the outstanding shares.
-AMERICREDIT CORP. (NYSE:ACF) today announced the appointment of Bruce R. Berkowitz to its board of directors. AmeriCredit’s board now includes ten directors.
Mr. Berkowitz is the President of Fairholme Funds, Inc., and is also a member of its board of directors. He has more than 24 years of investment management experience and is the Managing Member and Chief Investment Officer of Fairholme Capital Management, L.L.C. Mr. Berkowitz also serves as a director and member of the audit committee of TAL International and White Mountains Insurance Group.
“We are pleased to add such a well-respected and experienced professional to our board of directors. I am certain that our company and our shareholders will benefit greatly from his knowledge and insight,” said AmeriCredit’s Chairman Clifton Morris Jr.
Additionally, in consummation of the transaction announced on Nov. 24, 2008, between AmeriCredit and Fairholme Funds, Inc., (FAIRX) AmeriCredit has issued approximately 15.1 million shares of its common stock to Fairholme Funds, Inc., valued at $6.02 per share, in exchange for $108 million of par value of AmeriCredit’s 8.50% Senior Notes due 2015.
Disclosure (“none” means no position):None
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Berkshire Hathaway (BRK.A), (BRK.B) is doing great with the put selling..
Just a day after getting “put” 3.2 million shares, Buffett gets another 2.2 million shares of Burlington Northern (BNI).
Disclosure (“none” means no position):None
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Regular readers know Grant’s wisdom is highly valued here. Therefore this interview is a listen.
Here is a review of his book I did a few months ago
Part 1: “Disastrous inflation is brewing..”
Part 2:
Part 3
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Sorry but if you invest millions or billions and do not ask any questions, oh well…what is the saying? “a fool and his money…..”?
Here is the coverage. do not have too much to say other than what I said in the beginning but readers are emailing about it.
Bloomberg:
Bloomberg:
MSNBC
MSNBC
When smart people (or those alleged to be) show such stunning indifference to their wealth, I just cannot muster up sympathy for them.
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Ok. Here is a great discussion between Peter Schiff, Don Luskin and Robert Froehlich about the auto situation (Steve Forbes in in the second video). Got to be honest….Schiff wins this one hands down..
So, we know what I have said about Mr. Schiff in the past. I still stand by that. But, here and now I think he is the one that makes the most sense. The best quote “we are punishing success and rewarding failure” with the gov’t bailouts.
Here is the video:
In this part Schiff argues the dollar is going to crater, buy gold, avoid financials, and look at hard metals.
Part 2:
Mr. Schiff, I notice you have a new book out, forward me a copy and I’ll give a read and a review.
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OPEC would then have almost 50% of world oil supply..
gonna be going long oil very soon through (DBO) and (DXO)
Disclosure (“none” means no position):Soon to be long oil through DBO and DXO
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Rogers, Sears, Monopoly, Margin, Yield
– A nice reminder of Sears real estate values
– This is pretty cool
– The reason for much of the selloff
– Near 9%
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The reasoning behind his recent investment in Wendy’s (WEN).
Disclosure (“none” means no position):None
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Three little words have cast doubt on the retailer that otherwise is doing everything it said it would.
In reviewing the last earnings call Borders (BGP) has made significant progress this year on all stated goals..
* Debt down over 30%
* Cash flow from negative $100m to plus $9 million
* Cost cuts surpassed the $120 million goal to $140 million now
* The new concept stores have exceed expectations
* Borders.com has over 30 million Rewards Members and adds over 120k a week.
Here is the problem:
“Regarding Paperchase we retained the right to exercise the put option to sell Paperchase to Pershing Square Capital Management for $65 million and we are also in discussions with Pershing Square regarding an alternative financing transaction.
Of course no assurance can be given as to whether an alternative financing transaction will be entered into or contemplated.”
Later, in response to a question, CEO Jones says:
Matthew Fassler – Goldman Sachs:
“Related to the other deal you’re looking at with Pershing you talked about retaining the put on Paperchase but you said you’re looking at an alternative strategic transaction to the extent and if you’re free to shed any light on what kind of transaction that might be we’d be interested.”
Edward Wilhelm
“We do have, we have retained the rights to the put, and the disclosure in the release was an alternative financing transaction. And we can’t comment any further then what was in the release.”
Matthew Fassler – Goldman Sachs
“Would that be presumably a more comprehensive transaction that goes beyond Paperchase?”
Edward Wilhelm
“We really can’t comment any further.”
George Jones
“The key thing to note though is we still have the right to the put so anything we do is obviously going to be favorable for the company.”
The lack of any further clarity leaves people wondering. Now, of course folks think the deal will be favorable to the company. But, does it mean it will stop it from Chapter 11 or does it mean it will provide additional liquidity to increase concept store openings? Does it mean credit markets are closed to the retailer or does it mean thy can just get a better deal from Pershing? Does it mean Ackman may just buy the rest of the company for the $25 million it will cost him at these prices and just spin it out in a few years and they want to avoid that?
You could go one for another 20 scenario’s and until Borders or Ackman come out and settle folks down, the stock will languish. Do I think the company is in trouble? No. But, I have no ammunition to make the argument when they give us nothing.
I know some folks who have spoken the Wilhelm as essentially said the same things and the reply was that they “understood but could not announce specifics now”. We do not need specifics…just a direction..
Disclosure (“none” means no position):Long BGP
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This is really bad news…
From the Economist”
China’s exports and imports plunged in November. Exports fell by 2.2% last month from a year ago; imports plummeted by an astonishing 17.9%. One analyst sums up the news as “a shock figure”.
The gloom is spread all over the place. Exports dropped across all big traded goods and all parts of the world. Exports to America fell by 6.1%; those to the ASEAN countries, which had grown by 21.5% in October, fell by 2.4%. The faster decline in imports meant that China’s monthly trade surplus reached a record $40.1 billion. Exports last fell in 2001.
Click here to find out more!Such numbers would be nasty enough for any big economy, but they are particularly shocking because China’s racing trade has been an engine of world trade, and thus global growth. During the 1990s China’s exports grew at an annual average of 12.9%; from 2000 to 2006 that growth nearly doubled to 21.1% each year. China’s rapidly rising imports have also driven growth elsewhere. The chief economist of a Chinese bank calls the latest figures “horrifying”.
The rapidity of the decline is as striking as its extent. Trade growth in October was similar to preceeding months; exports grew by more than 19% from a year earlier. A sudden drop in just a month has surprised even the most pessimistic economists. Some analysts point out that a global shortage of trade finance in November may have exaggerated the decline, but the Chinese juggernaut is definitely stumbling.
The consequences for the Chinese economy, which has seen dizzying rates of growth since economic reforms began in 1978 (growth in the 1990s averaged 10.5%), could now be dire. Its growth is unusually driven by its exports, which have made it the world’s factory. According to the World Bank, 27% of world GDP in 2006 came from exports (up from 21% in 1990). The corresponding figures for China that year show it to be particularly dependent on exports: 40% of its GDP came from exports in 2006, compared with 30% for highly open America and 11% for Britain. Thus the potential for a drop in exports to drag down China’s growth is correspondingly greater.
If China is not exporting, the world is not buying, not just the US. Further, much of the international growth that has fueled US exports, is due to China’s strength. should that wane as it appears to be, the US is due for another leg down.
Here is the tough part. The US can fuel export by cheapening the dollar. The problem with that is then oil and energy price rise as they are imports and the cheaper dollar buys less of them.
The cheaper dollar then leads to increased demand for agricultural exports, raising their prices here at home, more expensive food.
What to do? The world economy is going to slow no matter what governments around the world do. Credit is tight and until is gets looser, thing will slow. The trillions of dollars pumped into the system will not caused credit to flow, it will just go to cover losses on existing credit. What gov’t can do is stop the decline of the dollar and keep food and energy prices low. Will they do it? Sadly…no…
How to play it? Ag giants like ADM (ADM), Gold ETF (GLD) and Oil ETF’s (DXO), (DBO).
Full Article
Disclosure (“none” means no position):Long ADM, none
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It isn’t that things are getting better but that recent laws have moved the bar…
RealtyTrac® released its November 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 259,085 U.S. properties during the month, a 7 percent decrease from the previous month but still up 28 percent from November 2007. The report also shows one in every 488 U.S. housing units received a foreclosure filing in November.
RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1.5 million properties from over 2,200 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.
“Foreclosure activity in November hit the lowest level we’ve seen since June thanks in part to recently enacted laws that have extended the foreclosure process in some states, along with more aggressive loan modification programs and self-imposed holiday foreclosure moratoriums introduced by some lenders,” said James J. Saccacio, chief executive officer of RealtyTrac. “There are several indications, however, that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months.
“Delinquencies on loans not yet in the foreclosure process jumped to nearly 7 percent in the third quarter, a record high, according to the Mortgage Bankers Association,” Saccacio continued. ”And more than half of the homeowners who received loan modifications to reduce monthly mortgage payments in the first half of 2008 are already delinquent on their loans again, according to the U.S. Office of Thrift Supervision. Many of these delinquencies could turn into foreclosures next year.”
In other words, things in housing are still getting worse, not better. Because of recent rule changes, we will probably see a nice fat surge in the beginning of next year and home currently not allowed to be foreclosed on and have no chance of saving hit the market….
For those who think 2009 was bad…..you ain’t seen nothing yet..
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Gas, Sprint, Jim Grant, Grades
– Are we done freaking out about $4 a gallon?
– Fools are buying Treasuries
– Get some sleep
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Berkshire’s (BRK.S) Buffett still have the puts he wrote for January outstanding in Burlington Northern (BNI)
With the $6 to $7 premium Buffett received for the options, he is still ahead in the stock that now sits at $75 and change.
Here is the filing: 
Disclosure (“none” means no position):none
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